FBL SERIES FUND INC
485BPOS, 1995-12-01
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<PAGE>

   
As filed with the Securities and Exchange Commission   Registration Nos. 2-38512
on December 1, 1995                                                     811-2125
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
    
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549
                                    FORM N-1A
                            REGISTRATION STATEMENT
                        UNDER THE SECURITIES ACT OF 1933                   / /

                         Pre-Effective Amendment No.                       / /

   
                        Post-Effective Amendment No.  30                   /X/
    

                                     and/or

                             REGISTRATION STATEMENT
                    UNDER THE INVESTMENT COMPANY ACT OF 1940               / /

   
                              Amendment No.  30                            /X/
    

                              FBL SERIES FUND, INC.
               (Exact Name of Registrant as Specified in Charter)

     5400 University Avenue                          (515) 225-5586
 West Des Moines, Iowa  50266                 (Registrant's Telephone Number,
(Address of Principal Executive                   including Area Code)
     Offices) (Zip Code)

 Stephen M. Morain, Esquire                               Copy to:
   5400 University Avenue                        Charles F. Custer, Esquire
West Des Moines, Iowa  50266                 Vedder, Price, Kaufman & Kammholz
 (Name and Address of Agent                       222 North LaSalle Street
       for Service)                                  Chicago, IL  60601

   
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the Registrant
has registered an indefinite amount of shares under the Securities Act of 1933.
The Rule 24f-2 Notice for the year ended July 31, 1995 was filed with the
Securities and Exchange Commission on or about September 26, 1995.
    

It is proposed that this filing will become effective (check appropriate box)

   
     /X/  immediately upon filing pursuant to paragraph (b)
     / /  on (date) pursuant to paragraph (b)
     / /  60 days after filing pursuant to paragraph (a)(1)
     / /  on (date) pursuant to paragraph (a)(1)
    

   
     / /  75 days after filing pursuant to paragraph (a)(2)
    

   
     / /  on (date) pursuant to paragraph (a)(2) of Rule 485.
    

   
    

<PAGE>

   
If appropriate, check the following box:
    

     / /
   
          This post-effective amendment designates a new effective date for a
          previously filed post-effective amendment
    

<PAGE>
                              FBL SERIES FUND, INC.

                       Registration Statement on Form N-1A

                              CROSS REFERENCE SHEET
                             Pursuant to Rule 481(a)



                N-1A
               ITEM No.                                CAPTION
- --------------------------------------- ---------------------------------------
PART A  INFORMATION REQUIRED IN PROSPECTUS

1.   Cover Page                              Cover Page

2.   Synopsis  Summary;                      Summary of Expenses

3.   Condensed Financial Information         Condensed Financial Information;
                                                Performance Information

4.   General Description of Registrant       Organization of the Fund;
                                                Investment Objectives and
                                                Policies of the Portfolios;
                                                Description of Certain
                                                Investment Techniques; Principal
                                                Risk Factors

   
5.   Management of the Fund                  Management of the Fund; General
                                                Information
    

5A.  Management's Discussion of Fund         Not Applicable
    Performance

6.   Capital Stock and Other Securities      General Information; Organization
                                                of the Fund; Dividends and Taxes

   
7.   Purchase of Securities Being Offered    How to Buy Shares
    

8.   Redemption or Repurchase                How to Redeem Shares

9.   Pending Legal Proceedings               Not Applicable

PART B    INFORMATION REQUIRED IN STATEMENT OF ADDITIONAL INFORMATION
10.  Cover Page                              Cover Page

11.  Table of Contents                       Table of Contents

12.  General Information and History         Organization of the Fund (Part A)

13.  Investment Objectives and Policies      Investment Objectives, Policies and
                                                Techniques; Investment
                                                Restrictions

<PAGE>

                N-1A
               ITEM No.                                CAPTION
- --------------------------------------- ---------------------------------------

14.  Management of the Fund                  Officers and Directors; Investment
                                                Adviser; Underwriting and
                                                Distribution Expenses

15.  Control Persons and Principal Holders   Other Information
          of Securities

16.  Investment Advisory and Other Services  Investment Adviser; Other
                                                Information; Underwriting and
                                                Distribution Expenses

17.  Brokerage Allocation and Other          Portfolio Transactions and
          Practices                             Brokerage Commissions

18.  Capital Stock and Other Securities      Shareholder Voting Rights

19.  Purchase, Redemption and Pricing of     Purchase and Redemptions;
          Securities Being Offered              Net Asset Value

20.  Tax Status                              Taxes

21.  Underwriters                            Underwriting and Distribution
                                                Expenses

22.  Calculation of Performance Data         Performance Information

23.  Financial Statements                    Financial Statements

<PAGE>
                             FBL SERIES FUND, INC.

   
                       Prospectus dated December 1, 1995
    

  FBL  Series  Fund,  Inc.  (the  "Fund")  is  an  open-end,  diversified series
management investment company consisting  of six Portfolios,  each with its  own
investment  objectives and policies. For  most purposes, each Portfolio operates
like a separate mutual fund issuing its own shares.

                         Growth Common Stock Portfolio
                           High Grade Bond Portfolio
                           High Yield Bond Portfolio
                               Managed Portfolio
                             Money Market Portfolio
                              Blue Chip Portfolio

  The  Fund  is  designed  for  long-term  investors,  including  those  funding
tax-qualified  investment  plans such  as IRAs  or  other retirement  plans. The
Fund's investment adviser is FBL Investment Advisory Services, Inc.

   
  THE HIGH YIELD BOND PORTFOLIO INVESTS PRIMARILY IN LOWER-RATED BONDS, COMMONLY
REFERRED TO  AS "JUNK  BONDS,"  WHICH ENTAIL  GREATER RISKS,  INCLUDING  DEFAULT
RISKS,  THAN THOSE  ASSOCIATED WITH  HIGHER-RATED SECURITIES.  PURCHASERS SHOULD
CAREFULLY ASSESS THE RISKS ASSOCIATED WITH AN INVESTMENT IN THIS PORTFOLIO.  SEE
"INVESTMENT   OBJECTIVES  AND  POLICIES  OF   THE  PORTFOLIOS--HIGH  YIELD  BOND
PORTFOLIO," P.  13-14;  "PRINCIPAL  RISK  FACTORS--SPECIAL  CONSIDERATIONS--HIGH
YIELD  BONDS,"  P.  16-19;  "APPENDIX B--PORTFOLIO  COMPOSITION  FOR  HIGH YIELD
BONDS," P. B-1-B-2 AND "APPENDIX  C--DESCRIPTION OF CORPORATE BOND RATINGS,"  P.
C-1-C-2.
    

  AN  INVESTMENT IN THE MONEY MARKET PORTFOLIO IS NEITHER INSURED NOR GUARANTEED
BY THE  U.S.  GOVERNMENT.  THERE CAN  BE  NO  ASSURANCE THAT  THE  MONEY  MARKET
PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.

   
  This  Prospectus  contains  information  about  the  Fund  that  a prospective
investor should know before  investing. Please read it  carefully and retain  it
for  future reference. A Statement of Additional Information for the Fund, dated
December 1, 1995, has been filed with the Securities and Exchange Commission and
is incorporated herein by reference. The Statement of Additional Information  is
available  upon request and without  charge from the Fund  by writing or calling
the Fund at the address or telephone numbers set forth on the following page.
    

  THESE SECURITIES HAVE NOT BEEN APPROVED  OR DISAPPROVED BY THE SECURITIES  AND
EXCHANGE  COMMISSION OR ANY  STATE SECURITIES COMMISSION  NOR HAS THE SECURITIES
AND EXCHANGE  COMMISSION OR  ANY  STATE SECURITIES  COMMISSION PASSED  UPON  THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

   
  NO  DEALER,  SALESMAN,  OR  OTHER  PERSON  HAS  BEEN  AUTHORIZED  TO  GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS,  OTHER THAN THOSE CONTAINED IN  THIS
PROSPECTUS,  IN CONNECTION WITH  THE OFFER CONTAINED IN  THE PROSPECTUS, AND, IF
GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN  AUTHORIZED BY  THE FUND, THE  ADVISER OR  THE DISTRIBUTOR.  THIS
PROSPECTUS  DOES NOT CONSTITUTE AN OFFER TO  SELL, OR A SOLICITATION OF AN OFFER
TO BUY, THE SECURITIES OF THE FUND IN ANY JURISDICTION IN WHICH SUCH SALE, OFFER
TO SELL OR SOLICITATION MAY NOT BE LAWFULLY MADE.
    

   PLEASE READ THIS PROSPECTUS CAREFULLY AND RETAIN IT FOR FUTURE REFERENCE.
<PAGE>
- --------------------------------------------------------------------------------
                               TABLE OF CONTENTS

   
<TABLE>
<CAPTION>
                                                                                                           PAGE NO.
<S>                                                                                                      <C>
Summary................................................................................................            1
Summary of Expenses....................................................................................            3
Condensed Financial Information........................................................................            5
Investment Objectives and Policies of the Portfolios...................................................           11
Principal Risk Factors.................................................................................           15
Description of Certain Investment Techniques...........................................................           19
How to Buy Shares......................................................................................           22
How to Redeem Shares...................................................................................           22
Other Shareholder Services.............................................................................           25
Net Asset Value Information............................................................................           26
Performance Information................................................................................           27
Management of the Fund.................................................................................           28
Portfolio Transactions.................................................................................           30
Dividends and Taxes....................................................................................           30
Organization of the Fund...............................................................................           32
General Information....................................................................................           32
Appendix A.............................................................................................          A-1
Appendix B.............................................................................................          B-1
Appendix C.............................................................................................          C-1
</TABLE>
    

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<TABLE>
<S>                                                               <C>
R                                                                 YIELD AND PURCHASE INFORMATION
FARM BUREAU MUTUAL FUNDS                                          U.S. Toll Free (800) 247-4170
5400 University Avenue, West Des Moines, Iowa 50266               Iowa Toll Free (800) 422-3175
                                                                  Des Moines (515) 225-5586
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
                                                                         SUMMARY
                                                                     -----------

    THE  FUND.  FBL Series  Fund, Inc. (the "Fund")  is an open-end, diversified
series management  investment  company.  The  Fund is  designed  to  provide  an
opportunity  for investors to pool their money to achieve economies of scale and
diversification and to permit investors whose portfolios may not be large enough
to  qualify  for  individual  management  services  to  take  advantage  of  the
professional  investment  expertise of  FBL  Investment Advisory  Services, Inc.
("FBL" or the  "Adviser"). The Fund  currently issues shares  in six  investment
series  (a "Portfolio" or the  "Portfolios"), and the Board  of Directors of the
Fund (the "Board of Directors") may establish additional Portfolios at any time.

    The Fund is designed  for long-term investors, including  those who wish  to
use  shares of  one or  more Portfolios  as a  funding vehicle  for tax-deferred
retirement  plans  (including  tax-qualified  retirement  plans  and  Individual
Retirement  Account (IRA) plans), and not  for investors who intend to liquidate
their investments after  a short  period of  time. A  contingent deferred  sales
charge  (described below) is  generally imposed on  redemptions of shares within
six years of the date of purchase.

    INVESTMENT OBJECTIVES.  The Fund currently offers a choice of six investment
Portfolios, having the following investment objectives:

        GROWTH COMMON STOCK PORTFOLIO.   This Portfolio seeks long-term  capital
    appreciation  with current  income as  a secondary  objective. The Portfolio
    pursues these objectives by investing primarily in common stocks that appear
    to the  Fund's investment  adviser to  possess above-average  potential  for
    appreciation in market value.

        HIGH  GRADE BOND  PORTFOLIO.   This Portfolio seeks  as high  a level of
    current income  as is  consistent with  investment in  a portfolio  of  debt
    securities  deemed to be  of high quality by  the Fund's investment adviser.
    The  Portfolio  pursues  this  objective  by  investing  primarily  in  debt
    securities rated AAA, AA or A by Standard & Poor's Corporation or Aaa, Aa or
    A  by Moody's Investors Service, Inc.  and in U.S. Government securities and
    government agency securities.

        HIGH  YIELD  BOND  PORTFOLIO.    This  Portfolio  seeks,  as  a  primary
    objective,  as  high  a  level  of  current  income  as  is  consistent with
    investment in  a portfolio  of fixed-income  securities rated  in the  lower
    categories  of established  rating services.  As a  secondary objective, the
    Portfolio seeks  capital  appreciation  when  consistent  with  its  primary
    objective.  The Portfolio pursues these objectives by investing primarily in
    fixed-income securities rated  Baa or  lower by  Moody's Investors  Service,
    Inc.  and/or  BBB or  lower  by Standard  &  Poor's Corporation,  or unrated
    securities of comparable quality. AN INVESTMENT IN THIS PORTFOLIO MAY ENTAIL
    GREATER THAN ORDINARY FINANCIAL RISK.

        MANAGED PORTFOLIO.   This Portfolio seeks  the highest total  investment
    return  of  income  and  capital appreciation.  The  Portfolio  pursues this
    objective through a fully managed investment policy consisting of investment
    in the following three  market sectors: (i) common  stocks and other  equity
    securities  of  the type  in  which the  Growth  Common Stock  Portfolio may
    invest; (ii) high quality debt securities  and preferred stocks of the  type
    in  which the High Grade  Bond Portfolio may invest;  and (iii) high quality
    short-term money market instruments  of the type in  which the Money  Market
    Portfolio may invest.

        MONEY  MARKET PORTFOLIO.   This  Portfolio seeks  maximum current income
    consistent with liquidity and stability of principal. The Portfolio  pursues
    this objective by investing in high quality

                                       1
<PAGE>
    short-term  money market instruments. In  light of the distribution services
    fee (see  "General Information--Distributor")  and the  contingent  deferred
    sales charge (see "How to Redeem Shares"), the Money Market Portfolio should
    be  viewed as  part of  a long-term  investment in  the Fund  to be  used in
    conjunction with the other Portfolios, rather than as a typical money market
    fund.

        BLUE CHIP PORTFOLIO.  This Portfolio seeks growth of capital and income.
    The Portfolio pursues this objective by investing primarily in common stocks
    of well-capitalized, established  companies. Because this  Portfolio may  be
    invested  heavily in particular stocks or  industries, an investment in this
    Portfolio may entail relatively greater risk of loss.

    There can  be no  assurance that  the objectives  of any  Portfolio will  be
realized.  During periods when  the investment adviser  believes that the equity
market is overvalued, or, when warranted by other prevailing market or  economic
conditions,  the Growth Common  Stock Portfolio may  hold substantial amounts of
non-equity  investments.  For  further  information  regarding  the   investment
practices  of the various Portfolios, see "Investment Objectives and Policies of
the Portfolios." For  further information regarding  the principal risk  factors
associated  with investment in any of the Fund's Portfolios, see "Principal Risk
Factors."

    PURCHASES AND REDEMPTIONS.  Shares  of the Portfolios are available  through
selected  financial services  firms such  as broker/dealers,  through registered
representatives of FBL Marketing Services, Inc.  or directly from the Fund.  The
minimum  initial investment  is $250, and  subsequent investments may  be in any
amount. Shares of a Portfolio are redeemable at the net asset value per share of
the Portfolio next determined  after the Fund's receipt  of a request in  proper
form.  There  may  be  a  contingent  deferred  sales  charge  imposed  upon the
redemption of shares during the first six years after purchase, ranging from  5%
the  first year  to 1% during  the sixth  year. There is  no contingent deferred
sales charge once shares have been held six years. Shares of a Portfolio may  be
exchanged  for shares of another Portfolio for  a $5.00 exchange fee without any
contingent deferred sales charge. There is  a distribution services fee of  .50%
of the average daily net assets of the Fund. See "How to Buy Shares" and "How to
Redeem Shares."

   
    INVESTMENT  ADVISER AND DISTRIBUTOR.  FBL Investment Advisory Services, Inc.
serves as the investment adviser  for each of the  Portfolios for an annual  fee
that is based on the average daily net assets of each Portfolio and varies among
the  Portfolios. The maximum annual fee rate is .25% of average daily net assets
for the Blue Chip Portfolio, .40% of average daily net assets for the High Grade
Bond and  Money Market  Portfolios, .50%  of average  daily net  assets for  the
Growth  Common Stock Portfolio,  .55% of average  daily net assets  for the High
Yield Bond  Portfolio and  .60% of  average  daily net  assets for  the  Managed
Portfolio.  These fee rates are reduced when  asset levels in a Portfolio exceed
$200 million  (except for  the  Blue Chip  Portfolio).  See "Management  of  the
Fund--Investment   Adviser."  FBL  also  serves  as  distributor  and  principal
underwriter for the Fund. FBL pays securities  dealers a commission of up to  4%
for  sales of Portfolio shares and a service fee, payable monthly, at the annual
rate of .15% on  assets maintained and serviced  in Fund accounts. FBL  receives
from  the  Fund the  .50% annual  distribution  services fee  and a  .25% annual
administrative services fee, and receives directly any contingent deferred sales
charge paid on the redemption of shares. Firms to which commissions and  service
fees  may be paid include FBL Marketing Services, Inc., which is affiliated with
FBL. See "General Information--Distributor."
    

                                       2
<PAGE>
- --------------------------------------------------------------------------------
                                                                      SUMMARY OF
                                                                        EXPENSES
                                                                 ---------------

<TABLE>
<S>                                                                                   <C>
SHAREHOLDER TRANSACTION EXPENSES
    Maximum Sales Load Imposed on Purchases.........................................    None
    Maximum Sales Load Imposed on Reinvested Dividends..............................    None
    Deferred Sales Load (As a percentage of redemption proceeds):
        Year 1......................................................................     5%
        Year 2......................................................................     4%
        Year 3......................................................................     4%
        Year 4......................................................................     3%
        Year 5......................................................................     2%
        Year 6......................................................................     1%
        Year 7 and following........................................................     0%
    Redemption Fee..................................................................    None
    Exchange Fee....................................................................    $5.00
</TABLE>
   
<TABLE>
<CAPTION>
                                                                                        GROWTH         HIGH         HIGH
                                                                                        COMMON         GRADE        YIELD
                                                                                         STOCK         BOND         BOND
                                                                                     -------------  -----------  -----------
<S>                                                                                  <C>            <C>          <C>
ANNUAL FUND OPERATING EXPENSES
 (AS A PERCENTAGE OF NET ASSETS)
    Management Fees................................................................        0.50%         0.40%        0.55%
    12b-1 Fees.....................................................................        0.50          0.50         0.50
    Other Expenses.................................................................        0.62          1.09         0.95
                                                                                         ---           ---          ---
        Total Fund Operating Expenses..............................................        1.62%         1.99%        2.00%
                                                                                         ---           ---          ---
                                                                                         ---           ---          ---

<CAPTION>

                                                                                                       MONEY        BLUE
                                                                                        MANAGED       MARKET        CHIP
                                                                                     -------------  -----------  -----------
<S>                                                                                  <C>            <C>          <C>
ANNUAL FUND OPERATING EXPENSES
 (AS A PERCENTAGE OF NET ASSETS)
    Management Fees................................................................        0.60%         0.40%        0.25%
    12b-1 Fees.....................................................................        0.50          0.50         0.50
    Other Expenses.................................................................        0.84          1.10         1.03
                                                                                         ---           ---          ---
        Total Fund Operating Expenses..............................................        1.94%         2.00%        1.78%
                                                                                         ---           ---          ---
                                                                                         ---           ---          ---
</TABLE>
    

                                       3
<PAGE>
EXAMPLE

    You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period:

   
<TABLE>
<CAPTION>
PORTFOLIO                                                                     1 YEAR       3 YEARS      5 YEARS     10 YEARS
- --------------------------------------------------------------------------  -----------  -----------  -----------  -----------
<S>                                                                         <C>          <C>          <C>          <C>
Growth Common Stock.......................................................   $      66    $      91    $     108    $     192
High Grade Bond...........................................................   $      70    $     102    $     127    $     232
High Yield Bond...........................................................   $      70    $     103    $     128    $     233
Managed...................................................................   $      70    $     101    $     125    $     226
Money Market..............................................................   $      70    $     103    $     128    $     233
Blue Chip.................................................................   $      68    $      96    $     116    $     209
</TABLE>
    

    You would pay  the following expenses  on the same  investment, assuming  no
redemption.

   
<TABLE>
<CAPTION>
PORTFOLIO                                                                     1 YEAR       3 YEARS      5 YEARS     10 YEARS
- --------------------------------------------------------------------------  -----------  -----------  -----------  -----------
<S>                                                                         <C>          <C>          <C>          <C>
Growth Common Stock.......................................................   $      16    $      51    $      88    $     192
High Grade Bond...........................................................   $      20    $      62    $     107    $     232
High Yield Bond...........................................................   $      20    $      63    $     108    $     233
Managed...................................................................   $      20    $      61    $     105    $     226
Money Market..............................................................   $      20    $      63    $     108    $     233
Blue Chip.................................................................   $      18    $      56    $      96    $     209
</TABLE>
    

    The  purpose of the preceding table  is to assist investors in understanding
the various costs and expenses that an  investor in the Fund will bear  directly
or  indirectly. Long-term shareholders may pay  more in total sales charges than
the economic equivalent of the maximum front-end sales charges permitted by  the
National  Association  of Securities  Dealers, Inc.  The  example should  not be
considered to be a  representation of past or  future expenses. Actual  expenses
may  be greater or lesser than those shown. The example assumes a 5% annual rate
of return pursuant to the requirements of the Securities and Exchange Commission
and is not intended to  be representative of past  or future performance of  the
Portfolios.

                                       4
<PAGE>
- --------------------------------------------------------------------------------
                                                                       CONDENSED
                                                                       FINANCIAL
                                                                     INFORMATION
                                                                 ---------------

    The  condensed financial information  set forth below  has been derived from
the financial statements and financial highlights  of the Fund, which have  been
audited  by independent auditors. This table  should be read in conjunction with
the financial statements  and notes  thereto included  in the  Annual Report  to
Shareholders,  which financial statements  and notes are  incorporated herein by
reference.

    Selected data for a share of capital stock outstanding throughout each year:

GROWTH COMMON STOCK PORTFOLIO

   
<TABLE>
<CAPTION>
                                                             YEAR ENDED JULY 31,
                           ----------------------------------------------------------------------------------------
                            1995     1994     1993     1992     1991     1990     1989     1988     1987     1986
                           -------  -------  -------  -------  -------  -------  -------  -------  -------  -------
<S>                        <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>
Net asset value,
  beginning of year......  $  13.07 $  15.13 $  12.48 $  11.64 $  11.02 $  11.01 $  10.48 $  15.91 $  15.56 $  15.10
  Income From Investment
   Operations
    Net investment
     income..............      0.43     0.60     0.51     0.48     0.58     0.58     0.57     0.32     0.30     0.35
    Net gains or losses
     on securities (both
     realized and
     unrealized).........      0.65    (0.49)     2.75     0.93     0.65     0.05     0.57    (1.56)     2.18     1.36
                           -------  -------  -------  -------  -------  -------  -------  -------  -------  -------
  Total from investment
   operations............      1.08     0.11     3.26     1.41     1.23     0.63     1.14    (1.24)     2.48     1.71
  Less Distributions
    Dividends (from net
     investment
     income).............     (0.39)    (0.60)    (0.48)    (0.57)    (0.61)    (0.62)    (0.61)    (0.96)    (0.40)    (0.40)
    Distributions (from
     capital gains)......     (0.72)    (1.57)    (0.13)                                     (3.23)    (1.73)    (0.85)
    Distributions in
     excess of net
     realized gains......
                           -------  -------  -------  -------  -------  -------  -------  -------  -------  -------
  Total distributions....     (1.11)    (2.17)    (0.61)    (0.57)    (0.61)    (0.62)    (0.61)    (4.19)    (2.13)    (1.25)
                           -------  -------  -------  -------  -------  -------  -------  -------  -------  -------
Net asset value, end of
  year...................  $  13.04 $  13.07 $  15.13 $  12.48 $  11.64 $  11.02 $  11.01 $  10.48 $  15.91 $  15.56
                           -------  -------  -------  -------  -------  -------  -------  -------  -------  -------
                           -------  -------  -------  -------  -------  -------  -------  -------  -------  -------
Total Return:
  Total investment return
   based on net asset
   value (1).............      9.36%     0.34%    27.25%    12.51%    11.67%     5.90%    11.49%   (11.70%)    17.67%    12.57%
Ratios/Supplemental Data:
  Net assets, end of year
   ($000's omitted)......   70,947   64,315   51,732   39,418   36,193   35,285   37,435   48,060   57,279   42,932
  Ratio of net expenses
   to average net
   assets................     1.62%    1.60%    1.61%    1.69%    1.59%    1.62%    1.56%    1.39%    1.04%    0.99%
  Ratio of net income to
   average net assets....     3.43%    4.05%    3.80%    3.99%    5.19%    5.31%    5.34%    2.98%    2.02%    2.32%
  Portfolio turnover
   rate..................       85%      93%      92%      87%      59%     109%     172%     305%     262%      30%
</TABLE>
    

- ---------
   
Note: Per share amounts have been calculated  on the basis of monthly per  share
      amounts  (using average  monthly outstanding  shares) accumulated  for the
      period.
    

(1) Total investment return is calculated assuming an initial investment made at
    the net  asset value  at the  beginning  of the  year, reinvestment  of  all
    dividends  and  distributions  at  net  asset  value  during  the  year, and
    redemption on the last day of the year. Contingent deferred sales charge  is
    not reflected in the calculation of total investment return.

                                       5
<PAGE>
HIGH GRADE BOND PORTFOLIO

   
<TABLE>
<CAPTION>
                                                     YEAR ENDED JULY 31 (EXCEPT AS INDICATED),
                                     -------------------------------------------------------------------------
                                      1995     1994     1993     1992     1991     1990     1989     1988(1)
                                     -------  -------  -------  -------  -------  -------  -------  ----------
<S>                                  <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>
Net asset value, beginning of
 year..............................  $  10.13 $  10.69 $  10.68 $  10.15 $   9.95 $  10.11 $   9.85 $   10.00
  Income From Investment Operations
    Net investment income..........      0.63     0.64     0.70     0.73     0.78     0.75     0.74      0.45
    Net gains or losses on
     securities (both realized and
     unrealized)...................      0.16    (0.40)     0.13     0.62     0.20    (0.16)     0.26     (0.15)
                                     -------  -------  -------  -------  -------  -------  -------  ----------
  Total from investment
   operations......................      0.79     0.24     0.83     1.35     0.98     0.59     1.00      0.30
  Less Distributions
    Dividends (from net investment
     income).......................     (0.63)    (0.64)    (0.70)    (0.73)    (0.78)    (0.75)    (0.74)     (0.45)
    Distributions (from capital
     gains)........................              (0.16)    (0.12)    (0.09)
    Distributions in excess of net
     realized gains................     (0.03)
                                     -------  -------  -------  -------  -------  -------  -------  ----------
  Total distributions..............     (0.66)    (0.80)    (0.82)    (0.82)    (0.78)    (0.75)    (0.74)     (0.45)
                                     -------  -------  -------  -------  -------  -------  -------  ----------
Net asset value, end of year.......  $  10.26 $  10.13 $  10.69 $  10.68 $  10.15 $   9.95 $  10.11 $    9.85
                                     -------  -------  -------  -------  -------  -------  -------  ----------
                                     -------  -------  -------  -------  -------  -------  -------  ----------
Total Return:
  Total investment return based on
   net asset value (2).............      8.23%     1.77%     8.10%    13.71%    10.29%     6.15%    10.68%      4.48%(3)
Ratios/Supplemental Data:
  Net assets, end of year ($000's
   omitted)........................    8,345    7,596    8,047    7,676    4,276    3,635    3,317   2,968
  Ratio of net expenses to average
   net assets......................      1.99%     1.90%     1.79%     1.88%     1.62%     1.68%     1.84%      1.18%
  Ratio of net income to average
   net assets......................      6.29%     6.12%     6.59%     6.94%     7.78%     7.57%     7.57%      4.41%
  Portfolio turnover rate..........       18%      42%      54%      45%      40%      66%      27%     19%
</TABLE>
    

- ---------
Note: Per  share amounts have been calculated on  the basis of monthly per share
      amounts (using  average monthly  outstanding shares)  accumulated for  the
      period.

(1)  Period from December  1, 1987, date operations  commenced, through July 31,
    1988.

(2) Total investment return is calculated assuming an initial investment made at
    the net asset  value at  the beginning of  the period,  reinvestment of  all
    dividends  and  distributions  at net  asset  value during  the  period, and
    redemption on the last day of  the period. Contingent deferred sales  charge
    is not reflected in the calculation of total investment return.

(3) Computed on an annualized basis.

                                       6
<PAGE>
HIGH YIELD BOND PORTFOLIO

   
<TABLE>
<CAPTION>
                                                      YEAR ENDED JULY 31 (EXCEPT AS INDICATED),
                                     ---------------------------------------------------------------------------
                                       1995      1994     1993     1992     1991     1990     1989     1988(1)
                                     --------  --------  -------  -------  -------  -------  -------  ----------
<S>                                  <C>       <C>       <C>      <C>      <C>      <C>      <C>      <C>
Net asset value, beginning of
 year..............................  $   10.00 $   10.76 $  10.47 $   9.82 $   9.62 $   9.95 $   9.86 $   10.00
  Income From Investment Operations
    Net investment income..........       0.78      0.81     0.83     0.90     0.95     0.98     0.93      0.45
    Net gains or losses on
     securities (both realized and
     unrealized)...................       0.13     (0.60)     0.46     0.65     0.19    (0.33)     0.09     (0.14)
                                     --------  --------  -------  -------  -------  -------  -------  ----------
  Total from investment
   operations......................       0.91      0.21     1.29     1.55     1.14     0.65     1.02      0.31
  Less Distributions
    Dividends (from net investment
     income).......................      (0.78)     (0.81)    (0.83)    (0.90)    (0.94)    (0.98)    (0.93)     (0.45)
    Distributions (from capital
     gains)........................      (0.09)     (0.16)    (0.17)
    Distributions in excess of net
     realized gains................      (0.01)
                                     --------  --------  -------  -------  -------  -------  -------  ----------
  Total distributions..............      (0.88)     (0.97)    (1.00)    (0.90)    (0.94)    (0.98)    (0.93)     (0.45)
                                     --------  --------  -------  -------  -------  -------  -------  ----------
Net asset value, end of year.......  $   10.03 $   10.00 $  10.76 $  10.47 $   9.82 $   9.62 $   9.95 $    9.86
                                     --------  --------  -------  -------  -------  -------  -------  ----------
                                     --------  --------  -------  -------  -------  -------  -------  ----------
Total Return:
  Total investment return based on
   net asset value (2).............       9.71%      1.88%    12.95%    16.44%    12.83%     6.92%    10.82%      4.71%(3)
Ratios/Supplemental Data:
  Net assets, end of year ($000's
   omitted)........................     6,691     6,425    5,758    4,835    4,029    3,399    3,013   2,648
  Ratio of net expenses to average
   net assets......................       2.00%      2.00%     2.00%     1.98%     1.77%     1.83%     2.01%      1.32%
  Ratio of net income to average
   net assets......................       7.83%      7.68%     7.84%     8.79%     9.98%    10.00%     9.41%      4.47%
  Portfolio turnover rate..........        23%       26%      56%      56%      78%      89%      70%     26%
Information assuming no voluntary
 reimbursment by FBL Investment
 Advisory Services, Inc. of excess
 operating expenses:
  Per share net investment
   income..........................  $    0.75 $    0.79 $   0.82
  Ratio of expenses to average net
   assets..........................       2.29%      2.17%     2.05%
  Amount reimbursed................  $ 18,810  $ 10,754  $ 3,147
</TABLE>
    

- ---------
Note: Per  share amounts have been calculated on  the basis of monthly per share
      amounts (using  average monthly  outstanding shares)  accumulated for  the
      period.

(1)  Period from December  1, 1987, date operations  commenced, through July 31,
    1988.

(2) Total investment return is calculated assuming an initial investment made at
    the net asset  value at  the beginning of  the period,  reinvestment of  all
    dividends  and  distributions  at net  asset  value during  the  period, and
    redemption on the last day of  the period. Contingent deferred sales  charge
    is not reflected in the calculation of total investment return.

   
(3) Computed on an annualized basis.
    

                                       7
<PAGE>
MANAGED PORTFOLIO

   
<TABLE>
<CAPTION>
                                                                 YEAR ENDED JULY 31 (EXCEPT AS INDICATED),
                                               -----------------------------------------------------------------------------
                                                1995      1994      1993      1992      1991      1990      1989     1988(1)
                                               ------    ------    ------    ------    ------    ------    ------    -------
<S>                                            <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
Net asset value, beginning of year...........  $11.62    $12.51    $10.77    $ 9.95    $ 9.92    $ 9.93    $ 9.93    $10.00
  Income From Investment Operations
    Net investment income....................    0.56      0.55      0.54      0.61      0.66      0.68      0.65      0.42
    Net gains or losses on securities (both
     realized and unrealized)................    0.47     (0.62)     1.87      0.82      0.03     (0.01)              (0.10)
                                               ------    ------    ------    ------    ------    ------    ------    -------
  Total from investment operations...........    1.03     (0.07)     2.41      1.43      0.69      0.67      0.65      0.32
  Less Distributions
    Dividends (from net investment income)...   (0.56)    (0.50)    (0.52)    (0.61)    (0.66)    (0.68)    (0.65)    (0.39)
    Distributions (from capital gains).......   (0.14)    (0.32)    (0.15)
    Distributions in excess of net realized
     gains...................................   (0.10)
                                               ------    ------    ------    ------    ------    ------    ------    -------
  Total distributions........................   (0.80)    (0.82)    (0.67)    (0.61)    (0.66)    (0.68)    (0.65)    (0.39)
                                               ------    ------    ------    ------    ------    ------    ------    -------
Net asset value, end of year.................  $11.85    $11.62    $12.51    $10.77    $ 9.95    $ 9.92    $ 9.93    $ 9.93
                                               ------    ------    ------    ------    ------    ------    ------    -------
                                               ------    ------    ------    ------    ------    ------    ------    -------
Total Return:
  Total investment return based on net asset
   value (2).................................    9.40%    (0.61)%   23.02%    14.79%     7.05%     6.96%     4.88%     4.81%(3)
Ratios/Supplemental Data:
  Net assets, end of year ($000's omitted)...  21,105    19,100    8,257     3,887     3,935     3,594     3,399     3,301
  Ratio of net expenses to average net
   assets....................................    1.94%     1.96%     1.96%     2.07%     1.84%     1.84%     2.05%     1.29%
  Ratio of net income to average net
   assets....................................    4.86%     4.42%     4.54%     5.93%     6.51%     6.83%     6.42%     4.05%
  Portfolio turnover rate....................   69   %    29   %    52   %    77   %    31   %    73   %   119   %    53   %
Information assuming no voluntary
 reimbursment by FBL Investment Advisory
 Services, Inc. of excess operating expenses:
  Per share net investment income............                      $ 0.53
  Ratio of expenses to average net assets....                        2.02%
  Amount reimbursed..........................                      $3,497
</TABLE>
    

- ---------
Note: Per  share amounts have been calculated on  the basis of monthly per share
      amounts (using  average monthly  outstanding shares)  accumulated for  the
      period.

(1)  Period from December  1, 1987, date operations  commenced, through July 31,
    1988.

(2) Total investment return is calculated assuming an initial investment made at
    the net asset  value at  the beginning of  the period,  reinvestment of  all
    dividends  and  distributions  at net  asset  value during  the  period, and
    redemption on the last day of  the period. Contingent deferred sales  charge
    is not reflected in the calculation of total investment return.

   
(3) Computed on an annualized basis.
    

                                       8
<PAGE>
MONEY MARKET PORTFOLIO

   
<TABLE>
<CAPTION>
                                                          YEAR ENDED JULY 31 (EXCEPT AS INDICATED),
                                               ---------------------------------------------------------------
                                                1995    1994    1993    1992    1991    1990    1989   1988(1)
                                               ------  ------  ------  ------  ------  ------  ------  -------
<S>                                            <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Net asset value, beginning of year...........  $ 1.00  $ 1.00  $ 1.00  $ 1.00  $ 1.00  $ 1.00  $ 1.00  $ 1.00
  Income From Investment Operations
    Net investment income....................    0.04    0.02    0.01    0.03    0.05    0.07    0.07    0.03
    Net gains or losses on securities (both
     realized and unrealized)................
                                               ------  ------  ------  ------  ------  ------  ------  -------
  Total from investment operations...........   (0.04)   0.02    0.01    0.03    0.05    0.07    0.07    0.03
  Less Distributions
    Dividends (from net investment income)...   (0.04)  (0.02)  (0.01)  (0.03)  (0.05)  (0.07)  (0.07)  (0.03)
    Distributions (from capital gains).......
    Distributions in excess of net realized
     gains...................................
                                               ------  ------  ------  ------  ------  ------  ------  -------
  Total distributions........................   (0.04)  (0.02)  (0.01)  (0.03)  (0.05)  (0.07)  (0.07)  (0.03)
                                               ------  ------  ------  ------  ------  ------  ------  -------
Net asset value, end of year.................  $ 1.00  $ 1.00  $ 1.00  $ 1.00  $ 1.00  $ 1.00  $ 1.00  $ 1.00
                                               ------  ------  ------  ------  ------  ------  ------  -------
                                               ------  ------  ------  ------  ------  ------  ------  -------
Total Return:
  Total investment return based on net asset
   value (2).................................    3.60%   1.47%   1.33%   2.82%   5.52%   6.93%   7.25%   4.93%(3)
Ratios/Supplemental Data:
  Net assets, end of year ($000's omitted)...  2,439   2,627   2,555   2,861   3,672   3,604   2,925   2,478
  Ratio of net expenses to average net
   assets....................................    2.00%   1.93%   1.94%   2.00%   1.70%   1.65%   1.88%   1.79%(3)
  Ratio of net income to average net
   assets....................................    3.51%   1.45%   1.33%   2.83%   5.42%   6.65%   7.08%   4.74%(3)
  Portfolio turnover rate....................    0   %   0   %   0   %   0   %   0   %   0   %   0   %   0   %
Information assuming no voluntary
 reimbursement by FBL Investment Advisory
 Services, Inc. of excess operating expenses:
  Per share net investment income............  $ 0.03
  Ratio of expenses to average net assets....    2.20%
  Amount reimbursed..........................  $4,948
</TABLE>
    

- ---------
Note: Per  share amounts have been calculated on  the basis of monthly per share
      amounts (using  average monthly  outstanding shares)  accumulated for  the
      period.

(1)  Period from December  1, 1987, date operations  commenced, through July 31,
    1988.

(2) Total investment return is calculated assuming an initial investment made at
    the net asset  value at  the beginning of  the period,  reinvestment of  all
    dividends  and  distributions  at net  asset  value during  the  period, and
    redemption on the last day of  the period. Contingent deferred sales  charge
    is not reflected in the calculation of total investment return.

(3) Computed on an annualized basis.

                                       9
<PAGE>
BLUE CHIP PORTFOLIO

   
<TABLE>
<CAPTION>
                                                          YEAR ENDED JULY 31 (EXCEPT AS INDICATED),
                                               ---------------------------------------------------------------
                                                1995    1994    1993    1992    1991    1990    1989   1988(1)
                                               ------  ------  ------  ------  ------  ------  ------  -------
<S>                                            <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Net asset value, beginning of year...........  $18.75  $17.69  $16.78  $15.38  $15.61  $14.56  $11.57  $10.00
  Income From Investment Operations
    Net investment income....................    0.19    0.14    0.13    0.17    0.30    0.32    0.29    0.09(4)
    Net gains or losses on securities (both
     realized and unrealized)................    4.05    1.06    0.90    1.47    0.77    1.02    2.90    1.48
                                               ------  ------  ------  ------  ------  ------  ------  -------
  Total from investment operations...........    4.24    1.20    1.03    1.64    1.07    1.34    3.19    1.57
  Less Distributions
    Dividends (from net investment income)...   (0.14)  (0.14)  (0.12)  (0.24)  (0.31)  (0.28)  (0.20)
    Distributions (from capital gains).......                                   (0.99)  (0.01)
    Distributions in excess of net realized
     gains...................................
                                               ------  ------  ------  ------  ------  ------  ------  -------
  Total distributions........................   (0.14)  (0.14)  (0.12)  (0.24)  (1.30)  (0.29)  (0.20)   0.00
                                               ------  ------  ------  ------  ------  ------  ------  -------
Net asset value, end of year.................  $22.85  $18.75  $17.69  $16.78  $15.38  $15.61  $14.56  $11.57
                                               ------  ------  ------  ------  ------  ------  ------  -------
                                               ------  ------  ------  ------  ------  ------  ------  -------
Total Return:
  Total investment return based on net asset
   value (2).................................   22.77%   6.75%   6.21%  10.77%   8.36%   9.26%  27.94%  24.45%(3)
Ratios/Supplemental Data:
  Net assets, end of year ($000's omitted)...  9,657   6,745   5,415   4,405   3,883   3,166   2,001   1,358
  Ratio of net expenses to average net
   assets....................................  1.78  % 1.83  % 1.90  % 1.92  % 1.63  % 1.74  % 2.02  % 1.45  %
  Ratio of net income to average net
   assets....................................    0.92%   0.75%   0.73%   1.09%   2.06%   2.14%   2.25%   0.73%
  Portfolio turnover rate....................    1   %   1   %   0   %   0   %   5   %  37   %   0   %   4   %
</TABLE>
    

- ------------
Note: Per  share amounts have been calculated on  the basis of monthly per share
      amounts (using  average monthly  outstanding shares)  accumulated for  the
      period.

(1)  Period from December  1, 1987, date operations  commenced, through July 31,
    1988.

(2) Total investment return is calculated assuming an initial investment made at
    the net asset  value at  the beginning of  the period,  reinvestment of  all
    dividends  and  distributions  at net  asset  value during  the  period, and
    redemption on the last day of  the period. Contingent deferred sales  charge
    is not reflected in the calculation of total investment return.

(3) Computed on an annualized basis.

(4) FBL Investment Advisory Services Inc. reimbursed $548 under the terms of its
    investment advisory and management services agreement.

                                       10
<PAGE>
- --------------------------------------------------------------------------------
                                                           INVESTMENT OBJECTIVES
                                                                    AND POLICIES
                                                               OF THE PORTFOLIOS
                                                    ----------------------------

    Each  Portfolio  of the  Fund has  distinct  investment objectives  which it
pursues through separate investment policies as described below. There can be no
assurance that the objectives of any Portfolio will be achieved. The differences
in objectives and policies  among the Portfolios can  be expected to affect  the
return  of each Portfolio and  the degree of market  and financial risk to which
each Portfolio is subject.

    The  Statement  of  Additional  Information  contains  specific   investment
restrictions   that  govern  the  Portfolios'  investments.  Those  restrictions
identified as fundamental  policies, as  well as the  investment objectives  and
investment  policies described below in the  first paragraph for each Portfolio,
are fundamental policies and may not be  changed without a majority vote of  the
outstanding shares of the affected Portfolio. See "General
Information--Shareholder  Voting  Rights."  All  other  investment  policies and
practices described  in  this Prospectus  and  in the  Statement  of  Additional
Information  are not fundamental  and may be  changed by the  Board of Directors
without approval of the  shareholders. Each Portfolio may  engage in certain  of
the  portfolio  strategies described  in this  Prospectus under  "Description of
Certain Investment Techniques" and in  the Statement of Additional  Information.
"Appendix  C--Description of  Corporate Bond  Ratings" describes  the ratings of
Moody's Investors Service,  Inc. ("Moody's") and  Standard & Poor's  Corporation
("Standard & Poor's") that are referred to herein.

    The  portfolio  turnover  rates  for  the  Portfolios  are  set  forth under
"Condensed Financial Information." Portfolio turnover is calculated by  dividing
the  lesser of purchases  or sales of  a Portfolio's securities  during a fiscal
year by the  average monthly  value of  the Portfolio's  securities during  such
fiscal  year. In determining  the portfolio turnover  rate, all securities whose
maturities or expiration dates at the time of acquisition were one year or  less
are  excluded. Turnover rates  may be affected  by factors such  as purchase and
redemption requirements and market volatility, and may vary greatly from time to
time. Frequency  of portfolio  turnover will  not be  a limiting  factor if  the
investment  adviser deems it desirable to purchase or sell securities. Increased
portfolio turnover may  result in greater  brokerage commissions and  consequent
expense  to the Portfolio. If any Portfolio were  to derive more than 30% of its
gross income from the sale of securities  held less than three months, it  might
fail  to  qualify  under the  tax  laws  as a  regulated  investment  company in
particular years and consequently would lose certain beneficial tax treatment of
its income;  however,  each  Portfolio  intends to  continue  to  qualify  as  a
regulated investment company each year. See "Dividends and Taxes."

    Following  is a description of the  investment objectives and certain of the
investment practices of each of the Fund's Portfolios. For a further description
of the  investment practices  of  the various  Portfolios, see  "Description  of
Certain Investment Techniques."

GROWTH COMMON STOCK PORTFOLIO

    The  primary investment  objective of the  Growth Common  Stock Portfolio is
long-term capital appreciation.  Current income  is a  secondary objective.  The
Portfolio  pursues its objectives by investing primarily in growth common stocks
and securities convertible or exchangeable into growth common stocks,  including
warrants and rights.

                                       11
<PAGE>
    A  growth common stock is one which, in the opinion of the Fund's investment
adviser, appears to possess above-average  potential for appreciation in  market
value,  usually as a  result of the issuer's  relatively favorable prospects for
improvement in earnings.  Such securities generally  include those of  companies
with  established records  of growth  in sales  or earnings,  and companies with
promising new products, services or processes.

    The Portfolio may  also invest  in companies in  cyclical industries  during
periods when the common stock of such companies appears to the Fund's investment
adviser  to have good potential for capital appreciation. The Portfolio may also
invest up to 35%  of its total  assets in preferred  stocks and debt  securities
including   investment-grade  commercial  paper,  corporate  bonds,  debentures,
obligations of  banks  and  savings institutions,  U.S.  Government  securities,
government agency securities and repurchase agreements.

    The  investment adviser's strategy for the  Growth Common Stock Portfolio is
based on a value-oriented analysis of common stocks where it evaluates price  to
book  value, price to earnings, debt to  total capital ratio, price to cash flow
and other similar measures relative to  historic standards. When in the  opinion
of the investment adviser, the equity market reaches periods of overvaluation by
such  measures,  or,  when  warranted by  other  prevailing  market  or economic
conditions, the Portfolio for temporary defensive purposes may invest up to 100%
of  its  assets  in  other  types  of  securities,  including   investment-grade
commercial  paper, corporate bonds, debentures, preferred stocks, obligations of
banks and savings  institutions, U.S. Government  securities, government  agency
securities   and  repurchase  agreements,  or  it  may  retain  funds  in  cash.
"Investment-grade commercial paper" is commercial  paper rated A-2 or better  by
Standard & Poor's or Prime-2 or better by Moody's.

    Through  careful  selection  of  individual  securities,  diversification of
investments by industry  and type of  security and constant  supervision of  the
investment  portfolio, the investment adviser strives to reduce risk and thereby
conserve principal. However, the Portfolio's  investments are subject to  market
fluctuations and the risks inherent in all securities.

HIGH GRADE BOND PORTFOLIO

    The  investment objective of the High Grade  Bond Portfolio is to provide as
high a level of current income as  is consistent with investment in a  portfolio
of  debt  securities deemed  to  be of  high  quality by  the  Fund's investment
adviser. The  Portfolio pursues  its objective  by investing  primarily in  debt
securities  rated AAA, AA or A  by Standard & Poor's or  Aaa, Aa or A by Moody's
and in U.S. Government securities and government agency securities.

    From time to time, up to 20% of the Portfolio's total assets may be invested
in unrated debt securities or debt securities rated lower than the three highest
grades of Standard  & Poor's or  Moody's as described  above, or in  convertible
debt  securities,  convertible  preferred stocks,  or  non-convertible preferred
stocks rated within  the three highest  grades of Standard  & Poor's or  Moody's
applicable  to such securities. To the extent  that the Portfolio does invest in
debt securities that are rated lower than A by Moody's or Standard & Poor's  (or
are unrated but equivalent in quality to such securities), the Fund's investment
portfolio  will be  subject to  relatively greater  risk of  loss of  income and
principal as discussed under "Principal Risk Factors--Special
Considerations--High Yield Bonds." Securities rated Baa or lower by Moody's  and
BBB  or lower by  Standard & Poor's  are considered by  those rating agencies to
have varying degrees of speculative characteristics. Consequently, although they
can be expected  to provide  higher yields, such  securities may  be subject  to
greater  market  fluctuations and  risk  of loss  of  income and  principal than
lower-yielding, higher-rated  fixed-income securities.  It is  intended that  at
least  65%  of the  Portfolio's total  assets  will be  invested in  medium- and
long-term debt securities that are rated A or better or that are unrated but  of
equivalent quality.

                                       12
<PAGE>
    The  Portfolio will  not directly  purchase common  stocks. However,  it may
retain up to 10% of the value of its assets in common stocks acquired either  by
conversion  of debt securities or  by the exercise of  warrants attached to debt
securities.

    When warranted,  in the  opinion of  the investment  adviser, by  prevailing
market  or economic conditions,  the Portfolio for  temporary defensive purposes
may invest up  to 100% of  its assets  in other types  of securities,  including
investment-grade   commercial   paper,   obligations   of   banks   and  savings
institutions, U.S.  Government  securities,  government  agency  securities  and
repurchase agreements, or it may retain funds in cash.

    Although  in the opinion of the Fund's  investment adviser, the risk of loss
of principal should be minimized by the quality of the investments in which  the
Portfolio  will invest primarily, the long maturities that typically provide the
best yields may  subject the  Portfolio to substantial  price changes  resulting
from market yield fluctuations. The market price of fixed-income securities such
as  those purchased by the  Portfolio is affected by  changes in interest rates,
generally. The market value  of fixed-income securities  generally will fall  as
interest rates rise, and rise as interest rates fall.

HIGH YIELD BOND PORTFOLIO

    The  primary investment  objective of  the High  Yield Bond  Portfolio is to
obtain as high a level of current  income as is consistent with investment in  a
portfolio   of  fixed-income  securities  rated   in  the  lower  categories  of
established rating  services.  As a  secondary  objective, the  Portfolio  seeks
capital  appreciation when consistent with  its primary objective. The Portfolio
pursues  its  investment  objectives  by  investing  primarily  in  fixed-income
securities, including corporate bonds and notes, convertible debt securities and
preferred  stocks that are  rated in the lower  categories of established rating
services (Baa or lower by Moody's and BBB or lower by Standard & Poor's), or  in
unrated  securities of comparable quality. Such securities are commonly known as
"junk bonds."

   
    Securities rated Ba or lower by Moody's and BB or lower by Standard & Poor's
are considered by those rating services  to have varying degrees of  speculative
characteristics.  Consequently, although they can  be expected to provide higher
yields, such securities may be subject  to greater market fluctuations and  risk
of  loss of income and  principal than lower-yielding, higher-rated fixed-income
securities. See  "Principal  Risk  Factors--Special  Considerations--High  Yield
Bonds"  for discussion of various risk factors relating to high yield bonds. The
investment adviser will not  rely solely on the  ratings assigned by the  rating
services,  and the Portfolio may invest, without limit, in unrated securities if
such securities offer, in  the opinion of the  investment adviser, a  relatively
high  yield without undue risk. Although  the Portfolio will invest primarily in
lower-rated securities, it will  not invest in securities  in the lowest  rating
categories  (Ca or  lower for  Moody's and  CC or  lower for  Standard & Poor's)
unless the  investment adviser  believes  that the  financial condition  of  the
issuer  or the protection afforded to the particular securities is stronger than
would otherwise be indicated by such low ratings.
    

    The Portfolio anticipates that under  normal circumstances more than 80%  of
its  assets will be  invested in fixed-income  securities, including convertible
and non-convertible debt securities and preferred  stock, and that at least  65%
of  its assets will be invested in  debt securities. The remaining assets of the
Portfolio may be held in cash or investment-grade commercial paper,  obligations
of banks and savings institutions, U.S. Government securities, government agency
securities and repurchase agreements. The Portfolio does not intend to invest in
common  stocks, rights or  other equity securities,  but it may  acquire or hold
such securities (if consistent  with its objectives) when  they are acquired  in
unit  offerings with fixed-income securities or  in connection with an actual or
proposed conversion or exchange of fixed-income securities.

                                       13
<PAGE>
    When  changing  economic  conditions  and  other  factors  cause  the  yield
difference  between  lower-rated  and  higher-rated  securities  to  narrow, the
Portfolio  may  purchase  higher-rated  securities  if  the  investment  adviser
believes  that the  risk of  loss of income  and principal  may be substantially
reduced with  only a  relatively small  reduction in  yield. In  addition,  when
warranted,  in the  opinion of the  investment adviser, by  prevailing market or
economic conditions, the Portfolio for  temporary defensive purposes may  invest
up  to 100% of  its assets in investment-grade  commercial paper, obligations of
banks and savings  institutions, U.S. Government  securities, government  agency
securities  and repurchase agreements, or it may retain funds in cash. The yield
on such  securities may  be lower  than the  yield on  lower-rated  fixed-income
securities.

    Because  an investment  in high-yield securities  entails relatively greater
risk of loss of  income and principal,  an investment in  the Portfolio may  not
constitute  a complete  investment program  and may  not be  appropriate for all
investors.

MANAGED PORTFOLIO

    The investment objective  of the Managed  Portfolio is to  seek the  highest
total  investment  return  of  income and  capital  appreciation.  The Portfolio
pursues its objective through  a fully managed  investment policy consisting  of
investment  in the following  three market sectors: (i)  common stocks and other
equity securities of  the type in  which the Growth  Common Stock Portfolio  may
invest;  (ii) high quality debt  securities and preferred stocks  of the type in
which the  High  Grade  Bond  Portfolio  may  invest;  and  (iii)  high  quality
short-term  money  market instruments  of  the type  in  which the  Money Market
Portfolio may invest.

    The Portfolio's investment  policies for  the stock, debt  and money  market
sectors  are  substantially  identical  to  those  of  the  Growth  Common Stock
Portfolio, High Grade Bond Portfolio  and Money Market Portfolio,  respectively.
The  Managed Portfolio will,  from time to  time, adjust the  mix of investments
among the three market sectors to  capitalize on perceived variations in  return
potential produced by the interaction of changing financial markets and economic
conditions.  There are no  restrictions as to  the proportion of  one or another
type of security which the Portfolio  may hold. Accordingly, the Portfolio  may,
at  any  given time,  be substantially  invested in  equity securities,  in high
quality debt securities, or in high quality short-term money market instruments.
Major changes in the  investment mix may  occur over several  years or during  a
single year or shorter period depending upon market and economic conditions. The
fact  that the investment  mix may be adjusted  from time to  time may result in
high portfolio  turnover  and,  consequently,  high  brokerage  charges  to  the
Portfolio.

    Achievement of the Portfolio's objective depends on the investment adviser's
ability  to assess the effect of economic and market trends on different sectors
of the market.

MONEY MARKET PORTFOLIO

    The investment objective of the Money Market Portfolio is to obtain  maximum
current  income  consistent  with  liquidity  and  stability  of  principal. The
Portfolio pursues its  objective by  investing in high  quality short-term  debt
obligations  denominated  in U.S.  dollars that  are  deemed to  present minimal
credit risk.

    Money market  instruments  which the  Money  Market Portfolio  may  purchase
include U.S. Government securities, government agency securities, obligations of
banks  and  savings institutions,  commercial  paper, short-term  corporate debt
securities and  repurchase  agreements.  Appendix A  contains  a  more  detailed
description  of the money market instruments  in which the Portfolio may invest.
The Portfolio's investments will  be limited to  money market instruments  which
mature  in  thirteen months  or less  from  the date  of purchase;  however, the
Portfolio   may    invest    in    repurchase   agreements    in    which    the

                                       14
<PAGE>
underlying  securities have maturities  in excess of  one year from  the date of
purchase. In addition, the Portfolio  limits its investments to securities  that
meet  the  quality  and  diversification requirements  of  Rule  2a-7  under the
Investment Company Act of 1940 (the "Investment Company Act"). See Appendix A.

    The dollar-weighted average  maturity of  the Portfolio will  not exceed  90
days.  The Portfolio seeks to  maintain a constant net  asset value of $1.00 per
share, and will use the amortized cost method of securities valuation.  However,
there  can be no guarantee that the Portfolio  will be able to maintain a stable
net asset value of $1.00 per  share. See "Net Asset Value Information."  Because
of  the  short-term nature  of the  investments of  this Portfolio,  a portfolio
turnover rate is not applicable.

BLUE CHIP PORTFOLIO

    The investment objective of the Blue Chip Portfolio is growth of capital and
income. The Portfolio  pursues its  objective by investing  primarily in  common
stocks of well-capitalized, established companies.

    In   pursuing  its  objective,  the  Portfolio  will  invest  in  stocks  of
approximately 40 large, well-known companies that the Fund's investment  adviser
believes  to  collectively  comprise  a  representative  cross-section  of major
industries. Companies of this type are commonly referred to as "blue chip." Blue
chip companies  are generally  identified by  their substantial  capitalization,
established   history  of  earnings  and   superior  management  structure.  The
investment adviser will base its determination  of the companies to be  included
or retained in the Portfolio, not on the basis of any analysis of the companies'
underlying  economic or financial  fundamentals or of the  relative value of the
securities, but  rather  on  whether  the  companies  in  the  Portfolio,  taken
together,  reasonably represent a cross-section of major industries. The Adviser
anticipates that the Portfolio will purchase approximately equal dollar  amounts
of  shares of  each company.  However, the Portfolio  will not  own positions of
equal value in the various companies, partly because of price fluctuations after
purchases by the Portfolio.

    The Portfolio may, from time to time, have more than 5% of the value of  its
total  assets invested in each of one  or more particular companies. However, as
to 75% of the Portfolio's total assets, no more than 5% of the Portfolio's total
assets (at the  time of  purchase) will  be invested  in securities  of any  one
issuer  (other than the U.S. Government and its agencies and instrumentalities).
The concentration of a significant portion of  its assets in stocks of one or  a
few  companies (or in a relatively limited number of industries) may subject the
Portfolio to  increased  risk  of loss  if  those  stocks (or  stocks  in  those
industries) were to decline in value.

    The  Portfolio expects that it will  remain substantially invested in stocks
at all times. However, at most times the Portfolio will hold a small portion  of
its  assets (not to exceed 15% of its  total assets) in cash or cash equivalents
to accommodate redemptions and so as to avoid having to purchase stocks in small
quantities and thereby incur excessive  brokerage costs. Any such cash  balances
will be invested in high quality short-term money market instruments of the type
in  which  the Money  Market  Portfolio may  invest,  or retained  in  cash. The
Portfolio will  not engage  in the  trading  of securities  for the  purpose  of
realizing short-term profits.

- --------------------------------------------------------------------------------
                                                                  PRINCIPAL RISK
                                                                         FACTORS
                                                               -----------------

GENERAL

    In  general, risk associated with the  investments of a particular Portfolio
can be  described in  terms of  current income  volatility, financial  risk  and
market   risk.   Current   income   volatility   refers   to   the   degree  and

                                       15
<PAGE>
rapidity with which changes in overall market interest rates affect the level of
current income. Financial  risk refers to  the ability  of an issuer  of a  debt
security  to pay, on  a timely basis,  principal and interest  on such security.
With respect to the issuer of an  equity security, financial risk refers to  its
earning  stability  and  overall  financial  soundness.  Market  risk  for  debt
securities refers to the fact  that, as a general  matter, the current value  of
debt  securities varies inversely with changes  in prevailing interest rates; if
interest rates rise, the value of a debt security will tend to fall. Market risk
for equity securities refers to overall stock market valuation levels.

    The GROWTH COMMON STOCK PORTFOLIO and  BLUE CHIP PORTFOLIO most likely  will
be subject to moderate levels of both market and financial risk.

    The HIGH GRADE BOND PORTFOLIO most likely will be subject to moderate levels
of  market risk and relatively  low levels of financial  risk and current income
volatility.

    The HIGH YIELD BOND PORTFOLIO most likely will be subject to moderate levels
of market risk,  relatively high  levels of  financial risk  and relatively  low
levels of current income volatility.

    The  market  value  of fixed-income  securities  is affected  by  changes in
general market interest rates.  If interest rates decline,  the market value  of
fixed-income securities tends to increase; while if interest rates increase, the
market  value  of  fixed-income  securities  tends  to  decrease.  Highly  rated
fixed-income securities tend to have lower  interest rates and yields, and  less
market   or  financial  risk,  than   do  lower-rated  fixed-income  securities.
Lower-rated and unrated securities generally have a greater degree of market and
financial risk than higher-rated securities,  for reasons including the  greater
possibility that issuers of lower-rated or unrated securities may not be able to
pay  the principal and  interest when due, especially  during periods of adverse
economic conditions.

    The MANAGED PORTFOLIO  most likely  will be  subject to  moderate levels  of
market   and  financial  risk  and  relatively  low  levels  of  current  income
volatility, although current income volatility could be higher if the  Portfolio
is heavily invested in short-term money market instruments.

    The  MONEY MARKET PORTFOLIO should be  subject to little market or financial
risk because  it invests  in high  quality short-term  investments that  reflect
current  market interest rates. Although these types of securities generally are
considered to have low  financial risk, there is  some possibility that  issuers
may fail to meet their principal and interest obligations on a timely basis. The
Portfolio could experience a high level of current income volatility because the
level of its current income directly reflects short-term interest rates.

SPECIAL CONSIDERATIONS--HIGH YIELD BONDS

    As  reflected  above, the  High  Yield Bond  Portfolio  intends to  invest a
substantial portion  of  its assets  in  fixed-income securities  offering  high
current  income. Additionally, subject to its specific investment objectives and
policies as described above, the High Grade Bond Portfolio may invest a  portion
of its assets in such securities. Such high yielding fixed-income securities are
ordinarily in the lower rating categories of Moody's or Standard & Poor's (Ba/BB
or  lower) or will be unrated  securities of comparable quality. Such securities
are commonly known  as "junk bonds."  These lower-rated fixed-income  securities
are  considered,  on  balance,  as  predominantly  speculative  with  respect to
capacity to pay interest and repay principal in accordance with the terms of the
obligation and will generally  involve more credit risk  than securities in  the
higher  rating categories. The market values  of such securities tend to reflect
individual corporate  developments  to a  greater  extent than  do  higher-rated
securities,  which  react  primarily to  fluctuations  in the  general  level of
interest rates. Such lower-rated  securities also tend to  be more sensitive  to
economic  conditions  than are  higher-rated  securities. Adverse  publicity and
investor perceptions, whether  or not based  on fundamental analysis,  regarding
lower-rated bonds may depress

                                       16
<PAGE>
prices and liquidity for such securities. Factors adversely affecting the market
value  of high yielding securities will adversely affect a Portfolio's net asset
value. In addition, a Portfolio may  incur additional expenses to the extent  it
were  required to seek  recovery upon a  default in the  payment of principal or
interest on  its portfolio  holdings.  Although some  risk  is inherent  in  all
securities  ownership, holders  of fixed-income securities  have a  claim on the
assets of  the  issuer prior  to  the holders  of  common stock.  Therefore,  an
investment  in  fixed-income  securities  generally entails  less  risk  than an
investment in common stock of the same issuer.

   
    The investment philosophy of the High  Yield Bond Portfolio with respect  to
high  yield bonds  is based  on the  premise that  over the  long-term a broadly
diversified portfolio of high yield fixed-income securities should, even  taking
into  account possible losses, provide a  higher net return than that achievable
on a portfolio of higher-rated securities.  The High Yield Bond Portfolio  seeks
to achieve the highest yields possible while reducing relative risks through:
    

    (a) broad diversification,

    (b)  credit analysis by the  investment adviser of the  issuers in which the
       Portfolio invests,

    (c) monitoring and seeking to anticipate  changes and trends in the  economy
       and   financial  markets  that  might  affect  the  prices  of  portfolio
       securities.

    The investment adviser's  judgment as  to the "reasonableness"  of the  risk
involved  in any particular investment  will be a function  of its experience in
managing fixed-income investments  and its  evaluation of  general economic  and
financial conditions of a specific issuer.

    In  some circumstances, defensive strategies  may be implemented to preserve
or enhance capital even at the sacrifice of current yield. Defensive strategies,
which may be used singly or in any combination, may include, but are not limited
to,  investments  in  discount  securities   or  investments  in  money   market
instruments.

   
    High  yielding securities may be issued  by corporations in the growth stage
of their development.  They may also  be issued in  connection with a  corporate
reorganization  or as  part of a  corporate takeover. Companies  that issue such
high yielding securities are often highly  leveraged and may not have  available
to  them more traditional  methods of financing.  Therefore, the risk associated
with acquiring the securities of such  issuers generally is greater than is  the
case with higher-rated securities. For example, during an economic downturn or a
sustained  period of  rising interest  rates, highly  leveraged issuers  of high
yielding securities may experience financial  stress. During such periods,  such
issuers  may  not  have  sufficient  revenues  to  meet  their  interest payment
obligations. The issuer's ability  to service its debt  obligations may also  be
adversely affected by specific corporate developments, or the issuer's inability
to   meet  specific  projected  business  forecasts  or  the  unavailability  of
additional financing.  The  risk  of  loss  due to  default  by  the  issuer  is
significantly  greater for the holders of  high yielding securities because such
securities are generally unsecured and are often subordinated to other creditors
of the issuer.
    

    High yielding  securities frequently  have call  or buy-back  features  that
would permit an issuer to call or repurchase the security from the Portfolio. If
a call were exercised by the issuer during a period of declining interest rates,
a  Portfolio would  likely have  to replace  such called  security with  a lower
yielding security, thus decreasing the  net investment income to the  Portfolio.
The  premature disposition  of a  high yielding  security because  of a  call or
buy-back feature,  the  deterioration  of the  issuer's  creditworthiness  or  a
default  may also make it more difficult for  a Portfolio to time its receipt of
income, which may have tax implications.

                                       17
<PAGE>
    A  Portfolio  may  have  difficulty  disposing  of  certain  high   yielding
securities  for which there  is a thin  trading market. Because  not all dealers
maintain markets in all high yielding securities, there is no established retail
secondary market for  many of these  securities, and the  Fund anticipates  that
they  could  be  sold only  to  a  limited number  of  dealers  or institutional
investors. To the extent there is  a secondary trading market for high  yielding
securities,  it is generally not so  liquid as that for higher-rated securities.
The lack of a liquid secondary market may have an adverse impact on market price
and a Portfolio's ability to dispose of particular issues when necessary to meet
the Portfolio's liquidity  needs, or in  response to a  specific economic  event
such  as a deterioration  in the creditworthiness  of the issuer.  The lack of a
liquid secondary market for certain securities  may also make it more  difficult
for  the Fund  to obtain  accurate market quotations  for purposes  of valuing a
Portfolio's assets. Market quotations are generally available on many high yield
issues only from a limited number  of dealers and may not necessarily  represent
firm bids of such dealers or prices for actual sales.

    It  is  likely that  a major  economic recession  could severely  affect the
market for and the values of high yielding securities, as well as the ability of
the issuers of such securities to repay principal and pay interest thereon.

    A Portfolio  may acquire  high  yielding securities  that are  sold  without
registration  under the federal securities laws and therefore carry restrictions
on resale.  While many  recent  high yielding  securities  have been  sold  with
registration  rights, covenants and penalty provisions for delayed registration,
if a  Portfolio  is required  to  sell  such restricted  securities  before  the
securities  have  been  registered, it  may  be  deemed an  underwriter  of such
securities as  defined in  the Securities  Act of  1933, which  entails  special
responsibilities  and  liabilities.  A  Portfolio  may  incur  special  costs in
disposing of such securities, but will generally incur no costs when the  issuer
is responsible for registering the securities.

    A   Portfolio  may  acquire  high  yielding  securities  during  an  initial
underwriting. Such securities involve special risks because they are new issues.
The Fund has no arrangement with  any person concerning the acquisition of  such
securities,  and the  investment adviser  will carefully  review the  credit and
other characteristics pertinent to such new issues.

    From time to  time, there have  been proposals for  legislation designed  to
limit  the use of certain high  yielding securities in connection with leveraged
buy-outs, mergers and acquisitions,  or to limit  the deductibility of  interest
payments on such securities. Such proposals if enacted into law could reduce the
market  for  such securities  generally, could  negatively affect  the financial
condition of issuers of high yield  securities by removing or reducing a  source
of future financing and could negatively affect the value of specific high yield
issues. However, the likelihood of any such legislation or the effect thereof is
uncertain.

    Zero  coupon  securities and  pay in-kind  bonds involve  additional special
obligations. Zero coupon securities are debt obligations that do not entitle the
holder to any periodic payments of interest prior to maturity or to a  specified
cash  payment date when the securities  begin paying current interest (the "cash
payment date"), and  therefore are issued  and traded at  a discount from  their
face amounts or par value. The discount varies depending upon the time remaining
until maturity or cash payment date, prevailing interest rates, liquidity of the
security  and the perceived  credit quality of the  issuer. The discount, absent
financial difficulties of the  issuer, decreases as the  final maturity or  cash
payment  date  of the  security  approaches. The  market  prices of  zero coupon
securities are  generally  more  volatile  than those  of  securities  that  pay
interest  periodically,  and  they are  more  likely  to respond  to  changes in
interest rates than  non-zero coupon  securities having  similar maturities  and
credit  quality. The  credit risk  factors pertaining  to lower-rated securities
generally also apply  to lower-rated zero  coupon bonds and  pay in-kind  bonds.
Such zero coupon, pay in-kind or delayed interest bonds carry an additional risk
in that,

                                       18
<PAGE>
unlike  bonds that pay  interest throughout the period  to maturity, a Portfolio
will realize  no cash  until the  cash payment  date unless  a portion  of  such
securities is sold and, if the issuer defaults, a Portfolio may obtain no return
at all on its investment.

    Federal  income tax law requires the holder  of zero coupon securities or of
certain pay  in-kind bonds  (bonds that  pay interest  through the  issuance  of
additional bonds) to accrue income with respect to these securities prior to the
receipt  of  cash  payments.  To  maintain  its  qualification  as  a  regulated
investment company and avoid  liability for federal income  and excise taxes,  a
Portfolio  will be required  to distribute income accrued  with respect to these
securities and may have to dispose of portfolio securities under disadvantageous
circumstances  in  order  to  generate   cash  to  satisfy  these   distribution
requirements.

    Additional  information  concerning high  yielding securities  appears under
"Appendix C--Description of Corporate Bond Ratings."

- --------------------------------------------------------------------------------
                                                                  DESCRIPTION OF
                                                              CERTAIN INVESTMENT
                                                                      TECHNIQUES
                                                        ------------------------

    Except as otherwise  noted below,  the following  investment strategies  and
techniques may be used by all Portfolios.

FOREIGN SECURITIES

    The  Growth Common Stock Portfolio and  Managed Portfolio each may invest up
to 25% of its assets in equity  securities of foreign issuers to the extent  the
purchase of such foreign securities is otherwise consistent with the Portfolio's
investment  objectives. Investments will be made only in foreign securities that
are publicly traded in  the U.S. and  payable in U.S.  dollars. With respect  to
quality  and risk, the investment adviser  will attempt to select investments in
foreign securities  on the  same basis  as it  selects investments  in  domestic
securities.

WHEN-ISSUED OR DELAYED DELIVERY TRANSACTIONS

    From  time  to  time,  in  the ordinary  course  of  business,  each  of the
Portfolios may purchase newly-issued securities appropriate for the Portfolio on
a "when-issued" basis and  may purchase or sell  securities appropriate for  the
Portfolio  on  a  "delayed  delivery"  basis.  When-issued  or  delayed delivery
transactions involve a commitment by a Portfolio to purchase or sell  particular
securities  with payment  and delivery  to take  place at  a future  date. These
transactions allow the  Portfolio to  lock in  an attractive  purchase price  or
yield  on a  security the  Portfolio intends to  purchase or  an attractive sale
price on a security the Portfolio  intends to sell. Normally, settlement  occurs
within  one month of the purchase or sale. During the period between purchase or
sale and settlement,  no payment is  made or  received by a  Portfolio and,  for
delayed  delivery purchases, no  interest accrues to  the Portfolio. A Portfolio
will only make commitments  to purchase securities on  a when-issued or  delayed
delivery  basis with the intention of  actually acquiring the securities, but it
reserves the right to sell such securities before the settlement date if  deemed
advisable.

    At  the time a  Portfolio makes the  commitment to purchase  a security on a
when-issued or  delayed  delivery basis,  it  will record  the  transaction  and
reflect  the amount  due and the  value of  the security in  determining its net
asset value. Likewise, at the  time a Portfolio makes  the commitment to sell  a
security on a delayed delivery basis, it will record the transaction and include
the proceeds to be received in

                                       19
<PAGE>
determining  its net asset value; accordingly,  any fluctuations in the value of
the security  sold pursuant  to a  delayed delivery  commitment are  ignored  in
calculating  net asset value  so long as  the commitment remains  in effect. The
market value of the when-issued or  delayed delivery securities at any time  may
be  more or  less than the  purchase price to  be paid  or the sale  price to be
received at  the settlement  date. To  the extent  that a  Portfolio engages  in
when-issued  or delayed delivery transactions, it will  do so for the purpose of
acquiring or  selling  portfolio  securities  consistent  with  the  Portfolio's
investment  objectives  and  policies  and not  for  the  purpose  of investment
leverage or to speculate on interest rate changes.

    The investment adviser does not believe  that a Portfolio's net asset  value
or  income will be adversely affected overall by the purchase of securities on a
when-issued  or  delayed  delivery  basis.  Each  Portfolio  will  establish   a
segregated  account with the  Fund's custodian bank in  which the Portfolio will
maintain cash or U.S. Government securities or other high-grade debt obligations
at least equal in value to  commitments to purchase securities on a  when-issued
or delayed delivery basis; subject to this requirement, a Portfolio may purchase
securities  on a  when-issued or  delayed delivery  basis without  limit. To the
extent that assets of a Portfolio are  held in cash pending the settlement of  a
purchase  of securities, that Portfolio  would earn no income.  In the case of a
commitment to  sell  portfolio securities  on  a delayed  delivery  basis,  each
Portfolio   will  instruct  the  custodian  to  hold  the  portfolio  securities
themselves in a segregated account while the commitment is outstanding.

LOANS OF PORTFOLIO SECURITIES

    Each Portfolio may, from time to time, lend securities (but not in excess of
20% of  its  assets)  from  its Portfolio  to  brokers,  dealers  and  financial
institutions,  provided that: (i) the loan is secured continuously by collateral
consisting of U.S. Government securities, government agency securities, cash  or
cash  equivalents adjusted daily  to have a  market value at  least equal to the
current market value of  the securities loaned plus  accrued interest; (ii)  the
Portfolio  may at any time  call the loan and  regain the securities loaned; and
(iii) the investment adviser  (under the review of  the Board of Directors)  has
reviewed   the   creditworthiness   of   the  borrower   and   has   found  such
creditworthiness satisfactory.  The Portfolio  will  receive from  the  borrower
amounts  equal to the dividends  or interest paid on  the securities loaned, and
will also earn  income for having  made the  loan. Any cash  collateral will  be
invested  in  short-term securities,  the income  from  which will  increase the
return to the Portfolio.

WRITING COVERED CALL OPTIONS

    Each Portfolio  (other than  the Money  Market Portfolio)  may write  (sell)
covered  call options on portfolio securities representing up to 100% of its net
assets in an attempt  to enhance investment performance  or to reduce the  risks
associated with investments. A call option gives the purchaser the right to buy,
and  the writer the obligation  to sell, an underlying  security at a particular
exercise price during  the option period.  A Portfolio will  write call  options
only  on a covered basis, which means that the Portfolio will own the underlying
security subject  to the  call option  at all  times during  the option  period.
Options written by a Portfolio will normally have expiration dates between three
and  nine  months  from  the  date  written.  Such  options  and  the securities
underlying the options  must both  be listed on  national securities  exchanges,
except  that debt  securities and  related options  need not  be so  listed. The
advantage to a Portfolio of writing  covered call options is that the  Portfolio
receives  a premium which constitutes additional  income, which would serve both
to enhance investment performance and to offset in whole or in part any  decline
in  the  value of  the underlying  security. However,  the disadvantage  is that
during the option period the Portfolio  would give up the potential for  capital
appreciation above the exercise price if the underlying security were to rise in
value;  and  that,  unless  a  closing  purchase  transaction  is  effected, the
Portfolio will be required to continue  to hold the underlying security for  the
entire  option period,  and would  bear the  risk of  loss if  the price  of the
securitiy were to decline.

                                       20
<PAGE>
   
INVESTMENT COMPANY SECURITIES
    

   
    Each of the  Portfolios may  invest, subject to  the investment  limitations
described  below, in shares of other investment companies which seek to maintain
a $1.00 net asset value per share ("Money Market Funds"). The Portfolios  intend
to  invest available cash balances in such  Money Market Funds. In addition, the
Portfolios may  invest  in  such  Money Market  Funds  for  temporary  defensive
purposes  (for  example,  when FBL  believes  such  a position  is  warranted by
uncertain or unusual market  conditions, or when liquidity  is required to  meet
unusually  high redemption requests) or  for other purposes. No  more than 5% of
the value of a Portfolio's total assets will be invested in securities of  Money
Market  Funds.  In  addition,  a Portfolio  may  hold  no more  than  3%  of the
outstanding voting stock of any Money  Market Fund. As a shareholder of  another
investment  company, a Portfolio would bear,  along with other shareholders, its
pro-rata portion of the Money Market Fund's expenses, including advisory fees.
    

REPURCHASE AGREEMENTS

    Each Portfolio may enter  into repurchase agreements as  a means of  earning
income for periods as short as overnight. A repurchase agreement is an agreement
under  which the Portfolio  purchases a security  and the seller  agrees, at the
time of sale, to repurchase the security at a specified time and price,  thereby
determining  the  yield during  the Portfolio's  holding  period. That  yield is
determined by current short-term rates and may be more or less than the interest
rate on  the underlying  security. The  value of  the underlying  securities  is
marked  to market daily. If the value of the underlying securities declined, the
seller would be required to provide the Portfolio with additional securities  so
that  the aggregate value of the underlying securities was at least equal to the
repurchase price.

    The Portfolios may also  enter into a special  type of repurchase  agreement
known  as an  "open repurchase agreement."  An open  repurchase agreement varies
from the  typical  repurchase  agreement  in the  following  respects:  (1)  the
agreement  has no set maturity, but instead matures upon 24 hours' notice to the
seller; and (2) the repurchase price is not determined at the time the agreement
is entered into, but instead is based  on a variable interest rate and  duration
of the agreement.

    The  Portfolios  may enter  into repurchase  agreements  only with  banks or
securities dealers, and  the underlying  securities will  consist of  securities
issued   or   guaranteed   by   the  U.S.   Government   or   its   agencies  or
instrumentalities. If a seller  of a repurchase agreement  were to default,  the
Portfolio  might experience losses,  including delays and  expenses in enforcing
its rights. To minimize this risk,  the investment adviser (under the review  of
the Board of Directors) will review the creditworthiness of the seller, and must
find  such creditworthiness satisfactory  before a Portfolio  may enter into the
repurchase agreement.

    A Portfolio may  invest no more  than 10%  of its net  assets in  repurchase
agreements  maturing in more  than seven days, and  no more than  25% of its net
assets  in  repurchase  agreements  in  which  the  underlying  securities  have
maturities  in excess of one year, although  there is no limit on the percentage
of each Portfolio's assets  that may be invested  in repurchase agreements  that
mature in less than seven days and have underlying securities with maturities of
less  than one year.  Net assets are taken  at market value at  the time of each
purchase for purposes of the  foregoing limitations. Open repurchase  agreements
are considered to mature in one day.

                                       21
<PAGE>
- --------------------------------------------------------------------------------
HOW TO
BUY
SHARES
- ---------

   
    Shares  of the Fund's various  Portfolios are sold on  a continuing basis at
their net asset  value next determined  after a purchase  order and payment  are
received  in proper form  as described below.  The Fund is  open for business on
each day the New  York Stock Exchange  is open for  trading (except the  Tuesday
after  Christmas and the day after Thanksgiving). The Fund reserves the right to
reject any purchase order and to change the minimum purchase requirements at any
time. Share certificates are issued only on request.
    

INITIAL PURCHASE

    The minimum initial  purchase is $250,  except there is  no minimum  initial
investment  for retirement accounts and accounts  opened under bona fide payroll
deduction plans.  There  is no  initial  sales  charge. An  Application  may  be
obtained  either  from  the Fund  or  from  a registered  representative  of FBL
Marketing Services, Inc.

    Complete the  Application  and  mail  it with  your  check  payable  to  the
appropriate  Portfolio of the Fund to: FBL Series Fund, Inc., 3820 109th Street,
Des Moines, Iowa 50391-7003.

SUBSEQUENT PURCHASES

    Send the Fund a check (no  minimum) payable to the appropriate Portfolio  of
the Fund accompanied by a letter indicating the dollar value of the shares to be
purchased  and  identifying the  Portfolio,  the account  number  and registered
owner(s).

PURCHASES BY WIRE (MONEY MARKET PORTFOLIO ONLY)

    Purchases may be  made in the  Money Market Portfolio  by wire transfer.  If
making  an initial purchase, call the toll  free number (800) 247-4170 (in Iowa,
call toll  free (800)  422-3175 or  in  the Des  Moines metropolitan  area  call
225-5586) to obtain a Money Market Portfolio Account Number and provide the Fund
with  your name, address and social security or tax identification number. Then,
simply instruct your bank  to "wire transfer" funds  to: BANKERS TRUST  COMPANY,
ABA #021001033, DDA ACCOUNT #00220695 MONEY MARKET PORTFOLIO OF FBL SERIES FUND,
INC.,  FOR  FURTHER  CREDIT TO  YOUR  ACCOUNT REGISTRATION  AND  ACCOUNT NUMBER.
Finally, if making an initial purchase,  complete an Application and mail it  to
the Fund at the address listed under "Initial Purchase" above.

- --------------------------------------------------------------------------------
HOW TO
REDEEM
SHARES
- ---------

    Upon  receipt of an executed redemption request in proper form, as described
below, the Fund will  redeem shares of  a Portfolio at  the next determined  net
asset  value. Proceeds payable upon redemption will  be reduced by the amount of
any applicable  contingent  deferred  sales  charge. The  Fund  intends  to  pay
redemption  proceeds  within  one  business day  after  receipt  of  an executed
redemption request in proper  form. If shares to  be redeemed were purchased  by
check,  the Fund may  delay transmittal of redemption  proceeds until such time,
normally not more than  15 calendar days after  the redemption request, that  it
has assured itself that good payment has been collected for the purchase of such
shares.

                                       22
<PAGE>
    The  Adviser  employs  procedures  designed  to  confirm  that  instructions
communicated by telephone are  genuine, including requiring certain  identifying
information   prior  to  acting  upon   instructions,  recording  all  telephone
instructions and sending  written confirmations of  instructions. To the  extent
such  procedures are reasonably  designed to prevent  unauthorized or fraudulent
instructions neither the  Adviser nor the  Fund would be  liable for any  losses
from unauthorized or fraudulent instructions.

    Redemptions  can be requested by writing to the Fund, 3820 109th Street, Des
Moines, Iowa 50391-7003 and requesting redemption of either the number or dollar
value of shares  of a  specified Portfolio. Any  certificates for  shares to  be
redeemed  must be included, duly endorsed. The letter (and certificates, if any)
must be signed exactly as the account is registered. On a jointly owned account,
all owners  must sign.  SIGNATURES OF  ACCOUNT OWNERS  MUST BE  GUARANTEED BY  A
COMMERCIAL  BANK, TRUST  COMPANY, MEMBER OF  A STOCK EXCHANGE,  SAVINGS AND LOAN
ASSOCIATION  OR  SAVINGS  BANK,  OTHER  ELIGIBLE  FINANCIAL  INSTITUTION,  OR  A
REGISTERED  REPRESENTATIVE  OF FBL  MARKETING SERVICES,  INC. OR  FBL INVESTMENT
ADVISORY SERVICES, INC., and shall include such other documentation of authority
as the  Fund deems  necessary in  the case  of estates,  trusts,  guardianships,
corporations,  unincorporated associations and pension and profit sharing plans.
THE FUND CANNOT ACCEPT GUARANTEES FROM NOTARIES PUBLIC.

    EXPEDITED REDEMPTION PROCEDURES (MONEY MARKET PORTFOLIO ONLY).  Shareholders
may redeem shares of  the Money Market Portfolio  by telephone. The proceeds  of
shares  so redeemed (less any contingent deferred  sales charge) will be sent by
Federal  wire  transfer  to  a  single  designated  account  maintained  by  the
shareholder  at  a domestic  commercial bank  that  is a  member of  the Federal
Reserve System. To effect  a redemption, a shareholder  should call the Fund  at
the appropriate number shown on the cover of the Prospectus between the hours of
8:00  a.m. and 4:30  p.m. (Central Time)  on any day  when the Fund  is open for
business. Requests received by the Fund prior to the earlier of the close of the
New York Stock Exchange or 3:00 p.m. (Central Time) will result in shares  being
redeemed  that day at the next determined net asset value, and the proceeds will
normally be sent to the designated bank account the following business day.  The
minimum  amount that  may be wired  is $10,000.  The Fund reserves  the right to
change  this  minimum  or  to  terminate  the  wire  redemption  privilege.  All
applications for telephone redemption service must have signatures guaranteed by
a  commercial bank, trust company, member of  a stock exchange, savings and loan
association or savings bank, other eligible financial institution, a  registered
representative  of  FBL  Marketing  Services, Inc.  or  FBL  Investment Advisory
Services, Inc. and shall  include such other documentation  of authority as  the
Fund   deems  necessary   in  the   case  of   estates,  trusts,  guardianships,
corporations, unincorporated associations and pension and profit sharing  plans.
A  shareholder  wishing  to use  this  method  of redemption  must  complete the
appropriate portions of the Application  and it must be  on file with the  Fund.
Once  the form is on file, the Fund will honor redemption requests by any person
by telephone (using the toll free  numbers listed on the cover page),  telegraph
or  other method without a signature guarantee from the shareholder or any other
person. The  Fund is  not responsible  for the  efficiency of  the federal  wire
system  or the shareholder's bank.  To change the name  of the single designated
bank account to  receive wire  redemption proceeds, it  is necessary  to send  a
written  request  with signatures  guaranteed  to the  Fund.  The Fund  does not
currently charge for wiring funds, although the shareholder will be  responsible
for any wire fees charged by the receiving bank. This procedure is not available
for Retirement Accounts or shares for which certificates have been issued.

    Shareholders  may not use  expedited redemption procedures  until the shares
being redeemed have been on the Fund's books for at least four days. There is no
such delay in redeeming shares that were purchased by wiring Federal Funds.

                                       23
<PAGE>
   
    CONTINGENT DEFERRED SALES  CHARGE.   A contingent deferred  sales charge  is
imposed  on that  amount by  which a  redemption causes  the current  value of a
Portfolio account to  fall below the  total dollar amount  of purchases of  that
Portfolio's shares made during the preceding six years (reinvested dividends are
not  considered  purchases  for  this  purpose).  The  charge  is  imposed  upon
redemptions of shares in accordance with the following schedule:
    

<TABLE>
<CAPTION>
                      YEAR OF                            CONTINGENT
                    REDEMPTION                         DEFERRED SALES
                  AFTER PURCHASE                           CHARGE
- ---------------------------------------------------  -------------------
<S>                                                  <C>
    First..........................................              5%
    Second.........................................              4%
    Third..........................................              4%
    Fourth.........................................              3%
    Fifth..........................................              2%
    Sixth..........................................              1%
    Seventh and following..........................              0%
</TABLE>

   
    The following  example  will  illustrate the  operation  of  the  contingent
deferred   sales  charge.  Assume  that  an  investor  purchases  $10,000  of  a
Portfolio's shares and that 30 months later  the value of the account has  grown
through  investment performance  and reinvestment  of dividends  to $14,000. The
investor then may redeem up to $4,000 ($14,000 minus $10,000) without  incurring
a  contingent deferred  sales charge.  If the  investor should  redeem $5,000, a
contingent deferred sales charge would be  imposed on $1,000 of the  redemption.
The  charge would  be imposed  at the  rate of  4% ($40)  because the redemption
occurred in  the  third  year  after the  purchase.  In  determining  whether  a
contingent  deferred sales charge is payable,  it is assumed that the redemption
is made from the earliest purchase of shares.
    

    The contingent deferred  sales charge  will be waived  in the  event of  the
death  of the shareholder (including a  registered joint owner), with respect to
redemptions in connection  with distributions  from a 401(m),  401(k) or  457(k)
plan,  or with respect to withdrawals under the Fund's periodic withdrawal plan.
FBL Investment Advisory  Services, Inc.,  the Fund's  Distributor, receives  any
contingent deferred sales charge directly.

    INVOLUNTARY  REDEMPTIONS.    Due  to  the  high  cost  of  maintaining small
accounts, the Fund reserves the right  to redeem a Portfolio account that  falls
below  $250 as a result  of redemptions. Prior to  effecting such an involuntary
redemption, shareholders will be notified in writing and will be allowed 60 days
to make additional  purchases to bring  the account up  to the Portfolio's  $250
minimum  investment  requirement. Any  such involuntary  redemption will  not be
subject to a contingent deferred sales charge.

    REDEMPTIONS IN-KIND.  If the Board of Directors determines that it would  be
detrimental  to the best interests of  the remaining shareholders of a Portfolio
to make payment wholly or partly in cash, the Fund may pay the redemption  price
in  whole  or in  part by  the distribution  in-kind of  securities held  by the
applicable Portfolio in lieu of cash in conformity with applicable rules of  the
Securities and Exchange Commission. Investors may incur brokerage charges on the
sale  of  securities so  received in  payment of  redemption. A  redemption paid
in-kind is treated as  a sale for  federal income tax  purposes even though  the
shareholder  may have received no  cash. The Fund has  elected to be governed by
Rule 18f-1  under the  Investment Company  Act  pursuant to  which the  Fund  is
obligated  to redeem  shares solely in  cash up to  the lesser of  $250,000 or 1
percent of the net asset value of  a Portfolio during any 90-day period for  any
one shareholder of record.

                                       24
<PAGE>
- --------------------------------------------------------------------------------
                                                                           OTHER
                                                                     SHAREHOLDER
                                                                        SERVICES
                                                                ----------------

    The  Fund offers  a number  of shareholder  services designed  to facilitate
investment in shares of its Portfolios. Full details as to each of such services
and copies of the various plans described below can be obtained from the Fund.

PERIODIC WITHDRAWAL PLAN

    A shareholder who owns in a single  account $5,000 or more of a  Portfolio's
shares  may establish a Periodic Withdrawal Plan to provide for regular monthly,
quarterly or annual payments of  a fixed dollar amount  or fixed percent of  the
account  balance (with a minimum $100  annual payment and a maximum withdrawable
amount of 10% annually  of the shareholder's initial  account balance under  the
plan) to be sent to the shareholder or a designated payee. Shares of a Portfolio
held  in the shareholder's account having a net asset value of the amount of the
requested payment will be  redeemed on or around  the fifth business day  before
the  end of the applicable  month and a check will  be mailed to the shareholder
within seven days thereafter. Depending upon the size of the payments  requested
and  fluctuations in the net asset value of the shares redeemed, redemptions for
the purpose of making such payments may reduce or even exhaust the account.  FBL
will  waive the contingent deferred sales charge on redemptions made pursuant to
a periodic  withdrawal program.  The right  is reserved  to amend  the  periodic
withdrawal  program on thirty days' notice. The program may be terminated at any
time by the shareholder or the Fund.

   
AUTOMATIC INVESTMENT PLAN:
    

   
    A shareholder may elect  to participate in  the Fund's automatic  investment
plan.  This plan enables  a shareholder to automatically  purchase shares of the
Fund on a  monthly basis. A  minimum initial  investment of $50  is required  to
establish  an automatic investment plan. Minimum  monthly investments of $25 are
necessary to maintain the plan. The Fund will debit the shareholder's  financial
institution  account and subsequently  purchase shares of the  Fund having a net
asset value of the amount of the requested deposit on or around the 16th day  of
the  month.  Shareholders interested  in this  plan  must complete  an automatic
investment form available from the Fund.
    

EXCHANGE PRIVILEGE

   
    A shareholder may exchange all or some  shares of a Portfolio for shares  of
any  other Portfolio in the Fund, if  that Portfolio's shares are registered for
sale in the shareholder's state of  residence, on the basis of each  Portfolio's
relative  net  asset value  per share  next determined  following receipt  of an
exchange request in proper form. There is no minimum amount required to exercise
the exchange privilege between Portfolios,  except that shareholders wishing  to
open  an account in a new Portfolio  must meet the minimum purchase requirements
described under "How to Buy Shares." If the exchange involves the  establishment
of  a new account, an application for  that account must be completed and mailed
to the  Fund. Shares  may be  exchanged without  any contingent  deferred  sales
charge  but will be  subject to a  $5.00 exchange fee.  Amounts exchanged retain
their original cost and  purchase date for purposes  of the contingent  deferred
sales  charge.  If shares  of  the Portfolio  being  exchanged were  acquired at
different times, the shares  of the Portfolio acquired  in the exchange will  be
deemed  to possess  the same  holding period  (or exempt  status) for contingent
deferred sales charge purposes  as the shares being  exchanged. Exercise of  the
exchange  privilege is treated  as a sale  for federal income  tax purposes and,
depending on the circumstances, a  capital gain or loss  may be realized by  the
shareholder. Shareholders are automatically provided the exchange privilege upon
establishment of an account with the Fund.
    

                                       25
<PAGE>
Shareholders not interested in the exchange privilege must check the appropriate
box  on the Application. The exchange privilege may be provided after an account
has been established by completing an exchange form (obtainable from the  Fund).
Once  the privilege has been afforded a shareholder, exchanges may be authorized
by telephone (by calling one of the numbers shown on the front cover, from  8:00
a.m.  to 4:30 p.m. (Central Time) on any day that the Fund is open for business)
or by  letter (by  writing  the Fund  at 3820  109th  Street, Des  Moines,  Iowa
50391-7003).  Telephone exchange requests received prior to the close of the New
York Stock Exchange (usually 3:00 p.m.,  Central Time) will be effected at  that
day's relative net asset values.

    Shares  of FBL Money  Market Fund, Inc.  may be exchanged  for shares of any
Portfolio of  the Fund  without  imposition of  an  exchange fee.  The  exchange
privilege  may be modified  or terminated by  the Fund at  any time. An exchange
application must be on file with FBL Money Market Fund, Inc.

RETIREMENT PLANS

    Eligible shareholders of the Fund may participate in a variety of  qualified
retirement  plans which  are available from  the Distributor. Some  of the plans
currently offered are: Self-Employed Individual Retirement Plans (Keogh  Plans),
Individual Retirement Accounts (IRAs), Simplified Employee Pension Plans (SEPs),
Tax-Sheltered  403(b)  Plans, Corporate  Pension  and Profit  Sharing  Plans and
Public Employer Deferred Compensation Plans. The initial investment to establish
any such plan, and subsequent investments, may be in any amount (subject to plan
limitations).  Investors  Fiduciary  Trust  Company  ("IFTC")  of  Kansas  City,
Missouri serves as custodian and provides the required services for Keogh Plans,
IRAs,  SEPs and  Corporate Pension  and Profit  Sharing plans.  A custodial fee,
currently $10.00, will be collected annually by liquidating shares, or fractions
thereof, from each participant's  account(s). FBL Investment Advisory  Services,
Inc.  performs plan services for IFTC for a portion of the fee. Information with
respect to these plans is available upon request from the Fund.

    Trustees of qualified retirement plans and 403(b)(7) custodial accounts  are
required  by law to withhold 20% of the taxable portion of any distribution that
is eligible to be "rolled over." The 20% withholding requirement does not  apply
to  distributions from IRAs or  any part of a  distribution which is transferred
directly to  another  qualified  retirement  plan,  403(b)(7)  account  or  IRA.
Shareholders  should consult their  tax advisers regarding  this 20% withholding
requirement.

- --------------------------------------------------------------------------------
NET ASSET
VALUE
INFORMATION
- ---------------

   
    The net asset  value per share  of each  Portfolio is determined  as of  the
earlier  of 3:00 P.M. (Central Time) or the close of the New York Stock Exchange
on each day that the  Exchange is open (except  the Tuesday after Christmas  and
the  day after Thanksgiving), and on each other day on which there is sufficient
trading in the Portfolio's investments that it might affect the net asset value,
except that the net asset value of a  given Portfolio will not be computed on  a
day  when no orders  for purchase or  redemption of shares  of the Portfolio are
received. If the Fund offices should  be closed because of a weather-related  or
comparable  type of emergency,  and the Fund  is unable to  segregate orders and
redemption requests received  on the emergency  closed day, then  the Fund  will
price  those orders and redemptions at the  net asset value next determined. The
net asset value per share of each Portfolio is
    

                                       26
<PAGE>
computed by dividing  the total value  of the Portfolio's  securities and  other
assets,  less liabilities,  by the  total number  of outstanding  shares of such
Portfolio. The Fund reserves  the right to calculate  or estimate the net  asset
value  of  one or  more Portfolios  more  frequently than  once daily  if deemed
desirable.

    MONEY MARKET PORTFOLIO.  The net asset  value per share of the Money  Market
Portfolio  is  ordinarily $1.00.  The  Money Market  Portfolio's  securities are
valued using the  amortized cost method  of valuation. This  involves valuing  a
security  at cost on the date of  acquisition and thereafter assuming a constant
accretion of a discount or amortization of a premium to maturity. For a  further
discussion  of the manner in which such values are determined, see the Statement
of Additional Information under the heading "Net Asset Value."

    OTHER PORTFOLIOS.  For all Portfolios other than the Money Market Portfolio,
Portfolio securities that are  traded on a national  exchange are valued at  the
last  sale price as of the close of business on the day the securities are being
valued, or, lacking any  sales, at the  mean between the  closing bid and  asked
prices.   Securities  other  than   money  market  instruments   traded  in  the
over-the-counter market are valued at the mean between the bid and asked  prices
or  at  the yield  equivalent as  obtained from  one or  more dealers  that make
markets in the  securities. Portfolio  securities that  are traded  both in  the
over-the-counter  market and on a national  exchange are valued according to the
broadest and  most representative  market; and  it is  expected that,  for  debt
securities,  this  ordinarily will  be  the over-the-counter  market.  Values of
securities and assets for which market quotations are not readily available  are
determined  in good faith by  or under the direction  of the Board of Directors.
Money  market  instruments  are  valued  at  market  value,  except  that   debt
instruments  maturing in  60 days  or less are  valued using  the amortized cost
method of valuation described above with respect to the Money Market Portfolio.

- --------------------------------------------------------------------------------
                                                                     PERFORMANCE
                                                                     INFORMATION
                                                               -----------------

    From time  to time,  the Fund  may advertise  several types  of  performance
information  for a Portfolio. All Portfolios, except the Money Market Portfolio,
may advertise "average annual total return"  and "total return." The High  Grade
Bond and High Yield Bond Portfolios may also advertise "yield." The Money Market
Portfolio  may advertise "yield" and "effective yield." Each of these figures is
based upon  historical results  and  is not  necessarily representative  of  the
future performance of a Portfolio.

    Average  annual total return  and total return figures  measure both the net
income generated by, and the effect of any realized and unrealized  appreciation
or  depreciation  of,  the  underlying  investments  in  the  Portfolio  for the
designated period, assuming the reinvestment of all dividends and  distributions
during  the  period. Thus,  these  figures reflect  the  change in  value  of an
investment in  the Portfolio  during a  specified period.  Average annual  total
return will be quoted for at least one-, five- and ten-year periods (or, if such
periods  have not yet elapsed,  at the end of  a shorter period corresponding to
the life of the  Portfolio). Average annual total  return figures represent  the
average  annual  percentage change  in  the value  of  a specific  dollar amount
invested in  the Portfolio's  shares  for the  designated period.  Total  return
figures  are not  annualized and  represent the  aggregate percentage  or dollar
value change over the period.

    Yield is a  measure of the  net investment  income per share  earned over  a
specific  one-month  or 30-day  period (seven-day  period  for the  Money Market
Portfolio) expressed as  a percentage  of the  Portfolio's net  asset value  per
share  at the end of the period (except for the Money Market Portfolio where the
net asset value per share at the beginning  of the period is used). Yield is  an
annualized figure which

                                       27
<PAGE>
means  that  it  is assumed  that  the  Portfolio generates  the  same  level of
investment income over  a one-year  period. The  effective yield  for the  Money
Market  Portfolio is calculated similarly, but  the net investment income earned
is assumed  to  be compounded  when  annualized. The  Money  Market  Portfolio's
effective  yield will be slightly higher than its yield due to this compounding.
Semi-annual compounding is assumed  for Portfolios other  than the Money  Market
Portfolio.

    From  time  to  time, the  Fund  may  include in  its  sales  literature and
shareholder reports for  the High Grade  Bond and High  Yield Bond Portfolios  a
quotation   of  the  current   "distribution  rate"  for   the  Portfolios.  The
distribution rate is  simply a  measure of the  level of  income and  short-term
capital  gain  dividends distributed  for a  specified  period. It  differs from
yield, which  is a  measure of  the income  actually earned  by the  Portfolio's
investments  and from total  return, which is  a measure of  the income actually
earned by,  plus  the effect  of  any  realized or  unrealized  appreciation  or
depreciation   of,  such  investments  during  the  period.  Distribution  rate,
therefore, is not intended to be a complete measure of performance. Distribution
rate may sometimes  be greater than  yield since, for  instance, it may  include
short-term   gains  (which  may  be  non-recurring)  and  may  not  reflect  the
amortization of bond premiums.

    Additionally,  from  time   to  time,  in   advertisements  or  reports   to
shareholders,  a Portfolio may  compare its performance to  that of the Consumer
Price Index  or various  unmanaged  indexes such  as  the Dow  Jones  Industrial
Average, the Standard & Poor's 500, the Shearson/Lehman Government and Corporate
Bond  Index and the Salomon Brothers High Grade Bond Index. A Portfolio may also
use mutual fund quotation services such as Lipper Analytical Services, Inc.,  an
independent  mutual fund  reporting service,  or similar  industry services, for
purposes of  comparing a  Portfolio's rank  or performance  with that  of  other
mutual  funds  having  similar  investment  objectives.  Performance comparisons
should not  be  considered  representative  of the  future  performance  of  any
Portfolio.

    The Portfolio's shares are sold at net asset value, and return and net asset
value will fluctuate, except that the Money Market Portfolio seeks to maintain a
$1.00  net asset value per  share. Shares of the  Portfolio are redeemable by an
investor at the then  current net asset  value, which may be  more or less  than
original  cost. Yield and effective  yield figures do not  include the effect of
any contingent  deferred sales  charge. The  standardized average  annual  total
return  figures,  calculated  in accordance  with  a formula  prescribed  by the
Securities and  Exchange  Commission,  include  the  effect  of  the  contingent
deferred sales charge that may be imposed at the end of the period indicated. In
addition,  average annual total return figures,  which do not include the effect
of any contingent deferred sales charge, may also be used. Total return  figures
may  or may not include the effect  of the contingent deferred sales charge that
may be imposed at  the end of  the period in  question. Performance figures  not
including the effect of the applicable contingent deferred sales charge would be
reduced  if  it were  included. More  information  about performance  figures is
included in the Statement of Additional information.

- --------------------------------------------------------------------------------
MANAGEMENT
OF THE FUND
- ---------------

BOARD OF DIRECTORS

   
    The Board of Directors  has nine members, five  of whom are not  "interested
persons"  of the  Fund as defined  in the  Investment Company Act.  The Board of
Directors is responsible for  the overall supervision of  the operations of  the
Fund  and performs  the various  duties imposed  on the  directors of investment
companies by the Investment Company Act. The Board of Directors elects  officers
of the Fund annually.
    

                                       28
<PAGE>
INVESTMENT ADVISER

   
    FBL  Investment Advisory  Services, Inc.,  5400 University  Avenue, West Des
Moines, Iowa  50266, serves  as the  Fund's investment  adviser pursuant  to  an
Investment  Advisory  and  Management  Services  Agreement.  The  Adviser  is an
indirect  subsidiary  of  Farm  Bureau  Multi-State  Services,  Inc.,  an   Iowa
corporation. The following individuals are officers and/or directors of both the
Adviser  and the Fund: Stephen M. Morain,  Thomas R. Gibson, Timothy J. Hoffman,
Dennis M. Marker, William  J. Oddy, Richard D.  Warming, Sue A. Cornick,  Kristi
Rojohn and Elaine A. Followwill. FBL has served as the Fund's investment adviser
since  the  Fund commenced  operations  in 1971.  The  Adviser also  acts  as an
investment  adviser  to  individuals,  institutions  and  two  other  investment
companies:  FBL Money Market Fund, Inc.  and FBL Variable Insurance Series Fund.
Personnel of the Adviser also manage investments for the portfolios of insurance
companies.
    

    The Adviser handles the  investment and reinvestment  of the Fund's  assets,
and  is responsible for  the overall management of  the Fund's business affairs,
subject to the review of  the Board of Directors. Roger  F. Grefe and Robert  J.
Rummelhart  serve  as managers  for various  portfolios of  the Fund.  Mr. Grefe
joined FBL in 1986 and assumed responsibility for the management of Farm  Bureau
Growth  Fund,  Inc.,  currently  known as  the  Growth  Common  Stock Portfolio.
Additionally, he assumed management of the Managed Portfolio at its inception in
1987. Mr. Grefe  is a graduate  of Coe College  in Cedar Rapids,  Iowa and is  a
Chartered Financial Analyst and NASD Registered Principal.

    Mr.  Rummelhart has  managed both  the High Grade  Bond and  High Yield Bond
Portfolios since their  inception in 1987.  He received his  BA and MBA  degrees
from  the  University of  Iowa and  is  a Chartered  Financial Analyst  and NASD
Registered Representative.

    The Adviser  provides  investment supervision  to  the Blue  Chip  Portfolio
through  the use of a team approach. As cash accumulates for investment, trading
personnel are  notified  to  execute  the necessary  transactions  in  order  to
maintain the relative weights of the equity securities in this Portfolio.

    As  compensation for  the advisory and  management services  provided by the
Adviser, the  Fund has  agreed to  pay  the Adviser  an annual  management  fee,
accrued  daily and payable monthly, based on an annual percentage of the average
daily net assets of each Portfolio, as follows:

<TABLE>
<CAPTION>
                                                                         AVERAGE DAILY NET ASSETS
                                                                   -------------------------------------
                                                                      FIRST       SECOND        OVER
                                                                      $200         $200         $400
PORTFOLIO                                                            MILLION      MILLION      MILLION
- -----------------------------------------------------------------  -----------  -----------  -----------
<S>                                                                <C>          <C>          <C>
Growth Common Stock..............................................        0.50%        0.45%        0.40%
High Grade Bond..................................................        0.40%        0.35%        0.30%
High Yield Bond..................................................        0.55%        0.50%        0.45%
Managed..........................................................        0.60%        0.55%        0.50%
Money Market.....................................................        0.40%        0.35%        0.30%
Blue Chip........................................................        0.25%        0.25%        0.25%
</TABLE>

    The Adviser,  at its  expense,  furnishes the  Fund  with office  space  and
facilities,  certain  business  equipment,  advisory,  research  and statistical
facilities, and  clerical  services and  personnel  to administer  the  business
affairs of the Fund. The Fund pays its other expenses which include, but are not
limited  to, the following: the cost  of net asset value calculations; portfolio
transaction  costs;   interest   on  Fund   obligations;   stock   certificates;
miscellaneous reports; membership dues; reports and notices to shareholders; all
expenses  of registration of its shares under federal and state securities laws;
investor services (including  allocable telephone and  personnel expenses);  all
taxes  and fees payable to federal, state or other governmental authorities; and
the fees and expenses of independent auditors, legal

                                       29
<PAGE>
   
counsel, custodian, shareholder service, transfer and dividend disbursing agent.
For its services as investment adviser and manager and for facilities  furnished
to  the Fund during  the fiscal year  ending July 31,  1995 the Adviser received
management fees of .50%  of the average  daily net assets  of the Growth  Common
Stock  Portfolio, .40% of  the average daily  net assets of  the High Grade Bond
Portfolio, .55%  of  the  average  daily  net assets  of  the  High  Yield  Bond
Portfolio,  .60% of the average daily net  assets of the Managed Portfolio, .40%
of the average daily net  assets of the Money Market  Portfolio and .25% of  the
average daily net assets of the Blue Chip Portfolio.
    

    The  Adviser has agreed  to reimburse any  Portfolio to the  extent that the
annual operating expenses (including the  investment advisory fee but  excluding
brokerage,  interest, taxes, the distribution fee and extraordinary expenses) of
such Portfolio exceed 1 1/2% of average daily net assets. The amount reimbursed,
however, shall not exceed the amount of  the advisory fee paid by the  Portfolio
for such period.

- --------------------------------------------------------------------------------
PORTFOLIO
TRANSACTIONS
- -----------------

    With  respect  to transactions  in portfolio  securities, whether  through a
broker as agent or with a dealer  as principal, the Adviser endeavors to  obtain
for  the  Fund the  most  favorable prices  and  efficient execution  of orders.
Subject to this primary consideration, the Adviser places substantially all  the
Fund's  portfolio transactions  with brokerage  firms that  furnish research and
other services to  the Fund.  These services include,  but are  not limited  to,
advice  as to  the advisability  of purchasing  or selling  specific securities,
furnishing of  analyses  and reports  on  particular securities  or  industries,
providing  information  on  economic  factors  and  trends,  providing  computer
software used  in security  analyses and  providing technical  market  analyses.
Certain  affiliates  and  other  clients of  the  Adviser  also  place portfolio
transactions with these brokerage firms,  and such affiliates and clients  share
the benefits of the research and other services obtained from these brokers. The
Adviser  regards information  that is customarily  available only  in return for
brokerage as among the many elements to be considered in arriving at  investment
decisions.  No specific  value can be  determined for most  such information and
services and they are  deemed supplemental to the  Adviser's own efforts in  the
performance  of its duties under the Investment Advisory Agreement. Any research
benefits derived are available for all clients.

   
    The investment decisions for the  Fund are reached independently from  those
for  the other funds and accounts managed  by the Adviser. At certain times, one
or more Portfolios  of the Fund  may purchase identical  securities at the  same
time  as the  other funds  and accounts  managed by  the Adviser.  When multiple
accounts  and/or  funds  have  assets  available  for  investment  in  the  same
securities,  available  investments  are  allocated as  to  amount  in  a manner
considered equitable to each. In some cases, this procedure may affect the  size
or price of the position obtainable for the Fund. It is the opinion of the Board
of  Directors  that  the  benefits  to  the  Fund  arising  out  of simultaneous
transactions outweigh any disadvantages.
    

- --------------------------------------------------------------------------------
DIVIDENDS
AND TAXES
- ------------

DIVIDENDS

    GROWTH COMMON STOCK AND  BLUE CHIP PORTFOLIO DIVIDENDS.   The Fund  normally
follows the practice of distributing substantially all the net investment income
and any net short-term and long-term capital gains of these Portfolios after the
close of the Fund's fiscal year.

                                       30
<PAGE>
    HIGH  GRADE BOND AND HIGH YIELD BOND PORTFOLIO DIVIDENDS.  The Fund normally
follows the practice of distributing substantially all the net investment income
and net short-term capital  gains of these  Portfolios monthly and  distributing
any net long-term capital gains after the close of the Fund's fiscal year.

    MANAGED  PORTFOLIO DIVIDENDS.   The  Fund normally  follows the  practice of
distributing substantially  all  the net  investment  income of  this  Portfolio
quarterly  and distributing any net short-term and long-term capital gains after
the close of the Fund's fiscal year.

    MONEY MARKET PORTFOLIO DIVIDENDS.  On each day that the net asset value  per
share  of the Money Market Portfolio is determined, the Money Market Portfolio's
net investment income will be declared, as of the earlier of 3:00 p.m.  (Central
Time) or the close of the New York Stock Exchange, as a dividend to shareholders
of record prior to the declaration. Dividends will be reinvested or paid in cash
monthly.  If a  shareholder withdraws his  or her entire  account, all dividends
accrued to the time of withdrawal will be paid at that time.

    GENERAL.  Among other factors, the requirements of the Internal Revenue Code
may make it necessary or  desirable to vary from  the dividend practices as  set
forth  above.  Dividends with  respect to  any Portfolio  will be  reinvested in
shares of that same Portfolio unless a shareholder indicates in writing a desire
to receive them in cash.

TAXES

    It is the policy of each Portfolio to distribute annually substantially  all
its  net investment income and any net realized capital gains from the preceding
fiscal year. By  doing so, each  Portfolio intends to  continue to qualify  each
year  as a regulated investment  company under the Internal  Revenue Code. By so
qualifying, a  Portfolio will  not be  subject to  federal income  taxes to  the
extent  that  its  net investment  income  and  net realized  capital  gains are
distributed.

    Dividends will  not be  taxable  to tax-exempt  entities such  as  qualified
retirement  plans (e.g.,  IRAs or  qualified pension  or profit  sharing plans).
Dividends (whether  paid in  cash  or in  additional  shares) derived  from  net
investment  income  or net  short-term capital  gains will  be taxable  to other
shareholders as ordinary income  while net long-term  capital gain dividends  to
such  shareholders will be treated as  long-term capital gains regardless of the
length of  time  the  shareholder  held  the  Portfolio  shares.  For  corporate
taxpayers,  long-term  capital gains  are taxed  at the  same rates  as ordinary
income, but for  individual taxpayers, the  maximum federal income  tax rate  on
long-term  capital gains is 28%. The Fund will inform shareholders of the amount
and nature of such dividends as well as the amount of dividends eligible for the
"dividends  received  deduction"  available   to  corporate  shareholders.   For
shareholders  other  than  tax-exempt entities,  an  exchange of  shares  of one
Portfolio for shares of another Portfolio is ordinarily a taxable transaction.

    Each Portfolio's dividends  are paid on  a per-share basis.  At the time  of
such  payment, therefore, the value of each  share will be reduced by the amount
of the payment. If a shareholder purchases shares shortly before the payment  of
a  dividend or distribution, that shareholder pays the full price for the shares
but  receives  some  portion  of  the  price  back  as  a  taxable  dividend  or
distribution.  Shareholders  will receive  information  annually as  to  the tax
status of distributions made by the Fund in each calendar year.

    Dividends which a  Portfolio declares  in October, November  or December  to
shareholders  of record as  of a specified date  in one of  those months will be
treated for federal  income tax  purposes as  received by  such shareholders  on
December  31  of the  year declared,  if  paid during  January of  the following
calendar year.

                                       31
<PAGE>
    The Fund is  required by  law to withhold  31% of  taxable distributions  to
shareholders  who  do  not furnish  their  correct social  security  or taxpayer
identification number and in certain other circumstances.

- --------------------------------------------------------------------------------
ORGANIZATION
OF THE FUND
- ----------------

    The Fund is  an open-end, diversified  series management investment  company
registered  under  the  Investment Company  Act.  The  Fund was  organized  as a
corporation under the  laws of Maryland  on August 14,  1970 and has  authorized
capital of 5,000,000,000 shares of common stock, $.001 par value.

   
    The  Fund was initially known as Farm  Bureau Growth Fund, Inc. prior to the
effectiveness of  Articles of  Amendment to  its charter  on November  30,  1987
changing its name to FBL Series Fund, Inc. and, among other things, establishing
multiple  Portfolios  of  the  Fund and  designating  the  then  current assets,
liabilities and shareholders  of Farm Bureau  Growth Fund, Inc.  as the  assets,
liabilities  and shareholders of the Growth Common Stock Portfolio of FBL Series
Fund, Inc. The meaning of  the term "Growth Common  Stock Portfolio" as used  in
the  prospectus includes, where appropriate, Farm Bureau Growth Fund, Inc. prior
to December 1, 1987. The  expenses incurred by the  Fund in connection with  the
establishment of the Portfolios were paid by the Adviser.
    

    The shares of each Portfolio have equal rights and privileges with all other
shares  of that  Portfolio and  each share  of a  Portfolio represents  an equal
proportionate interest in that Portfolio with each other share. Upon liquidation
of the Fund or any Portfolio, shareholders of a Portfolio are entitled to  share
pro-rata  in the net assets of that Portfolio available for distribution. Shares
have no preemptive or conversion rights and are fully paid and nonassessable  by
the  Fund. The  Board of  Directors may  establish additional  Portfolios at any
time. The assets received by  the Fund on the sale  of shares of each  Portfolio
and  all income,  earnings, profits  and proceeds  thereof, subject  only to the
rights of creditors, are allocated to each Portfolio, and constitute the  assets
of such Portfolio. The assets of each Portfolio are required to be segregated on
the Fund's books of account.

   
    As  of October 31, 1995, Farm  Bureau Life Insurance Company, which provided
the initial capital for the Portfolios, owned more than 25% of the Money  Market
Portfolio.  Such  shares  have been  acquired  for  investment and  can  only be
disposed of by redemption or transfer to an affiliate.
    

- --------------------------------------------------------------------------------
GENERAL
INFORMATION
- ---------------

REPORTS TO SHAREHOLDERS

    Shareholders will  receive unaudited  semi-annual financial  statements  and
fiscal year-end financial statements audited by the Fund's independent auditors.

SHAREHOLDER INQUIRIES

    Shareholders  may  make  inquiries  either  by  contacting  their registered
representative or by  writing or calling  the Fund at  the address or  telephone
numbers as shown on the front cover.

SHAREHOLDER VOTING RIGHTS

    Under  the Fund's corporate charter,  the Fund is not  required to hold, and
does not expect to  hold, annual shareholders' meetings.  However, it will  hold
special meetings of shareholders as required or

                                       32
<PAGE>
   
deemed  desirable for such purposes  as electing Directors, changing fundamental
policies or approving an investment management agreement. Shareholders will vote
by Portfolio and not in  the aggregate, except when  voting in the aggregate  is
permitted  under the laws  of the State  of Maryland and  the Investment Company
Act, such as for the election of Directors.
    

    Each member  of  the Board  of  Directors serves  for  a term  of  unlimited
duration,  subject to the right of the Board of Directors or the shareholders to
remove such Director. The Board of Directors  has the power to alter the  number
of Directors and to appoint successor Directors provided that, immediately after
the  appointment of any successor Director, at least two-thirds of the Directors
have been elected by the shareholders of the Fund. However, if at any time  less
than  a  majority  of the  Directors  holding  office has  been  elected  by the
shareholders,  the  Directors  are  required  to  call  a  special  meeting   of
shareholders  for  the  purpose  of  electing  Directors  to  fill  any existing
vacancies in the Board.

    As used in this Prospectus and  in the Statement of Additional  Information,
the phrase "majority vote" of a Portfolio (or of the Fund, as appropriate) means
the  vote of the lesser of (i) 67% of the shares of the Portfolio (Fund) present
at a meeting  if the  holders of  more than 50%  of the  outstanding shares  are
present  in person or by proxy, or (ii)  more than 50% of the outstanding shares
of the Portfolio (Fund).

SHAREHOLDER SERVICE, DIVIDEND DISBURSING AND TRANSFER AGENT

    FBL serves  as  the  Fund's Shareholder  Service,  Dividend  Disbursing  and
Transfer  Agent for a separate fee. FBL in turn has contracted with DST Systems,
Inc., an  unrelated  party,  to  perform  certain  services  incidental  to  the
maintenance of shareholder accounts for a portion of the fee.

ACCOUNTING SERVICES

    The Fund has entered into an accounting services agreement with FBL pursuant
to  which  FBL  performs accounting  services  for  the Fund.  In  addition, the
agreement provides  that FBL  shall  calculate the  Fund's  net asset  value  in
accordance  with the  Fund's prospectus  and prepare  for Fund  approval and use
various tax returns and  other reports. For such  services, each Portfolio  pays
FBL an annual fee, payable monthly, of .05% of the Portfolio's average daily net
assets, with the annual fee payable by a Portfolio not to exceed $30,000.

DISTRIBUTOR

    FBL  Investment Advisory Services,  Inc. (the "Distributor")  also serves as
distributor and principal underwriter  for the Fund  pursuant to a  distribution
agreement  dated  December 1,  1987,  as amended  November  25, 1991.  Since the
distribution agreement provides for payment by the Fund of fees that are used by
the Distributor to pay for distribution services, the agreement, along with  the
related  dealer agreements (collectively, the  "Plan"), is approved and reviewed
in accordance with Rule 12b-1 under the Investment Company Act, which  regulates
the  manner in which an investment company may, directly or indirectly, bear the
expenses of distributing its shares. Since  the Plan applies to all  Portfolios,
the fees paid by one portfolio may be used to finance distribution of the shares
of  another portfolio  and the  distribution fee  payable to  the Distributor is
allocated among the Portfolios based on relative net asset size. The Distributor
bears all  its  expenses of  providing  services pursuant  to  the  distribution
agreement,  including the  payment of  any commissions  and the  preparation and
distribution of advertising or sales literature  and bears the cost of  printing
and  mailing prospectuses to  persons other than  shareholders. For its services
under the distribution agreement, the Fund  pays the Distributor a fee,  payable
monthly,  at the annual  rate of .50% of  average daily net  assets of the Fund.
This fee is accrued daily as an expense of the Fund. The Distributor compensates
firms for  sales of  Portfolio shares  at a  commission rate  of up  to 4%.  The
Distributor  may from time  to time pay additional  commissions, service fees or
promotional incentives to firms that sell shares of the Fund. In some instances,
such additional commissions,  fees or other  incentives may be  offered only  to
certain firms who sell or are expected to

                                       33
<PAGE>
sell  during specified  time periods  certain minimum  amounts of  shares of the
Fund, or  of  other  funds  underwritten by  the  Distributor.  The  Distributor
receives  any contingent  deferred sales  charges. See  "How to  Redeem Shares."
Firms to  which service  fees and  commissions may  be paid  include  affiliated
broker-dealers.

    As  a result of the commissions and  other payments made by the Distributor,
the expenses incurred  by the Distributor  during the early  years of the  Plan,
which  may include interest and overhead expenses, will exceed the fees received
by the Distributor  under the  Plan; however, it  is possible  that, during  the
later  years of the Plan, the fees paid by the Fund to the Distributor under the
Plan may  exceed  the Distributor's  expenses.  If  the Plan  is  terminated  in
accordance  with its terms, the  obligation of the Fund  to make payments to the
Distributor pursuant to the Plan will cease and the Fund will not be required to
make any payments past the termination date. Thus, there is no legal  obligation
for  the Fund to pay  any expenses incurred by the  Distributor in excess of its
fees under the Plan, if for any reason the Plan is terminated in accordance with
its terms. Future fees under the Plan may or may not be sufficient to  reimburse
the Distributor for its expenses incurred.

   
    During  the fiscal year  ended July 31,  1995, a total  of $553,282 was paid
pursuant to  the  Plan. Of  this  amount, $165,967  was  paid to  FBL  Marketing
Services,  Inc., the  principal dealer  for Fund shares,  $24 was  paid to other
dealers and the balance was retained by the Distributor. FBL Marketing Services,
Inc. is an affiliate of the Distributor.
    

    The Distributor provides  information and administrative  services for  Fund
shareholders  pursuant to an  administrative services agreement ("Administrative
Agreement"). For such  services, the Fund  pays the Distributor  a fee,  payable
monthly,  at an annual rate of .25% of average daily net assets of the Fund. The
Distributor may enter  into related agreements  with various financial  services
firms,  such as broker-dealer firms or  banks ("firms"), to provide services and
facilities for their customers or clients who are shareholders of the Fund.  The
services  and assistance that may  be provided by the  Distributor or such firms
may include,  but  are  not  limited to,  assisting  in  the  establishment  and
maintenance  of shareholder accounts  and records, furnishing  information as to
the status  of shareholder  accounts, processing  shareholder service  requests,
forwarding  purchase and redemption requests, responding to telephone inquiries,
assisting shareholders with tax  information and such other  services as may  be
agreed  upon from time  to time and  as may be  permitted by applicable statute,
rule or  regulation. The  Distributor  pays each  firm  a service  fee,  payable
monthly, at the annual rate of .15 of 1% on assets attributable to the firm that
have been maintained and serviced in Fund accounts.

                                       34
<PAGE>
- --------------------------------------------------------------------------------
                                                                      APPENDIX A
                                                                   -------------

                            MONEY MARKET INSTRUMENTS

   
    The  Money Market Portfolio invests in  money market instruments maturing in
thirteen months or less from the  time of investment, including the  instruments
described  below. In addition, the other Portfolios, subject to their respective
investment objectives, may invest in certain money market instruments.
    

    U.S. GOVERNMENT SECURITIES:  Bills,  notes, bonds and other debt  securities
issued by the U.S. Treasury. These are direct obligations of the U.S. Government
and differ mainly in the length of their maturities.

    U.S.  GOVERNMENT  AGENCY  OR INSTRUMENTALITY  SECURITIES:    Debt securities
issued or guaranteed by  agencies or instrumentalities  of the U.S.  Government.
Although  these securities  are not direct  obligations of  the U.S. Government,
some are supported by the full faith and credit of the U.S. Treasury; others are
supported only  by the  limited right  of the  issuer to  borrow from  the  U.S.
Treasury;   and  others  depend  solely  upon   the  credit  of  the  agency  or
instrumentality and not the U.S. Treasury.

    OBLIGATIONS OF  BANKS OR  SAVINGS INSTITUTIONS:   Certificates  of  deposit,
bankers'  acceptances and other short-term  debt obligations of commercial banks
or savings and  loan associations.  None of the  Portfolios will  invest in  any
instruments  issued by a commercial bank unless  it has total assets of at least
$100 million  and has  its deposits  insured by  the Federal  Deposit  Insurance
Corporation   ("FDIC").  Similarly,  the  Portfolios  will  not  invest  in  any
instrument issued by a savings and  loan association unless it has total  assets
of  at least  $100 million, has  been issued a  charter by the  Office of Thrift
Supervision ("OTS")  or was  formerly a  member of  the Federal  Home Loan  Bank
System  and is now subject to regulation by the OTS, and is insured by the FDIC.
However, the Portfolios may  invest in an  obligation of a  bank or savings  and
loan  association with assets of less than  $100 million if the principal amount
of such  obligation  is fully  covered  by FDIC  insurance.  The limit  of  such
coverage is currently $100,000.

    COMMERCIAL   PAPER:    Short-term  unsecured   promissory  notes  issued  by
corporations, primarily to finance short-term  credit needs. The Portfolio  will
only  invest in U.S. dollar-denominated instruments which the Board of Directors
determines present minimal credit risks and  which, at the time of  acquisition,
generally are either:

    1.   rated  in one  of the  two highest  rating categories  by at  least two
       nationally recognized statistical rating organizations ("NRSRO"); or

    2.  rated in one of the two  highest rating categories by only one NRSRO  if
       that NRSRO is the only NRSRO that has rated the instrument or issuer; or

    3.    in the  case  of an  unrated instrument,  determined  by the  Board of
       Directors to be of comparable quality to either of the above; or

    4.  issued by an issuer that has received a rating of the type described  in
       1  or 2  above on  other securities that  are comparable  in priority and
       security to the instrument.

    In addition,  the Fund  will  invest in  commercial  paper issued  by  major
corporations  in reliance  on the  so-called "private  placement" exemption from
registration by  Section 4(2)  of  the Securities  Act  of 1933  ("Section  4(2)
paper") subject to the above noted requirements with respect to ratings. Section
4(2)

                                      A-1
<PAGE>
paper  is restricted  as to disposition  under the federal  securities laws, and
generally is sold to institutional investors such as the Fund, who agree that it
is  purchasing  the  paper  for  investment  and  not  with  a  view  to  public
distribution.  Any resale  by the  purchaser must  be in  an exempt transaction.
Section 4(2) paper normally is  resold to other institutional investors  through
or  with the assistance of the issuer or investment dealers who make a market in
the Section 4(2) paper, thus providing liquidity. The Fund's investment  adviser
considers  the legally restricted but readily  saleable Section 4(2) paper to be
liquid; however,  the paper  will be  treated as  illiquid unless,  pursuant  to
procedures  approved  by  the Board  of  Directors, a  particular  investment in
Section 4(2) paper is determined to  be liquid. The investment adviser  monitors
the  liquidity of the Fund's  investments in Section 4(2)  paper on a continuing
basis.

    OTHER CORPORATE DEBT SECURITIES:  Outstanding nonconvertible corporate  debt
securities  (e.g., bonds  and debentures)  which were  not issued  as short-term
obligations but which have thirteen months or less remaining until maturity. The
Portfolio will  only  invest in  such  obligations  if the  Board  of  Directors
determines  that  they present  minimal  credit risk  and  are, at  the  time of
acquisition, rated AA/Aa or better by Standard & Poor's or Moody's and:

    1.  determined  by the Board  of Directors  to be of  comparable quality  to
       either 1 or 2 above; or

    2.   issued by an issuer that has received a rating of the type described in
       1 or  2 above  on  other short-term  securities  that are  comparable  in
       priority and security to the obligation.

    REPURCHASE   AGREEMENTS:      See   "Description   of   Certain   Investment
Techniques--Repurchase Agreements."

    FLOATING AND  VARIABLE  RATE  SECURITIES:    The  Portfolio  may  invest  in
instruments  having rates  of interest  that are  adjusted periodically  or that
float continuously or  periodically according to  formulas intended to  minimize
fluctuation  in the value  of the instruments  ("Variable Rate Securities"). The
interest rate on a Variable Rate Security is ordinarily determined by  reference
to,  or is a percentage of, a specified market rate such as a bank's prime rate,
the 90-day U.S. Treasury Bill rate, or the rate of return on commercial paper or
bank certificates of  deposit. Generally, the  changes in the  interest rate  on
Variable  Rate Securities  reduce the  fluctuation in  the market  value of such
securities. Accordingly, as interest rates  decrease or increase, the  potential
for   capital  appreciation  or  depreciation  is   less  than  for  fixed  rate
obligations. Some Variable Rate Securities have a demand feature ("Variable Rate
Demand Securities")  entitling the  purchaser  to resell  the securities  at  an
amount  approximately  equal  to  the  principal  amount  thereof  plus  accrued
interest. As in the case for  other Variable Rate Securities, the interest  rate
on  Variable Rate  Demand Securities varies  according to  some specified market
rate intended to minimize fluctuation in  the value of the instruments. Some  of
these  Variable Rate Demand Securities are unrated, their transfer is restricted
by the issuer and there  is little if any  secondary market for the  securities.
Thus,  any inability of  the issuers of  such securities to  pay on demand could
adversely affect the liquidity of these securities. The Portfolio determines the
maturity of Variable Rate Securities in accordance with Securities and  Exchange
Commission  rules  which  allow  the  Portfolio  to  consider  certain  of  such
instruments as having maturities shorter than  the maturity date on the face  of
the instrument.

                                      A-2
<PAGE>
- --------------------------------------------------------------------------------
                                                                      APPENDIX B
                                                                   -------------

                   PORTFOLIO COMPOSITION FOR HIGH YIELD BONDS

   
    The  tables below reflect  the average composition by  quality rating of the
investment securities of the High Yield  Bond Portfolio and the High Grade  Bond
Portfolio  for the  fiscal year  ended July  31, 1995.  Percentages are weighted
averages based upon the  portfolio composition at the  end of each month  during
the  year. The percentage of total assets  represented by bonds rated by Moody's
and Standard  &  Poor's  ("S&P")  is  shown.  The  percentage  of  total  assets
represented  by unrated bonds is also  shown. Although not specifically rated by
Moody's or Standard &  Poor's, U.S. Government securities  are reflected as  Aaa
and  AAA (highest quality) for  purposes of these tables.  The category noted as
"Cash and Other  Assets" includes all  assets other than  the rated and  unrated
bonds  reflected in the table  including, without limitation, equity securities,
preferred stocks, money market instruments, repurchase agreements and cash.
    

    The allocations reflected in the tables do not necessarily reflect the  view
of the investment adviser as to the quality of the bonds in the Portfolio on the
date  shown; and they  are not necessarily representative  of the composition of
the Portfolio at other times. The composition of the Portfolio will change  over
time.

                           HIGH YIELD BOND PORTFOLIO
                      COMPOSITION OF PORTFOLIO BY QUALITY

   
<TABLE>
<CAPTION>
                       PERCENTAGE OF                         PERCENTAGE OF
  MOODY'S RATING       PORTFOLIO BY                           PORTFOLIO BY     GENERAL DEFINITION OF
     CATEGORY         MOODY'S RATINGS   S&P RATING CATEGORY   S&P RATINGS              BOND
- -------------------  -----------------  -------------------  --------------  -------------------------
<S>                  <C>                <C>                  <C>             <C>
Aaa................          4.61%      AAA................        4.61 %    Highest quality
A..................          2.34       A..................        2.34      Upper medium grade
Baa................          3.35       BBB................        7.43      Medium grade
Ba.................         36.16       BB.................       25.75      Lower medium grade
B..................         47.26       B..................       52.38      Speculative
Caa................           .31       CCC................                  More speculative
Ca.................           .27       D..................         .27      Highly speculative
Not rated..........          2.78       Not rated..........        4.30      Not rated by Moody's or
                                                                              S&P
Cash and Other                          Cash and Other
 Assets............          2.92       Assets.............        2.92
                       -------                               -------
                           100.00%                               100.00 %
</TABLE>
    

                                      B-1
<PAGE>
                           HIGH GRADE BOND PORTFOLIO
                      COMPOSITION OF PORTFOLIO BY QUALITY

   
<TABLE>
<CAPTION>
                       PERCENTAGE OF                         PERCENTAGE OF
  MOODY'S RATING       PORTFOLIO BY                           PORTFOLIO BY     GENERAL DEFINITION OF
     CATEGORY         MOODY'S RATINGS   S&P RATING CATEGORY   S&P RATINGS              BOND
- -------------------  -----------------  -------------------  --------------  -------------------------
<S>                  <C>                <C>                  <C>             <C>
Aaa................         17.49%      AAA................       13.13 %    Highest quality
Aa.................         13.16       AA.................       20.48      High quality
A..................         41.42       A..................       32.33      Upper medium grade
Baa................         13.78       BBB................       19.71      Medium grade
Ba.................          5.24       BB.................                  Lower medium grade
Not rated..........          2.08       Not rated..........        7.52      Not rated by Moody's or
                                                                              S&P
Cash and Other                          Cash and Other
 Assets............          6.83       Assets.............        6.83
                       -------                               -------
                           100.00%                               100.00 %
</TABLE>
    

   
    The  description of each bond quality category set forth in the tables above
is intended to  be a  general guide  and not a  definitive statement  as to  how
Moody's  and  Standard &  Poor's define  such rating  category. A  more complete
description  of  the  rating  categories  is  set  forth  under  "Appendix   C--
Description  of Corporate Bond  Ratings." The ratings of  Moody's and Standard &
Poor's represent their opinions as to the capacity to pay interest and principal
of the securities that they undertake to rate. It should be emphasized, however,
that ratings are relative and subjective and do not evaluate market value  risk.
After purchase by a Portfolio, an obligation may cease to be rated or its rating
may  be  reduced.  Neither event  would  require  a Portfolio  to  eliminate the
obligation from its portfolio. An issue may be unrated simply because the issuer
chose not to have it rated, and not necessarily because it is of lower  quality.
Unrated issues may be less marketable.
    

                                      B-2
<PAGE>
- --------------------------------------------------------------------------------
                                                                      APPENDIX C
                                                                   -------------

                     DESCRIPTION OF CORPORATE BOND RATINGS

MOODY'S INVESTORS SERVICE, INC.

       AAA:
      Bonds  that are rated Aaa are judged to be of the best quality. They carry
      the smallest degree of  investment risk and are  generally referred to  as
      "gilt  edge."  Interest  payments  are  protected  by  a  large  or  by an
      exceptionally stable margin  and principal  is secure.  While the  various
      protective  elements  are  likely  to  change,  such  changes  as  can  be
      anticipated are most unlikely to impair the fundamentally strong  position
      of such issues.

        AA:
      Bonds that are rated Aa are judged to be of high quality by all standards.
      Together  with the  Aaa group  they comprise  what are  generally known as
      high-grade bonds. They are rated lower than the best bonds because margins
      of protection may not be as large  as in Aaa securities or fluctuation  of
      protective  elements may  be of  greater amplitude  or there  may be other
      elements present which  make the  long-term risks  appear somewhat  larger
      than with Aaa securities.

         A:
      Bonds  that are rated  A possess many  favorable investment attributes and
      may be considered as upper medium-grade obligations. This rating indicates
      an extremely  strong  capacity to  pay  principal and  interest  which  is
      considered   adequate  but  elements  may   be  present  which  suggest  a
      susceptibility to impairment sometime in the future.

       BAA:
      Bonds rated Baa  are considered medium-grade  obligations, i.e., they  are
      neither  highly  protected  nor  poorly  secured.  Interest  payments  and
      principal security appear adequate for the present but certain  protective
      elements  may be lacking or may  be characteristically unreliable over any
      great  length   of   time.   Such  bonds   lack   outstanding   investment
      characteristics and in fact have speculative characteristics as well.

        BA:
      Bonds  rated  Ba are  judged to  have  speculative elements;  their future
      cannot be considered as well-assured. Often the protection of interest and
      principal payments may be very  moderate and thereby not  well-safeguarded
      during  both good and  bad times over the  future. Uncertainty of position
      characterizes bonds in this class.

         B:
      Bonds rated B  generally lack characteristics  of a desirable  investment.
      Assurance  of interest and  principal payments or  of maintenance of other
      terms of the contract over any long period of time may be small.

       CAA:
      Bonds rated Caa are  of poor standing.  Such issues may  be in default  or
      there  may  be present  elements of  danger with  respect to  principal or
      interest.

        CA:
      Bonds rated  Ca represent  obligations  which are  speculative in  a  high
      degree.   Such  issues  are   often  in  default   or  have  other  market
      shortcomings.

STANDARD & POOR'S CORPORATION

       AAA:
      Bonds rated AAA are highest grade debt obligations. This rating  indicates
      an extremely strong capacity to pay principal and interest.

        AA:
      Bonds  rated AA also qualify as  high-quality obligations. Capacity to pay
      principal and interest is  very strong, and in  the majority of  instances
      they differ from AAA issues only in a small degree.

                                      C-1
<PAGE>
         A:
      Bonds  rated  A have  a  strong capacity  to  pay principal  and interest,
      although they are more  susceptible to the adverse  effects of changes  in
      circumstances and economic conditions.

       BBB:
      Bonds  rated  BBB  are regarded  as  having  an adequate  capacity  to pay
      principal  and  interest.   Whereas  they   normally  exhibit   protection
      parameters, adverse economic conditions or changing circumstances are more
      likely  to lead to a  weakened capacity to pay  principal and interest for
      bonds in this category, than for bonds in the A category.

     BB-B-CCC-CC:Bonds rated  BB, B,  CCC and CC  are regarded,  on balance,  as
      predominantly  speculative with  respect to  the issuer's  capacity to pay
      interest  and  repay  principal  in  accordance  with  the  terms  of  the
      obligations.  BB indicates  the lowest  degree of  speculation and  CC the
      highest degree  of speculation.  While such  bonds will  likely have  some
      quality  and  protective characteristics,  these  are outweighed  by large
      uncertainties or major risk exposures to adverse conditions.

   
         D:
      Bonds rated D are in default, and payment of interest and/or repayment  of
      principal is in arrears.
    

      Plus  (+) or Minus (-):  The ratings from "AA" to  "BB" may be modified by
      the addition of a plus or minus sign to show relative standing within  the
      major rating categories.

        NR:
      Not rated by the indicated rating agency.

                    DESCRIPTION OF COMMERCIAL PAPER RATINGS

MOODY'S INVESTORS SERVICE, INC.

       P-1:
      The  rating P-1 is the highest commercial paper rating assigned by Moody's
      and  indicates  that,  in  Moody's  opinion,  the  issuer  or   supporting
      institution has a superior ability for repayment of senior short-term debt
      obligations.  P-1 repayment ability will often be evidenced by many of the
      following   characteristics:    (1)    leading   market    positions    in
      well-established  industries, (2) high rates  of return on funds employed,
      (3) conservative capitalization structures with moderate reliance on  debt
      and  ample asset  protection, (4)  broad margins  in earnings  coverage of
      fixed  financial  charges  and  high  internal  cash  generation  and  (5)
      well-established  access  to  a  range of  financial  markets  and assured
      sources of alternate liquidity.

       P-2:
      The  rating  P-2  indicates  that,  in  Moody's  opinion,  the  issuer  or
      supporting  institution  has  a  strong ability  for  repayment  of senior
      short-term debt obligations. Strong ability for repayment will normally be
      evidenced by many of the  characteristics listed under the description  of
      "P-1."  Earnings  trends and  coverage ratios,  while  sound, may  be more
      subject  to   variation.  Capitalization   characteristics,  while   still
      appropriate,  may be more affected by external conditions. Ample alternate
      liquidity is maintained.

STANDARD & POOR'S CORPORATION

       A-1:
      This designation  indicates that  the degree  of safety  regarding  timely
      payment  of debt having an  original maturity of no  more than 365 days is
      either overwhelming or very strong.

       A-2:
      This designation indicates that capacity for timely payment of debt having
      an original maturity  of no  more than 365  days is  strong; however,  the
      relative degree of safety is not as high as for issues designated "A-1."

                                      C-2
<PAGE>
   
             Distributed by FBL Investment Advisory Services, Inc.
    

                          CONFIDENTIAL CUSTOMER RECORD
___________________________________           __________________________________
                 Name of
Customer                                                    Date

These  questions are for  the purpose of  determining the suitability  of a Fund
investment for you and are asked pursuant to rules established by the  Securites
and  Exchange  Commission. Furnishing  the answers  is  voluntary on  your part;
however, the  information will  be  treated confidentially  and is  intended  to
assist in determining an appropriate recommendation.

/ / I elect not to provide the information below.
 1. SEX: / / MALE / / FEMALE
 2. DATE OF BIRTH: _________________________________________________
 3. DEPENDENT CHILDREN: Number _______ Age of youngest _______ Age of oldest
_______
   
 4. PRINCIPAL OCCUPATION: ______________________________________________________
    
   
 5. NAME AND ADDRESS OF EMPLOYER: ______________________________________________
    
                                  ______________________________________________
 6. INSURANCE ON LIFE OF CUSTOMER: / / Less than $25,000 / / $25,000 to $50,000
                                   / / $50,000 to $100,000 / / $100,000 or over
 7. INVESTMENT OBJECTIVE: / / Growth of Investment
                          / / Other (Specify) __________________________________
 8. NET WORTH: / / Less than $25,000 / / $25,000 to $50,000 / / $50,000 to
$100,000 / / $100,000 or over
 9. SAVINGS: / / Less than $5,000 / / $5,000 to $10,000 / / $10,000 to $25,000
/ / $25,000 or over
10. OTHER ASSETS:
    Amount / / Less than $10,000 / / $10,000 to $50,000 / / $50,000 to $100,000
    / / $100,000 or over
    Description ________________________________________________________________
   __
   __
   
11. ANNUAL INCOME: / / Less than $10,000 / / $10,000 to $25,000
                / / $25,000 to $50,000 / / $50,000 to $100,000 / / $100,000 or
over
    
12. OTHER INFORMATION CONSIDERED IN MAKING AN INVESTMENT RECOMMENDATION:
    ____________________________________________________________________________
   __
   __
    ___________________________________      ___________________________________
     Signature of Customer          Signature of Representative
<PAGE>

<TABLE>
<S>                                           <C>
INVESTMENT ADVISER, DISTRIBUTOR,              CUSTODIAN
SHAREHOLDER SERVICE, DIVIDEND                 Bankers Trust Company
DISBURSING AND TRANSFER AGENT                 Global Assets -- Insurance Group
FBL Investment Advisory Services, Inc.        16 Wall Street
5400 University Avenue                        New York, New York 10005
West Des Moines, Iowa 50266

LEGAL COUNSEL                                 INDEPENDENT AUDITORS
Vedder, Price, Kaufman & Kammholz             Ernst & Young LLP
Suite 2600                                    Suite 3400
222 North LaSalle Street                      801 Grand Avenue
Chicago, Illinois 60601                       Des Moines, Iowa 50309
</TABLE>
<PAGE>
        ------------------------------------------------------------------------
                                                   Farm Bureau Mutual Funds

                            FBL Series Fund, Inc.

                                           R
   
                                PROSPECTUS
                                DECEMBER 1, 1995
    
                                           INVESTMENT MANAGER AND
                                           PRINCIPAL UNDERWRITER

                                           FBL INVESTMENT ADVISORY
                                           SERVICES, INC.

                                           5400 UNIVERSITY AVENUE
                                           WEST DES MOINES, IA 50266
                                           1-800-247-4170 (OUTSIDE IOWA)
                                           1-800-422-3175 (IN IOWA)
                                                225-5586 (DES MOINES)

FARM BUREAU MUTUAL FUNDS
        [LOGO]
5400 UNIVERSITY AVENUE
WEST DES MOINES, IOWA 50266
   
737-018(12/95)
    

<PAGE>

                                     PART B

                            FARM BUREAU MUTUAL FUNDS


                              FBL SERIES FUND, INC.
                             5400 University Avenue
                          West Des Moines, Iowa  50266
                                 (515) 225-5586

                       STATEMENT OF ADDITIONAL INFORMATION

   
                                December 1, 1995
    

     FBL Series Fund, Inc. (the "Fund") is an open-end, diversified management
investment company that consists of six Portfolios:  the Growth Common Stock
Portfolio, High Grade Bond Portfolio, High Yield Bond Portfolio, Managed
Portfolio, Money Market Portfolio and Blue Chip Portfolio.  Each Portfolio has
distinct investment objectives and policies and each is in effect a separate
fund issuing its own shares.

   
     This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Prospectus of the Fund dated December 1, 1995.  A
copy of the Prospectus may be obtained without charge by writing or calling the
Fund at the address and telephone number shown above.
    

<PAGE>

                                TABLE OF CONTENTS

   
<TABLE>
<CAPTION>
                                                                        Page
                                                                        ----
<S>                                                                     <C>
INVESTMENT OBJECTIVES, POLICIES AND TECHNIQUES . . . . . . . . . . . .   B-1
  Loans of Portfolio Securities. . . . . . . . . . . . . . . . . . . .   B-1
  Covered Call Options . . . . . . . . . . . . . . . . . . . . . . . .   B-2
  Ginnie Mae Certificates. . . . . . . . . . . . . . . . . . . . . . .   B-2

INVESTMENT RESTRICTIONS. . . . . . . . . . . . . . . . . . . . . . . .   B-4
  Fundamental Policies . . . . . . . . . . . . . . . . . . . . . . . .   B-4
  Non-Fundamental (Operating) Policies . . . . . . . . . . . . . . . .   B-6

OFFICERS AND DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . .   B-7

INVESTMENT ADVISER . . . . . . . . . . . . . . . . . . . . . . . . . .  B-12

PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS . . . . . . . . . . .  B-15

UNDERWRITING AND DISTRIBUTION EXPENSES . . . . . . . . . . . . . . . .  B-16

PURCHASES AND REDEMPTIONS. . . . . . . . . . . . . . . . . . . . . . .  B-17

NET ASSET VALUE. . . . . . . . . . . . . . . . . . . . . . . . . . . .  B-18
  Money Market Portfolio . . . . . . . . . . . . . . . . . . . . . . .  B-18
  Other Portfolios . . . . . . . . . . . . . . . . . . . . . . . . . .  B-19

TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  B-20

DIVIDENDS AND DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . .  B-21
  Money Market Portfolio . . . . . . . . . . . . . . . . . . . . . . .  B-21

PERFORMANCE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . .  B-21

SHAREHOLDER VOTING RIGHTS. . . . . . . . . . . . . . . . . . . . . . .  B-27

RETIREMENT PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . .  B-27
  Self-Employed Individual Retirement Plans. . . . . . . . . . . . . .  B-27
  Individual Retirement Accounts . . . . . . . . . . . . . . . . . . .  B-28
  Tax-Sheltered 403(b) Plans . . . . . . . . . . . . . . . . . . . . .  B-28
  Corporate Pension and Profit Sharing Plans . . . . . . . . . . . . .  B-28
  Public Employer Deferred Compensation Plans. . . . . . . . . . . . .  B-29
  General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  B-29
</TABLE>
    

<PAGE>

   
<TABLE>
<S>                                                                     <C>
OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . .  B-29
  Custodian. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  B-29
  Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . .  B-30
  Accounting Services. . . . . . . . . . . . . . . . . . . . . . . . .  B-30
  Shareholder Service, Dividend Disbursing and Transfer Agent. . . . .  B-30
  Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . .  B-30

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . .  B-30
</TABLE>
    

<PAGE>

                 INVESTMENT OBJECTIVES, POLICIES AND TECHNIQUES

     The investment objectives and policies of each of the Fund's six
Portfolios are set forth in the Prospectus under the heading "Investment
Objectives and Policies of the Portfolios."  A description of certain
investment strategies and techniques applicable to some or all of the
Portfolios is set forth in the Prospectus under the heading "Description of
Certain Investment Techniques."  A description of the money market instruments
in which the Money Market Portfolio may invest is contained in Appendix A to
the Prospectus.  A description of the corporate bond and commercial paper
ratings of Moody's Investors Services, Inc. ("Moody's") and Standard & Poor's
Corporation ("Standard & Poor's") is contained in the Prospectus.

     The following is intended to augment the explanation in the Prospectus of
certain investment strategies and techniques applicable to one or more of the
Portfolios.

LOANS OF PORTFOLIO SECURITIES

     Each Portfolio may from time to time lend securities (but not in excess of
20% of its assets) from its portfolio to brokers, dealers and financial
institutions, provided that:  (i) the loan is secured continuously by
collateral consisting of U.S. Government securities, government agency
securities, or cash or cash equivalents adjusted daily to have a market value
at least equal to the current market value of the securities loaned plus
accrued interest; (ii) the Portfolio may at any time call the loan and regain
the securities loaned; and (iii) the Adviser (under the review of the Board of
Directors) has reviewed the creditworthiness of the borrower and found such
creditworthiness satisfactory.  The collateral will be invested in short-term
securities, the income from which will increase the return to the Portfolio.

     The Portfolio will retain all rights of beneficial ownership in the loaned
securities, including voting rights and rights to interest or other
distributions, and will have the right to regain record ownership of loaned
securities to exercise such beneficial rights.  The Portfolio may pay
reasonable administrative, custodial and finders' fees to persons unaffiliated
with the Fund in connection with the arranging of such loans.  Unless certain
requirements contained in the Internal Revenue Code are satisfied, the
dividends, interest and other distributions received by the Portfolio on loaned
securities may not be treated for tax purposes as qualified income for the
purposes of the 90% test discussed under "Taxes." Each Portfolio intends to
loan portfolio securities only to the extent that such activity does not
jeopardize the Portfolio's qualification as a regulated investment company
under Subchapter M of the Internal Revenue Code.


                                       B-1

<PAGE>

COVERED CALL OPTIONS

     Each Portfolio (other than the Money Market Portfolio) may write (sell)
covered call options on its portfolio securities in seeking to enhance
investment performance.  A call option is a short-term contract, ordinarily
having a duration of nine months or less, which gives the purchaser of the
option, in return for a premium paid, the right to buy, and the writer of the
option the obligation to sell, the underlying security at the exercise price at
any time prior to the expiration of the option period.  An option is "covered"
if the writer owns the optioned security.

     A Portfolio will write covered call options both to reduce the risks
associated with certain of its investments and to increase total investment
return.  In return for the premium income, the Portfolio will forego the
opportunity to profit from an increase in the market price of the underlying
security above the exercise price so long as its obligations under the contract
continue, except insofar as the premium represents a profit. Moreover, in
writing the option, the Portfolio will retain the risk of loss if the price of
the security declines, and the premium is intended  to offset any such loss in
whole or in part. A Portfolio, in writing call options, must assume that the
call may be exercised at any time prior to the expiration of its obligations as
a writer and that in such circumstances, the net proceeds realized from the
sale of the underlying securities pursuant to the call may be substantially
below the prevailing market price.

     A Portfolio may write covered call options on debt securities that are
traded over-the-counter.  When a Portfolio writes an over-the-counter option,
there is no assurance that the Portfolio will be able to enter into a closing
purchase transaction.  It may not always be possible for the Portfolio to
negotiate a closing purchase transaction with the same dealer for the same
exercise price and expiration date as the option which the Portfolio previously
had written.  Although the Portfolio may choose to purchase an option from a
different dealer, the Portfolio would then be subject to the additional credit
risk of such dealer.  If the Portfolio is unable to effect a closing purchase
transaction, it will not be able to sell the underlying security until the
option expires or until it delivers the underlying security upon exercise.

GINNIE MAE CERTIFICATES

     The High Grade Bond Portfolio, High Yield Bond Portfolio and Managed
Portfolio may each invest in Ginnie Mae certificates ("Ginnie Maes").  Ginnie
Maes are debt securities issued by a mortgage banker or other mortgagee and
represent an interest in pools of mortgage loans insured by the Federal Housing
Administration or the Farmers Home Administration, or guaranteed by the
Veterans Administration.  Scheduled payments of principal and interest are made
to the registered holders of the Ginnie Maes.  The Government National Mortgage
Association ("GNMA") guarantees the timely payment of monthly installments of
principal and interest on Ginnie Maes at the time such payments are due,
whether or not such amounts are collected on the underlying mortgages by the


                                       B-2

<PAGE>

issuer of the Ginnie Maes.  The National Housing Act provides that the full
faith and credit of the United States is pledged to the timely payment of
principal and interest by GNMA of amounts due on these Ginnie Maes, and an
assistant attorney general of the United States has rendered an opinion that
this guarantee by GNMA is a general obligation of the United States backed by
its full faith and credit.

     The Ginnie Maes in which these Portfolios may invest are of the "modified
pass-through" type, which means that GNMA guarantees the timely payment of
principal and interest installments (whether or not the amounts are collected
by the issuer of the Ginnie Maes).  Under the other general type of Ginnie
Maes, referred to as "straight pass-through" Ginnie Maes, the payment of
principal and interest on a timely basis is not guaranteed.

     The average life of Ginnie Maes varies with the maturities of the
underlying mortgage instruments with maximum maturities of 30 years.  The
average life is likely to be substantially less than the original maturity of
the mortgage pools underlying the securities as the result of prepayments or
refinancing of such mortgages or foreclosure.  Such prepayments are passed
through to the registered holder with the regular monthly payments of principal
and interest, and have the effect of reducing future payments.  Due to the
guarantee of Ginnie Maes by GNMA, foreclosures impose no risk to the principal
invested.

     The average life of pass-through pools varies with the maturities of the
underlying mortgage instruments.  In addition, a pool's term may be shortened
by unscheduled or early payments of principal and interest on the underlying
mortgages.  The occurrence of mortgage prepayments is affected by factors
including the level of interest rates, general economic conditions, the
location and age of the mortgage and other social and demographic conditions.
As prepayment rates vary widely, it is not possible to accurately predict the
average life of a particular pool.  However, statistics indicate that the
average life of the type of mortgages backing the majority of Ginnie Maes is
approximately 12 years.  For this reason, it is standard practice to treat
Ginnie Maes as 30-year mortgage-backed securities that prepay fully in the
twelfth year.  Pools of mortgages with other maturities or different
characteristics will have varying assumptions for average life.  The assumed
average life of pools of mortgages having terms of less than 30 years is less
than 12 years, but typically not less than 5 years.

     The coupon rate of interest on Ginnie Maes is lower than the interest rate
paid on the VA-guaranteed or FHA-insured mortgages underlying the certificates,
but only by the amount of the fees paid to GNMA and the issuer.  Such fees in
the aggregate usually amount to approximately 1/2 of 1%.

     Yields on pass-through securities are typically quoted by investment
dealers and vendors based on the maturity of the underlying instruments and the
associated average-life assumption.  In periods of falling interest rates, the
rate of prepayment tends to increase, thereby shortening the actual average
life of a pool of mortgage-related securities. Conversely, in periods of rising
rates, the rate of prepayment tends to decrease, thereby


                                       B-3

<PAGE>

lengthening the actual average life of the pool.  Prepayments generally occur
when interest rates have fallen.  Reinvestments of prepayments at such times
will be at lower rates, which would lower the return of the Portfolios.  The
actual yield of each Ginnie Mae is influenced by the prepayment experience of
the mortgage pool underlying the certificates and may differ from the yield
based on the assumed average life. Interest on Ginnie Maes is paid monthly
rather than semi-annually as for traditional bonds.

                             INVESTMENT RESTRICTIONS

FUNDAMENTAL POLICIES

     In seeking to achieve its investment objective(s), each Portfolio has
adopted the following investment restrictions. These are fundamental policies
and may not be changed without a majority vote of the outstanding shares of
each Portfolio affected.  As used in this Statement of Additional Information
and in the Prospectus, the phrase "majority vote" of a Portfolio (or the Fund)
means the vote of the lesser of (i) 67% of the shares of the Portfolio (Fund)
present at a meeting if the holders of more than 50% of the outstanding shares
are present in person or by proxy, or (ii) more than 50% of the outstanding
shares of the Portfolio (Fund).  A change in policy by only one Portfolio may
be effected by a majority vote of the outstanding shares of that Portfolio.

Except as noted below, each Portfolio may not:

     1.   Purchase securities of any issuer (other than U.S. Government
securities or government agency securities) if, as a result, more than 5% of
the value of the Portfolio's assets (taken at value) would be invested in
securities of that issuer.

     2.   Purchase more than 10% of the voting securities or more than 10% of
any class of securities of any issuer.  (For this purpose all outstanding debt
securities of an issuer are considered as one class and all preferred stocks of
an issuer are considered as one class.)

     3.   Concentrate its investments in any one industry; however, it may
invest up to 25% of the value of its assets in any one industry.  This
restriction does not apply to U.S. Government securities or government agency
securities (or, with respect to the Money Market Portfolio, obligations of
banks or savings institutions), or to instruments, such as repurchase
agreements, secured by these instruments.

     4.   Purchase securities of other investment companies except by purchase
in the open market involving only customary brokers' commissions (and in no
event to the extent of more than 5% of the value of the Portfolio's total
assets), or as part of a merger, consolidation or acquisition of assets.


                                       B-4

<PAGE>

     5.   Purchase or sell (although it may purchase securities of issuers
which invest or deal in) interests in oil, gas or other mineral exploration or
development programs, real estate, commodities or commodity contracts.

     6.   Purchase any securities on margin (except that the Portfolio may
obtain such short-term credit as may be necessary for the clearance of
purchases and sales of portfolio securities) or make short sales unless, by
virtue of its ownership of other securities, it has the right to obtain
securities equivalent in kind and amount to the securities sold and, if the
right is conditional, the sale is made upon the same condition.

     7.   Purchase or retain the securities of any issuer if any of the
officers or directors of the Fund or of its investment adviser own individually
more than one-half of 1% of the securities of such issuer and together own more
than 5% of the securities of such issuer.

     8.   Issue senior securities, except as appropriate to evidence
indebtedness which a Portfolio is permitted to incur pursuant to (9) below.

     9.   Borrow money, except from banks for temporary or emergency purposes,
and in no event in excess of 5% of its total net assets, or pledge or mortgage
more than 15% of its gross assets.

     10.  Underwrite securities issued by others, except that it may be deemed
to be a statutory underwriter in the sale of any so-called restricted
securities which require registration under the Securities Act of 1933.  In
this connection, a Portfolio will not invest more than 10% of the value of its
total assets in securities which are subject to legal or contractual
restrictions on resale, or are not readily marketable.  No Portfolio has made,
or has a present intention of making, any such investments.

     11.  Participate on a joint (or a joint and several) basis in any trading
account in securities (but this does not include the "bunching" of orders for
the sale or purchase of portfolio securities with the other Portfolios or with
other investment company and client accounts managed by the Fund's investment
adviser or its affiliates to reduce brokerage commissions or otherwise to
achieve best overall execution, or to obtain securities on more favorable
terms).

     12.  Alone, or together with any other Portfolios, make investments for
the purpose of exercising control over, or management of, any issuer.

     13.  Lend money or securities, except as provided in (14) below (the
making of demand deposits with banks, and the purchase of securities such as
bonds, debentures, commercial paper and short-term obligations in accordance
with the Portfolio's investment objectives and policies, shall not be
considered the making of a loan).  In addition, each Portfolio may not invest
more than 10% of its total assets (taken at market value at the time of each
purchase) in repurchase agreements maturing in more than seven days.


                                       B-5

<PAGE>

     14.  Lend its portfolio securities in excess of 20% of its net assets.

     15.  Invest in foreign securities except for foreign equity securities
traded on U.S. exchanges and payable in U.S. dollars (and in no event in excess
of 25% of the Portfolio's net assets).

     16.  Write, purchase or sell puts, calls or combinations thereof, other
than writing covered call options.

     17.  Invest more than 5% of the value of its total assets in securities of
companies which have a record of less than three years continuous operation,
including in such three years the operation of any predecessor company or
companies, partnership or individual proprietorship if the company whose
securities are to be purchased by the Fund has come into existence as a result
of a merger, consolidation or reorganization or the purchase of substantially
all of the assets of such predecessor.

     The investment restrictions for the Blue Chip Portfolio are the same as
those for the other Portfolios except that investment restriction number 1
shall be applicable to only 75% of the value of the Blue Chip Portfolio's total
assets.

NON-FUNDAMENTAL (OPERATING) POLICIES

     The following are non-fundamental (operating) policies approved by the
Board of Directors.  Such policies may be changed by the Board of Directors
without approval of the Shareholders.

     Each Portfolio shall not:

     (a)  invest more than 10% of its total net assets in illiquid securities,
which includes repurchase agreements maturing in more than 7 days, securities
used to cover covered calls options written by a Portfolio, and any security
which is subject to restriction upon disposition or otherwise considered to be
illiquid.

     The Growth Common Stock Portfolio shall not:

     (b)  purchase warrants, valued at the lower of cost or market, in excess
of 5% of the value of the Portfolio's net assets.  Included within that amount,
but not to exceed 2% of the value of the Portfolio's net assets, may be
warrants that are not listed on the New York or American Stock Exchange.
Warrants acquired by the Portfolio at any time in units or attached to
securities are not subject to this restriction; or

     (c)  purchase securities which are subject to legal or contractual
restrictions on resale in excess of 5% of the value of the Portfolio's net
assets.


                                       B-6

<PAGE>

   
     The term "government agency securities" for purposes of investment
restriction 3 has the same meaning as that set forth in Appendix A to the
Prospectus.  The term "commodities or commodity contracts" as used in
investment restriction 5 includes futures contracts.
    

     If a percentage increase is adhered to at the time of investment, a later
increase or decrease in percentage beyond the specified limit resulting from a
change in values or net assets will not be considered a violation.

                             OFFICERS AND DIRECTORS

   
     The officers and directors of the Fund, their age and their principal
occupations for the past five years are set forth below, though corporate
positions may, in some instances, have changed during this period.  The address
of the officers of the Fund is 5400 University Avenue, West Des Moines, Iowa
50266.  The directors listed with an asterisk are "interested persons" of the
Fund as defined in the Investment Company Act of 1940.
    

   
MERLIN D. PLAGGE*, PRESIDENT AND DIRECTOR (65)
    

   
     Farmer; President and Director, Iowa Farm Bureau Federation, Farm Bureau
     Multi-State Services, Inc., Farm Bureau Life Insurance Company, Universal
     Assurors Life Insurance Company, FBL Insurance Brokerage, Inc., Farm Bureau
     Mutual Insurance Company, Utah Farm Bureau Insurance Company, FBL Financial
     Services, Inc., BIC, Inc., and Farm Bureau Agricultural Business
     Corporation; Director, Western Farm Bureau Management Corporation, Western
     Farm Bureau Life Insurance Company, Western Agricultural Insurance Company
     and American Agricultural Insurance Company.
    

   
EUGENE R. MAAHS*, SENIOR VICE PRESIDENT, SECRETARY-TREASURER AND DIRECTOR (64)
    

   
     Senior Vice President and Secretary-Treasurer, Farm Bureau Multi-State
     Services, Inc., Farm Bureau Life Insurance Company, Universal Assurors
     Life Insurance Company, Farm Bureau Mutual Insurance Company, Utah Farm
     Bureau Insurance Company, FBL Financial Services, Inc. and FBL Insurance
     Brokerage, Inc.; Executive Director and Secretary-Treasurer, Iowa Farm
     Bureau Federation; Senior Vice President and Assistant
     Secretary-Treasurer, South Dakota Farm Bureau Mutual Insurance Company;
     Vice President and Treasurer, Farm Bureau Management Corporation; Former
     Administrative Director, Iowa Farm Bureau Federation; Former Executive
     Vice President and Director, Communications Providers, Inc.; Co-Owner,
     Country Gardens.
    


                                       B-7

<PAGE>

   
STEPHEN M. MORAIN*, SENIOR VICE PRESIDENT, GENERAL COUNSEL, ASSISTANT SECRETARY
AND DIRECTOR (50)
    

   
     General Counsel and Assistant Secretary, Iowa Farm Bureau Federation;
     General Counsel, Secretary and Director, Farm Bureau Management
     Corporation; Senior Vice President and General Counsel, Farm Bureau
     Multi-State Services, Inc., Farm Bureau Life Insurance Company, Universal
     Assurors Life Insurance Company, Farm Bureau Mutual Insurance Company,
     Utah Farm Bureau Insurance Company, FBL Financial Services, Inc., FBL
     Insurance Brokerage, Inc. and South Dakota Farm Bureau Mutual Insurance
     Company; Senior Vice President, General Counsel and Director, FBL
     Investment Advisory Services, Inc. and FBL Marketing Services, Inc.;
     Director, Computer Aided Design Software, Inc. and Iowa Business
     Development Finance Corporation; Chairman, Edge Technologies, Inc.
    

   
THOMAS R. GIBSON, EXECUTIVE VICE PRESIDENT AND GENERAL MANAGER (51)
    

   
     Executive Vice President and General Manager, Farm Bureau Multi-State
     Services, Inc., Farm Bureau Life Insurance Company, Universal Assurors
     Life Insurance Company, Western Farm Bureau Life Insurance Company, Farm
     Bureau Mutual Insurance Company, Utah Farm Bureau Insurance Company, FBL
     Insurance Brokerage, Inc., FBL Financial Services, Inc., and South Dakota
     Farm Bureau Mutual Insurance Company; Executive Vice President, General
     Manager and Director, FBL Investment Advisory Services, Inc. and FBL
     Marketing Services, Inc.
    

   
TIMOTHY J. HOFFMAN, VICE PRESIDENT, CHIEF MARKETING OFFICER (45)
    

   
     Vice President, Chief Marketing Officer, Farm Bureau Multi-State Services,
     Inc., Farm Bureau Life Insurance Company, Universal Assurors Life
     Insurance Company, Western Farm Bureau Life Insurance Company, Farm Bureau
     Mutual Insurance Company, Utah Farm Bureau Insurance Company, FBL
     Financial Services, Inc., South Dakota Farm Bureau Mutual Insurance
     Company and FBL Insurance Brokerage, Inc. President and Director, FBL
     Marketing Services, Inc. and FBL Educational Services, Inc.; Vice
     President, Chief Marketing Officer and Director, FBL Investment Advisory
     Services, Inc.
    

   
WILLIAM J. ODDY, VICE PRESIDENT, CHIEF OPERATING OFFICER AND ASSISTANT GENERAL
MANAGER (51)
    

   

     Vice President, Chief Operating Officer and Assistant General Manager,
     Farm Bureau Multi-State Services, Inc., Farm Bureau Life Insurance
     Company, Universal Assurors Life Insurance Company, Western
    


                                       B-8

<PAGE>

   
     Farm Bureau Life Insurance Company, FBL Insurance Brokerage, Inc., Utah
     Farm Bureau Insurance Company, Farm Bureau Mutual Insurance Company, South
     Dakota Farm Bureau Mutual Insurance Company and FBL Financial Services,
     Inc.; President, Treasurer and Director, Communications Providers, Inc.;
     Vice President, Chief Operating Officer, Assistant General Manager,
     Treasurer and Director, FBL Investment Advisory Services, Inc. and FBL
     Marketing Services, Inc.; President and Director, FBL Real Estate Ventures,
     Ltd. and RIK, Inc.
    

   
RICHARD D. WARMING, VICE PRESIDENT, CHIEF INVESTMENT OFFICER (62)
    

   
     Vice President, Chief Investment Officer and Assistant Treasurer, Farm
     Bureau Multi-State Services, Inc., Farm Bureau Life Insurance Company,
     Universal Assurors Life Insurance Company, Western Farm Bureau Life
     Insurance Company, FBL Insurance Brokerage, Inc., Utah Farm Bureau
     Insurance Company, FBL Financial Services, Inc., Farm Bureau Mutual
     Insurance Company; Western Agricultural Insurance Company, Western Farm
     Bureau Mutual Insurance Company and South Dakota Farm Bureau Mutual
     Insurance Company; President and Director, FBL Leasing Services, Inc. and
     FBL Investment Advisory Services, Inc.; Vice President, Chief Investment
     Officer and Director, FBL Marketing Services, Inc.; Vice President,
     Secretary and Director, RIK, Inc; Secretary and Director, FBL Real Estate
     Ventures, Ltd.
    

   
DENNIS M. MARKER, INVESTMENT VICE PRESIDENT, ADMINISTRATION AND ASSISTANT
SECRETARY (44)
    

   

     Investment Vice President, Administration, Farm Bureau Life Insurance
     Company, Universal Assurors Life Insurance Company,  Western Farm Bureau
     Life Insurance Company, FBL Insurance Brokerage, Inc., Farm Bureau Mutual
     Insurance Company, Utah Farm Bureau Insurance Company and South Dakota
     Farm Bureau Mutual Insurance Company; Vice President and Director, FBL
     Leasing Services, Inc.; Investment Vice President, Administration,
     Secretary and Director, FBL Investment Advisory Services, Inc. and FBL
     Marketing Services, Inc.
    

   
SUE A. CORNICK, MARKET CONDUCT AND MUTUAL FUNDS MANAGER AND ASSISTANT SECRETARY
(35)
    

   
     Market Conduct and Mutual Funds Manager and Assistant Secretary, FBL
     Investment Advisory Services, Inc. and FBL Marketing Services, Inc.
    


                                       B-9

<PAGE>

   
KRISTI ROJOHN, ASSISTANT SECRETARY (32)
    

     Senior Compliance Assistant and Assistant Secretary, FBL Investment
     Advisory Services, Inc. and FBL Marketing Services, Inc.

   
ELAINE A. FOLLOWWILL, ASSISTANT SECRETARY (25)
    

   
     Compliance Assistant and Assistant Secretary, FBL Investment Advisory
     Services, Inc. and FBL Marketing Services, Inc.
    

   
DONALD G. BARTLING, DIRECTOR (68)
Box 104
Herman, Nebraska  68029
    

     Farmer; Partner, Bartling Brothers Partnership (farming business) and BBK
     (farming partnership); Director, Papio Missouri River Natural Resources
     District.

   
JOHN R. GRAHAM, DIRECTOR (50)
1512 Country Club Place
Manhattan, Kansas  66502
    

   
     Executive Vice President, Kansas Farm Bureau, Kansas Farm Bureau Services,
     Kansas Agricultural Marketing Association, FB Services Insurance Agency,
     Kansas Farm Bureau Life Insurance Company, The Farm Bureau Mutual
     Insurance Company, Inc., Kansas Farm Bureau Reinsurance Company, Inc. and
     KFB Insurance Company, Inc.; Chairman, Chief Executive Officer and
     Director, FB Capital Management, Inc. of Kansas; Director, National
     Association of Independent Insurers, Didde Corporation, Farm Bureau Mutual
     Insurance Agency of Kansas and Kansas State Travel Agency, Inc.; Partner,
     Arthur-Graham Rental Properties, CM Brass and G&H Real Estate Investments;
     Trustee, Master Teacher Employee Benefit Pension Trust.
    

   
ERWIN H. JOHNSON, DIRECTOR (52)
1841 March Avenue
Charles City, Iowa 50616
    

     Farmer; Owner and Manager, Center View Farms Co.; Director, First Security
     Bank and Trust Co., Charles City, Iowa; Farm Associate, Iowa State
     University Cooperative Extension Service; Voting Delegate, Former
     President and Director, Floyd County Farm Bureau.


                                      B-10

<PAGE>

   
ANN JORGENSEN, DIRECTOR (55)
R.R. 1, Box 43
Garrison, Iowa  52229
    

     Private Investor; Farm and Business Management;  Partner, Jorg-Anna Farms;
     President and Founder, Farm Home Offices; Vice President, Timberlane Hogs
     Limited; Director, Iowa Department of Economic Development; Chairperson,
     Rural Development Council; Member, Iowa Agriculture Products Advisory
     Council; Secretary, Iowa Public Television Foundation, Iowa Freedom
     International Foundation; Friends of the U.I.H.C.; Former Director and
     Chairperson, Iowa's Alcoholic Beverage Control Commission; Former Regent,
     State of Iowa Board of Regents; Former Director, Iowa Public Television
     and University of Iowa Hospitals and Clinics.

   
DALE W. NELSON, DIRECTOR (76)
4216 Patricia Drive
Des Moines, Iowa 50322
    

     Retired; Former Executive Director and Secretary-Treasurer, Iowa Farm
     Bureau Federation and affiliated companies; Former Senior Vice President,
     Secretary-Treasurer and Director of the Fund and FBL Money Market Fund,
     Inc..

   
CURTIS C. PIETZ, DIRECTOR (64)
R. R. 3, Box 79
Lakefield, Minnesota  65150
    

     Farmer; Director and Part Owner, Storden Seed and Chemical Service, Inc.;
     Director, Minnesota Rural Finance Authority; Former Program Evaluator,
     Minnesota Department of Vocational Education; Former President, Jackson
     County Farm Bureau; Former Chairman and Director, Southwest Farm
     Management Association; Director, F.C.S.

   
     The officers and directors of the Fund also serve in similar capacities as
officers and directors of FBL Money Market Fund, Inc., and as officers and
trustees of FBL Variable Insurance Series Fund.  Several of the officers and
directors of the Fund are also officers and directors of the Adviser.  The Fund
pays no direct remuneration to any officer of the Fund.  Each of the directors
who is not affiliated with the Adviser receives a fee of $115 plus expenses for
each directors' meeting attended.  For the fiscal year ended July 31, 1995,
directors fees paid by the Fund totalled $2,580.
    

   
     The following table sets forth the compensation received by all Directors
of the Fund, for the fiscal year ended July 31, 1995.  The information in the
last column of the table sets forth the total compensation received by all
Directors for
    


                                      B-11

<PAGE>

   
calendar year 1994 for services as a Director of the Fund and other funds
in the FBL Family.
    

   
<TABLE>
<CAPTION>
                                                            Pension and
                                        Aggregate            Retirement             Total Compensation
                                      Compensation        Benefits Accrued        from all funds in the
Name of Director                      From the Fund   as Part of Fund Expenses         FBL Family
- ----------------                      -------------   ------------------------    ---------------------
<S>                                   <C>             <C>                         <C>
Donald G. Bartling                      $   430                   0                       $ 1,200
John R. Graham                              430                   0                         1,200
Erwin H. Johnson                            430                   0                         1,200
Ann Jorgensen                               430                   0                         1,200
Eugene R. Maahs                               0                   0                             0
Stephen M. Morain                             0                   0                             0
Dale W. Nelson                              430                   0                         1,200
Curtis C. Pietz                             430                   0                         1,200
Merlin D. Plagge                              0                   0                             0
</TABLE>
    

   
     As of October 31, 1995, the officers and directors as a group owned less
than 1% of the then outstanding shares of the Fund.
    

                               INVESTMENT ADVISER

   
     The following information supplements the information set forth in the
Prospectus under "Management of the Fund -- Investment Adviser."  Pursuant to
an Investment Advisory and Management Services Agreement dated November 11,
1987 ("Agreement"), FBL Investment Advisory Services, Inc. ("FBL" or the
"Adviser") acts as the Fund's investment adviser and manager subject to the
review of the Fund's Board of Directors.  The Adviser is a wholly-owned
subsidiary of FBL Financial Services, Inc., which is a wholly-owned subsidiary
of Farm Bureau Life Insurance Company, an Iowa insurance company, which is a
wholly-owned subsidiary of Farm Bureau Multi-State Services, Inc., an Iowa
corporation, 64% of whose outstanding voting shares are in turn owned by Iowa
Farm Bureau Federation an Iowa not-for-profit corporation.  The Adviser also
acts as an investment adviser to individuals, institutions and two other mutual
funds:  FBL Money Market Fund, Inc. and FBL Variable Insurance Series Fund.
Personnel of the Adviser also manage investments for the portfolios of
insurance companies.
    

     The Adviser subscribes to leading bond information services and receives
published reports and statistical compilations from the issuers directly, as
well as analyses from brokers and dealers who may execute portfolio
transactions for the Fund or the Adviser's other clients.  The Adviser regards
this information and material, however, as an adjunct to its own research
activities.


                                      B-12

<PAGE>

     Under the Agreement, the Adviser regularly provides the Fund with
investment research, advice and supervision, and furnishes an investment
program consistent with the investment objectives and policies of each
Portfolio, determining for each Portfolio, what securities shall be purchased
and sold and what portion of the Portfolio's assets shall be held uninvested,
subject always to:  (i) the provisions of the articles of incorporation, the
Fund's by-laws, the Investment Company Act of 1940 and applicable requirements
of the Internal Revenue Code; (ii) the Portfolio's investment objectives,
policies and restrictions; and (iii) such policies and instructions as the
Board of Directors may from time to time establish.  The Adviser also advises
and assists the officers of the Fund in taking such steps as are necessary or
appropriate to carry out the decisions of the Board of Directors (and any
committees thereof) regarding the conduct of the business of the Fund.  The
Adviser has agreed to arrange for any of its officers or directors to serve
without salary as directors, officers or agents of the Fund if duly elected to
such positions.

     The Adviser, at its expense, furnishes the Fund with office space and
facilities, simple business equipment, advisory, research and statistical
facilities, and clerical services and personnel to administer the business
affairs of the Fund.  As compensation for the Adviser's investment advisory,
management and clerical services, as well as the facilities it provides and the
expenses it assumes, the Agreement provides for the payment of a monthly fee as
described in the Prospectus.

     The Adviser is not required to pay expenses of the Fund other than those
set forth above.  Each Portfolio will pay all other expenses incurred in its
operation, including a portion of the Fund's general administrative expenses,
allocated on the basis of the Portfolio's net asset value.  Expenses that will
be borne directly by the Portfolios include, but are not limited to, the
following:  net asset value calculations; portfolio transaction costs; interest
on Fund obligations; stock certificates; miscellaneous reports; membership
dues; all expenses of shareholders' and directors' meetings and of preparing,
printing and mailing proxy statements, reports and notices to shareholders; all
expenses of registering the Fund's shares under federal and state securities
laws; the typesetting costs of printing Fund prospectuses and supplements
thereto; investor services (including allocable telephone and personnel
expenses); all taxes and fees payable to federal, state or other governmental
authorities; the fees and expenses of independent public auditors, legal
counsel, custodian, dividend disbursing and transfer agent; fees of directors
who are not affiliated with the Adviser; insurance premiums for fidelity bond
and other coverage of the Fund's operations; and such non-recurring expenses as
may arise including actions, suits or proceedings affecting the Fund and the
legal obligation the Fund may have to indemnify its officers and directors with
respect thereto.  See "Underwriting and Distribution Expenses" and "Other
Information -- Accounting Services" for a description of certain other Fund
expenses.


                                      B-13

<PAGE>

   
     The Agreement was approved on November 11, 1987 by a vote of the
shareholders of Farm Bureau Growth Fund, Inc.(1) and on December 1, 1987 by
Farm Bureau Life Insurance Company as the then sole shareholder of each of the
other seven Portfolios of the Fund, and was most recently approved for
continuance on August 17, 1995, by the Board of Directors, including a vote of
a majority of the Directors who are not "interested persons" of either party to
the Agreement.  Unless earlier terminated as described below, the Agreement
will remain in effect until November 30, 1996.  Thereafter, the Agreement will
continue in effect, with respect to a Portfolio, from year to year so long as
its continuation is approved at least annually by (a) the vote of a majority of
those Directors who are not parties to the Agreement or "interested persons" of
either party to the Agreement cast in person at a meeting called for the
purpose of voting on such approval, and (b) either (i) the vote of a majority
of the Directors or (ii) the vote of a majority of the outstanding shares of
such Portfolio.
    

     The Agreement will be deemed to have been approved (or amended) by the
shareholders of any Portfolio if a majority of the outstanding shares of that
Portfolio vote for approval (or amendment) of the Agreement, notwithstanding
(a) that the Agreement has not been approved (or amended) by a majority of the
outstanding shares of any other Portfolio, and (b) that the Agreement has not
been approved (or amended) by a vote of a majority of the outstanding shares of
the Fund.  The Agreement may be terminated without penalty at any time upon 60
days' notice by either party, and will terminate automatically upon assignment.

     The Agreement provides that the Adviser shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Fund in
connection with matters to which the Agreement relates, except a loss resulting
from willful misfeasance, bad faith or gross negligence on the part of the
Adviser in the performance of its duties, or from reckless disregard by the
Adviser of its obligations and duties under the Agreement.

     Officers and employees of the Adviser from time to time may have
transactions with various banks, including the Fund's custodian bank.  It is
the Adviser's opinion that the terms and conditions of such transactions will
not be influenced by existing or potential custodial or other Fund
relationships.

- ------------------------
     (1)  The Fund, which was incorporated in Maryland on August 14, 1970, was
known as Farm Bureau Growth Fund, Inc. prior to the effectiveness of Articles
of Amendment to its charter on December 1, 1987 which, among other things,
changed its name to FBL Series Fund, Inc. and established eight Portfolios of
the Fund and designated the then current assets, liabilities and shareholders
of Farm Bureau Growth Fund, Inc. as the assets, liabilities and shareholders of
the Growth Common Stock Portfolio of FBL Series Fund, Inc.  The meaning of the
term "Growth Common Stock Portfolio" as used herein includes, where
appropriate, Farm Bureau Growth Fund, Inc. prior to December 1,
1987.


                                      B-14

<PAGE>

   
     The investment advisory and management fee expense for the fiscal years
ended July 31, 1995, 1994 and 1993 was $331,615, $294,555 and $217,543,
respectively, for the Growth Common Stock Portfolio; $31,381, $30,712 and
$31,638, respectively, for the High Grade Bond Portfolio; $35,015, $33,735 and
$28,620, respectively, for the High Yield Bond Portfolio; $118,526, $85,361 and
$30,189, respectively, for the Managed Portfolio; $10,035, $10,596 and $10,643,
respectively, for the Money Market Portfolio; and $19,647, $14,982 and
$12,007, respectively, for the Blue Chip Portfolio.
    

                PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS

     With respect to transactions in portfolio securities, whether through a
broker as agent or with a dealer as principal, the Adviser endeavors to obtain
for the Fund the most favorable prices and efficient execution of orders.
Subject to this primary consideration, the Adviser may place a Portfolio's
transactions with firms that furnish research, statistical and other services.
In particular, the Adviser may direct brokerage transactions to a specific
broker in return for certain data and research-oriented software.  Certain
affiliates of the Adviser also place portfolio transactions with these
brokerage firms, and such affiliates share the benefits of the research and
other services obtained from these brokers.

     Brokerage research services, as provided in Section 28(e) of the
Securities Exchange Act of 1934, include:  advice as to the value of
securities, the advisability of investing in, purchasing or selling securities,
and the availability of securities or purchasers or sellers of securities;
furnishing analyses and reports concerning issues, industries, securities,
economic factors and trends; portfolio strategy and performance of accounts;
and the execution of securities transactions and performance of functions
incidental thereto (such as clearance and settlement).

   
     The Fund paid brokerage commissions during the fiscal years ended July 31,
1995, 1994 and 1993 of $199,427, $156,305 and $95,696, respectively.  The
Adviser regards information that is customarily available only in return for
brokerage as among the many elements to be considered in arriving at investment
decisions.  No specific value can be determined for most such information and
services and they are deemed supplemental to the Adviser's own efforts in the
performance of its duties under the investment advisory agreement.  Neither the
Adviser nor any of its affiliates will receive any brokerage business arising
out of the portfolio transactions of the Fund.
    

     If, in the judgment of the Adviser, the Fund or any Portfolio will be
benefited by such supplemental research services, the Fund or such Portfolio is
authorized to pay greater


                                      B-15

<PAGE>

spreads or commissions than another broker or dealer may charge for the same
transaction.  Accordingly, while the Adviser generally seeks reasonably
competitive spreads or commissions, the Portfolios will not necessarily be
paying the lowest spread or commission available in every case.  The expenses
of the Adviser will not necessarily be reduced as a result of the receipt of
such supplemental information.

     The Portfolios may deal in some instances in securities that are not
listed on a national securities exchange but rather are traded in the
over-the-counter market.  The Portfolios may also purchase listed securities
through the "third market."  Where transactions are executed in the
over-the-counter market or third market, the Adviser will seek to deal with
primary market makers but, when necessary, will utilize the services of
brokers.  In all such cases, the Adviser will attempt to negotiate the best
price and execution.  Money market instruments are generally traded directly
with the issuer.  On occasion, other securities may be purchased directly from
the issuer.  The cost of a Portfolio's securities transactions will consist
primarily of brokerage commissions or dealer or underwriter spreads.

     Certain investments may be appropriate for certain of the Portfolios and
for other clients advised by the Adviser. Investment decisions for the
Portfolios and such other clients are made with a view to achieving their
respective investment objectives and after consideration of factors such as
their current holdings, availability of cash for investment and the size of
their investments in general.  Frequently, a particular security may be bought
or sold for only one client, or in different amounts and at different times for
more than one but less than all clients.  Likewise, a particular security may
be bought for one or more clients when one or more other clients are selling
the security.  In addition, purchases or sales of the same security may be made
for two or more Portfolios or other clients at the same time.  In such event,
such transactions will be allocated among the Portfolios or other clients in a
manner believed by the Adviser to be equitable to each.  In some cases, this
procedure could have an adverse effect on the price or amount of the securities
purchased or sold by a Portfolio.  It is the opinion of the Board of Directors
that the benefits available because of the Adviser's organization outweigh any
disadvantages that may arise from exposure to simultaneous transactions.
Purchase and sale orders for a Portfolio may be combined with those of other
Portfolios or other clients of the Adviser in the interest of the most
favorable net results to the Portfolio.

                     UNDERWRITING AND DISTRIBUTION EXPENSES

     FBL Investment Advisory Services, Inc. (the "Distributor") also serves as
principal underwriter for the Fund under an Underwriting Agreement dated
December 31, 1983, and as distributor of the Fund's shares under a Distribution
Plan and Agreement dated December 1, 1987, as amended November 25, 1991
("Distribution Agreement").  See "General Information--Distributor" in the
Prospectus.  The Distributor bears all its expenses of providing services
pursuant to the Distribution Agreement, including the payment of any
commissions, the preparation and distribution of advertising or sales
literature, and bears


                                      B-16

<PAGE>

the cost of printing and mailing prospectuses to persons other than
shareholders.  The Fund bears the cost of qualifying and maintaining the
qualification of its shares for sale under the securities laws of the various
states and the expense of registering its shares with the Securities and
Exchange Commission.

     The Distribution Agreement continues in effect from year to year so long
as such continuance is approved at least annually by a vote of the Board of
Directors of the Fund, including the Directors who are not "interested persons"
of the Fund and who have no direct or indirect financial interest in the
agreement. The Distribution Agreement automatically terminates in the event of
its assignment and may be terminated at any time without penalty by the Fund or
by the Distributor upon six months' notice.  Termination by the Fund may be by
vote of a majority of the Board of Directors, or a majority of the Directors
who are not "interested persons" of the Fund and who have no direct or indirect
financial interest in the Distribution Agreement, or a "majority of the
outstanding voting securities" of the Fund as defined under the Investment
Company Act of 1940.  The Distribution Agreement may not be amended to increase
the fee to be paid by the Fund without approval by a majority of the
outstanding voting securities of the Fund and all material amendments must in
any event be approved by the Board of Directors in the manner described above
with respect to the continuation of the Agreement.  Shareholders vote in the
aggregate and not by Portfolio with respect to the Distribution Agreement.

     Pursuant to an action by the Board of Directors on August 15, 1991, the
Board approved an amendment to the Distribution Agreement which provided for a
reduction in the distribution services fee and approved an Administrative
Services Agreement between the Fund and the Distributor which provides for an
administrative services fee to be paid to the Distributor. Effective November
25, 1991, the distribution services fee paid by the Fund to the Distributor was
lowered from .75% to .50% of average daily net assets of the Fund and an
administrative services fee of .25% of average daily net assets of the Fund
will be paid by the Fund to the Distributor.

   
     The Fund paid annual distribution fees to the Distributor during the
fiscal years ended July 31, 1995, 1994 and 1993 of $553,282, $477,956 and
$345,586, respectively.  During the fiscal year ended July 31, 1995, of the
aggregate amount of distribution fees paid to the Distributor, $165,967 was
paid to FBL Marketing Services, Inc., an affiliate of the Distributor, $24 was
paid to other dealers and the balance of $387,291 was retained by the
Distributor.  During the fiscal year ended July 31, 1995, the Distributor
incurred expenses in the approximate amounts noted: $394,111 for commissions
paid to Dealers for Fund sales, $171,343 for management services, $20,513 for
rent, $17,424 for report costs, $9,839 for telephone, $5,763 for postage,
$3,014 for printing and office supplies, and $2,939 for furniture and equipment.
    


                                      B-17

<PAGE>

   
     During the fiscal years ended July 31, 1995, 1994 and 1993 the Distributor
received $135,141, $49,718 and $75,251, respectively, in contingent deferred
sales charges.
    

     The Distributor also acts as principal underwriter and sole distributor of
the shares of FBL Money Market Fund, Inc. and FBL Variable Insurance Series
Fund.

                            PURCHASES AND REDEMPTIONS

     The following supplements the discussion in the Prospectus under the
headings "How to Buy Shares" and "How to Redeem Shares."

     Shares of each Portfolio are sold at their respective net asset value next
determined after an order for purchase and payment are received in proper form.

     Shares of each Portfolio are redeemed at their respective net asset value
next determined after a request for redemption is received in proper form.  The
Fund may suspend the right of redemption or postpone the date of payment, with
respect to the shares of a Portfolio, during any period when (a) trading on the
New York Stock Exchange is restricted as determined by the Securities and
Exchange Commission or such exchange is closed for trading (other than
customary weekend and holiday closing); (b) an emergency exists, as determined
by the Securities and Exchange Commission, as a result of which disposal of
such Portfolio's securities, or determination of the net asset value of such
Portfolio, is not reasonably practicable; or (c) the Securities and Exchange
Commission by order permits such suspension for the protection of Shareholders.
 In such event, redemption will be effected at the net asset value next
determined after the suspension has been terminated unless the Shareholder has
withdrawn the redemption request in writing and the request has been received
by FBL Investment Advisory Services, Inc., 5400 University Avenue, West Des
Moines, Iowa 50266, prior to the day of such determination of net asset value.

                                 NET ASSET VALUE

     The following supplements the discussion in the Prospectus under the
heading "Net Asset Value Information."

MONEY MARKET PORTFOLIO

     The net asset value per share of the Money Market Portfolio is computed by
dividing the total value of the Portfolio's securities and other assets, less
liabilities (including dividends payable), by the number of shares outstanding.
 The assets are determined by valuing the portfolio securities at amortized
cost, pursuant to Rule 2a-7 under the Investment Company Act.  The amortized
cost method of valuation involves valuing a security at cost at the time of
purchase and thereafter assuming a constant amortization to


                                      B-18

<PAGE>

maturity of any discount or premium, regardless of the impact of fluctuating
interest rates on the market value of the instrument.

     The purpose of the amortized cost method of valuation is to attempt to
maintain a constant net asset value per share of $1.00.  While this method
provides certainty in valuation, it may result in periods during which value,
as determined by amortized cost, is higher or lower than the price the
Portfolio would receive if it sold its portfolio securities.  Under the
direction of the Board of Directors, certain procedures have been adopted to
monitor and stabilize the price per share.  Calculations are made to compare
the value of the portfolio securities, valued at amortized cost, with market
values.  Market valuations are obtained by using actual quotations provided by
market makers, estimates of market value, or values obtained from yield data
relating to classes of money market instruments published by reputable sources
at the mean between the bid and asked prices for those instruments.  If a
deviation of 1/2 of 1% or more between the Portfolio's $1.00 per share net
asset value and the net asset value calculated by reference to market
valuations were to occur, or if there were any other deviations which the Board
of Directors believes would result in dilution or other unfair results material
to Shareholders, the Board of Directors would consider what action, if any,
should be initiated.

     The market value of debt securities usually reflects yields generally
available on securities of similar quality.  When yields decline, the market
value of a Portfolio holding higher yielding securities can be expected to
increase; when yields increase, the market value of a Portfolio invested at
lower yields can be expected to decline.  In addition, if the Portfolio has net
redemptions at a time when interest rates have increased, the Portfolio may be
forced to sell portfolio securities prior to maturity at a price below the
Portfolio's carrying value.  Also, because the Portfolio generally will be
valued at amortized cost rather than market value, any yield quoted may be
different from the yield that would result if the entire Portfolio were valued
at market value, since the amortized cost method does not take market
fluctuations into consideration.

OTHER PORTFOLIOS

     The net asset value per share of each Portfolio other than the Money
Market Portfolio is computed by dividing the total value of the Portfolio's
securities and other assets, less liabilities, by the number of Portfolio
shares then outstanding. Securities traded on a national exchange are valued at
the last sale price as of the close of business on the day the securities are
being valued, or, lacking any sales, at the mean between closing bid and asked
prices.  Securities, other than money market instruments, traded in the
over-the-counter market are valued at the mean between the bid and asked prices
or at yield equivalent as obtained from one or more dealers that make markets
in the securities.  Securities traded both in the over-the-counter market and
on a national exchange are valued according to the broadest and most
representative market, and it is expected that for debt securities this
ordinarily will be the over-the-counter market.  Securities and assets for
which market quotations are not readily available are valued at fair value as
determined in good


                                      B-19

<PAGE>

faith by or under the direction of the Board of Directors.  Money market
instruments are valued at market value, except that instruments maturing in 60
days or less are valued using the amortized cost method of valuation.

     The proceeds received by each Portfolio for each issue or sale of its
shares, and all income, earnings, profits and proceeds thereof, subject only to
the rights of creditors, are allocated specifically to such Portfolio, and
constitute the underlying assets of such Portfolio.  The underlying assets of
each Portfolio are segregated on the Fund's books of account and are charged
with the liabilities of such Portfolio and with a share of the general
liabilities of the Fund.  Expenses with respect to any two or more Portfolios
are allocated in proportion to the net asset values of the respective
Portfolios except where allocations of direct expenses can otherwise be fairly
made.

                                      TAXES

     For federal income tax purposes, each Portfolio is treated as a separate
entity.  Each Portfolio intends to continue to qualify to be taxed as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended ("Code").  If a Portfolio qualifies as a regulated
investment company and complies with the provisions of the Code, such Portfolio
will be relieved from federal income tax on the part of its net ordinary income
and net realized capital gain that it distributes to its shareholders.  To
qualify for treatment as a "regulated investment company," a Portfolio must,
among other things, derive in each taxable year at least 90% of its gross
income from dividends, interest, payments with respect to securities loans, and
gains from the sale or other disposition of stock or securities or foreign
currencies (subject to the authority of the Secretary of the Treasury to
exclude foreign currency gains that are not ancillary to the Portfolio's
principal business of investing in stock or securities or options and futures
with respect to such stock or securities), or other income (including but not
limited to gains from options, futures, or forward contracts) derived with
respect to its business of investing in such stocks, securities, or currencies.
 In addition, to qualify for treatment as a "regulated investment company," a
Portfolio must derive less than 30% of its gross income in each taxable year
from gains (without deduction for losses) from the sale or other disposition of
securities held for less than three months.  This rule may limit a Portfolio's
ability to engage in futures and options transactions.

     A 4% excise tax is imposed on the excess of the required distribution for
a calendar year over the distributed amount for such calendar year.  The
required distribution is generally the sum of 98% of a Portfolio's net ordinary
income for the calendar year plus 98% of its capital gain net income for the
one year period ending October 31.  The Fund intends to declare or distribute
dividends from each Portfolio during the calendar year of an amount sufficient
to prevent imposition of the 4% excise tax.

     A portion of the ordinary income distributions from a Portfolio may be
eligible for the "dividends received deduction" available to corporate
shareholders.  The aggregate


                                      B-20

<PAGE>

   
amount eligible for the "dividends received deduction" may not exceed the
aggregate qualifying dividends received by such Portfolio for the fiscal year.
The portion of the income dividends paid during the fiscal year ended July 31,
1995 that qualified for the "dividends received deduction" available to
corporate shareholders was as follows: 71% of the income dividend paid December
29, 1994 by the Growth Common Stock Portfolio; 61%, 65%, 64% and 61% of the
income dividends paid November 7, 1994, December 29, 1994, May 5, 1995, and
August 7, 1995, respectively, by the Managed Portfolio; and 87% of the income
dividend paid December 29, 1994 by the Blue Chip Portfolio.
    

     If a shareholder exchanges shares of a Portfolio for shares of another
Portfolio of the Fund, the shareholder will recognize a gain or loss for
federal income tax purposes measured by the difference between the value of the
shares acquired and the basis of the shares exchanged.  Such gain or loss will
generally be a capital gain or loss and will be a long-term gain or loss if the
shareholder has held his or her shares for more than one year. If a shareholder
realizes a loss on the redemption of shares of a Portfolio and invests in
shares of the same Portfolio within 30 days before or after the redemption, the
transactions may be subject to the wash sale rules resulting in a postponement
of the recognition of such loss for federal income tax purposes.  Any loss
recognized on the disposition of shares of a Portfolio held six months or less
will be treated as long-term capital loss to the extent that the shareholder
has received any long-term capital gain dividends on such shares.

     The discussion under "Dividends and Taxes" in the Prospectus, in
conjunction with the foregoing, is a general summary of applicable provisions
of the Code and Treasury Regulations now in effect as currently interpreted by
the courts and the Internal Revenue Service.  The Code and these Regulations,
as well as the current interpretations thereof, may be changed at any time by
legislative, judicial or administrative action.

                           DIVIDENDS AND DISTRIBUTIONS

     Reference is made to the discussion in the Prospectus under the heading
"Dividends and Taxes" for a more complete discussion of dividends and
distributions.

MONEY MARKET PORTFOLIO

     The Portfolio declares dividends of all its daily net investment income on
each day the Portfolio's net asset value per share is determined.  Dividends
are payable monthly and are automatically reinvested and distributed monthly on
the last business day of each month in full and fractional shares of the
Portfolio at the then-current net asset value unless a Shareholder requests
payment in cash.  Each Shareholder will receive a monthly summary of the
Portfolio's activity, including information on dividends paid or reinvested.

     Net investment income, for dividend purposes, consists of (1) accrued
interest income, plus or minus (2) amortized purchase discount or premium, plus
or minus (3) all


                                      B-21

<PAGE>

short-term realized gains or losses and unrealized appreciation or depreciation
on portfolio assets, minus (4) all accrued expenses of the Portfolio.  Expenses
of the Portfolio are accrued daily.  So long as the portfolio securities are
valued at amortized cost, there will be no unrealized appreciation or
depreciation on such securities.

                             PERFORMANCE INFORMATION

     As described in the Prospectus, a Portfolio's historical performance or
return may be shown in the form of "average annual total return" and "total
return" in the case of all Portfolios except the Money Market Portfolio;
"yield" in the case of the High Grade Bond and High Yield Bond Portfolios; and
"yield" and "effective yield" in the case of the Money Market Portfolio. These
various measures of performance are described below.

     Average annual total return and total return measure both the net income
generated by, and the effect of any realized and unrealized appreciation or
depreciation of, the underlying investments of a Portfolio over the specified
period.  Yield is a measure of the net investment income per share earned over
a specific one-month or 30-day period (seven-day period for the Money Market
Portfolio) expressed as a percentage of the net asset value.

     A Portfolio's standardized average annual total return quotation is
computed in accordance with a method prescribed by rules of the Securities and
Exchange Commission.  The standardized average annual total return for a
Portfolio for a specific period is determined by assuming a hypothetical $1,000
investment in the Fund's shares on the first day of the period at the then
effective net asset value per share ("initial investment"), and computing the
ending redeemable value ("redeemable value") of that investment at the end of
the period. The redeemable value includes the effect of the applicable
contingent deferred sales charge that may be imposed at the end of the period.
The redeemable value is then divided by the initial investment, and this
quotient is taken to the Nth root (N representing the number of years in the
period) and 1 is subtracted from the result, which is then expressed as a
percentage.  The calculation assumes that all income and capital gains
dividends by the Portfolio have been reinvested at net asset value on the
reinvestment dates during the period. Standardized average annual total return
figures for various periods are set forth in the tables below.  In addition,
included in the table below are figures for the average annual total return
without the deduction of the contingent deferred sales charge.  Thus, the same
formula as set forth above is used except that the redeemable value has not
been reduced by the applicable sales charge for that period.

     Calculation of a Portfolio's total return is not subject to a standardized
formula.  Total return performance for a specific period is calculated by first
taking an investment (assumed to be $1,000) in the Fund's shares on the first
day of the period at the then effective net asset value per share ("initial
investment") and computing the ending value ("ending value") of that investment
at the end of the period.  The ending value may or may not include the effect
of the applicable contingent deferred sales charge that may be


                                      B-22

<PAGE>

imposed at the end of the period.  The total return percentage is then
determined by subtracting the initial investment from the value and dividing
the difference by the initial investment and expressing the result as a
percentage.  This calculation assumes that all income and capital gains
dividends by the Portfolio have been reinvested at net asset value on the
reinvestment dates during the period. Total return may also be shown as the
increased dollar value of the hypothetical investment over the period.  Total
return figures for various periods are set forth in the tables below.

   
     The yield for a Portfolio, other than the Money Market Portfolio, is
computed in accordance with the formula set forth below, which is a
standardized method prescribed by rules of the Securities and Exchange
Commission.  The High Grade Bond Portfolio's yield based upon the 30-day period
ended July 31, 1995 was 6.37% and the High Yield Bond Portfolio's was 8.12%.  A
Portfolio's yield is computed by dividing the net investment income per share
earned during the specific one-month or 30-day period by the offering price per
share on the last day of the period, according to the following formula:
    

                         [(a-b +1)(6) -1]
                Yield = 2  ---
                           cd

                a =  dividends and interest earned during the period.

                b =  expenses accrued for the period (net of reimbursements).

                c =  the average daily number of shares outstanding during the
                     period that were entitled to receive dividends.

                d =  the offering price per share on the last day of the period.

     In computing yield, the Fund follows certain standardized accounting
practices specified by Securities and Exchange Commission rules.  These
practices are not necessarily consistent with those that the Fund uses to
prepare its annual and interim financial statements in accordance with
generally accepted accounting principles.

   
     The Money Market Portfolio's yield is computed in accordance with a
standard method prescribed by rules of the Securities and Exchange Commission.
Under that method, the yield quotation is based on a seven-day period and is
computed as follows.  The net investment income per share (accrued interest on
portfolio securities, plus or minus amortized premium or discount, less accrued
expenses) is divided by the price per share (expected to remain constant at
$1.00) at the beginning of the period ("base period return") and the result is
divided by seven and multiplied by 365. The resulting yield figure is carried
to the nearest one hundredth of one percent.  Realized capital gains or losses
and unrealized appreciation or depreciation of investments are not included in
the calculation.  The Money Market Portfolio's yield for the seven day period
ended July 31, 1995 was 3.86%.
    


                                      B-23

<PAGE>

   
     The Money Market Portfolio's effective yield is determined by taking the
base period return (computed as described above) and calculating the effect of
assumed compounding.  The formula for the effective yield is
[(base period return +1) raised to the 365/7] -1.  The Money Market Portfolio's
effective yield for the seven day period ended July 31, 1995 was 3.93%.
    

     A Portfolio's performance quotations are based upon historical results and
are not necessarily representative of future performance.  The Fund's shares
are sold at net asset value, and return and net asset value will fluctuate
except that the Money Market Portfolio seeks to maintain a $1.00 net asset
value per share.  Factors affecting a Portfolio's performance include general
market conditions, operating expenses and investment management.  Shares of a
Portfolio are redeemable at net asset value, which may be more or less than
original cost. Redemptions within the first six years after purchase may be
subject to a contingent deferred sales charge that ranges from 5% the first
year to 0% after six years.  Yield and effective yield do not include the
effect of the contingent deferred sales charge.  The standardized average
annual total return does include the effect of the contingent deferred sales
charge. Average annual total return does not, and total return may or may not
include the effect of the contingent deferred sales charge that may be imposed
at the end of the designated period. Performance figures not including the
effect of the contingent deferred sales charge would be reduced if the charge
were included.  No adjustments are made for taxes payable on dividends.

   
     The figures below show performance information for various periods ended
July 31, 1995.  Because all of the Portfolios, with the exception of the Growth
Common Stock Portfolio, have been in operation only since December 1, 1987, the
performance information reflects only an ninety-two month period.
    


                                      B-24

<PAGE>

   
                        AVERAGE ANNUAL TOTAL RETURN TABLE
                         FOR PERIOD ENDED JULY 31, 1995
    

   
<TABLE>
<CAPTION>
                                        STANDARDIZED        AVERAGE ANNUAL
                                       AVERAGE ANNUAL        TOTAL RETURN
PORTFOLIO                             TOTAL RETURN (1)      UNADJUSTED (2)
- ---------                             ----------------      --------------
<S>                                   <C>                   <C>
Growth Common Stock
  10 years                                 9.25%                 9.25%
  5 years                                 11.64%                11.90%
  1 year                                   4.37%                 9.36%

High Grade Bond
  Life of Portfolio (3)                    8.02%                 8.02%
  5 years                                  8.06%                 8.35%
  1 year                                   3.23%                 8.23%

High Yield Bond
  Life of Portfolio (3)                    9.65%                 9.65%
  5 years                                 10.38%                10.65%
  1 year                                   4.71%                 9.71%

Managed

</TABLE>
    


                                      B-25

<PAGE>

   
<TABLE>
<S>                                   <C>                   <C>

  Life of Portfolio (3)                    8.99%                 8.99%
  5 years                                 10.18%                10.45%
  1 year                                   4.40%                 9.40%

Blue Chip
  Life of Portfolio (3)                   13.84%                13.84%
  5 years                                 10.55%                10.81%
  1 year                                  17.77%                33.77%

</TABLE>
    

(1)  The adjusted value represents the percentage change in the ending
     value after the deduction of the contingent deferred sales charge.

(2)  The unadjusted value represents the percentage change in the ending value
     without the deduction of the contingent deferred sales charge.

(3)  The High Grade Bond, High Yield Bond, Managed and Blue Chip Portfolios
     commenced operations on December 1, 1987.


                                      B-26

<PAGE>

   
                               TOTAL RETURN TABLE
                         FOR PERIOD ENDED JULY 31, 1995
    

   
<TABLE>
<CAPTION>
                                          STANDARDIZED        TOTAL RETURN
PORTFOLIO                               TOTAL RETURN (1)     UNADJUSTED (2)
- ---------                               ----------------     --------------
<S>                                     <C>                  <C>
Growth Common Stock
  10 years                                  142.15%              142.15%
  5 years                                    73.44%               75.44%
  1 year                                      4.37%                9.36%

High Grade Bond
  Life of Portfolio (3)                      80.66%               80.66%
  5 years                                    47.34%               49.34%
  1 year                                      3.23%                8.23%

High Yield Bond
  Life of Portfolio (3)                     102.63%              102.63%
  5 years                                    63.85%               65.85%
  1 year                                      4.71%                9.71%

Managed

</TABLE>
    


                                      B-27

<PAGE>

   
<TABLE>
<S>                                     <C>                  <C>
  Life of Portfolio (3)                      93.52%               93.52%
  5 years                                    62.37%               64.37%
  1 year                                      4.40%                9.40%

Blue Chip
  Life of Portfolio (3)                     170.23%              170.23%
  5 years                                    65.09%               67.09%
  1 year                                     17.77%               22.77%
</TABLE>
    

(1)  The adjusted value represents the percentage change in the ending value
     after the deduction of the contingent deferred sales charge.

(2)  The unadjusted value represents the percentage change in the ending value
     without the deduction of the contingent deferred sales charge.

(3)  The High Grade Bond, High Yield Bond, Managed and Blue Chip Portfolios
     commenced operations on December 1, 1987.


                                      B-28

<PAGE>

                            SHAREHOLDER VOTING RIGHTS

     All shares of the Fund have equal voting rights and may be voted in the
election of Directors and on other matters submitted to the vote of
shareholders.  As permitted by Maryland law and the Fund's corporate charter,
there will normally be no meetings of shareholders for the purpose of electing
directors unless and until such time as fewer than a majority of the directors
holding office have been elected by shareholders.  At that time, the directors
then in office will call a shareholders' meeting for the election of directors.
 The directors shall normally continue to hold office and may appoint successor
directors, provided that immediately after the appointment of any successor
director, at least two-thirds of the directors have been elected by the
shareholders.  The shares do not have cumulative voting rights, which means
that the holders of a majority of the shares voting for the election of
directors can elect all the directors.  No amendment may be made to the Fund's
corporate charter without the affirmative vote of a majority of the outstanding
shares of the Fund.

     In matters which only affect a particular Portfolio, the matter shall have
been effectively acted upon by a majority vote of that Portfolio even though:
(i) the matter has not been approved by a majority vote of any other Portfolio;
or (ii) the matter has not been approved by a majority vote of the Fund.

                                RETIREMENT PLANS

     The Fund offers a variety of retirement investment programs whereby
contributions are invested in shares of the Fund, and any dividends (and
capital gain distributions, if any) are reinvested in additional full and
fractional shares of the Fund.  The Fund has waived the minimum investment
requirement for an account opened under any of these programs and subsequent
investments can be in any amount (subject to plan limitations).

SELF-EMPLOYED INDIVIDUAL RETIREMENT PLANS

     The Fund has available for self-employed individuals a form of Paired
Defined Contribution Plan, Trust Agreement and related Custodial Agreement
(Keogh Plan) under IRS approved prototypes. A self-employed individual has
complete discretion to make his or her own fee arrangements with the custodial
bank of his or her selection, instead of using the custodian named herein on
the terms described under "General" below.  The maximum annual tax deductible
amount for contributions is generally the lesser of 25% of earned income or
$30,000.  For further details, including the right of appointing a successor
custodian, reference is made to the Plan, Trust Agreement and Custodial
Agreement available from the Fund.


                                      B-29

<PAGE>

INDIVIDUAL RETIREMENT ACCOUNTS

     The Fund has available Individual Retirement Accounts (IRAs) under IRS
approved prototypes.  A full $2,000 deduction for IRA contributions is
available only to (1) taxpayers who are not active participants in an
employer-sponsored retirement plan and (2) taxpayers who are active
participants in an employer-sponsored plan but have adjusted gross income below
a specified level.  For these purposes, a taxpayer generally will be deemed to
be an active participant in an employer-sponsored retirement plan if for any
part of the taxable year either the employee or his or her spouse is an active
participant under a qualified pension plan, a qualified profit sharing or money
purchase plan, a 403(b) annuity program, a Simplified Employee Pension plan, or
a government plan (other than a plan maintained for state and local employees
under section 457 of the Internal Revenue Code). Married taxpayers filing a
joint return who are active participants in an employer-sponsored plan may make
a tax deductible IRA contribution of up to $2,000 ($2,250 spousal) if their
adjusted gross income is $40,000 or less.  Between $40,000 and $50,000 of
adjusted gross income, the IRA deduction is phased-out.  For single taxpayers
who are active participants in an employer-sponsored plan, the $2,000
deductible IRA contribution is similarly phased-out between $25,000 and $35,000
of adjusted gross income.  To the extent the IRA deduction is reduced or
eliminated by the phase-out rule, an individual may elect to make nondeductible
IRA contributions that, when combined with the deductible contributions, may
not exceed $2,000 ($2,250 for a spousal IRA).  The income on the IRA
contribution will not be taxed until withdrawn.

     For a period of seven days after establishment of an IRA Account and
receipt of a disclosure statement the investor may revoke his or her
application and the full payment made to the Account will be returned.  Form
5305-A, available from the Distributor, FBL Investment Advisory Services, Inc.,
5400 University Avenue, West Des Moines, Iowa 50266, is to be used to establish
an Account.  The form should be consulted for detailed information, including
circumstances under which redemption requests must be accompanied by a
declaration of intent as to the disposition of the amount distributed.

TAX-SHELTERED 403(B) PLANS

   
     The Fund has available Tax-Deferred Plans under section 403(b) of the
Internal Revenue Code.  Certain tax-exempt organizations and public schools may
establish such plans under which they will be able to make contributions which
are not currently taxable to their employees.  For further details, contact the
Fund.
    

CORPORATE PENSION AND PROFIT SHARING PLANS

     Accounts for corporate pension and profit sharing plans (IRS approved
prototypes as well as other plans) are available.  For further details, contact
the Fund.


                                      B-30

<PAGE>

PUBLIC EMPLOYER DEFERRED COMPENSATION PLANS

     Employees of state, county and municipal agencies may make investments
with pre-tax dollars through eligible deferred compensation plans authorized
under section 457 of the Internal Revenue Code.  Contributions and earnings are
tax-sheltered until the funds are actually paid to the employee.  Plans and
Administrative Services are available to states, counties and municipalities to
provide a tax-sheltered program for employees. For further details, contact the
Fund.

GENERAL

   
     Investors Fiduciary Trust Company of Kansas City, Missouri, serves as
custodian and provides the services required for Keogh Plans, Individual
Retirement Plans, section 403(b) Plans and corporate pension and profit sharing
plans.  An annual maintenance fee, currently $10, will be collected annually by
redemption of shares or fractions thereof from each participant's account.  FBL
Investment Advisory Services, Inc. performs plan services for a portion of the
fee and during the fiscal year ended July 31, 1995 received $79,703 for its
services.  Unusual administrative responsibilities will be subject to such
additional charges as will reasonably compensate the custodian for the service
involved.
    

     Since a retirement investment program involves a commitment covering
future years, it is important that the investor consider his or her needs and
whether the investment objective of the Fund as described in the Prospectus is
likely to fulfill them. Premature termination or curtailment of the plan may
result in adverse tax consequences.  Consultation with an attorney or other tax
adviser regarding these plans is recommended.  For further information
regarding these plans, contact the Fund.

                                OTHER INFORMATION

PRINCIPAL HOLDERS OF SECURITIES

   
     As of October 31, 1995, Farm Bureau Life Insurance Company (a wholly-owned
subsidiary of Farm Bureau Multi-State Services, Inc., an Iowa corporation),
owned more than 25% of the Money Market Portfolio.  As of October 31, 1995,
Farm Bureau Life Insurance Company owned more than 5% of the outstanding voting
securities of the High Yield Bond Portfolio.  Farm Bureau Life Insurance
Company indirectly owns FBL Investment Advisory Services, Inc., the Fund's
investment adviser, principal underwriter and distributor.
    

CUSTODIAN

     Bankers Trust Company, 16 Wall Street, New York, New York 10005, currently
serves as custodian of all cash and securities owned by the Fund.  The
custodian performs no managerial or policy-making functions for the Fund.


                                      B-31

<PAGE>

INDEPENDENT AUDITORS

   
     The Fund's independent auditors are Ernst & Young LLP, 801 Grand Avenue,
Suite 3400, Des Moines, Iowa 50309.  The independent auditors audit and report
on the Fund's annual financial statements, review certain regulatory reports
and perform other professional accounting, auditing, tax and advisory services
when engaged to do so by the Fund.
    

ACCOUNTING SERVICES

   
     The Fund has entered into an accounting services agreement with FBL
Investment Advisory Services, Inc. ("FBL") pursuant to which FBL performs
accounting services for the Fund.  In addition, the agreement provides that FBL
shall calculate the Fund's net asset value in accordance with the Fund's
current Prospectus and to prepare, for Fund approval and use, various tax
returns and other reports.  For such services, each Portfolio pays FBL an
annual fee, payable monthly, of .05% of the Portfolio's average daily net
assets, with the annual fee payable by a Portfolio not to exceed $30,000.
During the fiscal year ended July 31, 1995, the aggregate amount of such fees
paid to FBL was $52,166.
    

SHAREHOLDER SERVICE, DIVIDEND DISBURSING AND TRANSFER AGENT

   
     FBL Investment Advisory Services, Inc. serves as the Fund's shareholder
service, transfer and dividend disbursing agent.  FBL in turn has contracted
with DST Systems, Inc. ("DST"), an unrelated party, to perform certain services
incident to the maintenance of shareholder accounts.  The Fund pays FBL an
annual fee of $7.00 to $9.00 per account and miscellaneous activity fees plus
out of pocket expenses, a portion of which is paid to DST. During the fiscal
year ended July 31, 1995, the aggregate amount of such fees paid to FBL was
$301,139, of which $183,637 was paid to DST.
    

LEGAL MATTERS

     The firm of Vedder, Price, Kaufman & Kammholz, Chicago, Illinois, is
counsel for the Fund.

                              FINANCIAL STATEMENTS

   
     The audited financial statements of the Fund, including the notes thereto,
contained in the Annual Report to Shareholders of FBL Series Fund, Inc. for the
fiscal year ended July 31, 1995, are incorporated herein by reference.  A copy
of such Annual Report to Shareholders may be obtained without charge by
contacting the Fund.
    


                                      B-32

<PAGE>
                                                  --------------------------
                                                    Farm Bureau Mutual Funds

<TABLE>
<S>                                         <C>
                                            FBL Series Fund, Inc.
                                            [FBL LOGO]

                                              ANNUAL REPORT
                                              JULY 31, 1995
                                              INVESTMENT MANAGER AND
                                              PRINCIPAL UNDERWRITER
                                              FBL INVESTMENT ADVISORY
                                              SERVICES, INC.
                                              5400 UNIVERSITY AVENUE
                                              WEST DES MOINES, IA 50266
                                              1-800-247-4170 (OUTSIDE IOWA)
                                              1-800-422-3175 (IN IOWA)
                                                    225-5586 (DES MOINES)
</TABLE>

<TABLE>
<S>                             <C>                                       <C>
FARM BUREAU MUTUAL FUNDS                                                     This report is not to be distributed
5400 UNIVERSITY AVENUE                                                       unless preceded or accompanied by
WEST DES MOINES, IOWA 50266     [FBL FINANCIAL SERVICES LOGO]                a prospectus.

737-028(95)
</TABLE>
<PAGE>
PRESIDENT'S LETTER

Dear Shareholder,

    Compared to a rather stressful 1994, stock and bond market participants have
had  a much better  time during 1995.  Reversing the trends  in place during the
latter half  of 1994,  this year  has witnessed  a marked  slowdown in  economic
activity,  leading  the Federal  Reserve to  cut  interest rates  by one-quarter
point. This rate decrease has fueled a major rally in the bond market, and to no
less extent  the stock  market. The  latter  believes that  the lower  level  of
economic  growth  will  allow  profits  to continue  rising  with  little  or no
inflationary pressures. However,  classical theory  tells us that  one of  these
markets  is not telling the truth: either  recession is on the horizon (the bond
case) or economic growth will resume, smartly (the stock case).

    That this has been  a powerful bull  market no one can  deny. That all  bull
markets  come to an end is a concept that is difficult to focus on, particularly
in  the  midst  of  so  much   upward  momentum.  This  strong  and   relatively
uninterrupted  rally has been a catalyst to growing mutual fund sales. According
to NED  DAVIS  RESEARCH,  seventy-eight  percent of  all  money  deposited  into
domestic  equity mutual funds  has been during  the past four  years. This means
that a  large portion  of money  invested has  never experienced  a  significant
market  correction. We do not  know when this bull market  will end, nor when it
does end, how  these relatively  inexperienced market  participants will  react.
Perhaps  they will remain true to their "long-term investment objectives" and no
disruption will occur. We will remain watchful in this regard.

    Our overall value-oriented theme  remains in force,  seeking to enhance  our
RISK-ADJUSTED   performance  record  and   to  create  lasting   value  for  our
shareholders. To accomplish these goals, we attempt to avoid participating fully
in severe market  corrections. By focusing  on downside risk  as well as  upside
potential,   current  conditions  have  forced  us  to  become  very  selective,
particularly with respect to equity investments. (The Blue Chip Portfolio is not
managed according to a value-oriented strategy, but is substantially invested in
common stocks at  all times, seeking  to parallel the  performance of the  major
market indices such as the S&P 500 and the DJIA.)

    Below  are activity and strategy summaries for the various portfolios of FBL
Series Fund, Inc.

    GROWTH COMMON STOCK:  In recent months, virtually all of the market averages
set new all-time highs. The DJIA and S&P  500 are now more than 15% above  their
1994 peaks. However, the Merrill Lynch market analysis department ran a computer
tabulation  which showed  only 36% of  the common  stocks on the  New York Stock
Exchange have exceeded  their 1993-1994  price highs.  The large  capitalization
stocks  which dominate the  performance of the  DJIA and S&P  500 went down less
than the wide array of  stocks in the rotational  corrective phase of 1994  and,
therefore,  it has been easier for those  major averages to reach new highs. For
the six-month period ending June 30, 1995, the Dow Jones Industrial Average  and
the S&P 500 total return were 20.42% and 20.09%, respectively. Expectations that
the  DJIA will  continue its steep  climb abound everywhere.  However, we remain
skeptical of naive extrapolation of market returns.

    The Growth Common Stock Portfolio  will continue its search for  undervalued
stocks  that have served it well in the  past, looking for equities that have no
inflated expectations built into  their prices. At any  market level, there  are
stocks  that  are out  of  favor with  investors.  The problems  that  cause low
valuations are  often  temporary,  and the  patient,  disciplined  investor  can
capitalize on such opportunities.

                                       2
<PAGE>
We  believe that such undervalued situations  exist in the following industries:
insurance, oil  and  gas  exploration  and production,  oil  and  gas  drilling,
banking, specialty chemicals, telecommunications, utilities and real estate.

    In  addition,  the Portfolio  maintains a  moderate  investment in  cash and
cash-equivalent securities. Currently, cash is a very unpopular asset class  and
is  viewed as a passive investment (fiduciaries  don't believe you can add value
to a portfolio by holding cash). Of course, we think that is inaccurate. Between
1965 and 1976, cash (as approximated by U.S. Treasury Bills) had a higher return
than large  stocks, small  stocks, corporate  bonds, government  bonds and  even
intermediate  bonds, so there are  times when cash is  better than anything. The
amount of cash held in the Portfolio will largely depend on the availability  of
attractive  undervalued securities. As our investments approach full value, sale
proceeds  will  be  invested  in  cash  and  cash-equivalents  until  investment
opportunities present themselves.

    HIGH  GRADE BOND:   U.S. Treasury  yields decreased  dramatically during the
first six months of 1995. For example, the 2-year, 10-year and 30-year  Treasury
issues  yielded 7.69%, 7.83% and 7.88%,  respectively, at December 31, 1994, but
at June 30,  1995, were  5.79%, 6.20%  and 6.62%.  Similarly, corporate  spreads
remain  near historically  low levels, suggesting  that investors  are not being
well compensated for taking on both credit and market risk inherent in corporate
bonds.

    This Portfolio continues to hold a significant portion of its assets in high
coupon, callable  bonds that  offer attractive  incremental yields  relative  to
similar  non-callable  issues.  Due  to  their  call  features,  these  types of
corporate issues  tend to  go up  in price  less than  non-callable issues  when
interest  rates drop; and conversely, due to their incremental yield, tend to go
down less than non-callable  issues when interest rates  rise. Because of  this,
Portfolio  returns will tend to lag other,  more aggressive funds in both up and
down markets. Future cash  flows may be directed  toward Treasury securities  in
the seven-to-twelve year maturity range.

    HIGH  YIELD BOND:  During the first six  months of 1995, the high yield bond
market slightly underperformed the high grade corporate market. The reasons  for
this  underperformance were the  naturally shorter duration  of high yield bonds
and a general increase in their yield spreads as investors became more concerned
about a rise in actual default rates and the potential for an economic slowdown.

    During this period, the yield  and spread on the  DLJ 100 Active High  Yield
Issues  Index declined from a  12.22% yield and 442  basis-point spread with the
comparable Treasury issue, to a 10.96%  yield and a spread of 488  basis-points.
In  general, we view these spread levels  as reasonable, and therefore, no major
changes in the Portfolio are contemplated at this time.

    MANAGED:   The Managed  Portfolio  has benefited  from  the recent  drop  in
interest  rates and  continues to  focus on  income from  stocks and  bonds. Our
objective is  to  provide an  income  stream competitive  with  various  savings
vehicles,  while  at  the same  time  providing  growth potential.  Many  of our
holdings remain deeply undervalued and are beginning to attract the attention of
investors.  The  Managed  Portfolio  will  continue  to  seek  out  high  income
securities  from  both  the  stock  and  bond  markets,  focusing  primarily  on
convertible issues with yields of 5%-9%.

    MONEY MARKET:  The moves by the Federal Reserve Board indicate their  strong
resolve  toward  fighting  inflation  and intention  to  maintain  a restrictive
monetary policy. In response, the Money Market Portfolio, in the first  quarter,
extended  its maturities to lock-in  yields before the decline  in the fed funds
rate. As there  has not been  a significant  change in spreads,  we continue  to
utilize  government agency  securities and  commercial paper  for their relative
value.

                                       3
<PAGE>
    BLUE CHIP:  True to its passive  strategy, the performance of the Blue  Chip
Portfolio  over the  past year  has reflected  that of  the large capitalization
market sector which it represents. The  Blue Chip Portfolio will, at all  times,
remain  substantially  invested  in  common  stocks  of  large  companies.  This
Portfolio is designed  for those  investors who prefer  substantial exposure  to
common stocks at all times or who wish to make their own market value judgments.

                                         INSERT SPECIMEN SIGNATURE
                                           MERLIN D. PLAGGE
                                           PRESIDENT

September 11, 1995

                                       4
<PAGE>
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE

GROWTH COMMON STOCK PORTFOLIO

             COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
                 THE GROWTH COMMON STOCK PORTFOLIO AND S&P 500

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
             GROWTH COMMON STOCK PORTFOLIO      S&P 500 STOCK COMPOSITE INDEX
<S>        <C>                                <C>
1985                                   10000                              10000
1986                                   11257                              12841
1987                                   13246                              17886
1988                                   11696                              15790
1989                                   13039                              20832
1990                                   13809                              22186
1991                                   15420                              25017
1992                                   17350                              28216
1993                                   22077                              30679
1994                                   22153                              32263
1995                                   24226                              40686
</TABLE>

    For  the twelve-month period ended  July 31, 1995, the  total return for the
Growth Common Stock  Portfolio was  9.36% compared  to the  26.06% total  return
produced  by the S&P  500 Stock Composite Index.  The Portfolio has concentrated
much of its investments in high-income common stocks and convertible securities.
These securities pay a higher  degree of income than the  market as a whole  and
are  generally not  as volatile  as the  overall market.  Historically, when the
stock market really takes off, we do well, but may lag the averages because  our
highly  focused  style does  not include  certain industry  groups which  may be
enjoying a moment  of particular  popularity. We  accept this  trade-off as  our
total return investments (price appreciation and income) offer a consistent cash
flow  to the Portfolio, and ultimately to  its shareholders. We are beginning to
see a pay-off in the form of additional price appreciation from the  Portfolio's
current  exposure to undervalued convertible securities, many of which are found
in the energy sector. We  remain committed to the  energy sector on a  long-term
basis.

                                       5
<PAGE>
HIGH GRADE BOND PORTFOLIO

             COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
       THE HIGH GRADE BOND PORTFOLIO AND LEHMAN BROTHERS AGGREGATE INDEX

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
            HIGH GRADE BOND PORTFOLIO     LEHMAN BROTHERS MUTUAL FUND AGGREGATE INDEX
<S>        <C>                          <C>
1987                             10000                                            10000
1988                             10297                                            10585
1989                             11396                                            12194
1990                             12097                                            13054
1991                             13342                                            14451
1992                             15171                                            16589
1993                             16401                                            18278
1994                             16692                                            18292
1995                             18066                                            20141
</TABLE>

    For  the twelve-month  period ended  July 31,  1995, the  8.23% total return
produced by  the High  Grade Bond  Portfolio  was less  than the  10.11%  return
produced  by  the Lehman  Brothers Mutual  Fund  Aggregate Index.  The Portfolio
continues to  pursue an  investment  strategy of  holding  a large  position  in
high-coupon  callable bonds.  These bonds offer  additional yield  for taking on
call risk and allow  for a more  stable return to  the Portfolio. Because  these
securities  have a call feature, they  tend to underperform similar non-callable
issues  when  interest  rates  go  down,  and  conversely,  outperform   similar
non-callable issues when interest rates rise.

                                       6
<PAGE>
HIGH YIELD BOND PORTFOLIO

             COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
  THE HIGH YIELD BOND PORTFOLIO AND LEHMAN BROTHERS CORPORATE/HIGH YIELD INDEX

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
           HIGH YIELD BOND PORTFOLIO    LEHMAN BROTHERS MUTUAL FUND CORPROATE/HIGH YIELD INDEX
<S>        <C>                         <C>
1987                            10000                                                      10000
1988                            10312                                                      10776
1989                            11427                                                      12344
1990                            12218                                                      13103
1991                            13786                                                      14564
1992                            16051                                                      17092
1993                            18129                                                      19175
1994                            18470                                                      19251
1995                            20263                                                      21605
</TABLE>

    The High Yield Bond Portfolio underperformed the Lehman Brothers Mutual Fund
Corporate/High  Yield  Index for  the twelve-month  period  ended July  31, 1995
(9.71% total return for the Portfolio versus 12.23% for the Index). This  slight
underperformance  can largely be attributed to the Portfolio's large position in
high-coupon callable bonds. The Portfolio will continue to maintain its position
of such bonds until current market conditions warrant otherwise.

                                       7
<PAGE>
MANAGED PORTFOLIO

             COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
                       THE MANAGED PORTFOLIO AND S&P 500

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
            MANAGED PORTFOLIO     S&P 500 STOCK COMPOSITE INDEX
<S>        <C>                  <C>
1987                     10000                              10000
1988                     10318                              12070
1989                     11007                              15917
1990                     11773                              16946
1991                     12603                              19111
1992                     14467                              21550
1993                     17798                              23466
1994                     17689                              24672
1995                     19352                              31101
</TABLE>

    The Managed Portfolio is an asset  allocation portfolio and will not  likely
mirror  any  particular index  (equity or  fixed-income)  over time.  During the
twelve-month period ended July 31, 1995,  the Portfolio produced a total  return
of  9.40% compared  to the  26.06% total  return produced  by the  S&P 500 Stock
Composite Index. The  Managed Portfolio  emphasizes stocks  and bonds  producing
current  income  with the  opportunity  for modest  growth  and during  the year
maintained the  majority of  its  assets in  convertible bonds  and  convertible
preferred   stocks.  Our  companies   in  the  Portfolio   are  performing  well
operationally and many of the stocks are beginning to be more widely followed by
investors. This should help the Portfolio's return in the long-run. The  Managed
Portfolio will always maintain a focus on income-producing securities as part of
its long-term strategy.

                                       8
<PAGE>
BLUE CHIP PORTFOLIO

             COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
                      THE BLUE CHIP PORTFOLIO AND S&P 500

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
           BLUE CHIP PORTFOLIO     S&P 500 STOCK COMPOSITE INDEX
<S>        <C>                   <C>
1987                      10000                              10000
1988                      11570                              12070
1989                      14802                              15917
1990                      16173                              16946
1991                      17525                              19111
1992                      19412                              21550
1993                      20618                              23466
1994                      22011                              24672
1995                      27023                              31101
</TABLE>

    The  Blue Chip Portfolio  is designed to  represent the large capitalization
sector of  the domestic  equity  market and  remains substantially  invested  in
approximately  40  such  common  stock issues  at  all  times.  Accordingly, the
performance of  this Portfolio  will  roughly parallel  that  of the  Dow  Jones
Industrial  Average and the S&P  500 Stock Composite Index.  As is apparent from
the line  graph,  the performance  of  the  Blue Chip  Portfolio,  adjusted  for
expenses,  was similar  to that  of the  S&P 500  Stock Composite  Index for the
twelve-month period ended July 31, 1995.

                                       9
<PAGE>
FBL SERIES FUND, INC.
STATEMENTS OF ASSETS AND LIABILITIES
JULY 31, 1995

<TABLE>
<CAPTION>
                                                                                 GROWTH           HIGH
                                                                              COMMON STOCK     GRADE BOND
                                                                                PORTFOLIO       PORTFOLIO
                                                                             ---------------  -------------
<S>                                                                          <C>              <C>
ASSETS
Investments in securities, at value (cost -- $68,687,815; $7,872,647;
  $6,457,065; $20,487,970; $2,440,038; and $6,202,994, respectively) (NOTE
  5).......................................................................   $  70,997,899   $   8,091,828
Cash.......................................................................          26,742          98,811
Receivables:
  Accrued dividends and interest...........................................         268,737         169,544
  Investment securities sold...............................................                           1,057
Prepaid expense and other assets...........................................           2,499             237
                                                                             ---------------  -------------
Total Assets...............................................................   $  71,295,877   $   8,361,477
                                                                             ---------------  -------------
                                                                             ---------------  -------------
LIABILITIES AND NET ASSETS
Liabilities
  Accounts payable:
    FBL Investment Advisory Services, Inc. (NOTE 3)........................   $       9,869   $       3,281
    Investment securities purchased........................................         312,050
    Dividends payable......................................................
  Accrued expenses.........................................................          27,455          13,167
                                                                             ---------------  -------------
Total Liabilities..........................................................         349,374          16,448
Net assets applicable to outstanding capital stock (NOTE 4)................      70,946,503       8,345,029
                                                                             ---------------  -------------
Total Liabilities and Net Assets...........................................   $  71,295,877   $   8,361,477
                                                                             ---------------  -------------
                                                                             ---------------  -------------
NET ASSET VALUE PER SHARE..................................................   $       13.04   $       10.26
                                                                             ---------------  -------------
                                                                             ---------------  -------------
</TABLE>

SEE ACCOMPANYING NOTES.

                                       10
<PAGE>

<TABLE>
<CAPTION>
                                                                            HIGH
                                                                         YIELD BOND       MANAGED       MONEY MARKET     BLUE CHIP
                                                                          PORTFOLIO      PORTFOLIO       PORTFOLIO       PORTFOLIO
                                                                        -------------  --------------  --------------  -------------
                                                                        <C>            <C>             <C>             <C>
ASSETS
Investments in securities, at value (cost -- $68,687,815; $7,872,647;
  $6,457,065; $20,487,970; $2,440,038; and $6,202,994, respectively)
  (NOTE 5)............................................................  $   6,453,172  $   20,961,847   $  2,440,038   $   9,570,468
Cash..................................................................         75,367          63,039          6,356          87,907
Receivables:
  Accrued dividends and interest......................................        177,038         131,492          3,579          15,265
  Investment securities sold..........................................
Prepaid expense and other assets......................................            190             592             68             284
                                                                        -------------  --------------  --------------  -------------
Total Assets..........................................................  $   6,705,767  $   21,156,970   $  2,450,041   $   9,673,924
                                                                        -------------  --------------  --------------  -------------
                                                                        -------------  --------------  --------------  -------------
LIABILITIES AND NET ASSETS
Liabilities
  Accounts payable:
    FBL Investment Advisory Services, Inc. (NOTE 3)..................   $       3,442  $        9,207   $        770   $       3,074
    Investment securities purchased..................................
    Dividends payable................................................                          26,339
  Accrued expenses...................................................          11,818          16,598         10,421          13,579
                                                                        -------------  --------------  --------------  -------------
Total Liabilities....................................................          15,260          52,144         11,191          16,653
Net assets applicable to outstanding capital stock (NOTE 4)..........       6,690,507      21,104,826      2,438,850       9,657,271
                                                                        -------------  --------------  --------------  -------------
Total Liabilities and Net Assets.....................................   $   6,705,767  $   21,156,970   $  2,450,041   $   9,673,924
                                                                        -------------  --------------  --------------  -------------
                                                                        -------------  --------------  --------------  -------------
NET ASSET VALUE PER SHARE............................................   $       10.03  $        11.85   $       1.00   $       22.85
                                                                        -------------  --------------  --------------  -------------
                                                                        -------------  --------------  --------------  -------------
</TABLE>

                                       11
<PAGE>
FBL SERIES FUND, INC.
STATEMENTS OF OPERATIONS
YEAR ENDED JULY 31, 1995

<TABLE>
<CAPTION>
                                                                                                   HIGH
                                                                               GROWTH COMMON    GRADE BOND
                                                                              STOCK PORTFOLIO   PORTFOLIO
                                                                              ---------------  ------------
<S>                                                                           <C>              <C>
INVESTMENT INCOME
Dividends...................................................................   $   2,473,760
Interest....................................................................         888,498    $  652,064
                                                                              ---------------  ------------
Total Investment Income.....................................................       3,362,258       652,064
EXPENSES
Paid to FBL Investment Advisory Services, Inc. (NOTE 3):
  Investment advisory and management fees...................................         331,615        31,381
  Transfer and dividend disbursing agent fees...............................         114,756        37,079
  Distribution fees.........................................................         331,615        39,226
  Administrative service fees...............................................         165,807        19,613
  Accounting fees...........................................................          30,000         3,922
Custodian fees..............................................................          12,702         7,627
Legal fees..................................................................          12,421         1,446
Audit fees..................................................................          11,000         6,100
Directors' fees and expenses................................................           3,902           464
Reports to shareholders.....................................................          34,090         4,016
Registration fees...........................................................          19,971         4,728
Miscellaneous...............................................................           9,236           795
                                                                              ---------------  ------------
Total Expenses..............................................................       1,077,115       156,397
Expense Reimbursement (NOTE 3)..............................................
                                                                              ---------------  ------------
Net Expenses................................................................       1,077,115       156,397
                                                                              ---------------  ------------
Net Investment Income.......................................................       2,285,143       495,667
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) from investment transactions.......................       2,239,764       (33,881)
Change in unrealized appreciation of investments............................       1,538,922       170,813
                                                                              ---------------  ------------
Net Gain on Investments.....................................................       3,778,686       136,932
                                                                              ---------------  ------------
Net Increase in Net Assets Resulting from Operations........................   $   6,063,829    $  632,599
                                                                              ---------------  ------------
                                                                              ---------------  ------------
</TABLE>

SEE ACCOMPANYING NOTES.

                                       12
<PAGE>

<TABLE>
<CAPTION>
                                                                           HIGH
                                                                        YIELD BOND      MANAGED      MONEY MARKET     BLUE CHIP
                                                                         PORTFOLIO     PORTFOLIO      PORTFOLIO       PORTFOLIO
                                                                        -----------  -------------  --------------  -------------
<S>                                                                     <C>          <C>            <C>             <C>
INVESTMENT INCOME
Dividends.............................................................               $     846,078                  $     179,229
Interest..............................................................   $ 626,932         499,625   $    138,122          33,968
                                                                        -----------  -------------  --------------  -------------
Total Investment Income...............................................     626,932       1,345,703        138,122         213,197
EXPENSES
Paid to FBL Investment Advisory Services, Inc. (NOTE 3):
  Investment advisory and management fees.............................      35,015         118,526         10,035          19,647
  Transfer and dividend disbursing agent fees.........................      38,496          68,228          8,361          34,219
  Distribution fees...................................................      31,832          98,771         12,544          39,294
  Administrative service fees.........................................      15,916          49,386          6,272          19,647
  Accounting fees.....................................................       3,183           9,877          1,254           3,930
Custodian fees........................................................       6,830           8,939          5,404           7,508
Legal fees............................................................       1,154           4,166            441           1,548
Audit fees............................................................       5,100           5,300          6,600           5,100
Directors' fees and expenses..........................................         377           1,158            151             449
Reports to shareholders...............................................       3,275          10,180          1,311           3,970
Registration fees.....................................................       4,313           7,650          2,458           4,392
Miscellaneous.........................................................         648           1,908            291             726
                                                                        -----------  -------------  --------------  -------------
Total Expenses........................................................     146,139         384,089         55,122         140,430
Expense Reimbursement (NOTE 3)........................................     (18,810)                        (4,948)
                                                                        -----------  -------------  --------------  -------------
Net Expenses..........................................................     127,329         384,089         50,174         140,430
                                                                        -----------  -------------  --------------  -------------
Net Investment Income.................................................     499,603         961,614         87,948          72,767
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) from investment transactions.................      10,149         176,989                             80
Change in unrealized appreciation of investments......................      87,294         671,828                      1,636,574
                                                                        -----------  -------------  --------------  -------------
Net Gain on Investments...............................................      97,443         848,817                      1,636,654
                                                                        -----------  -------------  --------------  -------------
Net Increase in Net Assets Resulting from Operations..................   $ 597,046   $   1,810,431   $     87,948   $   1,709,421
                                                                        -----------  -------------  --------------  -------------
                                                                        -----------  -------------  --------------  -------------
</TABLE>

                                       13
<PAGE>
FBL SERIES FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
                                                                                         GROWTH
                                                                                      COMMON STOCK
                                                                                       PORTFOLIO
                                                                             ------------------------------
                                                                                  YEAR ENDED JULY 31,
                                                                                  1995            1994
                                                                             --------------  --------------
<S>                                                                          <C>             <C>
OPERATIONS
Net investment income......................................................  $    2,285,143  $    2,391,865
Net realized gain (loss) from investment transactions......................       2,239,764       2,990,410
Change in unrealized appreciation/depreciation of investments..............       1,538,922      (5,444,330)
                                                                             --------------  --------------
Net Increase (Decrease) in Net Assets Resulting from Operations............       6,063,829         (62,055)
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTE 6)
Net investment income......................................................      (1,942,351)     (2,240,070)
Net realized gain from investment transactions.............................      (3,592,463)     (5,827,898)
Distributions in excess of net realized gain from investment
  transactions.............................................................
                                                                             --------------  --------------
                                                                                 (5,534,814)     (8,067,968)
CAPITAL SHARE TRANSACTIONS (NOTE 4)........................................       6,102,860      20,713,013
                                                                             --------------  --------------
Total Increase (Decrease) in Net Assets....................................       6,631,875      12,582,990
NET ASSETS
Beginning of year..........................................................      64,314,628      51,731,638
                                                                             --------------  --------------
End of year (including undistributed net investment income as set forth
  below)...................................................................  $   70,946,503  $   64,314,628
                                                                             --------------  --------------
                                                                             --------------  --------------
Undistributed Net Investment Income........................................  $    1,457,162  $    1,114,370
                                                                             --------------  --------------
                                                                             --------------  --------------
</TABLE>

SEE ACCOMPANYING NOTES.

                                       14
<PAGE>

<TABLE>
<CAPTION>
                                                                                 HIGH                          HIGH
                                                                              GRADE BOND                    YIELD BOND
                                                                              PORTFOLIO                     PORTFOLIO
                                                                     ----------------------------  ----------------------------
                                                                         YEAR ENDED JULY 31,           YEAR ENDED JULY 31,
                                                                         1995           1994           1995           1994
                                                                     -------------  -------------  -------------  -------------
                                                                     <C>            <C>            <C>            <C>
OPERATIONS
Net investment income..............................................  $     495,667  $     471,816  $     499,603  $     471,824
Net realized gain (loss) from investment transactions..............        (33,881)        80,649         10,149         60,461
Change in unrealized appreciation/depreciation of investments......        170,813       (370,308)        87,294       (419,934)
                                                                     -------------  -------------  -------------  -------------
Net Increase (Decrease) in Net Assets Resulting from Operations....        632,599        182,157        597,046        112,351
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTE 6)
Net investment income..............................................       (495,667)      (471,816)      (499,603)      (471,824)
Net realized gain from investment transactions.....................                      (107,277)       (59,344)       (93,574)
Distributions in excess of net realized gain from investment
  transactions.....................................................        (24,669)                       (7,192)
                                                                     -------------  -------------  -------------  -------------
                                                                          (520,336)      (579,093)      (566,139)      (565,398)
CAPITAL SHARE TRANSACTIONS (NOTE 4)................................        636,952        (54,060)       234,188      1,120,677
                                                                     -------------  -------------  -------------  -------------
Total Increase (Decrease) in Net Assets............................        749,215       (450,996)       265,095        667,630
NET ASSETS
Beginning of year..................................................      7,595,814      8,046,810      6,425,412      5,757,782
                                                                     -------------  -------------  -------------  -------------
End of year (including undistributed net investment income as set
  forth below)....................................................   $   8,345,029  $   7,595,814  $   6,690,507  $   6,425,412
                                                                     -------------  -------------  -------------  -------------
                                                                     -------------  -------------  -------------  -------------
Undistributed Net Investment Income...............................   $           0  $           0  $           0  $           0
                                                                     -------------  -------------  -------------  -------------
                                                                     -------------  -------------  -------------  -------------
</TABLE>

                                       15
<PAGE>
FBL SERIES FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

<TABLE>
<CAPTION>
                                                                                        MANAGED
                                                                                       PORTFOLIO
                                                                             ------------------------------
                                                                                  YEAR ENDED JULY 31,
                                                                                  1995            1994
                                                                             --------------  --------------
<S>                                                                          <C>             <C>
OPERATIONS
Net investment income......................................................  $      961,614  $      631,359
Net realized gain from investment transactions.............................         176,989         122,890
Change in unrealized appreciation/depreciation of investments..............         671,828        (977,638)
                                                                             --------------  --------------
Net Increase (Decrease) in Net Assets Resulting from Operations............       1,810,431        (223,389)
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTE 6)
Net investment income......................................................        (963,801)       (629,162)
Net realized gain from investment transactions.............................        (239,223)       (352,968)
Distributions in excess of net realized gain from investment
  transactions.............................................................        (161,255)
                                                                             --------------  --------------
                                                                                 (1,364,279)       (982,130)
CAPITAL SHARE TRANSACTIONS (NOTE 4)........................................       1,558,373      12,048,899
                                                                             --------------  --------------
Total Increase (Decrease) in Net Assets....................................       2,004,525      10,843,380
NET ASSETS
Beginning of year..........................................................      19,100,301       8,256,921
                                                                             --------------  --------------
End of year (including undistributed net investment income as                                $   19,100,301
  set forth below).........................................................  $   21,104,826
                                                                             --------------  --------------
                                                                             --------------  --------------
Undistributed Net Investment Income........................................  $        1,272  $        3,459
                                                                             --------------  --------------
                                                                             --------------  --------------
</TABLE>

SEE ACCOMPANYING NOTES.

                                       16
<PAGE>

<TABLE>
<CAPTION>
                                                                             MONEY MARKET                   BLUE CHIP
                                                                              PORTFOLIO                     PORTFOLIO
                                                                     ----------------------------  ----------------------------
                                                                         YEAR ENDED JULY 31,           YEAR ENDED JULY 31,
                                                                         1995           1994           1995           1994
                                                                    -------------  -------------  -------------  -------------
                                                                     <C>            <C>            <C>            <C>
OPERATIONS
Net investment income.............................................   $      87,948  $      38,845  $      72,767  $      45,282
Net realized gain from investment transactions....................                                            80             85
Change in unrealized appreciation/depreciation of investments.....                                     1,636,574        335,561
                                                                     -------------  -------------  -------------  -------------
Net Increase (Decrease) in Net Assets Resulting from Operations...          87,948         38,845      1,709,421        380,928
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTE 6)
Net investment income.............................................         (87,948)       (38,845)       (53,615)       (42,519)
Net realized gain from investment transactions....................
Distributions in excess of net realized gain from investment
  transactions....................................................
                                                                     -------------  -------------  -------------  -------------
                                                                           (87,948)       (38,845)       (53,615)       (42,519)
CAPITAL SHARE TRANSACTIONS (NOTE 4)...............................        (187,752)        72,048      1,256,850        991,238
                                                                     -------------  -------------  -------------  -------------
Total Increase (Decrease) in Net Assets...........................        (187,752)        72,048      2,912,656      1,329,647
NET ASSETS
Beginning of year.................................................       2,626,602      2,554,554      6,744,615      5,414,968
                                                                     -------------  -------------  -------------  -------------
End of year (including undistributed net investment income as
  set forth below)................................................   $   2,438,850  $   2,626,602  $   9,657,271  $   6,744,615
                                                                     -------------  -------------  -------------  -------------
                                                                     -------------  -------------  -------------  -------------
Undistributed Net Investment Income...............................   $           0  $           0  $      41,475  $      22,323
                                                                     -------------  -------------  -------------  -------------
                                                                     -------------  -------------  -------------  -------------
</TABLE>

                                       17
<PAGE>
FBL SERIES FUND, INC.
SCHEDULE OF INVESTMENTS
GROWTH COMMON STOCK PORTFOLIO
JULY 31, 1995

<TABLE>
<CAPTION>
                                                                   SHARES
                                                                    HELD          VALUE
                                                                -------------  -----------
<S>                                                             <C>            <C>
COMMON STOCKS (44.20%)
- ----------------------
  CHEMICALS AND ALLIED PRODUCTS (4.26%)
  Crompton & Knowles Corp.....................................      200,000    $ 3,025,000
  COMMUNICATIONS/TELECOMMUNICATIONS (7.34%)
  American Telephone & Telegraph Corp.........................       68,100      3,592,275
  Lincoln Telecommunications Co...............................      100,000      1,612,500
                                                                               -----------
                                                                                 5,204,775
  DEPOSITORY INSTITUTIONS (3.39%)
  CU Bancorp..................................................      296,000      2,405,000
  ELECTRIC, GAS AND SANITARY SERVICES (4.24%)
  Montana Power Co............................................      140,000      3,010,000
  FURNITURE AND FIXTURES (3.00%)
  Ladd Furniture..............................................      157,550      2,126,925
  HOLDING AND OTHER INVESTMENT OFFICES (4.67%)
  General Growth Properties, Inc..............................      170,000      3,315,000
  INSURANCE CARRIERS (8.06%)
  EMC Insurance Group, Inc....................................      353,100      4,325,475
  Progressive Corp............................................       36,000      1,390,500
                                                                               -----------
                                                                                 5,715,975
  MISCELLANEOUS RETAIL (4.32%)
  Ferrellgas Partners, L.P....................................      140,000      3,062,500
  NONDEPOSITORY INSTITUTIONS (0.35%)
  Berkshire Hathaway, Inc.....................................           10(1)     247,500
  TRANSPORTATION -- BY AIR (1.68%)
  Petroleum Helicopters, Inc. (Non-Voting)....................      108,000      1,066,500
  Petroleum Helicopters, Inc. (Voting)........................       12,350        128,131
                                                                               -----------
                                                                                 1,194,631
  WHOLESALE TRADE -- DURABLE GOODS (1.37%)
  TBC Corporation.............................................      100,000(1)     975,000
  WHOLESALE TRADE -- NONDURABLE GOODS (1.52%)
  Super Valu Stores, Inc......................................       35,000      1,076,250
                                                                               -----------
Total Common Stocks...........................................                  31,358,556
</TABLE>

                                       18
<PAGE>
FBL SERIES FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
GROWTH COMMON STOCK PORTFOLIO
<TABLE>
<CAPTION>
                                                                   SHARES
                                                                    HELD          VALUE
                                                                -------------  -----------
PREFERRED STOCKS (32.22%)
- -------------------------
<S>                                                             <C>            <C>
  DEPOSITORY INSTITUTIONS (5.45%)
  Conservative Savings Corp., Convertible.....................      101,139    $ 2,680,183
  Sterling Financial Corp.....................................       45,300      1,189,125
                                                                               -----------
                                                                                 3,869,308
  GAS PRODUCTION AND DISTRIBUTION (1.48%)
  Western Gas Resources, Inc., Convertible....................       30,000      1,053,750
  HOLDING AND OTHER INVESTMENT OFFICES (4.45%)
  Echo Bay Finance Corp., Convertible.........................      110,200      3,154,475
  OIL AND GAS EXTRACTION (10.72%)
  Chieftain International, Inc., Convertible..................       75,200      1,776,600
  Noble Drilling Corp., Convertible...........................      143,500      3,372,250
  Reading & Bates Corp., Convertible..........................       79,530      2,455,489
                                                                               -----------
                                                                                 7,604,339
  WATER TRANSPORTATION (5.04%)
  Sea Containers, Ltd., Convertible...........................       78,750      3,573,281
  WHOLESALE TRADE -- NONDURABLE GOODS (5.08%)
  Howell Corp.................................................       69,600      3,601,800
                                                                               -----------
Total Preferred Stocks........................................                  22,856,953
<CAPTION>
                                                                  PRINCIPAL
                                                                   AMOUNT
                                                                -------------
<S>                                                             <C>            <C>
CORPORATE BONDS (12.29%)
- ------------------------
  HOLDING AND OTHER INVESTMENT OFFICES (2.89%)
  Centennial Bancorp, Convertible Sub. Deb., 7.00%, due
    5/01/04...................................................  $ 2,073,000      2,047,336
  METAL MINING (3.36%)
  Agnico Eagle Mines, Convertible Sub. Deb., 3.50%, due
    1/27/04...................................................    2,840,000      2,385,600
  PRINTING AND PUBLISHING (6.04%)
  American City Business Journals, Inc., Convertible Sub.
    Deb., 6.00%, due 12/31/11.................................    3,121,000      4,285,820
                                                                               -----------
Total Corporate Bonds.........................................                   8,718,756
</TABLE>

                                       19
<PAGE>
FBL SERIES FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
GROWTH COMMON STOCK PORTFOLIO

<TABLE>
<CAPTION>
                                                                  PRINCIPAL
                                                                   AMOUNT         VALUE
                                                                -------------  -----------
<S>                                                             <C>            <C>
SHORT-TERM INVESTMENTS (11.36%)
- -------------------------------
  UNITED STATES GOVERNMENT AGENCIES (3.51%)
  Federal National Mortgage Assoc., 5.75%, due 8/01/95........  $   500,000    $   500,000
  Federal National Mortgage Assoc., 5.74%, due 8/22/95........    1,000,000        996,709
  Federal National Mortgage Assoc., 5.72%, due 9/22/95........    1,000,000        991,925
                                                                               -----------
                                                                                 2,488,634
  COMMERCIAL PAPER (7.85%)
  Deere (John) Capital Corp., 5.74%, due 8/23/95..............      675,000        675,000
  Ford Motor Credit Corp., 5.97%, due 8/01/95.................      500,000        500,000
  Ford Motor Credit Corp., 5.99%, due 8/10/95.................    1,000,000      1,000,000
  General Electric Capital Corp., 5.98%, due 8/03/95..........    3,000,000      3,000,000
  IBM Credit Corp., 5.77%, due 8/24/95........................      400,000        400,000
                                                                               -----------
                                                                                 5,575,000
                                                                               -----------
Total Short-Term Investments..................................                   8,063,634
                                                                               -----------
Total Investments (100.07%)...................................                  70,997,899
OTHER ASSETS LESS LIABILITIES (-0.07%)
- --------------------------------------
  Cash, receivables and prepaid expense, less accounts payable
    and accrued expenses......................................                     (51,396)
                                                                               -----------
Total Net Assets (100.00%)....................................                 $70,946,503
                                                                               -----------
                                                                               -----------
</TABLE>

(1) Non-income producing security.
SEE ACCOMPANYING NOTES.

                                       20
<PAGE>
FBL SERIES FUND, INC.
SCHEDULE OF INVESTMENTS
HIGH GRADE BOND PORTFOLIO
JULY 31, 1995

<TABLE>
<CAPTION>
                                                                      PRINCIPAL
                                                                       AMOUNT       VALUE
                                                                     -----------  ----------
<S>                                                                  <C>          <C>
CORPORATE BONDS (85.06%)
- ------------------------
  APPAREL AND ACCESSORY STORES (4.43%)
  TJX Companies, Inc., 9.50%, due 5/01/16..........................   $ 350,000   $  370,020
  COMMUNICATIONS (7.15%)
  Hawaiian Telephone Co., 8.00%, due 9/01/01.......................     250,000      254,803
  Pacific Telephone & Telegraph Co., 7.25%, due 2/01/08............     350,000      341,582
                                                                                  ----------
                                                                                     596,385
  DEPOSITORY INSTITUTIONS (11.56%)
  Midland America Capital Corp., 12.75%, due 11/15/03..............     175,000      206,130
  National Westminster Bancorp, Inc., 9.45%, due 5/01/01...........     125,000      140,833
  Norwest Corp., 9.25%, due 5/01/97................................     100,000      105,077
  Third National Bank, 7.50%, due 11/15/02.........................     158,000      159,861
  UnionBancorp, Inc. (Defeased), 8.50%, due 4/01/96................     350,000      352,398
                                                                                  ----------
                                                                                     964,299
  ELECTRIC, GAS AND SANITARY SERVICES (9.86%)
  Atlantic City Electric Co., 9.25%, due 10/01/19..................     145,000      153,496
  Commonwealth Edison Co., 9.125%, due 1/15/14.....................     280,000      294,907
  MDU Resources Group, Inc., 9.125%, due 10/01/16..................     200,000      214,746
  Texas Eastern Transmission Corp., 10.00%, due 9/01/11............     150,000      159,555
                                                                                  ----------
                                                                                     822,704
  ELECTRONIC & OTHER ELECTRIC EQUIPMENT (3.03%)
  Harris Corp., 7.75%, due 12/15/01................................     250,000      252,623
  FABRICATED METAL PRODUCTS (5.07%)
  Emhart Corp., 9.25%, due 8/15/16.................................     404,000      423,368
  FOOD AND KINDRED PRODUCTS (8.81%)
  Anheuser-Busch Companies, Inc., 8.50%, due 3/01/17...............     350,000      366,958
  Sara Lee Corp., 8.75%, due 5/15/16...............................     350,000      368,116
                                                                                  ----------
                                                                                     735,074
  GENERAL MERCHANDISE STORES (3.80%)
  Dayton-Hudson Corp., 9.25%, due 11/15/16.........................     300,000      317,073
  HOLDING AND OTHER INVESTMENT OFFICES (4.46%)
  Federal Realty Investment Trust, 8.875%, due 1/15/00.............     350,000      371,987
</TABLE>

                                       21
<PAGE>
FBL SERIES FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
HIGH GRADE BOND PORTFOLIO
<TABLE>
<CAPTION>
                                                                      PRINCIPAL
                                                                       AMOUNT       VALUE
                                                                     -----------  ----------
<S>                                                                  <C>          <C>
  INSURANCE CARRIERS (5.75%)
  Old Republic Int'l. Corp., 11.50%, due 6/01/15...................   $ 150,000   $  159,090
  Old Republic Int'l. Corp., 10.00%, due 2/01/18...................     200,000      213,208
  Torchmark Corp., 9.625%, due 5/01/98.............................     100,000      107,284
                                                                                  ----------
                                                                                     479,582
  NONDEPOSITORY INSTITUTIONS (3.76%)
  National Rural Utilities Cooperative Finance Corp., 9.00%, due
    3/15/16........................................................     305,000      313,787
  OIL AND GAS EXTRACTION (2.79%)
  Burlington Resources, Inc., 9.125%, due 10/01/21.................     200,000      232,876
  PETROLEUM AND COAL PRODUCTS (0.97%)
  Pennzoil Co., 9.00%, due 4/01/17.................................      77,000       81,188
  PRINTING AND PUBLISHING (3.95%)
  Valassis Communications, Inc., 9.55%, due 12/01/03...............     300,000      329,676
  RAILROAD TRANSPORTATION (4.30%)
  Union Pacific Corp., 8.50%, due 1/15/17..........................     350,000      359,226
  SECURITY AND COMMODITY BROKERS (2.52%)
  Lehman Brothers Holdings, Inc., 8.875%, due 11/01/98.............     200,000      210,278
  TRANSPORTATION EQUIPMENT (2.85%)
  Ford Motor Credit Co., 9.50%, due 9/15/11........................     200,000      237,962
                                                                                  ----------
Total Corporate Bonds..............................................                7,098,108
MORTGAGE-BACKED SECURITIES (10.72%)
- -----------------------------------
  FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC) (1.04%)
  Pool # 503442, 9.50%, due 7/01/05................................      83,065       86,776
  GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) (9.68%)
  Pool # 144332, 9.00%, due 7/15/16................................      49,247       52,140
  Pool # 236070, 10.00%, due 10/15/12..............................     628,649      669,109
  Pool # 307097, 9.00%, due 7/15/21................................      81,771       86,165
                                                                                  ----------
                                                                                     807,414
                                                                                  ----------
Total Mortgage-Backed Securities...................................                  894,190
SHORT-TERM INVESTMENTS (1.19%)
- ------------------------------
  UNITED STATES GOVERNMENT AGENCY
  Federal National Mortgage Assoc., due 8/30/95....................     100,000       99,530
                                                                                  ----------
Total Investments (96.97%).........................................                8,091,828
</TABLE>

                                       22
<PAGE>
FBL SERIES FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
HIGH GRADE BOND PORTFOLIO

<TABLE>
<CAPTION>
                                                                                    VALUE
                                                                                  ----------
<S>                                                                  <C>          <C>
OTHER ASSETS LESS LIABILITIES (3.03%)
- -------------------------------------
  Cash, receivables and prepaid expense, less accounts payable and
    accrued expenses...............................................               $  253,201
                                                                                  ----------
Total Net Assets (100.00%).........................................               $8,345,029
                                                                                  ----------
                                                                                  ----------
</TABLE>

SEE ACCOMPANYING NOTES.

                                       23
<PAGE>
FBL SERIES FUND, INC.
SCHEDULE OF INVESTMENTS
HIGH YIELD BOND PORTFOLIO
JULY 31, 1995

<TABLE>
<CAPTION>
                                                                        PRINCIPAL
                                                                         AMOUNT       VALUE
                                                                       -----------  ----------
<S>                                                                    <C>          <C>
CORPORATE BONDS (91.97%)
- ------------------------
  AGRICULTURAL PRODUCTION -- CROPS (2.34%)
  Chiquita Brands International, Inc., 11.50%, due 6/01/01...........   $ 150,000   $  156,563
  APPAREL AND ACCESSORY STORES (5.23%)
  Genesco, Inc., 10.375%, due 2/01/03................................     150,000      138,750
  TJX Companies, Inc., 9.50%, due 5/01/16............................     200,000      211,440
                                                                                    ----------
                                                                                       350,190
  APPAREL AND OTHER TEXTILE PRODUCTS (7.32%)
  Dan River, Inc., 10.125%, due 12/15/03.............................     280,000      280,000
  Fieldcrest Cannon, Inc., 11.25%, due 6/15/04.......................     200,000      209,500
                                                                                    ----------
                                                                                       489,500
  AUTO REPAIR, SERVICES AND PARKING (1.70%)
  Envirotest Systems Corp., 9.625%, due 4/01/03......................     150,000      114,000
  BUSINESS SERVICES (3.31%)
  Borg-Warner Corp., 9.125%, due 5/01/03.............................     250,000      221,250
  COMMUNICATIONS (3.87%)
  Panamsat, L.P., 9.75%, due 8/01/00.................................     250,000      258,750
  ELECTRIC, GAS AND SANITARY SERVICES (7.94%)
  Commonwealth Edison Co., 9.125%, due 1/15/14.......................     265,000      279,109
  Public Service Company of New Mexico, 5.875%, due 5/01/97..........     150,000      145,695
  Texas Eastern Transmission Corp., 10.00%, due 10/01/11.............     100,000      106,370
                                                                                    ----------
                                                                                       531,174
  ELECTRONIC AND OTHER ELECTRIC EQUIPMENT (3.38%)
  Amphenol Corp., 12.75%, due 12/15/02...............................     200,000      226,000
  FABRICATED METAL PRODUCTS (6.84%)
  Emhart Corp., 9.25%, due 8/15/16...................................     250,000      261,985
  Jorgensen (Earle M.) Co., 10.75%, due 3/01/00......................     200,000      196,000
                                                                                    ----------
                                                                                       457,985
  FOOD STORES (5.37%)
  P&C Food Markets, Inc., 11.50%, due 10/15/01.......................     150,000      157,500
  Penn Traffic Co., 10.25%, due 2/15/02..............................     200,000      201,750
                                                                                    ----------
                                                                                       359,250
  GENERAL MERCHANDISE STORES (4.86%)
  Federated Department Stores, Inc., 10.00%, due 2/15/01.............     300,000      325,125
</TABLE>

                                       24
<PAGE>
FBL SERIES FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
HIGH YIELD BOND PORTFOLIO
<TABLE>
<CAPTION>
                                                                        PRINCIPAL
                                                                         AMOUNT       VALUE
                                                                       -----------  ----------
<S>                                                                    <C>          <C>
  INDUSTRIAL MACHINERY AND EQUIPMENT (0.83%)
  Hyster-Yale Materials Handling, Inc., 12.375%, due 8/01/99.........   $  54,000   $   55,620
  LUMBER AND WOOD PRODUCTS (5.86%)
  Georgia-Pacific Corp., 9.25%, due 3/15/16..........................     150,000      158,410
  Pacific Lumber Co., 10.50%, due 3/01/03............................     250,000      233,750
                                                                                    ----------
                                                                                       392,160
  MISCELLANEOUS RETAIL (4.61%)
  Eckerd Corp., 9.25%, due 2/15/04...................................     295,000      308,275
  PAPER AND ALLIED PRODUCTS (3.82%)
  Container Corp. of America, 9.75%, due 4/01/03.....................     250,000      255,625
  PETROLEUM AND COAL PRODUCTS (5.22%)
  Clark Oil & Refining Corp., 10.50%, due 12/01/01...................     175,000      183,750
  Huntsman Corp., 11.00%, due 4/15/04................................     150,000      165,375
                                                                                    ----------
                                                                                       349,125
  RUBBER AND MISCELLANEOUS PLASTICS PRODUCTS (4.10%)
  Foamex, L.P., 9.50%, due 6/01/00...................................     182,000      182,910
  Plastic Specialties & Technologies, Inc., 11.25%, due 12/01/03.....     100,000       91,500
                                                                                    ----------
                                                                                       274,410
  STONE, CLAY AND GLASS PRODUCTS (7.17%)
  Owens-Illinois, Inc., 11.00%, due 12/01/03.........................     200,000      221,000
  USG Corp., 9.25%, due 9/15/01......................................     250,000      258,750
                                                                                    ----------
                                                                                       479,750
  TEXTILE MILL PRODUCTS (0.78%)
  Bibb Co. (The), 14.00%, due 10/01/99...............................     125,000(1)     52,500
  TRANSPORTATION EQUIPMENT (3.32%)
  Preston Corp., 7.00%, due 5/01/11..................................     306,000      221,850
  WATER TRANSPORTATION (4.10%)
  Moran Transport Co., 11.75%, due 7/15/94...........................     300,000      274,500
                                                                                    ----------
Total Corporate Bonds................................................                6,153,602
SHORT-TERM INVESTMENT (4.48%)
- -----------------------------
  UNITED STATES GOVERNMENT AGENCY
  Federal National Mortgage Assoc., due 8/10/95......................     300,000      299,570
                                                                                    ----------
Total Investments (96.45%)...........................................                6,453,172
</TABLE>

                                       25
<PAGE>
FBL SERIES FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
HIGH YIELD BOND PORTFOLIO

<TABLE>
<CAPTION>
                                                                                    VALUE
                                                                                  ----------
<S>                                                                  <C>          <C>
OTHER ASSETS LESS LIABILITIES (3.55%)
- -------------------------------------
  Cash, receivables and prepaid expense, less accounts payable and
    accrued expenses...............................................               $  237,335
                                                                                  ----------
Total Net Assets (100.00%).........................................               $6,690,507
                                                                                  ----------
                                                                                  ----------
</TABLE>

(1)_Company has defaulted on the April 1, 1995 interest payment.

SEE ACCOMPANYING NOTES.

                                       26
<PAGE>
FBL SERIES FUND, INC.
SCHEDULE OF INVESTMENTS
MANAGED PORTFOLIO
JULY 31, 1995

<TABLE>
<CAPTION>
                                                                    SHARES
                                                                     HELD        VALUE
                                                                  ----------  -----------
<S>                                                               <C>         <C>
COMMON STOCKS (27.28%)
- ----------------------
  COMMUNICATIONS (4.75%)
  American Telephone & Telegraph Corp...........................      19,000  $ 1,002,250
  ELECTRIC, GAS AND SANITARY SERVICES (7.76%)
  Montana Power Co..............................................      39,600      851,400
  Peoples Energy Corp...........................................      30,000      787,500
                                                                              -----------
                                                                                1,638,900
  HOLDING AND OTHER INVESTMENT OFFICES (4.53%)
  General Growth Properties, Inc................................      49,000      955,500
  INSURANCE CARRIERS (6.09%)
  EMC Insurance Group, Inc......................................     105,000    1,286,250
  MISCELLANEOUS RETAIL (4.15%)
  Ferrellgas Partners, L.P......................................      40,000      875,000
                                                                              -----------
Total Common Stocks.............................................                5,757,900
PREFERRED STOCKS (33.53%)
- -------------------------
  DEPOSITORY INSTITUTIONS (7.45%)
  Community First Bankshares, Inc...............................      17,000      497,250
  Conservative Savings Corp., Convertible.......................      34,170      905,505
  Sterling Financial Corp.......................................       6,450      169,313
                                                                              -----------
                                                                                1,572,068
  GAS PRODUCTION AND DISTRIBUTION (1.06%)
  MCN Michigan, L.P.............................................       7,500      199,687
  Western Gas Resources, Inc....................................       1,000       24,875
                                                                              -----------
                                                                                  224,562
  HOLDING AND OTHER INVESTMENT OFFICES (3.93%)
  Echo Bay Finance Corp., Convertible...........................      29,000      830,125
  OIL AND GAS EXTRACTION (9.20%)
  ICO, Inc., Convertible........................................      10,000      203,750
  Noble Drilling Corp., Convertible.............................      36,000      846,000
  Reading & Bates Corp., Convertible............................      28,900      892,288
                                                                              -----------
                                                                                1,942,038
  PAPER AND ALLIED PRODUCTS (2.08%)
  James River Corp. of Virginia, Convertible....................       9,000      438,750
</TABLE>

                                       27
<PAGE>
FBL SERIES FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
MANAGED PORTFOLIO
<TABLE>
<CAPTION>
                                                                    SHARES
                                                                     HELD        VALUE
                                                                  ----------  -----------
<S>                                                               <C>         <C>
  WATER TRANSPORTATION (4.95%)
  Sea Containers, Ltd., Convertible.............................      23,000  $ 1,043,625
  WHOLESALE TRADE -- NONDURABLE GOODS (4.86%)
  Howell Corp...................................................      19,800    1,024,650
                                                                              -----------
Total Preferred Stocks..........................................                7,075,818
<CAPTION>
                                                                  PRINCIPAL
                                                                    AMOUNT
                                                                  ----------
<S>                                                               <C>         <C>
CORPORATE BONDS (28.80%)
- ------------------------
  COMMUNICATIONS (0.51%)
  Hawaiian Telephone Co., 8.00%, due 9/01/01....................  $  105,000      107,017
  DEPOSITORY INSTITUTIONS (1.65%)
  Columbia Banking System, Convertible Sub. Deb., 7.85%, due
    6/30/02.....................................................     170,000      179,350
  National Westminster Bancorp, Inc., 9.45%, due 5/01/01........     150,000      169,000
                                                                              -----------
                                                                                  348,350
  ELECTRIC, GAS AND SANITARY SERVICES (0.73%)
  National Co-op Services Corp. (Arkansas Electric), 9.48%, due
    1/01/12.....................................................     142,000      153,131
  FABRICATED METAL PRODUCTS (2.56%)
  Emhart Corp., 9.25%, due 8/15/16..............................     515,000      539,689
  FOOD AND KINDRED PRODUCTS (1.99%)
  Anheuser-Busch Companies, Inc., 8.50%, due 3/01/17............     200,000      209,690
  Sara Lee Corp., 8.75%, due 5/15/16............................     200,000      210,352
                                                                              -----------
                                                                                  420,042
  GAS PRODUCTION AND DISTRIBUTION (4.40%)
  Consolidated Natural Gas Co., Convertible Sub. Deb., 7.25%,
    due 12/15/15................................................     900,000      929,250
  HOLDING AND OTHER INVESTMENT OFFICES (2.85%)
  Centennial Bancorp, Convertible Sub. Deb., 7.00%, due
    5/01/04.....................................................     608,000      600,473
  INSURANCE CARRIERS (1.25%)
  Torchmark Corp., 8.625%, due 3/01/17..........................     250,000      263,383
  METAL MINING (5.17%)
  Agnico-Eagle Mines, Convertible Sub. Deb., 3.50%, due
    1/27/04.....................................................   1,300,000    1,092,000
  PETROLEUM AND COAL PRODUCTS (0.66%)
  Pennzoil Co., 9.00%, due 4/01/17..............................     133,000      140,234
</TABLE>

                                       28
<PAGE>
FBL SERIES FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
MANAGED PORTFOLIO

<TABLE>
<CAPTION>
                                                                  PRINCIPAL
                                                                    AMOUNT       VALUE
                                                                  ----------  -----------
<S>                                                               <C>         <C>
  PRINTING AND PUBLISHING (6.06%)
  American City Business Journals, Inc., Convertible Sub. Deb.,
    6.00%, due 12/31/11.........................................  $  932,000  $ 1,279,841
  RAILROAD TRANSPORTATION (0.97%)
  Union Pacific Corp., Sinking Fund Deb., 8.50%, due 1/15/17....     200,000      205,272
                                                                              -----------
Total Corporate Bonds...........................................                6,078,682

SHORT-TERM INVESTMENTS (4.97%)
- -----------------------------------
  COMMERCIAL PAPER (2.60%)
    NONDEPOSITORY INSTITUTIONS
    Deere (John) Capital Corp., 5.74%, due 8/23/95..............     100,000      100,000
    General Electric Capital Corp., 5.37%, due 8/17/95..........     450,000      450,000
                                                                              -----------
                                                                                  550,000
  UNITED STATES GOVERNMENT AGENCIES (2.37%)
    Federal Home Loan Mortgage Corp., due 8/01/95...............     300,000      300,000
    Federal Home Loan Mortgage Corp., due 8/18/95...............     200,000      199,447
                                                                              -----------
                                                                                  499,447
                                                                              -----------
Total Short-Term Investments....................................                1,049,447
REPURCHASE AGREEMENT (4.74%)
- ----------------------------
  Cantor Fitzgerald, dated 7/31/95, due 8/01/95 in the amount of
    $1,000,785 (collateralized by Federal Home Loan Mortgage
    Corp. Bond, 8.00%, fair value -- $999,117, due 7/01/24 and
    Federal National Mortgage Assoc. CMO, 9.30%, fair value --
    $27,258, due 2/25/20).......................................   1,000,000    1,000,000
                                                                              -----------
Total Investments (99.32%)......................................               20,961,847
OTHER ASSETS LESS LIABILITIES (0.68%)
- -------------------------------------
  Cash, receivables and prepaid expense, less accounts payable
    and accrued expenses........................................                  142,979
                                                                              -----------
Total Net Assets (100.00%)......................................              $21,104,826
                                                                              -----------
                                                                              -----------
</TABLE>

SEE ACCOMPANYING NOTES.

                                       29
<PAGE>
FBL SERIES FUND, INC.
SCHEDULE OF INVESTMENTS
MONEY MARKET PORTFOLIO
JULY 31, 1995

<TABLE>
<CAPTION>
                                                           ANNUALIZED
                                                            YIELD ON      PRINCIPAL
                                                          PURCHASE DATE    AMOUNT       VALUE
                                                          -------------  -----------  ----------
<S>                                                       <C>            <C>          <C>
SHORT-TERM INVESTMENTS (100.05%)
- --------------------------------
  COMMERCIAL PAPER (19.68%)
    NONDEPOSITORY INSTITUTIONS
    American General Finance Corp., due 10/11/95........        5.759%    $ 120,000   $  120,000
    Deere (John) Capital Corp., due 8/23/95.............        5.738       120,000      120,000
    Ford Motor Credit Corp., due 8/01/95................        5.972       120,000      120,000
    General Electric Capital Corp., due 9/13/95.........        5.745       120,000      120,000
                                                                                      ----------
  Total Commercial Paper................................                                 480,000
  UNITED STATES GOVERNMENT AGENCIES (80.37%)
    Federal Farm Credit Bank, due 9/08/95...............        5.749       225,000      223,661
    Federal National Mortgage Assoc., due 8/15/95.......        5.710       775,000      773,306
    Federal National Mortgage Assoc., due 8/22/95.......        5.982       400,000      398,628
    Federal National Mortgage Assoc., due 8/30/95.......        5.911        70,000       69,673
    Federal National Mortgage Assoc., due 9/22/95.......        5.715       250,000      247,981
    Federal National Mortgage Assoc., due 10/23/95......        5.722       250,000      246,789
                                                                                      ----------
  Total United States Government Agencies...............                               1,960,038
                                                                                      ----------
Total Investments (100.05%).............................                               2,440,038
OTHER ASSETS LESS LIABILITIES (-0.05%)
- --------------------------------------
  Cash, receivables and prepaid expense, less accounts
    payable and accrued expenses........................                                  (1,188)
                                                                                      ----------
Total Net Assets (100.00%)..............................                              $2,438,850
                                                                                      ----------
                                                                                      ----------
</TABLE>

SEE ACCOMPANYING NOTES.

                                       30
<PAGE>
FBL SERIES FUND, INC.
SCHEDULE OF INVESTMENTS
BLUE CHIP PORTFOLIO
JULY 31, 1995

<TABLE>
<CAPTION>
                                                                       SHARES
                                                                        HELD        VALUE
                                                                     -----------  ----------
<S>                                                                  <C>          <C>
COMMON STOCKS (92.39%)
- ----------------------
  CHEMICALS AND ALLIED PRODUCTS (16.70%)
  Bristol-Myers Squibb Co..........................................       2,315   $  160,314
  DuPont (EI) de Nemours & Co......................................       3,185      213,395
  Eastman Chemical Co..............................................       1,567      100,288
  Johnson & Johnson................................................       3,617      259,520
  Merck & Co., Inc.................................................       4,477      231,125
  Praxair, Inc.....................................................       7,359      206,052
  Procter & Gamble Co..............................................       3,005      206,969
  Union Carbide Corp...............................................       6,761      234,945
                                                                                  ----------
                                                                                   1,612,608
  COMMUNICATIONS (6.51%)
  American Telephone & Telegraph Co................................       3,464      182,726
  Bell Atlantic Corp...............................................       2,992      171,292
  Capital Cities/ABC, Inc..........................................       2,353      274,713
                                                                                  ----------
                                                                                     628,731
  DEPOSITORY INSTITUTIONS (1.91%)
  Morgan JP & Co., Inc.............................................       2,529      184,933
  EATING AND DRINKING PLACES (2.74%)
  McDonald's Corp..................................................       6,847      264,465
  ELECTRONIC AND OTHER ELECTRIC EQUIPMENT (2.17%)
  General Electric Co..............................................       3,550      209,450
  FOOD AND KINDRED PRODUCTS (7.62%)
  Coca-Cola Co. (The)..............................................       4,903      322,985
  PepsiCo, Inc.....................................................       4,717      221,109
  Philip Morris Companies, Inc.....................................       2,678      191,812
                                                                                  ----------
                                                                                     735,906
  GENERAL MERCHANDISE STORES (4.19%)
  Sears, Roebuck & Co..............................................       3,677      119,962
  Wal-Mart Stores, Inc.............................................       7,407      197,211
  Woolworth (F.W.) Co. Ltd.........................................       5,592       87,375
                                                                                  ----------
                                                                                     404,548
</TABLE>

                                       31
<PAGE>
FBL SERIES FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
BLUE CHIP PORTFOLIO
<TABLE>
<CAPTION>
                                                                       SHARES
                                                                        HELD        VALUE
                                                                     -----------  ----------
<S>                                                                  <C>          <C>
  INDUSTRIAL MACHINERY AND EQUIPMENT (5.34%)
  Caterpillar, Inc.................................................       4,785   $  336,744
  International Business Machines Corp.............................       1,648      179,426
                                                                                  ----------
                                                                                     516,170
  INSTRUMENTS AND RELATED PRODUCTS (1.98%)
  Eastman Kodak Co.................................................       3,320      191,315
  INSURANCE CARRIERS (3.85%)
  Allstate Corp....................................................       3,408      106,500
  American International Group, Inc................................       3,544      265,800
                                                                                  ----------
                                                                                     372,300
  MOTION PICTURES (2.54%)
  Disney (Walt) Co.................................................       4,181      245,111
  NONDEPOSITORY INSTITUTIONS (1.17%)
  Dean Witter, Discover & Co.......................................       2,230      112,615
  PAPER AND ALLIED PRODUCTS (3.88%)
  International Paper Co...........................................       2,413      203,899
  Minnesota Mining & Manufacturing Co..............................       3,024      171,234
                                                                                  ----------
                                                                                     375,133
  PETROLEUM AND COAL PRODUCTS (10.58%)
  Amoco Corp.......................................................       2,625      176,531
  Chevron Corp.....................................................       3,636      179,528
  Exxon Corp.......................................................       2,644      191,690
  Mobil Corp.......................................................       2,063      201,658
  Texaco, Inc......................................................       2,335      155,278
  USX Corp. -- Marathon Group......................................       5,807      116,866
                                                                                  ----------
                                                                                   1,021,551
  PRIMARY METAL INDUSTRIES (3.80%)
  Aluminum Company of America......................................       4,090      232,619
  Bethlehem Steel Corp.............................................       8,509      134,017
                                                                                  ----------
                                                                                     366,636
  RUBBER AND MISCELLANEOUS PLASTICS PRODUCTS (3.31%)
  Goodyear Tire & Rubber Co........................................       7,371      319,717
  SECURITY AND COMMODITY BROKERS (2.45%)
  American Express Co..............................................       4,812      185,262
  Lehman Brothers Holding, Inc.....................................       2,330       51,551
                                                                                  ----------
                                                                                     236,813
</TABLE>

                                       32
<PAGE>
FBL SERIES FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
BLUE CHIP PORTFOLIO
<TABLE>
<CAPTION>
                                                                       SHARES
                                                                        HELD        VALUE
                                                                     -----------  ----------
<S>                                                                  <C>          <C>
  TRANSPORTATION EQUIPMENT (10.71%)
  Allied-Signal, Inc...............................................       6,595   $  308,316
  Boeing Co. (The).................................................       2,833      189,811
  Ford Motor Co....................................................       6,244      180,296
  General Motors Corp..............................................       3,051      148,736
  United Technologies Corp.........................................       2,461      206,724
                                                                                  ----------
                                                                                   1,033,883
  WHOLESALE TRADE -- DURABLE GOODS (0.94%)
  Westinghouse Electric Corp.......................................       6,638       90,443
                                                                                  ----------
Total Common Stocks................................................                8,922,328
<CAPTION>
                                                                      PRINCIPAL
                                                                       AMOUNT
                                                                     -----------
<S>                                                                  <C>          <C>
SHORT-TERM INVESTMENTS (6.71%)
- ------------------------------
  UNITED STATES GOVERNMENT AGENCIES
  Federal National Mortgage Assoc., due 8/15/95....................   $ 450,000      449,016
  Federal National Mortgage Assoc., due 8/28/95....................     200,000      199,124
                                                                                  ----------
Total Short-Term Investments.......................................                  648,140
                                                                                  ----------
Total Investments (99.10%).........................................                9,570,468
OTHER ASSETS LESS LIABILITIES (0.90%)
- -------------------------------------
  Cash, receivables and prepaid expense, less accounts payable and
    accrued expenses...............................................                   86,803
                                                                                  ----------
Total Net Assets (100.00%).........................................               $9,657,271
                                                                                  ----------
                                                                                  ----------
</TABLE>

SEE ACCOMPANYING NOTES.

                                       33
<PAGE>
FBL SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1995

1. SIGNIFICANT ACCOUNTING POLICIES
    FBL  Series  Fund,  Inc. (the  "Fund")  is registered  under  the Investment
Company Act  of  1940,  as  amended,  as  an  open-end,  diversified  management
investment  company and operates in the  mutual fund industry. The Fund consists
of six portfolios (known as the Growth Common Stock, High Grade Bond, High Yield
Bond, Managed, Money Market and Blue Chip Portfolios).

    All portfolios, other than  the Money Market  Portfolio, value their  common
stocks,  corporate bonds, United States Treasury obligations and mortgage-backed
securities that are traded on  any national exchange at  the last sale price  on
the  day of valuation or, lacking any sales, at the mean between the closing bid
and asked prices. Investments traded  in the over-the-counter market are  valued
at  the mean between  the bid and  asked prices or  yield equivalent as obtained
from one or more  dealers that make markets  in the securities. Investments  for
which  market quotations are not  readily available are valued  at fair value as
determined in  good faith  by  the Board  of Directors.  Short-term  investments
(including  repurchase  agreements)  are  valued at  market  value,  except that
obligations maturing in  60 days  or less are  valued using  the amortized  cost
method  of valuation described below with respect to the Money Market Portfolio,
which approximates market.

    The Money  Market  Portfolio values  investments  at amortized  cost,  which
approximates  market. Under the  amortized cost method, a  security is valued at
its cost  on the  date  of purchase  and thereafter  is  adjusted to  reflect  a
constant amortization to maturity of the difference between the principal amount
due at maturity and the cost of the investment to the portfolio.

    The  value of the underlying  securities serving to collateralize repurchase
agreements is  marked  to market  daily.  Should  the value  of  the  underlying
securities  decline,  the seller  would be  required  to provide  the applicable
portfolio with  additional  securities  so  that  the  aggregate  value  of  the
underlying securities was at least equal to the repurchase price. If a seller of
a  repurchase agreement were to default, the affected portfolio might experience
losses in enforcing its  rights. To minimize this  risk, the investment  adviser
(under   the  supervision   of  the  Board   of  Directors)   will  monitor  the
creditworthiness of the seller  of the repurchase agreement  and must find  such
creditworthiness  satisfactory before a portfolio  may enter into the repurchase
agreement.

    The Fund records investment transactions  generally one day after the  trade
date.  The identified cost basis  has been used in  determining the net realized
gain or  loss  from  investment  transactions  and  unrealized  appreciation  or
depreciation on investments. Dividends are taken into income on an accrual basis
as  of the  ex-dividend date  and interest  is recognized  on an  accrual basis.
Discounts and premiums on investments purchased  are amortized over the life  of
the respective investments.

    Dividends and distributions to shareholders are recorded on the record date.

2. FEDERAL INCOME TAXES
    No  provision for federal  income taxes is  considered necessary because the
Fund is qualified as a "regulated investment company" under the Internal Revenue
Code and intends to distribute each year substantially all of its net investment
income and realized capital  gains to shareholders. The  cost of investments  is
the same for both federal income tax and financial reporting purposes.

                                       34
<PAGE>
FBL SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. FEDERAL INCOME TAXES (CONTINUED)
    At  July 31, 1995,  the High Grade  Bond, High Yield  Bond, Managed and Blue
Chip Portfolios had  net capital  loss carryforwards  of approximately  $39,000,
$7,000, $161,000 and $4,000, respectively, which will expire in 1999 and 2003.

3. MANAGEMENT CONTRACT AND TRANSACTIONS WITH AFFILIATES
    The  Fund has entered into agreements with FBL Investment Advisory Services,
Inc. ("FBL Investment")  relating to the  management of the  portfolios and  the
investment  of  their assets.  Pursuant to  these agreements,  fees paid  to FBL
Investment are as follows: (1)  annual investment advisory and management  fees,
which  are based on each portfolio's daily  net assets as follows: Growth Common
Stock Portfolio -  0.50%; High  Grade Bond Portfolio  - 0.40%;  High Yield  Bond
Portfolio - 0.55%; Managed Portfolio - 0.60%; Money Market Portfolio - 0.40% and
Blue  Chip Portfolio -  0.25%; (2) distribution  fees, which are  computed at an
annual rate of 0.50% of each portfolio's  average daily net asset value and,  in
part,  are subsequently remitted  by FBL Investment  to retail dealers including
FBL Marketing  Services, Inc.  ("FBL  Marketing"), an  affiliate who  serves  as
principal  dealer; (3)  administrative service  fees, which  are computed  at an
annual rate of  0.25% of  each portfolio's average  daily net  asset value;  (4)
shareholder  service,  transfer and  dividend disbursing  agent fees,  which are
based on  direct  services provided  and  expenses incurred  by  the  investment
adviser, plus an annual per account charge ranging from $7.20 to $12.00; and (5)
accounting  fees, which  are based  on each portfolio's  daily net  assets at an
annual rate of 0.05%, with a maximum per portfolio annual expense of $30,000.

    FBL Investment has  agreed to  reimburse the portfolios  annually for  total
expenses  (excluding  brokerage,  interest,  taxes,  the  distribution  fee  and
extraordinary expenses) in excess of 1.50% of each portfolio's average daily net
assets. The  amount reimbursed,  however, shall  not exceed  the amount  of  the
investment advisory and management fees paid by the portfolio for such period.

    Certain  officers and directors of the Fund are also officers of Farm Bureau
Life Insurance  Company,  FBL Investment,  FBL  Marketing and  other  affiliated
entities.  At July  31, 1995, Farm  Bureau Life Insurance  Company, the indirect
parent of  FBL  Investment  and  FBL  Marketing,  owned  shares  of  the  Fund's
portfolios as follows:

<TABLE>
<CAPTION>
PORTFOLIO                                                          SHARES
- ---------------------------------------------------------------  ----------
<S>                                                              <C>
High Yield Bond................................................     125,149
Money Market...................................................   1,910,602
</TABLE>

    FBL  Investment  also  owned shares  of  the Growth  Common  Stock Portfolio
aggregating 120,118 at July 31, 1995.

                                       35
<PAGE>
FBL SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

4. CAPITAL SHARE TRANSACTIONS
    Net assets as of July 31, 1995 consisted of:

<TABLE>
<CAPTION>
                                                                                PORTFOLIO
                                                 ------------------------------------------------------------------------
                                                   GROWTH                    HIGH
                                                   COMMON     HIGH GRADE    YIELD                    MONEY        BLUE
                                                    STOCK        BOND        BOND       MANAGED      MARKET       CHIP
                                                 -----------  ----------  ----------  -----------  ----------  ----------
<S>                                              <C>          <C>         <C>         <C>          <C>         <C>
Capital Stock (5,000,000,000 shares of $.001
  par value Capital Stock authorized)..........  $     5,441  $      813  $      667  $     1,781  $    2,439  $      423
Additional paid-in capital.....................   66,985,376   8,163,783   6,700,925   20,789,151   2,436,411   6,252,283
Accumulated undistributed net investment
  income.......................................    1,457,162                                1,272                  41,475
Accumulated undistributed net realized gain
  (loss) from investment transactions..........      188,440     (38,748)     (7,192)    (161,255)                 (4,384)
Net unrealized appreciation (depreciation) of
  investments..................................    2,310,084     219,181      (3,893)     473,877               3,367,474
                                                 -----------  ----------  ----------  -----------  ----------  ----------
Net Assets.....................................  $70,946,503  $8,345,029  $6,690,507  $21,104,826  $2,438,850  $9,657,271
                                                 -----------  ----------  ----------  -----------  ----------  ----------
                                                 -----------  ----------  ----------  -----------  ----------  ----------
Shares issued and outstanding as of July 31,
  1995.........................................    5,441,946     813,312     666,735    1,780,492   2,438,850     422,597
                                                 -----------  ----------  ----------  -----------  ----------  ----------
                                                 -----------  ----------  ----------  -----------  ----------  ----------
</TABLE>

    Transactions in Capital Stock for each portfolio were as follows:

<TABLE>
<CAPTION>
                                                        SHARES ISSUED IN
                                                         REINVESTMENT OF
                                                          DIVIDENDS AND                             NET INCREASE (DECREASE)
                                   SHARES SOLD            DISTRIBUTIONS         SHARES REDEEMED
                              ----------------------  ---------------------  ---------------------  -----------------------
PORTFOLIO                      SHARES      AMOUNT      SHARES      AMOUNT     SHARES      AMOUNT      SHARES      AMOUNT
- ----------------------------  ---------  -----------  ---------  ----------  ---------  ----------  ----------  -----------
<S>                           <C>        <C>          <C>        <C>         <C>        <C>         <C>         <C>
Year Ended July 31, 1995:

Growth Common Stock.........    456,086  $ 5,716,180    465,616  $5,401,147    399,968  $5,014,467     521,734  $ 6,102,860
High Grade Bond.............     97,267      947,943     37,987     400,616     71,483     711,607      63,771      636,952
High Yield Bond.............     85,943      872,956     35,880     351,724     97,585     990,492      24,238      234,188
Managed.....................    206,561    2,362,969    107,958   1,216,938    178,193   2,021,534     136,326    1,558,373
Money Market................    194,697      194,697     19,711      19,711    402,160     402,160    (187,752)    (187,752)
Blue Chip...................     91,343    1,825,635      2,799      52,645     31,209     621,430      62,933    1,256,850
Year Ended July 31, 1994:

Growth Common Stock.........  1,244,749  $17,459,895    586,203  $7,878,314    329,182  $4,625,196   1,501,770  $20,713,013
High Grade Bond.............    244,811    2,558,740     38,343     399,309    286,594   3,012,109      (3,440)     (54,060)
High Yield Bond.............    220,909    2,366,382     28,346     291,725    142,044   1,537,430     107,211    1,120,677
Managed.....................    965,352   11,828,893     72,904     873,667     54,051     653,661     984,205   12,048,899
Money Market................    963,596      963,596     10,609      10,609    902,157     902,157      72,048       72,048
Blue Chip...................    101,015    1,848,854        885      41,682     48,342     899,298      53,558      991,238
</TABLE>

                                       36
<PAGE>
FBL SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

5. INVESTMENT TRANSACTIONS
    For the  year  ended  July  31, 1995,  the  cost  of  investment  securities
purchased and proceeds from investment securities sold (not including short-term
investments and U.S. Government securities) by portfolio, were as follows:

<TABLE>
<CAPTION>
PORTFOLIO                                         PURCHASES      SALES
- -----------------------------------------------  -----------  -----------
<S>                                              <C>          <C>
Growth Common Stock............................  $51,759,359  $55,260,641
High Grade Bond................................    1,551,385    1,000,723
High Yield Bond................................    1,397,485    1,364,675
Managed........................................   12,738,635   13,456,756
Blue Chip......................................    1,218,742       40,558
</TABLE>

    At  July 31, 1995,  net unrealized appreciation  of investments by portfolio
was composed of the following:

<TABLE>
<CAPTION>
                                                                              NET UNREALIZED
                                                      GROSS UNREALIZED         APPRECIATION
                                                ----------------------------  (DEPRECIATION)
PORTFOLIO                                       APPRECIATION   DEPRECIATION   OF INVESTMENTS
- ----------------------------------------------  -------------  -------------  ---------------
<S>                                             <C>            <C>            <C>
Growth Common Stock...........................   $ 4,604,542    $ 2,294,458     $ 2,310,084
High Grade Bond...............................       258,361         39,180         219,181
High Yield Bond...............................       227,535        231,428          (3,893)
Managed.......................................     1,152,708        678,831         473,877
Blue Chip.....................................     3,448,339         80,865       3,367,474
</TABLE>

                                       37
<PAGE>
FBL SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

6. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
    Dividends from  net  investment  income for  the  following  portfolios  are
declared  daily  and were  payable  on the  last business  day  of the  month as
follows:

<TABLE>
<CAPTION>
                                                                      HIGH       HIGH
                                                                      GRADE      YIELD       MONEY
PAYABLE DATE                                                          BOND       BOND       MARKET
- ------------------------------------------------------------------  ---------  ---------  -----------
<S>                                                                 <C>        <C>        <C>
August 31, 1994...................................................  $   .0547  $   .0718   $   .0020
September 30, 1994................................................      .0504      .0664       .0024
October 31, 1994..................................................      .0507      .0641       .0022
November 30, 1994.................................................      .0530      .0602       .0027
December 30, 1994.................................................      .0541      .0675       .0030
January 31, 1995..................................................      .0525      .0664       .0033
February 28, 1995.................................................      .0500      .0687       .0030
March 31, 1995....................................................      .0532      .0681       .0034
April 28, 1995....................................................      .0495      .0576       .0031
May 31, 1995......................................................      .0571      .0647       .0036
June 30, 1995.....................................................      .0542      .0611       .0033
July 31, 1995.....................................................      .0542      .0607       .0033
                                                                    ---------  ---------  -----------
Total Dividends Per Share.........................................  $   .6336  $   .7773   $   .0353
                                                                    ---------  ---------  -----------
                                                                    ---------  ---------  -----------
</TABLE>

                                       38
<PAGE>
FBL SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

6. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS (CONTINUED)
    In addition, dividends and distributions to shareholders from net investment
income and net  realized gain on  investment transactions were  paid during  the
year ended July 31, 1995, for the following portfolios:

<TABLE>
<CAPTION>
ORDINARY INCOME DIVIDENDS:                                            DIVIDEND    PERCENT QUALIFYING
                                  DECLARATION   RECORD     PAYABLE   AMOUNT PER    FOR DEDUCTION BY
PORTFOLIO                            DATE        DATE       DATE        SHARE        CORPORATIONS
- --------------------------------  -----------  ---------  ---------  -----------  -------------------
<S>                               <C>          <C>        <C>        <C>          <C>
Growth Common Stock.............    12/22/94    12/29/94   12/29/94   $  0.3913              71%
Managed.........................    10/28/94    10/31/94   11/07/94      0.1100              61
Managed.........................    12/22/94    12/29/94   12/29/94      0.1363              65
Managed.........................     4/27/95     4/28/95    5/05/95      0.1775              64
Managed.........................     7/28/95     7/31/95    7/07/95      0.1375              61
Blue Chip.......................    12/22/94    12/29/94   12/29/94      0.1400              87
</TABLE>

<TABLE>
<CAPTION>
CAPITAL GAINS DISTRIBUTIONS:                                          DIVIDEND
                                  DECLARATION   RECORD     PAYABLE   AMOUNT PER
PORTFOLIO                            DATE        DATE       DATE        SHARE
- --------------------------------  -----------  ---------  ---------  -----------
<S>                               <C>          <C>        <C>        <C>          <C>
Growth Common Stock.............    12/22/94    12/29/94   12/29/94   $  0.7237
High Grade Bond.................    12/22/94    12/29/94   12/29/94      0.0320
High Yield Bond.................    12/22/94    12/29/94   12/29/94      0.10475
Managed.........................    12/22/94    12/29/94   12/29/94      0.2387
</TABLE>

    The  capital gains  distributions related to  the Growth  Common Stock, High
Yield Bond  and Managed  Portfolios  include net  short-term realized  gains  of
$2,277,014  ($0.4587  per  share),  $11,910 ($0.01875  per  share)  and $199,174
($0.1187 per share), respectively, that are taxable to shareholders as  ordinary
income dividends.

                                       39
<PAGE>
FBL SERIES FUND, INC.
FINANCIAL HIGHLIGHTS
YEARS ENDED JULY 31, 1995, 1994, 1993, 1992 AND 1991

<TABLE>
<CAPTION>
                                                                                       GROWTH
                                                                                    COMMON STOCK
                                                                                      PORTFOLIO
                                                           ---------------------------------------------------------------
                                                              1995         1994         1993         1992         1991
                                                           -----------  -----------  -----------  -----------  -----------
<S>                                                        <C>          <C>          <C>          <C>          <C>
Net asset value, beginning of year.......................  $   13.07    $   15.13    $   12.48    $   11.64    $   11.02
  Income From Investment Operations
    Net investment income................................       0.43         0.60         0.51         0.48         0.58
    Net gains or losses on securities (both realized and
      unrealized)........................................       0.65        (0.49)        2.75         0.93         0.65
                                                           -----------  -----------  -----------  -----------  -----------
  Total from investment operations.......................       1.08         0.11         3.26         1.41         1.23
                                                           -----------  -----------  -----------  -----------  -----------
  Less Distributions
    Dividends (from net investment income)...............      (0.39)       (0.60)       (0.48)       (0.57)       (0.61)
    Distributions (from capital gains)...................      (0.72)       (1.57)       (0.13)
    Distributions in excess of net realized gains........
                                                           -----------  -----------  -----------  -----------  -----------
  Total distributions....................................      (1.11)       (2.17)       (0.61)       (0.57)       (0.61)
                                                           -----------  -----------  -----------  -----------  -----------
Net asset value, end of year.............................  $   13.04    $   13.07    $   15.13    $   12.48    $   11.64
                                                           -----------  -----------  -----------  -----------  -----------
                                                           -----------  -----------  -----------  -----------  -----------
Total Return:
  Total investment return based on net asset value (1)...       9.36%        0.34%       27.25%       12.51%       11.67%

Ratios/Supplemental Data:
  Net assets, end of year ($000's omitted)...............     70,947        64,315       51,732       39,418       36,193
  Ratio of net expenses to average net assets............       1.62%        1.60%        1.61%        1.69%        1.59%
  Ratio of net income to average net assets..............       3.43%        4.05%        3.80%        3.99%        5.19%
  Portfolio turnover rate................................         85%          93%          92%          87%          59%

Information assuming no voluntary reimbursement by FBL
 Investment of excess operating expenses (see NOTE 3):
  Per share net investment income........................
  Ratio of expenses to average net assets................
  Amount reimbursed......................................
</TABLE>

- ------------------------------
Note: Per  share amounts have been calculated on  the basis of monthly per share
      amounts (using  average monthly  outstanding shares)  accumulated for  the
      period.

(1) Total investment return is calculated assuming an initial investment made at
    the  net  asset value  at the  beginning  of the  year, reinvestment  of all
    dividends and  distributions  at  net  asset  value  during  the  year,  and
    redemption  on the last day of the year. Contingent deferred sales charge is
    not reflected in the calculation of total investment return.

   SEE ACCOMPANYING NOTES.

                                       40
<PAGE>

<TABLE>
<CAPTION>
                                                    HIGH                                               HIGH
                                                 GRADE BOND                                         YIELD BOND
                                                  PORTFOLIO                                          PORTFOLIO
                               -----------------------------------------------   -------------------------------------------------
                                1995      1994      1993      1992      1991       1995       1994      1993      1992      1991
                               -------   -------   -------   -------   -------   --------   --------   -------   -------   -------
<S>                            <C>       <C>       <C>       <C>       <C>       <C>        <C>        <C>       <C>       <C>
Net asset value, beginning
  of year....................  $10.13    $10.69    $10.68    $10.15    $ 9.95     $10.00     $10.76    $10.47    $ 9.82    $ 9.62
Income From Investment
  Operations
    Net investment income....    0.63      0.64      0.70      0.73      0.78       0.78       0.81      0.83      0.90      0.95
    Net gains or losses on
      securities (both
      realized and
      unrealized)............    0.16     (0.40)     0.13      0.62      0.20       0.13      (0.60)     0.46      0.65      0.19
                               -------   -------   -------   -------   -------   --------   --------   -------   -------   -------
  Total from investment
    operations...............    0.79      0.24      0.83      1.35      0.98       0.91       0.21      1.29      1.55      1.14
                               -------   -------   -------   -------   -------   --------   --------   -------   -------   -------
  Less Distributions
    Dividends (from net
      investment income).....   (0.63)    (0.64)    (0.70)    (0.73)    (0.78)     (0.78)     (0.81)    (0.83)    (0.90)    (0.94)
    Distributions (from
      capital gains).........             (0.16)    (0.12)    (0.09)    (0.09)     (0.16)     (0.17)
    Distributions in excess
      of net realized gains..   (0.03)                                             (0.01)
                               -------   -------   -------   -------   -------   --------   --------   -------   -------   -------
  Total distributions........   (0.66)    (0.80)    (0.82)    (0.82)    (0.78)     (0.88)     (0.97)    (1.00)    (0.90)    (0.94)
                               -------   -------   -------   -------   -------   --------   --------   -------   -------   -------
Net asset value, end of year.  $10.26    $10.13    $10.69    $10.68    $10.15     $10.03     $10.00    $10.76    $10.47    $ 9.82
                               -------   -------   -------   -------   -------   --------   --------   -------   -------   -------
                               -------   -------   -------   -------   -------   --------   --------   -------   -------   -------
Total Return:
  Total investment return
    based on net asset
    value (1)................    8.23%     1.77%     8.10%    13.71%    10.29%      9.71%      1.88%    12.95%    16.44%    12.83%

Ratios/Supplemental Data:
  Net assets, end of year
    ($000's omitted).........   8,345     7,596     8,047     7,676     4,276      6,691      6,425     5,758     4,835     4,029
  Ratio of net expenses to
    average net assets.......    1.99%     1.90%     1.79%     1.88%     1.62%      2.00%      2.00%     2.00%     1.98%     1.77%
  Ratio of net income to
    average net assets.......    6.29%     6.12%     6.59%     6.94%     7.78%      7.83%      7.68%     7.84%     8.79%     9.98%
  Portfolio turnover rate....      18%       42%       54%       45%       40%        23%        26%       56%       56%       78%

Information assuming no
 voluntary reimbursement by
 FBL
  Investment of excess
   operating expenses (see
   NOTE 3):
    Per share net investment
      income.................                                                     $ 0.75     $ 0.79    $ 0.82
  Ratio of expenses to
   average net assets........                                                       2.29%      2.17%     2.05%
  Amount reimbursed..........                                                    $18,810    $10,754    $3,147
</TABLE>

                                       41
<PAGE>
FBL SERIES FUND, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
                                                                       MANAGED
                                                                      PORTFOLIO
                                                 ----------------------------------------------------
                                                   1995       1994       1993       1992       1991
                                                 --------   --------   --------   --------   --------
<S>                                              <C>        <C>        <C>        <C>        <C>
Net asset value, beginning of year.............  $11.62     $12.51     $10.77     $ 9.95     $ 9.92
  Income From Investment Operations
    Net investment income......................    0.56       0.55       0.54       0.61       0.66
    Net gains or losses on securities (both
      realized and unrealized).................    0.47      (0.62)      1.87       0.82       0.03
                                                 --------   --------   --------   --------   --------
  Total from investment operations.............    1.03      (0.07)      2.41       1.43       0.69
                                                 --------   --------   --------   --------   --------
  Less Distributions
    Dividends (from net investment income).....   (0.56)     (0.50)     (0.52)     (0.61)     (0.66)
    Distributions (from capital gains).........   (0.14)     (0.32)     (0.15)
    Distributions in excess of net realized
      gains....................................   (0.10)
                                                 --------   --------   --------   --------   --------
  Total distributions..........................   (0.80)     (0.82)     (0.67)     (0.61)     (0.66)
                                                 --------   --------   --------   --------   --------
Net asset value, end of year...................  $11.85     $11.62     $12.51     $10.77     $ 9.95
                                                 --------   --------   --------   --------   --------
                                                 --------   --------   --------   --------   --------
Total Return:
  Total investment return based on net asset
    value (1)..................................    9.40%     (0.61)%    23.02%     14.79%      7.05%

Ratios/Supplemental Data:
  Net assets, end of year ($000's omitted).....  21,105     19,100      8,257      3,887      3,935
  Ratio of net expenses to average net assets..    1.94%      1.96%      1.96%      2.07%      1.84%
  Ratio of net income to average net assets....    4.86%      4.42%      4.54%      5.93%      6.51%
  Portfolio turnover rate......................      69%        29%        52%        77%        31%

Information assuming no voluntary reimbursement
 by FBL Investment of excess operating expenses
 (see NOTE 3):
  Per share net investment income..............                        $ 0.53
  Ratio of expenses to average net assets......                          2.02%
  Amount reimbursed............................                        $3,497
</TABLE>

                                       42
<PAGE>

<TABLE>
<CAPTION>
                                               MONEY MARKET                                       BLUE CHIP
                                                 PORTFOLIO                                        PORTFOLIO
                             ------------------------------------------------  ------------------------------------------------
                               1995      1994      1993      1992      1991      1995      1994      1993      1992      1991
                             --------  --------  --------  --------  --------  --------  --------  --------  --------  --------
                             <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
Net asset value, beginning
  of year.................   $ 1.00    $ 1.00    $ 1.00    $ 1.00    $ 1.00    $18.75    $17.69    $16.78    $15.38    $15.61
  Income From Investment
   Operations
    Net investment income.     0.04      0.02      0.01      0.03      0.05      0.19      0.14      0.13      0.17      0.30
    Net gains or losses
     on securities (both
     realized and
     unrealized)..........                                                       4.05      1.06      0.90      1.47      0.77
                             --------  --------  --------  --------  --------  --------  --------  --------  --------  --------
  Total from investment
   operations.............     0.04      0.02      0.01      0.03      0.05      4.24      1.20      1.03      1.64      1.07
                             --------  --------  --------  --------  --------  --------  --------  --------  --------  --------
  Less Distributions
    Dividends (from net
     investment income)..     (0.04)    (0.02)    (0.01)    (0.03)    (0.05)    (0.14)    (0.14)    (0.12)    (0.24)    (0.31)
    Distributions (from
     capital gains)......                                                                                               (0.99)
    Distributions in
     excess of net
     realized gains......
                             --------  --------  --------  --------  --------  --------  --------  --------  --------  --------
  Total distributions....     (0.04)    (0.02)    (0.01)    (0.03)    (0.05)    (0.14)    (0.14)    (0.12)    (0.24)    (1.30)
                             --------  --------  --------  --------  --------  --------  --------  --------  --------  --------
Net asset value, end of
 year....................    $ 1.00   $  1.00   $  1.00   $  1.00   $  1.00    $22.85    $18.75    $17.69    $16.78    $ 5.38
                             --------  --------  --------  --------  --------  --------  --------  --------  --------  --------
                             --------  --------  --------  --------  --------  --------  --------  --------  --------  --------
Total Return:
  Total investment
   return based on net
   asset value (1)........     3.60%    1.47%      1.33%     2.82%     5.52%    22.77%     6.75%     6.21%    10.77%     8.36%

Ratios/Supplemental Data:
  Net assets, end of year
   ($000's omitted).......    2,439    2,627      2,555     2,861     3,672     9,657     6,745     5,415     4,405     3,883
  Ratio of net expenses to
   average net assets.....     2.00%    1.93%      1.94%     2.00%     1.70%     1.78%     1.83%     1.90%     1.92%     1.63%
  Ratio of net income to
   average net assets.....     3.51%     1.45%     1.33%     2.83%     5.42%     0.92%     0.75%     0.73%     1.09%     2.06%
  Portfolio turnover
   rate...................        0%        0%        0%        0%        0%        1%        1%        0%        0%        5%

Information assuming no
 voluntary reimbursement
 by FBL Investment of
 excess operating expenses
 (see NOTE 3):
  Per share net investment
   income.................   $ 0.03
  Ratio of expenses to
   average net assets.....     2.20%
  Amount reimbursed.......   $4,948
</TABLE>

                                       43
<PAGE>
REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders
FBL Series Fund, Inc.

    We  have  audited the  accompanying  statements of  assets  and liabilities,
including the schedules of  investments, of FBL  Series Fund, Inc.  (comprising,
respectively,  the  Growth  Common  Stock, High  Grade  Bond,  High  Yield Bond,
Managed, Money Market and  Blue Chip Portfolios)  as of July  31, 1995, and  the
related  statements of  operations for  the year  then ended,  the statements of
changes in net assets for  each of the two years  in the period then ended,  and
the  financial highlights for each  of the five years  in the period then ended.
These financial statements  and financial highlights  are the responsibility  of
the  Fund's management.  Our responsibility  is to  express an  opinion on these
financial statements and financial highlights based on our audits.

    We conducted  our  audits in  accordance  with generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance  about  whether  the  financial  statements  and  financial
highlights  are free of material misstatement. An audit includes examining, on a
test basis, evidence  supporting the  amounts and disclosures  in the  financial
statements.  Our procedures included confirmation of securities owned as of July
31, 1995,  by  correspondence with  the  custodian  and broker.  An  audit  also
includes assessing the accounting principles used and significant estimates made
by   management,  as  well   as  evaluating  the   overall  financial  statement
presentation. We believe  that our  audits provide  a reasonable  basis for  our
opinion.

    In  our opinion, the financial  statements and financial highlights referred
to above present  fairly, in all  material respects, the  financial position  of
each of the respective portfolios constituting the FBL Series Fund, Inc. at July
31,  1995, the results of their operations  for the year then ended, the changes
in their net assets for each of the two years in the period then ended, and  the
financial  highlights for each  of the five  years in the  period then ended, in
conformity with generally accepted accounting principles.

                                          /s/ Ernst & Young LLP

Des Moines, Iowa
September 1, 1995

                                       44
<PAGE>

                              FBL SERIES FUND, INC.

                                     PART C

                                OTHER INFORMATION


ITEM 24.  FINANCIAL STATEMENTS AND EXHIBITS.

(A)  FINANCIAL STATEMENTS:

     (i)  Financial Statements included in Part A of Registration Statement:

   
          Condensed Financial Information at July 31, 1995
    

   
     (ii) Financial Statements included in Part B of Registration Statement
          through incorporation by reference to the 1995 Annual Report to
          Shareholders of FBL Series Fund, Inc.:
    

   
          Report of Independent Auditors
          Statements of Assets and Liabilities
            at July 31, 1995
          Statements of Operations for the year ended
            July 31, 1995
          Statements of Changes in Net Assets for the years
            ended July 31, 1995 and 1994
          Schedules of Investments at July 31, 1995
          Notes to Financial Statements
    

                                       C-1

<PAGE>

(B)  EXHIBITS:

   
     1.   *(a) Articles of Incorporation 1/

          *(b) Articles of Amendment which became effective in 1977 and 1978 2/

          *(c) Articles of Amendment which became effective on November 30, 1987
               3/

          *(d) Articles of Amendment which became effective on November 22, 1991

          *(e) Articles Supplementary to the Charter which became effective on
               November 25, 1991
    

   
     *2.  By-laws, as amended 3/
    

     3.   Inapplicable

   
     *4.  Specimen copy of uniform common stock certificate 3/
    


   
     *5.  Investment Advisory and Management Services Agreement dated
          November 11, 1987 4/
    

   
     6.   *(a) Underwriting Agreement dated December 31, 1983 5/

          *(b) Form of Dealer Agreement 4/

          *(c) Administrative Services Agreement dated November 25, 1991 9/
    

     7.   Inapplicable

   
    

_______________________
   
     *    Filed herewith
     1/   Previously filed with the initial Registration Statement on Form S-5,
filed on or about September 26, 1970.
    

   
     2/   Previously filed with Post-Effective Amendment No. 10 to the
Registration Statement on Form N-1, filed on or about June 29, 1979.
    

   
     3/   Previously filed with Post-Effective Amendment No. 22 to the
Registration Statement on Form N-1A, filed on or about December 1, 1987.
    

   
     4/   Previously filed with Post-Effective Amendment No. 21 to the
Registration Statement on Form N-1A, filed on or about September 18, 1987.
    

                                       C-2

<PAGE>

   
     5/   Previously filed with Post-Effective Amendment No. 18 to the
Registration Statement on Form N-1A, filed on or about October 2, 1984.
    

   
     9/   Previously filed with Post-Effective Amendment No. 26 to the
Registration Statement on Form N-1A, filed on or about September 26, 1991.
    

   
     *8.  Custodian Agreement dated January 12, 1993
    

   
     *9.  (a)  Fidelity Bond Joint Insureds Agreement 8/
          *(b) Joint Insureds D&O and E&O Agreement 3/

          *(c) Accounting Services Agreement 3/

          *(d) Shareholder Service, Dividend Distributing and Transfer Agent
               Agreement dated September 1, 1995
    

     10.  Inapplicable

   
     *11. Consent of Ernst & Young LLP
    

     12.  Inapplicable

     13.  Inapplicable

   
     *14. *(a)(1)   Form of Prototype Money Purchase
                    Pension and Profit Sharing Plan, as amended
          *(a)(2)   Form of Adoption Agreements
          *(a)(3)   Application Form for Keogh Plan 6/
          *(b)(1)   Model Individual Retirement Account, Form
                    5305-A
          *(b)(2)   Model IRA Disclosure Statement 7/
    

   
     15.  *(a) Distribution and Shareholder Servicing Plan and Agreement dated
               as of December 1, 1987 4/

          *(b) Distribution and Shareholder Servicing Plan and Agreement dated
               December 1, 1987, as amended November 25, 1991 10/
    

   
     16.  Schedule for Computation of Performance Data 11/
    

   
     *27. Financial Data Schedules
    
_______________________
   
     *    Filed herewith
     6/   Previously filed with Post-Effective Amendment No. 20 to the
Registration Statement on Form N-1A, filed on or about November 29, 1986.
    

                                       C-3

<PAGE>

   
     7/   Previously filed with Post-Effective Amendment No. 14 to the
Registration Statement on Form N-1, filed on or about November 25, 1981.
    

   
     8/   Previously filed with Post-Effective Amendment No. 23 to the
Registration Statement on Form N-1A, filed on or about November 30, 1988.
    

   
     10/  Previously filed with Post-Effective Amendment No. 26 to the
Registration Statement on Form N-1A, filed on or about September 26, 1991.
    

   
     11/  Incorporated by reference from Post-Effective Amendment No. 23 to the
Registration Statement on Form N-1A, filed on or about November 30, 1988.
    

                                       C-4

<PAGE>

ITEM 25.  PERSONS CONTROLLED BY OR UNDER COMMON
          CONTROL WITH REGISTRANT.

          Inapplicable.

ITEM 26.  NUMBER OF HOLDERS OF SECURITIES.

   
          As of October 31, 1995, the number of record holders of each class of
common stock of the Registrant were as follows:
    

   
                                               Number of
          Title of Class                     Record Holders
          --------------                     --------------
          Growth Common Stock Portfolio       9,906
          High Grade Bond Portfolio           1,306
          High Yield Bond Portfolio           1,386
          Managed Portfolio                   4,640
          Money Market Portfolio                198
          Blue Chip Portfolio                 2,812
    

ITEM 27.  INDEMNIFICATION.

          The Maryland Code, Corporations and Associations, Section 2-418,
provides for indemnification of directors, officers, employees and agents.
Article XVI of the Registrant's Articles of Incorporation restricts
indemnification for any officer or director in cases of willful misfeasance,
gross negligence or reckless disregard of the duties involved in the conduct of
their offices.  Article XV of the Registrant's By-Laws provides for
indemnification of officers under certain circumstances.

          The Investment Advisory and Management Services Agreement between the
Registrant and FBL Investment Advisory Services, Inc. ("Adviser") provides that,
in the absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties thereunder on the part of the Adviser, the
Adviser shall not be liable for any error of judgment or mistake of law, or for
any loss suffered by the Fund in connection with the matters to which such
Agreement relates.

          In addition, the Registrant maintains a directors and officers "errors
and omissions" liability insurance policy under which the Registrant and its
directors and officers are named insureds.

          Insofar as indemnification for liabilities arising under the
Securities Act of 1933 ("Act") may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against

                                       C-5

<PAGE>

public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

ITEM 28.  BUSINESS AND OTHER CONNECTIONS OF
          INVESTMENT ADVISER.

          Registrant's investment adviser is FBL Investment Advisory Services,
Inc. ("FBL").  In addition to its services to Registrant as investment adviser,
underwriter, shareholder service, transfer and dividend disbursing agent, all as
set forth in parts A and B of this Registration Statement on Form N-1A, FBL acts
as adviser, underwriter, shareholder service, transfer and dividend disbursing
agent for FBL Money Market Fund, Inc., a diversified open-end management
investment company, and FBL Variable Insurance Series Fund , a diversified open-
end series management investment company.

          The principal occupations of the principal executive officers and
directors of FBL and their services as officers and employees of Farm Bureau
Multi-State Services, Inc. and its affiliates as disclosed below.  The address
of Farm Bureau Multi-State Services, Inc. and its affiliates is 5400 University
Avenue, West Des Moines, Iowa 50266.

                                       C-6

<PAGE>

  Name and Position(s)
         With FBL                             Principal Occupations
- -------------------------          --------------------------------------------
   
STEPHEN M. MORAIN,                 General Counsel and Assistant Secretary,
   Senior Vice President,          Iowa Farm Bureau Federation; General Counsel,
      General Counsel and          Secretary and Director, Farm Bureau
      Director                     Management Corporation; Senior Vice President
                                   and General Counsel, Farm Bureau Multi-State
                                   Services, Inc., Farm Bureau Life Insurance
                                   Company, Universal Assurors Life Insurance
                                   Company, Farm Bureau Mutual Insurance
                                   Company, Utah Farm Bureau Insurance Company,
                                   FBL Financial Services, Inc., FBL Insurance
                                   Brokerage, Inc. and South Dakota Farm Bureau
                                   Mutual Insurance Company; Senior Vice
                                   President, General Counsel, Assistant
                                   Secretary and Director, FBL Series Fund, Inc.
                                   and FBL Money Market Fund, Inc.; Senior Vice
                                   President, General Counsel, Assistant
                                   Secretary and Trustee, FBL Variable Insurance
                                   Series Fund; Senior Vice President, General
                                   Counsel and Director, FBL Marketing Services,
                                   Inc.; Director, Computer Aided Design
                                   Software, Inc. and Iowa Business Development
                                   Finance Corporation; Chairman, Edge
                                   Technologies, Inc.
    

   
RICHARD D. WARMING,                Vice President, Chief Investment Officer
   President and Director          and Assistant Treasurer, Farm Bureau Multi-
                                   State Services, Inc., Farm Bureau Life
                                   Insurance Company, Universal Assurors Life
                                   Insurance Company, Western Farm Bureau Life
                                   Insurance Company, FBL Insurance Brokerage,
                                   Inc., Utah Farm Bureau Insurance Company, FBL
                                   Financial Services, Inc., Farm Bureau Mutual
                                   Insurance Company, Western Agricultural
                                   Insurance Company, Western Farm Bureau Mutual
                                   Insurance Company and South Dakota Farm
                                   Bureau Mutual Insurance Company; President
                                   and Director, FBL Leasing Services, Inc.;
                                   Vice President, Chief Investment Officer, FBL
                                   Series Fund, Inc., FBL Money Market Fund,
                                   Inc. and FBL Variable Insurance Series Fund;
                                   Vice President, Chief Investment Officer and
                                   Director, FBL Marketing Services, Inc.; Vice-
                                   President, Secretary and Director,

                                       C-7

<PAGE>

                                   RIK, Inc.; Secretary and Director, FBL Real
                                   Estate Ventures, Ltd.
    

   
WILLIAM J. ODDY,                   Vice President, Chief Operating Officer
   Vice President, Chief           and Assistant General Manager, Farm
      Operating Officer,           Bureau Multi-State Services, Inc.; Farm
      Assistant General            Bureau Life Insurance Company, Universal
      Manager, Treasurer and       Assurors Life Insurance Company, Western
      Director                     Farm Bureau Life Insurance Company, FBL
                                   Insurance Brokerage, Inc., Utah Farm Bureau
                                   Insurance Company, Farm Bureau Mutual
                                   Insurance Company, South Dakota Farm Bureau
                                   Mutual Insurance Company, FBL Financial
                                   Services, Inc., FBL Series Fund, Inc., FBL
                                   Money Market Fund, Inc. and FBL Variable
                                   Insurance Series Fund; President, Treasurer
                                   and Director, Communications Providers, Inc.;
                                   Vice President, Chief Operating Officer,
                                   Assistant General Manager, Treasurer and
                                   Director, FBL Marketing Services, Inc.;
                                   President and Director, FBL Real Estate
                                   Ventures, Ltd. and RIK, Inc.
    

   
DENNIS M. MARKER,                  Investment Vice President, Administration,
   Investment Vice President,      Farm Bureau Life Insurance Company,
      Administration, Secretary    Universal Assurors Life Insurance Company,
      and Director                 Western Farm Bureau Life Insurance Company,
                                   FBL Insurance Brokerage, Inc., Farm Bureau
                                   Mutual Insurance Company, Utah Farm Bureau
                                   Insurance Company and South Dakota Farm
                                   Bureau Mutual Insurance Company; Investment
                                   Vice President, Administration and Assistant
                                   Secretary, FBL Series Fund, Inc., FBL Money
                                   Market Fund, Inc. and FBL Variable Insurance
                                   Series Fund; Vice President and Director, FBL
                                   Leasing Services, Inc.; Investment Vice
                                   President, Administration, Secretary and
                                   Director, FBL Marketing Services, Inc.
    

   
THOMAS R. GIBSON,                  Executive Vice President and General
   Executive Vice President,       Manager, Farm Bureau Multi-State Services,
      General Manager and          Inc., Farm Bureau Life Insurance Company,
      Director                     Universal Assurors Life Insurance Company,
                                   Western Farm

                                       C-8

<PAGE>

  Name and Position(s)
         With FBL                             Principal Occupations
- -------------------------          --------------------------------------------
                                   Bureau Life Insurance Company, Farm Bureau
                                   Mutual Insurance Company, Utah Farm Bureau
                                   Insurance Company, FBL Insurance Brokerage,
                                   Inc., FBL Financial Services, Inc., South
                                   Dakota Farm Bureau Mutual Insurance Company,
                                   FBL Series Fund, Inc., FBL Money Market Fund,
                                   Inc. and FBL Variable Insurance Series Fund;
                                   Executive Vice President, General Manager and
                                   Director, FBL Marketing Services, Inc.
    

   
TIMOTHY J. HOFFMAN,                Vice President, Chief Marketing Officer,
   Vice President, Chief           Farm Bureau Multi-State Services, Inc.,
      Marketing Officer and        Farm Bureau Life Insurance Company,
      Director                     Universal Assurors Life Insurance Company,
                                   Western Farm Bureau Life Insurance Company,
                                   Farm Bureau Mutual Insurance Company, Utah
                                   Farm Bureau Insurance Company, FBL Financial
                                   Services, Inc., South Dakota Farm Bureau
                                   Mutual Insurance Company, FBL Insurance
                                   Brokerage, Inc., FBL Series Fund, Inc., FBL
                                   Money Market Fund, Inc. and FBL Variable
                                   Insurance Series Fund; President and
                                   Director, FBL Marketing Services, Inc. and
                                   FBL Education Services, Inc.
    


ITEM 29.  PRINCIPAL UNDERWRITERS.

          (a)  FBL Investment Advisory Services, Inc., the principal underwriter
               for Registrant, also acts as the principal investment adviser,
               underwriter, shareholder service, transfer and dividend
               disbursing agent for FBL Money Market Fund, Inc., a diversified
               open-end management investment company and FBL Variable Insurance
               Series Fund, a diversified, open-end series management investment
               company.

          (b)  The principal business address of each director and principal
               officer of the principal underwriter is 5400 University Avenue,
               West Des Moines, Iowa 50266. See Item 28 for information on the
               principal officers of FBL Investment Advisory Services, Inc.,
               investment adviser and principal underwriter for the Registrant.

          (c)  Inapplicable.

                                       C-9

<PAGE>

ITEM 30.  LOCATION OF ACCOUNTS AND RECORDS.

          All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the rules thereunder
will be maintained at the offices of the Registrant and the offices of the
Adviser, FBL Investment Advisory Services, Inc., 5400 University Avenue, West
Des Moines, Iowa 50266.

ITEM 31.  MANAGEMENT SERVICES.

          Inapplicable.

ITEM 32.  UNDERTAKINGS.

          Inapplicable.

                                      C-10

<PAGE>

   
                                   SIGNATURES


Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the registrant certifies that it meets all of the
requirements for effectiveness of this registration statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of West Des Moines and State of Iowa, on the 28th
day of November, 1995.

                                        FBL SERIES FUND, INC.


                                        By: /s/Merlin D. Plagge
                                           ------------------------------------
                                               Merlin D. Plagge, President



Pursuant to the requirements of the Securities Act of 1933, this post-effective
amendment to the registration statement has been signed below by the following
persons in the capacity and on the date indicated.

/s/Merlin D. Plagge                President and Director   November 28, 1995
- ------------------------------     (Principal Executive     -------------------
Merlin D. Plagge                   Officer)                      (dated)

/s/Eugene R. Maahs                 Senior Vice President,   November 28, 1995
- ------------------------------     Secretary-Treasurer and  -------------------
Eugene R. Maahs                    Director (Principal           (dated)
                                   Financial and Accounting
                                   Officer)

/s/Stephen M. Morain               Senior Vice President,   November 28, 1995
- ------------------------------     General Counsel,         -------------------
Stephen M. Morain                  Assistant Secretary and       (dated)
                                   Director

/s/Donald G. Bartling              Director                 November 28, 1995
- ------------------------------                              -------------------
Donald G. Bartling*                                              (dated)

/s/John R. Graham                  Director                 November 28, 1995
- ------------------------------                              -------------------
John R. Graham*                                                  (dated)

                                      C-11

<PAGE>

/s/Erwin H. Johnson                Director                 November 28, 1995
- ------------------------------                              -------------------
Erwin H. Johnson*                                                (dated)

/s/Ann Jorgensen                   Director                 November 28, 1995
- ------------------------------                              -------------------
Ann Jorgensen*                                                   (dated)

/s/Dale W. Nelson                  Director                 November 28, 1995
- ------------------------------                              -------------------
Dale W. Nelson*                                                  (dated)

/s/Curtis C. Pietz                 Director                 November 28, 1995
- ------------------------------                              -------------------
Curtis C. Pietz*                                                 (dated)

*By/s/Stephen M. Morain  Attorney-in-Fact, pursuant to Power of Attorney.
   --------------------
     Stephen M. Morain
    

                                      C-12

<PAGE>

   
                                INDEX TO EXHIBITS


1.   *(a) Articles of Incorporation

     *(b) Articles of Amendment which became
          effective in 1977 and 1978

     *(c) Articles of Amendment which
          became effective on
          November 30, 1987

     *(d) Articles of Amendment which
          became effective on November 22, 1991

     *(e) Articles Supplementary to the
          Charter which became effective on
          November 25, 1991
    

   
*2.  By-laws, as amended
    

3.   Inapplicable

   
*4.  Specimen copy of uniform common
     stock certificate
    

   
*5.  Investment Advisory and Management
     Services Agreement dated
     November 11, 1987
    

   
    

   
*6.  *(a) Underwriting Agreement dated
          December 31, 1983
    

   
    

   
     *(b) Form of Dealer Agreement
    

________________________
   
     *    Filed herewith
    

<PAGE>

   
    

   
     *(c) Administrative Services Agreement
          dated November 25, 1991
    

7.   Inapplicable

   
*8.  Custodian Agreement dated January 12, 1993
    

   
9.   *(a) Fidelity Bond Joint Insureds Agreement

     *(b) Joint Insureds D&O and E&O Agreement

     *(c) Accounting Services Agreement

     *(d) Shareholder Service, Dividend Distribution and Transfer Agent
          Agreement dated September 1, 1995
    

10.  Inapplicable

   
*11. Consent of Ernst & Young LLP
    

12.  Inapplicable

13.  Inapplicable

   
14.  *(a)(1)   Form of Prototype Money Purchase
               Pension and Profit Sharing Plan as amended
     *(a)(2)   Form of Adoption Agreements
     *(a)(3)   Application Form for Keogh Plan5/
     *(b)(1)   Model Individual Retirement Account, Form 5305-A
     *(b)(2)   Model IRA Disclosure Statement6/
    
_______________________

<PAGE>

   
     *    Filed herewith
    

<PAGE>

   
    

   
15.  *(a) Distribution and Shareholder Servicing Plan and
          Agreement dated as of December 1, 1987

     *(b) Distribution and Shareholder Servicing Plan and
          Agreement dated December 1, 1987, as amended
          November 25, 1991.
    

   
16.  Schedule for Computation of Performance Data
    

   
*27. Financial Data Schedules
    

_______________________

   
     *    Filed herewith
    

   
    

<PAGE>

                            ARTICLES OF INCORPORATION

                                       OF

                        CHALLENGER INVESTMENT FUND, INC.


     We, the undersigned, CHARLES F. CUSTER,  whose post office address is One
North LaSalle Street, Chicago, Illinois, JAMES S. WIRT, whose post office
address is One North LaSalle Street, Chicago, Illinois and RUSSELL H. MATTHIAS,
JR., whose post office address is One North LaSalle Street, Chicago, Illinois,
each being at least twenty-one years of age, do under and by virtue of the
General Law of the State of Maryland, authorizing the formation of corporations,
associate ourselves as incorporators with the intention of forming a
corporation.

                                   ARTICLE  I

     The name of the corporation is CHALLENGER INVESTMENT FUND, INC.,
(hereinafter called the "Corporation").

                                   ARTICLE II

     The nature of the business and the objects and purposes to be transacted,
promoted or carried on are to engage in the business of an incorporated
investment company of the management type investing and reinvesting its assets
in accordance with the provisions of these articles of incorporation.  The
general nature of its business shall be to buy, hold, sell, exchange, pledge and
otherwise deal in notes, stock, bonds, or other securities of whatsoever
nature; to do any and all acts and things necessary or incidental thereto to the
extent permitted business corporations under the provisions of the laws of the
State of Maryland as from time to time amended; to borrow money or otherwise
obtain credit and to secure the same by mortgaging, pledging or otherwise
subjecting as security the assets of the corporation; and to sell, hold,
purchase and reissue the shares of its own capital stock in accordance with the
provisions of these articles of incorporation.

                                  ARTICLE  III

     The post office address of the place at which the principal office of the
corporation in this State will be located, c/o The Corporation Trust
Incorporated, First National Bank Building, Light and Redwood Streets,
Baltimore, Maryland, 21202.  The resident agent of the corporation is The
Corporation Trust Incorporated, a corporation of this State, the post office
address of which is First National Bank Building, Light and Redwood Streets,
Baltimore, Maryland, 21202.

                                        1

<PAGE>

                                   ARTICLE  IV

     The total capital stock to be authorized is as follows:

Class of Stock       Par Value          Number of Shares           Amount
- --------------       ---------          ----------------           ------
   Common             $1.00                10,000,000           $10,000,000

 Restrictions imposed upon the transfer of shares:

                                      None.

     There shall be one class of stock only, known as the common
stock, of $1.00 par value, each share of which shall have equal voting rights as
all other shares.

                                   ARTICLE  V

     The number of directors of the corporation shall be seven, which
number may be increased or decreased pursuant to the by-laws of the corporation
but shall never be less than three.  The election of directors need not be by
ballot.  The names of the directors who shall act until the first annual meeting
or until their successors are duly chosen and qualify are:

                                Dean R. Kleckner
                               Kenneth C. Thatcher
                                Donald B. Groves
                               P. Dillon Hempstead
                               Charles H. Marshall
                                Maynard Tollefson
                                Alice V. Van Wert

                                   ARTICLE  VI

     The board of directors shall have authority from time to time to
invest the funds of the corporation in stocks, bonds and other securities issued
by corporations, trusts or associations, domestic or foreign; and obligations
issued or guaranteed by the United States of America, or any agency thereof, by
the government of any foreign country, by any State of the United States, or by
any political subdivision or agency of any state or foreign country; and to
change investments from time to time, and to hold uninvested funds in cash.

                                        2

<PAGE>

                                  ARTICLE  VII

    (a)   The board of directors may from time to time issue and sell or provide
for the issuance and sale of the authorized but unissued shares of the
corporation.  All shares of the corporation sold shall be sold for cash which
shall in each case be paid prior to the delivery of any certificate of the
corporation for such shares.  The initial issuance of the shares of the
corporation shall not exceed 20,000 shares; which shall be sold at a sales price
such as will produce net proceeds to the corporation before taxes in connection
with such issuance and sale of not less than $10.00 per share.  After the sale
of the initial issuance, the remaining shares of this corporation provided in
these articles of incorporation and including such additional shares as may from
time to time hereafter be authorized by vote of the shareholders and including
any shares of the corporation which may have been repurchased by the
corporation, as herein provided, may be sold as the board of directors may from
time to time deem advisable.  Such shares shall be sold at a price which will
produce net proceeds to the corporation equal to not less than the net asset
value thereof in effect when such sales are made or the net asset value next
determined after receipt of the order to purchase such shares.

    (b)   The corporation may issue and sell fractions of shares having pro rata
all the rights of full shares, including, without limitation, the right to vote
and to receive dividends, and wherever the words "share" or "shares" are used in
these articles or in the by-laws they shall be deemed to include fractions of
shares where the context does not clearly indicate that only full shares are
intended.

    (c)   No shares need be offered to existing shareholders before being
offered to others.  In connection with the acquisition of all or substantially
all the assets of another company or trust, the board of directors may issue or
cause to be issued shares of the corporation and accept in payment thereof in
lieu of cash such assets of such company or trust at market value, provided such
assets are of the character in which the board of directors are authorized to
invest the funds of the corporation.  No shares shall be sold by the corporation
during any period when the determination of net asset value is suspended by
declaration or resolution of the board of directors pursuant to the provisions
of these articles of incorporation.

                                  ARTICLE  VIII

    (a)   Any shareholder of record in the corporation desiring to dispose of
his shares may deposit his certificate or certificates for such shares with the
corporation or its agent, duly endorsed or accompanied by a proper instrument of
transfer, with a request that the corporation redeem the shares represented
thereby.  Upon any such deposit being made, the corporation shall be required to
redeem said shares but only at the net asset value of such shares next
determined following their deposit.  When authorized by the board of directors,
the corporation may deduct from such redemption a charge not exceeding 1% of the
net asset value of such shares.  Payment for such shares shall be made by the
corporation within seven days after the date upon which the shares are
deposited.  Whenever the board of directors, by declaration of resolution, has

                                        3
<PAGE>

suspended the determination of net asset value pursuant to the provisions of
these articles of incorporation, the right of any shareholder to require the
corporation to redeem his shares shall be likewise suspended.  At any time
such suspension is in effect any shareholder may withdraw his certificate or
certificates from deposit or may leave the same on deposit, in which case the
redemption price shall be the net asset value next determined after the
suspension is terminated.

    (b)   The corporation may by agreement with any shareholder purchase shares
of the corporation at a price not exceeding the net asset value in effect at the
time when such purchase or contract to purchase is made or the net asset value
next to be determined.

    (c)   Any shares of its stock purchased or redeemed by the corporation
pursuant to the provisions of this article shall be deemed retired and shall
thereafter have the status of authorized but unissued stock.

                                   ARTICLE  IX

    (a)   The net asset value of each share of the corporation outstanding shall
be determined by or under the direction of the board of directors as of the
close of the New York Stock Exchange on each day on which said exchange is open.
The board of directors may also determine or cause to be determined the net
asset value as of any particular time in addition to the close of the New York
Stock Exchange on any day on which said Exchange is open.  Such net asset value
shall be determined  (1) by appraising securities in the portfolio of the
corporation which are traded on the New York Stock Exchange or any other
national securities exchange at the last sale price, or, if no sale, at the
last bid price,  (2) by appraising all other securities not so traded at the bid
price if market quotations are available,  (3) by appraising all other
securities and other assets at fair value in the best judgement of the board of
directors,  (4) by deducting from the total appraised value of the assets, any
actual and accrued liabilities determined in accordance with good accounting
practice, and  (5) by dividing the total net asset value of the corporation thus
obtained by the number of shares of the corporation then outstanding in the
hands of the public.  When the net asset value is determined as of a time other
than the close of the New York Stock Exchange, such determination may be
calculated or estimated in such manner as shall be deemed adequate to reflect a
fair approximate estimate of the probable change in net asset value which has
occurred since such close.

    (b)   The board of directors may suspend the determination of net asset
value for all or any part of any period during which the New York Stock Exchange
is closed, other than a period during which such Exchange is normally closed, or
during which trading on the New York Stock Exchange is restricted by
governmental order, or during which an emergency exists such as would make
disposal by the corporation of securities owned by the corporation unreasonable
or impracticable, or would make determination of the net asset value of the
assets of the corporation impracticable.  The determination of whether trading
on the New York Stock Exchange is restricted or whether such an emergency, as
herein provided, exists shall be by applicable rules and regulations of the
Securities and Exchange Commission or other governmental authority.  The
suspension shall become effective at such time as the board of directors shall
specify in their declaration or resolution,

                                        4
<PAGE>

but not later than the close of business on the next succeeding business day
following the declaration or resolution.  After such suspension becomes
effective, there shall be no determination of net asset value until the board of
directors shall declare the suspension terminated.  The suspension shall
terminate in any event on the first day on which the New York Stock Exchange is
open, the restricted trading on the New York Stock Exchange shall have expired,
or the emergency shall have expired in accordance with the official ruling of
the Securities and Exchange Commission or other governmental authority, or in
the absence of such ruling, upon the determination of the board of directors.

    (c)   The board of directors may delegate any of its powers and duties under
this article with respect to appraisal of assets and liabilities and
determination of net asset value or with respect to suspension of the
determination of net asset value to an officer or officers or agent or agents of
the corporation designated from time to time by the board of directors.

                                   ARTICLE  X

    (a)   The corporation may employ a custodian, which shall be a bank or trust
company having an aggregate capital, surplus and undivided profits of at least
$2,000,000.  Such custodian shall have authority to act as agent for the
corporation, subject to such restrictions, limitations and other requirements,
if any, as may be contained in the by-laws of the corporation, to hold the
securities owned by the corporation and deliver the same upon written order; to
receive and receipt for any monies due to the corporation and deposit the same
in its own banking department or elsewhere as the board of directors may direct;
and to disburse such funds upon orders or vouchers.

    (b)   The corporation may also employ such custodian as its agent to keep
the books and accounts of the corporation, and to furnish clerical and
accounting services; and to determine the net asset value of the shares of the
corporation in accordance with the provisions of these articles of
incorporation.  The compensation to be paid to the custodian for such services
as it may render to the corporation shall be in such amount as may be agreed
upon by the corporation and the custodian.  When so directed by the board of
directors, the custodian shall deliver and pay over all property of the
corporation held by it as specified in such directions.

    (c)   The board of directors in its discretion may employ a transfer agent,
registrar or dividend disbursing agent for the corporation under such terms and
conditions as the board shall deem advisable.

                                   ARTICLE  XI

    (a)   The board of directors may in its discretion from time to time enter
into a contract or contracts with any one or more parties as an underwriter,
providing for the sale of the shares of this corporation at a price to net the
corporation not less than the amount provided for in Article VII hereof, whereby
the corporation may either agree to sell the shares to the underwriter or
underwriters or appoint the underwriter or underwriters to be its agent or
agents in the sale of such shares.

                                        5
<PAGE>

Such contract or contracts may be either exclusive or non-exclusive, and may
contain such other terms and conditions as the board of directors may deem
advisable.  Such contract or contracts may also provide for the repurchase of
shares of this corporation by such underwriter as agent of the corporation.

    (b)   The board of directors may in its discretion from time to time enter
into an investment advisory or management contract with any other person, firm
or corporation, hereinafter called the "Investment Adviser", to furnish advice
to the corporation with respect to the desirability of investing in, purchasing
or selling securities or other property, or to determine what securities or
other property shall be purchased or sold by the corporation, and to furnish to
the board of directors such management, investment advisory, statistical and
research facilities and such other services and facilities, if any, as the board
of directors may deem desirable upon such terms and conditions as the board of
directors may determine.  The compensation to be paid under the terms of such
contract or contracts shall be subject to the limitations contained in Article
XII of these articles of incorporation.

    (c)   The board of directors, subject to the provisions of this Article, may
in its discretion enter into an underwriting contract and an investment advisory
contract with the same person, firm or corporation.  Any contract may be entered
into with any person, firm or corporation irrespective of whether or not one or
more of the directors of officers of this corporation may also be an officer,
director, shareholder or member of such other person, firm or corporation, and
such contract shall not be invalidated or rendered voidable by reason of any
such relationship.  No person holding such relationship shall be liable because
of such relationship for any loss or expense to the corporation under or by
reason of such contract, or accountable for any profit realized directly or
indirectly therefrom, provided that such contract when executed was reasonable
and fair, consistent with the provisions of these articles of incorporation and
approved by a majority of the board of directors of this corporation who are not
so related, or by the vote of a majority of the outstanding shares of this
corporation.

    (d)   Any contract entered into pursuant to the terms of this article shall
be consistent with and subject to the requirements of the Investment Company Act
of 1940, including any amendment thereto or other applicable act of Congress
hereafter enacted, with respect to its duration, termination, authorization,
approval, assignment or renewal.  No amendment to any contract for investment
advisory services shall be effective unless approved by affirmative vote of a
majority of the outstanding shares of the corporation.

                                  ARTICLE  XII

    (a)   Subject to the limitations contained in this article the directors
shall be entitled to reasonable remuneration from the corporation for their
services as directors in such amount as may from time to time be fixed by vote
of the board of directors.  The board of directors shall also fix the
compensation of all officers, consultants and agents of the corporation whom
they may elect or appoint.

                                        6
<PAGE>

    (b)   The corporation may incur such expenses as are necessary to perform
its function and such expenses may include but are not limited to the following:
Compensation to be paid to any other party to an investment advisory contract
with the corporation entered into pursuant to Article XI; the compensation to be
paid to the officers, consultants and employees of the corporation; office hire;
ordinary office expenses; investment advisory, statistical and research
facilities; directors' fees; legal or accounting expenses; taxes and
governmental fees; cost of stock certificates; reports and notices to
shareholders; association dues; fees and expense of any custodian (including the
expense computing the net asset value as provided in Article IX); transfer
agent; and registrar or dividend disbursing agent.  The aggregate annual
expenses of every character exclusive of interest and taxes shall not exceed 1 -
1/2% of the average net assets of the corporation calculated on a monthly or
more frequent basis.  During any period during which the determination of net
asset value is suspended, as provided in these articles of incorporation, the
net asset value as last determined and effective shall for the purposes of this
article be deemed to be the net asset value as of the close of business on each
business day until a new net asset value is again determined and made effective
as provided herein.

    (c)   The provisions of this article shall not preclude the payment of
reasonable fees for legal or accounting services to any firm of which a director
or officer of the corporation may be a member, nor of customary brokerage
charges in connection with the purchase or sale of securities to any firm in the
brokerage business of which a director or officer of the corporation may be a
member, officer, or director, and no part of any such fee, charge or
compensation shall be deemed compensation to such officer or director within the
purview of this article.  No compensation, commission, fee or profit which may
be received by the other party to a contract entered into pursuant to Article XI
shall be deemed compensation to any officer or director of the corporation
simply because such officer or director is also an officer, director or member
of such other party.

                                  ARTICLE  XIII

          The corporation shall not lend any of its assets to the underwriter or
investment adviser or to any officer or director of the underwriter or
investment adviser of this corporation and shall not permit any officer or
director, or any officer or director of the underwriter or investment adviser,
to deal for or on behalf of the corporation with himself as principal or agent,
or with any partnership, association or corporation in which he has a financial
interest; provided that the foregoing provisions shall not prevent (a) officers
and directors of the corporation from buying, holding or selling shares in the
corporation, or from being partners, officers or directors of or otherwise
financially interested in the underwriter or the investment adviser; (b)
employment of legal counsel, registrar, transfer agent, dividend disbursing
agent or custodian who is, or has a partner, shareholder, officer or director
who is, an officer or director of the corporation, if only customary fees are
charged for services to the corporation; or (c) purchases or sales of securities
or other property if such transaction is permitted by or is exempt or exempted
from the provisions of the Investment Company Act of 1940.

                                        7

<PAGE>


                                   ARTICLE XIV

    (a)   The board of directors may from time to time declare and pay dividends
and subject to the limitations and conditions contained in this article the
amount of such dividends and the payment thereof shall be within the discretion
of the directors.  Ordinary dividends may be paid from undistributed net income
of the corporation.  Net income for this purpose shall be calculated on the
basis of good accounting practice and shall include all dividend and interest
income but exclude all capital gains of the corporation whether realized or
unrealized.  The income account shall be charged with all current expenses and
taxes other than taxes allocated to capital gains and reserves, if any,
authorized by the board of directors as provided in these articles of
incorporation.  Capital losses, whether realized or unrealized, shall not be
charged against such account.  Investment income shall include dividends
declared but unreceived by the corporation when the computation is made as of
the record date, or the ex-dividend date if different from the record date.
Stock dividends may be allocated either to income or principal, as the board of
directors in their discretion may determine.  The undistributed net income shall
be adjusted to reflect the amounts included in the price of shares of the
corporation issued and sold as well as those repurchased which represent payment
for participation in the undistributed net income.  The board of directors may
make such other adjustment as they shall determine with the advice of the
auditors of the corporation, which shall be in accordance with good accounting
practice.

    (b)   The board of directors may also declare dividends out of accumulated
and undistributed net realized capital gains, in which case such fact shall be
clearly revealed to shareholders and the basis of calculation shall be set
forth.

    (c)   Inasmuch as the computation of net income and capital gains for
federal income tax purposes may vary from the computation thereof on the books,
the above provision shall be interpreted to give the board of directors the
power in its discretion to distribute for any year as ordinary dividends and as
capital gains distributions, respectively, amounts sufficient to enable the
corporation as a regulated investment company to avoid any liability for federal
income tax in respect to that year.  All dividends declared, except as provided
above, shall be deemed liquidating dividends and the shareholders shall be
advised accordingly.  The board of directors may at any time declare and
distribute pro rata among the shareholders as of record on the date provided a
stock dividend out of authorized but unissued shares of the corporation.  In the
case of a dividend payable in shares of stock or cash at the election of a
shareholder, the board of directors may prescribe whether a shareholder failing
to express his election before a given time shall be deemed to have elected to
take cash rather than shares, or to take shares rather than cash, or to take
shares with cash adjustment of fractions.

    (d)   The board of directors may, in connection with any dividend declared
or otherwise, extend to the shareholders entitled to receive such dividend the
right to reinvest such dividend or a portion thereof in shares of the
corporation at net asset value.  Such right of purchase shall not be considered
an option or warrant to purchase shares of the corporation and shall be
exercised only within the time and under such conditions as may be prescribed by
the board of directors.  The board of directors, pursuant to such right or
otherwise, may authorize the purchase of fractional shares upon

                                        8
<PAGE>

such conditions and under such circumstances as the board of directors may
prescribe in connection therewith.

                                   ARTICLE  XV

    (a)   The board of directors shall submit to the shareholders at least semi-
annually a written financial report of the transactions of the corporation,
including financial statements.  The financial statements of such reports shall
be certified to at least annually by independent public accountants.

    (b)   In the event the holders of two-thirds of the outstanding shares of
the corporation shall vote at any time to wind up and liquidate the corporation,
no further shares of the corporation shall be issued, sold or purchased by the
corporation and the directors shall immediately proceed to wind up the
corporation's affairs, liquidate the assets, pay all liabilities and expenses of
the corporation and distribute the remaining assets, if any, among the
shareholders in proportion to their holding of shares.  The board of directors
shall also do any other acts necessary to secure and complete the dissolution of
the corporation.

    (c)   When the dissolution and liquidation of the corporation has been
directed by vote of the shareholders, the directors then holding office shall
continue in office until the liquidation and dissolution of the corporation has
been completed.  During the period of liquidation and until final distribution
to the shareholders has been made, the compensation of the directors and all
other parties shall be determined on the same basis as if the computation of the
net asset value of the shares had been suspended, as provided in these articles
of incorporation.

                                  ARTICLE  XVI

          No provision contained in these articles of incorporation or in the
by-laws adopted hereunder shall protect or indemnify any director or officer of
the corporation against any liability to the corporation or to its shareholders
to which he would be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.

                                  ARTICLE  XVII

          The corporation reserves the right to amend, alter, change or repeal
any provisions contained in these articles of incorporation, in the manner now
or hereafter prescribed by statute, upon the affirmative vote of a majority of
the outstanding shares of the corporation, and all rights conferred upon
shareholders herein are granted subject to this reservation.

          We, the undersigned, being each of the incorporators hereinbefore
named for the purpose of forming a corporation in pursuance of the general
corporation laws of the State of Maryland, do make this certificate, hereby
declaring and

                                        9
<PAGE>

certifying that the facts stated herein are true, and, accordingly, have
hereunto set our hands and seals this 12th day of August 1970.

                                                CHALLENGER INVESTMENT FUND, INC.

                                                __________________________(Seal)
                                                   Charles F. Custer

                                                __________________________(Seal)
                                                   James S. Wirt

                                                __________________________(Seal)
                                                   Russell H. Matthias, Jr.


STATE OF ILLINOIS   )
                    )  SS.
COUNTY OF COOK      )

     BE IT REMEMBERED, That on this 12th day of August 1970, personally
came before me, a Notary Public for the State of Illinois, CHARLES F. CUSTER,
JAMES S. WIRT and RUSSELL H. MATTHIAS, JR., all of the parties to the foregoing
Articles of Incorporation, known to me personally to be such, and severally
acknowledged the said articles to be the act and deed of the signers
respectively, and that the facts therein contained are truly set forth.

     GIVEN under my hand and seal of office the day and year aforesaid.

                                                __________________________(Seal)
                                                   Notary Public

Notary Public
Cook County, Illinois

<PAGE>

                        CHALLENGER INVESTMENT FUND, INC.

                              ARTICLES OF AMENDMENT


     Challenger Investment Fund, Inc., a Maryland corporation having its
principal office in Baltimore City, Maryland (hereinafter called the
Corporation), hereby certifies to the State Department of Assessments and
Taxation of Maryland, that:

     FIRST:  The charter of the Corporation is hereby amended by striking out
Article VIII, Section (a) of the Articles of Incorporation and inserting in lieu
thereof the following:

          (a)  Any shareholder of record in the corporation desiring to
     dispose of his shares may deposit his certificate or certificates for
     such shares with the corporation or its agent, duly endorsed or
     accompanied by a proper instrument of transfer, with a request that
     the corporation redeem the shares represented thereby.  Upon any such
     deposit being made, the corporation shall be required to redeem said
     shares but only at the net asset value of such shares next determined
     following their deposit.  Payment for such shares shall be made by the
     corporation within seven days after the date upon which the shares are
     deposited.  Whenever the board of directors, by declaration or
     resolution, has suspended the determination of net asset value
     pursuant to the provisions of these articles of incorporation, the
     right of any shareholder to require the corporation to redeem his
     shares shall be likewise suspended.  At any time such suspension is in
     effect any shareholder may withdraw his certificate or certificates
     from deposit or may leave the same on deposit, in which case the
     redemption price shall be the net asset value next determined after
     the suspension is terminated.

     SECOND:  The board of directors of the Corporation on April 7, 1977 duly
adopted a resolution in which was set forth the foregoing amendment to the
charter, declaring that the said amendment of the charter as proposed was
advisable and directing that it be submitted for action thereon by the
shareholders of the Corporation at the annual meeting to be held on June 15,
1977.

     THIRD:  Notice setting forth a summary of the changes to be effected by
said amendment of the charter and stating that a purpose of the meeting of the
stockholders would be to take action thereon, was given, as required by law, to
all stockholders entitled to vote thereon.  The amendment of the charter of the
Corporation as hereinabove set forth was approved by the stockholders of the
Corporation at said meeting by the affirmative vote of more than two-thirds of
all the votes entitled to be cast thereon.

     FOURTH:  The amendment of the charter of the Corporation as hereinabove set
forth has been duly advised by the board of directors and approved by the
stockholders of the Corporation.

<PAGE>

     IN WITNESS WHEREOF,  Challenger Investment Fund, Inc. has caused these
presents to be signed in its name and on its behalf by its President and
witnessed by its Assistant Secretary on    July  12   , 1977.

                              CHALLENGER INVESTMENT FUND, INC.



                              By
                                -------------------------------
                                Dean R. Kleckner,  President

WITNESS:



- ---------------------------------------
Ben C. Buckingham,  Assistant Secretary

     THE UNDERSIGNED, President of Challenger Investment Fund, Inc., who
executed on behalf of said corporation the foregoing Articles of Amendment, of
which this certificate is made a part, hereby acknowledges, in the name and on
behalf of said corporation, the foregoing Articles of Amendment to be the
corporate act of said corporation and further certifies that, to the best of his
knowledge, information and belief, the matters and facts set forth therein with
respect to the approval thereof are true in all material respects, under the
penalties of perjury.




                                                ------------------------------
                                                Dean R. Kleckner

<PAGE>

                        CHALLENGER INVESTMENT FUND, INC.
                              ARTICLES OF AMENDMENT

     Challenger Investment Fund, Inc., a Maryland corporation having its
principal office in Baltimore City, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland, that:

     FIRST:    The charter of the Corporation is hereby amended by striking
Article I of the Articles of Incorporation, as heretofore amended, and inserting
in lieu thereof the following:

                                   ARTICLE  I

     The name of the corporation is FARM BUREAU GROWTH FUND, INC.,  (hereinafter
called the "corporation").

     SECOND:   The board of directors of the Corporation on April 6, 1978 duly
adopted a resolution in which was set forth the foregoing amendment to the
charter, declaring that the said amendment of the charter as proposed was
advisable and directing that it be submitted for action thereon by the
shareholders of the Corporation at the annual meeting to be held on June 13,
1978.

     THIRD:    Notice setting forth the said amendment of the charter and
stating that a purpose of the meeting of the stockholders would be to take
action thereon, was given, as required by law, to all stockholders entitled to
vote thereon.  The amendment of the charter of the Corporation as hereinabove
set forth was approved by the stockholders of the Corporation at said meeting by
the affirmative vote of a majority of all the votes entitled to be cast thereon.

     FOURTH:   The amendment of the charter of the Corporation as hereinabove
set forth has been duly advised by the board of directors and approved by the
stockholders of the Corporation.

     FIFTH:    The articles of amendment shall become effective on the 31st day
of July, 1978.

     IN WITNESS WHEREOF, Challenger Investment Fund, Inc. has caused these
presents to be signed in its name and on its behalf by its President and
witnessed by its Assistant Secretary on June 30, 1978.

                                   CHALLENGER INVESTMENT FUND, INC.


                                   By:
                                      -----------------------------------------
                                      Dean R. Kleckner,  President


WITNESS:



- ------------------------------
Edward F. Seitzinger
Assistant Secretary


     THE UNDERSIGNED, President of Challenger Investment Fund, Inc., who
executed on behalf of said corporation the foregoing Articles of Amendment, of
which this certificate is made a part, hereby acknowledges in the name and on
behalf of said corporation, the foregoing Articles of Amendment to be the
corporate act of said corporation and further certifies that, to the best of his
knowledge, information and belief, the matters and facts set forth therein with
respect to the approval thereof are true in all material respects, under the
penalties of perjury.




                                   --------------------------------------------
                                   Dean R. Kleckner


<PAGE>
                          FARM BUREAU GROWTH FUND, INC.
                              ARTICLES OF AMENDMENT

     Farm Bureau Growth Fund, Inc., a Maryland corporation having its principal
office in Baltimore City, Maryland (hereinafter called the "Corporation"),
hereby certifies, to the State Department of Assessments and Taxation of
Maryland, that:
     FIRST:    The charter of the corporation is hereby amended by striking out
the following sections of the Articles of Incorporation, as heretofore amended,
and inserting in lieu of each respective section the following:

                                   ARTICLE I

          The name of the corporation is FBL SERIES FUND, INC. (hereinafter
     called the "Corporation").


                                   ARTICLE IV

          (a)  The total number of shares of all classes of stock which the
     Corporation, by resolution or resolutions of the board of directors, shall
     have authority to issue is five billion (5,000,000,000) shares, par value
     $0.001 per share, such shares having an aggregate par value of five million
     dollars ($5,000,000).  Two billion (2,000,000,000) of such shares may be
     issued in the following classes, each class containing the number of shares
     and having the designations indicated below, subject, however, to the
     authority hereinafter granted to the board of directors to further classify
     and reclassify any such shares and, incident to such classification or
     reclassification, to increase or decrease such number of shares:

          Growth Common Stock Portfolio                250,000,000
          Aggressive Growth Common Stock Portfolio     250,000,000
          Money Market Portfolio                       250,000,000
          High Quality Bond Portfolio                  250,000,000
          High Yield Bond Portfolio                    250,000,000
          Ginnie Mae Portfolio                         250,000,000
          Blue Chip Index Portfolio                    250,000,000
          Managed Portfolio                            250,000,000

     The balance of three billion (3,000,000,000) shares of such stock may be
     issued in such classes, or in any new class or classes, each consisting of
     such number of shares and having such preferences, conversion or other
     rights and such voting powers, restrictions, limitations as to dividends
     and qualifications and such terms or conditions of redemption as shall be
     determined from time to time by resolution or resolutions providing for
     the issuance of such stock adopted by the board of directors, to whom
     authority so to fix and determine the same is hereby expressly granted.
          (b)  Each share of the previously existing sole class of stock of the
     Corporation issued and outstanding on the effective date of this revised
     Article IV shall thereafter be and be designated as a share of stock of the

<PAGE>


     Growth Common Stock Portfolio, and the assets, rights, liabilities and
     obligations of the Corporation on that date shall become the assets,
     rights, liabilities and obligations of the Growth Common Stock Portfolio.
          (c)  Each class of stock of the Corporation, now or hereafter
     designated, shall have the following described powers, preferences and
     rights; and the qualifications, limitations and restrictions thereof shall
     be as follows:
            (1)          All consideration received by the Corporation for the
          issue or sale of shares of a particular class, together with all
          income, earnings, profits and proceeds thereof, including any proceeds
          derived from the sale, exchange or liquidation thereof, and any assets
          derived from any reinvestment of such proceeds, in whatever form the
          same may be, are herein referred to as "assets belonging to" such
          class.
            (2)          The assets belonging to a particular class of stock
          will be charged with the liabilities (including, in the discretion of
          the board of directors or its delegate, accrued expenses and reserves)
          incurred in respect of such class, and such class shall also be
          charged with its share of any other liabilities.  The determination of
          the board of directors or its delegate shall be final and conclusive
          as to the amount of liabilities, including accrued expenses and
          reserves, which is to be charged to one or more particular classes.
          The power to make such determinations may be delegated by the board of
          directors from time to time to one or more of the directors and
          officers of the Corporation, or to an agent of the Corporation
          appointed for such purpose.  The liabilities with which a class is so
          charged are herein referred to as the "liabilities belonging to" such
          class.
            (3)          The holders of shares of all classes of stock of the
          Corporation (whether now or hereafter classified) shall, at any
          meeting of the shareholders, have one vote or fraction thereof for
          each share or fraction thereof held.  On any matter submitted to a
          vote of shareholders, all shares of the Corporation then issued and
          outstanding and entitled to vote, irrespective of the class, shall be
          voted by class and not in the aggregate except that, when otherwise
          expressly permitted by the laws of the State of Maryland, the
          Investment Company Act of 1940 and the regulations thereunder or other
          applicable law, shares shall be voted in the aggregate.
            (4)          The relative rights of the shares of each class to
          receive dividends shall be as set forth in Article XIV of these
          articles of incorporation.
            (5)          The relative rights of the shares of each class to be
          redeemed or repurchased shall be as set forth in Articles VII and VIII
          of these articles of incorporation.
            (6)          The relative rights of the shares of each class upon
          winding up and dissolution of the Corporation shall be as set forth in
          Article XV of these articles of incorporation.

                                   ARTICLE V

          The number of directors of the Corporation shall be eight, which
     number may be increased or decreased pursuant to the by-laws of the
     Corporation but shall never be less than three.  The election of directors
     need not be by ballot.

<PAGE>

                                   ARTICLE VII

          (a)  The board of directors may from time to time issue and sell or
     provide for the issuance and sale of the authorized but unissued shares of
     the Corporation.  Except as otherwise provided in this Article, all shares
     of the Corporation sold shall be sold for cash, which shall in each case be
     paid prior to the delivery of any certificate of the Corporation for such
     shares.  Shares of this Corporation provided for in these articles of
     incorporation, including such additional shares as may from time to time
     hereafter be authorized and including any shares of the Corporation which
     may have been repurchased by the Corporation, as herein provided, may be
     sold as the board of directors may from time to time deem advisable.  Such
     shares shall be sold at a price which will produce net proceeds to the
     Corporation equal to not less than the net asset value thereof in effect
     when such sales are made or the net asset value next determined after
     receipt of the order to purchase such shares.
          (b)  The Corporation may issue and sell fractions of shares having pro
     rata all the rights of full shares, including, without limitation, the
     right to vote and to receive dividends; and wherever the words "share" or
     "shares" are used in these articles of incorporation or in the by-laws they
     shall be deemed to include fractions of shares where the context does not
     clearly indicate that only full shares are intended.
          (c)  No shares need be offered to existing shareholders before being
     offered to others.  In connection with the acquisition of all or
     substantially all the assets of another company or trust, the board of
     directors may issue or cause to be issued shares of any class of the
     Corporation's stock and accept in payment thereof in lieu of cash such
     assets of such company or trust at market value, provided such assets are
     of a character in which the board of directors is authorized to invest the
     funds of such class of the Corporation's stock.  No shares shall be sold by
     the Corporation during any period when the determination of net asset value
     is suspended.

                                  ARTICLE VIII

          (a)  Any shareholder of record in the Corporation desiring to dispose
     of his shares may deposit his certificate or certificates for such shares
     with the Corporation or its agent, duly endorsed or accompanied by a proper
     instrument of transfer, with a request that the Corporation redeem the
     shares represented thereby.  Upon any such deposit being made, the
     Corporation shall be required to redeem said shares upon the terms set
     forth in the Corporation's effective registration statement on file with
     the Securities and Exchange Commission.  Payment for such shares shall be
     made by the Corporation within seven days after the date upon which the
     shares are deposited.  Whenever the board of directors, by declaration or
     resolution, has suspended the determination of net asset value pursuant to
     the provisions of these articles of incorporation, the right of any
     shareholder to require the Corporation to redeem his shares shall be
     likewise suspended.  At any time such suspension is in effect any
     shareholder may withdraw his certificate or certificates from deposit or
     may leave the same on deposit, in which case the redemption price shall be
     the net asset value next determined after the suspension is terminated.
          (b)  The Corporation may by agreement with any shareholder purchase
     shares of the Corporation at a price not exceeding the net asset value in
     effect at the time when such purchase or contract to purchase is made or
     the net asset value next to be determined.

<PAGE>

          (c)  Any shares of its stock purchased or redeemed by the Corporation
     pursuant to the provisions of this Article shall be deemed retired and
     shall thereafter have the status of authorized but unissued stock.

                                   ARTICLE IX

          (a)  The net asset value of each share of the Corporation outstanding
     shall be determined in accordance with the Corporation's current
     prospectus.
          (b)  The board of directors may suspend the determination of net asset
     value for all or any part of any period during which the New York Stock
     Exchange is closed, other than a period during which such Exchange is
     normally closed, or during which trading on the New York Stock Exchange is
     restricted by governmental order, or during which an emergency exists such
     as would make disposal by the Corporation of securities owned by the
     Corporation unreasonable or impracticable, or would make determination of
     the net asset value of the assets of the Corporation impracticable.  The
     determination of whether trading on the New York Stock Exchange is
     restricted or whether such an emergency, as herein provided, exists shall
     be by applicable rules and regulations of the Securities and Exchange
     Commission or other governmental authority.  The suspension shall become
     effective at such time as the board of directors shall specify in their
     declaration or resolution, but not later than the close of business on the
     next succeeding business day following the declaration or resolution.
     After such suspension becomes effective, there shall be no determination of
     net asset value until the board of directors shall declare the suspension
     terminated.  The suspension shall terminate in any event on the first day
     on which the New York Stock Exchange is open, the restricted trading on the
     New York Stock Exchange shall have expired, or the emergency shall have
     expired in accordance with the official ruling of the Securities and
     Exchange Commission or other governmental authority, or in the absence of
     such ruling, upon the determination of the board of directors.
          (c)  Any redemptions or purchases of shares by the Corporation of any
     class of the Corporation's stock shall be made solely from assets belonging
     to such class.  Any shares of any class of the Corporation's stock
     purchased or obtained by the Corporation by purchase or redemption shall be
     deemed retired and shall thereafter have the status of authorized but
     unissued shares of such class.  At any time when a shareholder's ownership
     of shares of any class has a value of less than $250, the Corporation may
     redeem the shares of such class owned by such a shareholder at a current
     price determined in accordance with the Corporation's current prospectus.
          (d)  Any redemptions or purchases of shares by the Corporation of any
     class of the Corporation's stock shall be in cash, except that upon
     determination of the board of directors redemptions may be made in kind as
     provided in the Corporation's current prospectus.

                                   ARTICLE XI

          (a)  The board of directors may in its discretion from time to time
     enter into a contract or contracts with any one or more parties as an
     underwriter, providing for the sale of the shares of this Corporation,
     whereby the Corporation may either agree to sell the shares to the
     underwriter or underwriters or appoint the underwriter or underwriters to
     be its agent or agents in the sale of such shares.  Such contract or
     contracts may be either exclusive or non-exclusive, and may contain such
     other terms and conditions as the board of directors may deem advisable.

<PAGE>

     Such contract or contracts may also provide for the repurchase of shares of
     this Corporation by such underwriter as agent of the Corporation.
          (b)  The board of directors may in its discretion from time to time
     enter into an investment advisory or management contract with any other
     person, firm or corporation, hereinafter called the "Investment Adviser,"
     to furnish advice to the Corporation with respect to the desirability of
     investing in, purchasing or selling securities or other property, or to
     determine what securities or other property shall be purchased or sold by
     the Corporation, and to furnish to the board of directors such management,
     investment advisory, statistical and research facilities and such other
     services and facilities, if any, as the board of directors may deem
     desirable upon such terms and conditions as the board of directors
     determine.  The compensation to be paid under the terms of such contract or
     contracts shall be subject to the limitations contained in Article XII of
     these articles of incorporation.
          (c)  The board of directors, subject to the provisions of the Article,
     may in its discretion enter into an underwriting contract and an investment
     advisory contract with the same person, firm or corporation.  Any contract
     may be entered into with any person, firm or corporation irrespective of
     whether or not one or more of the directors or officers of this Corporation
     may also be an officer, director, shareholder or member of such other
     person, firm or corporation, and such contract shall not be invalidated or
     rendered voidable by reason of any such relationship.  No person holding
     such relationship shall be liable because of such relationship for any loss
     or expense to the Corporation under or by reason of such contract, or
     accountable for any profit realized directly or indirectly therefrom,
     provided that such contract when executed was reasonable and fair,
     consistent with the provisions of these articles of incorporation and
     approved by a majority of the board of directors of this corporation who
     are not so related, or by the vote of a majority of the outstanding shares
     of this Corporation.
          (d)  Any contract entered into pursuant to the terms of this Article
     shall be consistent with and subject to the requirements of the Investment
     Company Act of 1940, including any amendment thereto or other applicable
     act of Congress hereafter enacted, with respect to its duration,
     termination, authorization, approval, assignment or renewal.

                                  ARTICLE XII

          (a)  Subject to the limitations contained in this Article, the
     directors shall be entitled to reasonable remuneration from the Corporation
     for their services as directors in such amount as may from time to time be
     fixed by vote of the board of directors.
          (b)  The Corporation may incur such expenses as are necessary to
     perform its function and such expenses may include but are not limited to
     the following: compensation to be paid to any other party to an investment
     advisory contract with the Corporation entered into pursuant to Article XI;
     the compensation to be paid to the officers, consultants and employees of
     the Corporation; office hire; ordinary office expenses; the costs of
     investment advisory, statistical and research facilities; directors' fees;
     legal or accounting expenses; taxes and governmental fees; cost of stock
     certificates; the costs of reports and notices to shareholders; association
     dues; fees and expenses of any custodian (including the expense of
     computing the net asset value of any class of the Corporation's stock);
     fees and expenses of the transfer agent; and fees and expenses of the
     registrar or dividend disbursing agent.  During

<PAGE>

     any period during which the determination of net asset value is suspended,
     as provided in these articles of incorporation, the net asset value as last
     determined and effective shall for the purposes of this Article be deemed
     to be the net asset value as of the close of business on each business day
     until a new net asset value is again determined and made effective as
     provided herein.
          (c)  The provisions of the Article shall not preclude the payment of
     reasonable fees for legal or accounting services to any firm of which a
     director of officer of the Corporation may be a member, nor of customary
     brokerage charges in connection with the purchase or sale of securities to
     any firm in the brokerage business of which a director or officer of the
     Corporation may be a member, officer or director, and no part of any such
     fee, charge or compensation shall be deemed compensation to such officer or
     director within the purview of this Article.  No compensation, commission,
     fee or profit which may be received by the other party to a contract
     entered into pursuant to Article XI shall be deemed compensation to any
     officer or director of the Corporation simply because such officer or
     director is also an officer, director or member of such other party.

                                  ARTICLE XIV

          (a)  The board of directors may from time to time declare and pay
     dividends on any or all classes of stock.  The amount of such dividends and
     the payment thereof shall be within the discretion of the directors, except
     that distributions from assets belonging to a particular class of stock may
     be distributed only to the holders of such class.
          (b)  The board of directors may also declare dividends for a
     particular class of stock out of accumulated and undistributed net realized
     capital gains.
          (c)  Inasmuch as the computation of net income and capital gains for
     federal income tax purposes may vary from the computation thereof on the
     books, the above provision shall be interpreted to give the board of
     directors the power in its discretion to distribute for any year as
     ordinary dividends and as capital gains distributions, respectively,
     amounts sufficient to enable the Corporation (and, if appropriate, each of
     its classes of stock) as a regulated investment company to avoid any
     liability for federal income tax in respect to that year.  All dividends
     declared, except as provided above, shall be deemed liquidating dividends
     and the shareholders shall be advised accordingly.  The board of directors
     may at any time declare and distribute pro rata among the shareholders
     of record on the date provided a stock dividend out of authorized but
     unissued shares of the appropriate class of the Corporation's stock.  In
     the case of a dividend payable in shares of stock or cash at the election
     of a shareholder, the board of directors may prescribe whether a
     shareholder failing to express his election before a given time shall be
     deemed to have elected to take cash rather than shares, or to take shares
     rather than cash, or to take shares with cash adjustment of fractions.
          (d)  The board of directors may, in connection with any dividend
     declared or otherwise, extend to the shareholders entitled to receive such
     dividend the right to reinvest such dividend or a portion thereof in shares
     of the appropriate class of the Corporation's stock at net asset value.
     Such right of purchase shall not be considered an option or warrant to
     purchase shares of the appropriate class of the Corporation's stock and
     shall be exercised only within the time and under such conditions as may be
     prescribed by the board of directors.  The board of directors, pursuant to
     such right or otherwise, may authorize the purchase of fractional shares
     upon such conditions


<PAGE>

     and under such circumstances as the board of directors may prescribe in
     connection therewith.

                                   ARTICLE XV

          (a)  The board of directors shall submit to the shareholders at least
     semi-annually a written financial report of the transactions of the
     Corporation, including financial statements.  The financial statements in
     such reports shall be certified to at least annually by independent public
     accountants.
          (b)  In the event the holders of two-thirds of the outstanding shares
     of the Corporation shall vote at any time to wind up and liquidate the
     Corporation, no further shares of the Corporation shall be issued, sold or
     purchased by the Corporation and the directors shall immediately proceed to
     wind up the Corporation's affairs, liquidate the assets, pay all
     liabilities and expenses of the Corporation and distribute the remaining
     assets, if any, among the shareholders.  The board of directors shall also
     do any other acts necessary to secure and complete the dissolution of the
     Corporation. In the event of the liquidation or dissolution of the
     Corporation (for whatever reason), shareholders of each class shall be
     entitled to receive, as a class, out of the assets of the Corporation
     available for distribution to shareholders, the assets belonging to such
     class; and the assets so distributable to the shareholders of any class
     shall be distributed among such shareholders in proportion to the number of
     shares of such class held by them and recorded on the books of the
     Corporation.
          (c)  When the dissolution and liquidation of the Corporation has been
     directed by vote of the shareholders, the directors then holding office
     shall continue in office until the liquidation and dissolution of the
     Corporation has been completed.  During the period of liquidation and until
     final distribution to the shareholders has been made, the compensation of
     the directors and all other parties shall be determined on the same basis
     as if the computation of the net asset value of the shares had been
     suspended, as provided in these articles of incorporation.

     SECOND:   The board of directors of the Corporation, on August 12, 1987,
duly adopted a resolution in which was set forth the foregoing amendments of the
charter, declaring that the said amendments of the charter as proposed were
advisable and directing that they be submitted for action thereon by the
stockholders of the Corporation at a special meeting to be held on November 11,
1987.
     THIRD:    Notice setting forth a summary of the changes to be effected by
said amendments of the charter and stating that a purpose of the meeting of the
stockholders would be to take action thereon, was given, as required by law, to
all stockholders entitled to vote thereon.  The amendments of the charter of the
Corporation as hereinabove set forth were approved by the stockholders of the
Corporation at said meeting by the affirmative vote of a majority of all the
votes entitled to be cast thereon.
     FOURTH:   The amendments of the charter of the Corporation as hereinabove
set forth have been duly advised by the board of directors and approved by the
stockholders of the Corporation, the requisite vote under Article XVII of the
Article of Incorporation.
     FIFTH:    (a)  the total number of shares of stock which the Corporation
was heretofore authorized to issue is Ten Million (10,000,000) shares, all of
one class of the par value of One Dollar ($1.00) each and of the aggregate par
value of Ten Million Dollars ($10,000,000).

<PAGE>

            (b)     The total number of shares of all classes of stock is
increased by this amendment to Five Billion (5,000,000,000) shares of common
stock of the par value of One One Thousandth Dollars ($0.001) each and of the
aggregate par value of Five Million Dollars ($5,000,000).
            (c)     A description of each class of stock of the Corporation with
the preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption of each class of the authorized capital stock, is as set forth in
Articles IV, VII, VIII, XIV, and XV of the Articles of Incorporation as amended
by these Articles of Amendment.
     SIXTH:    The Articles of Amendment shall become effective as of the close
of business on the 30th day of November, 1987.
     IN WITNESS WHEREOF, Farm Bureau Growth Fund, Inc. has caused these presents
to be signed in its name and on its behalf by its President (or Vice-President)
and witnessed by its Secretary (or Assistant Secretary) on November 17, 1987.

                         FARM BUREAU GROWTH FUND, INC.


                         By:
                              -------------------------------
                              President (or Vice President)

                              Robert R. Joslin - President
                              ----------------------------
                                        (name)

Witness:


- --------------------------------------
Secretary  (or Assistant Secretary)


Dennis M. Marker - Assistant Secretary
- --------------------------------------
       (name)




     THE UNDERSIGNED, President (or Vice-President) of Farm Bureau Growth Fund,
Inc., who executed on behalf of said corporation the foregoing Articles of
Amendment, of which this certificate is made a part, hereby acknowledges, in the
name and on behalf of said corporation, the foregoing Articles of Amendment to
be the corporate act of said corporation and further certifies that, to the best
of his knowledge, information and belief, the matters and facts set forth
therein with respect to the approval thereof are true in all material respects,
under the penalties of perjury.




                              ------------------------------------

                              Robert R. Joslin - President
                              -------------------------------------
                                       (name)

<PAGE>

                                                                      Exhibit 1d

                              FBL SERIES FUND, INC.

                              ARTICLES OF AMENDMENT
                        TO THE ARTICLES OF INCORPORATION


     FBL SERIES FUND, INC., a Maryland corporation (hereinafter called the
Corporation) whose principal office in the State of Maryland is c/o The
Corporation Trust Incorporated, 32 South Street, Baltimore, Maryland 21202,
hereby certifies to the State Department of Assessments and Taxation of
Maryland, that:

     FIRST:    The Charter of the Corporation is hereby amended by restating
Article VI, Section (a) to read as follows:


          (a)  The total number of shares of all classes of stock which the
     Corporation, by resolution or resolutions of the board of directors, shall
     have authority to issue is five billion (5,000,000,000) shares, par value
     $0.001 per share, such shares having an aggregate par value of five million
     dollars ($5,000,000).  Two billion (2,000,000,000) of such shares may be
     issued in the following classes, each class containing the number of shares
     and having the designations indicated below, subject, however, to the
     authority hereinafter granted to the board of directors to further classify
     and reclassify any such shares and, incident to such classification or
     reclassification, to increase or decrease such number of shares:

          Growth Common Stock Portfolio          500,000,000
          Money Market Portfolio                 250,000,000
          High Quality Bond Portfolio            500,000,000
          High Yield Bond Portfolio              250,000,000
          Blue Chip Portfolio                    250,000,000
          Managed Portfolio                      250,000,000

          The balance of three billion (3,000,000,000) shares of such stock may
     be issued in such classes, or in any new class or classes, each consisting
     of such number of shares and having such preferences, conversion or other
     rights and such voting powers, restrictions, limitations as to dividends
     and qualifications and such terms or conditions of redemption as shall be
     determined from time to time by resolution or resolutions providing for the
     issuance of such stock adopted by the board of directors, to whom authority
     to fix and determine the same is hereby expressly granted.

     The Board of Directors, at a meeting held August 15, 1991, unanimously
approved and adopted a resolution in which was set forth the foregoing amendment
to the Corporation's charter and recommended that the shareholders approve this
amendment in conjunction with the Corporation's reorganization whereby all the
assets and liabilities of the Aggressive Growth Common Stock Portfolio would be
transferred to the Growth Common Stock Portfolio in exchange for shares of the
Growth Common Stock Portfolio and all the assets and liabilities of the Ginnie
Mae Portfolio would be transferred to the

<PAGE>

High Quality Bond Portfolio in exchange for shares of the High Quality Bond
Portfolio, and the Aggressive Growth Common Stock Portfolio and Ginnie Mae
Portfolio would be eliminated, with shares representing those portfolios being
reclassified as shares of the Growth Common Stock Portfolio and High Quality
Bond Portfolio, respectively.  Approval of the proposed amendment by a majority
of the outstanding voting securities was obtained at a meeting of the
shareholders of the Aggressive Growth Common Stock Portfolio and the Ginnie Mae
Portfolio held on November 13, 1991.

     IN WITNESS WHEREOF, FBL SERIES FUND, INC.  has caused these presents to be
signed in its name and on its behalf by its President and witnessed by its
Secretary on November 22, 1991.

                         FBL SERIES FUND, INC.

                         By:
                            ----------------------------------------------------
                             Merlin D.  Plagge
                             President

Witness

- ----------------------------
Eugene R.  Maahs
Secretary

     THE UNDERSIGNED, President of FBL SERIES FUND, INC., who executed on behalf
of said corporation the foregoing Articles of Amendment, of which this
certificate is made a part, hereby acknowledges, in the name and on behalf of
said corporation, the foregoing Articles of Amendment to be the corporate act of
said corporation and further certifies that, to the best of his knowledge,
information and belief, the matters and facts set forth therein with respect to
the approval thereof are true in all material respects, under penalties of
perjury.


                         ------------------------------------------------------
                           Merlin D.  Plagge


<PAGE>

                                                                      Exhibit 1e

                         ARTICLES SUPPLEMENTARY TO THE

                                   CHARTER OF

                              FBL SERIES FUND, INC.


     FBL SERIES FUND, INC., a Maryland Corporation (hereinafter called the
Corporation) whose principal office in the State of Maryland is c/o The
Corporation Trust Incorporated, 32 South Street, Baltimore, Maryland 21202,
hereby certifies to the State Department of Assessments and Taxation of
Maryland, that:

     FIRST:    The name of the "High Quality Bond Portfolio," one of six classes
of shares, par value $.001 per share, of the Corporation, has been changed to
the "High Grade Bond Portfolio," with the same preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends, qualifications
and terms and conditions of redemption.

     SECOND:   The shares aforesaid have been duly classified by the board of
directors pursuant to authority and power contained in the charter of the
Corporation.

     IN WITNESS WHEREOF, FBL SERIES FUND, INC.  has caused these presents to be
signed in its name and on its behalf by its President (or Vice-President) and
attested by its Secretary (or Assistant Secretary) this 25th day of November,
1991.

                              FBL SERIES FUND, INC.

                              By:
                                 -----------------------------------------


ATTEST:


By:
   -----------------------------------


     THE UNDERSIGNED, President (or Vice-President) of FBL SERIES FUND, INC.,
who executed on behalf of said corporation the foregoing Articles Supplementary
to the Articles of Incorporation, of which this certificate is made a part,
hereby acknowledges, in the name and on behalf of said corporation, the
foregoing Articles Supplementary to the Articles of Incorporation to be the
corporate act of said corporation and further certifies that, to the best of his
knowledge, information and belief, the matters and facts set forth therein with
respect to the approval thereof are true in all material respects, under
penalties of perjury.


                                   ------------------------------------------



<PAGE>
                                     BY-LAWS

                                       OF

                              FBL SERIES FUND, INC.

                                    ARTICLE I
                              SHAREHOLDERS MEETINGS

     1.   Meetings of the shareholders shall be held at such time and place
within, or without, the State of Maryland as may be determined by the board of
directors and designated in the notice of said meeting.
     2.   No meeting of the shareholders of this corporation shall be held
unless required by applicable law or otherwise determined by the board of
directors.
     3.   Meetings of the shareholders, for any purpose or purposes, unless
otherwise prescribed by statute, may be called by the board of directors or the
president at any time, and shall be called by the president or secretary at the
request in writing of one or more shareholders holding at least twenty-five
percent (25%) (or ten percent (10%) if a purpose of the meeting is to determine
if a director is to be removed from office) of the common stock of the
corporation, then issued and outstanding and entitled to vote, requesting a
meeting be called for a purpose requiring action by the shareholders as provided
herein or in the Articles of Incorporation, which purpose shall be specified in
any such written application.  Business transacted shall be confined to the
objects stated in the notice.
     4.   Written notice of every meeting of the shareholders, stating the time,
place and purpose or purposes for which the meeting is called, shall be given by
the secretary to each shareholder entitled to vote thereat and to any
shareholder entitled by law to such notice.  Such notice shall be given to each
shareholder by mailing the same, postage prepaid, to the address of the
shareholder as it appears on the books of the corporation not less than ten (10)
nor more than ninety (90) days before the time fixed for such meeting.
     5.   The holders of a majority of the shares of common stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall be requisite and shall constitute a quorum at all meetings of the
shareholders for the transaction of business, except as may be otherwise
provided by statute.  If such quorum shall not be present or represented at any
meeting of the shareholders, the shareholders entitled to vote thereat, present
in person or represented by proxy, shall have power to adjourn the meeting from
time to time (provided no adjournment shall be to a date more than one hundred
and twenty (120) days after the original record date), without notice other than
announcement at the meeting, until a quorum shall be present or represented.  At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified.
     6.   When a quorum is present at any meeting, the vote of the holders of a
majority of the shares having the right to vote thereat, present in person or
represented by proxy, shall determine any questions brought before such meeting,
unless the question is one upon which by express provision of the statutes,
articles of incorporation or these by-laws, a different vote is required in
which case such express provision shall control.

<PAGE>

     7.   At any meeting of the shareholders every shareholder having the right
to vote shall be entitled to vote in person or by proxy appointed by an
instrument in writing, subscribed by such shareholder and bearing a date not
more than eleven (11) months prior to said meeting, which instrument shall be
filed with the secretary of the meeting before being voted.  Each shareholder
shall have one vote or fraction thereof for each share or fraction thereof held.
     8.   The board of directors may fix a record date not more than ninety (90)
nor less than ten (10) days prior to the date for which a meeting is called, as
of which the shareholders entitled to vote at such meeting, or any adjournment
thereof, shall be determined, notwithstanding any transfer or the issue of any
share occurring after such record date.

                                   ARTICLE II
                                    DIRECTORS

     1.   The number of directors which shall constitute the whole board shall
be not less than three (3) nor more than fifteen (15).  Within these limits, the
shareholders or a majority of the entire board of directors may increase or
decrease the number of directors, but the tenure of office of any director shall
not be affected by any decrease in the number of directors then in office.
Subject to death, resignation or removal, each director shall hold office until
the next meeting of shareholders called for the purpose of conducting the
election of such director or a successor thereto, and until his successor is
elected and qualified.  Directors need not be shareholders of the corporation.
     2.   If the office of any director or directors becomes vacant for any
reason, a majority of the remaining directors, though less than a quorum, may
choose a successor or successors, provided that immediately after filling any
such vacancy, at least two-thirds (2/3) of the directors then holding office
shall have been elected to such office by the shareholders; otherwise such
vacancy shall be filled by vote of the shareholders at a meeting called for such
purpose.
     3.   The property and business of the corporation shall be managed by its
board of directors which may exercise all such powers of the corporation and do
all such lawful acts and things as are not by statute, the articles of
incorporation or these by-laws prohibited or directed or required to be
exercised or done by the shareholders.
     4.   The board of directors may hold its meetings and keep the books of the
corporation at the office of the corporation in the City of West Des Moines,
State of Iowa, or at such other places as they may from time to time determine.
The original or duplicate stock ledger shall be kept at the office of the
corporation in the City of West Des Moines, State of Iowa, or at the office of
any transfer agent which may be employed by the corporation pursuant to Article
X of the articles of incorporation.
     5.   A regular meeting of the board may be held at the place of and
immediately following the meeting of the shareholders at which such board was
elected, either within or without the State of Maryland; provided the directors
may, by unanimous consent of the whole board in writing, hold their regular
meeting at such other place and time as they may determine.  No notice of such
meeting shall be necessary to the newly elected directors in order to legally
constitute the meeting provided a quorum shall be present.  Other regular
meetings of the board of directors shall be held without notice at such time and
place, either within or without the State of Maryland, as shall from time to
time be determined by the board.
     6.   Special meetings of the board of directors may be held at any time
when called by the president or two (2) or more directors.  Not less than
twenty-four (24) hours notice of any special meeting shall be given by the
secretary or the officer calling such meeting to each director either in person,
by telephone, by mail or by telegram.  Such notice may be

<PAGE>

waived by any director either in person, or in writing, or by telegram.  Such
special meetings shall be held at such time and place, within or without the
State of Maryland, as the notice thereof or waiver shall specify.  Unless
otherwise specified in the notice thereof, any and all business may be
transacted at any at any meeting of the board of directors.
     7.   At all meetings of the board of directors one-third (1/3) of the
entire board of directors shall be necessary and sufficient to constitute a
quorum for the transaction of business and the act of the majority of the
directors present at any meeting at which there is a quorum shall be the act of
the board of directors, except as may be otherwise specifically provided by
statute, by the articles of incorporation or by these by-laws.  If a quorum
shall not be present at any meeting of the board of directors, the directors
present thereat may adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum shall be present.

                                   ARTICLE III
                                   COMMITTEES

     The board of directors may, by resolution or resolutions passed by a
majority of the whole board, elect from their own number an executive committee
to consist of not less than three (3) nor more than five (5) members, which
shall have the power to conduct the current and ordinary business of the
corporation while the board of directors is not in session.  The board of
directors may also in the same manner elect from their own number from time to
time other committees, the number composing such committees and the powers
conferred thereon to be determined form the resolution creating the same.  The
committees shall keep regular minutes of their proceedings and report the same
to the board of directors when required.

                                   ARTICLE IV
                                     NOTICES

     1.   Whenever, under the provisions of any statute, the articles of
incorporation or these by-laws, notice is required to be given to any
shareholder or director it shall not be construed to mean personal notice unless
the context otherwise provides.  Such notice may be given in writing, by mail,
by depositing the same in a post office or letter box, in a post-paid sealed
wrapper, addressed to such shareholder or director at such address as appears on
the books of the corporation, and such notice shall be deemed to be given at the
time when the same shall be thus mailed.
     2.   Whenever any notice is required to be given under the provisions of
any statute, the articles of incorporation or by these by-laws, a waiver
thereof in writing signed by the person or persons entitled to said notice,
whether before or after the time stated therein, shall be deemed equivalent
thereto.

                                    ARTICLE V
                                    OFFICERS

     1.   The officers of the corporation shall be elected annually by the board
of directors.  The board of directors may elect one of its own members as
chairman of the board, and shall elect a president, secretary and treasurer.
The board of directors may also elect one or more vice-presidents, one or more
assistant secretaries and one or more assistant treasurers.  Two or more
offices, when consistent, may be held by the same person, except that any person
holding the office of president shall not hold the office of vice-president.
The president of the corporation shall be a director.  All other officers may
be, but need not be, directors of the corporation.

<PAGE>

     2.   The board of directors may appoint such other officers, agents and
representatives of the corporation as shall be deemed necessary, with such
powers for such term and to perform such acts and duties on behalf of the
corporation  as the board of directors may see fit to the extent authorized or
permitted by law, the articles of incorporation and these by-laws.
     3.   The chairman of the board, if one shall be elected, shall preside at
all meetings of the shareholders and board of directors, and shall perform such
other duties as the board of directors may from time to time prescribe.
     4.   The president shall be the chief executive officer or the corporation
and, in the absence of the chairman of the board, or if a chairman is not
elected, shall preside at all meetings of the shareholders and board of
directors.  The president shall have power to sign all certificates for shares
of stock.  The president shall perform such other duties as the board of
directors shall from time to time prescribe.
     5.   The vice-presidents, in the order of their seniority or as designated
by the board of directors, shall in the absence or disability of the president,
perform the duties and exercise the powers of the president, and shall perform
such other duties as the board of directors may from time to time prescribe.
     6.   The secretary shall record all votes and proceedings of the meetings
of the shareholders and of the board of directors in the corporation records.
He shall give, or cause to be given, notice of all meetings of the shareholders
and meetings of the board of directors when notice thereof is required.  The
secretary shall have custody of the seal of the corporation and may affix the
same to any instrument requiring the corporate seal and attest to the same with
his signature.  He shall have the power to sign all certificates for shares of
stock and shall perform such other duties as the board of directors may from
time to time prescribe.
     7.   The assistant secretaries in order of their seniority or as directed
by the board of directors, shall in the absence or disability of the secretary,
perform the duties and exercise the powers of the secretary and shall perform
such other duties as the board of directors may prescribe.
     8.   The treasurer shall deliver all funds and securities of the
corporation which may come into his hands to such bank or trust company as the
board of directors may designate as custodian in accordance with Article X of
the articles of incorporation.  He shall keep such record of the financial
transactions of the corporation  as the board of directors shall prescribe.  The
treasurer shall have power to sign all certificates for shares of stock and
shall perform such other duties as the board of directors may from time to time
prescribe.
     9.   The assistant treasurers in order of their seniority or as directed by
the board of directors, shall, in the absence or disability of the treasurer,
perform the duties and exercise the powers of the treasurer and shall perform
such other duties as the board of directors may prescribe.
     10.  The officers of the corporation shall hold office until their
successors are chosen and qualified.  Any officer elected or appointed by the
board of directors may be removed at any time by the board of directors.  If the
office of any officer shall become vacant for any reason, the vacancy shall be
filled by the board of directors.


                                   ARTICLE VI
                               STOCK CERTIFICATES

     1.   The certificates of stock of the corporation shall be in the form
prescribed by the board of directors and shall be signed by the president, or a
vice-president and the secretary or treasurer or an assistant secretary or an
assistant

<PAGE>

treasurer.  If the board of directors shall require all certificates for shares
of stock to be signed (1) by a transfer agent or an assistant transfer agent or,
(2) by a transfer clerk, acting on behalf of the corporation, the signature of
any officer of the corporation thereon and the seal of the corporation thereon
may be facsimiles.
     2.   In the event any officer of the corporation authorized to sign
certificates for shares of stock of the corporation shall die or cease to hold
office, the board of directors may, by resolution, adopt and permit to be
issued, when duly countersigned, certificates bearing the signature, either real
or facsimile, of such officers.
     3.   The board of directors may direct a new certificate or certificates to
be issued in place of any certificate or certificates theretofore issued by the
corporation alleged to have been lost, mutilated or destroyed upon such terms
and upon such conditions as it may prescribe.
     4.   The corporation shall be entitled to treat the holder of record of any
share or shares of stock as the holder in fact thereof and, accordingly, shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of the
State of Maryland.
     5.   Shares of stock shall be transferable, so as to affect the rights of
the corporation, only by transfer recorded on the books of the corporation in
person or by attorney, and upon surrender of the certificates.
     6.   The board of directors shall have power to fix in advance a date, not
exceeding sixty (60) days preceding the date for the payment of any dividend, or
the date for the allotment of rights, as a record date for the determination of
the shareholders entitled to receive payment of any dividend or to any such
allotment of rights.  In such case only such shareholders of record on the date
so fixed shall be considered shareholders for the purpose stated,
notwithstanding any transfer of any shares on the books of the corporation after
any such record date fixed as aforesaid.

                                   ARTICLE VII
                        INVESTMENT AND OTHER RESTRICTIONS

     The investment restrictions of the corporation's Portfolios shall be as set
forth in the corporation's registration statement as filed with the Securities
and Exchange Commission and in effect from time to time, and may be changed only
pursuant to the appropriate vote of shareholders and/or directors as set forth
in such registration statement and in accordance with applicable law.

                                  ARTICLE VIII
                                    CUSTODIAN

     1.   The Custodian employed by the corporation pursuant to Article X of the
articles of incorporation shall be required to enter into a contract with the
corporation which shall contain in substance the following provisions:
          (a)  The corporation will cause all securities and funds owned by the
     corporation to be delivered or paid to the custodian, except as may be
     permitted by the Investment Company Act of 1940.
          (b)  The custodian will receive and receipt for any monies due to the
     corporation and deposit the same in its own banking department or in such
     other banking institution, if any, as the board of directors may direct.

<PAGE>

               The custodian shall have the sole power to draw upon any such
               account.
          (c)  The custodian shall release and deliver securities owned by the
     corporation in the following cases only:
               (1)  Upon the sale of such securities for the account of the
          corporation and the receipt of payment therefor;
               (2)  To the issuer thereof or its agent when such securities are
          called, redeemed, retired or otherwise become payable, provided that
          in any such case the cash proceeds thereof shall be delivered to the
          custodian;
               (3)  To the issuer thereof or its agent for transfer into the
          name of the corporation or the custodian, or a nominee of either, or
          for exchange for a different number of bonds or certificates
          representing the same number of shares or aggregate face amount,
          provided that in any such case the new securities replacing such
          securities are delivered to the custodian;
               (4)  To the broker selling the same for examination in accord
          with the "street delivery" custom;
               (5)  For exchange or conversion pursuant to any plan of merger,
          consolidation, reorganization, recapitalization or readjustment of the
          issuer of such securities, or pursuant to provisions for conversion
          contained in such securities, provided that in any such case the new
          securities and cash, if any, are delivered to the custodian;
               (6)  In the case of warrants, rights or similar options the
          surrender thereof shall be only for the exercise of such warrants,
          rights of other options on behalf of the corporation upon interim
          receipts or temporary securities for definitive securities.
               (7)  For the purpose of exchanging interim receipts or temporary
          securities for  definitive securities;
               (8)  For the purpose of effecting a loan of the corporation's
          securities to any person, firm, corporation or trust upon the receipt
          by the custodian of cash or cash equivalent collateral at least equal
          to the market value of the securities loaned;
               (9)  To any bank for the purpose of collateralizing the
          obligation of the corporation to repay any monies borrowed by the
          corporation from such bank; provided, however, that the custodian may
          at the option of such lending bank keep such collateral in its
          possession, subject to the rights of such bank given it by virtue of
          any promissory note or agreement executed and delivered by the
          corporation to such bank; or
               (10) For the purpose of redeeming in kind shares of the
          corporation upon delivery thereof to the custodian.
          (d)  The Custodian shall pay out monies of the corporation only upon:
               (1)  the purchase of securities for the account of the
          corporation and the delivery in due course of such securities to the
          custodian;
               (2)  or in connection with the conversion, exchange or surrender
          of securities owned by the

<PAGE>

          corporation as set forth herein;
               (3)  for the repurchase or redemption of shares issued by the
          corporation;
               (4)  for the making of any disbursements authorized by the board
          of directors pursuant to the articles of incorporation and these by-
          laws;
               (5)  in connection with the payment to a bank of the interest on,
          or any portion of the principal of, any loan made by such bank to the
          corporation;
               (6)  in connection with the payment to any person who has
          borrowed the corporation's securities of the amount deposited with the
          custodian as collateral for such borrowing, upon delivery of such
          securities to the custodian; or
               (7)  the payment of any expenses or liabilities incurred by
          the corporation.
          (e)  The custodian shall make deliveries of securities and payments of
     cash only upon written instructions signed by such officer or officers, or
     other agent or agents of the corporation, including the investment adviser,
     as may be authorized to sign such instructions by resolution of the board
     of directors.
          The board of directors may from time to time authorize different
     persons to sign instructions for different purposes.
     2.   The contract between the corporation and the custodian may contain any
other provisions not inconsistent with the articles of incorporation or with
these by-laws as the board of directors may approve.
     3.   Such contract shall be terminable by either party upon written notice
to the other; provided, however, that upon termination of the contract or
inability of the custodian to continue to serve, the custodian shall, upon
written notice of the appointment of another bank or trust company as successor
custodian, deliver and pay over to such successor custodian all securities and
monies held by it for the account of the corporation.  In such case the board of
directors shall promptly appoint a successor custodian, but in the event no
successor custodian can be found having the required qualifications and willing
to serve, it shall be the duty of the board of directors to call as promptly as
possible a special meeting of the shareholders to determine whether the
corporation shall function without a custodian or shall be liquidated.  If so
directed by vote of the holders of a majority of the outstanding shares of the
corporation, as shown by proper certified resolution, the custodian shall
deliver and pay over all property of the corporation held by it as specified in
such vote.

                                   ARTICLE IX
                               INVESTMENT ADVISER

     The board of directors, with the approval of the shareholders and
consistent with Article XI of the articles of incorporation, may enter into a
contract with any person, firm or corporation to act as investment adviser and
to perform such duties and render such other services as shall be deemed
necessary.  Any such contract shall provide that it may be terminated at any
time by the corporation without penalty and upon not more than sixty (60) days'
written notice and shall be automatically terminated in the event of its
assignment by such person, firm or corporation.  Any such contract, which shall
continue in effect for a period of more than two (2) years from the date of its
execution, shall be specifically approved at least annually by vote of a
majority of the outstanding voting securities of the corporation or by the board
of directors of

<PAGE>

the corporation, including approval by a majority of the directors who are not
parties to such a contract or affiliated persons of such party (except solely by
reason of being a director of the corporation).  Such contract may contain any
other provision not inconsistent with the articles of incorporation and these
by-laws.

                                    ARTICLE X
                                   UNDERWRITER

     The board of directors, consistent with Article XI of the articles of
incorporation, may enter into a contract with any person, firm or corporation to
act as underwriter for the corporation and to perform such other duties and
render such other services as shall be deemed necessary.  Any such contract
shall provide that it shall be automatically terminated in the event of its
assignment by such person, firm or corporation, and that in the event it shall
continue in effect for a period of more than two (2) years from the date of
execution, it shall be specifically approved at least annually by vote of a
majority of the outstanding voting securities of the corporation or by the board
of directors of the corporation, including approval by a majority of the
directors who are not parties to such contract or affiliated persons of any such
party (except solely by reason of being a director of the corporation).  Such
contract may be exclusive or not exclusive and may be, but need not be, with the
same person, firm or corporation, a party to an investment adviser's contract
with the corporation as provided in the articles of incorporation and these by-
laws.  Such contract may also contain any provision not inconsistent with the
articles of incorporation and these by-laws.

                                   ARTICLE XI
                    STOCK TRANSACTIONS BY OFFICERS AND OTHERS

     No officer or director of the corporation, and insofar as the corporation
can enforce this prohibition, neither the investment adviser nor an underwriter,
as described in Article IX and Article X, respectively, nor any member, officer,
director, trustee or shareholder of such investment adviser or underwriter shall
take a long or short position in the securities issued by the corporation,
except as follows:
          (a)  The foregoing provision shall not prohibit an underwriter from
     purchasing shares of the corporation from the corporation or from another
     underwriter if such purchases are limited to purchases for the purpose of
     filling orders for such shares received by such underwriter, and provided
     that orders to purchase from the corporation or from another underwriter
     are entered with the corporation or the custodian promptly upon receipt by
     the purchasing underwriter or, in case of a purchase from another
     underwriter, upon receipt by such other underwriter of orders for such
     shares, unless the purchasing underwriter is otherwise instructed by a
     retail customer;
          (b)  The foregoing provision shall not prohibit an underwriter from
     purchasing shares of the corporation as agent for the account of the
     corporation.
          (c)  The foregoing provision shall not prohibit the purchase of shares
     of the corporation from the corporation or from an underwriter by an
     officer or director of the corporation or by such underwriter, or by any
     member, officer, director, trustee or shareholder of the investment adviser
     or of such underwriter at the public

<PAGE>

     offering price at the time of such purchase.
          (d)  The foregoing provision shall not prohibit the purchase of shares
     of the corporation at net asset value, pursuant to a uniform offer
     described in the prospectus, by any officer, or director of the
     corporation, its investment adviser or principal underwriter or by any full
     time employee or sales representative of any of the foregoing who has acted
     as such for not less than ninety (90) days, or by any trust, pension,
     profit-sharing or other benefit plan for such persons; provided, that such
     purchases are made upon the written assurance of the purchaser that the
     purchase is made for investment purposes and that the shares will not be
     re-sold except through redemption or repurchase by or on behalf of the
     corporation.

                                   ARTICLE XII
                                     AUDITOR

     An auditor shall be selected annually, pursuant to the Investment Company
Act of 1940.

                                  ARTICLE XIII
                                   FISCAL YEAR

     The fiscal year of the corporation shall be fixed by resolution of the
board of directors.

                                   ARTICLE XIV
                                      SEAL

     The corporate seal of the corporation shall, subject to alteration by the
board of directors, consist of a flat-faced circular die, upon which shall be
engraved or cut the word "Maryland", together with the name of the corporation
and the year of its incorporation.

                                   ARTICLE XV
                                 INDEMNIFICATION

     1.   The Corporation shall indemnify each present and past officer and
director and his heirs and personal representative to the full extent permitted
by the Corporation's Articles of Incorporation and the Annotated Code of
Maryland Corporations and Associations Sec.  2-418 or any successor statute as
amended from time to time.
     2.   With respect to a proceeding against an officer or director brought by
or on behalf of the Corporation to obtain a judgement or decree in its favor,
the corporation shall provide the officer or director with the same
indemnification, after the same determination, as it is required to provide with
respect to a proceeding not brought by or on behalf of the Corporation.
     3.   The board of directors in its sole discretion may authorize or provide
to an employee or agent any

<PAGE>

indemnification described in this article.
     4.   Any indemnification provided by this Article:
          (a)  Continues as to any officer, director, employee or agent who has
     ceased to be such and inures to the benefit of his heirs and personal
     representative; and
          (b)  Does not exclude any other rights to which a person is or may be
     entitled by law, any agreement, vote of stockholders of disinterested
     directors, or otherwise as to any action, including:
               (i)  Action in his official capacity; and
               (ii) Action in another capacity while holding the office.
     5.   The indemnification provided by this Article shall be provided as to
officers and directors, and may be provided as to employees and agents, with
respect to any action, suit or proceeding arising from an act or omission or
alleged act or omission, whether occurring before or after the adoption of this
Article.
     6.   The provisions of this Article constitute a contract between the
Corporation and each director or officer who serves in any such capacity at any
time while this Article and the relevant provisions of The Annotated Code of
Maryland Corporations and Associations or other applicable law, if any, are in
effect, and repeal or modification of any such law or of this Article shall not
affect any rights or obligations then existing with respect to any state of
facts then or theretofore or thereafter brought or threatened based in whole or
in part upon any such state of facts.
     7.   Each section or portion thereof of this Article shall be deemed
severable from the remainder, and the invalidity of any such section or portion
shall not affect the validity of the remainder of this Article.
     8.   Nothing in this Article protects, or purports to protect, or may be
interpreted to construed to protect, an officer or director against any
liability to the Corporation or its security holders to which he would otherwise
be subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.

                                   ARTICLE XVI
                                   AMENDMENTS

     Either the board of directors or the shareholders may make, amend, alter or
repeal the by-laws at any meeting duly held, the notice of which includes notice
of proposed addition, amendment, alteration or repeal of such by-laws; provided,
however, that the provisions concerning investment and other restrictions
contained in Article VII of the by-laws shall not be amended, altered or
repealed unless authorized by the vote of a majority of the outstanding voting
securities of the corporation.
     These by-laws include all amendments adopted through November 11, 1987 as
follows:
          Article I, Section 8, amended June, 1973.
          Article II, Section 4, amended September, 1974.
          Article VI, Section 6, amended January, 1977.
          Article XV, amended April, 1978.
          Article I, Section 2, amended April, 1979.

<PAGE>

          Article I, Section 7, amended April, 1980.
          Article VII, Section 8, amended November, 1980.
          Article I, Sections 1,2,3,5 and 9; Article II, Sections 2 and 5;
          Article V, Section 1; amended August, 1987.
          Article I, Section 3; Article VII; Article VIII; amended November 11,
         1987.

<PAGE>

Account
       -----------------------------------------------------         Certificate
Discount/Account No.                                                    Number
                    ----------------------------------------
Number of Shares
                --------------------------------------------
Date
    --------------------------------------------------------


COMMON STOCK
PAR VALUE $0.001

NUMBER                               [LOGO]                            SHARES

                             FBL SERIES FUND, INC.

INCORPORATED UNDER THE LAWS OF MARYLAND

                                                             SEE REVERSE
                                                       FOR CERTAIN DEFINITIONS
- -----------------------------------
PORTFOLIO

 302403
- -----------------------------------
PORTFOLIO CUSIP


THIS CERTIFIES OWNERSHIP BY    S P E C I M A N

                                                                CUSIP  3024031

OF THE INDICATED NUMBER OF FULLY PAID AND NON-ASSESSABLE SHARES OF PAR VALUE
OF ONE TENTH OF ONE CENT ($0.001) EACH, OF THE COMMON STOCK OF FBL SERIES
FUND, INC., TRANSFERABLE ON THE BOOKS OF THE CORPORATION BY THE HOLDER
HEREOF IN PERSON OR BY DULY AUTHORIZED ATTORNEY UPON SURRENDER OF THIS
CERTIFICATE PROPERLY ENDORSED. THIS CERTIFICATE AND THE SHARES REPRESENTED
HEREBY ARE ISSUED AND SHALL BE HELD SUBJECT TO THE PROVISIONS OF
THE ARTICLES OF INCORPORATION AND THE BY-LAWS OF THE CORPORATION AND OF ALL
AMENDMENTS FROM TIME TO TIME MADE THERETO, COPIES OF WHICH ARE ON FILE WITH
THE TRANSFER AGENT.

THIS CERTIFICATE IS NOT VALID UNLESS COUNTERSIGNED BY THE TRANSFER AGENT.

WITNESS THE SEAL OF THE CORPORATION AND THE SIGNATURES OF ITS DULY AUTHORIZED
OFFICERS.

DATED: _______________________________

COUNTERSIGNED:
FBL INVESTMENT ADVISORY SERVICES, INC.          BY
     (WEST DES MOINES, IOWA)                       ----------------------------
                        TRANSFER AGENT               PRESIDENT/VICE PRESIDENT


                                         [SEAL]

BY                                              BY
- --------------------------------------             ----------------------------
                  AUTHORIZED SIGNATURE             SECRETARY/ASSISTANT SECRETARY


<PAGE>

The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full accord
to applicable laws or regulations:

     TEN COM--as tenants in common      UNIF GIFT MIN ACT--______Custodian_____
                                                           (Cust)        (Minor)
     JT TEN --as joint tenants with right of      under Uniform Gifts to Minors
            survivorship and not as tenants       Act _________
            in common                                   (State)

     Additional abbreviations may also be used though not in the above list.

REDEMPTION RIGHTS

The redemption provisions pertaining to the common stock of the corporation, as
set forth in Article VIII of the articles of incorporation of the corporation
are as follows:

                                   ARTICLE VIII

     (a) Any shareholder of record in the corporation desiring to dispose of
his shares may deposit his certificate or certificates for such shares with
the corporation or its agent, duly endorsed or accompanied by a proper
instrument, of transfer, with a request that the corporation redeem the
shares represented thereby. Upon any such deposit being made, the corporation
shall be required to redeem said shares upon the terms set forth in the
Corporation's effective registration statement on file with the Securities
and Exchange Commission.  Payment for such shares shall be made by the
corporation within seven days after the date upon which the shares are
deposited.  Whenever the board of directors, by declaration or resolution,
has suspended the determination of net asset value pursuant to the provisions
of these articles of incorporation, the right of any shareholder to require
the corporation to redeem his shares shall be likewise suspended.  At any
time such suspension is in effect any shareholder may withdraw his
certificate or certificates from deposit or may leave the same on deposit, in
which case the redemption price shall be the net asset value next determined
after the suspension is terminated.
     (b) The corporation may by agreement with any shareholder purchase shares
of the corporation at a price not exceeding the net asset value in effect at the
time when such purchase or contract to purchase is made or the net asset value
next to be determined.
     (c) Any redemptions or purchases of shares by the Corporation of any
class of the Corporation's stock shall be made solely from assets belonging to
such class. Any shares of any class of the Corporation's stock purchased or
obtained by the Corporation by purchase or redemption shall be deemed retired
and shall thereafter have the status of authorized but unissued shares of
such class. At any time when a shareholder's ownership of shares of any class
has a value of less than $250, the Corporation may redeem the shares of such
class owned by such a shareholder at a current price determined in accordance
with the Corporation's current prospectus.
     (d) Any redemptions or purchases of shares by the Corporation of any
class of the Corporation's stock shall be in cash, except that upon
determination of the board of directors redemptions may be made in kind as
provided in the Corporation's current prospectus.

                         REDEMPTION OR ASSIGNMENT FORM

               THE UNDERSIGNED TENDERS THIS CERTIFICATE TO THE CORPORATION
*A. For the redemption, in accordance with the corporation's charter, of
__________ shares of the corporation's capital stock represented by this
certificate.
*B. And, for value received hereby sells, assigns and transfers unto

_______________________________    Insert social security or other identifying
 [Full Name(s) of Assignee(s)]     number of person to whom the certificate is
                                   being assigned.
_______________________________
          (Address)                      /__________/_______/__________/

_______________________________
(City)      (State)      (Zip)

__________________ shares of the stock represented by this certificate and

hereby irrevocably constitutes and appoints _______________ attorney to transfer

the same on the books of the corporation, with full power of substitution in the
premises.
                                   SIGNATURE(S)
*If redemption, fill in paragraph   ____________________________________________
 A and cross out paragraph B.
 If assignment, fill in paragraph   ____________________________________________
 B and cross out paragraph A.
 If some shares are to be redeemed  ____________________________________________
 and others assigned, fill in both                 (Street)
 paragraphs.                        ____________________________________________
                                      (City)       (State)                (Zip)
CHECK ONE IF APPLICABLE
/ / A new certificate is to be      NOTICE:   The signature(s) to this form must
    issued to the undersigned         correspond with the name(s) as written
    for any balance of shares         upon the face of the certificate in every
    represented by the                particular, without alteration or enlarge-
    certificate and not being         ment, or any change whatever.
    tendered for redemption
    or assignment.
                                               Signature(s) Guaranteed By:
/ / Place the balance of
    shares in uncertificated          _______________________________________
    status on my account.                          (Bank or Firm)

                                      By ____________________________________
                                      Signature(s) must be guaranteed by a
                                      commercial bank, trust company, or member
                                      firm of a major stock exchange (New York,
                                      American, Midwest or Pacific Coast).



<PAGE>

                             INVESTMENT ADVISORY AND
                          MANAGEMENT SERVICES AGREEMENT

     This Agreement made this 11th day of November, 1987, by and between FARM
BUREAU GROWTH FUND, INC., a Maryland corporation (the "Fund"), and FBL
INVESTMENT ADVISORY SERVICES, INC., a Delaware corporation ("Adviser");

                                   WITNESSETH:

     In consideration of the mutual covenants herein contained, it is agreed as
follows:

     1.   ADVISORY SERVICES.  Adviser shall furnish investment research and
advice to the Fund and shall manage the investment and reinvestment of the
assets of the investment portfolios currently offered and to be offered by the
Fund (the "Portfolios") and its business affairs and matters incidental thereto,
all subject to the supervision of the Board of Directors of the Fund, and the
provisions of the Articles of Incorporation and By-Laws of the Fund and any
resolutions, rules or regulations adopted by the Board of Directors of the Fund.
Adviser shall for all purposes herein provided be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized herein,
have no authority to act for or represent the Fund in any way or otherwise be
deemed an agent for the Fund.  The Fund shall also be free to retain, at its own
expense, other persons to provide it with any services whatsoever including, but
not limited to, statistical, factual or technical information or advice.  The
services of Adviser herein provided are not to be deemed exclusive and Adviser
shall be free to render similar services or other services to others so long as
its services hereunder shall not be impaired thereby.

     2.   LIMITATIONS ON ADVISORY SERVICES.  The Adviser shall perform the
services under this Agreement subject to the supervision and review of the Board
of Directors and in a manner consistent with the objectives, policies, and
restrictions of each Portfolio of the Fund as stated in its Registration
Statement, as amended from time to time, the provisions of the Investment
Company Act of 1940 ("ICA") and the applicable requirements of the Internal
Revenue Code of 1986.

     3.   DUTIES OF ADVISER.  In carrying out its obligations to manage the
investment and reinvestment of the assets of the Fund, the Adviser shall, as
appropriate and consistent with the limitations set forth in Paragraph 2 hereof:

          (a)  perform research and obtain and evaluate pertinent economic,
               statistical, and financial data relevant to the investment
               policies of each Portfolio of the Fund as set forth in the

<PAGE>

               prospectus for the Fund, as amended from time to time;

          (b)  make and carry out day-to-day decisions to acquire or dispose of
               permissible investments, manage the investments and any other
               property of the Fund, and provide or obtain such services as may
               be necessary in managing, acquiring or disposing of investments;
               and

          (c)  determine the composition of the assets of each of the
               Portfolios, including the purchase, retention or sale of the
               securities and cash contained in those Portfolios.

     4.   REPORT TO BOARD.  The Adviser, either through persons employed by it
or at its expense, shall furnish to the Board at least once every quarter a
schedule of investments and other assets held in the Portfolios and a statement
of all purchases and sales for the Portfolios, except short term money market
instruments, made during the period since the last report.

     5.   RECORDS.  The Adviser agrees to preserve for the period prescribed by
the rules and regulations of the Securities and Exchange Commission all records
the Adviser maintains for the Fund as are required to be maintained pursuant to
said rules.  The Adviser agrees that all such records shall be the property of
the Fund and shall be made available, within five (5) business days of the
request, to the Fund's accountants or auditors during regular business hours at
the Adviser's offices upon prior written notice.  In the event of termination of
this Agreement for any reason, all such records shall be returned promptly to
the Fund, free from any claim or retention of rights by the Adviser.  In
addition, the Adviser will provide any materials, reasonably related to the
investment advisory services provided hereunder, as may be reasonably requested
in writing by the Directors or officers of the Fund or as may be required by any
governmental agency having jurisdiction.

     6.   EXPENSES.  Adviser shall at its expense furnish the Fund with office
space (in the offices of Adviser, or other such place or places as may be agreed
upon by the parties) and such office facilities, simple business equipment,
advisory, research and statistical facilities and clerical services and
personnel as may be necessary to administer the investment business of the Fund.
Adviser shall arrange, if desired by the fund, for officers or employees of
Adviser to serve without salary from the Fund as Directors, officers or agents
of the Fund if duly elected or appointed to such positions by the shareholders
of the Fund or by the Board of Directors thereof and subject to their individual
consent and to any limitations imposed by law.  Adviser will not be required to
pay any other expenses of the Fund other than those expressly enumerated herein;
and in particular, but without limiting the generality of the foregoing, Adviser
will not be required to pay any of the following fund expenses: (1) expenses for
services rendered by a custodian including those for the safekeeping of the
Fund's securities or other property and for keeping its books of account, (2)
charges and expenses of independent auditors, legal counsel, any transfer or
dividend disbursing agent or any registrar of the Fund, (3) costs of acquiring
and disposing of portfolio

<PAGE>

securities, (4) interest, if any, on obligations incurred by the Fund, (5) the
cost of calculating the net asset value of the Fund as provided in the Articles
of Incorporation and By-Laws of the Fund, of stock certificates and of corporate
reports, (6) membership dues in the Investment Company Institute or any similar
organization, (7) the cost of reports, notices to shareholders and other
shareholder communications and other like miscellaneous expenses, (8) expenses
of any registration and qualification of shares of the Fund for sale under
Federal securities laws and the securities laws of any State or other
jurisdiction, (9) telephone and personnel costs incurred by Adviser and
allocable to the above, (10) taxes and fees payable to Federal, State or other
Governmental agencies or otherwise, and (11) expenses of underwriting and
selling shares of stock issued by the Fund.  The Board shall determine how
expenses are to be allocated among the existing Portfolios, and the
determination of the Board shall be final and binding.  The Fund shall not pay
or incur any obligation for any management or administrative expenses for which
the Fund intends to seek reimbursement from Adviser as herein provided without
first obtaining the written approval of Adviser.

     7.   COMPENSATION.  For the services to be rendered and the charges and
expenses assumed and to be paid by the Adviser as provided herein, the Fund
shall pay the Adviser compensation based on an annual percentage of the average
daily net assets of each Portfolio as follows:

                                           Average Daily Net Assets
                                           -----------------------------
                                           First       Second     Over
                                           $200        $200      $400
Portfolio                                  Million     Million   Million
- ---------                                  -------     -------   -------
Managed. . . . . . . . . . . . . . . . .   0.60%       0.55%     0.50%
Aggressive Growth Common Stock . . . . .   0.60%       0.55%     0.50%
High Yield Bond. . . . . . . . . . . . .   0.55%       0.50%     0.45%
Growth Common Stock. . . . . . . . . . .   0.50%       0.45%     0.40%
Ginnie Mae Portfolio . . . . . . . . . .   0.50%       0.45%     0.40%
High Quality Bond. . . . . . . . . . . .   0.40%       0.35%     0.30%
Money Market . . . . . . . . . . . . . .   0.40%       0.35%     0.30%
Blue Chip Index. . . . . . . . . . . . .   0.25%       0.25%     0.25%

Compensation under this Agreement shall be calculated and accrued for each
business day by applying the appropriate annual rates to the net assets of the
Portfolio in accordance with the formula set forth above as of the close of the
last business day preceding the day for which the fee is being calculated, and
dividing the sum so computed by the number of business days in the fiscal year.
The fees thus accrued shall be payable monthly, provided that such compensation
shall be paid proportionately for any other period ending with the termination
of this Agreement.
     8.   LIMITATION OF EXPENSES.  In the event that expenses of any Portfolio
chargeable to its income account (including amounts payable hereunder but
exclusive of brokerage fees, distribution services fee, interest, taxes and
extraordinary expenses for any fiscal year ending on a date at which this
Agreement is in effect) shall exceed 1.50% of the average daily net assets of
the Portfolio for said fiscal year, calculated on the basis of the average of
all of the daily valuations of the net assets of the Portfolio in effect as of
the close of each business day

<PAGE>

during said fiscal year, Adviser shall pay to the Portfolio the amount by which
such expenses exceed the applicable limitation, within three days after the
determination of the amount thereof.  In no event shall Adviser be required to
reimburse the Portfolio in an amount exceeding its compensation for such period
from such Portfolio under this Agreement.

     9.   FUND TRANSACTIONS AND BROKERAGE.  The Adviser agrees to determine the
securities to be purchased or sold by each Portfolio of the Fund, subject to the
provisions of Paragraphs 2 and 3 above, and to place orders pursuant to its
determinations either directly with the issuer, with any broker-dealer or
underwriter that specializes in the securities for which the order is made, or
with any other broker or dealer selected by the Adviser, subject to the
following limitations.

     The Adviser is authorized to select the brokers or dealers that will
execute the purchases and sales of portfolio securities for each Portfolio of
the Fund and will use its best efforts to obtain the most favorable price and
efficient execution of the Fund's orders, taking into account all appropriate
factors, including: price; dealer spread or commission, if any; size and
difficulty of the transaction; the nature of the market for the security; the
reliability, financial condition and general execution and operational
capabilities of the broker-dealer; and the research, statistical, and economic
data or facilities furnished by the broker-dealer to the Fund.

     If, in the judgment of the Adviser, the Fund or any Portfolio thereof would
be benefited by supplemental investment research, the Fund or such Portfolio may
pay reasonable increased transaction costs to obtain such information.  The
expenses of the Adviser may not necessarily be reduced as a result of receipt of
such supplemental information.  The Adviser or any of its affiliates may also
use any investment research obtained for the benefit of the Fund or any
Portfolio thereof in providing investment advice to its other investment
advisory accounts.

     10.  AVOIDANCE OF INCONSISTENT POSITION.  In connection with purchases or
sales of portfolio securities for the account of the Fund or any Portfolio
thereof, neither Adviser nor any officer, director or shareholder of Adviser
shall act as principal or receive any commission other than its compensation
provided for in this Agreement.  Such limitation, however, shall not prohibit
the payment of the usual and customary brokerage commissions to any of such
parties in the proper case.  It is understood and agreed that Adviser, by virtue
of a separate agreement or agreements with the Fund, may also act as
underwriter, distributor, transfer agent and/or shareholder service agent for
the Fund, and/or perform accounting services for the Fund, and may be
compensated therefor.

     The same securities held by the Fund may also be held by separate
investment accounts or other investment companies for which the Adviser may act
as an adviser or by the Adviser or its affiliates.  Because of different
investment objectives or other factors, a particular security may be bought by
the adviser or its affiliates

<PAGE>

or for one or more clients when one or more clients are selling the same
security.  If purchases or sales of securities for the Fund or other entities
for which the Adviser or its affiliates act as investment adviser or for their
advisory clients arise for consideration at or about the same time, the Fund
agrees that the Adviser may make transactions in such securities, in such manner
as is deemed equitable to all.  To the extent that transactions on behalf of
more than one client of the Adviser during the same period may increase demand
for securities being purchased or the supply of securities being sold, the Fund
recognizes that there may be an adverse effect on price.

     It is agreed that, on occasions when the Adviser deems the purchase or sale
of a security to be in the best interests of the Fund as well as other accounts
or companies, it may, to the extent permitted by applicable laws and
regulations, but shall not be obligated to, aggregate the securities to be sold
or purchased for the Fund with those to be sold or purchased for other accounts
or companies in order to obtain favorable execution and lower brokerage
commissions.  In that event, allocation of the securities purchased or sold, as
well as the expenses incurred in the transaction, will be made by the Adviser
in the manner it considers to be most equitable and consistent with its
fiduciary obligations to the Fund and to such other accounts or companies.  The
Fund recognizes that in some cases this procedure may adversely affect the size
of the position obtainable for a Portfolio of the Fund.

     11.  LIMITATION OF LIABILITY OF ADVISER.  Adviser shall not be liable for
any error of judgment or mistake of law, or for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, except loss to the
Fund resulting from willful misfeasance, bad faith or gross negligence on the
part of Adviser in the performance of its obligations and duties under this
Agreement.  It is understood that the officers, directors, agents and
shareholders of the Fund are or may become interested in Adviser as officers,
directors, agents, shareholders, or otherwise, and that the officers, directors,
shareholders and agents of Adviser may become similarly interested in the Fund;
and that the existence of any such dual interest shall not affect the validity
of this Agreement or any transaction hereunder except as a provided in the
Articles of Incorporation or By-Laws of the Fund or Articles of Incorporation of
the Adviser, or by the specific provisions of applicable law.  Any person, even
though also employed by Adviser, who may be or become an employee of and paid by
the Fund shall be deemed, when acting within the scope of his employment by the
Fund, to be acting in such employment solely for the Fund and not as a an
employee or agent of Adviser.

     12.  EFFECTIVE DATE AND TERM.  This Agreement shall not become effective
unless and until it is approved by the Fund's Board of Directors, including a
majority of Directors who are not parties to this Agreement or "interested
persons" (as defined in the ICA) of any such party to this Agreement and, as to
the Growth Common Stock Portfolio, a vote of a "majority of the outstanding
voting securities" (as defined in the ICA) of such Portfolio.  This Agreement
shall come into full force and effect on December 1, 1987, provided that it
shall not become effective as to any subsequently created Portfolio until it has
been approved by the Board of Directors specifically for such Portfolio.

<PAGE>

     As to each Portfolio of the Fund, the Agreement shall continue in effect
until November 30, 1988, and shall thereafter continue in effect from year to
year so long as its continuance is approved at least annually in the manner
required by the ICA and the rules and regulations thereunder; provided however
that if the continuation of this Agreement is not approved for a Portfolio, the
Adviser may continue to serve in such capacity for such Portfolio in the manner
and to the extent permitted by the ICA and the rules and regulations thereunder.
In connection with such approvals, the Directors shall request, and the Adviser
shall furnish, such information as may be necessary to evaluate this Agreement.

     As to each Portfolio of the Fund, this Agreement:

     A.   may be terminated without the payment of any penalty upon 60 days'
          written notice to the Adviser either by the Board of Directors or by a
          majority vote of those persons having voting rights in respect of the
          affected Portfolio(s) of the Fund;

     B.   shall automatically terminate if it is assigned (within the meaning of
          the ICA) by the Adviser;

     C.   may be terminated by the Adviser without payment of any penalty upon
          60 days' written notice to the Secretary of the Board of Directors of
          the Fund; and

     D.   may be amended, changed, waived, discharged or terminated only by an
          instrument in writing signed by the party against which enforcement of
          the change, waiver, discharge or termination is sought.  An amendment
          of this Agreement shall not be effective until approved by (i) a vote
          of the holders of a majority of the outstanding voting securities of
          the Portfolio; and (ii) a majority of those Directors of the Fund who
          are not parties to this Agreement or "interested persons" (as defined
          in the ICA) of any party to this Agreement, cast in person at a
          meeting called for the purpose of voting on such approval.

     13.  NOTICES.  Any notices under this Agreement shall be in writing
addressed and delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate for the receipt of such notice.

     14.  MISCELLANEOUS.  The captions in this Agreement are included for
convenience or reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect.  This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

     IN WITNESS WHEREOF, the Fund and Adviser have caused this Agreement to be
executed in their

<PAGE>

names and on their behalf and under their corporate seals by and through their
duly authorized officers all on the day and year first above written.

ATTEST:                                   FARM BUREAU GROWTH FUND, INC.



- -----------------------------------       -------------------------------------
By: Its Assistant Secrtary                By: Its Vice President


ATTEST:                                   FBL INVESTMENT ADVISORY SERVICES, INC.


- -----------------------------------       -------------------------------------
By: Its Assistant Secretary               By: Its Vice President


<PAGE>

                              UNDERWRITING AGREEMENT


     This agreement made this 31st day of December, 1983, between FARM BUREAU
GROWTH FUND, INC., a Maryland corporation (hereinafter called the "Fund"), and
PFS MANAGEMENT SERVICES, INC., a Delaware corporation (hereinafter called the
"Underwriter");

                                    WITNESSETH:

     In consideration of the mutual covenants hereinafter contained, it is
agreed as follows:

     1.   The Fund hereby appoints the Underwriter its exclusive agent for the
distribution of common stock of the Fund in jurisdictions wherein shares of the
Fund may legally be offered for sale; provided, however, that the Fund in its
absolute discretion may  (1) issue shares of its common stock in connection with
the acquisition of assets or shares or securities of another corporation or
entity or in connection with a merger or consolidation with any other
corporation as and to the extent permitted by its Articles of Incorporation and
any applicable laws; (2) issue or sell shares directly to the shareholders of
the Fund upon such terms and conditions and for such consideration, if any, as
it may determine, whether in connection with the distribution of subscription or
purchase rights, the payment or reinvestment of dividends or distributions, or
otherwise; or (3) issue or sell shares at net asset value to the shareholders of
any other investment company, for which the Underwriter shall act as exclusive
distributor, who wish to exchange all or a portion of their investment in shares
of such other investment company for shares of the Fund.

     2.   The Underwriter hereby accepts appointment as exclusive agent for the
distribution of the common stock of the Fund and agrees that it will use its
best efforts with reasonable promptness to sell such part of the authorized
shares of the common stock of the Fund remaining unissued as from time to time
shall be effectively registered under the Securities Act of 1933 ("Securities
Act"), at prices determined as hereinafter provided and on terms hereinafter set
forth, all subject to applicable Federal and state laws and regulations and to
the Articles of Incorporation and By-Laws of the Fund and in accordance with the
current prospectus of the Fund.

     3.   The Fund agrees that it will use its best efforts to keep effectively
registered under the Securities Act for sale as herein contemplated such shares
of its common stock as the Underwriter shall reasonably request and as the
Securities and Exchange Commission shall permit to be so registered.

     4.   Notwithstanding any other provision hereof, the Fund may terminate,
suspend or withdraw the offering of shares of its common stock whenever, in its
sole discretion, it deems such action to be desirable.

     5.   The Underwriter shall sell shares of common stock of the Fund to or
through qualified dealers or others



<PAGE>

in such manner, not inconsistent with the provisions hereof and the then
effective Registration Statement of the Fund under the Securities Act (and
related prospectus), as the Underwriter may determine from time to time,
provided that no dealer or other person shall be appointed or authorized to act
as agent of the Fund without the prior written consent of the Fund and that the
form of each agreement between the Underwriter and any such dealer, or other
person shall have been approved by the Fund.

     6.   All shares of common stock of the Fund offered for sale or sold by the
Underwriter shall be so offered or sold at the net asset value in accordance
with the then current prospectus.  The net asset value per share shall be
computed in accordance with the Articles of Incorporation of the Fund and shall
be determined in the manner and at the times set forth in the then current
prospectus of the Fund related to such shares.

     7.   The price the Fund shall receive for all shares purchased from the
Fund shall be the net asset value used in determining the public offering price
applicable to the sale of such shares.

     8.   The Underwriter shall issue and deliver on behalf of the Fund such
confirmations of sales made by it as agent pursuant to this agreement as may be
required.  At or prior to the time of delivery by the Fund to or on the order of
the Underwriter of certificates for any shares of common stock of the Fund, the
Underwriter will pay or cause to be paid to the Fund, the amount due the Fund
for the sale of such shares.  Certificates shall be issued or shares registered
on the transfer books of the Fund in such names and denominations as the
Underwriter may specify.

     9.   The Fund will execute any and all documents and furnish any and all
information which may be reasonably necessary in connection with the
qualification of its shares of common stock for sale (including the
qualification of the Fund as a dealer where necessary or advisable) in such
states as the Underwriter may reasonably request (it being understood that the
Fund shall not be required without its consent to qualify to do business in any
jurisdiction or to comply with any requirement which in its opinion is unduly
burdensome).  The Underwriter, at its own expense, will effect all
qualifications as dealer or broker or otherwise under all applicable state or
Federal laws required in order that the shares may be sold in as broad a
territory as practicable.

     10.  The Fund will furnish to the Underwriter from time to time such
information with respect to the Fund and its shares as the Underwriter may
reasonably request for use in connection with the sale of shares of the Fund.
The Underwriter agrees that it will not use or distribute or authorize the use,
distribution or dissemination by its dealers or others in connection with the
sale of such shares any statements, other than those contained in the Fund's
current prospectus, except such supplemental literature or advertising as shall
be lawful under Federal and state securities laws and regulations, and that it
will furnish the Fund with copies of all such material.

     11.  The Underwriter shall order shares of common stock of the Fund from
the Fund only to the extent that it shall have received purchase orders
therefor.  The Underwriter will not make, or authorize any dealers or others to
make


<PAGE>

any short sales of shares of the Fund.

     12.  The Underwriter, as agent of and for the account of the Fund, may
repurchase the common stock of the Fund at such prices and upon such terms and
conditions as shall be specified in the current prospectus of the Fund.

     13.  In selling or reacquiring shares of common stock of the Fund for the
account of the Fund, the Underwriter will in all respects conform to the
requirements of all state and Federal laws and the Rules of Fair Practice of the
National Association of Securities Dealers relating to such sale or
reacquisition, as the case may be, and will indemnify and save harmless the Fund
from any damage or expense on account of any wrongful act by the Underwriter or
any employee, representative or agent of the Underwriter.  The Underwriter will
observe and be bound by all the provisions of the Articles of Incorporation and
By-Laws of the Fund and the current prospectus of the Fund and of any
fundamental policies adopted by the Fund pursuant to the Investment Company Act
of 1940, notice of which shall have been given by the Fund to the Underwriter
which at the time in any way require, limit, restrict or prohibit or otherwise
regulate any action on the part of the Underwriter.

     14.  The Underwriter will require each dealer to conform to the provisions
hereof and the Registration Statement (and related prospectus) at the time in
effect under the Securities Act with respect to the public offering price of the
Fund's shares, and neither the Underwriter nor any such dealer shall withhold
the placing of purchase orders so as to make a profit thereby.

     15.  The Fund will pay or cause to be paid expenses of any registration and
qualification of shares of its common stock for sale under the Federal
securities laws and the securities laws of any state or other jurisdiction in
which the Underwriter may wish to arrange for the sale of the same, the expenses
of other reports and acts required by law, in connection with such registration
and qualification, and the expenses incident to the issuance of shares of common
stock, such as the cost of stock certificates, issue taxes, and fees of the
transfer agent.  The Underwriter will pay all expenses (other than expenses
which the Fund may bear pursuant to its Distribution and Shareholder Servicing
Plan and Agreement with the Underwriter or which one or more dealers may bear
pursuant to any agreement with the Underwriter) incident to the sale and
distribution of the shares issued or sold hereunder, including, without limiting
the generality of the foregoing, all (1) expenses of printing and distributing
any prospectus and of preparing, printing and distributing or disseminating any
other literature, advertising and selling aids in connection with the offering
of the shares for sale (except that such expenses need not include expenses
incurred by the Fund in connection with the preparation, printing and
distribution of any report or other communication to stockholders in their
capacity as such), and (2) expenses of advertising in connection with such
offering.  No transfer taxes, if any, which may be payable in connection with
the issue or delivery of shares sold as herein contemplated or of the
certificates for such shares shall be borne by the Fund, and the Underwriter
will indemnify and hold harmless the Fund against liability for all such
transfer taxes.

     16.  This agreement shall become effective on the date hereof and shall
continue until the close of business


<PAGE>

on November 15, 1984 and from year to year thereafter, but only so long as such
continuance is specifically approved at least annually in a manner consistent
with the Investment Company Act of 1940.  Either party hereto may terminate this
agreement on any date by giving the other party at least six months' prior
written notice of such termination specifying the date fixed therefor.  Without
prejudice to any other remedies of the Fund in any such event the Fund may
terminate this agreement at any time immediately upon any failure of fulfillment
of any of the obligations of the Underwriter hereunder.

     17.  This agreement shall automatically terminate in the event of its
assignment within the meaning of such term under the Investment Company Act of
1940.

     18.  Any notice under this agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notice.

     IN WITNESS WHEREOF, the Fund and the Underwriter have each caused this
agreement to be executed on its behalf by an officer thereunto duly authorized
and its corporate seal to be affixed on the day and year first above written.

                                   FARM BUREAU GROWTH FUND, INC.


                                   By:
                                       ---------------------------------


ATTEST:



        ---------------------------------
               William J.  Oddy
               Assistant Secretary

                                   PFS MANAGEMENT SERVICES, INC.


                                   By:
                                       ---------------------------------


ATTEST:


        ---------------------------------
             William J.  Oddy
             Assistant Secretary




<PAGE>

                                                                      Exhibit 6b

                                DEALER AGREEMENT

                      FBL INVESTMENT ADVISORY SERVICES, INC.
                             5400 University Avenue
                            West Des Moines, IA 50265


Gentlemen:
     As distributor and principal underwriter , we invite you to become a member
of the group of securities dealers (the "Selling Group") authorized to solicit
applications to purchase shares ("Applications") of the Money Market Portfolio,
Growth Common Stock Portfolio, Aggressive Growth Common Stock Portfolio, High
Quality Bond Portfolio, High Yield Bond Portfolio, Ginnie Mae Portfolio, Blue
Chip Index Portfolio and Managed Portfolio (sometimes referred to collectively
as the "Portfolios" and individually as the "Portfolio") of FBL Series Fund,
Inc.  (the "Fund") and to service shareholder accounts as hereinafter described
but only in those states in which the shares of the respective Funds may legally
be offered for sale and only on the following terms:

A.   SOLICITATION OF APPLICATIONS

     1.  Applications received from you and accepted by the appropriate Fund
will be at the public offering price determined in the manner described in the
then current prospectus of such Fund notwithstanding anything to the contrary in
this Agreement.  The public offering price for the purchase of the shares of a
Fund is its net asset value per share.

     2.  The procedure relating to the handling of applications shall be subject
to instructions which we shall forward from time to time to all members of the
Selling Group.  All applications are subject to acceptance by us and the Funds
at our West Des Moines, Iowa offices and we and the Funds reserve the right, in
our and their sole discretion, to reject any application.

     3.  As a member of the Selling Group, you agree:

          (a)  To purchase shares only from us or from your customers (other
          than a securities broker or dealer).

          (b)  That you will purchase shares from us only to cover purchase
          orders already received from your customers, or for your own bona fide
          investment.

          (c)  That you will not purchase shares from your customers at a price
          lower than the bid price then quoted by or for such Fund.  You may,
          however, sell shares for the account of your customer to the Fund, or
          to us as agent for such Fund, at the bid price currently quoted by or
          for such Fund.

          (d)  That you will not withhold placing with us orders received from
          your customers so as to profit yourself as a result of such
          withholding.

     4.   You agree that you will promptly forward all customers' applications
to us.  The Funds will not accept conditional applications.

     5.   You agree that the Fund's share price applicable to applications will
be such Fund's public offering price next determined after receipt of the
application and payment at the office of such Fund in West Des Moines, Iowa in
accordance with the then current prospectus of such Fund.

<PAGE>

     6.   Payments for Fund shares purchased must be made at or prior to
acceptance of the application at the Fund's office in West Des Moines, Iowa, as
contemplated by the application forms furnished by us.  Delivery of shares will
be made by credit to shareholder accounts or, if requested in writing, by
delivery of certificates.

     7.   Applications are subject to acceptance by us and the Funds.  The Funds
reserve the right in their discretion, without notice to you, to suspend sales
or withdraw the offering of shares entirely.

     8.   No person is authorized to make any representations concerning any
Fund or its shares except those contained in such Fund's then current prospectus
and any such information as may be authorized by us or such Fund for use as
information supplemental to such prospectus.  In soliciting applications for
shares of a Fund, you shall rely solely on the representations contained in such
Fund's then current prospectus and the supplemental information above mentioned.

     9.   Additional copies of any prospectus or statement of additional
information and any printed information designed as supplemental to such
prospectus will be supplied by us to members of the Selling Group in reasonable
quantities upon request.

     10.  Your acceptance of this agreement constitutes a representation that
you are (i) a registered security dealer and a member in good standing of the
National Association of Securities Dealers, Inc. and agree to comply with all
applicable state and federal laws and rules and regulations applicable to
transactions hereunder and to the rules of Fair Practice of the National
Association of Securities Dealers, Inc., including specifically Section 26,
Article III thereof.  You likewise agree that you will not offer or sell shares
of any Fund in any state or other jurisdiction in which they may not lawfully be
offered for sale.

B.   SHAREHOLDER SERVICES

     1.   You shall provide services to existing and prospective shareholders of
the Funds, including, without limitation, assistance in the establishment and
maintenance of shareholder accounts and records, forwarding purchase and
redemption requests, answering routine client inquiries regarding the Fund,
assistance to clients in changing dividend options, account designations and
addresses, assisting shareholders with tax information and such other services
as we may reasonably request.

     2.   You shall also prepare such quarterly reports for us as shall
reasonably be required by us.

C.   COMPENSATION

     1.   Your acceptance of this agreement constitutes your agreement to become
a member of the Selling Group and to render the services, and to assume the
obligations, set forth herein for the compensation herein provided.  You shall
for all purposes herein provided be deemed to be an independent contractor and
shall have no authority to act for or represent the Funds or us in any way or
otherwise be deemed an agent of the Funds or us, except as expressly provided
above.

     2.   For the services described herein, we will compensate you for sales of
Fund shares at a commission rate of up to 4% and pay a fee to you after the end
of each month at the annual rate of 0.15 of 1% of the average aggregate net
asset value of the shares of those accounts in the Funds for which you provide
services at a level deemed by us to be satisfactory.  For the month and year in
which this Agreement becomes effective or terminates, there shall be an
appropriate proration on the basis of the number of days that the Agreement is
in effect during the month and year, respectively.

<PAGE>

D.   GENERAL TERMS


     1.   This Agreement shall be in substitution of all prior agreements
between us regarding the shares of any Fund.

     2.   This Agreement shall become effective on the date hereof and shall
continue in effect until terminated.  This Agreement shall automatically
terminate in the event of its assignment and shall terminate with respect to a
Fund upon any termination of that Fund's Distribution and Shareholder Servicing
Plan and Agreement (the "Plan").  It may be terminated by you on thirty (30)
days' written notice.  It may also be terminated with respect to a Fund at any
time, without payment of any penalty, by vote of a majority of the members of
the Board of Directors of such Fund who are not interested persons of the Fund
and have no direct or indirect financial interest in the operation of the Plan
or in any agreement related to the Plan or by a vote of a majority (as defined
in the Investment Company Act of 1940) of the Fund's outstanding shares on
thirty (30) days' written notice.  We reserve the right, in our discretion,
without notice, to modify, cancel or assign this agreement, which shall be
construed in accordance with the laws of the State of Iowa.

     3.   You acknowledge that we may enter into similar agreements with others
without your consent.

     4.   If any provision of this Agreement shall be held or made invalid by a
court decision, statue, rule or otherwise, the remainder shall not be affected
thereby.

     5.   All communications to us shall be sent to FBL Investment Advisory
Services, Inc., 5400 University Avenue, West Des Moines, Iowa, 50265.  Any
notice to you shall be duly given if mailed or telegraphed to you at your
address as registered from time to time with the National Association of
Securities Dealers, Inc.  This agreement in its entirety is applicable to sales
coming from, and only from, the state or states listed on the attached Schedule
A as from time to time amended by notice to you.  Schedule A is by this
reference made a part of this agreement.



                              FBL INVESTMENT ADVISORY SERVICES, INC.


Dated:                             By:
                                      ------------------------------------------
                                          Variable Products Vice President


     The undersigned accepts your invitation to become a member of the Selling
Group and agrees to abide by the foregoing terms and conditions.



Dated:                             By:
                                      ------------------------------------------

<PAGE>


                               SCHEDULE A
                                  to
                            DEALER AGREEMENT

                                Arizona
                               Colorado
                                 Idaho
                               Illinois
                                 Iowa
                                Kansas
                               Minnesota
                                Montana
                               Nebraska
                              New Mexico
                             North Dakota
                               Oklahoma
                             South Dakota
                                Utah
                              Wisconsin
                               Wyoming


<PAGE>

                                                                      Exhibit 6c

                        ADMINISTRATIVE SERVICES AGREEMENT


     AGREEMENT dated this 25th day of November, 1991, by and between FBL SERIES
FUND, INC., a Maryland corporation (the "Fund"), and FBL INVESTMENT ADVISORY
SERVICES INC., a Delaware corporation ("FBL").

     In consideration of the mutual covenants hereinafter contained, it is
hereby agreed by and between the parties hereto as follows:

     1.   The Fund hereby appoints FBL to provide information and administrative
services for the benefit of the Fund and its shareholders.  In this regard, FBL
shall appoint various broker-dealer firms and other financial services firms
("Firms") to provide related services and facilities for their clients who are
shareholders of the Fund ("clients").  The Firms shall provide such office space
and equipment, telephone facilities and personnel as is necessary or beneficial
for providing information and services to shareholders of the Fund.  Such
services and assistance may include, but are not limited to, establishing and
maintaining shareholder accounts and records, processing purchase and redemption
transactions, answering routine client inquiries regarding the Fund and its
special features, assistance to clients in changing dividend and investment
options, account designations and addresses, and such other services as the Fund
or FBL may reasonably request.  FBL may also provide some of the above services
for the Fund directly.

     FBL accepts such appointment and agrees during such period to render such
services and to assume the obligations herein set forth for the compensation
herein provided.  FBL shall for all purposes herein provided be deemed to be an
independent contractor and, unless otherwise expressly provided or authorized,
shall have no authority to act for or represent the Fund in any way or otherwise
be deemed an agent of the Fund.  FBL, by separate agreement with the Fund, may
also serve the Fund in other capacities.  In carrying out its duties and
responsibilities hereunder, FBL will appoint various Firms to provide
administrative and other services described herein directly to or for the
benefit of shareholders of the Fund who may be clients of such Firms.  Such
Firms shall at all times be deemed to be independent contractors retained by FBL
and not by the Fund.  FBL and not the Fund will be responsible for the payment
of compensation to such Firms for such services.

     2.   For the services and facilities described in Section 1, the Fund will
pay to FBL at the end of each calender month an administrative service fee
computed at an annual rate of 0.25 of 1% of the average daily net assets of the
Fund.  For the month and year in which this Agreement becomes effective or
terminates, there shall be an appropriate proration on the basis of the number
of days that the Agreement is in effect during such month and year,
respectively.  The services of FBL to the Fund under this Agreement are not to
be deemed exclusive, and FBL shall be free to render similar services or other
services to others.

     The net asset value for each share of the Fund shall be calculated in
accordance with the provisions of the Fund's current prospectus.  On each day
when net asset value is not calculated, the net asset value of a share of the
Fund shall be deemed to be the net asset value of such a share as of the close
of business on the last day on which such calculation was made for the purpose
of the foregoing computations.

<PAGE>

     3.   The Fund shall assume and pay all charges and expenses of its
operations not specifically assumed or otherwise to be provided by FBL under
this Agreement.

     4.   This Agreement may be terminated at any time without the payment of
any penalty by the Fund or by FBL on sixty (60) days' written notice to the
other party.  Termination of this Agreement shall not affect the right of FBL to
receive payments on any unpaid balance of the compensation described in Section
2 hereof earned prior to such termination.  All material amendments to this
Agreement must be approved by vote of the Board of Directors of the Fund.

     5.   If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder shall not be thereby
affected.

     6.   Any notice under this Agreement shall be in writing addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notice.

     7.   This Agreement shall be construed in accordance with applicable
federal law and the laws of the State of Iowa.

     IN WITNESS WHEREOF, the Fund and FBL have caused this Agreement to be
executed as of the day and year first above written.

FBL SERIES FUND, INC.                     FBL INVESTMENT ADVISORY SERVICES, INC.


By:                                       By:
   --------------------------------          --------------------------------
Title:       Vice President               Title:            President
      -----------------------------             -----------------------------

<PAGE>

                                                                       Exhibit 8

                           CUSTODIAN ACCOUNT AGREEMENT

     THIS CUSTODIAN ACCOUNT AGREEMENT, dated December 15, 1992, is entered into
by and between FARM BUREAU LIFE INSURANCE COMPANY, an insurance company
organized under the laws of Iowa, and its affiliated companies ("Company"), and
BANKERS TRUST COMPANY, a New York banking corporation ("Custodian");

                              W I T N E S S E T H:

     In consideration of the mutual covenants herein contained and other
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:

1.   DEFINITIONS

     Whenever used in this Agreement, or in any appendices, schedules or
exhibits hereto or amendments hereof, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:

     (a)  "ACCOUNT SECURITIES" means the Securities, other property and cash
held by Custodian in the Custodian Account, and shall include all income
generated by or the proceeds of any sale of such Securities.

     (b)  "AUTHORIZED PERSON" means any Person or Persons jointly or severally
authorized from time to time, in a writing in substantially the form of Exhibit
A attached hereto and made a part hereof, delivered to Custodian, to act on
behalf of Investment Adviser or Company with respect to any action required or
permitted to be taken by the Investment Adviser or Company under this Agreement.
Such writing shall clearly indicate the scope of authority of each Authorized
Person.

     (c)  "CUSTODIAN ACCOUNT" means the one or more custodianship, safekeeping
and cash accounts established and maintained by Custodian or any subcustodian
for Company pursuant to this Agreement, as listed in Exhibit B attached hereto
and made a part hereof.

     (d)  "DEPOSITORY" means any centralized securities depository system,
domestic or foreign, whether presently or hereafter organized, in which
Custodian participates, and shall include (i) the Depository Trust Company, (ii)
the Participant's Trust Company, or (iii) any other centralized securities
depository system selected by Custodian, but subject to the approval of Company
and any required approval by regulatory authorities applicable to Custodian in
the conduct of its business as Custodian.

     (e)  The term "HOLD" shall include Custodian's authority to deposit part or
all of the Account Securities with a Depository.


                                        1
<PAGE>

     (f)  "INSTRUCTIONS" means a communication received by Custodian from one or
more Authorized Persons directing action or delivering information pursuant
thereto.  Instructions may be oral or written and may be delivered (i) by
telephone, (ii) in hard copy, or (iii) by computer, electronic instruction
system or telecommunications terminals, which shall include but not be limited
to, a telex, a TWXS, a facsimile transmission, a bank wire or Custodian's
proprietary POL*ARIS Service; PROVIDED,HOWEVER, THAT the Parties hereto or
Custodian and Investment Adviser, as the case may be, shall have agreed to the
form, the means of transmission and the means of identification of such
Instructions; FURTHER PROVIDED THAT Instructions initially given orally shall be
confirmed  within the thirty (30) minute period immediately following the
initial receipt of the Instructions by Custodian in a manner consistent with
clauses (ii) or (iii) above.  Instructions shall conform to operating procedures
communicated from time to time by Custodian to Company.

     (g)  "PARAGRAPH" means a paragraph of this Agreement.

     (h)  "PERSON" means a natural person, trust, estate, corporation,
association, partnership, joint venture, employee organization, committee,
board, participant, beneficiary, trustee, partner, or venturer, including but
not limited to Company and Investment Advisers, as the context may require.

     (i)  "SECURITY" or "SECURITIES" includes bonds, debentures, notes, stocks,
evidences of indebtedness and other securities and property.

     (j)  "INVESTMENT ADVISER" means an entity duly appointed by Company as an
investment manager as further described in paragraph 7.

     The plural of any term shall have a meaning corresponding to the singular
thereof as so defined and any neuter pronoun used herein shall include the
masculine or feminine as the context may require.

     Any references in this Agreement to any provision of any statute, code or
regulation shall be deemed to incorporate any amended, substitute or successor
provisions, whenever adopted.

2.   APPOINTMENT OF CUSTODIAN

     (a)  APPOINTMENT.  Subject to the provisions hereof, Company hereby
employs, appoints and authorizes Custodian to act as custodian of all the
Securities and monies at the time owned by or in the possession of Company
during the period of this Agreement which have been delivered to, or Custodian
has otherwise expressly been given authority to hold in the Custodian Account.

     (b)  ESTABLISHMENT OF CUSTODIAN ACCOUNT.  Custodian hereby agrees to
establish the Custodian Account in the name of Company, or such other name or
names as Company and Custodian may agree upon from time to time, and to hold in
the Custodian Account all Securities or other property and cash deposited with,
delivered to or received by Custodian for deposit in the Custodian Account in
accordance with Instructions; PROVIDED THAT Custodian shall have the right to
refuse to accept any Securities or other property that are not in proper form
for deposit, but Custodian may refuse to accept any Security or other property
only after it discloses to Company the inadequacy or


                                        2
<PAGE>

deficiency in the Security or other property and it grants Company a
commercially reasonable time to correct such inadequacy or deficiency.
Custodian shall have no responsibility or liability for or on account of
Securities or other assets not delivered to Custodian or not accepted by
Custodian as hereinabove provided.

     (c)  CUSTODIAN'S PERSONNEL.  The individual personnel of Custodian duly
authorized to have access to Account Securities, to receive Instructions and to
act thereon are listed in the certification annexed hereto as Exhibit C and, as
amended from time to time, made a part hereof.  Custodian shall advise Company
of any change in the individuals so authorized by written notice to Company.

     (d)  SCOPE OF DUTIES.  Custodian's duties and responsibilities shall be
limited to those expressly set forth in this Agreement, and in any appendices,
schedules or exhibits hereto.

3.   FORM OF CUSTODY AND SAFEKEEPING

     (a)  FORM OF CUSTODY.  Custodian shall be responsible for safekeeping
Account Securities.  Custodian is authorized to (i) retain physical possession
of Account Securities, and/or (ii) deposit Account Securities with a Depository
or Sub-Custodian (hereinafter defined) selected by Custodian pursuant to
paragraph 8(b) and which is approved by the Company; provided, however that if
the Company shall deliver to Custodian foreign securities to be treated as
Account Securities, then Custodian is authorized to (i) retain physical
possession of such foreign securities, and/or ii) deposit such foreign
securities with a Depository or Sub-Custodian selected by Custodian pursuant to
paragraph 8(b).  For purposes of this section a foreign security means a
security that is issued by an entity that is not domiciled in the United States
or a United States territory.

     (b)  PHYSICAL CUSTODY.  Custodian shall ensure that Account Securities are
at all times properly identified as belonging solely to Company.  In this
regard, Custodian shall physically segregate Account Securities from any
property owned by Custodian.  Custodian shall not be required to physically
segregate Account Securities (other than bearer securities which shall be so
segregated) from other securities or property held by Custodian for third
parties, but Custodian shall maintain adequate records showing the true
ownership of Account Securities.

     (c)  DEPOSITORY CUSTODY.  If Custodian deposits Account Securities with a
Depository, Custodian shall maintain adequate records showing the location and
true ownership of such property.

     (d)  REGISTRATION IN NOMINEE NAME.  Custodian is authorized to reregister
securities received in registered form in the name of its nominee, or the
nominee of a Depository, unless alternate registration Instructions are
furnished.  In consideration of Custodian's registration of Account Securities
in the name of its nominee, Company agrees to pay on demand to Custodian or its
nominee the amount of any loss or liability for stockholders' assessments, or
otherwise, claimed or asserted against Custodian, such nominee or Depository's
nominee by reason of such registration.  Securities may also be held in the
Custodian Account in coupon bearer form, where, in the judgment of Custodian, it
is not practicable or possible to register such securities.


                                        3
<PAGE>

4.   LIABILITY FOR SAFEKEEPING

     (a)  LIMITATION OF LIABILITY.  Custodian's safekeeping responsibility under
paragraph 3 shall be limited to exercising the care and diligence usually
accorded by Custodian to the safekeeping of its own property; PROVIDED, HOWEVER,
Custodian's responsibility under paragraph 3 is limited to losses occasioned by
the negligence, willful misconduct or bad faith of its employees or by robbery,
burglary, theft or destruction while the securities are in Custodian's physical
possession.  With respect to deliveries of securities to a third party,
Custodian shall be deemed no more than an "intermediary" as defined in Section
8-306(3) of the New York Uniform Commercial Code.  Custodian shall not be under
any obligation to any Person to insure Custodian or the Custodian Account
against loss.  Provided that Custodian shall maintain an off-premises, back-up
information storage site for its custodial books and records which i) shall
include books and records documenting the contents of Company's Custodian
Account; ii) shall enable Custodian to continue to do business in a commercially
reasonable manner; and iii) shall enable Custodian, through the normal course of
business, to physically replace all of the Account Securities controlled by
Custodian on behalf of Company.  Custodian shall not be liable under any
circumstances for loss or damage due to war, insurrection, terrorist act, civil
disobedience, hurricane, cyclone, tornado, earthquake, volcanic eruption, other
similar natural disaster, nuclear fusion or fission or radioactivity.  Custodian
shall not be liable for loss or damage due to equipment failure, except such as
is due to its own negligence, willful misconduct, or bad faith.

     (b)  LIABILITY FOR LOSS.  In the event of loss or damage to Account
Securities for which Custodian is liable under the foregoing provisions of this
paragraph 4, Custodian shall replace such Account Securities with securities of
the same class and issue, together with all rights and privileges pertaining
thereto; PROVIDED THAT, if the Account Securities so lost are subject to a
contract of sale and Custodian is unable to deliver the Account Securities or
replacements therefor for settlement on the date specified in Instructions,
Custodian shall be liable to Company for the contract price of the Account
Securities so sold plus simple interest thereon at the prime rate as reported in
the Wall Street Journal computed from the specified settlement date to the date
of payment to Company.

5.   TRANSACTIONS.

     (a)  INSTRUCTIONS.  Company may from time to time give Custodian, or
appoint an Investment Adviser to give Custodian, Instructions concerning
purchases and sales and other transactions with respect to Account Securities
and Custodian shall effect such transactions subject to the provisions and
undertakings of this paragraph 5.  No person shall have access to Account
Securities or the right to order or effect transactions in Account Securities
except as set forth in this Agreement or in Instructions.

     (i)  AUTHORIZATION TO ACT ON INSTRUCTIONS.  Custodian is authorized to
     accept, act upon and rely upon Instructions that Custodian believes in
     good faith to have been given by an Authorized Person, or that are
     transmitted with proper testing or authentication in accordance with
     procedures specified by Custodian, or that are transmitted
     electronically through Custodian's POL*ARIS communications system or
     any similar electronic instruction system acceptable to Custodian.


                                        4
<PAGE>

     (ii)  RELIANCE ON INSTRUCTIONS.  Custodian shall incur no liability to
     Company or otherwise and shall be fully protected in acting in
     compliance with and reliance on Instructions that Custodian reasonably
     believes in good faith to be genuine and to be signed, sent or made by
     an Authorized Person, including oral Instructions which are promptly
     confirmed in accordance with Section 1(f) hereof.  If Instructions are
     required to be given before the Custodian may act and such
     Instructions have not been given, Custodian shall contact Company to
     inform it of the absence of required Instructions and shall allow
     Company a commercially reasonable time to provide Custodian with
     Instructions.

     (iii)  ERRORS IN INSTRUCTIONS.  Custodian shall not be responsible for
     any errors or inaccuracies contained in Instructions, which are
     properly confirmed, except where such errors or inaccuracies are due
     to its own negligence, willful misconduct or bad faith.

     (b)  DELIVERIES AND RECEIPTS.  In accordance with Instructions, Custodian
shall deliver specified Account Securities (including cash in the Custodian
Account) to the Person designated in such Instructions and shall receive in
exchange therefor the Securities and/or cash and/or other property specified
therein.  Account Securities may be delivered "free" if the Instructions so
specify and the Instructions are authorized by two, separate, Authorized
Persons.  If cash is to be delivered by Custodian, the Custodian Account shall
be charged by Custodian on the actual settlement date.  Receipts of cash by
Custodian shall be effected in accordance with paragraph 5(c). Custodian shall
exercise customary care and diligence in examining and verifying the
certificates or other indicia of ownership of the securities or other property
received before accepting or paying for same.  If Instructions direct Custodian
to deliver certificates or other physical evidence of ownership of Account
Securities to any Person other than a Depository, Custodian's sole
responsibility shall be to exercise customary care and diligence in effecting
the delivery as instructed and collecting payment therefor.  Notwithstanding the
foregoing, if the delivery and/or receipt is effected through the facilities of
a Depository, Custodian's responsibilities shall be limited to using customary
care and diligence in verifying proper consummation of the transaction by the
Depository.  Upon completion of a delivery, Custodian shall be discharged
completely of any liability or responsibility from claims with respect to the
safekeeping and custody of Account Securities which may occur at a time
subsequent to the period in which Custodian had control over the Account
Securities.  Nothing herein shall relieve the Custodian of responsibility for
any act or omission to act of Custodian which occurred prior to the completion
of such a delivery.

     (c) DELIVERY AGAINST PAYMENT.  In accordance with Instructions, Custodian
will deliver or cause to be delivered the Account Securities thus designated as
sold for the Custodian Account of Company to the broker or other person
specified in the Instructions relating to such sale, such delivery to be made
only upon receipt of payment therefor in such form as shall be satisfactory to
Custodian and Company, with the understanding that Custodian may deliver or
cause to be delivered Account Securities for payment in accordance with the
reasonable customs prevailing among dealers in securities.


                                        5
<PAGE>

     (d)  TIMELY INSTRUCTIONS.  Company, or its Investment Adviser, as the case
may be, shall be responsible for ensuring that Custodian receives timely,
correct and complete Instructions to enable Custodian to effect settlement of
any purchase of Securities or sale of Account Securities on the contract
settlement date.  If Custodian does not receive such Instructions within a
reasonable time prior to the contract settlement date and Custodian notifies
Company of the absence of such Instructions, Custodian shall have no liability
of any kind to any Person for failing to effect settlement on the contract
settlement date.

     (e)  LIMIT OF RESPONSIBILITY.  Custodian, in its capacity as such, shall
have no responsibility to manage or recommend investments of Account Securities
or to initiate or effect any purchase, sale, or other investment transaction in
the absence of Instructions from Company or the Investment Adviser.  Custodian
shall hold cash in the Custodian Account, subject to receipt of such
instructions, without liability for interest thereon; provided, however, that
should any cash remain in the Custodian Account said cash shall be swept, daily,
into an investment vehicle chosen by Company, subject to the terms and
conditions applicable to such investment vehicle.  Custodian shall in no event
be responsible or liable for:

     (i)  the validity of the issue of any Securities purchased by Company,
     the legality of the purchase thereof, or the propriety of the amount
     paid therefor;

     (ii)  the legality of the sale of any Securities by Company, or the
     propriety of the amount for which the same are sold;

     (iii)  the legality or propriety of any borrowing or loan by Company; or

     (iv)  any money, whether or not represented by any check, draft or other
     instrument for the payment of money, received by it on behalf of Company
     until Custodian actually receives and collects such money directly by the
     final crediting of the Custodian Account or the Account representing
     Company's interest in the Depository.

     (f)  CORPORATE ACTIONS.  In no event shall Custodian be responsible to
ascertain or to take any action concerning, any maturities, puts, calls,
conversions, exchanges, reorganizations, voting of proxies, offers, tenders or
similar matters relating to Account Securities, whether physically held by
Custodian or on deposit with a Depository, other than to deliver to Company and,
if directed by Company, to its Investment Adviser, notices and information
relating to any such corporate action received by Custodian from any issuers,
offerors, or otherwise.  Custodian's sole responsibility in this regard shall be
to deliver promptly to Company or its Investment Adviser, as the case may be,
such notices proxies, offers tenders or similar matters and properly signed
proxies after Custodian receives them, and Custodian shall not otherwise act
with respect to any such notice unless and until Custodian has received
appropriate Instructions from Company or the Investment Adviser, as the case may
be. Company agrees and will instruct its Investment Adviser that any
Instructions to Custodian with respect to any such corporate actions must be
delivered to Custodian within sufficient time for Custodian to act thereon if
any action by Custodian is required.  As used herein, "sufficient time" shall
mean at any time up to the last permissible hour on the date for action
specified by Custodian in


                                        6
<PAGE>

Custodian's written notice hereunder and Custodian shall have no liability to
any person for Custodian's failure to act upon any such Instructions for the
Custodian Account received by Custodian at any time after such hour and date.

     (g) ALLOCATION OF PARTIAL REDEMPTION.  Should any Account Securities held
in a Depository be called for a partial redemption by the issuer of such
securities, Custodian is authorized to accept allocation as determined pursuant
to the program therefor then in effect at such Depository or, in the absence of
any such program, Custodian's sole discretion to allot the called portion to the
respective holders in any manner deemed to be fair and equitable in its
judgment.

     (h) FOREIGN SECURITIES. With respect to Account Securities issued by
foreign entities or other Account Securities for which adequate corporate
information is not readily available, Custodian's responsibility is expressly
limited to safekeeping.  With respect to such Account Securities, Custodian
assumes no responsibility for following such Account Securities or their issuers
for coupon payments, redemptions, exchanges or similar matters affecting such
Account Securities.  Collections of monies in foreign currency, to the extent
possible, will be converted into U.S. dollars at customary rates in accordance
with Custodian's normal procedures.  All risks and expenses incident to such
foreign collections and conversions are assumed by the Custodian Account, and
Custodian shall have no responsibility for fluctuations in exchange rates
affecting such collections or conversions.

     (i) PROCEEDS.  Unless Company is informed otherwise in writing by
Custodian, the proceeds of sales, redemptions, collections, and other receipts,
and dividend and interest income will be credited, subject to collection, by
Custodian to the Custodian Account promptly upon receipt and in no event later
than the availability schedule attached hereto, marked Exhibit D and by this
reference incorporated herein.

     (j) EXCHANGES.  Custodian is authorized, without Instructions, to exchange
temporary for definitive certificates and old certificates for new or
overstamped certificates evidencing a change therein.

     (k) DEPOSITORY DELIVERIES.  In complying with Instructions for delivery of
eligible transactions, Custodian will make deliveries through (i) the Federal
Reserve System, pursuant to Subpart 0 of the Treasury Department Circular #300
(31 Code of Federal Regulations Part 306), and operating circulares of the
Federal Reserve Bank of New York, or (ii) the facilities of any other Depository
pursuant to Section 8-320 of the New York Uniform Commercial Code and the Rules
and Procedures of such Depository.

     (l) AVAILABLE FUNDS. Custodian is not obligated to effect any transaction
or make any payment in connection therewith unless there are sufficient
available funds on deposit in the Custodian Account or funds have otherwise been
made available to Custodian therefor to its satisfaction.  Should Custodian not
effect a transaction or make a payment it shall immediately notify Company of
such fact so that Company may make appropriate alternate arrangements to
effectuate the transaction or make the payment.  The amount by which payments
made by Custodian with respect to property in, or to be received for, the
Custodian Account, or with respect to other transactions pursuant to this


                                        7
<PAGE>

Agreement, exceed available funds and result in an account overdraft shall be
deemed a loan from Custodian to Company, payable on demand and bearing interest
at the then current rate customarily charged by Custodian on similar loans.  All
such loans shall be based on Custodian's sole determination to make the
underlying advance in each case.

     (m) MANDATORY EXCHANGE.  Anything in paragraph 5(f) to the contrary
notwithstanding, Custodian will, without Instructions, surrender and exchange
Account Securities for other Securities in connection with any maturity,
reorganization, recapitalization, or similar transaction in which the owner of
the Account Securities is not given an option; provided, however, Custodian
shall be responsible to effect any such exchange only upon receiving actual
notice of the event permitting or requiring such exchange.  For purposes of this
subparagraph, actual notice shall mean notice that is received by Custodian from
the issuer of the Security, the agent of the issuer of the Security, a
nationally recognized subscription service, the Company, or from any other
source which would enable Custodian to act in a commercially reasonable manner.
To facilitate any such exchange, Custodian is authorized to surrender against
payment maturing Obligations and Obligations called for redemption; provided,
however, that Custodian deliver to Company notice of such exchange five (5)
business days prior to the actual exchange taking place.

     (n) RECEIPT OF PAYMENTS.  Subject to the provisions of this Agreement, and
unless and until it receives Instructions to the contrary, Custodian is
authorized to:

     (i)  present for payment all coupons and other income items held in
     the Custodian Account;

     (ii)  receive payments of interest and principal, dividends, warrants,
     and other things of value in connection with Account Securities and
     hold such payments in the Custodian Account, with notice thereof to
     Company;

     (iii)  sign for Company all declarations, affidavits, certificates or other
     documents that may be required to collect or receive payments or
     distributions with respect to Account Securities and disclose, without
     further consent of Company, Company's identity to issuers of Account
     Securities, or the agents of such issuers, who may request such disclosure.

Recapitalization and stock distributions will be credited upon receipt to the
Custodian Account.

     (o)  LENDING OF ACCOUNT SECURITIES.  Custodian shall have the power and
authority to lend Account Securities only in accordance with the terms of a
separate securities lending agreement, if any, entered into between Custodian
and Company.

6.   REPORTS, BOOKS AND RECORDS

     (a)  RECORDS.  On behalf of the Company, Custodian shall keep all original
books and records concerning the Account Securities held in the Custodian
Account and the security transactions directed by Company or its Investment
Adviser.  The books and records pertaining to Company that are in the


                                        8
<PAGE>

possession of Custodian shall be the property of Company.  Upon the reasonable
request of Company, copies of any such books and records shall be provided by
Custodian to Company or Company's authorized representative.

     (b)  REPORTS AND STATEMENTS.  Books and records prepared and maintained by
Custodian pursuant to this Agreement shall promptly post each transaction to the
appropriate Custodian Account, as specified in Instructions.  Custodian shall
make available to Company, by POL*ARIS or in the manner otherwise agreed upon,
transaction reports and a summary of the transfers to or from the Custodian
Account during said business day. Custodian shall make available to Company, by
POL*ARIS or in the manner otherwise agreed upon, a statement of transactions and
holdings in the Custodian Account on a monthly basis or at such other intervals
as Custodian and Company shall mutually agree. Said monthly reports shall be
delivered to Company prior to the fifth (5th) business day of each calendar
month.

     (c)  ADDITIONAL BOOKS AND RECORDS.  In addition to its internal record
requirements, Custodian shall create and maintain such books and records and
provide such reports with respect to the Custodian Account as Custodian and
Company shall agree upon from time to time.

     (d)  INSPECTION.  The books and records of Custodian pertaining to the
Custodian Account shall be open to inspection and audit at reasonable times by
duly authorized officers, employees and auditors employed by Company.  The costs
incurred by Custodian in connection with routine periodic inspections and audits
shall be borne by Custodian.  Any such costs incurred in connection with
extraordinary inspections and audits shall be charged to and paid by Company.

     (e)  OPINION OF COMPANY'S INDEPENDENT ACCOUNTANT.  Custodian shall take all
reasonable actions, as Company may from time to time request, to enable the
Company to obtain from year to year favorable opinions from Company's
independent accountants with respect to Custodian's activities hereunder.

     (f)  REPORTS BY CUSTODIAN'S INDEPENDENT PUBLIC ACCOUNTANTS.  Custodian
shall provide Company no less frequently than once per year with reports by
independent public accountants on  Custodian's system of internal accounting
control relating to the services provided by Custodian under this Agreement.
Such reports shall state that such system is sufficient to meet the objective of
providing management with reasonable, but not absolute, assurance that assets
for which custodian has responsibility are safeguarded against loss from
unauthorized use or disposition, and that transactions are executed in
accordance with appropriate authorizations and in conformity with the governing
instruments and are recorded properly to permit the preparation of the required
financial reports.

     (g) OTHER REPORTS.  Custodian shall provide Company with any report
received by Custodian on the system of internal accounting control of any
Depository and with any such reports on its own systems of internal or other
accounting control as Company may reasonably request from time to time.

     (h) POL*ARIS.  Company has the option to elect to participate in
Custodian's POL*ARIS Service, an electronic communications service that
provides, on a daily basis, the ability to view on-line


                                        9
<PAGE>

or to print out hard copy of all transactions involving the delivery in and out
of Account Securities on a free or payment basis, payments of principal and
interest or dividends, pending transactions and fails, and schedules of
Custodian Account holdings.

          (i)  SECURITY OF TERMINAL.  In the event that Company subscribes
     to the POL*ARIS Service, Company shall be fully responsible for the
     security of its Connecting terminal(s), access thereto and the proper
     and authorized use thereof, and Company's initiation and application
     of continuing effective safeguards.  In this connection, except for
     any instance involving Custodian's own negligence, willful misconduct
     or bad faith, and in addition to any other undertakings by Company in
     this Agreement, Company agrees to defend and indemnify Custodian and
     to hold Custodian harmless from and against any and all suits,
     actions, proceedings at law or in equity, claims (groundless or
     otherwise), liabilities, losses, damages, payments, settlements,
     penalties, fines, costs (including fees and disbursements of counsel
     selected by Custodian) and every other expense of every nature
     asserted against or incurred by Custodian as a result of any improper
     or unauthorized use of such terminal(s) whether on the premises of
     Company, an Investment Adviser, or the agent of either; but not
     including Custodian or any agent thereof.

          (ii) PRICING SERVICES.  To the extent that the POL*ARIS Service
     provided hereunder shall include market values of the Custodian Account
     holdings, Custodian may, at its discretion, obtain such information from
     outside sources that Custodian reasonably deems to be reliable.  Custodian
     does not verify, represent or warrant either the accuracy or the
     completeness of any such information transmitted through the POL*ARIS
     Service.

7.   INVESTMENT ADVISERS AND INVESTMENTS

     (a)  APPOINTMENT OF INVESTMENT ADVISERS.  Company may appoint one or more
Investment Advisers to manage the assets held in the Custodian Account.  The
terms and conditions of appointment and authority of any Investment Adviser
shall be the sole responsibility of Company.  Company shall promptly notify
Custodian by means of Instructions of the appointment and removal of an
Investment Adviser, the portion of the Custodian Accounts that are subject to
the investment control of such Investment Adviser and all other facts pertinent
to such Investment Adviser's authority to give Instructions, including a
designation of the Authorized Persons of such Investment Adviser.

     (b) INVESTMENT REVIEW.  Custodian shall be under no duty or obligation to
review any investment or reinvestment made or received upon the Instructions of
Company or any Investment Adviser.  Without limiting the generality of the
foregoing, with respect to each transaction, the Authorized Person giving the
Instructions shall have the entire responsibility for assuring that the
transaction does not violate the prohibitions of any applicable state or federal
law, applicable Investment Adviser agreement, any restrictions or guidelines
applicable to the Investment Adviser in an Investment Adviser agreement, or
court order or judgment affecting the administration of the Custodian Account or
adversely affect the tax treatment of the Custodian Account.



                                       10
<PAGE>

8.   AGENTS, DEPOSITORIES AND SUB-CUSTODIANS

     (a) AGENTS. Custodian may at any time or from time to time, appoint at its
own expense, (and may at any time remove) any other bank, trust company or
responsible commercial agent as its agent to carry out such of the provisions of
this Agreement as Custodian may from time to time direct, PROVIDED THAT the
appointment of any such agent shall not relieve Custodian of any of its
responsibilities and liabilities under this Agreement.

     (b)  SUB-CUSTODIANS AND DEPOSITORIES.  Custodian may appoint at its own
expense and risk one or more banking institutions or Depositories, domestic or
foreign, to act as Sub-Custodian or as Depository of Account Securities,
PROVIDED THAT Company shall have informed Custodian by means of Instructions
that such entity has been approved by all requisite action as a Sub-Custodian or
Depository for Account Securities and Custodian shall have received no
subsequent Instructions rescinding such approval, and FURTHER PROVIDED THAT the
appointment of any Sub-Custodian or Depository shall not relieve Custodian of
any of its responsibilities or liabilities under this Agreement.

9.   LEGAL PROCEEDINGS

     Other than legal proceedings which are initiated in response to Custodian's
willful misconduct, negligence or bad faith, Custodian shall not be required to
initiate, appear in or defend any legal proceedings or take any other similar
action with respect to the Custodian Account or Account Securities unless
Custodian has been indemnified to its satisfaction against any loss and expense
(including attorneys' fees) likely to be suffered or incurred thereby.
Notwithstanding anything herein to the contrary, Custodian shall be required to
affirmatively assist Company in any legal proceeding or similar action with
respect to the Custodian Account Securities.

10.  INDEMNIFICATION OF CUSTODIAN

     (a) INDEMNIFICATION.  In its capacity as Custodian, Custodian shall not be
liable for any act or failure to act of Company or Company's Investment Adviser.
Custodian shall not be liable for any error of judgment or mistake of law or,
except as expressly provided to the contrary in paragraph 4, for any loss
suffered by the Custodian Account unless resulting from willful misconduct, bad
faith or negligence on the part of Custodian in the performance of its duties or
from the disregard by Custodian of its obligations and duties under this
Agreement. Except as otherwise expressly provided to the contrary in the
preceding sentence, Custodian shall be indemnified against and held harmless
from any and all suits, actions, proceedings at law or in equity, claims
(groundless or otherwise), liabilities, losses, damages, payments, settlements,
penalties, fines, costs (including fees and disbursements of counsel selected by
Custodian and approved by Company, which approval shall not be unreasonably
withheld) and every other reasonable expense of every nature asserted against or
incurred by Custodian in any way arising from Custodian's appointment hereunder.
If amounts due Custodian pursuant to this paragraph 10 are not paid out of the
Custodian Account for any reason, they shall be paid by Company. Custodian
agrees to inform Company in writing of any event which comes to its notice as a
result of which the Custodian Account or Company might become liable to
indemnify Custodian under these


                                       11
<PAGE>

provisions, provided that any reasonable delay in so doing shall not in any way
affect the Custodian Account's or Company's obligation to Custodian hereunder.
Custodian's right to indemnification shall survive the termination of this
Agreement.

     (b) PARTICIPATION IN LITIGATION.  In the event any action or proceeding
shall be brought against Custodian, in its capacity as such,  it shall notify
Company of the commencement thereof, and, subject to all provisions hereof and
to the extent that it shall wish, Company shall be entitled to participate
therein or to assume the defense thereof.   After notice from Company to
Custodian of its election so to assume the defense of such action or proceeding
and to pay all fees and expenses of such counsel, Company shall not be liable to
Custodian for any legal expenses of other counsel or any other expenses, in each
case subsequently incurred by Custodian, in connection with the defense thereof
other than reasonable costs of investigation, unless either Company or Custodian
shall have been advised at any time by counsel, agreeable to both Company and
Custodian, that the assumption or continuation of such defense by Company would
be inappropriate under applicable standards of professional conduct on account
of actual or potential differing interests between Company and Custodian or
under fiduciary principles applicable to the Custodian Account. Custodian may,
at any time, waive its right to indemnification hereunder and assume its own
defense.

     (c) BREACH OF REPRESENTATION OR WARRANTY.  Company's liability under the
foregoing indemnification shall cover, without limitation, all loss, liability,
claims, damages and expenses resulting from a breach of any representation or
warranty delivered herein by Company.

11.  REPRESENTATIONS AND WARRANTIES OF COMPANY

     Company hereby represents, warrants and covenants to Custodian that:

     (a)  the employment of Custodian and the allocation of fees, expenses and
other charges to the Custodian Account as herein provided, is not prohibited by
law or any governing documents or contracts relating to the Custodian Account or
the maintenance of custodian accounts for Company as contemplated herein;

     (b)  the terms of this Agreement do not violate any obligation by which
Company is bound, whether arising by contract, operation of law or otherwise;

     (c)  this Agreement has been duly authorized by appropriate action and when
executed and delivered will be binding upon Company in accordance with its
terms;

     (d) Company will deliver to Custodian such evidence of such authorization
as Custodian may reasonably require, whether by way of a certified resolution,
opinion of counsel or otherwise;

     (e)  Custodian, in its capacity as such, is not required to maintain any
fidelity bond insurance with respect to Account Securities pursuant to the
requirements of any law applicable to Company;


                                       12
<PAGE>

     (f)  Company has furnished Custodian the names and original or facsimile
signatures of all Authorized Persons currently authorized to act on behalf of
Company pursuant to this Agreement; and

     (g)  with respect to matters covered by this Agreement, Custodian shall be
entitled to assume any document delivered herewith remains in effect and any
Authorized Person or Investment Adviser named herein or pursuant hereto
continues to be authorized to act hereunder until Custodian is notified by means
of Instructions as to any amendment, change or substitute.

12.  REPRESENTATIONS AND WARRANTIES OF CUSTODIAN

     Custodian hereby represents, warrants and covenants to Company that:

     (a)  the terms of this Agreement do not violate any obligation by which
Custodian is bound, whether arising by contract, operation of law or otherwise;

     (b)  this Agreement has been duly authorized by appropriate action and when
executed and delivered will be binding upon Custodian in accordance with its
terms;

     (c)  Custodian will deliver to Company such evidence of such authorization
as Company may reasonably require, whether by way of a certified resolution,
opinion of counsel or otherwise;

     (d)  Custodian, in its capacity as such, is not required to maintain any
fidelity bond insurance with respect to Account Securities pursuant to the
requirements of any law applicable to Custodian;

     (e)  Custodian has furnished Company the names of all Persons currently
authorized to act on behalf of Custodian hereunder; and

     (f)  with respect to any matters covered by this Agreement, Company shall
be entitled to assume any document delivered herewith remains in effect and any
Person named herein or pursuant hereto continues to be authorized to act
hereunder until it is notified of any amendment, change or substitute.

13.  FEES, EXPENSES AND OTHER CHARGES

     (a)  FEE SCHEDULES.  For the services provided hereunder, Company shall pay
Custodian monthly in arrears a fee calculated and accrued in accordance with
Custodian's applicable fee schedule set forth in Exhibit E, attached hereto and
as amended from time to time made a part hereof.  Such fee schedule does not
include reasonable out-of-pocket disbursements of Custodian for which Custodian
shall be entitled to be reimbursed by Company.  Except for fees and expenses
which are the result of Custodian's negligence, willful misconduct or bad faith,
Custodian shall be entitled to reimbursement for all reasonable out-of-pocket
fees and expenses of counsel arising from the performance of Custodian's duties
hereunder, such reasonable out-of-pocket disbursements, fees and expenses shall
include but shall not be limited to the items specified in Exhibit F, attached
hereto.   Exhibit F may be modified by Custodian upon not less than sixty (60)
days prior written notice to Company.


                                       13
<PAGE>

     (b) PAYMENT.    Custodian will invoice Company as soon as practicable after
the end of each calendar month and said invoices will be detailed in accordance
with the applicable fee schedule(s) and will include reimbursable out-of-pocket
disbursements.

14.  TERM AND TERMINATION

     (a)  TERM.  This Agreement shall become effective on the date first set
forth above.

     (b)  NOTICE OF TERMINATION.  Company may terminate this Agreement and the
Custodian Account upon thirty (30) days written notice to the Custodian.  The
Custodian may terminate this Agreement and the Custodian Account upon ninety
(90) days written notice to the Company.

     (c)  DELIVERY OF ACCOUNT SECURITIES AND OTHER PROPERTY.  Upon termination,
Custodian shall deliver in proper form for transfer all Account Securities
specified in the notice of termination, or cause such to be delivered, to a
successor custodian designated by Company or, if a successor custodian has not
accepted an appointment by the effective date of termination of the Custodian
Account, to Company if the Board of Directors or Board of Trustees of the
Company has authorized the Company to maintain the custody of its own assets in
accordance with Rule 17f-2 under the 1940 Act, and if not, then to a custodian
appointed by a court of competent jurisdiction.  Custodian shall be entitled to
be reimbursed for any reasonable expenses incurred in connection with such
delivery unless such termination is at Custodian's request.  Custodian agrees to
cooperate with Company and any substitute or successor custodian appointed by
Company during a reasonable transition period.

     (d)  In the event a notice of termination is given by Custodian, Company
shall, on or before the specified termination date, deliver to Custodian a
resolution of the Board of Directors Company designating a successor custodian
or custodians.  In the absence of such designation by Company, Custodian shall
deliver all of the effected Account Securities to the designee of Company which
will, upon delivery, be deemed to be the successor custodian.

15.  TAXES

     (a) FILINGS.  Custodian shall have no responsibility to file any tax
returns regarding the Custodian Account or the Account Securities.  Custodian is
authorized and empowered to execute any certificates of ownership or other
reports, declarations or affidavits that it is or may hereafter be required to
execute and furnish under any regulation of the Internal Revenue Service, or by
or under any other authority of the United States or any jurisdiction, which are
required in connection with any property that is now or may hereafter be held in
the Custodian Account.  The authority granted to Custodian in this section 15 is
conditioned upon Company's prior exhaustion of all its rights of challenge and
appeal regarding said regulations or United States authority. Company agrees to
notify Custodian immediately in writing of any material change in status that
may affect any such certificates, reports or other required documents or the
contents thereof.

     (b) INDEMNIFICATION.  Company agrees to indemnify the Subcustodian and any
nominee in whose name Account Securities or other property of Company is
registered against any liability


                                       14
<PAGE>

Custodian or such nominee may incur by reason of taxes assessed to Custodian or
such nominee resulting directly or indirectly from the fact that Account
Securities or other property of Company are registered in the name of Custodian
or such nominee; PROVIDED, HOWEVER, said indemnity obligation is subject to
Company's prior exhaustion of all lawful or legal challenge or appeal rights
regarding any tax or related liability.  Custodian's right to indemnification as
aforesaid shall survive the termination of this Agreement.

16.  ADVICE

     Custodian may from time to time consult with counsel to Company or with an
Authorized Person in connection with its obligations arising hereunder and shall
be fully protected in acting upon the written advice or instructions of such
counsel or Authorized Person, as the case may be.

17.  ADDRESSES

     Except as provided to the contrary with respect to Instructions and until
further notice from either party, any notices delivered pursuant to this
Agreement, and all other communications shall be in writing and shall be
delivered or sent to the following addresses or such other addresses as from
time to time may be specified hereunder:

     If to Company:

     Farm Bureau Insurance Companies
     5400 University Avenue
     West Des Moines, IA 50266
     Attn: Investment Accounting

     If to Custodian:

     Banker's Trust
     16 Wall Street
     New York, N.Y.  10005
     Attn: David F. Hoyt

All notices and other communications shall be effective when received.  The
party seeking to rely on notice having been given under this paragraph 16 shall
be responsible for ascertaining the facts thereof.

18.  MISCELLANEOUS

     (a)  INFORMATION TO AND CONSENT OF CUSTODIAN.  During the term of this
Agreement, Company shall furnish to Custodian at its office, prior to any
distribution thereof, copies of any materials prepared for distribution to any
Persons who are not parties hereto that refer in  a material way to Custodian.
Company shall not distribute or permit the distribution of such materials if
Custodian reasonably objects in writing within five (5) business days (or such
other time as may be mutually


                                       15
<PAGE>

agreed) after receipt thereof.  Company shall furnish or otherwise make
available to Custodian such other information relating to the business affairs
of Company as Custodian at any time, or from time to time, reasonably requests
in order to discharge its obligations hereunder.

     (b)  SCOPE OF THE AGREEMENT.  This Agreement contains the whole of the
understanding between the parties with respect to the subject matter hereof.

     (c)  AMENDMENT.  This Agreement may be amended at any time by a written
instrument signed by an Authorized Person of Company and by a duly authorized
officer of Custodian.

     (d)  SEVERABILITY.  If any provision of this Agreement is determined to be
invalid or unenforceable, such determination shall not affect the validity or
enforceability of any other provisions of this Agreement.

     (e)  NO WAIVER.  No term or provision hereof shall be deemed waived and no
breach excused unless such waiver or consent shall be in writing and signed by
the party claimed to have waived or consented.  No waiver of any term or
provision hereof shall be deemed a continuing waiver unless it is so designated.
Any consent by any party to a breach by the other, whether express or implied,
shall not constitute a consent to or excuse for any other breach.

     (f)  CAPTIONS.  The captions of this Agreement are included for convenience
of reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect.

     (g)  ASSIGNMENT.  This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their heirs, successors, and assigns; PROVIDED
HOWEVER, this Agreement shall not be assignable by Company without the written
consent of Custodian, or by Custodian without the written consent of Company,
and any attempted assignment without such written consent shall be null and
void.

     (h)  GOVERNING LAW.  This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.



     IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.

FARM BUREAU LIFE INSURANCE         BANKERS TRUST COMPANY
COMPANY

By:                                     By:
     --------------------                    --------------------
     --------------------                    --------------------
     Its:                                    Its:
          ---------------                         ---------------


                                       16
<PAGE>

                                   APPENDIX A:
                          MUTUAL FUND CUSTODY ACCOUNT-
                              FBL SERIES FUND, INC.

     THIS MUTUAL FUND CUSTODY ACCOUNT AGREEMENT (hereinafter the "Appendix"),
dated January 12, 1993, is entered into by and between FBL SERIES FUND, INC.,
a Maryland corporation ("Company") and BANKERS TRUST COMPANY, a New York
banking corporation ("Bankers Trust").

     WHEREAS, both Bankers Trust and Company desire to have the Mutual Fund
Custody Account- FBL Series Fund, Inc. governed by the terms and provisions
of the Custodian Account Agreement dated December 15, 1992 (the "Agreement"),
as hereby amended;

     NOW, THEREFORE, in consideration of the mutual covenants contained in the
Agreement and this Appendix and other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, agree as follows:

1.   Section 1 entitled DEFINITIONS is amended as follows:

     (d)  "DEPOSITORY" means any centralized securities depository system,
domestic or foreign, whether presently or hereafter organized, in which
Custodian participates, and shall include (i) the Depository Trust Company, (ii)
the Federal Reserve Book-Entry System, (iii) the Participant's Trust Company, or
(iv) any other centralized securities depository system selected by Custodian,
but subject to the approval of Company's Board of Directors or Trustees and any
required approval by regulatory authorities applicable to Custodian in the
conduct of its business as Custodian.  The term "Depository" shall further mean
and include any other person to be named in a certificate issued by Custodian
and approved by Company's Board of Directors or Company's Board of Trustees and
authorized to act as a depository under the 1940 Act, including its successor or
successors and its nominee or nominees.

     (f)  "INSTRUCTIONS" means a communication received by Custodian from one or
more Authorized Persons directing action or delivering information pursuant
thereto in regard to Company's Account Securities, Securities or Portfolios.
Instructions may be oral or written and may be delivered (i) by telephone, (ii)
in hard copy, or (iii) by computer, electronic instruction system or
telecommunications terminals, which shall include but not be limited to, a
telex, a TWXS, a facsimile transmission, a bank wire or Custodian's proprietary
POL*ARIS Service; PROVIDED,HOWEVER, THAT the Parties hereto or Custodian and
Investment Adviser, as the case may be, shall have agreed herein to the form,
the means of transmission and the means of identification of such Instructions;
FURTHER PROVIDED THAT Instructions initially given orally shall be confirmed
within the thirty (30) minute period immediately following the initial receipt
of the Instructions by Custodian in  a manner consistent with clauses (ii) or
(iii) above. Instructions shall conform to operating procedures communicated
from time to time by Custodian to Company.

     (k)  "1940 ACT" refers to the Investment Company Act of 1940, and the Rules
and Regulations thereunder, all as amended from time to time.


                                       21
<PAGE>

     (l)  "PORTFOLIO" means Account Securities grouped together in a separate
investment portfolio of Company.  Company shall provide Custodian with a listing
of Company's Portfolios.

2.   Section 6 entitled REPORTS, BOOKS AND RECORDS is amended as follows:

     (a)  RECORDS.  On behalf of Company, Custodian shall keep all original
books and records concerning the Account Securities and the Security
transactions directed by Company or its Investment Advisor.  The books and
records pertaining to Company that are in the possession of Custodian shall be
the property of Company.  Such books and records shall be prepared and
maintained as required by the 1940 Act and other applicable securities laws and
rules and regulations.  Upon the reasonable request of Company, copies of any
such books and records shall be provided by Custodian to Company or Company's
authorized representative.

     (b)  REPORTS AND STATEMENTS.  Books and records prepared and maintained by
Custodian pursuant to this Agreement shall reflect the prompt posting of each
transaction to the appropriate Custodian Account and Portfolio, as specified in
Instructions.  Custodian shall make available to Company, by POL*ARIS or in the
manner otherwise agreed upon, transaction reports and a summary of the transfers
to or from the Custodian Account during said business day. Custodian shall make
available to Company, by POL*ARIS or in the manner otherwise agreed upon, a
statement of transactions and holdings in the Custodian Account on a monthly
basis or at such other intervals as Custodian and Company shall mutually agree.
Said monthly reports shall be delivered to Company prior to the fifth (5th)
business day of each calendar month.

     (c)  ADDITIONAL BOOKS AND RECORDS.  In addition to its internal record
requirements, Custodian shall create and maintain such books and records and
provide such reports with respect to the Custodian Account as Custodian and
Company shall agree upon from time to time.  Custodian is not the fund
accountant for Company.  Custodian shall cooperate with the fund accountant and
shall make available to the fund accountant the transaction reports and
statements referred to in paragraph 6(b) above, but Custodian shall not be
responsible for reconciling books and records with those of the fund accountant
or for keeping books and records normally kept by the fund accountant.

     (d)  INSPECTION.  The books and records of Custodian pertaining to the
Custodian Account shall be open to inspection and audit at reasonable times by
duly authorized officers, employees and auditors employed by Company and by
employees and agents of the Securities and Exchange Commission.  The costs
incurred by Custodian in connection with routine periodic inspections and audits
shall be borne by Custodian.  Any such reasonable costs incurred in connection
with extraordinary inspections and audits shall be charged to and paid in
accordance with paragraph 13.

3.   Section 8 entitled AGENTS, DEPOSITORIES AND SUB-CUSTODIANS is amended as
follows:

     (a) AGENTS. Custodian may at any time or from time to time, appoint at its
own expense, (and may at any time remove) any other bank, trust company or
responsible commercial agent as its agent to carry out such of the provisions of
this Agreement as Custodian may from time to time direct,


                                       22
<PAGE>

PROVIDED THAT such agent agrees with custodian to comply with all relevant
provisions of the 1940 Act and applicable rules and regulations thereunder; and
FURTHER PROVIDED THAT the appointment of any such agent shall not relieve
Custodian of any of its responsibilities and liabilities under this Agreement.

     (b)  SUB-CUSTODIANS AND DEPOSITORIES.  Custodian may appoint at its own
expense and risk one or more banking institutions or Depositories, domestic or
foreign, to act as Sub-Custodian or as Depository of Account Securities,
PROVIDED THAT such entity agrees with Custodian to comply with all provisions of
the 1940 Act and applicable rules and regulations thereunder; and FURTHER
PROVIDED THAT Company shall have informed Custodian by means of Instructions
that such entity has been approved by all requisite action as a Sub-Custodian or
Depository for Account Securities and Custodian shall have received no
subsequent Instructions rescinding such approval; and FURTHER PROVIDED THAT the
appointment of any Sub-Custodian or Depository shall not relieve Custodian of
any of its responsibilities or liabilities under this Agreement.

4.   Section 12 entitled REPRESENTATIONS AND WARRANTIES OF CUSTODIAN is amended
as follows:

     (g)  Custodian is qualified as a custodian under Section 26(a) of the 1940
Act and covenants that it will remain so qualified or upon ceasing to be so
qualified shall promptly notify Company in writing.

5.   Section 13 entitled FEES, EXPENSES AND OTHER CHARGES is amended as follows:

     (a)  FEE SCHEDULES.  For the services provided hereunder, Company shall pay
Custodian monthly in arrears a fee calculated and accrued in accordance with
Custodian's applicable fee schedule set forth in Exhibit E, attached hereto and
as amended from time to time made a part hereof.  Such fee schedule does not
include reasonable out-of-pocket disbursements of Custodian for which Custodian
shall be entitled to be reimbursed by Company.  Except for fees and expenses
which are the result of Custodian's negligence, willful misconduct or bad faith,
Custodian shall be entitled to reimbursement for all reasonable out-of-pocket
fees and expenses of counsel arising from the performance of Custodian's duties
hereunder, such disbursements, fees and expenses shall include but shall not be
limited to the items specified in Exhibit F, attached hereto.  Exhibit F may be
modified by Custodian upon not less than sixty (60) days prior written notice to
Company.

     (i) Should Company designate additional Portfolios after the date of
     this Appendix, the parties hereto shall mutually agree upon the fee
     due Custodian for the additional responsibilities assumed by Custodian
     as a result of administering such newly created Portfolios. Such
     mutually agreed upon fee shall be reflected in a written fee schedule
     designated for that Portfolio which shall be dated, signed by an
     officer of each party hereto, and attached to this Appendix as an
     exhibit.

6.   Section 14 entitled TERM AND TERMINATION is amended as follows:



                                       23
<PAGE>

     (b)  NOTICE OF TERMINATION.  Company may terminate this Agreement and the
Custodian Account upon thirty (30) days written notice to the Custodian,
PROVIDED THAT Company may terminate this Agreement and the Custodian Account
upon less notice if it receives notice from Custodian that it is no longer
qualified as a Custodian under Section 26(a) of the 1940 Act.  The Custodian may
terminate this Agreement and the Custodian Account upon ninety (90) days written
notice to the Company.

     (d) In the event that a notice of termination is given by Company, it shall
be accompanied by a certified resolution of the Company's Board of Directors or
Trustees electing to terminate this Agreement with respect to any custodian
account and designating a successor custodian or custodians, which the Company
shall deem to be an entity qualified to so act under the 1940 Act.


     IN WITNESS WHEREOF, the parties hereto have caused this Appendix to be
executed as of the day and year first above written.


FBL SERIES FUND, INC.              BANKERS TRUST COMPANY

By:                                By:
     ---------------                    ---------------
     ---------------                    ---------------
     Its:                               Its:
          ----------                         ----------

By:                                By:
     ---------------                    ---------------
     ---------------                    ---------------
     Its:                               Its:
          ----------                         ----------


                                       24
<PAGE>

                                    EXHIBIT A

                               AUTHORIZED PERSONS
<TABLE>
<CAPTION>
                                                                                                                    SCOPE OF
NAME                          TITLE                                 PHONE                      SIGNATURE            AUTHORITY
- ----                          -----                                 -----                      ---------            ---------
<S>                           <C>                                   <C>                   <C>                       <C>
Richard D. Warming            VP-Investments and Asst Treasurer     (515) 225-5500                                      @
                                                                                          --------------------
Dennis M. Marker              Investment Administration VP          (515) 225-5522                                      @
                                                                                          --------------------
Janet Lamberts                Mutual Funds Manager                  (515) 225-5523                                      @
                                                                                          --------------------
Sharon Jerdee                 Investment Accounting Manager         (515) 225-5912                                      @
                                                                                          --------------------
Jeanne L. Westbrook Smith     Cash Management Administrator         (515) 225-5520                                      @
                                                                                          --------------------
Jody L. Kinseth               Investment Staff Accountant           (515) 225-5899                                      @
                                                                                          --------------------
Ann M. Grogan                 Securities Assistant                  (515) 225-5502                                      $
                                                                                          --------------------
Faith I. Schroeder            Short Term Assistant                  (515) 225-5422                                      $
                                                                                          --------------------
Linda Koenig                  Investment Accounting Asst.           (515) 225-5471                                      $
                                                                                          --------------------
Rita Kurimski                 Accounting Clerk                      (515) 225-5945                                      $
                                                                                          --------------------
</TABLE>



AUTHORITY
@ - Payment Versus Delivery With Out Dollar Limit; Free Deliveries, Limited to
    Confirmation of Instructions Only
$ - Payment Versus Delivery With Out Dollar Limit; Free Deliveries, Limited to
    Instructions Only


                                       32
<PAGE>

                                    EXHIBIT B

                FARM BUREAU FAMILY OF FINANCIAL PLANNING SERVICES

                            LIST OF CUSTODY ACCOUNTS

Account Number                                       Title
- --------------                                       -----
    098629                                 FBL Money Market Fund, Inc.
    098630                                 FBL Series Fund, Inc.
                                           Growth Common Stock Portfolio
    098631                                 FBL Series Fund, Inc.
                                           High Grade Bond Portfolio
    098632                                 FBL Series Fund, Inc.
                                           High Yield Bond Portfolio
    098633                                 FBL Series Fund, Inc.
                                           Managed Portfolio
    098634                                 FBL Series Fund, Inc.
                                           Money Market Portfolio
    098635                                 FBL Series Fund, Inc.
                                           Blue Chip Portfolio
    098636                                 FBL Variable Series Fund, Inc.
                                           Growth Common Stock Portfolio
    098637                                 FBL Variable Series Fund, Inc.
                                           High Grade Bond Portfolio
    098638                                 FBL Variable Series Fund, Inc.
                                           High Yield Bond Portfolio
    098639                                 FBL Variable Series Fund, Inc.
                                           Managed Portfolio
    098640                                 FBL Variable Series Fund, Inc.
                                           Money Market Portfolio
    098641                                 FBL Variable Series Fund, Inc.
                                           Blue Chip Portfolio
    098642                                 Farm Bureau Life Insurance Company
                                           (Commissioner's)
    098643                                 Farm Bureau Life Insurance Company
    098644                                 FBL Insurance Company
                                           (Commissioner's)
    098645                                 FBL Insurance Company
    098646                                 Farm Bureau Mutual Insurance Co.
    098647                                 Utah Farm Bureau Insurance Company
    098648                                 South Dakota Farm Bureau Mutual
                                           Insurance Company
    098649                                 Iowa Farm Bureau Federation
    098650                                 Universal Assurors Life Insurance Co.


                                       33
<PAGE>

                                    EXHIBIT C

                FARM BUREAU FAMILY OF FINANCIAL PLANNING SERVICES

                        AUTHORIZED PERSONNEL OF CUSTODIAN



          Name                                      Title
          ----                                      -----

     Elizabeth Cuevas                        Administrative Assistant

     George Flores                           Account Administrator

     Marlene Maynard                         Assistant Treasurer

     Richard McCormick                       Assistant Treasurer

     Peter Mistretta                         Assistant Vice President

     John Ricciardi                          Assistant Treasurer

     Kashim Skeete                           Assistant Vice President

     Bradford Smith                          Account Administrator

     Lorraine Squires                        Assistant Treasurer

     Marva White                             Assistant Treasurer


                                       34
<PAGE>

                                    EXHIBIT D

                FARM BUREAU FAMILY OF FINANCIAL PLANNING SERVICES

                           INCOME COLLECTION STANDARDS

PD = Payable Date, PD + 1, 2, 3 = One business day after Payable Date, Two
     business days, Three business days.

CH = Clearing House Funds, FF = Fed Funds

<TABLE>
<CAPTION>
                                                                                          Form of
Security Type                                Income Posting                                Funds
- -------------                                --------------                               -------
<S>                                          <C>                                          <C>
CMO's
  Principal and interest                     PD + 1**                                     FF
  Interest Only                              PD                                           FF
Cedel / Euro-clear Securities (US $)         PD +1                                        CH
Cedel / Euro-clear Securities (non - US $)   PD +3****                                    CH US$
Coupon Bonds                                 PD                                           CH
DTC Equities (announced)                     PD                                           FF
DTC Equities (unannounced)                   When received by BTCo.                       FF
DTC Fixed Income                             PD                                           FF
DTC Variable Rates                           PD                                           CH
Fed. Book Entry                              PD                                           FF
Fed. Housing Authority Notes                 PD + 3                                       CH
Fixed Rate Physical Bonds                    PD                                           CH
Foreign Securities                           Upon collection and conversion to US$        CH
Interest Bearing CDs and Deposit Notes       PD***                                        CH
Money Market Preferreds                      PD + 1                                       FF
Pass-through Mortgages                       PD + 3                                       CH
Physical Equities                            PD                                           CH
PTC GNMAs (P&I)                              PD                                           FF
Physical GNMAs (P&I)                         PD + 2                                       FF
Physical U.S. Agencies                       PD + 2                                       FF
Private Placements                           When received by BTCo.                       CH / FF*
Small Business Admin. Loan Certificates      When received by BTCo.                       CH
Unit Investment Trusts                       PD                                           CH
Variable Rate Physical Bonds                 PD                                           CH
</TABLE>

   * In whichever form funds are received by BTCo.
  ** Except final paydown, which is paid upon collection in like funds.
 *** Those requiring presentation will be paid upon collection in like funds.
**** Provided foreign exchange transaction has been completed by the depository.


                                       35
<PAGE>

                               EXHIBIT E - PAGE 1

                FARM BUREAU FAMILY OF FINANCIAL PLANNING SERVICES

                              CUSTODY FEE SCHEDULE

<TABLE>
<CAPTION>

Product / Service                                                     Price
- --------------------------------------------------------------------------------
<S>                                                               <C>
Maintenance                                                       $ 75.00
Depository Bonds                                                  $  1.25
Vault Bonds                                                          2.50
Depository Stock                                                     1.25
Vault Stock                                                          2.50
FBE Automated                                                       12.00
FBE Manual                                                          17.00
DTC Automated                                                        9.00
DTC Manual                                                          14.00
DTC ID                                                               6.00
PTC Automated                                                       12.00
PTC Manual                                                          17.00
Physical Automated                                                  20.00
Physical Manual                                                     25.00
Mortgage Backed Principal & Interest                                 5.00
Private Placement Income                                            15.00
DTC SDFS Surcharge                                                   5.00
Maturities                                                           6.00
Reorganizations                                                     40.00
Cedel Asset Value                                                     .0166 b.p.
Foreign Custody Asset Value                                           .0500 b.p.
Cedel / Euro-CD Transactions                                        15.00
Foreign Custody Transactions                                       100.00
Master Limited Partnerships (per CUSIP)                            100.00
Money Movements                                                      5.00
POL*ARIS Maintenance                                               300.00
Per Record Fee                                                        .00
</TABLE>


                                       36
<PAGE>

                               EXHIBIT E - PAGE 2

                FARM BUREAU FAMILY OF FINANCIAL PLANNING SERVICES

                          CASH MANAGEMENT FEE SCHEDULE
<TABLE>
<CAPTION>
Product / Service                                                  Price
- -----------------                                                 -------

Cash Connector
- --------------
<S>                                                               <C>
BTC Report Accounts (per account)                                 $ 80.00
Money Transfer Repetitive Payment                                   30.00

Money Transfer A
- ----------------

Cash Connector / SWIFT (input)                                    $  2.00
Fed / CHIPS / Book Payments                                          3.00
Fedwire Surcharge                                                     .53
Book Transfers                                                       1.00
Repair Surcharge                                                     1.00
Drawdown Request                                                     4.00
Urgent Form
        Micro Cash Connector                                         2.75
        Custodian Administrator Remit                               10.00

Money Transfer B
- ----------------

Fedwire / CHIPS / Book Receipts                                   $  3.00
Mail Advice                                                           .50
SWIFT Advice                                                          .50
Book Transfer Receipt                                                0.00

Statement Rendition
- -------------------

Maintenance (per account)                                         $ 20.00
Additional Statements (no charge for first statement)                2.00
Credit / Debit Postings                                               .25

FDIC Assessment
- ---------------

Per $100 of the average ledger balances maintained on the
  FDIC call dates                                                 $   .23

Overdraft Charges
- -----------------

Reserve costs plus additional charge based on prime rate
</TABLE>


                                       37
<PAGE>

                                    EXHIBIT F

                FARM BUREAU FAMILY OF FINANCIAL PLANNING SERVICES

                       OUT-OF-POCKET REIMBURSABLE EXPENSES

Postage

Insurance

Re-registration charges

Shipping Expenses (Overnight Courier)

Custodian will make every attempt to keep out-of-pocket expenses as reasonable
as possible.


                                       38

<PAGE>



                                  FIDELITY BOND
                            JOINT INSUREDS AGREEMENT


THIS AGREEMENT is made this 10th day of August, 1988, by and between FBL MONEY
MARKET FUND, INC. ("Money Fund"), FBL SERIES FUND, INC.  ("Series Fund") both
Maryland corporations; FBL Variable Insurance Series Fund ("Insurance Series
Fund") and FBL Institutional Series Fund ("Institutional Series Fund") both
Massachusetts business trusts (collectively the "Funds").

The Funds, all of which are managed by FBL Investment Advisory Services, Inc.,
have acquired a joint insured brokers blanket bond issued by the Employers
Mutual Casualty Company effective September 26, 1976 ("Bond").  The aggregate
amount of the Bond ("Bond Amount") is equal to the summation of the "Basic
Coverage" for each Fund, as indicated in Exhibit A attached hereto.  The Funds
desire to provide herein for an allocation of the premium for the Bond and a
manner of allocating any proceeds received from the Bond.

The Funds, therefore, agree that:
      1.    ALLOCATION OF PREMIUM.  Each Fund shall pay a portion of the
            annual joint Bond premium as agreed to in writing no less often than
            annually by the Funds and attached hereto as Exhibit A.  These
            amounts are determined on the basis of the relative costs to each
            Fund of a single insured bond in the amount of that Fund's Basic
            Coverage as indicated in Exhibit A.

      2.    LOSS TO ONE FUND.  In the event of an insured loss to only one
            Fund, the entire proceeds from the Bond for that loss shall be
            allocated to the Fund incurring such loss.

      3.    LOSS TO MORE THAN ONE FUND.

            (a)   LOSS PERCENTAGES.  For purposes of allocating the coverage
                  of the Bond, each Fund shall have a Loss Percentage as
                  indicated in Exhibit A, which percentages are based upon the
                  percentage of the total Bond coverage represented by the
                  amount of each Fund's Basic Coverage.

            (b)   INITIAL ALLOCATION.  Each Fund involved in an insured loss
                  which involves another Fund shall receive a portion of the
                  proceeds from the Bond equal to the lesser of  (i) the amount
                  of that Fund's loss or (ii) an amount equal to the product of
                  the Bond Amount multiplied by that Fund's Loss Percentage,
                  which initial allocation assures that each Fund shall receive
                  the full amount of its loss up to the amount of its Basic
                  Coverage.


            (c)   SUBSEQUENT ALLOCATIONS.  Any Bond proceeds unallocated after
                  the initial allocation shall be


<PAGE>


                    allocated to the Funds for which the loss was not covered by
                    the initial allocation.

      4.    AGENT.  Series Fund is hereby appointed as the agent for the Funds
            for the purpose of making, adjusting, receiving and enforcing
            payment of all claims under the bond and otherwise dealing with
            Employers Mutual Casualty Company with respect to the Bond.  Any
            expenses incurred by Series Fund in its capacity as agent in
            connection with a claim shall be shared by the Funds in proportion
            to the Bond proceeds received by the Funds for the loss.  All other
            expenses incurred by Series Fund in its capacity as agent shall be
            shared by the Funds in the same portion as their Loss Percentages.

      5.    MODIFICATION AND TERMINATION.  This Agreement may be modified or
            amended from time to time by mutual written agreement among the
            Funds.  It may be terminated with respect to any one Fund by not
            less than 75 days' written notice to the other Funds.  It shall
            terminate as of the date that any Fund ceases to be an insured under
            the Bond; provided that such termination shall not affect such
            Fund's rights and obligations hereunder with respect to any claims
            on behalf of such Fund which are paid under the Bond by Employers
            Mutual Casualty Company after the date such Fund ceases to be an
            insured under the Bond.

      6.    FURTHER ASSURANCES.  Each Fund agrees to perform such further acts
            and execute such further documents as are necessary to effectuate
            the purposes hereof.

IN WITNESS WHEREOF, the Funds have caused this Agreement to be executed as of
the day and year first above written.



Attest:                                      FBL MONEY MARKET FUND, INC.


                                             By:
- ---------------------------                     ------------------------------
Its Assistant Secretary                               Its Vice President



Attest:                                      FBL SERIES FUND, INC.

                                             By:
- ---------------------------                     ------------------------------
Its Assistant Secretary                               Its Vice President




Attest:                                      FBL VARIABLE INSURANCE SERIES FUND


                                             By:
- ---------------------------                     ------------------------------
Its Assistant Secretary                               Its Vice President




<PAGE>

Attest:                                         FBL INSTITUTIONAL SERIES FUND


                                             By:
- ---------------------------                     ------------------------------
Its Assistant Secretary                               Its Vice President



<PAGE>

                                    EXHIBIT A

                                  FIDELITY BOND
                            JOINT INSUREDS AGREEMENT


For Bond Period September 26, 1995 through September 26, 1996.


<TABLE>
<CAPTION>

<S>                 <C>                     <C>                       <C>

1.   Basic Coverage

                    Fund                     Basic Coverage
                    ----                     --------------
                    Series Fund                   1,350,000
                    Money Fund                      250,000
                    Insurance Series Fund           975,000
                                                  ---------
                    TOTAL                         2,575,000


2.   Allocation of Premium

                    Premium for              Premium
                    Separate                 Allocation               Bond
  Fund              Insured Bond             Percentage               Premium
  ----              ------------             ----------               --------
  Series Fund          4,925.00                40.55%                 3,999.61
  Money Fund           2,786.00                22.94%                 2,262.52
  Ins. Series Fund     4,434.00                36.51%                 3,600.87
                      ---------               -------                 --------
  TOTAL               12,145.00               100.00%                 9,863.00


3.  Allocation of Bond Proceeds

                   Fund                   Loss Percentage
                   ----                   ---------------
                   Series Fund                52.43%
                   Money Fund                  9.71%
                   Ins. Series Fund           37.86%
                                           -----------
                   TOTAL                     100.00%

</TABLE>


<PAGE>




Attest:                         FBL SERIES FUND, INC.


                                By:
- ---------------------------         ------------------------
Its Assistant Secretary             Its Vice President





Attest:                         FBL MONEY MARKET FUND, INC.



                                By:
- ---------------------------         ------------------------
Its Assistant Secretary             Its Vice President






Attest:                         FBL VARIABLE INSURANCE SERIES FUND



                                By:
- ----------------------------        --------------------------
Its Assistant Secretary             Its Vice President



<PAGE>

April 13, 1995                      EXHIBIT A
                                     to the
              DO&EO Joint Insureds Agreement dated August 10, 1988

For Policy Period, 12:01 a.m., January 1, 1995, through 12:01 a.m., January 1,
1996.



<TABLE>
<CAPTION>


<S>                                         <C>                 <C>

Party                                        Premium               %
- -----                                        -------             -----

FBL Investment Advisory Services, Inc.      $23,354              70.34
FBL Marketing Services, Inc.                    174               0.52
FBL Variable Insurance Series Fund            2,046               6.16
FBL Series Fund, Inc.                         6,495              19.56
FBL Money Market Fund, Inc.                   1,134               3.42
                                            -------             ------
                                            $33,203             100.00
                                            -------             ------
                                            -------             ------

</TABLE>


Attest:                                 FBL INVESTMENT ADVISORY SERVICES, INC.


- -----------------------------           By:  -----------------------------------
Secretary:  Dennis M. Marker                      Richard D. Warming

Attest:                                 FBL MARKETING SERVICES, INC.



- -----------------------------           By:  -----------------------------------
Secretary:  Dennis M. Marker                    Timothy J. Hoffman

Attest:                                 FBL VARIABLE INSURANCE FUND


- ----------------------------            By:  -----------------------------------
Secretary: Eugene R. Maahs                        Merlin D. Plagge

Attest:                                 FBL SERIES FUND, INC.


- ----------------------------            By:  -----------------------------------
Secretary: Eugene R. Maahs                        Merlin D. Plagge

Attest:                                 FBL MONEY MARKET FUND, INC.


- -----------------------------           By:  -----------------------------------
Secretary: Eugene R. Maahs                        Merlin D. Plagge


<PAGE>



                          ACCOUNTING SERVICES AGREEMENT

                                     BETWEEN

                     FBL INVESTMENT ADVISORY SERVICES, INC.

                                       AND

                              FBL SERIES FUND, INC.


      THIS AGREEMENT, entered into this 1st day of December, 1987, by and
between FBL Investment Advisory Services, Inc., a Delaware corporation,
hereinafter referred to as "FBL", and FBL Series Fund, Inc., a Maryland
corporation, hereinafter referred to as "Fund".

                                   WITNESSETH:

      WHEREAS, the Fund currently issues shares in eight portfolios, which,
together with any subsequently created portfolios, shall hereinafter be referred
to as the "Portfolios";

      WHEREAS, the Fund desires to obtain certain accounting and other services
from FBL; and

      WHEREAS, FBL desires to provide such services for the Fund;

      NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties agree as follows:

I.    FBL agrees to:


            A.  Maintain all books, accounts, ledgers, journals, supporting
      documents and supplementary records pertaining to the business of the Fund
      which constitute the record forming the basis for financial statements
      required of the Fund by law or required by resolution of the Fund Board of
      Directors.

            B.  Calculate the net asset value of each of the Portfolios of the
      Fund in accordance with the Fund's current prospectus and communicate same
      to the Fund's transfer agent on each day that the net asset value per
      share is calculated for the Portfolios.

            C.  Provide the personnel and facilities necessary to process
      payment of all Fund expenditures, as authorized by the Fund.

            D.  Maintain all records of a financial nature pertaining to Fund
      portfolio transactions as are required by law or resolution of the Fund
      Board of Directors.


<PAGE>

            E.  Prepare monthly financial statements, any statistical reports
      requested by the Fund Board of Directors and supporting accounting work
      papers.

            F.  Provide the Fund Board of Directors the monthly financial
      statements and statistical reports.

            G.  Prepare such other reports and analyses as requested by the Fund
      Board of Directors to be presented at their quarterly meetings.

            H.  Prepare financial statements and any other related per share
      data required for inclusion in the annual and semi-annual reports to
      shareholders and amendments to the Fund's registration statement.

            I.  Prepare for timely filing all the Fund's required governmental
      (state and federal) reports, tax returns and other filings, which FBL is
      not otherwise required to prepare pursuant to the terms of other
      agreements in effect between the Fund and FBL.

            J.  Prepare recommendations to the Fund Board of Directors regarding
      the payment of income dividends and capital gains distributions.

            K.  Maintain or cause to be maintained all other books, accounts and
      other documents that are required to be maintained by Rule 31a-1 under the
      Investment Company Act of 1940 that are not required to be maintained for
      the Fund pursuant to some other agreement between the Fund and FBL or
      another party.

            L.  Preserve or cause to be preserved for the periods required in
      Rule 31a-2 under the Investment Company Act of 1940 all records covered by
      this Agreement that are required to be maintained by Rule 31a-1.

II.   The Fund agrees to:

            Pay FBL an annual fee aggregating 0.05% of the average daily net
      assets of each Portfolio, accrued daily and payable monthly, with such
      payments not to exceed $30,000 per Portfolio per annum.

III.  The parties hereto mutually agree:

            A.  That this Agreement shall become effective on the 1st day of
      December 1987, shall remain in effect until November 30, 1988, and shall
      continue in effect from year to year thereafter, unless sooner terminated
      as hereinafter provided, so long as the continuance of the Agreement is
      approved at least annually by a majority of the Directors who are not
      parties to the Agreement or "interested persons" as that term is defined
      in the Investment Company Act of 1940.


<PAGE>



            B.  That either party may terminate this Agreement at any time by
      giving 60 days' written notice of such termination to the other party.

            C.  That any amendment to this Agreement must be in writing,
      executed by both parties hereto.

            D.  That notices and other writings delivered or mailed postage
      prepaid to the Fund or to FBL at 5400 University Avenue, West Des Moines,
      Iowa 50265 shall be deemed to have been properly delivered or given
      hereunder to the respective parties.

            E.  That this Agreement is executed and delivered in the State of
      Iowa and is subject to and shall be construed according to the laws of
      that State.

      IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement
to be executed in its name and on its behalf and under its corporate seal by and
through its duly authorized officers on the day and year above stated.

ATTEST:                                   FBL SERIES FUND, INC.



- -----------------------------             ------------------------------
By:  Its Assistant Secretary              By: Its Vice President



ATTEST:                                   FBL INVESTMENT ADVISORY SERVICES, INC.


- -----------------------------             ------------------------------
By:  Its Assistant Secretary              By: Its Vice President





<PAGE>

                DIVIDEND DISBURSING AND TRANSFER AGENT AGREEMENT

                                     BETWEEN

                        CHALLENGER INVESTMENT FUND, INC.

                                       AND

                          PFS MANAGEMENT SERVICES, INC.



     This Dividend Disbursing and Transfer Agent Agreement made this 15th day of
February, 1971 between CHALLENGER INVESTMENT FUND, INC., a Maryland corporation
(hereinafter called the "Fund"), and PFS MANAGEMENT SERVICES, INC., a Delaware
corporation (hereinafter called the "Agent");

                                   WITNESSETH:
     WHEREAS, the Fund desires to enter into a Dividend Disbursing and Transfer
Agent Agreement with Agent under which Agent will provide the services as set
forth in detail in this Agreement, and Agent is desirous of providing such
services upon the terms and conditions hereinafter provided,

     NOW, THEREFORE, in consideration of the mutual covenants herein contained,
it is agreed as follows:

          1.   The Agent shall act as stock transfer agent for the Fund and in
     this connection, the Agent shall:

               (a) keep the stock transfer books or records of the Fund and
          addresses of all shareholders, the number and date of issuance of
          shares and fractional shares held by each, the number and date of
          certificates for the shares and the number and date of cancellation of
          each share and each certificate surrendered for cancellation;

               (b) handle the issuance and redemption of Fund shares;

               (c) effect and record shareholder transfers of ownership and
          changes in forms of registration;

               (d) cause all shareholder reports and proxies to be properly
          addressed and mailed in connection with shareholders meetings;

               (e) tabulate all proxies; and

               (f) prepare and mail all required shareholder federal and state
          and other income tax information forms.


<PAGE>

          2.   The Agent shall also act as the Fund's dividend agent in
     allocating and causing ordinary dividends and capital gains distributions
     to be disbursed to shareholders.

          3.   For its services specified above, the Fund shall pay to the Agent
     fees as provided in Exhibit A which is attached hereto and made a part
     hereof.  Such fees shall be paid by the Fund quarterly.

          4.   The Agent shall administer all periodic withdrawal plans relating
     to Fund shares and receive such compensation therefor as may be provided
     from time to time in the then current prospectus of the Fund.

          5.   The Agent agrees to act in good faith in furnishing the services
     provided for herein and shall at all times maintain a staff of trained
     personnel for the purpose of performing its obligations under this
     Agreement.  The Agent assumes no responsibility under this Agreement other
     than to render the services called for hereunder, in good faith.

          6.   The Agent agrees that in all matters relating to the services to
     be performed by it hereunder, it will use its best efforts to act in
     conformity with the terms of the Articles of Incorporation, By-Laws,
     Registration Statements and current Prospectus of the Fund.  Each of the
     parties agrees that in all matters relating to the performance of the
     Agreement, it will use its best efforts to conform to and comply with the
     requirements of the Federal Investment Company Act of 1940 and all other
     applicable Federal, state or other laws and regulations.  Nothing herein
     contained shall be deemed to relieve or deprive the Board of Directors of
     the Fund of its responsibility for and control of the conduct of the
     affairs of the Fund.

          7.   The services of the Agent as provided herein are not to be deemed
     to be exclusive, and it shall be free to render services of any kind to any
     other group, firm, individual or association, including other investment
     companies, and to engage in any other business or activity.

          8.   This Agreement, including Exhibit A hereto, may be amended at any
     time by mutual written consent of the parties.

          9.   This Agreement shall be effective as of the date of execution,
     and may be terminated by either party hereto upon sixty (60) days' written
     notice given by one to the other, provided that no such notice of
     termination given by the Agent to the Fund shall be effective unless and
     until a substitute person or entity has been engaged by the Fund to perform
     the services required hereunder for the Fund, or the Fund has certified to
     the Agent that other arrangements have been made by it to provide such
     services.


<PAGE>

     IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affixed, as of the day and year first above
written.

                                        CHALLENGER INVESTMENT FUND, INC.


ATTEST:                                 ---------------------------------------


- -----------------------------------

                                        PFS MANAGEMENT SERVICES, INC.


ATTEST:                                 ---------------------------------------


- -----------------------------------



<PAGE>

                                    EXHIBIT A

                                       TO

                    SHAREHOLDER SERVICE, DIVIDEND DISBURSING
                          AND TRANSFER AGENT AGREEEMENT
                                     BETWEEN
                           FBL MONEY MARKET FUND, INC.
                                       AND
                     FBL INVESTMENT ADVISORY SERVICES, INC.
                                SEPTEMBER 1, 1995


ANNUAL PER ACCOUNT MAINTENANCE FEES:
     High Grade Bond Portfolio               $9.00
     High Yield Bond Portfolio                9.00
     Money Market Portfolio                   9.00
     Managed Portfolio                        8.00
     Blue Chip Portfolio                      7.00
     Growth Common Stock Portfolio            7.00

An annual minimum account maintenance fee of $12,000 applies to each fund/cusip.

ACTIVITY FEES:
     Closed Account Fee                       1.50
     New Account Set Up                       3.00
     Transaction Fee                          1.00
     ACH Fee                                   .25
     Telephone Call                           1.00
     Letter Fee                               1.50
     Check Writing Fee                         .05

The annual account maintenance fee is payable monthly at the rate of 1/12 of the
annual fee per fund portfolio account.  Activity fees will be paid monthly.

In addition, each Fund Portfolio will pay each month out-of-pocket expenses
incurred or advances made by FBL Investment Advisory Services, Inc. under the
Shareholder Service, Dividend Disbursing and Transfer Agent Agreement.  These
items include, but are not limited to, postage, envelopes, checks, continuous
forms, reports and statements, telephone, telegraph, stationary, supplies, costs
of outside mailing firms, record storage and media for storage of records (e.g.,
microfilm, computer tapes).

Executed this      1st      day of      September     , 1995.
              -------------        -------------------

                                          FBL MONEY MARKET FUND, INC.

Attest:______________________________     _____________________________________
       Its Assistant Secretary            Its President

                                          FBL INVESTMENT ADVISORY SERVICES, INC.

Attest:______________________________     _____________________________________
       Its Secretary                      Its President







<PAGE>

                         [ERNST & YOUNG LLP LETTERHEAD]

                                                            Exhibit 11

                         Consent of Independent Auditors




The Board of Directors and Shareholders
FBL Series Fund, Inc.


We consent to the reference to our firm under the captions "Condensed Financial
Information" and "Independent Auditors" in Part A and "Other Information -
Independent Auditors" in Part B and to the incorporation by reference in this
Post Effective Amendment to Form N-1A Registration Statement under the
Securities Act of 1933 (No. 2-38512) and Registration Statement under the
Investment Company Act of 1940 (No. 811-2125) of FBL Series Fund, Inc. of our
report dated September 1, 1995, included in the July 31, 1995 Annual Report of
FBL Series Fund, Inc.


                                             /s/ Ernst & Young LLP




Des Moines, Iowa
November 27, 1995

<PAGE>

                                                               Exhibit 14(a)(1)

                    _________________________________________
                    _________________________________________


                                    QUALIFIED
                                   RETIREMENT
                                      PLAN
                                  ____________

                                   BASIC PLAN
                                    DOCUMENT

                    _________________________________________
                    _________________________________________

<PAGE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                                TABLE OF CONTENTS


SECTION ONE   DEFINITIONS
     1.01     Adoption Agreement . . . . . . . . . . . . . . . . . . . . .    1
     1.02     Basic Plan Document. . . . . . . . . . . . . . . . . . . . .    1
     1.03     Beneficiary. . . . . . . . . . . . . . . . . . . . . . . . .    1
     1.04     Break in Eligibility Service . . . . . . . . . . . . . . . .    1
     1.05     Break in Vesting Service . . . . . . . . . . . . . . . . . .    1
     1.06     Code . . . . . . . . . . . . . . . . . . . . . . . . . . . .    1
     1.07     Compensation . . . . . . . . . . . . . . . . . . . . . . . .    1
     1.08     Custodian. . . . . . . . . . . . . . . . . . . . . . . . . .    2
     1.09     Disability . . . . . . . . . . . . . . . . . . . . . . . . .    2
     1.10     Early Retirement Age . . . . . . . . . . . . . . . . . . . .    2
     1.11     Earned Income. . . . . . . . . . . . . . . . . . . . . . . .    2
     1.12     Effective Date . . . . . . . . . . . . . . . . . . . . . . .    2
     1.13     Eligibility Computation Period . . . . . . . . . . . . . . .    2
     1.14     Employee . . . . . . . . . . . . . . . . . . . . . . . . . .    2
     1.15     Employer . . . . . . . . . . . . . . . . . . . . . . . . . .    2
     1.16     Employer Contribution. . . . . . . . . . . . . . . . . . . .    3
     1.17     Employment Commencement Date . . . . . . . . . . . . . . . .    3
     1.18     Employer Profit Sharing Contribution . . . . . . . . . . . .    3
     1.19     Entry Dates. . . . . . . . . . . . . . . . . . . . . . . . .    3
     1.20     ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . .    3
     1.21     Forfeiture . . . . . . . . . . . . . . . . . . . . . . . . .    3
     1.22     Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . .    3
     1.23     Highly Compensated Employee. . . . . . . . . . . . . . . . .    3
     1.24     Hours of Service - Means . . . . . . . . . . . . . . . . . .    3
     1.25     Individual Account . . . . . . . . . . . . . . . . . . . . .    4
     1.26     Investment Fund. . . . . . . . . . . . . . . . . . . . . . .    4
     1.27     Key Employee . . . . . . . . . . . . . . . . . . . . . . . .    4
     1.28     Leased Employee. . . . . . . . . . . . . . . . . . . . . . .    4
     1.29     Nondeductible Employee Contributions . . . . . . . . . . . .    4
     1.30     Normal Retirement Age. . . . . . . . . . . . . . . . . . . .    4
     1.31     Owner-Employee . . . . . . . . . . . . . . . . . . . . . . .    4
     1.32     Participant. . . . . . . . . . . . . . . . . . . . . . . . .    4
     1.33     Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . .    4
     1.34     Plan Administrator . . . . . . . . . . . . . . . . . . . . .    4
     1.35     Plan Year. . . . . . . . . . . . . . . . . . . . . . . . . .    4
     1.36     Prior Plan . . . . . . . . . . . . . . . . . . . . . . . . .    4
     1.37     Prototype Plan . . . . . . . . . . . . . . . . . . . . . . .    4
     1.38     Qualifying Participant . . . . . . . . . . . . . . . . . . .    4
     1.39     Related Employer . . . . . . . . . . . . . . . . . . . . . .    5
     1.40     Related Employer Participation Agreement . . . . . . . . . .    5
     1.41     Self-Employed Individual . . . . . . . . . . . . . . . . . .    5
     1.42     Separate Fund. . . . . . . . . . . . . . . . . . . . . . . .    5
     1.43     Taxable Wage Base. . . . . . . . . . . . . . . . . . . . . .    5
     1.44     Termination of Employment. . . . . . . . . . . . . . . . . .    5
     1.45     Top-Heavy Plan . . . . . . . . . . . . . . . . . . . . . . .    5
     1.46     Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . .    5
     1.47     Valuation Date . . . . . . . . . . . . . . . . . . . . . . .    5
     1.48     Vested . . . . . . . . . . . . . . . . . . . . . . . . . . .    5
     1.49     Year of Eligibility Service. . . . . . . . . . . . . . . . .    5
     1.50     Year of Vesting Service. . . . . . . . . . . . . . . . . . .    5

SECTION TWO   ELIGIBILITY AND PARTICIPATION
     2.01     Eligibility To Participate . . . . . . . . . . . . . . . . .    6
     2.02     Plan Entry . . . . . . . . . . . . . . . . . . . . . . . . .    6
     2.03     Transfer To Or From Ineligible Class . . . . . . . . . . . .    6
     2.04     Return As A Participant After Break In
                Eligibility Service. . . . . . . . . . . . . . . . . . . .    6
     2.05     Determinations Under This Section. . . . . . . . . . . . . .    6
     2.06     Terms Of Employment. . . . . . . . . . . . . . . . . . . . .    6
     2.07     Special Rules Where Elapsed Time Method Is Being Used. . . .    6
     2.08     Election Not To Participate. . . . . . . . . . . . . . . . .    7

<PAGE>

SECTION THREE   CONTRIBUTIONS
     3.01     Employer Contributions . . . . . . . . . . . . . . . . . . .    7
     3.02     Nondeductible Employee Contributions . . . . . . . . . . . .    9
     3.03     Rollover Contributions . . . . . . . . . . . . . . . . . . .    9
     3.04     Transfer Contributions . . . . . . . . . . . . . . . . . . .    9
     3.05     Limitation On Allocations. . . . . . . . . . . . . . . . . .    9

SECTION FOUR   INDIVIDUAL ACCOUNTS OF PARTICIPANTS AND VALUATION
     4.01     Individual Accounts. . . . . . . . . . . . . . . . . . . . .   12
     4.02     Valuation Of Fund. . . . . . . . . . . . . . . . . . . . . .   12
     4.03     Valuation Of Individual Accounts . . . . . . . . . . . . . .   12
     4.04     Modification Of Method For Valuing Individual Accounts . . .   12
     4.05     Segregation Of Assets. . . . . . . . . . . . . . . . . . . .   12
     4.06     Statement of Individual Accounts . . . . . . . . . . . . . .   12

SECTION FIVE   TRUSTEE OR CUSTODIAN
     5.01     Creation Of Fund . . . . . . . . . . . . . . . . . . . . . .   13
     5.02     Investment Authority . . . . . . . . . . . . . . . . . . . .   13
     5.03     Financial Organization Custodian Or Trustee Without
                Full Trust Powers. . . . . . . . . . . . . . . . . . . . .   13
     5.04     Financial Organization Trustee With Full Trust Powers
                And Individual Trustee . . . . . . . . . . . . . . . . . .   13
     5.05     Division Of Fund Into Investment Funds . . . . . . . . . . .   14
     5.06     Compensation And Expenses. . . . . . . . . . . . . . . . . .   14
     5.07     Not Obligated To Question Data . . . . . . . . . . . . . . .   14
     5.08     Liability For Withholding On Distributions . . . . . . . . .   15
     5.09     Resignation Or Removal Of Trustee (Or Custodian) . . . . . .   15
     5.10     Degree Of Care - Limitations Of Liability. . . . . . . . . .   15
     5.11     Indemnification Of Prototype Sponsor And Trustee
                (Or Custodian) . . . . . . . . . . . . . . . . . . . . . .   15
     5.12     Investment Managers. . . . . . . . . . . . . . . . . . . . .   15
     5.13     Matters Relating To Insurance. . . . . . . . . . . . . . . .   16
     5.14     Direction Of Investments By Participant. . . . . . . . . . .   16

SECTION SIX   VESTING AND DISTRIBUTION
     6.01     Distribution To Participant. . . . . . . . . . . . . . . . .   16
     6.02     Form Of Distribution To A Participant. . . . . . . . . . . .   19
     6.03     Distributions Upon The Death Of A Participant. . . . . . . .   19
     6.04     Form Of Distribution To Beneficiary. . . . . . . . . . . . .   20
     6.05     Joint And Survivor Annuity Requirements. . . . . . . . . . .   20
     6.06     Distribution Requirements. . . . . . . . . . . . . . . . . .   22
     6.07     Annuity Contracts. . . . . . . . . . . . . . . . . . . . . .   24
     6.08     Loans To Participants. . . . . . . . . . . . . . . . . . . .   24
     6.09     Distribution In Kind . . . . . . . . . . . . . . . . . . . .   25
     6.10     Direct Rollovers Of Eligible Rollover Distributions. . . . .   25
     6.11     Procedure For Missing Participants Or Beneficiaries. . . . .   26

SECTION SEVEN   CLAIMS PROCEDURE
     7.01     Filing A Claim For Plan Distributions. . . . . . . . . . . .   26
     7.02     Denial Of Claim. . . . . . . . . . . . . . . . . . . . . . .   26
     7.03     Remedies Available . . . . . . . . . . . . . . . . . . . . .   26

SECTION EIGHT   PLAN ADMINISTRATOR
     8.01     Employer Is Plan Administrator . . . . . . . . . . . . . . .   26
     8.02     Powers And Duties Of The Plan Administrator. . . . . . . . .   26
     8.03     Expenses And Compensation. . . . . . . . . . . . . . . . . .   27
     8.04     Information From Employer. . . . . . . . . . . . . . . . . .   27

SECTION NINE   AMENDMENT AND TERMINATION
     9.01     Right Of Prototype Sponsor To Amend The Plan . . . . . . . .   27
     9.02     Right Of Employer To Amend The Plan. . . . . . . . . . . . .   27
     9.03     Limitation On Power To Amend . . . . . . . . . . . . . . . .   27
     9.04     Amendment Of Vesting Schedule. . . . . . . . . . . . . . . .   28

<PAGE>

     9.05     Permanency . . . . . . . . . . . . . . . . . . . . . . . . .   28
     9.06     Method And Procedure For Termination . . . . . . . . . . . .   28
     9.07     Continuance Of Plan By Successor Employer. . . . . . . . . .   28
     9.08     Failure Of Plan Qualification. . . . . . . . . . . . . . . .   28

SECTION TEN   MISCELLANEOUS
     10.01    State Community Property Laws. . . . . . . . . . . . . . . .   28
     10.02    Headings . . . . . . . . . . . . . . . . . . . . . . . . . .   28
     10.03    Gender And Number. . . . . . . . . . . . . . . . . . . . . .   28
     10.04    Plan Merger Or Consolidation . . . . . . . . . . . . . . . .   28
     10.05    Standard Of Fiduciary Conduct. . . . . . . . . . . . . . . .   28
     10.06    General Undertaking Of All Parties . . . . . . . . . . . . .   29
     10.07    Agreement Binds Heirs, Etc.. . . . . . . . . . . . . . . . .   29
     10.08    Determination Of Top-Heavy Status. . . . . . . . . . . . . .   29
     10.09    Special Limitations For Owner-Employees. . . . . . . . . . .   30
     10.10    Inalienability Of Benefits . . . . . . . . . . . . . . . . .   30
     10.11    Cannot Eliminate Protected Benefits. . . . . . . . . . . . .   30

SECTION ELEVEN   401(K) PROVISIONS
     11.100   Definitions. . . . . . . . . . . . . . . . . . . . . . . . .   30
     11.101   Actual Deferral Percentage (ADP) . . . . . . . . . . . . . .   30
     11.102   Aggregate Limit. . . . . . . . . . . . . . . . . . . . . . .   31
     11.103   Average Contribution Percentage (ACP). . . . . . . . . . . .   31
     11.104   Contributing Participant . . . . . . . . . . . . . . . . . .   31
     11.105   Contribution Percentage. . . . . . . . . . . . . . . . . . .   31
     11.106   Contribution Percentage Amounts. . . . . . . . . . . . . . .   31
     11.107   Elective Deferrals . . . . . . . . . . . . . . . . . . . . .   31
     11.108   Eligible Participant . . . . . . . . . . . . . . . . . . . .   31
     11.109   Excess Aggregate Contributions . . . . . . . . . . . . . . .   31
     11.110   Excess Contributions . . . . . . . . . . . . . . . . . . . .   31
     11.111   Excess Elective Deferrals. . . . . . . . . . . . . . . . . .   31
     11.112   Matching Contribution. . . . . . . . . . . . . . . . . . . .   32
     11.113   Qualified Nonelective Contributions. . . . . . . . . . . . .   32
     11.114   Qualified Matching Contributions . . . . . . . . . . . . . .   32
     11.115   Qualifying Contributing Participant. . . . . . . . . . . . .   32
     11.201   Requirements To Enroll As A Contributing Participant . . . .   32
     11.202   Changing Elective Deferral Amounts . . . . . . . . . . . . .   32
     11.203   Ceasing Elective Deferrals . . . . . . . . . . . . . . . . .   32
     11.204   Return As A Contributing Participant After Ceasing
                Elective Deferrals . . . . . . . . . . . . . . . . . . . .   32
     11.205   Certain One-Time Irrevocable Elections . . . . . . . . . . .   32
     11.300   Contributions. . . . . . . . . . . . . . . . . . . . . . . .   32
     11.301   Contributions By Employer. . . . . . . . . . . . . . . . . .   32
     11.302   Matching Contributions . . . . . . . . . . . . . . . . . . .   33
     11.303   Qualified Nonelective Contributions. . . . . . . . . . . . .   33
     11.304   Qualified Matching Contributions . . . . . . . . . . . . . .   33
     11.305   Nondeductible Employee Contributions . . . . . . . . . . . .   33
     11.400   Nondiscrimination Testing. . . . . . . . . . . . . . . . . .   33
     11.401   Actual Deferral Percentage Test (ADP). . . . . . . . . . . .   33
     11.402   Limits On Nondeductible Employee Contributions And
                Matching Contributions . . . . . . . . . . . . . . . . . .   34
     11.500   Distribution Provisions. . . . . . . . . . . . . . . . . . .   35
     11.501   General Rule . . . . . . . . . . . . . . . . . . . . . . . .   35
     11.502   Distribution Requirements. . . . . . . . . . . . . . . . . .   35
     11.503   Hardship Distribution. . . . . . . . . . . . . . . . . . . .   35
     11.504   Distribution Of Excess Elective Deferrals. . . . . . . . . .   35
     11.505   Distribution Of Excess Contributions . . . . . . . . . . . .   36
     11.506   Distribution Of Excess Aggregate Contributions . . . . . . .   36
     11.507   Recharacterization . . . . . . . . . . . . . . . . . . . . .   36
     11.508   Distribution Of Elective Deferrals If Excess Annual
                Additions. . . . . . . . . . . . . . . . . . . . . . . . .   37
     11.600   Vesting. . . . . . . . . . . . . . . . . . . . . . . . . . .   37
     11.601   100% Vesting On Certain Contributions. . . . . . . . . . . .   37
     11.602   Forfeitures And Vesting Of Matching Contributions. . . . . .   37

<PAGE>

             QUALIFIED RETIREMENT PLAN AND TRUST
             Defined Contribution Basic Plan Document 04
             ------------------------------------------------------------------
             ------------------------------------------------------------------

SECTION ONE  DEFINITIONS

               The following words and phrases when used in the Plan with
               initial capital letters shall, for the purpose of this Plan, have
               the meanings set forth below unless the context indicates that
               other meanings are intended:

      1.01     ADOPTION AGREEMENT
               Means the document executed by the Employer through which it
               adopts the Plan and Trust and thereby agrees to be bound by all
               terms and conditions of the Plan and Trust.

      1.02     BASIC PLAN DOCUMENT
               Means this prototype Plan and Trust document.

      1.03     BENEFICIARY
               Means the individual or individuals designated pursuant to
               Section 6.03(A) of the Plan.

      1.04     BREAK IN ELIGIBILITY SERVICE
               Means a 12 consecutive month period which coincides with an
               Eligibility Computation Period during which an Employee fails to
               complete more than 500 Hours of Service (or such lesser number of
               Hours of Service specified in the Adoption Agreement for this
               purpose).

      1.05     BREAK IN VESTING SERVICE
               Means a Plan Year (or other vesting computation period described
               in Section 1.50) during which an Employee fails to complete more
               than 500 Hours of Service (or such lesser number of Hours of
               Service specified in the Adoption Agreement for this purpose).

      1.06     CODE
               Means the Internal Revenue Code of 1986 as amended from
               time-to-time.

      1.07     COMPENSATION

               A.  Basic Definition

                   For Plan Years beginning on or after January 1, 1989, the
                   following definition of Compensation shall apply:

                   As elected by the Employer in the Adoption Agreement (and if
                   no election is made, W-2 wages will be deemed to have been
                   selected), Compensation shall mean one of the following:

                   1.  W-2 wages.  Compensation is defined as information
                       required to be reported under Sections 6041 and 6051, and
                       6052 of the Code (Wages, tips and other compensation as
                       reported on Form W-2).  Compensation is defined as wages
                       within the meaning of Section 3401(a) of the Code and all
                       other payments of compensation to an Employee by the
                       Employer (in the course of the Employer's trade or
                       business) for which the Employer is required to furnish
                       the Employee a written statement under Sections 6041(d)
                       and 6051(a)(3), and 6052 of the Code.  Compensation must
                       be determined without regard to any rules under Section
                       3401(a) that limit the remuneration included in wages
                       based on the nature or location of the employment or the
                       services performed (such as the exception for
                       agricultural labor in Section 3401(a)(2)).

                   2.  Section 3401(a) wages.  Compensation is defined as wages
                       within the meaning of Section 3401(a) of the Code, for
                       the purposes of income tax withholding at the source but
                       determined without regard to any rules that limit the
                       remuneration included in wages based on the nature or
                       location of the employment or the services performed
                       (such as the exception for agricultural labor in Section
                       3401(a)(2)).

                   3.  415 safe-harbor compensation.  Compensation is defined as
                       wages, salaries, and fees for professional services and
                       other amounts received (without regard to whether or not
                       an amount is paid in cash) for personal services actually
                       rendered in the course of employment with the Employer
                       maintaining the Plan to the extent that the amounts are
                       includible in gross income (including, but not limited
                       to, commissions paid salesmen, compensation for services
                       on the basis of a percentage of profits, commissions on
                       insurance premiums, tips, bonuses, fringe benefits, and
                       reimbursements or other expense allowances under a
                       nonaccountable plan (as described in 1.62-2(c)), and
                       excluding the following:

                       a.  Employer contributions to a plan of deferred
                           compensation which are not includible in the
                           Employee's gross income for the taxable year in which
                           contributed, or employer contributions under a
                           simplified employee pension plan to the extent such
                           contributions are deductible by the Employee, or any
                           distributions from a plan of deferred compensation;

                       b.  Amounts realized from the exercise of a nonqualified
                           stock option, or when restricted stock (or property)
                           held by the Employee either becomes freely
                           transferable or is no longer subject to a substantial
                           risk of forfeiture;

                       c.  Amounts realized from the sale, exchange or other
                           disposition of stock acquired under a qualified stock
                           option; and

                       d.  Other amounts which received special tax benefits, or
                           contributions made by the Employer (whether or not
                           under a salary reduction agreement) towards the
                           purchase of an annuity contract described in Section
                           403(b) of the Code (whether or not the contributions
                           are actually excludable from the gross income of the
                           Employee).

               For any Self-Employed Individual covered under the Plan,
               Compensation will mean Earned Income.

               B.  DETERMINATION PERIOD AND OTHER RULES

                   Compensation shall include only that Compensation which is
                   actually paid to the Participant during the determination
                   period.  Except as provided elsewhere in this Plan, the
                   determination period shall be the Plan Year unless the
                   Employer has selected another period in the Adoption
                   Agreement.   If the Employer makes no election, the
                   determination period shall be the Plan Year.

                   Unless otherwise indicated in the Adoption Agreement,
                   Compensation shall include any amount which is contributed by
                   the Employer pursuant to a salary reduction agreement and
                   which is not includible in the gross income of the Employee
                   under Sections 125, 402(e)(3), 402(h)(1)(B) or 403(b) of the
                   Code.

<PAGE>

2

                   Where this Plan is being adopted as an amendment and
                   restatement to bring a Prior Plan into compliance with the
                   Tax Reform Act of 1986, such Prior Plan's definition of
                   Compensation shall apply for Plan Years beginning before
                   January 1, 1989.

               C.  LIMITS ON COMPENSATION

                   For years beginning after December 31, 1988 and before
                   January 1, 1994, the annual Compensation of each Participant
                   taken into account for determining all benefits provided
                   under the Plan for any determination period shall not exceed
                   $200,000.  This limitation shall be  adjusted by the
                   Secretary at the same time and in the same manner as under
                   Section 415(d) of the Code, except that the dollar increase
                   in effect on January 1 of any calendar year is effective for
                   Plan Years beginning in such calendar year and the first
                   adjustment to the $200,000 limitation is effective on January
                   1, 1990.

                   For Plan Years beginning on or after January 1, 1994, the
                   annual Compensation of each Participant taken into account
                   for determining all benefits provided under the Plan for any
                   Plan Year shall not exceed $150,000, as adjusted for
                   increases in the cost-of-living in accordance with Section
                   401(a)(17)(B) of the Internal Revenue Code.  The cost-of-
                   living adjustment in effect for a calendar year applies to
                   any determination period beginning in such calendar year.

                   If the period for determining Compensation used in
                   calculating an Employee's allocation for a determination
                   period is a short Plan Year (i.e., shorter than 12 months),
                   the annual Compensation limit is an amount equal to the
                   otherwise applicable annual Compensation limit multiplied by
                   a fraction, the numerator of which is the number of months in
                   the short Plan Year, and the denominator of which is 12.

                   In determining the Compensation of a Participant for purposes
                   of this limitation, the rules of Section 414(q)(6) of the
                   Code shall apply, except in applying such rules, the term
                   "family" shall include only the spouse of the Participant and
                   any lineal descendants of the Participant who have not
                   attained age 19 before the close of the year.  If, as a
                   result of the application of such rules the adjusted $200,000
                   limitation is exceeded, then (except for purposes of
                   determining the portion of Compensation up to the integration
                   level, if this Plan provides for permitted disparity), the
                   limitation shall be prorated among the affected individuals
                   in proportion to each such individual's Compensation as
                   determined under this Section prior to the application of
                   this limitation.

                   If Compensation for any prior determination period is taken
                   into account in determining an Employee's allocations or
                   benefits for the current determination period, the
                   Compensation for such prior determination period is subject
                   to the applicable annual Compensation limit in effect for
                   that prior period.  For this purpose, in determining
                   allocations in Plan Years beginning on or after January 1,
                   1989, the annual Compensation limit in effect for
                   determination periods beginning before that date is $200,000.
                   In addition, in determining allocations in Plan Years
                   beginning on or after January 1, 1994, the annual
                   Compensation limit in effect for determination periods
                   beginning before that date is $150,000.

      1.08     CUSTODIAN
               Means an entity specified in the Adoption Agreement as Custodian
               or any duly appointed successor as provided in Section 5.09.

      1.09     DISABILITY
               Unless the Employer has elected a different definition in the
               Adoption Agreement, Disability means the inability to engage in
               any substantial, gainful activity by reason of any medically
               determinable physical or mental impairment that can be expected
               to result in death or which has lasted or can be expected to last
               for a continuous period of not less than 12 months.  The
               permanence and degree of such impairment shall be supported by
               medical evidence.

      1.10     EARLY RETIREMENT AGE
               Means the age specified in the Adoption Agreement.  The Plan will
               not have an Early Retirement Age if none is specified in the
               Adoption Agreement.

      1.11     EARNED INCOME
               Means the net earnings from self-employment in the trade or
               business with respect to which the Plan is established, for which
               personal services of the individual are a material income-
               producing factor.  Net earnings will be determined without regard
               to items not included in gross income and the deductions
               allocable to such items.  Net earnings are reduced by
               contributions by the Employer to a qualified plan to the extent
               deductible under Section 404 of the Code.

               Net earnings shall be determined with regard to the deduction
               allowed to the Employer by Section 164(f) of the Code for taxable
               years beginning after December 31, 1989.

      1.12     EFFECTIVE DATE
               Means the date the Plan becomes effective as indicated in the
               Adoption Agreement.  However, as indicated in the Adoption
               Agreement, certain provisions may have specific effective dates.
               Further, where a separate date is stated in the Plan as of which
               a particular Plan provision becomes effective, such date will
               control with respect to that provision.

      1.13     ELIGIBILITY COMPUTATION PERIOD
               An Employee's initial Eligibility Computation Period shall be the
               12 consecutive month period commencing on the Employee's
               Employment Commencement Date.  The Employee's subsequent
               Eligibility Computation Periods shall be the 12 consecutive month
               periods commencing on the anniversaries of his or her Employment
               Commencement Date; provided, however, if pursuant to the Adoption
               Agreement, an Employee is required to complete one or less Years
               of Eligibility Service to become a Participant, then his or her
               subsequent Eligibility Computation Periods shall be the Plan
               Years commencing with the Plan Year beginning during his or her
               initial Eligibility Computation Period.  An Employee does not
               complete a Year of Eligibility Service before the end of the 12
               consecutive month period regardless of when during such period
               the Employee completes the required number of Hours of Service.

      1.14     EMPLOYEE
               Means any person employed by an Employer maintaining the Plan or
               of any other employer required to be aggregated with such
               Employer under Sections 414(b), (c), (m) or (o) of the Code.

               The term Employee shall also include any Leased Employee deemed
               to be an Employee of any Employer described in the previous
               paragraph as provided in Section 414(n) or (o) of the Code.

      1.15     EMPLOYER
               Means any corporation, partnership, sole-proprietorship or other
               entity named in the Adoption Agreement  and any successor who by
               merger, consolidation, purchase or otherwise assumes the
               obligations of the Plan.  A partnership is considered to be the
               Employer of each of the partners and a sole-proprietorship is
               considered to be the Employer of a sole proprietor.  Where this
               Plan is being maintained by a union or other entity that
               represents its member Employees in the negotiation of collective
               bargaining agreements, the term Employer shall mean such union or
               other entity.
<PAGE>

                                                                              3
      1.16     EMPLOYER CONTRIBUTION
               Means the amount contributed by the Employer each year as
               determined under this Plan.

      1.17     EMPLOYMENT COMMENCEMENT DATE
               An Employee's Employment Commencement date means the date the
               Employee first performs an Hour of Service for the Employer.

      1.18     EMPLOYER PROFIT SHARING CONTRIBUTION
               Means an Employer Contribution made pursuant to the Section of
               the Adoption Agreement titled "Employer Profit Sharing
               Contributions."  The Employer may make Employer Profit Sharing
               Contributions without regard to current or accumulated earnings
               or profits.

      1.19     ENTRY DATES
               Means the first day of the Plan Year and the first day of the
               seventh month of the Plan Year, unless the Employer has specified
               different dates in the Adoption Agreement.

      1.20     ERISA
               Means the Employee Retirement Income Security Act of 1974 as
               amended from time-to-time.

      1.21     FORFEITURE
               Means that portion of a Participant's Individual Account derived
               from Employer Contributions which he or she is not entitled to
               receive (i.e., the nonvested portion).

      1.22     FUND
               Means the Plan assets held by the Trustee for the Participants'
               exclusive benefit.

      1.23     HIGHLY COMPENSATED EMPLOYEE
               The term Highly Compensated Employee includes highly compensated
               active employees and highly compensated former employees.

               A highly compensated active employee includes any Employee who
               performs service for the Employer during the determination year
               and who, during the look-back year: (a) received Compensation
               from the Employer in excess of $75,000 (as adjusted pursuant to
               Section 415(d) of the Code); (b) received Compensation from the
               Employer in excess of $50,000 (as adjusted pursuant to Section
               415(d) of the Code) and was a member of the top-paid group for
               such year; or (c) was an officer of the Employer and received
               Compensation during such year that is greater than 50% of the
               dollar limitation in effect under Section 415(b)(1)(A) of the
               Code.  The term Highly Compensated Employee also includes:  (a)
               Employees who are both described in the preceding sentence if the
               term "determination year" is substituted for the term "look-back
               year" and the Employee is one of the 100 Employees who received
               the most Compensation from the Employer during the determination
               year; and (b) Employees who are 5% owners at any time during the
               look-back year or determination year.

               If no officer has satisfied the Compensation requirement of (c)
               above during either a determination year or look-back year, the
               highest paid officer for such year shall be treated as a Highly
               Compensated Employee.

               For this purpose, the determination year shall be the Plan Year.
               The look-back year shall be the 12 month period immediately
               preceding the determination year.

               A highly compensated former employee includes any Employee who
               separated from service (or was deemed to have separated) prior to
               the determination year, performs no service for the Employer
               during the determination year, and was a highly compensated
               active employee for either the separation year or any
               determination year ending on or after the Employee's 55th
               birthday.

               If an Employee is, during a determination year or look-back year,
               a family member of either a 5% owner who is an active or former
               Employee or a Highly Compensated Employee who is one of the 10
               most Highly Compensated Employees ranked on the basis of
               Compensation paid by the Employer during such year, then the
               family member and the 5% owner or top 10 Highly Compensated
               Employee shall be aggregated.  In such case, the family member
               and 5% owner or top 10 Highly Compensated Employee shall be
               treated as a single Employee receiving Compensation and Plan
               contributions or benefits equal to the sum of such Compensation
               and contributions or benefits of the family member and 5% owner
               or top 10 Highly Compensated Employee.  For purposes of this
               Section, family member includes the spouse, lineal ascendants and
               descendants of the Employee or former Employee and the spouses of
               such lineal ascendants and descendants.

               The determination of who is a Highly Compensated Employee,
               including the determinations of the number and identity of
               Employees in the top-paid group, the top 100 Employees, the
               number of Employees treated as officers and the Compensation that
               is considered, will be made in accordance with Section 414(q) of
               the Code and the regulations thereunder.

      1.24     HOURS OF SERVICE - Means

               A.  Each hour for which an Employee is paid, or entitled to
                   payment, for the performance of duties for the Employer.
                   These hours will be credited to the Employee for the
                   computation period in which the duties are performed; and

               B.  Each hour for which an Employee is paid, or entitled to
                   payment, by the Employer on account of a period of time
                   during which no duties are performed (irrespective of whether
                   the employment relationship has terminated) due to vacation,
                   holiday, illness, incapacity (including disability), layoff,
                   jury duty, military duty or leave of absence.  No more than
                   501 Hours of Service will be credited under this paragraph
                   for any single continuous period (whether or not such period
                   occurs in a single computation period).  Hours under this
                   paragraph shall be calculated and credited pursuant to
                   Section 2530.200b-2 of the Department of Labor Regulations
                   which is incorporated herein by this reference; and

               C.  Each hour for which back pay, irrespective of mitigation of
                   damages, is either awarded or agreed to by the Employer.  The
                   same Hours of Service will not be credited both under
                   paragraph (A) or paragraph (B), as the case may be, and under
                   this paragraph (C).  These hours will be credited to the
                   Employee for the computation period or periods to which the
                   award or agreement pertains rather than the computation
                   period in which the award, agreement, or payment is made.

               D.  Solely for purposes of determining whether a Break in
                   Eligibility Service or a Break in Vesting Service has
                   occurred in a computation period (the computation period for
                   purposes of determining whether a Break in Vesting Service
                   has occurred is the Plan Year or other vesting computation
                   period described in Section 1.50), an individual who is
                   absent from work for maternity or paternity reasons shall
                   receive credit for the Hours of Service which would otherwise
                   have been credited to such individual but for such absence,
                   or in any case in which such hours cannot be determined, 8
                   Hours of Service per day of such absence.  For purposes of
                   this paragraph, an absence from work for maternity or
                   paternity reasons means an

<PAGE>

4

                   absence (1) by reason of the pregnancy of the individual, (2)
                   by reason of a birth of a child of the individual, (3) by
                   reason of the placement of a child with the individual in
                   connection with the adoption of such child by such
                   individual, or (4) for purposes of caring for such child for
                   a period beginning immediately following such birth or
                   placement.  The Hours of Service credited under this
                   paragraph shall be credited (1) in the Eligibility
                   Computation Period or Plan Year or other vesting computation
                   period described in Section 1.50 in which the absence begins
                   if the crediting is necessary to prevent a Break in
                   Eligibility Service or a Break in Vesting Service in the
                   applicable period, or (2) in all other cases, in the
                   following Eligibility Computation Period or Plan Year or
                   other vesting computation period described in Section 1.50.

               E.  Hours of Service will be credited for employment with other
                   members of an affiliated service group (under Section 414(m)
                   of the Code), a controlled group of corporations (under
                   Section 414(b) of the Code), or a group of trades or
                   businesses under common control (under Section 414(c) of the
                   Code) of which the adopting Employer is a member, and any
                   other entity required to be aggregated with the Employer
                   pursuant to Section 414(o) of the Code and the regulations
                   thereunder.

                   Hours of Service will also be credited for any individual
                   considered an Employee for purposes of this Plan under Code
                   Sections 414(n) or 414(o) and the regulations thereunder.

               F.  Where the Employer maintains the plan of a predecessor
                   employer, service for such predecessor employer shall be
                   treated as service for the Employer.

               G.  The above method for determining Hours of Service may be
                   altered as specified in the Adoption Agreement.

      1.25     INDIVIDUAL ACCOUNT
               Means the account established and maintained under this Plan for
               each Participant in accordance with Section 4.01.

      1.26     INVESTMENT FUND
               Means a subdivision of the Fund established pursuant to Section
               5.05.

      1.27     KEY EMPLOYEE
               Means any person who is determined to be a Key Employee under
               Section 10.08.

      1.28     LEASED EMPLOYEE
               Means any person (other than an Employee of the recipient) who
               pursuant to an agreement between the recipient and any other
               person ("leasing organization") has performed services for the
               recipient (or for the recipient and related persons determined in
               accordance with Section 414(n)(6) of the Code) on a substantially
               full time basis for a period of at least one year, and such
               services are of a type historically performed by Employees in the
               business field of the recipient Employer.  Contributions or
               benefits provided a Leased Employee by the leasing organization
               which are attributable to services performed for the recipient
               Employer shall be treated as provided by the recipient Employer.


               A Leased Employee shall not be considered an Employee of the
               recipient if: (1) such employee is covered by a money purchase
               pension plan providing: (a) a nonintegrated employer contribution
               rate of at least 10% of compensation, as defined in Section
               415(c)(3) of the Code, but including amounts contributed pursuant
               to a salary reduction agreement which are excludable from the
               employee's gross income under Section 125, Section 402(e)(3),
               Section 402(h)(1)(B) or Section 403(b) of the Code, (b) immediate
               participation, and (c) full and immediate vesting; and (2) Leased
               Employees do not constitute more than 20% of the recipient's
               nonhighly compensated work force.

      1.29     NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
               Means any contribution made to the Plan by or on behalf of a
               Participant that is included in the Participant's gross income in
               the year in which made and that is maintained under a separate
               account to which earnings and losses are allocated.

      1.30     NORMAL RETIREMENT AGE
               Means the age specified in the Adoption Agreement.  However, if
               the Employer enforces a mandatory retirement age which is less
               than the Normal Retirement Age, such mandatory age is deemed to
               be the Normal Retirement Age.  If no age is specified in the
               Adoption Agreement, the Normal Retirement Age shall be age 65.

      1.31     OWNER - EMPLOYEE
               Means an individual who is a sole proprietor, or who is a partner
               owning more than 10% of either the capital or profits interest of
               the partnership.

      1.32     PARTICIPANT
               Means any Employee or former Employee of the Employer who has met
               the Plan's eligibility requirements, has entered the Plan and who
               is or may become eligible to receive a benefit of any type from
               this Plan or whose Beneficiary may be eligible to receive any
               such benefit.

      1.33     PLAN
               Means the prototype defined contribution plan adopted by the
               Employer.  The Plan consists of this Basic Plan Document plus the
               corresponding Adoption Agreement as completed and signed by the
               Employer.

      1.34     PLAN ADMINISTRATOR
               Means the person or persons determined to be the Plan
               Administrator in accordance with Section 8.01.

      1.35     PLAN YEAR
               Means the 12 consecutive month period which coincides with the
               Employer's fiscal year or such other 12 consecutive month period
               as is designated in the Adoption Agreement.

      1.36     PRIOR PLAN
               Means a plan which was amended or replaced by adoption of this
               Plan document as indicated in the Adoption Agreement.

      1.37     PROTOTYPE SPONSOR
               Means the entity specified in the Adoption Agreement that makes
               this prototype plan available to employers for adoption.

      1.38     QUALIFYING PARTICIPANT
               Means a Participant who has satisfied the requirements described
               in Section 3.01(B)(2) to be entitled to share in any Employer
               Contribution (and Forfeitures, if applicable) for a Plan Year.

<PAGE>

                                                                              5
      1.39     RELATED EMPLOYER
               Means an employer that may be required to be aggregated with the
               Employer adopting this Plan for certain qualification
               requirements under Sections 414(b), (c), (m) or (o) of the Code
               (or any other employer that has ownership in common with the
               Employer).  A Related Employer may participate in this Plan if so
               indicated in the Section of the Adoption Agreement titled
               "Employer Information" or if such Related Employer executes a
               Related Employer Participation Agreement.

      1.40     RELATED EMPLOYER PARTICIPATION AGREEMENT
               Means the agreement under this prototype Plan that a Related
               Employer may execute to participate in this Plan.

      1.41     SELF-EMPLOYED INDIVIDUAL
               Means an individual who has Earned Income for the taxable year
               from the trade or business for which the Plan is established;
               also, an individual who would have had Earned Income but for the
               fact that the trade or business had no net profits for the
               taxable year.

      1.42     SEPARATE FUND
               Means a subdivision of the Fund held in the name of a particular
               Participant representing certain assets held for that
               Participant.  The assets which comprise a Participant's Separate
               Fund are those assets earmarked for him or her and those assets
               subject to the Participant's individual direction pursuant to
               Section 5.14.

      1.43     TAXABLE WAGE BASE
               Means, with respect to any taxable year, the contribution and
               benefit base in effect under Section 230 of the Social Security
               Act at the beginning of the Plan Year.

      1.44     TERMINATION OF EMPLOYMENT
               A Termination of Employment of an Employee of an Employer shall
               occur whenever his or her status as an Employee of such Employer
               ceases for any reason other than death.  An Employee who does not
               return to work for the Employer on or before the expiration of an
               authorized leave of absence from such Employer shall be deemed to
               have incurred a Termination of Employment when such leave ends.

      1.45     TOP-HEAVY PLAN
               This Plan is a Top-Heavy Plan for any Plan Year if it is
               determined to be such pursuant to Section 10.08.

      1.46     TRUSTEE
               Means an individual, individuals or corporation specified in the
               Adoption Agreement as Trustee or any duly appointed successor as
               provided in Section 5.09.  Trustee shall mean Custodian in the
               event the financial organization named as Trustee does not have
               full trust powers.

      1.47     VALUATION DATE
               Means the date or dates as specified in the Adoption Agreement.
               If no date is specified in the Adoption Agreement, the Valuation
               Date shall be the last day of the Plan Year and each other date
               designated by the Plan Administrator which is selected in a
               uniform and nondiscriminatory manner when the assets of the Fund
               are valued at their then fair market value.

      1.48     VESTED
               Means nonforfeitable, that is, a claim which is unconditional and
               legally enforceable against the Plan obtained by a Participant or
               the Participant's Beneficiary to that part of an immediate or
               deferred benefit under the Plan which arises from a Participant's
               Years of Vesting Service.

      1.49     YEAR OF ELIGIBILITY SERVICE
               Means a 12 consecutive month period which coincides with an
               Eligibility Computation Period during which an Employee completes
               at least 1,000 Hours of Service (or such lesser number of Hours
               of Service specified in the Adoption Agreement for this purpose).
               An Employee does not complete a Year of Eligibility Service
               before the end of the 12 consecutive month period regardless of
               when during such period the Employee completes the required
               number of Hours of Service.

      1.50     YEAR OF VESTING SERVICE
               Means a Plan Year during which an Employee completes at least
               1,000 Hours of Service (or such lesser number of Hours of Service
               specified in the Adoption Agreement for this purpose).
               Notwithstanding the preceding sentence, where the Employer so
               indicates in the Adoption Agreement, vesting shall be computed by
               reference to the 12 consecutive month period beginning with the
               Employee's Employment Commencement Date and each successive 12
               month period commencing on the anniversaries thereof.

               In the case of a Participant who has 5 or more consecutive Breaks
               in Vesting Service, all Years of Vesting Service after such
               Breaks in Vesting Service will be disregarded for the purpose of
               determining the Vested portion of his or her Individual Account
               derived from Employer Contributions that accrued before such
               breaks.  Such Participant's prebreak service will count in
               vesting the postbreak Individual Account derived from Employer
               Contributions only if either:

               (A) such Participant had any Vested right to any portion of his
                   or her Individual Account derived from Employer Contributions
                   at the time of his or her Termination of Employment; or

               (B) upon returning to service, the number of consecutive Breaks
                   in Vesting Service is less than his or her number of Years of
                   Vesting Service before such breaks.

               Separate subaccounts will be maintained for the Participant's
               prebreak and postbreak portions of his or her Individual Account
               derived from Employer Contributions.  Both subaccounts will share
               in the gains and losses of the Fund.

               Years of Vesting Service shall not include any period of time
               excluded from Years of Vesting Service in the Adoption Agreement.

               In the event the Plan Year is changed to a new 12-month period,
               Employees shall receive credit for Years of Vesting Service, in
               accordance with the preceding provisions of this definition, for
               each of the Plan Years (the old and new Plan Years) which overlap
               as a result of such change.
<PAGE>

6

SECTION TWO    ELIGIBILITY AND PARTICIPATION

      2.01     ELIGIBILITY TO PARTICIPATE
               Each Employee of the Employer, except those Employees who belong
               to a class of Employees which is excluded from participation as
               indicated in the Adoption Agreement, shall be eligible to
               participate in this Plan upon the satisfaction of the age and
               Years of Eligibility Service requirements specified in the
               Adoption Agreement.

      2.02     PLAN ENTRY

               A.  If this Plan is a replacement of a Prior Plan by amendment or
                   restatement, each Employee of the Employer who was a
                   Participant in said Prior Plan before the Effective Date
                   shall continue to be a Participant in this Plan.

               B.  An Employee will become a Participant in the Plan as of the
                   Effective Date if the Employee has met the eligibility
                   requirements of Section 2.01 as of such date.  After the
                   Effective Date, each Employee shall become a Participant on
                   the first Entry Date following the date the Employee
                   satisfies the eligibility requirements of Section 2.01 unless
                   otherwise indicated in the Adoption Agreement.

               C.  The Plan Administrator shall notify each Employee who becomes
                   eligible to be a Participant under this Plan and shall
                   furnish the Employee with the application form, enrollment
                   forms or other documents which are required of Participants.
                   The eligible Employee shall execute such forms or documents
                   and make available such information as may be required in the
                   administration of the Plan.

      2.03     TRANSFER TO OR FROM INELIGIBLE CLASS
               If an Employee who had been a Participant becomes ineligible to
               participate because he or she is no longer a member of an
               eligible class of Employees, but has not incurred a Break in
               Eligibility Service, such Employee shall participate immediately
               upon his or her return to an eligible class of Employees.  If
               such Employee incurs a Break in Eligibility Service, his or her
               eligibility to participate shall be determined by Section 2.04.

               An Employee who is not a member of the eligible class of
               Employees will become a Participant immediately upon becoming a
               member of the eligible class provided such Employee has satisfied
               the age and Years of Eligibility Service requirements.  If such
               Employee has not satisfied the age and Years of Eligibility
               Service requirements as of the date he or she becomes a member of
               the eligible class, such Employee shall become a Participant on
               the first Entry Date following the date he or she satisfies those
               requirements unless otherwise indicated in the Adoption
               Agreement.

      2.04     RETURN AS A PARTICIPANT AFTER BREAK IN ELIGIBILITY SERVICE

               A.  EMPLOYEE NOT PARTICIPANT BEFORE BREAK - If an Employee incurs
                   a Break in Eligibility Service before satisfying the Plan's
                   eligibility requirements, such Employee's Years of
                   Eligibility Service before such Break in Eligibility Service
                   will not be taken into account.

               B.  NONVESTED PARTICIPANTS - In the case of a Participant who
                   does not have a Vested interest in his or her Individual
                   Account derived from Employer Contributions, Years of
                   Eligibility Service before a period of consecutive Breaks in
                   Eligibility Service will not be taken into account for
                   eligibility purposes if the number of consecutive Breaks in
                   Eligibility Service in such period equals or exceeds the
                   greater of 5 or the aggregate number of Years of Eligibility
                   Service before such break.  Such aggregate number of Years of
                   Eligibility Service will not include any Years of Eligibility
                   Service disregarded under the preceding sentence by reason of
                   prior breaks.

                   If a Participant's Years of Eligibility Service are
                   disregarded pursuant to the preceding paragraph, such
                   Participant will be treated as a new Employee for eligibility
                   purposes.  If a Participant's Years of Eligibility Service
                   may not be disregarded pursuant to the preceding paragraph,
                   such Participant shall continue to participate in the Plan,
                   or, if terminated, shall participate immediately upon
                   reemployment.

               C.  VESTED PARTICIPANTS - A Participant who has sustained a
                   Break in Eligibility Service and who had a Vested interest in
                   all or a portion of his or her Individual Account derived
                   from Employer Contributions shall continue to participate in
                   the Plan, or, if terminated, shall participate immediately
                   upon reemployment.

      2.05     DETERMINATIONS UNDER THIS SECTION
               The Plan Administrator shall determine the eligibility of each
               Employee to be a Participant.  This determination shall be
               conclusive and binding upon all persons except as otherwise
               provided herein or by law.

      2.06     TERMS OF EMPLOYMENT
               Neither the fact of the establishment of the Plan nor the fact
               that a common law Employee has become a Participant shall give to
               that common law Employee any right to continued employment;  nor
               shall either fact limit the right of the Employer to discharge or
               to deal otherwise with a common law Employee without regard to
               the effect such treatment may have upon the Employee's rights
               under the Plan.

      2.07     SPECIAL RULES WHERE ELAPSED TIME METHOD IS BEING USED
               This Section 2.07 shall apply where the Employer has indicated in
               the Adoption Agreement that the elapsed time method will be used.
               When this Section applies, the definitions of year of service,
               break in service and hour of service in this Section will replace
               the definitions of Year of Eligibility Service, Year of Vesting
               Service, Break in Eligibility Service, Break in Vesting Service
               and Hours of Service found in the Definitions Section of the Plan
               (Section One).

               For purposes of determining an Employee's initial or continued
               eligibility to participate in the Plan or the Vested interest in
               the Participant's Individual Account balance derived from
               Employer Contributions, (except for periods of service which may
               be disregarded on account of the "rule of parity" described in
               Sections 1.50 and 2.04) an Employee will receive credit for the
               aggregate of all time period(s) commencing with the Employee's
               first day of employment or reemployment and ending on the date a
               break in service begins.  The first day of employment or
               reemployment is the first day the Employee performs an hour of
               service.  An Employee will also receive credit for any period of
               severance of less than 12 consecutive months.  Fractional periods
               of a year will be expressed in terms of days.

               For purposes of this Section, hour of service will mean each hour
               for which an Employee is paid or entitled to payment for the
               performance of duties for the Employer.  Break in service is a
               period of severance of at least 12 consecutive months.  Period of
               severance is a continuous period of time during which the
               Employee is not employed by the Employer.  Such period begins on
               the date the Employee retires, quits or is discharged, or if
               earlier, the 12 month anniversary of the date on which the
               Employee was otherwise first absent from service.

               In the case of an individual who is absent from work for
               maternity or paternity reasons, the 12 consecutive month period
               beginning on the first anniversary of the first date of such
               absence shall not constitute a break in service.  For purposes of
               this

<PAGE>

                                                                              7

               paragraph, an absence from work for maternity or paternity
               reasons means an absence (1) by reason of the pregnancy of the
               individual, (2) by reason of the birth of a child of the
               individual, (3) by reason of the placement of a child with the
               individual in connection with the adoption of such child by such
               individual, or (4) for purposes of caring for such child for a
               period beginning immediately following such birth or placement.

               Each Employee will share in Employer Contributions for the period
               beginning on the date the Employee commences participation under
               the Plan and ending on the date on which such Employee severs
               employment with the Employer or is no longer a member of an
               eligible class of Employees.

               If the Employer is a member of an affiliated service group (under
               Section 414(m) of the Code), a controlled group of corporations
               (under Section 414(b) of the Code), a group of trades or
               businesses under common control (under Section 414(c) of the
               Code), or any other entity required to be aggregated with the
               Employer pursuant to Section 414(o) of the Code, service will be
               credited for any employment for any period of time for any other
               member of such group.  Service will also be credited for any
               individual required under Section 414(n) or Section 414(o) to be
               considered an Employee of any Employer aggregated under Section
               414(b), (c), or (m) of the Code.

      2.08     ELECTION NOT TO PARTICIPATE
               This Section 2.08 will apply if this Plan is a nonstandardized
               plan and the Adoption Agreement so provides.  If this Section
               applies, then an Employee or a Participant may elect not to
               participate in the Plan for one or more Plan Years.  The Employer
               may not contribute for an Employee or Participant for any Plan
               Year during which such Employee's or Participant's election not
               to participate is in effect.  Any election not to participate
               must be in writing and filed with the Plan Administrator.

               The Plan Administrator shall establish such uniform and
               nondiscriminatory rules as it deems necessary or advisable to
               carry out the terms of this Section, including, but not limited
               to, rules prescribing the timing of the filing of elections not
               to participate and the procedures for electing to re-participate
               in the Plan.

               An Employee or Participant continues to earn credit for vesting
               and eligibility purposes for each Year of Vesting Service or Year
               of Eligibility Service he or she completes and his or her
               Individual Account (if any) will share in the gains or losses of
               the Fund during the periods he or she elects not to participate.

SECTION THREE  CONTRIBUTIONS

      3.01     EMPLOYER CONTRIBUTIONS

               A.  OBLIGATION TO CONTRIBUTE - The Employer shall make
                   contributions to the Plan in accordance with the contribution
                   formula specified in the Adoption Agreement.  If this Plan is
                   a profit sharing plan, the Employer shall, in its sole
                   discretion, make contributions without regard to current or
                   accumulated earnings or profits.

               B.  ALLOCATION FORMULA AND THE RIGHT TO SHARE IN THE EMPLOYER
                   CONTRIBUTION -

                   1.  General - The Employer Contribution for any Plan Year
                       will be allocated or contributed to the Individual
                       Accounts of Qualifying  Participants in accordance with
                       the allocation or contribution formula specified in the
                       Adoption Agreement.  The Employer Contribution for any
                       Plan Year will be allocated to each Participant's
                       Individual Account as of the last day of that Plan Year.

                       Any Employer Contribution for a Plan Year must satisfy
                       Section 401(a)(4) and the regulations thereunder for such
                       Plan Year.

                   2.  Qualifying Participants - A Participant is a Qualifying
                       Participant and is entitled to share in the Employer
                       Contribution for any Plan Year if the Participant was a
                       Participant on at least one day during the Plan Year and
                       satisfies any additional conditions specified in the
                       Adoption Agreement.  If this Plan is a standardized plan,
                       unless the Employer specifies more favorable conditions
                       in the Adoption Agreement, a Participant will not be a
                       qualifying Participant for a Plan Year if he or she
                       incurs a Termination of Employment during such Plan Year
                       with not more than 500 Hours of Service if he or she is
                       not an Employee on the last day of the Plan Year.  The
                       determination of whether a Participant is entitled to
                       share in the Employer Contribution shall be made as of
                       the last day of each Plan Year.


                   3.  Special Rules for Integrated Plans - This Plan may not
                       allocate contributions based on an integrated formula if
                       the Employer maintains any other plan that provides for
                       allocation of contributions based on an integrated
                       formula that benefits any of the same Participants.  If
                       the Employer has selected the integrated contribution or
                       allocation formula in the Adoption Agreement, then the
                       maximum disparity rate shall be determined in accordance
                       with the following table.

                               MAXIMUM DISPARITY RATE
<TABLE>
<CAPTION>

                                                                       Top-Heavy                Nonstandardized and
Integration Level                     Money Purchase                Profit Sharing         Non-Top-Heavy Profit Sharing
- -----------------------------------------------------------------------------------------------------------------------
<S>                                   <C>                           <C>                    <C>
Taxable Wage Base (TWB)                    5.7%                          2.7%                            5.7%

More than $0 but not more
than 20% of TWB                            5.7%                          2.7%                            5.7%

More than 20% of TWB but
not more than 80% of TWB                   4.3%                          1.3%                            4.3%

More than 80% of TWB but
not more than TWB                          5.4%                          2.4%                            5.4%
</TABLE>

<PAGE>

8

               C.  ALLOCATION OF FORFEITURES - Forfeitures for a Plan Year which
                   arise as a result of the application of Section 6.01(D) shall
                   be allocated as follows:

                   1.  Profit Sharing Plan - If this is a profit sharing plan,
                       unless the Adoption Agreement indicates otherwise,
                       Forfeitures shall be allocated in the manner provided in
                       Section 3.01(B) (for Employer Contributions) to the
                       Individual Accounts of Qualifying Participants who are
                       entitled to share in the Employer Contribution for such
                       Plan Year.  Forfeitures shall be allocated as of the last
                       day of the Plan Year during which the Forfeiture arose
                       (or any subsequent Plan Year if indicated in the Adoption
                       Agreement).

                   2.  Money Purchase Pension and Target Benefit Plan - If this
                       Plan is a money purchase plan or a target benefit plan,
                       unless the Adoption Agreement indicates otherwise,
                       Forfeitures shall be applied towards the reduction of
                       Employer Contributions to the Plan.   Forfeitures shall
                       be allocated as of the last day of the Plan Year during
                       which the Forfeiture arose (or any subsequent Plan Year
                       if indicated in the Adoption Agreement).

               D.  TIMING OF EMPLOYER CONTRIBUTION - The Employer Contribution
                   for each Plan Year shall be delivered to the Trustee (or
                   Custodian, if applicable) not later than the due date for
                   filing the Employer's income tax return for its fiscal year
                   in which the Plan Year ends, including extensions thereof.

               E.  MINIMUM ALLOCATION FOR TOP-HEAVY PLANS - The contribution and
                   allocation provisions of this Section 3.01(E) shall apply for
                   any Plan Year with respect to which this Plan is a Top-Heavy
                   Plan.

                   1.  Except as otherwise provided in (3) and (4) below, the
                       Employer Contributions and Forfeitures allocated on
                       behalf of any Participant who is not a Key Employee shall
                       not be less than the lesser of 3% of such Participant's
                       Compensation or (in the case where the Employer has no
                       defined benefit plan which designates this Plan to
                       satisfy Section 401 of the Code) the largest percentage
                       of Employer Contributions and Forfeitures, as a
                       percentage of the first $200,000 ($150,000 for Plan Years
                       beginning after December 31, 1993), (increased by any
                       cost of living adjustment made by the Secretary of
                       Treasury or the Secretary's delegate) of the Key
                       Employee's Compensation, allocated on behalf of any Key
                       Employee for that year.  The minimum allocation is
                       determined without regard to any Social Security
                       contribution.  The Employer may, in the Adoption
                       Agreement, limit the Participants who are entitled to
                       receive the minimum allocation.  This minimum allocation
                       shall be made even though under other Plan provisions,
                       the Participant would not otherwise be entitled to
                       receive an allocation, or would have received a lesser
                       allocation for the year because of (a) the Participant's
                       failure to complete 1,000 Hours of Service (or any
                       equivalent provided in the Plan), or (b) the
                       Participant's failure to make mandatory Nondeductible
                       Employee Contributions to the Plan, or (c) Compensation
                       less than a stated amount.

                   2.  For purposes of computing the minimum allocation,
                       Compensation shall mean Compensation as defined in
                       Section 1.07 of the Plan and shall include any amounts
                       contributed by the Employer pursuant to a salary
                       reduction agreement and which is not includible in the
                       gross income of the Employee under Sections 125,
                       402(e)(3), 402(h)(1)(B) or 403(b) of the Code even if the
                       Employer has elected to exclude such contributions in the
                       definition of Compensation used for other purposes under
                       the Plan.

                   3.  The provision in (1) above shall not apply to any
                       Participant who was not employed by the Employer on the
                       last day of the Plan Year.

                   4.  The provision in (1) above shall not apply to any
                       Participant to the extent the Participant is covered
                       under any other plan or plans of the Employer and the
                       Employer has provided in the adoption agreement that the
                       minimum allocation or benefit requirement applicable to
                       Top-Heavy Plans will be met in the other plan or plans.

                   5.  The minimum allocation required under this Section
                       3.01(E) and Section 3.01(F)(1) (to the extent required to
                       be nonforfeitable under Code Section 416(b)) may not be
                       forfeited under Code Section 411(a)(3)(B) or
                       411(a)(3)(D).

               F.  SPECIAL REQUIREMENTS FOR PAIRED PLANS - The Employer
                   maintains paired plans if the Employer has adopted both a
                   standardized profit sharing plan and a standardized money
                   purchase pension plan using this Basic Plan Document.

                   1.  Minimum Allocation - When the paired plans are top-heavy,
                       the top-heavy requirements set forth in Section
                       3.01(E)(1) of the Plan shall apply.

                       a.  Same eligibility requirements.  In satisfying the
                           top-heavy minimum allocation requirements set forth
                           in Section 3.01(E) of the Plan, if the Employees
                           benefiting under each of the paired plans are
                           identical, the top-heavy minimum allocation shall be
                           made to the money purchase pension plan.

                       b.  Different eligibility requirements.  In satisfying
                           the top-heavy minimum allocation requirements set
                           forth in Section 3.01(E) of the Plan, if the
                           Employees benefiting under each of the paired plans
                           are not identical, the top-heavy minimum allocation
                           will be made to both of the paired plans.

                       A Participant is treated as benefiting under the Plan for
                       any Plan Year during which the Participant received or is
                       deemed to receive an allocation in accordance with
                       Section 1.410(b)-3(a).

                   2.  Only One Plan Can Be Integrated - If the Employer
                       maintains paired plans, only one of the Plans may provide
                       for the disparity in contributions which is permitted
                       under Section 401(l) of the Code.  In the event that both
                       Adoption Agreements provide for such integration, only
                       the money purchase pension plan shall be deemed to be
                       integrated.

               G.  RETURN OF THE EMPLOYER CONTRIBUTION TO THE EMPLOYER UNDER
                   SPECIAL CIRCUMSTANCES - Any contribution made by the Employer
                   because of a mistake of fact must be returned to the Employer
                   within one year of the contribution.

                   In the event that the Commissioner of Internal Revenue
                   determines that the Plan is not initially qualified under the
                   Code, any contributions made incident to that initial
                   qualification by the Employer must be returned to the
                   Employer within one year after the date the initial
                   qualification is denied, but only if the application for
                   qualification is made by the time prescribed by law for
                   filing the Employer's return for the taxable year in which
                   the Plan is adopted, or such later date as the Secretary of
                   the Treasury may prescribe.

                   In the event that a contribution made by the Employer under
                   this Plan is conditioned on deductibility and is not
                   deductible under Code Section 404, the contribution, to the
                   extent of the amount disallowed, must be returned to the
                   Employer within one year after the deduction is disallowed.

               H.  Omission of Participant

                   1.  If the Plan is a money purchase plan or a target benefit
                       plan and, if in any Plan Year, any Employee who should be
                       included as a Participant is erroneously omitted and
                       discovery of such omission is not made until after a
                       contribution by the Employer for the year has been made
                       and allocated, the Employer shall make a subsequent
                       contribution to

<PAGE>

                                                                              9

                       include earnings thereon, with respect to the omitted
                       Employee in the amount which the Employer would have
                       contributed with respect to that Employee had he or she
                       not been omitted.

                   2.  If the Plan is a profit sharing plan, and if in any Plan
                       Year, any Employee who should be included as a
                       Participant is erroneously omitted and discovery of such
                       omission is not made until after the Employer
                       Contribution has been made and allocated, then the Plan
                       Administrator must re-do the allocation (if a correction
                       can be made) and inform the Employee.  Alternatively, the
                       Employer may choose to contribute for the omitted
                       Employee the amount to include earnings thereon, which
                       the Employer would have contributed for the Employee.

      3.02     NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
               This Plan will not accept Nondeductible Employee Contributions
               and matching contributions for Plan Years beginning after the
               Plan Year in which this Plan is adopted by the Employer.
               Nondeductible Employee Contributions for Plan Years beginning
               after December 31, 1986, together with any matching contributions
               as defined in Section 401(m) of the Code, will be limited so as
               to meet the nondiscrimination test of Section 401(m) of the Code.

               A separate account will be maintained by the Plan Administrator
               for the Nondeductible Employee Contributions of each Participant.

               A Participant may, upon a written request submitted to the Plan
               Administrator withdraw the lesser of the portion of his or her
               Individual Account attributable to his or her Nondeductible
               Employee Contributions or the amount he or she contributed as
               Nondeductible Employee Contributions.

               Nondeductible Employee Contributions and earnings thereon will be
               nonforfeitable at all times.  No Forfeiture will occur solely as
               a result of an Employee's withdrawal of Nondeductible Employee
               Contributions.

               The Plan Administrator will not accept deductible employee
               contributions which are made for a taxable year beginning after
               December 31, 1986.  Contributions made prior to that date will be
               maintained in a separate account which will be nonforfeitable at
               all times.  The account will share in the gains and losses of the
               Fund in the same manner as described in Section 4.03 of the Plan.
               No part of the deductible employee contribution account will be
               used to purchase life insurance.  Subject to Section 6.05, joint
               and survivor annuity requirements (if applicable), the
               Participant may withdraw any part of the deductible employee
               contribution account by making a written application to the Plan
               Administrator.

      3.03     ROLLOVER CONTRIBUTIONS
               If so indicated in the Adoption Agreement, an Employee may
               contribute a rollover contribution to the Plan.  The Plan
               Administrator may require the Employee to submit a written
               certification that the contribution qualifies as a rollover
               contribution under the applicable provisions of the Code.  If it
               is later determined that all or part of a rollover contribution
               was ineligible to be rolled into the Plan, the Plan Administrator
               shall direct that any ineligible amounts, plus earnings
               attributable thereto, be distributed from the Plan to the
               Employee as soon as administratively feasible.

               A separate account shall be maintained by the Plan Administrator
               for each Employee's rollover contributions which will be
               nonforfeitable at all times.  Such account will share in the
               income and gains and losses of the Fund in the manner described
               in Section 4.03 and shall be subject to the Plan's provisions
               governing distributions.

               The Employer may, in a uniform and nondiscriminatory manner, only
               allow Employees who have become Participants in the Plan to make
               rollover contributions.

      3.04     TRANSFER CONTRIBUTIONS
               If so indicated in the Adoption Agreement, the Trustee (or
               Custodian, if applicable) may receive any amounts transferred to
               it from the trustee or custodian of another plan qualified under
               Code Section 401(a).   If it is later determined that all or part
               of a transfer contribution was ineligible to be transferred into
               the Plan, the Plan Administrator shall direct that any ineligible
               amounts, plus earnings attributable thereto, be distributed from
               the Plan to the Employee as soon as administratively feasible.

               A separate account shall be maintained by the Plan Administrator
               for each Employee's transfer contributions which will be
               nonforfeitable at all times.  Such account will share in the
               income and gains and losses of the Fund in the manner described
               in Section 4.03 and shall be subject to the Plan's provisions
               governing distributions.

               The Employer may, in a uniform and nondiscriminatory manner, only
               allow Employees who have become Participants in the Plan to make
               transfer contributions.

      3.05     LIMITATION ON ALLOCATIONS
               A.  If the Participant does not participate in, and has never
                   participated in another qualified plan maintained by the
                   Employer or a welfare benefit fund, as defined in Section
                   419(e) of the Code maintained by the Employer, or an
                   individual medical account, as defined in Section 415(l)(2)
                   of the Code, or a simplified employee pension plan, as
                   defined in Section 408(k) of the Code, maintained by the
                   Employer, which provides an annual addition as defined in
                   Section 3.08(E)(1), the following rules shall apply:

                   1.  The amount of annual additions which may be credited to
                       the Participant's Individual Account for any limitation
                       year will not exceed the lesser of the maximum
                       permissible amount or any other limitation contained in
                       this Plan.  If the Employer Contribution that would
                       otherwise be contributed or allocated to the
                       Participant's Individual Account would cause the annual
                       additions for the limitation year to exceed the maximum
                       permissible amount, the amount contributed or allocated
                       will be reduced so that the annual additions for the
                       limitation year will equal the maximum permissible
                       amount.

                   2.  Prior to determining the Participant's actual
                       Compensation for the limitation year, the Employer may
                       determine the maximum permissible amount for a
                       Participant on the basis of a reasonable estimation of
                       the Participant's Compensation for the limitation year,
                       uniformly determined for all Participants similarly
                       situated.

                   3.  As soon as is administratively feasible after the end of
                       the limitation year, the maximum permissible amount for
                       the limitation year will be determined on the basis of
                       the Participant's actual Compensation for the limitation
                       year.

                   4.  If pursuant to Section 3.05(A)(3) or as a result of the
                       allocation of Forfeitures there is an excess amount, the
                       excess will be disposed of as follows:

                       a.  Any Nondeductible Employee Contributions, to the
                           extent they would reduce the excess amount, will be
                           returned to the Participant;

                       b.  If after the application of paragraph (a) an excess
                           amount still exists, and the Participant is covered
                           by the Plan at the end of the limitation year, the
                           excess amount in the Participant's Individual Account
                           will be used to reduce

<PAGE>

10

                           Employer Contributions (including any allocation of
                           Forfeitures) for such Participant in the next
                           limitation year, and each succeeding limitation year
                           if necessary;

                       c.  If after the application of paragraph (b) an excess
                           amount still exists, and the Participant is not
                           covered by the Plan at the end of a limitation year,
                           the excess amount will be held unallocated in a
                           suspense account.  The suspense account will be
                           applied to reduce future Employer Contributions
                           (including allocation of any Forfeitures) for all
                           remaining Participants in the next limitation year,
                           and each succeeding limitation year if necessary;

                       d.  If a suspense account is in existence at any time
                           during a limitation year pursuant to this Section, it
                           will not participate in the allocation of the Fund's
                           investment gains and losses.  If a suspense account
                           is in existence at any time during a particular
                           limitation year, all amounts in the suspense account
                           must be allocated and reallocated to Participants'
                           Individual Accounts before any Employer Contributions
                           or any Nondeductible Employee Contributions may be
                           made to the Plan for that limitation year.  Excess
                           amounts may not be distributed to Participants or
                           former Participants.

               B.  If, in addition to this Plan, the Participant is covered
                   under another qualified master or prototype defined
                   contribution plan maintained by the Employer, a welfare
                   benefit fund maintained by the Employer, an individual
                   medical account maintained by the Employer, or a simplified
                   employee pension maintained by the Employer that provides an
                   annual addition as defined in Section 3.05(E)(1), during any
                   limitation year, the following rules apply:

                   1.  The annual additions which may be credited to a
                       Participant's Individual Account under this Plan for any
                       such limitation year will not exceed the maximum
                       permissible amount reduced by the annual additions
                       credited to a Participant's Individual Account under the
                       other qualified master or prototype plans, welfare
                       benefit funds, individual medical accounts and simplified
                       employee pensions for the same limitation year.  If the
                       annual additions with respect to the Participant under
                       other qualified master or prototype defined contribution
                       plans, welfare benefit funds, individual medical accounts
                       and simplified employee pensions maintained by the
                       Employer are less than the maximum permissible amount and
                       the Employer Contribution that would otherwise be
                       contributed or allocated to the Participant's Individual
                       Account under this Plan would cause the annual additions
                       for the limitation year to exceed this limitation, the
                       amount contributed or allocated will be reduced so that
                       the annual additions under all such plans and funds for
                       the limitation year will equal the maximum permissible
                       amount.  If the annual additions with respect to the
                       Participant under such other qualified master or
                       prototype defined contribution plans, welfare benefit
                       funds, individual medical accounts and simplified
                       employee pensions in the aggregate are equal to or
                       greater than the maximum permissible amount, no amount
                       will be contributed or allocated to the Participant's
                       Individual Account under this Plan for the limitation
                       year.

                   2.  Prior to determining the Participant's actual
                       Compensation for the limitation year, the Employer may
                       determine the maximum permissible amount for a
                       Participant in the manner described in Section
                       3.05(A)(2).

                   3.  As soon as is administratively feasible after the end of
                       the limitation year, the maximum permissible amount for
                       the limitation year will be determined on the basis of
                       the Participant's actual Compensation for the limitation
                       year.

                   4.  If, pursuant to Section 3.05(B)(3) or as a result of the
                       allocation of Forfeitures a Participant's annual
                       additions under this Plan and such other plans would
                       result in an excess amount for a limitation year, the
                       excess amount will be deemed to consist of the annual
                       additions last allocated, except that annual additions
                       attributable to a simplified employee pension will be
                       deemed to have been allocated first, followed by annual
                       additions to a welfare benefit fund or individual medical
                       account, regardless of the actual allocation date.

                   5.  If an excess amount was allocated to a Participant on an
                       allocation date of this Plan which coincides with an
                       allocation date of another plan, the excess amount
                       attributed to this Plan will be the product of,

                       a.  the total excess amount allocated as of such date,
                           times

                       b.  the ratio of (i) the annual additions allocated to
                           the Participant for the limitation year as of such
                           date under this Plan to (ii) the total annual
                           additions allocated to the Participant for the
                           limitation year as of such date under this and all
                           the other qualified prototype defined contribution
                           plans.

                   6.  Any excess amount attributed to this Plan will be
                       disposed in the manner described in Section 3.05(A)(4).

               C.  If the Participant is covered under another qualified defined
                   contribution plan maintained by the Employer which is not a
                   master or prototype plan, annual additions which may be
                   credited to the Participant's Individual Account under this
                   Plan for any limitation year will be limited in accordance
                   with Sections 3.05(B)(1) through 3.05(B)(6) as though the
                   other plan were a master or prototype plan unless the
                   Employer provides other limitations in the Section of the
                   Adoption Agreement titled "Limitation on Allocation - More
                   Than One Plan."

               D.  If the Employer maintains, or at any time maintained, a
                   qualified defined benefit plan covering any Participant in
                   this Plan, the sum of the Participant's defined benefit plan
                   fraction and defined contribution plan fraction will not
                   exceed 1.0 in any limitation year.  The annual additions
                   which may be credited to the Participant's Individual Account
                   under this Plan for any limitation year will be limited in
                   accordance with the Section of the Adoption Agreement titled
                   "Limitation on Allocation - More Than One Plan."

               E.  The following terms shall have the following meanings when
                   used in this Section 3.05:

                   1.  Annual additions:  The sum of the following amounts
                       credited to a Participant's Individual Account for the
                       limitation year:

                       a.  Employer Contributions,

                       b.  Nondeductible Employee Contributions,

                       c.  Forfeitures,

                       d.  amounts allocated, after March 31, 1984, to an
                           individual medical account, as defined in Section
                           415(l)(2) of the Code, which is part of a pension or
                           annuity plan maintained by the Employer are treated
                           as annual additions to a defined contribution plan.
                           Also amounts derived from contributions paid or
                           accrued after December 31, 1985, in taxable years
                           ending after such date, which are attributable to
                           post-retirement medical benefits, allocated to the
                           separate account of a key employee, as defined in
                           Section 419A(d)(3) of the Code, under a welfare
                           benefit fund, as

<PAGE>

                                                                             11

                           defined in Section 419(e) of the Code, maintained by
                           the Employer are treated as annual additions to a
                           defined contribution plan, and

                       e.  allocations under a simplified employee pension.

                       For this purpose, any excess amount applied under Section
                       3.05(A)(4) or 3.05(B)(6) in the limitation year to reduce
                       Employer Contributions will be considered annual
                       additions for such limitation year.

                   2.  Compensation:  Means Compensation as defined in Section
                       1.07 of the Plan except that Compensation for purposes of
                       this Section 3.05 shall not include any amounts
                       contributed by the Employer pursuant to a salary
                       reduction agreement and which is not includible in the
                       gross income of the Employee under Sections 125,
                       402(e)(3), 402(h)(1)(B) or 403(b) of the Code even if the
                       Employer has elected to include such contributions in the
                       definition of Compensation used for other purposes under
                       the Plan.  Further, any other exclusion the Employer has
                       elected (such as the exclusion of certain types of pay or
                       pay earned before the Employee enters the Plan) will not
                       apply for purposes of this Section.

                       Notwithstanding the preceding sentence, Compensation for
                       a Participant in a defined contribution plan who is
                       permanently and totally disabled (as defined in Section
                       22(e)(3) of the Code) is the Compensation such
                       Participant would have received for the limitation year
                       if the Participant had been paid at the rate of
                       Compensation paid immediately before becoming permanently
                       and totally disabled; such imputed Compensation for the
                       disabled Participant may be taken into account only if
                       the Participant is not a Highly Compensated Employee (as
                       defined in Section 414(q) of the Code) and contributions
                       made on behalf of such Participant are nonforfeitable
                       when made.

                   3.  Defined benefit fraction:  A fraction, the numerator of
                       which is the sum of the Participant's projected annual
                       benefits under all the defined benefit plans (whether or
                       not terminated) maintained by the Employer, and the
                       denominator of which is the lesser of 125% of the dollar
                       limitation determined for the limitation year under
                       Section 415(b) and (d) of the Code or 140% of the highest
                       average compensation, including any adjustments under
                       Section 415(b) of the Code.

                       Notwithstanding the above, if the Participant was a
                       Participant as of the first day of the first limitation
                       year beginning after December 31, 1986, in one or more
                       defined benefit plans maintained by the Employer which
                       were in existence on May 6, 1986, the denominator of this
                       fraction will not be less than 125% of the sum of the
                       annual benefits under such plans which the Participant
                       had accrued as of the close of the last limitation year
                       beginning before January 1, 1987, disregarding any
                       changes in the terms and conditions of the plan after May
                       5, 1986.  The preceding sentence applies only if the
                       defined benefit plans individually and in the aggregate
                       satisfied the requirements of Section 415 of the Code for
                       all limitation years beginning before January 1, 1987.

                   4.  Defined contribution dollar limitation:  $30,000 or if
                       greater, one-fourth of the defined benefit dollar
                       limitation set forth in Section 415(b)(1) of the Code as
                       in effect for the limitation year.

                   5.  Defined contribution fraction:  A fraction, the numerator
                       of which is the sum of the annual additions to the
                       Participant's account under all the defined contribution
                       plans (whether or not terminated) maintained by the
                       Employer for the current and all prior limitation years
                       (including the annual additions attributable to the
                       Participant's nondeductible employee contributions to all
                       defined benefit plans, whether or not terminated,
                       maintained by the Employer, and the annual additions
                       attributable to all welfare benefit funds, as defined in
                       Section 419(e) of the Code, individual medical accounts,
                       and simplified employee pensions, maintained by the
                       Employer), and the denominator of which is the sum of the
                       maximum aggregate amounts for the current and all prior
                       limitation years of service with the Employer (regardless
                       of whether a defined contribution plan was maintained by
                       the Employer).  The maximum aggregate amount in any
                       limitation year is the lesser of 125% of the dollar
                       limitation determined under Section 415(b) and (d) of the
                       Code in effect under Section 415(c)(1)(A) of the Code or
                       35% of the Participant's Compensation for such year.

                       If the Employee was a Participant as of the end of the
                       first day of the first limitation year beginning after
                       December 31, 1986, in one or more defined contribution
                       plans maintained by the Employer which were in existence
                       on May 6, 1986, the numerator of this fraction will be
                       adjusted if the sum of this fraction and the defined
                       benefit fraction would otherwise exceed 1.0 under the
                       terms of this Plan.  Under the adjustment, an amount
                       equal to the product of (1) the excess of the sum of the
                       fractions over 1.0 times (2) the denominator of this
                       fraction, will be permanently subtracted from the
                       numerator of this fraction.  The adjustment is calculated
                       using the fractions as they would be computed as of the
                       end of the last limitation year beginning before January
                       1, 1987, and disregarding any changes in the terms and
                       conditions of the Plan made after May 5, 1986, but using
                       the Section 415 limitation applicable to the first
                       limitation year beginning on or after January 1, 1987.

                       The annual addition for any limitation year beginning
                       before January 1, 1987, shall not be recomputed to treat
                       all Nondeductible Employee Contributions as annual
                       additions.

                   6.  Employer:  For purposes of this Section 3.05, Employer
                       shall mean the Employer that adopts this Plan, and all
                       members of a controlled group of corporations (as defined
                       in Section 414(b) of the Code as modified by Section
                       415(h)), all commonly controlled trades or businesses (as
                       defined in Section 414(c) as modified by Section 415(h))
                       or affiliated service groups (as defined in Section
                       414(m)) of which the adopting Employer is a part, and any
                       other entity required to be aggregated with the Employer
                       pursuant to regulations under Section 414(o) of the Code.

                   7.  Excess amount:  The excess of the Participant's annual
                       additions for the limitation year over the maximum
                       permissible amount.

                   8.  Highest average compensation:  The average compensation
                       for the three consecutive years of service with the
                       Employer that produces the highest average.

                   9.  Limitation year:  A calendar year, or the 12-consecutive
                       month period elected by the Employer in the Adoption
                       Agreement.  All qualified plans maintained by the
                       Employer must use the same limitation year.  If the
                       limitation year is amended to a different 12-consecutive
                       month period, the new limitation year must begin on a
                       date within the limitation year in which the amendment is
                       made.

                   10. Master or prototype plan:  A plan the form of which is
                       the subject of a favorable opinion  letter from the
                       Internal Revenue Service.

                   11. Maximum permissible amount:  The maximum annual addition
                       that may be contributed or allocated to a Participant's
                       Individual Account under the Plan for any limitation year
                       shall not exceed the lesser of:

                       a.  the defined contribution dollar limitation, or

                       b.  25% of the Participant's Compensation for the
                           limitation year.
<PAGE>

12

                       The compensation limitation referred to in (b) shall not
                       apply to any contribution for medical benefits (within
                       the meaning of Section 401(h) or Section 419A(f)(2) of
                       the Code) which is otherwise treated as an annual
                       addition under Section 415(l)(1) or 419A(d)(2) of the
                       Code.

                       If a short limitation year is created because of an
                       amendment changing the limitation year to a different 12-
                       consecutive month period, the maximum permissible amount
                       will not exceed the defined contribution dollar
                       limitation multiplied by the following fraction:

                           Number of months in the short limitation year
                           ---------------------------------------------
                                                12

                   12. Projected annual benefit:  The annual retirement benefit
                       (adjusted to an actuarially equivalent straight life
                       annuity if such benefit is expressed in a form other than
                       a straight life annuity or qualified joint and survivor
                       annuity) to which the Participant would be entitled under
                       the terms of the Plan assuming:

                       a.  the Participant will continue employment until Normal
                           Retirement Age under the Plan (or current age, if
                           later), and

                       b.  the Participant's Compensation for the current
                           limitation year and all other relevant factors used
                           to determine benefits under the Plan will remain
                           constant for all future limitation years.

                           Straight life annuity means an annuity payable in
                           equal installments for the life of the Participant
                           that terminates upon the Participants's death.

SECTION FOUR   INDIVIDUAL ACCOUNTS OF PARTICIPANTS AND VALUATION

      4.01     INDIVIDUAL ACCOUNTS
               A.  The Plan Administrator shall establish and maintain an
                   Individual Account in the name of each Participant to reflect
                   the total value of his or her interest in the Fund.  Each
                   Individual Account established hereunder shall consist of
                   such subaccounts as may be needed for each Participant
                   including:

                   1.  a subaccount to reflect Employer Contributions and
                       Forfeitures allocated on behalf of a Participant;

                   2.  a subaccount to reflect a Participant's rollover
                       contributions;

                   3.  a subaccount to reflect a Participant's transfer
                       contributions;

                   4.  a subaccount to reflect a Participant's Nondeductible
                       Employee Contributions; and

                   5.  a subaccount to reflect a Participant's deductible
                       employee contributions.

               B.  The Plan Administrator may establish additional accounts as
                   it may deem necessary for the proper administration of the
                   Plan, including, but not limited to, a suspense account for
                   Forfeitures as required pursuant to Section 6.01(D).

      4.02     VALUATION OF FUND
               The Fund will be valued each Valuation Date at fair market value.

      4.03     VALUATION OF INDIVIDUAL ACCOUNTS
               A.  Where all or a portion of the assets of a Participant's
                   Individual Account are invested in a Separate Fund for the
                   Participant, then the value of that portion of such
                   Participant's Individual Account at any relevant time equals
                   the sum of the fair market values of the assets in such
                   Separate Fund, less any applicable charges or penalties.

               B.  The fair market value of the remainder of each Individual
                   Account is determined in the following manner:

                   1.  First, the portion of the Individual Account invested in
                       each Investment Fund as of the previous Valuation Date is
                       determined.  Each such portion is reduced by any
                       withdrawal made from the applicable Investment Fund to or
                       for the benefit of a Participant or the Participant's
                       Beneficiary, further reduced by any amounts forfeited by
                       the Participant pursuant to Section 6.01(D) and further
                       reduced by any transfer to another Investment Fund since
                       the previous Valuation Date and is increased by any
                       amount transferred from another Investment Fund since the
                       previous Valuation Date.  The resulting amounts are the
                       net Individual Account portions invested in the
                       Investment Funds.

                   2.  Secondly, the net Individual Account portions invested in
                       each Investment Fund are adjusted upwards or downwards,
                       pro rata (i.e., ratio of each net Individual Account
                       portion to the sum of all net Individual Account
                       portions) so that the sum of all the net Individual
                       Account portions invested in an Investment Fund will
                       equal the then fair market value of the Investment Fund.
                       Notwithstanding the previous sentence, for the first Plan
                       Year only, the net Individual Account portions shall be
                       the sum of all contributions made to each Participant's
                       Individual Account during the first Plan Year.

                   3.  Thirdly, any contributions to the Plan and Forfeitures
                       are allocated in accordance with the appropriate
                       allocation provisions of Section 3.  For purposes of
                       Section 4, contributions made by the Employer for any
                       Plan Year but after that Plan Year will be considered to
                       have been made on the last day of that Plan Year
                       regardless of when paid to the Trustee (or Custodian, if
                       applicable).

                       Amounts contributed between Valuation Dates will not be
                       credited with investment gains or losses until the next
                       following Valuation Date.

                   4.  Finally, the portions of the Individual Account invested
                       in each Investment Fund (determined in accordance with
                       (1), (2) and (3) above) are added together.

      4.04     MODIFICATION OF METHOD FOR VALUING INDIVIDUAL ACCOUNTS
               If necessary or appropriate, the Plan Administrator may establish
               different or additional procedures (which shall be uniform and
               nondiscriminatory) for determining the fair market value of the
               Individual Accounts.

      4.05     SEGREGATION OF ASSETS
               If a Participant elects a mode of distribution other than a lump
               sum, the Plan Administrator may place that Participant's account
               balance into a segregated Investment Fund for the purpose of
               maintaining the necessary liquidity to provide benefit
               installments on a periodic basis.

      4.06     STATEMENT OF INDIVIDUAL ACCOUNTS
               No later than 270 days after the close of each Plan Year, the
               Plan Administrator shall furnish a statement to each Participant
               indicating the Individual Account balances of such Participant as
               of the last Valuation Date in such Plan Year.

<PAGE>

                                                                            13

SECTION FIVE   TRUSTEE OR CUSTODIAN

      5.01     CREATION OF FUND
               By adopting this Plan, the Employer establishes the Fund which
               shall consist of the assets of the Plan held by the Trustee (or
               Custodian, if applicable) pursuant to this Section 5.  Assets
               within the Fund may be pooled on behalf of all Participants,
               earmarked on behalf of each Participant or be a combination of
               pooled and earmarked.  To the extent that assets are earmarked
               for a particular Participant, they will be held in a Separate
               Fund for that Participant.

               No part of the corpus or income of the Fund may be used for, or
               diverted to, purposes other than for the exclusive benefit of
               Participants or their Beneficiaries.

     5.02      INVESTMENT AUTHORITY
               Except as provided in Section 5.14 (relating to individual
               direction of investments by Participants), the Employer, not the
               Trustee (or Custodian, if applicable), shall have exclusive
               management and control over the investment of the Fund into any
               permitted investment.  Notwithstanding the preceding sentence, a
               Trustee may make an agreement with the Employer whereby the
               Trustee will manage the investment of all or a portion of the
               Fund.  Any such agreement shall be in writing and set forth such
               matters as the Trustee deems necessary or desirable.

     5.03      FINANCIAL ORGANIZATION CUSTODIAN OR TRUSTEE WITHOUT FULL TRUST
               POWERS
               This Section 5.03 applies where a financial organization has
               indicated in the Adoption Agreement that it will serve, with
               respect to this Plan, as Custodian or as Trustee without full
               trust powers (under applicable law).  Hereinafter, a financial
               organization Trustee without full trust powers (under applicable
               law) shall be referred to as a Custodian.  The Custodian shall
               have no discretionary authority with respect to the management of
               the Plan or the Fund but will act only as directed by the entity
               who has such authority.

               A.  PERMISSIBLE INVESTMENTS - The assets of the Plan shall be
                   invested only in those investments which are available
                   through the Custodian in the ordinary course of business
                   which the Custodian may legally hold in a qualified plan and
                   which the Custodian chooses to make available to Employers
                   for qualified plan investments.  Notwithstanding the
                   preceding sentence, the Prototype Sponsor may, as a condition
                   of making the Plan available to the Employer, limit the types
                   of property in which the assets of the Plan may be invested.

               B.  RESPONSIBILITIES OF THE CUSTODIAN - The responsibilities of
                   the Custodian shall be limited to the following:

                   1.  To receive Plan contributions and to hold, invest and
                       reinvest the Fund without distinction between principal
                       and interest; provided, however, that nothing in this
                       Plan shall require the Custodian to maintain physical
                       custody of stock certificates (or other indicia of
                       ownership of any type of asset) representing assets
                       within the Fund;

                   2.  To maintain accurate records of contributions, earnings,
                       withdrawals and other information the Custodian deems
                       relevant with respect to the Plan;

                   3.  To make disbursements from the Fund to Participants or
                       Beneficiaries upon the proper authorization of the Plan
                       Administrator; and

                   4.  To furnish to the Plan Administrator a statement which
                       reflects the value of the investments in the hands of the
                       Custodian as of the end of each Plan Year and as of any
                       other times as the Custodian and Plan Administrator may
                       agree.

               C.  POWERS OF THE CUSTODIAN - Except as otherwise provided in
                   this Plan, the Custodian shall have the power to take any
                   action with respect to the Fund which it deems necessary or
                   advisable to discharge its responsibilities under this Plan
                   including, but not limited to, the following powers:

                   1.  To invest all or a portion of the Fund (including idle
                       cash balances) in time deposits, savings accounts, money
                       market accounts or similar investments bearing a
                       reasonable rate of interest in the Custodian's own
                       savings department or the savings department of another
                       financial organization;

                   2.  To vote upon any stocks, bonds, or other securities; to
                       give general or special proxies or powers of attorney
                       with or without power of substitution; to exercise any
                       conversion privileges or subscription rights and to make
                       any payments incidental thereto; to oppose, or to consent
                       to, or otherwise participate in, corporate
                       reorganizations or other changes affecting corporate
                       securities, and to pay any assessment or charges in
                       connection therewith; and generally to exercise any of
                       the powers of an owner with respect to stocks, bonds,
                       securities or other property;

                   3.  To hold securities or other property of the Fund in its
                       own name, in the name of its nominee or in bearer form;
                       and

                   4.  To make, execute, acknowledge, and deliver any and all
                       documents of transfer and conveyance and any and all
                       other instruments that may be necessary or appropriate to
                       carry out the powers herein granted.


      5.04     FINANCIAL ORGANIZATION TRUSTEE WITH FULL TRUST POWERS AND
               INDIVIDUAL TRUSTEE
               This Section 5.04 applies where a financial organization has
               indicated in the Adoption Agreement that it will serve as Trustee
               with full trust powers.  This Section also applies where one or
               more individuals are named in the Adoption Agreement to serve as
               Trustee(s).

               A.  PERMISSIBLE INVESTMENTS - The Trustee may invest the assets
                   of the Plan in property of any character, real or personal,
                   including, but not limited to the following:  stocks,
                   including shares of open-end investment companies (mutual
                   funds); bonds; notes; debentures; options; limited
                   partnership interests; mortgages; real estate or any
                   interests therein; unit investment trusts; Treasury Bills,
                   and other U.S. Government obligations; common trust funds,
                   combined investment trusts, collective trust funds or
                   commingled funds maintained by a bank or similar financial
                   organization (whether or not the Trustee hereunder); savings
                   accounts, time deposits or money market accounts of a bank or
                   similar financial organization (whether or not the Trustee
                   hereunder); annuity contracts; life insurance policies; or in
                   such other investments as is deemed proper without regard to
                   investments authorized by statute or rule of law governing
                   the investment of trust funds but with regard to ERISA and
                   this Plan.

                   Notwithstanding the preceding sentence, the Prototype Sponsor
                   may, as a condition of making the Plan available to the
                   Employer, limit the types of property in which the assets of
                   the Plan may be invested.

               B.  RESPONSIBILITIES OF THE TRUSTEE - The responsibilities of the
                   Trustee shall be limited to the following:

                   1.  To receive Plan contributions and to hold, invest and
                       reinvest the Fund without distinction between principal
                       and interest; provided, however, that nothing in this
                       Plan shall require the Trustee to maintain physical
                       custody of stock certificates (or other indicia of
                       ownership) representing assets within the Fund;

<PAGE>

14

                   2.  To maintain accurate records of contributions, earnings,
                       withdrawals and other information the Trustee deems
                       relevant with respect to the Plan;

                   3.  To make disbursements from the Fund to Participants or
                       Beneficiaries upon the proper authorization of the Plan
                       Administrator; and

                   4.  To furnish to the Plan Administrator a statement which
                       reflects the value of the investments in the hands of the
                       Trustee as of the end of each Plan Year and as of any
                       other times as the Trustee and Plan Administrator may
                       agree.

               C.  POWERS OF THE TRUSTEE - Except as otherwise provided in this
                   Plan, the Trustee shall have the power to take any action
                   with respect to the Fund which it deems necessary or
                   advisable to discharge its responsibilities under this Plan
                   including, but not limited to, the following powers:

                   1.  To hold any securities or other property of the Fund in
                       its own name, in the name of its nominee or in bearer
                       form;


                   2.  To purchase or subscribe for securities issued, or real
                       property owned, by the Employer or any trade or business
                       under common control with the Employer but only if the
                       prudent investment and diversification requirements of
                       ERISA are satisfied;

                   3.  To sell, exchange, convey, transfer or otherwise dispose
                       of any securities or other property held by the Trustee,
                       by private contract or at public auction.  No person
                       dealing with the Trustee shall be bound to see to the
                       application of the purchase money or to inquire into the
                       validity, expediency, or propriety of any such sale or
                       other disposition, with or without advertisement;

                   4.  To vote upon any stocks, bonds, or other securities; to
                       give general or special proxies or powers of attorney
                       with or without power of substitution; to exercise any
                       conversion privileges or subscription rights and to make
                       any payments incidental thereto; to oppose, or to consent
                       to, or otherwise participate in, corporate
                       reorganizations or other changes affecting corporate
                       securities, and to delegate discretionary powers, and to
                       pay any assessments or charges in connection therewith;
                       and generally to exercise any of the powers of an owner
                       with respect to stocks, bonds, securities or other
                       property;

                   5.  To invest any part or all of the Fund (including idle
                       cash balances) in certificates of deposit, demand or time
                       deposits, savings accounts, money market accounts or
                       similar investments of the Trustee (if the Trustee is a
                       bank or similar financial organization), the Prototype
                       Sponsor or any affiliate of such Trustee or Prototype
                       Sponsor, which bear a reasonable rate of interest;

                   6.  To provide sweep services without the receipt by the
                       Trustee of additional compensation or other consideration
                       (other than reimbursement of direct expenses properly and
                       actually incurred in the performance of such services);

                   7.  To hold in the form of cash for distribution or
                       investment such portion of the Fund as, at any time and
                       from time-to-time, the Trustee shall deem prudent and
                       deposit such cash in interest bearing or noninterest
                       bearing accounts;

                   8.  To make, execute, acknowledge, and deliver any and all
                       documents of transfer and conveyance and any and all
                       other instruments that may be necessary or appropriate to
                       carry out the powers herein granted;

                   9.  To settle, compromise, or submit to arbitration any
                       claims, debts, or damages due or owing to or from the
                       Plan, to commence or defend suits or legal or
                       administrative proceedings, and to represent the Plan in
                       all suits and legal and administrative proceedings;

                   10. To employ suitable agents and counsel, to contract with
                       agents to perform administrative and recordkeeping duties
                       and to pay their reasonable expenses, fees and
                       compensation, and such agent or counsel may or may not be
                       agent or counsel for the Employer;


                   11. To cause any part or all of the Fund, without limitation
                       as to amount, to be commingled with the funds of other
                       trusts (including trusts for qualified employee benefit
                       plans) by causing such money to be invested as a part of
                       any pooled, common, collective or commingled trust fund
                       (including any such fund described in the Adoption
                       Agreement) heretofore or hereafter created by any Trustee
                       (if the Trustee is a bank), by the Prototype Sponsor, by
                       any affiliate bank of such a Trustee or by such a Trustee
                       or the Prototype Sponsor, or by such an affiliate in
                       participation with others; the instrument or instruments
                       establishing such trust fund or funds, as amended, being
                       made part of this Plan and trust so long as any portion
                       of the Fund shall be invested through the medium thereof;
                       and

                   12. Generally to do all such acts, execute all such
                       instruments, initiate such proceedings, and exercise all
                       such rights and privileges with relation to property
                       constituting the Fund as if the Trustee were the absolute
                       owner thereof.

      5.05     DIVISION OF FUND INTO INVESTMENT FUNDS
               The Employer may direct the Trustee (or Custodian) from time-to-
               time to divide and redivide the Fund into one or more Investment
               Funds.  Such Investment Funds may include, but not be limited to,
               Investment Funds representing the assets under the control of an
               investment manager pursuant to Section 5.12 and Investment Funds
               representing investment options available for individual
               direction by Participants pursuant to Section 5.14.  Upon each
               division or redivision, the Employer may specify the part of the
               Fund to be allocated to each such Investment Fund and the terms
               and conditions, if any, under which the assets in such Investment
               Fund shall be invested.

      5.06     COMPENSATION AND EXPENSES
               The Trustee (or Custodian, if applicable) shall receive such
               reasonable compensation as may be agreed upon by the Trustee (or
               Custodian) and the Employer.  The Trustee (or Custodian) shall be
               entitled to reimbursement by the Employer for all proper expenses
               incurred in carrying out his or her duties under this Plan,
               including reasonable legal, accounting and actuarial expenses.
               If not paid by the Employer, such compensation and expenses may
               be charged against the Fund.

               All taxes of any kind that may be levied or assessed under
               existing or future laws upon, or in respect of, the Fund or the
               income thereof shall be paid from the Fund.

      5.07     NOT OBLIGATED TO QUESTION DATA
               The Employer shall furnish the Trustee (or Custodian, if
               applicable) and Plan Administrator the information which each
               party deems necessary for the administration of the Plan
               including, but not limited to, changes in a Participant's status,
               eligibility, mailing addresses and other such data as may be
               required.  The Trustee (or Custodian) and Plan Administrator
               shall be entitled to act on such information as is supplied them
               and shall have no duty or responsibility to further verify or
               question such information.

<PAGE>

                                                                             15

      5.08     LIABILITY FOR WITHHOLDING ON DISTRIBUTIONS
               The Plan Administrator shall be responsible for withholding
               federal income taxes from distributions from the Plan, unless the
               Participant (or Beneficiary, where applicable) elects not to have
               such taxes withheld.  The Trustee (or Custodian) or other payor
               may act as agent for the Plan Administrator to withhold such
               taxes and to make the appropriate distribution reports, if the
               Plan Administrator furnishes all the information to the Trustee
               (or Custodian) or other payor it may need to do withholding and
               reporting.

      5.09     RESIGNATION OR REMOVAL OF TRUSTEE (OR CUSTODIAN)
               The Trustee (or Custodian, if applicable) may resign at any time
               by giving 30 days advance written notice to the Employer.  The
               resignation shall become effective 30 days after receipt of such
               notice unless a shorter period is agreed upon.

               The Employer may remove any Trustee (or Custodian) at any time by
               giving written notice to such Trustee (or Custodian) and such
               removal shall be effective 30 days after receipt of such notice
               unless a shorter period is agreed upon.  The Employer shall have
               the power to appoint a successor Trustee (or Custodian).

               Upon such resignation or removal, if the resigning or removed
               Trustee (or Custodian) is the sole Trustee (or Custodian), he or
               she shall transfer all of the assets of the Fund then held by
               such Trustee (or Custodian) as expeditiously as possible to the
               successor Trustee (or Custodian) after paying or reserving such
               reasonable amount as he or she shall deem necessary to provide
               for the expense in the settlement of the accounts and the amount
               of any compensation due him or her and any sums chargeable
               against the Fund for which he or she may be liable.  If the Funds
               as reserved are not sufficient for such purpose, then he or she
               shall be entitled to reimbursement from the successor Trustee (or
               Custodian) out of the assets in the successor Trustee's (or
               Custodian's) hands under this Plan.  If the amount reserved shall
               be in excess of the amount actually needed, the former Trustee
               (or Custodian) shall return such excess to the successor Trustee
               (or Custodian).

               Upon receipt of the transferred assets, the successor Trustee (or
               Custodian) shall thereupon succeed to all of the powers and
               responsibilities given to the Trustee (or Custodian) by this
               Plan.

               The resigning or removed Trustee (or Custodian) shall render an
               accounting to the Employer and unless objected to by the Employer
               within 30 days of its receipt, the accounting shall be deemed to
               have been approved and the resigning or removed Trustee (or
               Custodian) shall be released and discharged as to all matters set
               forth in the accounting.  Where a financial organization is
               serving as Trustee (or Custodian) and it is merged with or bought
               by another organization (or comes under the control of any
               federal or state agency), that organization shall serve as the
               successor Trustee (or Custodian) of this Plan, but only if it is
               the type of organization that can so serve under applicable law.

               Where the Trustee or Custodian is serving as a nonbank trustee or
               custodian pursuant to Section 1.401-12(n) of the Income Tax
               Regulations, the Employer will appoint a successor Trustee (or
               Custodian) upon notification by the Commissioner of Internal
               Revenue that such substitution is required because the Trustee
               (or Custodian) has failed to comply with the requirements of
               Section 1.401-12(n) or is not keeping such records or making such
               returns or rendering such statements as are required by forms or
               regulations.

      5.10     DEGREE OF CARE - LIMITATIONS OF LIABILITY
               The Trustee (or Custodian) shall not be liable for any losses
               incurred by the Fund by any direction to invest communicated by
               the Employer, Plan Administrator, investment manager appointed
               pursuant to Section 5.12 or any Participant or Beneficiary.  The
               Trustee (or Custodian) shall be under no liability for
               distributions made or other action taken or not taken at the
               written direction of the Plan Administrator.  It is specifically
               understood that the Trustee (or Custodian) shall have no duty or
               responsibility with respect to the determination of matters
               pertaining to the eligibility of any Employee to become a
               Participant or remain a Participant hereunder, the amount of
               benefit to which a Participant or Beneficiary shall be entitled
               to receive hereunder, whether a distribution to Participant or
               Beneficiary is appropriate under the terms of the Plan or the
               size and type of any policy to be purchased from any insurer for
               any Participant hereunder or similar matters; it being understood
               that all such responsibilities under the Plan are vested in the
               Plan Administrator.

      5.11     INDEMNIFICATION OF PROTOTYPE SPONSOR AND TRUSTEE (OR CUSTODIAN)
               Notwithstanding any other provision herein, and except as may be
               otherwise provided by ERISA, the Employer shall indemnify and
               hold harmless the Trustee (or Custodian, if applicable) and the
               Prototype Sponsor, their officers, directors, employees, agents,
               their heirs, executors, successors and assigns, from and against
               any and all liabilities, damages, judgments, settlements, losses,
               costs, charges, or expenses (including legal expenses) at any
               time arising out of or incurred in connection with any action
               taken by such parties in the performance of their duties with
               respect to this Plan, unless there has been a final adjudication
               of gross negligence or willful misconduct in the performance of
               such duties.

               Further, except as may be otherwise provided by ERISA, the
               Employer will indemnify the Trustee (or Custodian) and Prototype
               Sponsor from any liability, claim or expense (including legal
               expense) which the Trustee (or Custodian) and Prototype Sponsor
               shall incur by reason of or which results, in whole or in part,
               from the Trustee's (or Custodian's) or Prototype Sponsor's
               reliance on the facts and other directions and elections the
               Employer communicates or fails to communicate.

     5.12      INVESTMENT MANAGERS

               A.  DEFINITION OF INVESTMENT MANAGER - The Employer may appoint
                   one or more investment managers to make investment decisions
                   with respect to all or a portion of the Fund.  The investment
                   manager shall be any firm or individual registered as an
                   investment adviser under the Investment Advisers Act of 1940,
                   a bank as defined in said Act or an insurance company
                   qualified under the laws of more than one state to perform
                   services consisting of the management, acquisition or
                   disposition of any assets of the Plan.

               B.  INVESTMENT MANAGER'S AUTHORITY - A separate Investment Fund
                   shall be established representing the assets of the Fund
                   invested at the direction of the investment manager.  The
                   investment manager so appointed shall direct the Trustee (or
                   Custodian, if applicable ) with respect to the investment of
                   such Investment Fund.  The investments which may be acquired
                   at the direction of the investment manager are those
                   described in Section 5.03(A) (for Custodians) or Section
                   5.04(A) (for Trustees).

               C.  WRITTEN AGREEMENT - The appointment of any investment manager
                   shall be by written agreement between the Employer and the
                   investment manager and a copy of such agreement (and any
                   modification or termination thereof) must be given to the
                   Trustee (or Custodian).

                   The agreement shall set forth, among other matters, the
                   effective date of the investment manager's appointment and an
                   acknowledgement by the investment manager that it is a
                   fiduciary of the Plan under ERISA.

<PAGE>

16

               D.  CONCERNING THE TRUSTEE (OR CUSTODIAN) - Written notice of
                   each appointment of an investment manager shall be given to
                   the Trustee (or Custodian) in advance of the effective date
                   of such appointment.  Such notice shall specify which portion
                   of the Fund will constitute the Investment Fund subject to
                   the investment manager's direction.  The Trustee (or
                   Custodian) shall comply with the investment direction given
                   to it by the investment manager and will not be liable for
                   any loss which may result by reason of any action (or
                   inaction) it takes at the direction of the investment
                   manager.

      5.13     MATTERS RELATING TO INSURANCE

               A.  If a life insurance policy is to be purchased for a
                   Participant, the aggregate premium for certain life insurance
                   for each Participant must be less than a certain percentage
                   of the aggregate Employer Contributions and Forfeitures
                   allocated to a Participant's Individual Account at any
                   particular time as  follows:

                   1.  Ordinary Life Insurance - For purposes of these
                       incidental insurance provisions, ordinary life insurance
                       contracts are contracts with both nondecreasing death
                       benefits and nonincreasing premiums.  If such contracts
                       are purchased, less than 50% of the aggregate Employer
                       Contributions and Forfeitures allocated to any
                       Participant's Individual Account will be used to pay the
                       premiums attributable to them.

                   2.  Term and Universal Life Insurance - No more than 25% of
                       the aggregate Employer Contributions and Forfeitures
                       allocated to any Participant's Individual Account will be
                       used to pay the premiums on term life insurance
                       contracts, universal life insurance contracts, and all
                       other life insurance contracts which are not ordinary
                       life.

                   3.  Combination - The sum of 50% of the ordinary life
                       insurance premiums and all other life insurance premiums
                       will not exceed 25% of the aggregate Employer
                       Contributions and Forfeitures allocated to any
                       Participant's Individual Account.

                       If this Plan is a profit sharing plan, the above
                       incidental benefits limits do not apply to life
                       insurance contracts purchased with Employer
                       Contributions and Forfeitures that have been in the
                       Participant's Individual Account for at least 2 full
                       Plan Years, measured from the date such contributions
                       were allocated.

               B.  Any dividends or credits earned on insurance contracts for a
                   Participant shall be allocated to such Participant's
                   Individual Account.

               C.  Subject to Section 6.05, the contracts on a Participant's
                   life will be converted to cash or an annuity or distributed
                   to the Participant upon commencement of benefits.

               D.  The Trustee (or Custodian, if applicable) shall apply for and
                   will be the owner of any insurance contract(s) purchased
                   under the terms of this Plan.  The insurance contract(s) must
                   provide that proceeds will be payable to the Trustee (or
                   Custodian), however, the Trustee (or Custodian) shall be
                   required to pay over all proceeds of the contract(s) to the
                   Participant's designated Beneficiary in accordance with the
                   distribution provisions of this Plan.  A Participant's spouse
                   will be the designated Beneficiary of the proceeds in all
                   circumstances unless a qualified election has been made in
                   accordance with Section 6.05.  Under no circumstances shall
                   the Fund retain any part of the proceeds.  In the event of
                   any conflict between the terms of this Plan and the terms of
                   any insurance contract purchased hereunder, the Plan
                   provisions shall control.

               E.  The Plan Administrator may direct the Trustee (or Custodian)
                   to sell and distribute insurance or annuity contracts to a
                   Participant (or other party as may be permitted) in
                   accordance with applicable law or regulations.

      5.14     DIRECTION OF INVESTMENTS BY PARTICIPANT
               If so indicated in the Adoption Agreement, each Participant may
               individually direct the Trustee (or Custodian, if applicable)
               regarding the investment of part or all of his or her Individual
               Account.  To the extent so directed, the Employer, Plan
               Administrator, Trustee (or Custodian) and all other fiduciaries
               are relieved of their fiduciary responsibility under Section 404
               of ERISA.

               The Plan Administrator shall direct that a Separate Fund be
               established in the name of each Participant who directs the
               investment of part or all of his or her Individual Account.  Each
               Separate Fund shall be charged or credited (as appropriate) with
               the earnings, gains, losses or expenses attributable to such
               Separate Fund.  No fiduciary shall be liable for any loss which
               results from a Participant's individual direction.  The assets
               subject to individual direction shall not be invested in
               collectibles as that term is defined in Section 408(m) of the
               Code.

               The Plan Administrator shall establish such uniform and
               nondiscriminatory rules relating to individual direction as it
               deems necessary or advisable including, but not limited to, rules
               describing (1) which portions of Participant's Individual Account
               can be individually directed; (2) the frequency of investment
               changes; (3) the forms and procedures for making investment
               changes;  and (4) the effect of a Participant's failure to make a
               valid direction.

               The Plan Administrator may, in a uniform and nondiscriminatory
               manner, limit the available investments for Participants'
               individual direction to certain specified investment options
               (including, but not limited to, certain mutual funds, investment
               contracts, deposit accounts and group trusts).  The Plan
               Administrator may permit, in a uniform and nondiscriminatory
               manner, a Beneficiary of a deceased Participant or the alternate
               payee under a qualified domestic relations order (as defined in
               Section 414(p) of the Code) to individually direct in accordance
               with this Section.

SECTION SIX    VESTING AND DISTRIBUTION

     6.01      DISTRIBUTION TO PARTICIPANT
               A.  DISTRIBUTABLE  EVENTS

                   1.  Entitlement to Distribution - The Vested portion of a
                       Participant's Individual Account shall be distributable
                       to the Participant upon (1) the occurrence of any of the
                       distributable events specified in the Adoption Agreement;
                       (2) the Participant's Termination of Employment after
                       attaining Normal Retirement Age; (3) the termination of
                       the Plan; and (4) the Participant's Termination of
                       Employment after satisfying any Early Retirement Age
                       conditions.

                       If a Participant separates from service before satisfying
                       the Early Retirement Age requirement, but has satisfied
                       the service requirement, the Participant will be entitled
                       to elect an early retirement benefit upon satisfaction of
                       such age requirement.

                   2.  Written Request:  When Distributed - A Participant
                       entitled to distribution who wishes to receive a
                       distribution must submit a written request to the Plan
                       Administrator.  Such request shall be made upon a form
                       provided by the Plan Administrator.  Upon a valid
                       request, the Plan Administrator shall direct the Trustee
                       (or Custodian, if applicable) to commence distribution no
                       later than the time specified in the Adoption Agreement
                       for this purpose and, if not specified in the Adoption
                       Agreement, then no later than 90 days following the later
                       of:

<PAGE>

                                                                             17

                       a.  the close of the Plan Year within which the event
                           occurs which entitles the Participant to
                           distribution; or
                       b.  the close of the Plan Year in which the request is
                           received.

                   3.  Special Rules for Withdrawals During Service - If this is
                       a profit sharing plan and the Adoption Agreement so
                       provides, a Participant may elect to receive a
                       distribution of all or part of the Vested portion of his
                       or her Individual Account, subject to the requirements of
                       Section 6.05 and further subject to the following limits:

                       a.  Participant for 5 or more years.  An Employee who has
                           been a Participant in the Plan for 5 or more years
                           may withdraw up to the entire Vested portion of his
                           or her Individual Account.

                       b.  Participant for less than 5 years.  An Employee who
                           has been a Participant in the Plan for less than 5
                           years may withdraw only the amount which has been in
                           his or her Individual Account attributable to
                           Employer Contributions for at least 2 full Plan
                           Years, measured from the date such contributions were
                           allocated.  However, if the distribution is on
                           account of hardship, the Participant may withdraw up
                           to his or her entire Vested portion of the
                           Participant's Individual Account.  For this purpose,
                           hardship shall have the meaning set forth in Section
                           6.01(A)(4) of the Code.

                   4.  Special Rules for Hardship Withdrawals - If this is a
                       profit sharing plan and the Adoption Agreement so
                       provides, a Participant may elect to receive a hardship
                       distribution of all or part of the Vested portion of his
                       or her Individual Account, subject to the requirements of
                       Section 6.05 and further subject to the following limits:

                       a.  Participant for 5 or more years.  An Employee who has
                           been a Participant in the Plan for 5 or more years
                           may withdraw up to the entire Vested portion of his
                           or her Individual Account.

                       b.  Participant for less than 5 years.  An Employee who
                           has been a Participant in the Plan for less than 5
                           years may withdraw only the amount which has been in
                           his or her Individual Account attributable to
                           Employer Contributions for at least 2 full Plan
                           Years, measured from the date such contributions were
                           allocated.

                           For purposes of this Section 6.01(A)(4) and Section
                           6.01(A)(3) hardship is defined as an immediate and
                           heavy financial need of the Participant where such
                           Participant lacks other available resources.  The
                           following are the only financial needs considered
                           immediate and heavy:  expenses incurred or necessary
                           for medical care, described in Section 213(d) of the
                           Code, of the Employee, the Employee's spouse or
                           dependents; the purchase (excluding mortgage
                           payments) of a principal residence for the Employee;
                           payment of tuition and related educational fees for
                           the next 12 months of post-secondary education for
                           the Employee, the Employee's spouse, children or
                           dependents; or the need to prevent the eviction of
                           the Employee from, or a foreclosure on the mortgage
                           of, the Employee's principal residence.

                           A distribution will be considered as necessary to
                           satisfy an immediate and heavy financial need of the
                           Employee only if:

                           1)  The employee has obtained all distributions,
                               other than hardship distributions, and all
                               nontaxable loans under all plans maintained by
                               the Employer;
                           2)  The distribution is not in excess of the amount
                               of an immediate and heavy financial need
                               (including amounts necessary to pay any federal,
                               state or local income taxes or penalties
                               reasonably anticipated to result from the
                               distribution).

                   5.  One-Time In-Service Withdrawal Option - If this is a
                       profit sharing plan and the Employer has elected the one-
                       time in-service withdrawal option in the Adoption
                       Agreement, then Participants will be permitted only one
                       in-service withdrawal during the course of such
                       Participants employment with the Employer.  The amount
                       which the Participant can withdraw will be limited to the
                       lesser of the amount determined under the limits set
                       forth in Section 6.01(A)(3) or the percentage of the
                       Participant's Individual Account specified by the
                       Employer in the Adoption Agreement.  Distributions under
                       this Section will be subject to the requirements of
                       Section 6.05.

                   6.  Commencement of Benefits - Notwithstanding any other
                       provision, unless the Participant elects otherwise,
                       distribution of benefits will begin no later than the
                       60th day after the latest of the close of the Plan Year
                       in which:

                       a.  the Participant attains Normal Retirement Age;
                       b.  occurs the 10th anniversary of the year in which the
                           Participant commenced participation in the Plan; or
                       c.  the Participant incurs a Termination of Employment.

                   Notwithstanding the foregoing, the failure of a Participant
                   and spouse to consent to a distribution while a benefit is
                   immediately distributable, within the meaning of Section
                   6.02(B) of the Plan, shall be deemed to be an election to
                   defer commencement of payment of any benefit sufficient to
                   satisfy this Section.

               B.  DETERMINING THE VESTED PORTION - In determining the Vested
                   portion of a Participant's Individual Account, the following
                   rules apply:

                   1.  Employer Contributions and Forfeitures - The Vested
                       portion of a Participant's Individual Account derived
                       from Employer Contributions and Forfeitures is determined
                       by applying the vesting schedule selected in the Adoption
                       Agreement (or the vesting schedule described in Section
                       6.01(C) if the Plan is a Top-Heavy Plan).

                   2.  Rollover and Transfer Contributions - A Participant is
                       fully Vested in his or her rollover contributions and
                       transfer contributions.

                   3.  Fully Vested Under Certain Circumstances - A Participant
                       is fully Vested in his or her Individual Account if any
                       of the following occurs:

                       a.  the Participant reaches Normal Retirement Age;

                       b.  the Plan is terminated or partially terminated; or

                       c.  there exists a complete discontinuance of
                           contributions under the Plan.

                       Further, unless otherwise indicated in the Adoption
                       Agreement, a Participant is fully Vested if the
                       Participant dies, incurs a Disability, or satisfies the
                       conditions for Early Retirement Age (if applicable).

<PAGE>

18

                   4.  Participants in a Prior Plan - If a Participant was a
                       participant in a Prior Plan on the Effective Date, his or
                       her Vested percentage shall not be less than it would
                       have been under such Prior Plan as computed on the
                       Effective Date.

               C.  MINIMUM VESTING SCHEDULE FOR TOP-HEAVY PLANS - The following
                   vesting provisions apply for any Plan Year in which this Plan
                   is a Top-Heavy Plan.

                   Notwithstanding the other provisions of this Section 6.01 or
                   the vesting schedule selected in the Adoption Agreement
                   (unless those provisions or that schedule provide for more
                   rapid vesting), a Participant's Vested portion of his or her
                   Individual Account attributable to Employer Contributions and
                   Forfeitures shall be determined in accordance with the
                   vesting schedule elected by the Employer in the Adoption
                   Agreement (and if no election is made the 6 year graded
                   schedule will be deemed to have been elected) as described
                   below:

<TABLE>
<CAPTION>

                          6 YEAR GRADED                           3 YEAR CLIFF

                   Years of                                Years of
               Vesting Service     Vested Percentage   Vesting Service     Vested Percentage
               <S>                 <C>                 <C>                 <C>
                      1                    0                  1                    0
                      2                   20                  2                    0
                      3                   40                  3                  100
                      4                   60
                      5                   80
                      6                  100

</TABLE>


                   This minimum vesting schedule applies to all benefits within
                   the meaning of Section 411(a)(7) of the Code, except those
                   attributable to Nondeductible Employee Contributions
                   including benefits accrued before the effective date of
                   Section 416 of the Code and benefits accrued before the Plan
                   became a Top-Heavy Plan. Further, no decrease in a
                   Participant's Vested percentage may occur in the event the
                   Plan's status as a Top-Heavy Plan changes for any Plan Year.
                   However, this Section 6.01(C) does not apply to the
                   Individual Account of any Employee who does not have an Hour
                   of Service after the Plan has initially become a Top-Heavy
                   Plan and such Employee's Individual Account attributable to
                   Employer Contributions and Forfeitures will be determined
                   without regard to this Section.

                   If this Plan ceases to be a Top-Heavy Plan, then in
                   accordance with the above restrictions, the vesting schedule
                   as selected in the Adoption Agreement will govern.  If the
                   vesting schedule under the Plan shifts in or out of top-heavy
                   status, such shift is an amendment to the vesting schedule
                   and the election in Section 9.04 applies.

               D.  BREAK IN VESTING SERVICE AND FORFEITURES - If a Participant
                   incurs a Termination of Employment, any portion of his or her
                   Individual Account which is not Vested shall be held in a
                   suspense account.  Such suspense account shall share in any
                   increase or decrease in the fair market value of the assets
                   of the Fund in accordance with Section 4 of the Plan.  The
                   disposition of such suspense account shall be as follows:

                   1.  Breaks in Vesting Service - If a Participant neither
                       receives nor is deemed to receive a distribution pursuant
                       to Section 6.01(D)(3) or (4) and the Participant returns
                       to the service of the Employer before incurring 5
                       consecutive Breaks in Vesting Service, there shall be no
                       Forfeiture and the amount in such suspense account shall
                       be recredited to such Participant's Individual Account.

                   2.  Five Consecutive Breaks in Vesting Service - If a
                       Participant neither receives nor is deemed to receive a
                       distribution pursuant to Section 6.01(D)(3) or (4) and
                       the Participant does not return to the service of the
                       Employer before incurring 5 consecutive Breaks in Vesting
                       Service, the portion of the Participant's Individual
                       Account which is not Vested shall be treated as a
                       Forfeiture and allocated in accordance with Section
                       3.01(C).

                   3.  Cash-out of Certain Participants - If the value of the
                       Vested portion of such Participant's Individual Account
                       derived from Nondeductible Employee Contributions and
                       Employer Contributions does not exceed $3,500, the
                       Participant shall receive a distribution of the entire
                       Vested portion of such Individual Account and the portion
                       which is not Vested shall be treated as a Forfeiture and
                       allocated in accordance with Section 3.01(C).  For
                       purposes of this Section, if the value of the Vested
                       portion of a Participant's Individual Account is zero,
                       the Participant shall be deemed to have received a
                       distribution of such Vested Individual Account.  A
                       Participant's Vested Individual Account balance shall not
                       include accumulated deductible employee contributions
                       within the meaning of Section 72(o)(5)(B) of the Code for
                       Plan Years beginning prior to January 1, 1989.

                   4.  Participants Who Elect to Receive Distributions - If such
                       Participant elects to receive a distribution, in
                       accordance with Section 6.02(B), of the value of the
                       Vested portion of his or her Individual Account derived
                       from Nondeductible Employee Contributions and Employer
                       Contributions, the portion which is not Vested shall be
                       treated as a Forfeiture and allocated in accordance with
                       Section 3.01(C).

                   5.  Re-employed Participants - If a Participant receives or
                       is deemed to receive a distribution pursuant to Section
                       6.01(D)(3) or (4) above and the Participant resumes
                       employment covered under this Plan, the Participant's
                       Employer-derived Individual Account balance will be
                       restored to the amount on the date of distribution if the
                       Participant repays to the Plan the full amount of the
                       distribution attributable to Employer Contributions
                       before the earlier of 5 years after the first date on
                       which the Participant is subsequently re-employed by the
                       Employer, or the date the Participant incurs 5
                       consecutive Breaks in Vesting Service following the date
                       of the distribution.

                       Any restoration of a Participant's Individual Account
                       pursuant to Section 6.01(D)(5) shall be made from other
                       Forfeitures, income or gain to the Fund or contributions
                       made by the Employer.

               E.  DISTRIBUTION PRIOR TO FULL VESTING - If a distribution is
                   made to a Participant who was not then fully Vested in his or
                   her Individual Account derived from Employer Contributions
                   and the Participant may increase his or her Vested percentage
                   in his or her Individual Account, then the following rules
                   shall apply:

                   1.  a separate account will be established for the
                       Participant's interest in the Plan as of the time of the
                       distribution, and

                   2.  at any relevant time the Participant's Vested portion of
                       the separate account will be equal to an amount ("X")
                       determined by the formula:  X=P (AB + (R x D)) - (R x D)
                       where "P" is the Vested percentage at the relevant time,
                       "AB" is the separate account balance at the relevant
                       time;  "D" is the amount of the distribution;  and "R" is
                       the ratio of the separate account balance at the relevant
                       time to the separate account balance after distribution.

<PAGE>

                                                                             19

      6.02     FORM OF DISTRIBUTION TO A PARTICIPANT

               A.  VALUE OF INDIVIDUAL ACCOUNT DOES NOT EXCEED $3,500 - If the
                   value of the Vested portion of a Participant's Individual
                   Account derived from Nondeductible Employee Contributions and
                   Employer Contributions does not exceed $3,500, distribution
                   from the Plan shall be made to the Participant in a single
                   lump sum in lieu of all other forms of distribution from the
                   Plan as soon as administratively feasible.

               B.  VALUE OF INDIVIDUAL ACCOUNT EXCEEDS $3,500

                   1.  If the value of the Vested portion of a Participant's
                       Individual Account derived from Nondeductible Employee
                       Contributions and Employer Contributions exceeds (or at
                       the time of any prior distribution exceeded) $3,500, and
                       the Individual Account is immediately distributable, the
                       Participant and the Participant's spouse (or where either
                       the Participant or the spouse died, the survivor) must
                       consent to any distribution of such Individual Account.
                       The consent of the Participant and the Participant's
                       spouse shall be obtained in writing within the 90-day
                       period ending on the annuity starting date.  The annuity
                       starting date is the first day of the first period for
                       which an amount is paid as an annuity or any other form.
                       The Plan Administrator shall notify the Participant and
                       the Participant's spouse of the right to defer any
                       distribution until the Participant's Individual Account
                       is no longer immediately distributable.  Such
                       notification shall include a general description of the
                       material features, and an explanation of the relative
                       values of, the optional forms of benefit available under
                       the Plan in a manner that would satisfy the notice
                       requirements of Section 417(a)(3) of the Code, and shall
                       be provided no less than 30 days and no more than 90 days
                       prior to the annuity starting date.

                       If a distribution is one to which Sections 401(a)(11) and
                       417 of the Internal Revenue Code do not apply, such
                       distribution may commence less than 30 days after the
                       notice required under Section 1.411(a)-11(c) of the
                       Income Tax Regulations is given, provided that:

                       a.  the Plan Administrator clearly informs the
                           Participant that the Participant has a right to a
                           period of at least 30 days after receiving the notice
                           to consider the decision of whether or not to elect a
                           distribution (and, if applicable, a particular
                           distribution option), and

                       b.  the Participant, after receiving the notice,
                           affirmatively elects a distribution.

                           Notwithstanding the foregoing, only the Participant
                           need consent to the commencement of a distribution in
                           the form of a qualified joint and survivor annuity
                           while the Individual Account is immediately
                           distributable.  Neither the consent of the
                           Participant nor the Participant's spouse shall be
                           required to the extent that a distribution is
                           required to satisfy Section 401(a)(9) or Section 415
                           of the Code.  In addition, upon termination of this
                           Plan if the Plan does not offer an annuity option
                           (purchased from a commercial provider), the
                           Participant's Individual Account may, without the
                           Participant's consent, be distributed to the
                           Participant or transferred to another defined
                           contribution plan (other than an employee stock
                           ownership plan as defined in Section 4975(e)(7) of
                           the Code) within the same controlled group.

                           An Individual Account is immediately distributable if
                           any part of the Individual Account could be
                           distributed to the Participant (or surviving spouse)
                           before the Participant attains or would have attained
                           (if not deceased) the later of Normal Retirement Age
                           or age 62.

                   2.  For purposes of determining the applicability of the
                       foregoing consent requirements to distributions made
                       before the first day of the first Plan Year beginning
                       after December 31, 1988, the Vested portion of a
                       Participant's Individual Account shall not include
                       amounts attributable to accumulated deductible employee
                       contributions within the meaning of Section 72(o)(5)(B)
                       of the Code.

               C.  OTHER FORMS OF DISTRIBUTION TO PARTICIPANT - If the value of
                   the Vested portion of a Participant's Individual Account
                   exceeds $3,500 and the Participant has properly waived the
                   joint and survivor annuity, as described in Section 6.05, the
                   Participant may request in writing that the Vested portion of
                   his or her Individual Account be paid to him or her in one or
                   more of the following forms of payment:  (1) in a lump sum;
                   (2) in installment payments over a period not to exceed the
                   life expectancy of the Participant or the joint and last
                   survivor life expectancy of the Participant and his or her
                   designated Beneficiary; or (3) applied to the purchase of an
                   annuity contract.

                   Notwithstanding anything in this Section 6.02 to the
                   contrary, a Participant cannot elect payments in the form of
                   an annuity if the Retirement Equity Act safe harbor rules of
                   Section 6.05(F) apply.

      6.03     DISTRIBUTIONS UPON THE DEATH OF A PARTICIPANT

               A.  DESIGNATION OF BENEFICIARY - SPOUSAL CONSENT - Each
                   Participant may designate, upon a form provided by and
                   delivered to the Plan Administrator, one or more primary and
                   contingent Beneficiaries to receive all or a specified
                   portion of the Participant's Individual Account in the event
                   of his or her death.  A Participant may change or revoke such
                   Beneficiary designation from time to time by completing and
                   delivering the proper form to the Plan Administrator.

                   In the event that a Participant wishes to designate a primary
                   Beneficiary who is not his or her spouse, his or her spouse
                   must consent in writing to such designation, and the spouse's
                   consent must acknowledge the effect of such designation and
                   be witnessed by a notary public or plan representative.
                   Notwithstanding this consent requirement, if the Participant
                   establishes to the satisfaction of the Plan Administrator
                   that such written consent may not be obtained because there
                   is no spouse or the spouse cannot be located, no consent
                   shall be required.  Any change of Beneficiary will require a
                   new spousal consent.


               B.  PAYMENT TO BENEFICIARY - If a Participant dies before the
                   Participant's entire Individual Account has been paid to him
                   or her, such deceased Participant's Individual Account shall
                   be payable to any surviving Beneficiary designated by the
                   Participant, or, if no Beneficiary survives the Participant,
                   to the Participant's estate.

               C.  WRITTEN REQUEST:  WHEN DISTRIBUTED - A Beneficiary of a
                   deceased Participant entitled to a distribution who wishes to
                   receive a distribution must submit a written request to the
                   Plan Administrator.  Such request shall be made upon a form
                   provided by the Plan Administrator.  Upon a valid request,
                   the Plan Administrator shall direct the Trustee (or
                   Custodian) to commence distribution no later than the time
                   specified in the Adoption Agreement for this purpose and if
                   not specified in the Adoption Agreement, then no later than
                   90 days following the later of:

                   1.  the close of the Plan Year within which the Participant
                       dies;  or
                   2.  the close of the Plan Year in which the request is
                       received.

<PAGE>

20

      6.04     FORM OF DISTRIBUTION TO BENEFICIARY

               A.  VALUE OF INDIVIDUAL ACCOUNT DOES NOT EXCEED $3,500 - If the
                   value of the Participant's Individual Account derived from
                   Nondeductible Employee Contributions and Employer
                   Contributions does not exceed $3,500, the Plan Administrator
                   shall direct the Trustee (or Custodian, if applicable) to
                   make a distribution to the Beneficiary in a single lump sum
                   in lieu of all other forms of distribution from the Plan.

               B.  VALUE OF INDIVIDUAL ACCOUNT EXCEEDS $3,500 - If the value of
                   a Participant's Individual Account derived from Nondeductible
                   Employee Contributions and Employer Contributions exceeds
                   $3,500 the preretirement survivor annuity requirements of
                   Section 6.05 shall apply unless waived in accordance with
                   that Section or unless the Retirement Equity Act safe harbor
                   rules of Section 6.05(F) apply.  However, a surviving spouse
                   Beneficiary may elect any form of payment allowable under the
                   Plan in lieu of the preretirement survivor annuity.  Any such
                   payment to the surviving spouse must meet the requirements of
                   Section 6.06.

               C.  OTHER FORMS OF DISTRIBUTION TO BENEFICIARY - If the value of
                   a Participant's Individual Account exceeds $3,500 and the
                   Participant has properly waived the preretirement survivor
                   annuity, as described in Section 6.05 (if applicable) or if
                   the Beneficiary is the Participant's surviving spouse, the
                   Beneficiary may, subject to the requirements of Section 6.06,
                   request in writing that the Participant's Individual Account
                   be paid as follows:  (1) in a lump sum; or (2) in installment
                   payments over a period not to exceed the life expectancy of
                   such Beneficiary.

      6.05     JOINT AND SURVIVOR ANNUITY REQUIREMENTS

               A.  The provisions of this Section shall apply to any Participant
                   who is credited with at least one Hour of Eligibility Service
                   with the Employer on or after August 23, 1984, and such other
                   Participants as provided in Section 6.05(G).

               B.  QUALIFIED JOINT AND SURVIVOR ANNUITY - Unless an optional
                   form of benefit is selected pursuant to a qualified election
                   within the 90-day period ending on the annuity starting date,
                   a married Participant's Vested account balance will be paid
                   in the form of a qualified joint and survivor annuity and an
                   unmarried Participant's Vested account balance will be paid
                   in the form of a life annuity.  The Participant may elect to
                   have such annuity distributed upon attainment of the earliest
                   retirement age under the Plan.

               C.  QUALIFIED PRERETIREMENT SURVIVOR ANNUITY - Unless an optional
                   form of benefit has been selected within the election period
                   pursuant to a qualified election, if a Participant dies
                   before the annuity starting date then the Participant's
                   Vested account balance shall be applied toward the purchase
                   of an annuity for the life of the surviving spouse.  The
                   surviving spouse may elect to have such annuity distributed
                   within a reasonable period after the Participant's death.

               D.  DEFINITIONS

                   1.  Election Period - The period which begins on the first
                       day of the Plan Year in which the Participant attains age
                       35 and ends on the date of the Participant's death.  If a
                       Participant separates from service prior to the first day
                       of the Plan Year in which age 35 is attained, with
                       respect to the account balance as of the date of
                       separation, the election period shall begin on the date
                       of separation.

                       Pre-age 35 waiver - A Participant who will not yet attain
                       age 35 as of the end of any current Plan Year may make
                       special qualified election to waive the qualified
                       preretirement survivor annuity for the period beginning
                       on the date of such election and ending on the first day
                       of the Plan Year in which the Participant will attain age
                       35.  Such election shall not be valid unless the
                       Participant receives a written explanation of the
                       qualified preretirement survivor annuity in such terms as
                       are comparable to the explanation required under Section
                       6.05(E)(1).  Qualified preretirement survivor annuity
                       coverage will be automatically reinstated as of the first
                       day of the Plan Year in which the Participant attains age
                       35.  Any new waiver on or after such date shall be
                       subject to the full requirements of this Section 6.05.

                   2.  Earliest Retirement Age - The earliest date on which,
                       under the Plan, the Participant could elect to receive
                       retirement benefits.

                   3.  Qualified Election - A waiver of a qualified joint and
                       survivor annuity or a qualified preretirement survivor
                       annuity.  Any waiver of a qualified joint and survivor
                       annuity or a qualified preretirement survivor annuity
                       shall not be effective unless:  (a) the Participant's
                       spouse consents in writing to the election, (b) the
                       election designates a specific Beneficiary, including any
                       class of beneficiaries or any contingent beneficiaries,
                       which may not be changed without spousal consent (or the
                       spouse expressly permits designations by the Participant
                       without any further spousal consent); (c) the spouse's
                       consent acknowledges the effect of the election; and (d)
                       the spouse's consent is witnessed by a plan
                       representative or notary public.  Additionally, a
                       Participant's waiver of the qualified joint and survivor
                       annuity shall not be effective unless the election
                       designates a form of benefit payment which may not be
                       changed without spousal consent (or the spouse expressly
                       permits designations by the Participant without any
                       further spousal consent).  If it is established to the
                       satisfaction of a plan representative that there is no
                       spouse or that the spouse cannot be located, a waiver
                       will be deemed a qualified election.

                       Any consent by a spouse obtained under this provision (or
                       establishment that the consent of a spouse may not be
                       obtained) shall be effective only with respect to such
                       spouse.  A consent that permits designations by the
                       Participant without any requirement of further consent by
                       such spouse must acknowledge that the spouse has the
                       right to limit consent to a specific Beneficiary, and a
                       specific form of benefit where applicable, and that the
                       spouse voluntarily elects to relinquish either or both of
                       such rights.  A revocation of a prior waiver may be made
                       by a Participant without the consent of the spouse at any
                       time before the commencement of benefits.  The number of
                       revocations shall not be limited.  No consent obtained
                       under this provision shall be valid unless the
                       Participant has received notice as provided in Section
                       6.05(E) below.

                   4.  Qualified Joint and Survivor Annuity - An immediate
                       annuity for the life of the Participant with a survivor
                       annuity for the life of the spouse which is not less than
                       50% and not more than 100% of the amount of the annuity
                       which is payable during the joint lives of the
                       Participant and the spouse and which is the amount of
                       benefit which can be purchased with the Participant's
                       vested account balance.  The percentage of the survivor
                       annuity under the Plan shall be 50% (unless a different
                       percentage is elected by the Employer in the Adoption
                       Agreement).

                   5.  Spouse (surviving spouse) - The spouse or surviving
                       spouse of the Participant, provided that a former spouse
                       will be treated as the spouse or surviving spouse and a
                       current spouse will not be treated as the spouse or
                       surviving spouse to the extent provided under a qualified
                       domestic relations order as described in Section 414(p)
                       of the Code.

                   6.  Annuity Starting Date - The first day of the first period
                       for which an amount is paid as an annuity or any other
                       form.

<PAGE>

                                                                             21

                   7.  Vested Account Balance - The aggregate value of the
                       Participant's Vested account balances derived from
                       Employer and Nondeductible Employee Contributions
                       (including rollovers), whether Vested before or upon
                       death, including the proceeds of insurance contracts, if
                       any, on the Participant's life.  The provisions of this
                       Section 6.05 shall apply to a Participant who is Vested
                       in amounts attributable to Employer Contributions,
                       Nondeductible Employee Contributions (or both) at the
                       time of death or distribution.

               E.  NOTICE REQUIREMENTS

                   1.  In the case of a qualified joint and survivor annuity,
                       the Plan Administrator shall no less than 30 days and not
                       more than 90 days prior to the annuity starting date
                       provide each Participant a written explanation of:  (a)
                       the terms and conditions of a qualified joint and
                       survivor annuity; (b) the Participant's right to make and
                       the effect of an election to waive the qualified joint
                       and survivor annuity form of benefit; (c) the rights of a
                       Participant's spouse; and (d) the right to make, and the
                       effect of, a revocation of a previous election to waive
                       the qualified joint and survivor annuity.

                   2.  In the case of a qualified preretirement annuity as
                       described in Section 6.05(C), the Plan Administrator
                       shall provide each Participant within the applicable
                       period for such Participant a written explanation of the
                       qualified preretirement survivor annuity in such terms
                       and in such manner as would be comparable to the
                       explanation provided for meeting the requirements of
                       Section 6.05(E)(1) applicable to a qualified joint and
                       survivor annuity.

                       The applicable period for a Participant is whichever of
                       the following periods ends last:  (a) the period
                       beginning with the first day of the Plan Year in which
                       the Participant attains age 32 and ending with the close
                       of the Plan Year preceding the Plan Year in which the
                       Participant attains age 35; (b) a reasonable period
                       ending after the individual becomes a Participant; (c) a
                       reasonable period ending after Section 6.05(E)(3) ceases
                       to apply to the Participant; and, (d) a reasonable period
                       ending after this Section 6.05 first applies to the
                       Participant.  Notwithstanding the foregoing, notice must
                       be provided within a reasonable period ending after
                       separation from service in the case of a Participant who
                       separates from service before attaining age 35.

                       For purposes of applying the preceding paragraph, a
                       reasonable period ending after the enumerated events
                       described in (b), (c) and (d) is the end of the two-year
                       period beginning one year prior to the date the
                       applicable event occurs, and ending one year after that
                       date.  In the case of a Participant who separates from
                       service before the Plan Year in which age 35 is attained,
                       notice shall be provided within the two-year period
                       beginning one year prior to separation and ending one
                       year after separation.  If such a Participant thereafter
                       returns to employment with the Employer, the applicable
                       period for such Participant shall be redetermined.

                   3.  Notwithstanding the other requirements of this Section
                       6.05(E), the respective notices prescribed by this
                       Section 6.05(E), need not be given to a Participant if
                       (a) the Plan "fully subsidizes" the costs of a qualified
                       joint and survivor annuity or qualified preretirement
                       survivor annuity, and (b) the Plan does not allow the
                       Participant to waive the qualified joint and survivor
                       annuity or qualified preretirement survivor annuity and
                       does not allow a married Participant to designate a
                       nonspouse beneficiary.  For purposes of this Section
                       6.05(E)(3), a plan fully subsidizes the costs of a
                       benefit if no increase in cost, or decrease in benefits
                       to the Participant may result from the Participant's
                       failure to elect another benefit.

               F.  RETIREMENT EQUITY ACT SAFE HARBOR RULES

                   1.  If the Employer so indicates in the Adoption Agreement,
                       this Section 6.05(F) shall apply to a Participant in a
                       profit sharing plan, and shall always apply to any
                       distribution, made on or after the first day of the first
                       Plan Year beginning after December 31, 1988, from or
                       under a separate account attributable solely to
                       accumulated deductible employee contributions, as defined
                       in Section 72(o)(5)(B) of the Code, and maintained on
                       behalf of a Participant in a money purchase pension plan,
                       (including a target benefit plan) if the following
                       conditions are satisfied:

                       a.  the Participant does not or cannot elect payments in
                           the form of a life annuity; and

                       b.  on the death of a Participant, the Participant's
                           Vested account balance will be paid to the
                           Participant's surviving spouse, but if there is no
                           surviving spouse, or if the surviving spouse has
                           consented in a manner conforming to a qualified
                           election, then to the Participant's designated
                           Beneficiary.  The surviving spouse may elect to have
                           distribution of the Vested account balance commence
                           within the 90-day period following the date of the
                           Participant's death.  The account balance shall be
                           adjusted for gains or losses occurring after the
                           Participant's death in accordance with the provisions
                           of the Plan governing the adjustment of account
                           balances for other types of distributions.  This
                           Section 6.05(F) shall not be operative with respect
                           to a Participant in a profit sharing plan if the plan
                           is a direct or indirect transferee of a defined
                           benefit plan, money purchase plan, a target benefit
                           plan, stock bonus, or profit sharing plan which is
                           subject to the survivor annuity requirements of
                           Section 401(a)(11) and Section 417 of the code.  If
                           this Section 6.05(F) is operative, then the
                           provisions of this Section 6.05 other than Section
                           6.05(G) shall be inoperative.

                   2.  The Participant may waive the spousal death benefit
                       described in this Section 6.05(F) at any time provided
                       that no such waiver shall be effective unless it
                       satisfies the conditions of Section 6.05(D)(3) (other
                       than the notification requirement referred to therein)
                       that would apply to the Participant's waiver of the
                       qualified preretirement survivor annuity.

                   3.  For purposes of this Section 6.05(F), Vested account
                       balance shall mean, in the case of a money purchase
                       pension plan or a target benefit plan, the Participant's
                       separate account balance attributable solely to
                       accumulated deductible employee contributions within the
                       meaning of Section 72(o)(5)(B) of the Code.  In the case
                       of a profit sharing plan, Vested account balance shall
                       have the same meaning as provided in Section 6.05(D)(7).

               G.  TRANSITIONAL RULES

                   1.  Any living Participant not receiving benefits on August
                       23, 1984, who would otherwise not receive the benefits
                       prescribed by the previous subsections of this Section
                       6.05 must be given the opportunity to elect to have the
                       prior subsections of this Section apply if such
                       Participant is credited with at least one Hour of Service
                       under this Plan or a predecessor plan in a Plan Year
                       beginning on or after January 1, 1976, and such
                       Participant had at least 10 Years of Vesting Service when
                       he or she separated from service.

                   2.  Any living Participant not receiving benefits on August
                       23, 1984, who was credited with at least one Hour of
                       Service under this Plan or a predecessor plan on or after
                       September 2, 1974, and who is not otherwise credited with
                       any service in a Plan Year beginning on or after January
                       1, 1976, must be given the opportunity to have his or her
                       benefits paid in accordance with Section 6.05(G)(4).

                   3.  The respective opportunities to elect (as described in
                       Section 6.05(G)(1) and (2) above) must be afforded to the
                       appropriate Participants during the period commencing on
                       August 23, 1984, and ending on the date benefits would
                       otherwise commence to said Participants.

<PAGE>

22

                   4.  Any Participant who has elected pursuant to Section
                       6.05(G)(2) and any Participant who does not elect under
                       Section 6.05(G)(1) or who meets the requirements of
                       Section 6.05(G)(1) except that such Participant does not
                       have at least 10 Years of Vesting Service when he or she
                       separates from service, shall have his or her benefits
                       distributed in accordance with all of the following
                       requirements if benefits would have been payable in the
                       form of a life annuity:

                       a.  Automatic Joint and Survivor Annuity - If benefits in
                           the form of a life annuity become payable to a
                           married Participant who:

                           (1) begins to receive payments under the Plan on or
                               after Normal Retirement Age; or

                           (2) dies on or after Normal Retirement Age while
                               still working for the Employer; or

                           (3) begins to receive payments on or after the
                               qualified early retirement age; or

                           (4) separates from service on or after attaining
                               Normal Retirement Age (or the qualified early
                               retirement age) and after satisfying the
                               eligibility requirements for the payment of
                               benefits under the Plan and thereafter dies
                               before beginning to receive such benefits;

                               then such benefits will be received under this
                               Plan in the form of a qualified joint and
                               survivor annuity, unless the Participant has
                               elected otherwise during the election period.
                               The election period must begin at least 6 months
                               before the Participant attains qualified early
                               retirement age and ends not more than 90 days
                               before the commencement of benefits.  Any
                               election hereunder will be in writing and may be
                               changed by the Participant at any time.

                       b.  Election of Early Survivor Annuity - A Participant
                           who is employed after attaining the qualified early
                           retirement age will be given the opportunity to
                           elect, during the election period, to have a survivor
                           annuity payable on death.  If the Participant elects
                           the survivor annuity, payments under such annuity
                           must not be less than the payments which would have
                           been made to the spouse under the qualified joint and
                           survivor annuity if the Participant had retired on
                           the day before his or her death.  Any election under
                           this provision will be in writing and may be changed
                           by the Participant at any time.  The election period
                           begins on the later of (1) the 90th day before the
                           Participant attains the qualified early retirement
                           age, or (2) the date on which participation begins,
                           and ends on the date the Participant terminates
                           employment.

                       c.  For purposes of Section 6.05(G)(4):

                           1.  Qualified early retirement age is the latest of:

                               a.  the earliest date, under the Plan, on which
                                   the Participant may elect to receive
                                   retirement benefits,

                               b.  the first day of the 120th month beginning
                                   before the Participant reaches Normal
                                   Retirement Age, or

                               c.  the date the Participant begins
                                   participation.

                           2.  Qualified joint and survivor annuity is an
                               annuity for the life of the Participant with a
                               survivor annuity for the life of the spouse as
                               described in Section 6.05(D)(4) of this Plan.

      6.06     DISTRIBUTION REQUIREMENTS
               A.  GENERAL RULES

                   1.  Subject to Section 6.05 Joint and Survivor Annuity
                       Requirements, the requirements of this Section shall
                       apply to any distribution of a Participant's interest and
                       will take precedence over any inconsistent provisions of
                       this Plan.  Unless otherwise specified, the provisions of
                       this Section 6.06 apply to calendar years beginning after
                       December 31, 1984.

                   2.  All distributions required under this Section 6.06 shall
                       be determined and made in accordance with the Income Tax
                       Regulations under Section 401(a)(9), including the
                       minimum distribution incidental benefit requirement of
                       Section 1.401(a)(9)-2 of the proposed regulations.

               B.  REQUIRED BEGINNING DATE - The entire interest of a
                   Participant must be distributed or begin to be distributed no
                   later than the Participant's required beginning date.

               C.  LIMITS ON DISTRIBUTION PERIODS - As of the first distribution
                   calendar year, distributions, if not made in a single sum,
                   may only be made over one of the following periods (or a
                   combination thereof):

                   1.  the life of the Participant,

                   2.  the life of the Participant and a designated Beneficiary,

                   3.  a period certain not extending beyond the life expectancy
                       of the Participant, or

                   4.  a period certain not extending beyond the joint and last
                       survivor expectancy of the Participant and a designated
                       Beneficiary.

               D.  DETERMINATION OF AMOUNT TO BE DISTRIBUTED EACH YEAR - If the
                   Participant's interest is to be distributed in other than a
                   single sum, the following minimum distribution rules shall
                   apply on or after the required beginning date:

                   1.  Individual Account

                       a.  If a Participant's benefit is to be distributed over
                           (1) a period not extending beyond the life expectancy
                           of the Participant or the joint life and last
                           survivor expectancy of the Participant and the
                           Participant's designated Beneficiary or (2) a period
                           not extending beyond the life expectancy of the
                           designated Beneficiary, the amount required to be
                           distributed for each calendar year, beginning with
                           distributions for the first distribution calendar
                           year, must at least equal the quotient obtained by
                           dividing the Participant's benefit by the applicable
                           life expectancy.

                       b.  For calendar years beginning before January 1, 1989,
                           if the Participant's spouse is not the designated
                           Beneficiary, the method of distribution selected must
                           assure that at least 50% of the present value of the
                           amount available for distribution is paid within the
                           life expectancy of the Participant.

                       c.  For calendar years beginning after December 31, 1988,
                           the amount to be distributed each year, beginning
                           with distributions for the first distribution
                           calendar year shall not be less than the quotient
                           obtained by dividing the Participant's benefit by the
                           lesser of (1) the applicable life expectancy or (2)
                           if the Participant's spouse is not the

<PAGE>

                                                                             23

                           designated Beneficiary, the applicable divisor
                           determined from the table set forth in Q&A-4 of
                           Section 1.401(a)(9)-2 of the Proposed Income Tax
                           Regulations.  Distributions after the death of the
                           Participant shall be distributed using the applicable
                           life expectancy in Section 6.05(D)(1)(a) above as the
                           relevant divisor without regard to proposed
                           regulations 1.401(a)(9)-2.

                       d.  The minimum distribution required for the
                           Participant's first distribution calendar year must
                           be made on or before the Participant's required
                           beginning date.  The minimum distribution for other
                           calendar years, including the minimum distribution
                           for the distribution calendar year in which the
                           Employee's required beginning date occurs, must be
                           made on or before December 31 of that distribution
                           calendar year.

                   2.  Other Forms - If the Participant's benefit is distributed
                       in the form of an annuity purchased from an insurance
                       company, distributions thereunder shall be made in
                       accordance with the requirements of Section 401(a)(9) of
                       the Code and the regulations thereunder.

               E.  DEATH DISTRIBUTION PROVISIONS


                   1.  Distribution Beginning Before Death - If the Participant
                       dies after distribution of his or her interest has begun,
                       the remaining portion of such interest will continue to
                       be distributed at least as rapidly as under the method of
                       distribution being used prior to the Participant's death.

                   2.  Distribution Beginning After Death - If the Participant
                       dies before distribution of his or her interest begins,
                       distribution of the Participant's entire interest shall
                       be completed by December 31 of the calendar year
                       containing the fifth anniversary of the Participant's
                       death except to the extent that an election is made to
                       receive distributions in accordance with (a) or (b)
                       below:

                       a.  if any portion of the Participant's interest is
                           payable to a designated Beneficiary, distributions
                           may be made over the life or over a period certain
                           not greater than the life expectancy of the
                           designated Beneficiary commencing on or before
                           December 31 of the calendar year immediately
                           following the calendar year in which the Participant
                           died;

                       b.  if the designated Beneficiary is the Participant's
                           surviving spouse, the date distributions are required
                           to begin in accordance with (a) above shall not be
                           earlier than the later of (1) December 31 of the
                           calendar year immediately following the calendar year
                           in which the Participant dies or (2) December 31 of
                           the calendar year in which the Participant would have
                           attained age 70 1/2.

                           If the Participant has not made an election pursuant
                           to this Section 6.05(E)(2) by the time of his or her
                           death, the Participant's designated Beneficiary must
                           elect the method of distribution no later than the
                           earlier of (1) December 31 of the calendar year in
                           which distributions would be required to begin under
                           this Section 6.05(E)(2), or (2) December 31 of the
                           calendar year which contains the fifth anniversary of
                           the date of death of the Participant.  If the
                           Participant has no designated Beneficiary, or if the
                           designated Beneficiary does not elect a method of
                           distribution, distribution of the Participant's
                           entire interest must be completed by December 31 of
                           the calendar year containing the fifth anniversary of
                           the Participant's death.

                   3.  For purposes of Section 6.06(E)(2) above, if the
                       surviving spouse dies after the Participant, but before
                       payments to such spouse begin, the provisions of Section
                       6.06(E)(2), with the exception of paragraph (b) therein,
                       shall be applied as if the surviving spouse were the
                       Participant.

                   4.  For purposes of this Section 6.06(E), any amount paid to
                       a child of the Participant will be treated as if it had
                       been paid to the surviving spouse if the amount becomes
                       payable to the surviving spouse when the child reaches
                       the age of majority.

                   5.  For purposes of this Section 6.06(E), distribution of a
                       Participant's interest is considered to begin on the
                       Participant's required beginning date (or, if Section
                       6.06(E)(3) above is applicable, the date distribution is
                       required to begin to the surviving spouse pursuant to
                       Section 6.06(E)(2) above).  If distribution in the form
                       of an annuity irrevocably commences to the Participant
                       before the required beginning date, the date distribution
                       is considered to begin is the date distribution actually
                       commences.

               F.  DEFINITIONS

                   1.  Applicable Life Expectancy - The life expectancy (or
                       joint and last survivor expectancy) calculated using the
                       attained age of the Participant (or designated
                       Beneficiary) as of the Participant's (or designated
                       Beneficiary's) birthday in the applicable calendar year
                       reduced by one for each calendar year which has elapsed
                       since the date life expectancy was first calculated.  If
                       life expectancy is being recalculated, the applicable
                       life expectancy shall be the life expectancy as so
                       recalculated.  The applicable calendar year shall be the
                       first distribution calendar year, and if life expectancy
                       is being recalculated such succeeding calendar year.

                   2.  Designated Beneficiary - The individual who is designated
                       as the Beneficiary under the Plan in accordance with
                       Section 401(a)(9) of the Code and the regulations
                       thereunder.

                   3.  Distribution Calendar Year - A calendar year for which a
                       minimum distribution is required.  For distributions
                       beginning before the Participant's death, the first
                       distribution calendar year is the calendar year
                       immediately preceding the calendar year which contains
                       the Participant's required beginning date.  For
                       distributions beginning after the Participant's death,
                       the first distribution calendar year is the calendar year
                       in which distributions are required to begin pursuant to
                       Section 6.05(E) above.

                   4.  Life Expectancy - Life expectancy and joint and last
                       survivor expectancy are computed by use of the expected
                       return multiples in Tables V and VI of Section 1.72-9 of
                       the Income Tax Regulations.

                       Unless otherwise elected by the Participant (or spouse,
                       in the case of distributions described in Section
                       6.05(E)(2)(b) above) by the time distributions are
                       required to begin, life expectancies shall be
                       recalculated annually.  Such election shall be
                       irrevocable as to the Participant (or spouse) and shall
                       apply to all subsequent years.  The life expectancy of a
                       nonspouse Beneficiary may not be recalculated.

                   5.  Participant's Benefit

                       a.  The account balance as of the last valuation date in
                           the valuation calendar year (the calendar year
                           immediately preceding the distribution calendar year)
                           increased by the amount of any Contributions or
                           Forfeitures allocated to the account balance as of
                           dates in the valuation calendar year after the
                           valuation date and decreased by distributions made in
                           the valuation calendar year after the valuation date.

<PAGE>

24

                       b.  Exception for second distribution calendar year.  For
                           purposes of paragraph (a) above, if any portion of
                           the minimum distribution for the first distribution
                           calendar year is made in the second distribution
                           calendar year on or before the required beginning
                           date, the amount of the minimum distribution made in
                           the second distribution calendar year shall be
                           treated as if it had been made in the immediately
                           preceding distribution calendar year.

                   6.  Required Beginning Date

                       a.  General Rule - The required beginning date of a
                           Participant is the first day of April of the calendar
                           year following the calendar year in which the
                           Participant attains age 70 1/2.

                       b.  Transitional Rules - The required beginning date of a
                           Participant who attains age 70 1/2 before January 1,
                           1988, shall be determined in accordance with (1) or
                           (2) below:

                           (1) Non 5% Owners - The required beginning date of a
                               Participant who is not a 5% owner is the first
                               day of April of the calendar year following the
                               calendar year in which the later of retirement or
                               attainment of age 70 1/2 occurs.

                           (2) 5% Owners - The required beginning date of a
                               Participant who is a 5% owner during any year
                               beginning after December 31, 1979, is the first
                               day of April following the later of:

                               (a) the calendar year in which the Participant
                                   attains age 70 1/2, or

                               (b) the earlier of the calendar year with or
                                   within which ends the Plan Year in which the
                                   Participant becomes a 5% owner, or the
                                   calendar year in which the Participant
                                   retires.

                                   The required beginning date of a Participant
                                   who is not a 5% owner who attains age 70 1/2
                                   during 1988 and who has not retired as of
                                   January 1, 1989, is April 1, 1990.

                       c.  5% Owner -  A Participant is treated as a 5% owner
                           for purposes of this Section 6.06(F)(6) if such
                           Participant is a 5% owner as defined in Section
                           416(i) of the Code (determined in accordance with
                           Section 416 but without regard to whether the Plan is
                           top-heavy) at any time during the Plan Year ending
                           with or within the calendar year in which such owner
                           attains age 66 1/2 or any subsequent Plan Year.

                       d.  Once distributions have begun to a 5% owner under
                           this Section 6.06(F)(6) they must continue to be
                           distributed, even if the Participant ceases to be a
                           5% owner in a subsequent year.

               G.  TRANSITIONAL RULE

                   1.  Notwithstanding the other requirements of this Section
                       6.06 and subject to the requirements of Section 6.05,
                       Joint and Survivor Annuity Requirements, distribution on
                       behalf of any Employee, including a 5% owner, may be made
                       in accordance with all of the following requirements
                       (regardless of when such distribution commences):

                       a.  The distribution by the Fund is one which would not
                           have qualified such Fund under Section 401(a)(9) of
                           the Code as in effect prior to amendment by the
                           Deficit Reduction Act of 1984.

                       b.  The distribution is in accordance with a method of
                           distribution designated by the Employee whose
                           interest in the Fund is being distributed or, if the
                           Employee is deceased, by a Beneficiary of such
                           Employee.

                       c.  Such designation was in writing, was signed by the
                           Employee or the Beneficiary, and was made before
                           January 1, 1984.

                       d.  The Employee had accrued a benefit under the Plan as
                           of December 31, 1983.

                       e.  The method of distribution designated by the Employee
                           or the Beneficiary specifies the time at which
                           distribution will commence, the period over which
                           distributions will be made, and in the case of any
                           distribution upon the Employee's death, the
                           Beneficiaries of the Employee listed in order of
                           priority.

                   2.  A distribution upon death will not be covered by this
                       transitional rule unless the information in the
                       designation contains the required information described
                       above with respect to the distributions to be made upon
                       the death of the Employee.

                   3.  For any distribution which commences before January 1,
                       1984, but continues after December 31, 1983, the
                       Employee, or the Beneficiary, to whom such distribution
                       is being made, will be presumed to have designated the
                       method of distribution under which the distribution is
                       being made if the method of distribution was specified in
                       writing and the distribution satisfies the requirements
                       in Sections 6.06(G)(1)(a) and (e).

                   4.  If a designation is revoked, any subsequent distribution
                       must satisfy the requirements of Section 401(a)(9) of the
                       Code and the regulations thereunder.  If a designation is
                       revoked subsequent to the date distributions are required
                       to begin, the Plan must distribute by the end of the
                       calendar year following the calendar year in which the
                       revocation occurs the total amount not yet distributed
                       which would have been required to have been distributed
                       to satisfy Section 401(a)(9) of the Code and the
                       regulations thereunder, but for the Section 242(b)(2)
                       election.  For calendar years beginning after December
                       31, 1988, such distributions must meet the minimum
                       distribution incidental benefit requirements in Section
                       1.401(a)(9)-2 of the Proposed Income Tax Regulations.
                       Any changes in the designation will be considered to be a
                       revocation of the designation.  However, the mere
                       substitution or addition of another Beneficiary (one not
                       named in the designation) under the designation will not
                       be considered to be a revocation of the designation, so
                       long as such substitution or addition does not alter the
                       period over which distributions are to be made under the
                       designation, directly or indirectly (for example, by
                       altering the relevant measuring life).  In the case in
                       which an amount is transferred or rolled over from one
                       plan to another plan, the rules in Q&A J-2 and Q&A J-3
                       shall apply.

      6.07     ANNUITY CONTRACTS
               Any annuity contract distributed under the Plan (if permitted or
               required by this Section 6) must be nontransferable.  The terms
               of any annuity contract purchased and distributed by the Plan to
               a Participant or spouse shall comply with the requirements of the
               Plan.

      6.08     LOANS TO PARTICIPANTS
               If the Adoption Agreement so indicates, a Participant may receive
               a loan from the Fund, subject to the following rules:

               A.  Loans shall be made available to all Participants on a
                   reasonably equivalent basis.

               B.  Loans shall not be made available to Highly Compensated
                   Employees (as defined in Section 414(q) of the Code) in an
                   amount greater than the amount made available to other
                   Employees.

<PAGE>

                                                                             25

               C.  Loans must be adequately secured and bear a reasonable
                   interest rate.

               D.  No Participant loan shall exceed the present value of the
                   Vested portion of a Participant's Individual Account.

               E.  A Participant must obtain the consent of his or her spouse,
                   if any, to the use of the Individual Account as security for
                   the loan.  Spousal consent shall be obtained no earlier than
                   the beginning of the 90 day period that ends on the date on
                   which the loan is to be so secured.  The consent must be in
                   writing, must acknowledge the effect of the loan, and must be
                   witnessed by a plan representative or notary public.  Such
                   consent shall thereafter be binding with respect to the
                   consenting spouse or any subsequent spouse with respect to
                   that loan.  A new consent shall be required if the account
                   balance is used for renegotiation, extension, renewal, or
                   other revision of the loan.  Notwithstanding the foregoing,
                   no spousal consent is necessary if, at the time the loan is
                   secured, no consent would be required for a distribution
                   under Section 417(a)(2)(B).  In addition, spousal consent is
                   not required if the Plan or the Participant is not subject to
                   Section 401(a)(11) at the time the Individual Account is used
                   as security, or if the total Individual Account subject to
                   the security is less than or equal to $3,500.

               F.  In the event of default, foreclosure on the note and
                   attachment of security will not occur until a distributable
                   event occurs in the Plan.  Notwithstanding the preceding
                   sentence, a Participant's default on a loan will be treated
                   as a distributable event and as soon as administratively
                   feasible after the default, the Participant's Vested
                   Individual Account will be reduced by the lesser of the
                   amount in default (plus accrued interest) or the amount
                   secured.  If this Plan is a 401(k) plan, then to the extent
                   the loan is attributable to a Participant's Elective
                   Deferrals, Qualified Nonelective Contributions or Qualified
                   Matching Contributions, the Participant's Individual Account
                   will not be reduced unless the Participant has attained age
                   59 1/2 or has another distributable event.  A Participant
                   will be deemed to have consented to the provision at the time
                   the loan is made to the Participant.

               G.  No loans will be made to any shareholder-employee or Owner-
                   Employee.  For purposes of this requirement, a shareholder-
                   employee means an employee or officer of an electing small
                   business (Subchapter S) corporation who owns (or is
                   considered as owning within the meaning of Section 318(a)(1)
                   of the Code), on any day during the taxable year of such
                   corporation, more than 5% of the outstanding stock of the
                   corporation.

                   If a valid spousal consent has been obtained in accordance
                   with 6.08(E), then, notwithstanding any other provisions of
                   this Plan, the portion of the Participant's Vested Individual
                   Account used as a security interest held by the Plan by
                   reason of a loan outstanding to the Participant shall be
                   taken into account for purposes of determining the amount of
                   the account balance payable at the time of death or
                   distribution, but only if the reduction is used as repayment
                   of the loan.  If less than 100% of the Participant's Vested
                   Individual Account (determined without regard to the
                   preceding sentence) is payable to the surviving spouse, then
                   the account balance shall be adjusted by first reducing the
                   Vested Individual Account by the amount of the security used
                   as repayment of the loan, and then determining the benefit
                   payable to the surviving spouse.

                   To avoid taxation to the Participant, no loan to any
                   Participant can be made to the extent that such loan  when
                   added to the outstanding balance of all other loans to the
                   Participant would exceed the lesser of (a) $50,000 reduced by
                   the excess (if any) of the highest outstanding balance of
                   loans during the one year period ending on the day before the
                   loan is made, over the outstanding balance of loans from the
                   Plan on the date the loan is made, or (b) 50% of the present
                   value of the nonforfeitable Individual Account of the
                   Participant or, if greater, the total Individual Account up
                   to $10,000.  For the purpose of the above limitation, all
                   loans from all plans of the Employer and other members of a
                   group of employers described in Sections 414(b), 414(c), and
                   414(m) of the Code are aggregated.  Furthermore, any loan
                   shall by its terms require that repayment (principal and
                   interest) be amortized in level payments, not less frequently
                   than quarterly, over a period not extending beyond 5 years
                   from the date of the loan, unless such loan is used to
                   acquire a dwelling unit which within a reasonable time
                   (determined at the time the loan is made) will be used as the
                   principal residence of the Participant.  An assignment or
                   pledge of any portion of the Participant's interest in the
                   Plan and a loan, pledge, or assignment with respect to any
                   insurance contract purchased under the Plan, will be treated
                   as a loan under this paragraph.

                   The Plan Administrator shall administer the loan program in
                   accordance with a written document.  Such written document
                   shall include, at a minimum, the following: (i) the identity
                   of the person or positions authorized to administer the
                   Participant loan program; (ii) the procedure for applying for
                   loans; (iii) the basis on which loans will be approved or
                   denied; (iv) limitations (if any) on the types and amounts of
                   loans offered; (v) the procedure under the program for
                   determining a reasonable rate of interest; (vi) the types of
                   collateral which may secure a Participant loan; and (vii) the
                   events constituting default and the steps that will be taken
                   to preserve Plan assets in the event of such default.


      6.09     DISTRIBUTION IN KIND
               The Plan Administrator may cause any distribution under this Plan
               to be made either in a form actually held in the Fund, or in cash
               by converting assets other than cash into cash, or in any
               combination of the two foregoing ways.

      6.10     DIRECT ROLLOVERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS

               A.  Direct Rollover Option
                   This Section applies to distributions made on or after
                   January 1, 1993.  Notwithstanding any provision of the Plan
                   to the contrary that would otherwise limit a distributee's
                   election under this Section, a distributee may elect, at the
                   time and in the manner prescribed by the Plan Administrator,
                   to have any portion of an eligible rollover distribution that
                   is equal to at least $500 paid directly to an eligible
                   retirement plan specified by the distributee in a direct
                   rollover.

               B.  Definitions

                   1.  Eligible rollover distribution - An eligible rollover
                       distribution is any distribution of all or any portion of
                       the balance to the credit of the distributee, except that
                       an eligible rollover distribution does not include:

                       a.  any distribution that is one of a series of
                           substantially equal periodic payments (not less
                           frequently than annually) made for the life (or life
                           expectancy) of the distributee or the joint lives (or
                           joint life expectancies) of the distributee and the
                           distributee's designated Beneficiary, or for a
                           specified period of ten years or more;

                       b.  any distribution to the extent such distribution is
                           required under Section 401(a)(9) of the Code;

                       c.  the portion of any other distribution that is not
                           includible in gross income (determined without regard
                           to the exclusion for net unrealized appreciation with
                           respect to employer securities); and

                       d.  any other distribution(s) that is reasonably expected
                           to total less than $200 during a year.

                   2.  Eligible retirement plan - An eligible retirement plan is
                       an individual retirement account described in Section
                       408(a) of the Code, an individual retirement annuity
                       described in Section 408(b) of the Code, an annuity plan
                       described in Section

<PAGE>

26

                       403(a) of the Code, or a qualified trust described in
                       Section 401(a) of the Code, that accepts the
                       distributee's eligible rollover distribution.  However,
                       in the case of an eligible rollover distribution to the
                       surviving spouse, an eligible retirement plan is an
                       individual retirement account or individual retirement
                       annuity.

                   3.  Distributee - A distributee includes an Employee or
                       former Employee.  In addition, the Employee's or former
                       Employee's surviving spouse and the Employee's or former
                       Employee's spouse or former spouse who is the alternate
                       payee under a qualified domestic relations order, as
                       defined in Section 414(p) of the Code, are distributees
                       with regard to the interest of the spouse or former
                       spouse.

                   4.  Direct rollover - A direct rollover is a payment by the
                       Plan to the eligible retirement plan specified by the
                       distributee.

      6.11     PROCEDURE FOR MISSING PARTICIPANTS OR BENEFICIARIES
               The Plan Administrator must use all reasonable measures to locate
               Participants or Beneficiaries who are entitled to distributions
               from the Plan.  In the event that the Plan Administrator cannot
               locate a Participant or Beneficiary who is entitled to a
               distribution from the Plan after using all reasonable measures to
               locate him or her, the Plan Administrator may, consistent with
               applicable laws, regulations and other pronouncements under
               ERISA, use any reasonable procedure to dispose of distributable
               plan assets, including any of the following:  (1) establish a
               bank account for and in the name of the Participant or
               Beneficiary and transfer the assets to such bank account, (2)
               purchase an annuity contract with the assets in the name of the
               Participant or Beneficiary, or (3) after the expiration of 5
               years after the benefit becomes payable, treat the amount
               distributable as a Forfeiture and allocate it in accordance with
               the terms of the Plan and if the Participant or Beneficiary is
               later located, restore such benefit to the Plan.

SECTION SEVEN  CLAIMS PROCEDURE

      7.01     FILING A CLAIM FOR PLAN DISTRIBUTIONS
               A Participant or Beneficiary who desires to make a claim for the
               Vested portion of the Participant's Individual Account shall file
               a written request with the Plan Administrator on a form to be
               furnished to him or her by the Plan Administrator for such
               purpose.  The request shall set forth the basis of the claim.
               The Plan Administrator is authorized to conduct such examinations
               as may be necessary to facilitate the payment of any benefits to
               which the Participant or Beneficiary may be entitled under the
               terms of the Plan.

      7.02     DENIAL OF CLAIM
               Whenever a claim for a Plan distribution by any Participant or
               Beneficiary has been wholly or partially denied, the Plan
               Administrator must furnish such Participant or Beneficiary
               written notice of the denial within 60 days of the date the
               original claim was filed.  This notice shall set forth the
               specific reasons for the denial, specific reference to pertinent
               Plan provisions on which the denial is based, a description of
               any additional information or material needed to perfect the
               claim, an explanation of why such additional information or
               material is necessary and an explanation of the procedures for
               appeal.

      7.03     REMEDIES AVAILABLE
               The Participant or Beneficiary shall have 60 days from receipt of
               the denial notice in which to make written application for review
               by the Plan Administrator.  The Participant or Beneficiary may
               request that the review be in the nature of a hearing.  The
               Participant or Beneficiary shall have the right to
               representation, to review pertinent documents and to submit
               comments in writing.  The Plan Administrator shall issue a
               decision on such review within 60 days after receipt of an
               application for review as provided for in Section 7.02.  Upon a
               decision unfavorable to the Participant or Beneficiary, such
               Participant or Beneficiary shall be entitled to bring such
               actions in law or equity as may be necessary or appropriate to
               protect or clarify his or her right to benefits under this Plan.

SECTION EIGHT  PLAN ADMINISTRATOR

      8.01     EMPLOYER IS PLAN ADMINISTRATOR
               A.  The Employer shall be the Plan Administrator unless the
                   managing body of the Employer designates a person or persons
                   other than the Employer as the Plan Administrator and so
                   notifies the Trustee (or Custodian, if applicable).  The
                   Employer shall also be the Plan Administrator if the person
                   or persons so designated cease to be the Plan Administrator.
                   The Employer may establish an administrative committee that
                   will carry out the Plan Administrator's duties.  Members of
                   the administrative committee may allocate the Plan
                   Administrator's duties among themselves.

               B.  If the managing body of the Employer designates a person or
                   persons other than the Employer as Plan Administrator, such
                   person or persons shall serve at the pleasure of the Employer
                   and shall serve pursuant to such procedures as such managing
                   body may provide.  Each such person shall be bonded as may be
                   required by law.

      8.02     POWERS AND DUTIES OF THE PLAN ADMINISTRATOR
               A.  The Plan Administrator may, by appointment, allocate the
                   duties of the Plan Administrator among several individuals or
                   entities.  Such appointments shall not be effective until the
                   party designated accepts such appointment in writing.

               B.  The Plan Administrator shall have the authority to control
                   and manage the operation and administration of the Plan.  The
                   Plan Administrator shall administer the Plan for the
                   exclusive benefit of the Participants and their Beneficiaries
                   in accordance with the specific terms of the Plan.

               C.  The Plan Administrator shall be charged with the duties of
                   the general administration of the Plan, including, but not
                   limited to, the following:

                   1.  To determine all questions of interpretation or policy in
                       a manner consistent with the Plan's documents and the
                       Plan Administrator's construction or determination in
                       good faith shall be conclusive and binding on all persons
                       except as otherwise provided herein or by law.  Any
                       interpretation or construction shall be done in a
                       nondiscriminatory manner and shall be consistent with the
                       intent that the Plan shall continue to be deemed a
                       qualified plan under the terms of Section 401(a) of the
                       Code, as amended from time-to-time, and shall comply with
                       the terms of ERISA, as amended from time-to-time;

                   2.  To determine all questions relating to the eligibility of
                       Employees to become or remain Participants hereunder;

                   3.  To compute the amounts necessary or desirable to be
                       contributed to the Plan;

                   4.  To compute the amount and kind of benefits to which a
                       Participant or Beneficiary shall be entitled under the
                       Plan and to direct the Trustee (or Custodian, if
                       applicable) with respect to all disbursements under the
                       Plan, and, when requested by

<PAGE>

                                                                             27

                       the Trustee (or Custodian), to furnish the Trustee (or
                       Custodian) with instructions, in writing, on matters
                       pertaining to the Plan and the Trustee (or Custodian) may
                       rely and act thereon;

                   5.  To maintain all records necessary for the administration
                       of the Plan;

                   6.  To be responsible for preparing and filing such
                       disclosure and tax forms as may be required from time-to-
                       time by the Secretary of Labor or the Secretary of the
                       Treasury; and

                   7.  To furnish each Employee, Participant or Beneficiary such
                       notices, information and reports under such circumstances
                       as may be required by law.

               D.  The Plan Administrator shall have all of the powers necessary
                   or appropriate to accomplish his or her duties under the
                   Plan, including, but not limited to, the following:

                   1.  To appoint and retain such persons as may be necessary to
                       carry out the functions of the Plan Administrator;

                   2.  To appoint and retain counsel, specialists or other
                       persons as the Plan Administrator deems necessary or
                       advisable in the administration of the Plan;

                   3.  To resolve all questions of administration of the Plan;

                   4.  To establish such uniform and nondiscriminatory rules
                       which it deems necessary to carry out the terms of the
                       Plan;

                   5.  To make any adjustments in a uniform and
                       nondiscriminatory manner which it deems necessary to
                       correct any arithmetical or accounting errors which may
                       have been made for any Plan Year; and

                   6.  To correct any defect, supply any omission or reconcile
                       any inconsistency in such manner and to such extent as
                       shall be deemed necessary or advisable to carry out the
                       purpose of the Plan.

      8.03     EXPENSES AND COMPENSATION
               All reasonable expenses of administration including, but not
               limited to, those involved in retaining necessary professional
               assistance may be paid from the assets of the Fund.
               Alternatively, the Employer may, in its discretion, pay any or
               all such expenses.  Pursuant to uniform and nondiscriminatory
               rules that the Plan Administrator may establish from time-to-
               time, administrative expenses and expenses unique to a particular
               Participant may be charged to a Participant's Individual Account
               or the Plan Administrator may allow Participants to pay such fees
               outside of the Plan.  The Employer shall furnish the Plan
               Administrator with such clerical and other assistance as the Plan
               Administrator may need in the performance of his or her duties.

      8.04     INFORMATION FROM EMPLOYER
               To enable the Plan Administrator to perform his or her duties,
               the Employer shall supply full and timely information to the Plan
               Administrator (or his or her designated agents) on all matters
               relating to the Compensation of all Participants, their regular
               employment, retirement, death, Disability or Termination of
               Employment, and such other pertinent facts as the Plan
               Administrator (or his or her agents) may require.  The Plan
               Administrator shall advise the Trustee (or Custodian, if
               applicable) of such of the foregoing facts as may be pertinent to
               the Trustee's (or Custodian's) duties under the Plan.  The Plan
               Administrator (or his or her agents) is entitled to rely on such
               information as is supplied by the Employer and shall have no duty
               or responsibility to verify such information.

SECTION NINE   AMENDMENT AND TERMINATION

      9.01     RIGHT OF PROTOTYPE SPONSOR TO AMEND THE PLAN
               A.  The Employer, by adopting the Plan, expressly delegates to
                   the Prototype Sponsor the power, but not the duty, to amend
                   the Plan without any further action or consent of the
                   Employer as the Prototype Sponsor deems necessary for the
                   purpose of adjusting the Plan to comply with all laws and
                   regulations governing pension or profit sharing plans.
                   Specifically, it is understood that the amendments may be
                   made unilaterally by the Prototype Sponsor.  However, it
                   shall be understood that the  Prototype Sponsor shall be
                   under no obligation to amend the Plan documents and the
                   Employer expressly waives any rights or claims against the
                   Prototype Sponsor for not exercising this power to amend.
                   For purposes of Prototype Sponsor amendments, the mass
                   submitter shall be recognized as the agent of the Prototype
                   Sponsor.  If the Prototype Sponsor does not adopt the
                   amendments made by the mass submitter, it will no longer be
                   identical to or a minor modifier of the mass submitter plan.

               B.  An amendment by the Prototype Sponsor shall be accomplished
                   by giving written notice to the Employer of the amendment to
                   be made.  The notice shall set forth the text of such
                   amendment and the date such amendment is to be effective.
                   Such amendment shall take effect unless within the 30 day
                   period after such notice is provided, or within such shorter
                   period as the notice may specify, the Employer gives the
                   Prototype Sponsor written notice of refusal to consent to the
                   amendment.  Such written notice of refusal shall have the
                   effect of withdrawing the Plan as a prototype plan and shall
                   cause the Plan to be considered an individually designed
                   plan.  The right of the Prototype Sponsor to cause the Plan
                   to be amended shall terminate should the Plan cease to
                   conform as a prototype plan as provided in this or any other
                   section.

      9.02     RIGHT OF EMPLOYER TO AMEND THE PLAN
               The Employer may (1) change the choice of options in the Adoption
               Agreement; (2) add overriding language in the Adoption Agreement
               when such language is necessary to satisfy Section 415 or Section
               416 of the Code because of the required aggregation of multiple
               plans; and (3) add certain model amendments published by the
               Internal Revenue Service which specifically provide that their
               adoption will not cause the Plan to be treated as individually
               designed.  An Employer that amends the Plan for any other reason,
               including a waiver of the minimum funding requirement under
               Section 412(d) of the Code, will no longer participate in this
               prototype plan and will be considered to have an individually
               designed plan.

               An Employer who wishes to amend the Plan to change the options it
               has chosen in the Adoption Agreement must complete and deliver a
               new Adoption Agreement to the Prototype Sponsor and Trustee (or
               Custodian, if applicable).  Such amendment shall become effective
               upon execution by the Employer and Trustee (or Custodian).

               The Employer further reserves the right to replace the Plan in
               its entirety by adopting another retirement plan which the
               Employer designates as a replacement plan.

     9.03      LIMITATION ON POWER TO AMEND
               No amendment to the Plan shall be effective to the extent that it
               has the effect of decreasing a Participant's accrued benefit.
               Notwithstanding the preceding sentence, a Participant's
               Individual Account may be reduced to the extent permitted under

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28

               Section 412(c)(8) of the Code.  For purposes of this paragraph, a
               plan amendment which has the effect of decreasing a Participant's
               Individual Account or eliminating an optional form of benefit
               with respect to benefits attributable to service before the
               amendment shall be treated as reducing an accrued benefit.
               Furthermore, if the vesting schedule of a Plan is amended, in the
               case of an Employee who is a Participant as of the later of the
               date such amendment is adopted or the date it becomes effective,
               the Vested percentage (determined as of such date) of such
               Employee's Individual Account derived from Employer Contributions
               will not be less than the percentage computed under the Plan
               without regard to such amendment.

      9.04     AMENDMENT OF VESTING SCHEDULE
               If the Plan's vesting schedule is amended, or the Plan is amended
               in any way that directly or indirectly affects the computation of
               the Participant's Vested percentage, or if the Plan is deemed
               amended by an automatic change to or from a top-heavy vesting
               schedule, each Participant with at least 3 Years of Vesting
               Service with the Employer may elect, within the time set forth
               below, to have the Vested percentage computed under the Plan
               without regard to such amendment.

               For Participants who do not have at least 1 Hour of Service in
               any Plan Year beginning after December 31, 1988, the preceding
               sentence shall be applied by substituting "5 Years of Vesting
               Service" for "3 Years of Vesting Service" where such language
               appears.

               The Period during which the election may be made shall commence
               with the date the amendment is adopted or deemed to be made and
               shall end the later of:

               A.  60 days after the amendment is adopted;

               B.  60 days after the amendment becomes effective; or

               C.  60 days after the Participant is issued written notice of the
                   amendment by the Employer or Plan Administrator.

      9.05     PERMANENCY
               The Employer expects to continue this Plan and make the necessary
               contributions thereto indefinitely, but such continuance and
               payment is not assumed as a contractual obligation.  Neither the
               Adoption Agreement nor the Plan nor any amendment or modification
               thereof nor the making of contributions hereunder shall be
               construed as giving any Participant or any person whomsoever any
               legal or equitable right against the Employer, the Trustee (or
               Custodian, if applicable) the Plan Administrator or the Prototype
               Sponsor except as specifically provided herein, or as provided by
               law.

      9.06     METHOD AND PROCEDURE FOR TERMINATION
               The Plan may be terminated by the Employer at any time by
               appropriate action of its managing body. Such termination shall
               be effective on the date specified by the Employer.  The Plan
               shall terminate if the Employer shall be dissolved, terminated,
               or declared bankrupt.  Written notice of the termination and
               effective date thereof shall be given to the Trustee (or
               Custodian), Plan Administrator, Prototype Sponsor, Participants
               and Beneficiaries of deceased Participants, and the required
               filings (such as the Form 5500 series and others) must be made
               with the Internal Revenue Service and any other regulatory body
               as required by current laws and regulations.  Until all of the
               assets have been distributed from the Fund, the Employer must
               keep the Plan in compliance with current laws and regulations by
               (a) making appropriate amendments to the Plan and (b) taking such
               other measures as may be required.

      9.07     CONTINUANCE OF PLAN BY SUCCESSOR EMPLOYER
               Notwithstanding the preceding Section 9.06, a successor of the
               Employer may continue the Plan and be substituted in the place of
               the present Employer.  The successor and the present Employer
               (or, if deceased, the executor of the estate of a deceased Self-
               Employed Individual who was the Employer) must execute a written
               instrument authorizing such substitution and the successor must
               complete and sign a new plan document.

      9.08     FAILURE OF PLAN QUALIFICATION
               If the Plan fails to retain its qualified status, the Plan will
               no longer be considered to be part of a prototype plan, and such
               Employer can no longer participate under this prototype.  In such
               event, the Plan will be considered an individually designed plan.

SECTION TEN    MISCELLANEOUS

     10.01     STATE COMMUNITY PROPERTY LAWS
               The terms and conditions of this Plan shall be applicable without
               regard to the community property laws of any state.

     10.02     HEADINGS
               The headings of the Plan have been inserted for convenience of
               reference only and are to be ignored in any construction of the
               provisions hereof.

     10.03     GENDER AND NUMBER
               Whenever any words are used herein in the masculine gender they
               shall be construed as though they were also used in the feminine
               gender in all cases where they would so apply, and whenever any
               words are used herein in the singular form they shall be
               construed as though they were also used in the plural form in all
               cases where they would so apply.

     10.04     PLAN MERGER OR CONSOLIDATION
               In the case of any merger or consolidation of the Plan with, or
               transfer of assets or liabilities of such Plan to, any other
               plan, each Participant shall be entitled to receive benefits
               immediately after the merger, consolidation, or transfer (if the
               Plan had then terminated) which are equal to or greater than the
               benefits he or she would have been entitled to receive
               immediately before the merger, consolidation, or transfer (if the
               Plan had then terminated).  The Trustee (or Custodian) has the
               authority to enter into merger agreements or agreements to
               directly transfer the assets of this Plan but only if such
               agreements are made with trustees or custodians of other
               retirement plans described in Section 401(a) of the Code.

     10.05     STANDARD OF FIDUCIARY CONDUCT
               The Employer, Plan Administrator, Trustee and any other fiduciary
               under this Plan shall discharge their duties with respect to this
               Plan solely in the interests of Participants and their
               Beneficiaries and with the care, skill, prudence and diligence
               under the circumstances then prevailing that a prudent man acting
               in like capacity and familiar with such matters would use in the
               conduct of an enterprise of a like character and with like aims.
               No fiduciary shall cause the Plan to engage in any transaction
               known as a "prohibited transaction" under ERISA.

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                                                                             29

     10.06     GENERAL UNDERTAKING OF ALL PARTIES
               All parties to this Plan and all persons claiming any interest
               whatsoever hereunder agree to perform any and all acts and
               execute any and all documents and papers which may be necessary
               or desirable for the carrying out of this Plan and any of its
               provisions.

     10.07     AGREEMENT BINDS HEIRS, ETC.
               This Plan shall be binding upon the heirs, executors,
               administrators, successors and assigns, as those terms shall
               apply to any and all parties hereto, present and future.

     10.08     DETERMINATION OF TOP-HEAVY STATUS
               A.  For any Plan Year beginning after December 31, 1983, this
                   Plan is a Top-Heavy Plan if any of the following conditions
                   exist:

                   1.  If the top-heavy ratio for this Plan exceeds 60% and this
                       Plan is not part of any required aggregation group or
                       permissive aggregation group of plans.

                   2.  If this Plan is part of a required aggregation group of
                       plans but not part of a permissive aggregation group and
                       the top-heavy ratio for the group of plans exceeds 60%.

                   3.  If this Plan is a part of a required aggregation group
                       and part of a permissive aggregation group of plans and
                       the top-heavy ratio for the permissive aggregation group
                       exceeds 60%.

                       For purposes of this Section 10.08, the following terms
                       shall have the meanings indicated below:

               B.  KEY EMPLOYEE - Any Employee or former Employee (and the
                   Beneficiaries of such Employee) who at any time during the
                   determination period was an officer of the Employer if such
                   individual's annual compensation exceeds 50% of the dollar
                   limitation under Section 415(b)(1)(A) of the Code, an owner
                   (or considered an owner under Section 318 of the Code) of one
                   of the 10 largest interests in the Employer if such
                   individual's compensation exceeds 100% of the dollar
                   limitation under Section 415(c)(1)(A) of the Code, a 5% owner
                   of the Employer, or a 1% owner of the Employer who has an
                   annual compensation of more than $150,000.  Annual
                   compensation means compensation as defined in Section
                   415(c)(3) of the Code, but including amounts contributed by
                   the Employer pursuant to a salary reduction agreement which
                   are excludable from the Employee's gross income under Section
                   125, Section 402(e)(3), Section 402(h)(1)(B) or Section
                   403(b) of the Code.  The determination period is the Plan
                   Year containing the determination date and the 4 preceding
                   Plan Years.

                   The determination of who is a Key Employee will be made in
                   accordance with Section 416(i)(1) of the Code and the
                   regulations thereunder.


               C.  TOP-HEAVY RATIO

                   1.  If the Employer maintains one or more defined
                       contribution plans (including any simplified employee
                       pension plan) and the Employer has not maintained any
                       defined benefit plan which during the 5-year period
                       ending on the determination date(s) has or has had
                       accrued benefits, the top-heavy ratio for this Plan alone
                       or for the required or permissive aggregation group as
                       appropriate is a fraction, the numerator of which is the
                       sum of the account balances of all Key Employees as of
                       the determination date(s) (including any part of any
                       account balance distributed in the 5-year period ending
                       on the determination date(s)), and the denominator of
                       which is the sum of all account balances (including any
                       part of any account balance distributed in the 5-year
                       period ending on the determination date(s)), both
                       computed in accordance with Section 416 of the Code and
                       the regulations thereunder.  Both the numerator and the
                       denominator of the top-heavy ratio are increased to
                       reflect any contribution not actually made as of the
                       determination date, but which is required to be taken
                       into account on that date under Section 416 of the Code
                       and the regulations thereunder.

                   2.  If the Employer maintains one or more defined
                       contribution plans (including any simplified employee
                       pension plan) and the Employer maintains or has
                       maintained one or more defined benefit plans which during
                       the 5-year period ending on the determination date(s) has
                       or has had any accrued benefits, the top-heavy ratio for
                       any required or permissive aggregation group as
                       appropriate is a fraction, the numerator of which is the
                       sum of account balances under the aggregated defined
                       contribution plan or plans for all Key Employees,
                       determined in accordance with (1) above, and the present
                       value of accrued benefits under the aggregated defined
                       benefit plan or plans for all Key Employees as of the
                       determination date(s), and the denominator of which is
                       the sum of the account balances under the aggregated
                       defined contribution plan or plans for all Participants,
                       determined in accordance with (1) above, and the present
                       value of accrued benefits under the defined benefit plan
                       or plans for all Participants as of the determination
                       date(s), all determined in accordance with Section 416 of
                       the Code and the regulations thereunder.  The accrued
                       benefits under a defined benefit plan in both the
                       numerator and denominator of the top-heavy ratio are
                       increased for any distribution of an accrued benefit made
                       in the 5-year period ending on the determination date.

                   3.  For purposes of (1) and (2) above, the value of account
                       balances and the present value of accrued benefits will
                       be determined as of the most recent valuation date that
                       falls within or ends with the 12-month period ending on
                       the determination date, except as provided in Section 416
                       of the Code and the regulations thereunder for the first
                       and second plan years of a defined benefit plan.  The
                       account balances and accrued benefits of a Participant
                       (a) who is not a Key Employee but who was a Key Employee
                       in a Prior Year, or (b) who has not been credited with at
                       least one Hour of Service with any employer maintaining
                       the plan at any time during the 5-year period ending on
                       the determination date will be disregarded.  The
                       calculation of the top-heavy ratio, and the extent to
                       which distributions, rollovers, and transfers are taken
                       into account will be made in accordance with Section 416
                       of the Code and the regulations thereunder. Deductible
                       employee contributions will not be taken into account for
                       purposes of computing the top-heavy ratio.  When
                       aggregating plans the value of account balances and
                       accrued benefits will be calculated with reference to the
                       determination dates that fall within the same calendar
                       year.

                       The accrued benefit of a Participant other than a Key
                       Employee shall be determined under (a) the method, if
                       any, that uniformly applies for accrual purposes under
                       all defined benefit plans maintained by the Employer, or
                       (b) if there is no such method, as if such benefit
                       accrued not more rapidly than the slowest accrual rate
                       permitted under the fractional rule of Section
                       411(b)(1)(C) of the Code.

                   4.  Permissive aggregation group:  The required aggregation
                       group of plans plus any other plan or plans of the
                       Employer  which, when considered as a group with the
                       required aggregation group, would continue to satisfy the
                       requirements of Sections 401(a)(4) and 410 of the Code.

<PAGE>

30

                   5.  Required aggregation group: (a) Each qualified plan of
                       the Employer in which at least one Key Employee
                       participates or participated at any time during the
                       determination period (regardless of whether the Plan has
                       terminated), and (b) any other qualified plan of the
                       Employer which enables a plan described in (a) to meet
                       the requirements of Sections 401(a)(4) or 410 of the
                       Code.

                   6.  Determination date:  For any Plan Year subsequent to the
                       first Plan Year, the last day of the preceding Plan Year.
                       For the first Plan Year of the Plan, the last day of that
                       year.

                   7.  Valuation date:  For purposes of calculating the top-
                       heavy ratio, the valuation date shall be the last day of
                       each Plan Year.

                   8.  Present value:  For purposes of establishing the "present
                       value" of benefits under a defined benefit plan to
                       compute the top-heavy ratio, any benefit shall be
                       discounted only for mortality and interest based on the
                       interest rate and mortality table specified for this
                       purpose in the defined benefit plan, unless otherwise
                       indicated in the Adoption Agreement.

     10.09     SPECIAL LIMITATIONS FOR OWNER-EMPLOYEES
               If this Plan provides contributions or benefits for one or more
               Owner-Employees who control both the business for which this Plan
               is established and one or more other trades or businesses, this
               Plan and the plan established for other trades or businesses
               must, when looked at as a single plan, satisfy Sections 401(a)
               and (d) of the Code for the employees of those trades or
               businesses.

               If the Plan provides contributions or benefits for one or more
               Owner-Employees who control one or more other trades or
               businesses, the employees of the other trades or businesses must
               be included in a plan which satisfies Sections 401(a) and (d) of
               the Code and which provides contributions and benefits not less
               favorable than provided for Owner-Employees under this Plan.

               If an individual is covered as an Owner-Employee under the plans
               of two or more trades or businesses which are not controlled and
               the individual controls a trade or business, then the
               contributions or benefits of the employees under the plan of the
               trade or business which is controlled must be as favorable as
               those provided for him or her under the most favorable plan of
               the trade or business which is not controlled.

               For purposes of the preceding paragraphs, an Owner-Employee, or
               two or more Owner-Employees, will be considered to control a
               trade or business if the Owner-Employee, or two or more Owner-
               Employees, together:

               A.  own the entire interest in a unincorporated trade or
                   business, or

               B.  in the case of a partnership, own more than 50% of either the
                   capital interest or the profit interest in the partnership.

               For purposes of the preceding sentence, an Owner-Employee, or two
               or more Owner-Employees, shall be treated as owning any interest
               in a partnership which is owned, directly or indirectly, by a
               partnership which such Owner-Employee, or such two or more Owner-
               Employees, are considered to control within the meaning of the
               preceding sentence.

     10.10     INALIENABILITY OF BENEFITS
               No benefit or interest available hereunder will be subject to
               assignment or alienation, either voluntarily or involuntarily.
               The preceding sentence shall also apply to the creation,
               assignment, or recognition of a right to any benefit payable with
               respect to a Participant pursuant to a domestic relations order,
               unless such order is determined to be a qualified domestic
               relations order, as defined in Section 414(p) of the Code.

               Generally, a domestic relations order cannot be a qualified
               domestic relations order until January 1, 1985.  However, in the
               case of a domestic relations order entered before such date, the
               Plan Administrator:

               (1) shall treat such order as a qualified domestic relations
                   order if such Plan Administrator is paying benefits pursuant
                   to such order on such date, and

               (2) may treat any other such order entered before such date as a
                   qualified domestic relations order even if such order does
                   not meet the requirements of Section 414(p) of the Code.

               Notwithstanding any provision of the Plan to the contrary, a
               distribution to an alternate payee under a qualified domestic
               relations order shall be permitted even if the Participant
               affected by such order is not otherwise entitled to a
               distribution and even if such Participant has not attained
               earliest retirement age as defined in Section 414(p) of the Code.

     10.11     CANNOT ELIMINATE PROTECTED BENEFITS
               Pursuant to Section 411(d)(6) of the Code, and the regulations
               thereunder, the Employer cannot reduce, eliminate or make subject
               to Employer discretion any Section 411(d)(6) protected benefit.
               Where this Plan document is being adopted to amend another plan
               that contains a protected benefit not provided for in this
               document, the Employer may attach a supplement to the Adoption
               Agreement that describes such protected benefit which shall
               become part of the Plan.

SECTION ELEVEN 401(k) PROVISIONS
               In addition to Sections 1 through 10, the provisions of this
               Section 11 shall apply if the Employer has established a 401(k)
               cash or deferred arrangement (CODA) by completing and signing the
               appropriate Adoption Agreement.

    11.100     DEFINITIONS
               The following words and phrases when used in the Plan with
               initial capital letters shall, for the purposes of this Plan,
               have the meanings set forth below unless the context indicates
               that other meanings are intended.

    11.101     ACTUAL DEFERRAL PERCENTAGE (ADP)
               Means, for a specified group of Participants for a Plan Year, the
               average of the ratios (calculated separately for each Participant
               in such group) of (1) the amount of Employer Contributions
               actually paid over to the Fund on behalf of such Participant for
               the Plan Year to (2) the Participant's Compensation for such Plan
               Year (taking into account only that Compensation paid to the
               Employee during the portion of the Plan Year he or she was an
               eligible Participant, unless otherwise indicated in the Adoption
               Agreement).  For purposes of calculating the ADP, Employer
               Contributions on behalf of any Participant shall include: (1) any
               Elective Deferrals made pursuant to the Participant's deferral
               election, (including Excess Elective Deferrals of Highly
               Compensated Employees), but excluding (a) Excess Elective
               Deferrals of Non-highly Compensated Employees that arise solely
               from Elective Deferrals made under the Plan or plans of this
               Employer and (b) Elective Deferrals that are taken into account
               in the Contribution Percentage test (provided the ADP test is
               satisfied both with and without exclusion of these Elective

<PAGE>

                                                                             31

               Deferrals); and (2) at the election of the Employer, Qualified
               Nonelective Contributions and Qualified Matching Contributions.
               For purposes of computing Actual Deferral Percentages, an
               Employee who would be a Participant but for the failure to make
               Elective Deferrals shall be treated as a Participant on whose
               behalf no Elective Deferrals are made.

    11.102     AGGREGATE LIMIT
               Means the sum of (1) 125% of the greater of the ADP of the
               Participants who are not Highly Compensated Employees for the
               Plan Year or the ACP of the Participants who are not Highly
               Compensated Employees under the Plan subject to Code Section
               401(m) for the Plan Year beginning with or within the Plan Year
               of the CODA; and (2) the lesser of 200% or two plus the lesser of
               such ADP or ACP.  "Lesser" is substituted for "greater" in "(1)"
               above, and "greater" is substituted for "lesser" after "two plus
               the" in "(2)" if it would result in a larger Aggregate Limit.

    11.103     AVERAGE CONTRIBUTION PERCENTAGE (ACP)
               Means the average of the Contribution Percentages of the Eligible
               Participants in a group.

    11.104     CONTRIBUTING PARTICIPANT
               Means a Participant who has enrolled as a Contributing
               Participant pursuant to Section 11.201 and on whose behalf the
               Employer is contributing Elective Deferrals to the Plan (or is
               making Nondeductible Employee Contributions).

    11.105     CONTRIBUTION PERCENTAGE
               Means the ratio (expressed as a percentage) of the Participant's
               Contribution Percentage Amounts to the Participant's Compensation
               for the Plan Year (taking into account only the Compensation paid
               to the Employee during the portion of the Plan Year he or she was
               an eligible Participant, unless otherwise indicated in the
               Adoption Agreement).

    11.106     CONTRIBUTION PERCENTAGE AMOUNTS
               Means the sum of the Nondeductible Employee Contributions,
               Matching Contributions, and Qualified Matching Contributions made
               under the Plan on behalf of the Participant for the Plan Year.
               Such Contribution Percentage Amounts shall not include Matching
               Contributions that are forfeited either to correct Excess
               Aggregate Contributions or because the contributions to which
               they relate are Excess Deferrals, Excess Contributions, Excess
               Aggregate Contributions or excess annual additions which are
               distributed pursuant to Section 11.508.  If so elected in the
               Adoption Agreement, the Employer may include Qualified
               Nonelective Contributions in the Contribution Percentage Amount.
               The Employer also may elect to use Elective Deferrals in the
               Contribution Percentage Amounts so long as the ADP test is met
               before the Elective Deferrals are used in the ACP test and
               continues to be met following the exclusion of those Elective
               Deferrals that are used to meet the ACP test.

    11.107     ELECTIVE DEFERRALS
               Means any Employer Contributions made to the Plan at the election
               of the Participant, in lieu of cash compensation, and shall
               include contributions made pursuant to a salary reduction
               agreement or other deferral mechanism.  With respect to any
               taxable year, a Participant's Elective Deferral is the sum of all
               Employer contributions made on behalf of such Participant
               pursuant to an election to defer under any qualified CODA as
               described in Section 401(k) of the Code, any simplified employee
               pension cash or deferred arrangement as described in Section
               402(h)(1)(B), any eligible deferred compensation plan under
               Section 457, any plan as described under Section 501(c)(18), and
               any Employer contributions made on the behalf of a Participant
               for the purchase of an annuity contract under Section 403(b)
               pursuant to a salary reduction agreement.  Elective Deferrals
               shall not include any deferrals properly distributed as excess
               annual additions.

               No Participant shall be permitted to have Elective Deferrals made
               under this Plan, or any other qualified plan maintained by the
               Employer, during any taxable year, in excess of the dollar
               limitation contained in Section 402(g) of the Code in effect at
               the beginning of such taxable year.

               Elective Deferrals may not be taken into account for purposes of
               satisfying the minimum allocation requirement applicable to Top-
               Heavy Plans described in Section 3.01(E).

    11.108     ELIGIBLE PARTICIPANT
               Means any Employee who is eligible to make a Nondeductible
               Employee Contribution or an Elective Deferral (if the Employer
               takes such contributions into account in the calculation of the
               Contribution Percentage), or to receive a Matching Contribution
               (including Forfeitures thereof) or a Qualified Matching
               Contribution.

               If a Nondeductible Employee Contribution is required as a
               condition of participation in the Plan, any Employee who would be
               a Participant in the Plan if such Employee made such a
               contribution shall be treated as an Eligible Participant on
               behalf of whom no Nondeductible Employee Contributions are made.

    11.109     EXCESS AGGREGATE CONTRIBUTIONS
               Means, with respect to any Plan Year, the excess of:

               A.  The aggregate Contribution Percentage Amounts taken into
                   account in computing the numerator of the Contribution
                   Percentage actually made on behalf of Highly Compensated
                   Employees for such Plan Year, over

               B.  The maximum Contribution Percentage Amounts permitted by the
                   ACP test (determined by reducing contributions made on behalf
                   of Highly Compensated Employees in order of their
                   Contribution Percentages beginning with the highest of such
                   percentages).

                   Such determination shall be made after first determining
                   Excess Elective Deferrals pursuant to Section 11.112 and then
                   determining Excess Contributions pursuant to Section 11.111.

    11.110     EXCESS CONTRIBUTIONS
               Means, with respect to any Plan Year, the excess of:

               A.  The aggregate amount of Employer Contributions actually taken
                   into account in computing the ADP of Highly Compensated
                   Employees for such Plan Year, over

               B.  The maximum amount of such contributions permitted by the ADP
                   test (determined by reducing contributions made on behalf of
                   Highly Compensated Employees in order of the ADPs, beginning
                   with the highest of such percentages).

    11.111     EXCESS ELECTIVE DEFERRALS
               Means those Elective Deferrals that are includible in a
               Participant's gross income under Section 402(g) of the Code to
               the extent such Participant's Elective Deferrals for a taxable
               year exceed the dollar limitation under such Code section.
               Excess Elective Deferrals shall be treated as annual additions
               under the Plan, unless such amounts are distributed no later than
               the first April 15 following the close of the Participant's
               taxable year.

<PAGE>

32

    11.112     MATCHING CONTRIBUTION
               Means an Employer Contribution made to this or any other defined
               contribution plan on behalf of a Participant on account of an
               Elective Deferral or a Nondeductible Employee Contribution made
               by such Participant under a plan maintained by the Employer.

               Matching Contributions may not be taken into account for purposes
               of satisfying the minimum allocation requirement applicable to
               Top-Heavy Plans described in Section 3.01(E).

    11.113     QUALIFIED NONELECTIVE CONTRIBUTIONS
               Means contributions (other than Matching Contributions or
               Qualified Matching Contributions) made by the Employer and
               allocated to Participants' Individual Accounts that the
               Participants may not elect to receive in cash until distributed
               from the Plan; that are nonforfeitable when made; and that are
               distributable only in accordance with the distribution provisions
               that are applicable to Elective Deferrals and Qualified Matching
               Contributions.

               Qualified Nonelective Contribution may be taken into account for
               purposes of satisfying the minimum allocation requirement
               applicable to Top-Heavy Plans described in Section 3.01(E).

    11.114     QUALIFIED MATCHING CONTRIBUTIONS
               Means Matching Contributions which are subject to the
               distribution and nonforfeitability requirements under Section
               401(k) of the Code when made.

    11.115     QUALIFYING CONTRIBUTING PARTICIPANT
               Means a Contributing Participant who satisfies the requirements
               described in Section 11.302 to be entitled to receive a Matching
               Contribution (and Forfeitures, if applicable) for a Plan Year.

    11.200     CONTRIBUTING PARTICIPANT

    11.201     REQUIREMENTS TO ENROLL AS A CONTRIBUTING PARTICIPANT
               A.  Each Employee who satisfies the eligibility requirements
                   specified in the Adoption Agreement may enroll as a
                   Contributing Participant as of any subsequent Entry Date (or
                   earlier if required by Section 2.03) specified in the
                   Adoption Agreement for this purpose.  A Participant who
                   wishes to enroll as a Contributing Participant must complete,
                   sign and file a salary reduction agreement (or agreement to
                   make Nondeductible Employee Contributions) with the Plan
                   Administrator.

               B.  Notwithstanding the times set forth in Section 11.201(A) as
                   of which a Participant may enroll as a Contributing
                   Participant, the Plan Administrator shall have the authority
                   to designate, in a nondiscriminatory manner, additional
                   enrollment times during the 12 month period beginning on the
                   Effective Date (or the date that Elective Deferrals may
                   commence, if later) in order that an orderly first enrollment
                   might be completed.  In addition, if the Employer has
                   indicated in the Adoption Agreement that Elective Deferrals
                   may be based on bonuses, then Participants shall be afforded
                   a reasonable period of time prior to the issuance of such
                   bonuses to elect to defer them into the Plan.

    11.202     CHANGING ELECTIVE DEFERRAL AMOUNTS
               A Contributing Participant may modify his or her salary reduction
               agreement (or agreement to make Nondeductible Employee
               Contributions) to increase or decrease (within the limits placed
               on Elective Deferrals (or Nondeductible Employee Contributions)
               in the Adoption Agreement) the amount of his or her Compensation
               deferred into the Plan.  Such modification may only be made as of
               the dates specified in the Adoption Agreement for this purpose,
               or as of any other more frequent date(s) if the Plan
               Administrator permits in a uniform and nondiscriminatory manner.
               A Contributing Participant who desires to make such a
               modification shall complete, sign and file a new salary reduction
               agreement (or agreement to make Nondeductible Employee
               Contribution) with the Plan Administrator.  The Plan
               Administrator may prescribe such uniform and nondiscriminatory
               rules it deems appropriate to carry out the terms of this
               Section.

    11.203     CEASING ELECTIVE DEFERRALS
               A Participant may cease Elective Deferrals (or Nondeductible
               Employee Contributions) and thus withdraw as a Contributing
               Participant as of the dates specified in the Adoption Agreement
               for this purpose (or as of any other date if the Plan
               Administrator so permits in a uniform and nondiscriminatory
               manner) by revoking the authorization to the Employer to make
               Elective Deferrals (or Nondeductible Employee Contributions) on
               his or her behalf.  A Participant who desires to withdraw as a
               Contributing Participant shall give written notice of withdrawal
               to the Plan Administrator at least thirty days (or such lesser
               period of days as the Plan Administrator shall permit in a
               uniform and nondiscriminatory manner) before the effective date
               of withdrawal.  A Participant shall cease to be a Contributing
               Participant upon his or her Termination of Employment, or an
               account of termination of the Plan.

    11.204     RETURN AS A CONTRIBUTING PARTICIPANT AFTER CEASING ELECTIVE
               DEFERRALS
               A Participant who has withdrawn as a Contributing Participant
               under Section 11.203 (or because the Participant has taken a
               hardship withdrawal pursuant to Section 11.503) may not again
               become a Contributing Participant until the dates set forth in
               the Adoption Agreement for this purpose, unless the Plan
               Administrator, in a uniform and nondiscriminatory manner, permits
               withdrawing Participants to resume their status as Contributing
               Participants sooner.

    11.205     CERTAIN ONE-TIME IRREVOCABLE ELECTIONS
               This Section 11.205 applies where the Employer has indicated in
               the Adoption Agreement that an Employee may make a one-time
               irrevocable election to have the Employer make contributions to
               the Plan on such Employee's behalf.  In such event, an Employee
               may elect, upon the Employee's first becoming eligible to
               participate in the Plan, to have contributions equal to a
               specified amount or percentage of the Employee's Compensation
               (including no amount of Compensation) made by the Employer on the
               Employee's behalf to the Plan (and to any other plan of the
               Employer) for the duration of the Employee's employment with the
               Employer.  Any contributions made pursuant to a one-time
               irrevocable election described in this Section are not treated as
               made pursuant to a cash or deferred election, are not Elective
               Deferrals and are not includible in an Employee's gross income.

               The Plan Administrator shall establish such uniform and
               nondiscriminatory procedures as it deems necessary or advisable
               to administer this provision.

    11.300     CONTRIBUTIONS

    11.301     CONTRIBUTIONS BY EMPLOYER
               The Employer shall make contributions to the Plan in accordance
               with the contribution formulas specified in the Adoption
               Agreement.

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                                                                             33

    11.302     MATCHING CONTRIBUTIONS
               The Employer may elect to make Matching Contributions under the
               Plan on behalf of Qualifying Contributing Participants as
               provided in the Adoption Agreement.  To be a Qualifying
               Contributing Participant for a Plan Year, the Participant must
               make Elective Deferrals (or Nondeductible Employee Contributions,
               if the Employer has agreed to match such contributions) for the
               Plan Year, satisfy any age and Years of Eligibility Service
               requirements that are specified for Matching Contributions in the
               Adoption Agreement and also satisfy any additional conditions set
               forth in the Adoption Agreement for this purpose.  In a uniform
               and nondiscriminatory manner, the Employer may make Matching
               Contributions at the same time as it contributes Elective
               Deferrals or at any other time as permitted by laws and
               regulations.

    11.303     QUALIFIED NONELECTIVE CONTRIBUTIONS
               The Employer may elect to make Qualified Nonelective
               Contributions under the Plan on behalf of Participants as
               provided in the Adoption Agreement.

               In addition, in lieu of distributing Excess Contributions as
               provided in Section 11.505 of the Plan, or Excess Aggregate
               Contributions as provided in Section 11.506 of the Plan, and to
               the extent elected by the Employer in the Adoption Agreement, the
               Employer may make Qualified Nonelective Contributions on behalf
               of Participants who are not Highly Compensated Employees that are
               sufficient to satisfy either the Actual Deferral Percentage test
               or the Average Contribution Percentage test, or both, pursuant to
               regulations under the Code.

    11.304     QUALIFIED MATCHING CONTRIBUTIONS
               The Employer may elect to make Qualified Matching Contributions
               under the Plan on behalf of Participants as provided in the
               Adoption Agreement.

    11.305     NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
               Notwithstanding Section 3.02, if the Employer so allows in the
               Adoption Agreement, a Participant may contribute Nondeductible
               Employee Contributions to the Plan.

               If the Employer has indicated in the Adoption Agreement that
               Nondeductible Employee Contributions will be mandatory, then the
               Employer shall establish uniform and nondiscriminatory rules and
               procedures for Nondeductible Employee Contributions as it deems
               necessary and advisable including, but not limited to, rules
               describing in amounts or percentages of Compensation Participants
               may or must contribute to the Plan.

               A separate account will be maintained by the Plan Administrator
               for the Nondeductible Employee Contributions for each
               Participant.

               A Participant may, upon a written request submitted to the Plan
               Administrator, withdraw the lesser of the portion of his or her
               Individual Account attributable to his or her Nondeductible
               Employee Contributions or the amount he or she contributed as
               Nondeductible Employee Contributions.

               Nondeductible Employee Contributions and earnings thereon will be
               nonforfeitable at all times.  No Forfeiture will occur solely as
               a result of an Employee's withdrawal of Nondeductible Employee
               Contributions.

    11.400     NONDISCRIMINATION TESTING

    11.401     ACTUAL DEFERRAL PERCENTAGE TEST (ADP)

               A.  LIMITS ON HIGHLY COMPENSATED EMPLOYEES - The Actual Deferral
                   Percentage (hereinafter "ADP") for Participants who are
                   Highly Compensated Employees for each Plan Year and the ADP
                   for Participants who are not Highly Compensated Employees for
                   the same Plan Year must satisfy one of the following tests:

                   1.  The ADP for Participants who are Highly Compensated
                       Employees for the Plan Year shall not exceed the ADP for
                       Participants who are not Highly Compensated Employees for
                       the same Plan Year multiplied by 1.25; or

                   2.  The ADP for Participants who are Highly Compensated
                       Employees for the Plan Year shall not exceed the ADP for
                       Participants who are not Highly Compensated Employees for
                       the same Plan Year multiplied by 2.0 provided that the
                       ADP for Participants who are Highly Compensated Employees
                       does not exceed the ADP for Participants who are not
                       Highly Compensated Employees by more than 2 percentage
                       points.


               B.  SPECIAL RULES

                   1.  The ADP for any Participant who is a Highly Compensated
                       Employee for the Plan Year and who is eligible to have
                       Elective Deferrals (and Qualified Nonelective
                       Contributions or Qualified Matching Contributions, or
                       both, if treated as Elective Deferrals for purposes of
                       the ADP test) allocated to his or her Individual Accounts
                       under two or more arrangements described in Section
                       401(k) of the Code, that are maintained by the Employer,
                       shall be determined as if such Elective Deferrals (and,
                       if applicable, such Qualified Nonelective Contributions
                       or Qualified Matching Contributions, or both) were made
                       under a single arrangement.  If a Highly Compensated
                       Employee participates in two or more cash or deferred
                       arrangements that have different Plan Years, all cash or
                       deferred arrangements ending with or within the same
                       calendar year shall be treated as a single arrangement.
                       Notwithstanding the foregoing, certain plans shall be
                       treated as separate if mandatorily disaggregated under
                       regulations under Section 401(k) of the Code.

                   2.  In the event that this Plan satisfies the requirements of
                       Sections 401(k), 401(a)(4), or 410(b) of the Code only if
                       aggregated with one or more other plans, or if one or
                       more other plans satisfy the requirements of such
                       sections of the Code only if aggregated with this Plan,
                       then this Section 11.401 shall be applied by determining
                       the ADP of Employees as if all such plans were a single
                       plan.  For Plan Years beginning after December 31, 1989,
                       plans may be aggregated in order to satisfy Section
                       401(k) of the Code only if they have the same Plan Year.

                   3.  For purposes of determining the ADP of a Participant who
                       is a 5% owner or one of the 10 most highly paid Highly
                       Compensated Employees, the Elective Deferrals (and
                       Qualified Nonelective Contributions or Qualified Matching
                       Contributions, or both, if treated as Elective Deferrals
                       for purposes of the ADP test) and Compensation of such
                       Participant shall include the Elective Deferrals (and, if
                       applicable, Qualified Nonelective Contributions and
                       Qualified Matching Contributions, or both) and
                       Compensation for the Plan Year of family members (as
                       defined in Section 414(q)(6) of the Code).  Family
                       members, with respect to such Highly Compensated
                       Employees, shall be disregarded as separate Employees in
                       determining the ADP both for Participants who are not
                       Highly Compensated Employees and for Participants who are
                       Highly Compensated Employees.

                   4.  For purposes of determining the ADP test, Elective
                       Deferrals, Qualified Nonelective Contributions and
                       Qualified Matching Contributions must be made before the
                       last day of the 12 month period immediately following the
                       Plan Year to which contributions relate.

<PAGE>

34

                   5.  The Employer shall maintain records sufficient to
                       demonstrate satisfaction of the ADP test and the amount
                       of Qualified Nonelective Contributions or Qualified
                       Matching Contributions, or both, used in such test.

                   6.  The determination and treatment of the ADP amounts of any
                       Participant shall satisfy such other requirements as may
                       be prescribed by the Secretary of the Treasury.

                   7.  If the Employer elects to take Qualified Matching
                       Contributions into account as Elective Deferrals for
                       purposes of the ADP test, then (subject to such other
                       requirements as may be prescribed by the Secretary of the
                       Treasury) unless otherwise indicated in the Adoption
                       Agreement, only the amount of such Qualified Matching
                       Contributions that are needed to meet the ADP test shall
                       be taken into account.

                   8.  In the event that the Plan Administrator determines that
                       it is not likely that the ADP test will be satisfied for
                       a particular Plan Year  unless certain steps are taken
                       prior to the end of such Plan Year, the Plan
                       Administrator may require Contributing Participants who
                       are Highly Compensated Employees to reduce their Elective
                       Deferrals for such Plan Year in order to satisfy  that
                       requirement. Said reduction shall also be required by the
                       Plan Administrator in the event that the Plan
                       Administrator anticipates that the Employer will not be
                       able to deduct all Employer Contributions from its income
                       for Federal income tax purposes.

    11.402     LIMITS ON NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS AND MATCHING
               CONTRIBUTIONS
               A.  LIMITS ON HIGHLY COMPENSATED EMPLOYEES - The Average
                   Contribution Percentage (hereinafter "ACP") for Participants
                   who are Highly Compensated Employees for each Plan Year and
                   the ACP for Participants who are not Highly Compensated
                   Employees for the same Plan Year must satisfy one of the
                   following tests:

                   1.  The ACP for Participants who are Highly Compensated
                       Employees for the Plan Year shall not exceed the ACP for
                       Participants who are not Highly Compensated Employees for
                       the same Plan Year multiplied by 1.25; or

                   2.  The ACP for Participants who are Highly Compensated
                       Employees for the Plan Year shall not exceed the ACP for
                       Participants who are not Highly Compensated Employees for
                       the same Plan Year multiplied by 2, provided that the ACP
                       for the Participants who are Highly Compensated Employees
                       does not exceed the ACP for Participants who are not
                       Highly Compensated Employees by more than 2 percentage
                       points.

               B.  SPECIAL RULES

                   1.  Multiple Use - If one or more Highly Compensated
                       Employees participate in both a CODA and a plan subject
                       to the ACP test maintained by the Employer and the sum of
                       the ADP and ACP of those Highly Compensated Employees
                       subject to either or both tests exceeds the Aggregate
                       Limit, then, as elected in the Adoption Agreement, the
                       ACP or the ADP of those Highly Compensated Employees who
                       also participate in a CODA will be reduced (beginning
                       with such Highly Compensated Employee whose ACP (or ADP,
                       if elected) is the highest) so that the limit is not
                       exceeded.  The amount by which each Highly Compensated
                       Employee's Contribution Percentage Amounts (or ADP, if
                       elected) is reduced shall be treated as an Excess
                       Aggregate Contribution (or Excess Contribution, if
                       elected).  The ADP and ACP of the Highly Compensated
                       Employees are determined after any corrections required
                       to meet the ADP and ACP tests.  Multiple use does not
                       occur if the ADP and ACP of the Highly Compensated
                       Employees does not exceed 1.25 multiplied by the ADP and
                       ACP of the Participants who are not Highly Compensated
                       Employees.

                   2.  For purposes of this Section 11.402, the Contribution
                       Percentage for any Participant who is a Highly
                       Compensated Employee and who is eligible to have
                       Contribution Percentage Amounts allocated to his or her
                       Individual Account under two or more plans described in
                       Section 401(a) of the Code, or arrangements described in
                       Section 401(k) of the Code that are maintained by the
                       Employer, shall be determined as if the total of such
                       Contribution Percentage Amounts was made under each plan.
                       If a Highly Compensated Employee participates in two or
                       more cash or deferred arrangements that have different
                       plan years, all cash or deferred arrangements ending with
                       or within the same calendar year shall be treated as a
                       single arrangement.  Notwithstanding the foregoing,
                       certain plans shall be treated as separate if mandatorily
                       disaggregated under regulations under Section 401(m) of
                       the Code.

                   3.  In the event that this Plan satisfies the requirements of
                       Sections 401(m), 401(a)(4) or 410(b) of the Code only if
                       aggregated with one or more other plans, or if one or
                       more other plans satisfy the requirements of such
                       Sections of the Code only if aggregated with this Plan,
                       then this Section shall be applied by determining the
                       Contribution Percentage of Employees as if all such plans
                       were a single plan.  For Plan Years beginning after
                       December 31, 1989, plans may be aggregated in order to
                       satisfy Section 401(m) of the Code only if they have the
                       same Plan Year.

                   4.  For purposes of determining the Contribution Percentage
                       of a Participant who is a 5% owner or one of the 10 most
                       highly paid Highly Compensated Employees, the
                       Contribution Percentage Amounts and Compensation of such
                       Participant shall include the Contribution Percentage
                       Amounts and Compensation for the Plan Year of family
                       members, (as defined in Section 414(q)(6) of the Code).
                       Family members, with respect to Highly Compensated
                       Employees, shall be disregarded as separate Employees in
                       determining the Contribution Percentage both for
                       Participants who are not Highly Compensated Employees and
                       for Participants who are Highly Compensated Employees.

                   5.  For purposes of determining the Contribution Percentage
                       test, Nondeductible Employee Contributions are considered
                       to have been made in the Plan Year in which contributed
                       to the Fund.  Matching Contributions and Qualified
                       Nonelective Contributions will be considered made for a
                       Plan Year if made no later than the end of the 12 month
                       period beginning on the day after the close of the Plan
                       Year.

                   6.  The Employer shall maintain records sufficient to
                       demonstrate satisfaction of the ACP test and the amount
                       of Qualified Nonelective Contributions or Qualified
                       Matching Contributions, or both, used in such test.

                   7.  The determination and treatment of the Contribution
                       Percentage of any Participant shall satisfy such other
                       requirements as may be prescribed by the Secretary of the
                       Treasury.


                   8.  If the Employer elects to take Qualified Nonelective
                       Contributions into account as Contribution Percentage
                       Amounts for purposes of the ACP test, then (subject to
                       such other requirements as may be prescribed by the
                       Secretary of the Treasury) unless otherwise indicated in
                       the Adoption Agreement, only the amount of such Qualified
                       Nonelective Contributions that are needed to meet the ACP
                       test shall be taken into account.

                   9.  If the Employer elects to take Elective Deferrals into
                       account as Contribution Percentage Amounts for purposes
                       of the ACP test, then (subject to such other requirements
                       as may be prescribed by the Secretary of the Treasury)
                       unless otherwise indicated in the Adoption Agreement,
                       only the amount of such Elective Deferrals that are
                       needed to meet the ACP test shall be taken into account.

<PAGE>

                                                                             35

    11.500     DISTRIBUTION PROVISIONS

    11.501     GENERAL RULE
               Distributions from the Plan are subject to the provisions of
               Section 6 and the provisions of this Section 11.  In the event of
               a conflict between the provisions of Section 6 and Section 11,
               the provisions of Section 11 shall control.

    11.502     DISTRIBUTION REQUIREMENTS
               Elective Deferrals, Qualified Nonelective Contributions, and
               Qualified Matching Contributions, and income allocable to each
               are not distributable to a Participant or his or her Beneficiary
               or Beneficiaries, in accordance with such Participant's or
               Beneficiary or Beneficiaries' election, earlier than upon
               separation from service, death or disability.

               Such amounts may also be distributed upon:

               A.  Termination of the Plan without the establishment of another
                   defined contribution plan, other than an employee stock
                   ownership plan (as defined in Section 4975(e) or Section 409
                   of the Code) or a simplified employee pension plan as defined
                   in Section 408(k).

               B.  The disposition by a corporation to an unrelated corporation
                   of substantially all of the assets (within the meaning of
                   Section 409(d)(2) of the Code used in a trade or business of
                   such corporation if such corporation continues to maintain
                   this Plan after the disposition, but only with respect to
                   Employees who continue employment with the corporation
                   acquiring such assets.

               C.  The disposition by a corporation to an unrelated entity of
                   such corporation's interest in a subsidiary (within the
                   meaning of Section 409(d)(3) of the Code) if such corporation
                   continues to maintain this Plan, but only with respect to
                   Employees who continue employment with such subsidiary.

               D.  The attainment of age 59 1/2 in the case of a profit sharing
                   plan.

               E.  If the Employer has so elected in the Adoption Agreement, the
                   hardship of the Participant as described in Section 11.503.

                   All distributions that may be made pursuant to one or more of
                   the foregoing distributable events are subject to the spousal
                   and Participant consent requirements (if applicable)
                   contained in Section 401(a)(11) and 417 of the Code.  In
                   addition, distributions after March 31, 1988, that are
                   triggered by any of the first three events enumerated above
                   must be made in a lump sum.

    11.503     HARDSHIP DISTRIBUTION
               A.  GENERAL - If the Employer has so elected in the Adoption
                   Agreement, distribution of Elective Deferrals (and any
                   earnings credited to a Participant's account as of the end of
                   the last Plan Year, ending before July 1, 1989) may be made
                   to a Participant in the event of hardship.  For the purposes
                   of this Section, hardship is defined as an immediate and
                   heavy financial need of the Employee where such Employee
                   lacks other available resources.  Hardship distributions are
                   subject to the spousal consent requirements contained in
                   Sections 401(a)(11) and 417 of the Code.

               B.  SPECIAL RULES

                   1.  The following are the only financial needs considered
                       immediate and heavy:  expenses incurred or necessary for
                       medical care, described in Section 213(d) of the Code, of
                       the Employee, the Employee's spouse or dependents; the
                       purchase (excluding mortgage payments) of a principal
                       residence for the Employee; payment of tuition and
                       related educational fees for the next 12 months of post-
                       secondary education for the Employee, the Employee's
                       spouse, children or dependents; or the need to prevent
                       the eviction of the Employee from, or a foreclosure on
                       the mortgage of, the Employee's principal residence.

                   2.  A distribution will be considered as necessary to satisfy
                       an immediate and heavy financial need of the Employee
                       only if:

                       a.  The Employee has obtained all distributions, other
                           than hardship distributions, and all nontaxable loans
                           under all plans maintained by the Employer;

                       b.  All plans maintained by the Employer provide that the
                           Employee's Elective Deferrals (and Nondeductible
                           Employee Contributions) will be suspended for 12
                           months after the receipt of the hardship
                           distribution;

                       c.  The distribution is not in excess of the amount of an
                           immediate and heavy financial need (including amounts
                           necessary to pay any Federal, state or local income
                           taxes or penalties reasonably anticipated to result
                           from the distribution); and

                       d.  All plans maintained by the Employer provide that the
                           Employee may not make Elective Deferrals for the
                           Employee's taxable year immediately following the
                           taxable year of the hardship distribution in excess
                           of the applicable limit under Section 402(g) of the
                           Code for such taxable year less the amount of such
                           Employee's Elective Deferrals for the taxable year of
                           the hardship distribution.

    11.504     DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS
               A.  GENERAL RULE - A Participant may assign to this Plan any
                   Excess Elective Deferrals made during a taxable year of the
                   Participant by notifying the Plan Administrator on or before
                   the date specified in the Adoption Agreement of the amount of
                   the Excess Elective Deferrals to be assigned to the Plan.  A
                   Participant is deemed to notify the Plan Administrator of any
                   Excess Elective Deferrals that arise by taking into account
                   only those Elective Deferrals made to this Plan and any other
                   plans of the Employer.

                   Notwithstanding any other provision of the Plan, Excess
                   Elective Deferrals, plus any income and minus any loss
                   allocable thereto, shall be distributed no later than April
                   15 to any Participant to whose Individual Account Excess
                   Elective Deferrals were assigned for the preceding year and
                   who claims Excess Elective Deferrals for such taxable year.

               B.  DETERMINATION OF INCOME OR LOSS - Excess Elective Deferrals
                   shall be adjusted for any income or loss up to the date of
                   distribution.  The income of loss allocable to Excess
                   Elective Deferrals is the sum of :  (1) income or loss
                   allocable to the Participant's Elective Deferral account for
                   the taxable year multiplied by a fraction, the numerator of
                   which is such Participant's Elective Deferrals for the year
                   and the denominator is the Participant's Individual Account
                   balance attributable to Elective Deferrals  without regard to
                   any income or loss occurring during such taxable year; and
                   (2) 10% of the amount determined under (1) multiplied by the
                   number of whole calendar months between the end of the
                   Participant's taxable year and the date of distribution,
                   counting the month of distribution if distribution occurs
                   after the 15th of such month.  Notwithstanding the preceding
                   sentence, the Plan Administrator may compute the income or
                   loss allocable to

<PAGE>

36

                   Excess Elective Deferrals in the manner described in Section
                   4 (i.e., the usual manner used by the Plan for allocating
                   income or loss to Participants' Individual Accounts),
                   provided such method is used consistently for all
                   Participants and for all corrective distributions under the
                   Plan for the Plan Year.

    11.505     DISTRIBUTION OF EXCESS CONTRIBUTIONS
               A.  GENERAL RULE - Notwithstanding any other provision of this
                   Plan, Excess Contributions, plus any income and minus any
                   loss allocable thereto, shall be distributed no later than
                   the last day of each Plan Year to Participants to whose
                   Individual Accounts such Excess Contributions were allocated
                   for the preceding Plan Year.  If such excess amounts are
                   distributed more than 2 1/2 months after the last day of the
                   Plan Year in which such excess amounts arose, a 10% excise
                   tax will be imposed on the Employer maintaining the Plan with
                   respect to such amounts.  Such distributions shall be made to
                   Highly Compensated Employees on the basis of the respective
                   portions of the Excess Contributions attributable to each of
                   such Employees.  Excess Contributions of Participants who are
                   subject to the family member aggregation rules shall be
                   allocated among the family members in proportion to the
                   Elective Deferrals (and amounts treated as Elective
                   Deferrals) of each family member that is combined to
                   determine the combined ADP.

                   Excess Contributions (including the amounts recharacterized)
                   shall be treated as annual additions under the Plan.

               B.  DETERMINATION OF INCOME OR LOSS - Excess Contributions shall
                   be adjusted for any income or loss up to the date of
                   distribution.  The income or loss allocable to Excess
                   Contributions is the sum of:  (1) income or loss allocable to
                   Participant's Elective Deferral account (and, if applicable,
                   the Qualified Nonelective Contribution account or the
                   Qualified Matching Contributions account or both) for the
                   Plan Year multiplied by a fraction, the numerator of which is
                   such Participant's Excess Contributions for the year and the
                   denominator is the Participant's Individual Account balance
                   attributable to Elective Deferrals (and Qualified Nonelective
                   Contributions or Qualified Matching Contributions, or both,
                   if any of such contributions are included in the ADP test)
                   without regard to any income or loss occurring during such
                   Plan Year; and (2) 10% of the amount determined under (1)
                   multiplied by the number of whole calendar months between the
                   end of the Plan Year and the date of distribution, counting
                   the month of distribution if distribution occurs after the
                   15th of such month.  Notwithstanding the preceding sentence,
                   the Plan Administrator may compute the income or loss
                   allocable to Excess Contributions in the manner described in
                   Section 4 (i.e., the usual manner used by the Plan for
                   allocating income or loss to Participants' Individual
                   Accounts), provided such method is used consistently for all
                   Participants and for all corrective distributions under the
                   Plan for the Plan Year.

               C.  ACCOUNTING FOR EXCESS CONTRIBUTIONS - Excess Contributions
                   shall be distributed from the Participant's Elective Deferral
                   account and Qualified Matching Contribution account (if
                   applicable) in proportion to the Participant's Elective
                   Deferrals and Qualified Matching Contributions (to the extent
                   used in the ADP test) for the Plan Year.  Excess
                   Contributions shall be distributed from the Participant's
                   Qualified Nonelective Contribution account only to the extent
                   that such Excess Contributions exceed the balance in the
                   Participant's Elective Deferral account and Qualified
                   Matching Contribution account.

    11.506     DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS
               A.  GENERAL RULE - Notwithstanding any other provision of this
                   Plan, Excess Aggregate Contributions, plus any income and
                   minus any loss allocable thereto, shall be forfeited, if
                   forfeitable, or if not forfeitable, distributed no later than
                   the last day of each Plan Year to Participants to whose
                   accounts such Excess Aggregate Contributions were allocated
                   for the preceding Plan Year.  Excess Aggregate Contributions
                   of Participants who are subject to the family member
                   aggregation rules shall be allocated among the family members
                   in proportion to the Employee and Matching Contributions (or
                   amounts treated as Matching Contributions) of each family
                   member that is combined to determine the combined ACP.  If
                   such Excess Aggregate Contributions are distributed more than
                   2 1/2 months after the last day of the Plan Year in which
                   such excess amounts arose, a 10% excise tax will be imposed
                   on the Employer maintaining the Plan with respect to those
                   amounts.

                   Excess Aggregate Contributions shall be treated as annual
                   additions under the Plan.

               B.  DETERMINATION OF INCOME OR LOSS - Excess Aggregate
                   Contributions shall be adjusted for any income or loss up to
                   the date of distribution.  The income or loss allocable to
                   Excess Aggregate Contributions is the sum of:  (1) income or
                   loss allocable to the Participant's Nondeductible Employee
                   Contribution account, Matching Contribution account (if any,
                   and if all amounts therein are not used in the ADP test) and,
                   if applicable, Qualified Nonelective Contribution account and
                   Elective Deferral account for the Plan Year multiplied by a
                   fraction, the numerator of which is such Participant's Excess
                   Aggregate Contributions for the year and the denominator is
                   the Participant's Individual Account balance(s) attributable
                   to Contribution Percentage Amounts without regard to any
                   income or loss occurring during such Plan Year; and (2) 10%
                   of the amount determined under (1) multiplied by the number
                   of whole calendar months between the end of the Plan Year and
                   the date of distribution, counting the month of distribution
                   if distribution occurs after the 15th of such month.
                   Notwithstanding the preceding sentence, the Plan
                   Administrator may compute the income or loss allocable to
                   Excess Aggregate Contributions in the manner described in
                   Section 4 (i.e., the usual manner used by the Plan for
                   allocating income or loss to Participants' Individual
                   Accounts), provided such method is used consistently for all
                   Participants and for all corrective distributions under the
                   Plan for the Plan Year.

               C.  FORFEITURES OF EXCESS AGGREGATE CONTRIBUTIONS - Forfeitures
                   of Excess Aggregate Contributions may either be reallocated
                   to the accounts of Contributing Participants who are not
                   Highly Compensated Employees or applied to reduce Employer
                   Contributions, as elected by the Employer in the Adoption
                   Agreement.

               D.  ACCOUNTING FOR EXCESS AGGREGATE CONTRIBUTIONS - Excess
                   Aggregate Contributions shall be forfeited, if forfeitable or
                   distributed on a pro rata basis from the Participant's
                   Nondeductible Employee Contribution account, Matching
                   Contribution account, and Qualified Matching Contribution
                   account (and, if applicable, the Participant's Qualified
                   Nonelective Contribution account or Elective Deferral
                   account, or both).

    11.507     RECHARACTERIZATION
               A Participant may treat his or her Excess Contributions as an
               amount distributed to the Participant and then contributed by the
               Participant to the Plan.  Recharacterized amounts will remain
               nonforfeitable and subject to the same distribution requirements
               as Elective Deferrals.  Amounts may not be recharacterized by a
               Highly Compensated Employee to the extent that such amount in
               combination with other Nondeductible Employee Contributions made
               by that Employee would exceed any stated limit under the Plan on
               Nondeductible Employee Contributions.

               Recharacterization must occur no later than two and one-half
               months after the last day of the Plan Year in which such Excess
               Contributions arose and is deemed to occur no earlier than the
               date the last Highly Compensated Employee is informed in writing
               of the amount recharacterized and the consequences thereof.
               Recharacterized amounts will be taxable to the Participant for
               the Participant's tax year in which the Participant would have
               received them in cash.

<PAGE>

                                                                             37

    11.508     DISTRIBUTION OF ELECTIVE DEFERRALS IF EXCESS ANNUAL ADDITIONS
               Notwithstanding any other provision of the Plan, a Participant's
               Elective Deferrals shall be distributed to him or her to the
               extent that the distribution will reduce an excess annual
               addition (as that term is described in Section 3.05 of the Plan).

    11.600     VESTING

    11.601     100% VESTING ON CERTAIN CONTRIBUTIONS
               The Participant's accrued benefit derived from Elective
               Deferrals, Qualified Nonelective Contributions, Nondeductible
               Employee Contributions , and Qualified Matching Contributions is
               nonforfeitable.  Separate accounts for Elective Deferrals,
               Qualified Nonelective Contributions, Nondeductible Employee
               Contributions, Matching Contributions, and Qualified Matching
               Contributions will be maintained for each Participant.  Each
               account will be credited with the applicable contributions and
               earnings thereon.

    11.602     FORFEITURES AND VESTING OF MATCHING CONTRIBUTIONS
               Matching Contributions shall be Vested in accordance with the
               vesting schedule for Matching Contributions in the Adoption
               Agreement.  In any event, Matching Contributions shall be fully
               Vested at Normal Retirement Age, upon the complete or partial
               termination of the profit sharing plan, or upon the complete
               discontinuance of Employer Contributions.  Notwithstanding any
               other provisions of the Plan, Matching Contributions or Qualified
               Matching Contributions must be forfeited if the contributions to
               which they relate are Excess Elective Deferrals, Excess
               Contributions, Excess Aggregate Contributions or excess annual
               additions which are distributed pursuant to Section 11.508.  Such
               Forfeitures shall be allocated in accordance with Section
               3.01(C).

               When a Participant incurs a Termination of Employment, whether a
               Forfeiture arises with respect to Matching Contributions shall be
               determined in accordance with Section 6.01(D).



<PAGE>

INTERNAL REVENUE SERVICE                     Department of the Treasury

Plan Description:  Prototype Standardized Money Purchase Pension Plan
FFN:  50218352702-002  Case:  9500722  EIN:  42-0623913
BPD:  02   Plan:  002   Letter Serial No:  D264074a
                                        Washington, DC 20224
                                        Person to Contact:  Ms. Arrington
     FARM BUREAU LIFE INSURANCE CO.
                                        Telephone Number:  (202) 622-8173
     5400 UNIVERSITY AVENUE
                                        Refer Reply to:  CP:E:EP:Q:ICU
     WEST DES MOINES, IA  50265
                                        Date:  06/06/95



Dear Applicant:

In our opinion, the form of the plan identified above is acceptable under
section 401 of the Internal Revenue Code for use by employers for the benefit of
their employees.  This opinion relates only to the acceptability of the form of
the plan under the Internal Revenue Code. It is not an opinion of the effect of
other Federal or local statutes.

You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.

Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a).  An employer who adopts this plan will be considered to have a plan
qualified under Code section 401(a) provided all the terms of the plan are
followed, and the eligibility requirements and contribution or benefit
provisions are not more favorable for highly compensated employees than for
other employees.  Except as stated below, the Key District Director will not
issue a determination letter with regard to this plan.

Our opinion does not apply to the form of the plan for purposes of Code section
401(a)(16) if: (1) an employer ever maintained another qualified plan for one or
more employees who are covered by this plan, other than a specified paired plan
within the meaning of section 7 of Rev. Proc. 89-9, 1989-1 C.B. 780; or (2)
after December 31, 1985, the employer maintains a welfare benefit fund defined
in Code section 419(e), which provides postretirement medical benefits allocated
to separate accounts for key employees as defined in Code section 419A(d)(3).

An employer that has adopted a standardized plan may not rely on this opinion
letter with respect to: (1) whether any amendment or series of amendments to the
plan satisfies the nondiscrimination requirements of section 1.401(a)(4)-5(a) of
the regulations, except with respect to plan amendments granting past service
that meet the safe harbor described in section 1.401(a)(4)-5(a)(5) and are not
part of a pattern of amendments that significantly discriminates in favor of
highly compensated employees; or (2) whether the plan satisfies the effective
availability requirement of section 1.401(a)(4)-4(c) of the regulations with
respect to any benefit, right or feature.

An employer that has adopted a standardized plan as an amendment to a plan other
than a standardized plan may not rely on this opinion letter with respect to
whether a benefit, right or other feature that is prospectively eliminated
satisfies the current availability requirements of section 1.401(a)-4 of the
regulations.

The employer may request a determination (1) as to whether the plan, considered
with all related qualified plans and, if appropriate, welfare benefit funds,
satisfies the requirements of Code section 401(a)(16) as to limitations on
benefits and contributions in Code section 415; (2) regarding the
nondiscriminatory effect of grants of past service; and (3) with respect to
whether a prospectively eliminated benefit, right or feature satisfies the
current availability requirements.

Our opinion does not apply to the form of the plan for purposes of section
401(a) of the Code unless the terms of the plan, as adopted or amended, that
pertain to the requirements of sections 401(a)(4), 401(a)(5), 401(a)(17),
401(l), 410(b) and 414(s) of the Code, as amended by the Tax Reform Act of 1986
or subsequent legislation, (a) are made effective retroactively to the first day
of the first plan year beginning after December 31, 1988 (or such other date on
which these requirements first became effective with respect to this plan); or
(b) are made effective no later than the first day on which the employer is no
longer entitled, under regulations, to rely on a reasonable, good faith
interpretation of these requirements, and the prior provisions of the plan
constitute such an interpretation.

Because you submitted this plan for approval after March 31, 1991, the
continued, interim and extended reliance provisions of sections 13 and 17.03
of Rev. Proc. 89-9, 1989-1 C.B. 780, are not applicable.

<PAGE>

Because you submitted this plan after the later of December 31, 1994, or the
date that was 90 days after the date on which a favorable opinion letter was
issued for your mass submitter's plan, it does not meet the requirements for the
extension of the remedial amendment period provided by Rev. Proc. 95-12, 1995-3
I.R.B. 24.

This letter may not be relied upon with respect to whether the plan satisfies
the qualification requirements as amended by Uruguay Round Agreements Act, Pub.
L. 103-465.

If you, the sponsoring organization, have any questions concerning the IRS
processing of this case, please call the above telephone number.  This number is
only for use of the sponsoring organization.  Individual participants and/or
adopting employers with questions concerning the plan should contact the
sponsoring organization.  The plan's adoption agreement must include the
sponsoring organization's address and telephone number for inquiries by adopting
employers.

If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information.  Whether you call or write, please refer to the Letter Serial
Number and File Folder Number shown in the heading of this letter.

You should keep this letter as a permanent record.  Please notify us if you
modify or discontinue sponsorship of this plan.

     Sincerely Yours,

     John Swieca  /s/
     Chief, Employee Plans Technical Branch 1





<PAGE>

Internal Revenue Service                     Department of the
                                             Treasury

Plan Description:  Prototype Non-standardized Safe Harbor Money Purchase
Pension Plan
FFN:  50318352702-004  Case:  9500724  EIN:  42-0623913
BPD:  02   Plan:  004   Letter Serial No:  D364076a
                                  Washington, DC 20224
                                  Person to Contact:  Ms. Arrington
     FARM BUREAU LIFE INSURANCE CO.
                                  Telephone Number:  (202) 622-8173
     5400 UNIVERSITY AVENUE
                                  Refer Reply to:  CP:E:EP:Q:ICU
     WEST DES MOINES, IA  50265
                                  Date:  06/06/95



Dear Applicant:

In our opinion, the form of the plan identified above is acceptable under
section 401 of the Internal Revenue Code for use by employers for the
benefit of their employees.  This opinion relates only to the
acceptability of the form of the plan under the Internal Revenue Code.  It
is not an opinion of the effect of other Federal or local statutes.

You must furnish a copy of this letter to each employer who adopts this
plan.  You are also required to send a copy of the approved form of the
plan, any approved amendments and related documents to each Key District
Director of Internal Revenue Service in whose jurisdiction there are
adopting employers.

Our opinion on the acceptability of the form of the plan is not a ruling
or determination as to whether an employer's plan qualifies under Code
section 401(a).  Therefore, an employer adopting the form of the plan
should apply for a determination letter by filing an application with the
Key District Director of Internal Revenue Service on Form 5307, Short Form
Application for Determination for Employee Benefit Plan.

The form of the plan is a nonstandardized safe harbor plan that meets the
requirements of section 3 of Rev. Proc. 93-10, 1993-5 I.R.B. 13.

Because you submitted this plan for approval after March 31, 1991, the
continued, interim and extended reliance provisions of sections 13 and 17.03
of Rev. Proc. 89-9, 1989-1 C.B. 780, are not applicable

Because you submitted this plan after the later of December 31, 1994, or
the date that was 90 days after the date on which a favorable opinion
letter was issued for your mass submitter's plan, it does not meet the
requirements for the extension of the remedial amendment period provided
by Rev. Proc. 95-12, 1995-3 I.R.B. 24.

This letter may not be relied upon with respect to whether the plan
satisfies the qualification requirements as amended by Uruguay Round
Agreements Act, Pub. L. 103-465.

If you, the sponsoring organization, have any questions concerning the IRS
processing of this case, please call the above telephone number.  This
number is only for use of the sponsoring organization.  Individual
participants and/or adopting employers with questions concerning the plan
should contact the sponsoring organization.  The plan's adoption agreement
must include the sponsoring organization's address and telephone number
for inquiries by adopting employers.

If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information.  Whether you call or write, please refer to the Letter Serial
Number and File Folder Number shown in the heading of this letter.

You should keep this letter as a permanent record.  Please notify us if
you modify or discontinue sponsorship of this plan.

     Sincerely Yours,

     John Swieca  /s/
     Chief, Employee Plans Technical Branch 1




<PAGE>

<TABLE>
<CAPTION>
FLEXIBLE STANDARDIZED MONEY PURCHASE PENSION PLAN
ADOPTION AGREEMENT
- --------------------------------------------------------------------------------------------------------------------------
<S><C>
SECTION 1.  EMPLOYER INFORMATION

            Name of Employer
                            ----------------------------------------------------------------------------------------

            Address
                   -------------------------------------------------------------------------------------------------

            City                                        State                     Zip
                ----------------------------------------     ---------------------   -------------------------------

            Telephone                     Employer's Federal Tax Identification Number
                     ---------------------                                            ------------------------------------

            Type of Business  (CHECK ONLY ONE) [   ]  Sole Proprietorship   [   ]  Partnership   [   ] C Corporation
                                               [   ] S Corporation   [   ] Other (SPECIFY)
                                                                                          --------------------------------
            [   ]   Check here if Related Employers may participate in this Plan and attach a Related Employer
                    Participation Agreement for each Related Employer who will participate in this Plan.

            Business Code
                         -------------------------------------

            Name of Plan
                        --------------------------------------------------------------------------------------------

            Name of Trust (IF DIFFERENT FROM PLAN NAME)
                                                       -------------------------------------------------------------

            Plan Sequence Number________(ENTER 001 IF THIS IS THE FIRST QUALIFIED PLAN THE EMPLOYER HAS EVER
            MAINTAINED, ENTER 002 IF IT IS THE SECOND, ETC.)

            Trust Identification Number (IF APPLICABLE)
                                                       ---------------------

            Account Number (OPTIONAL)
                                     ---------------------------------------

SECTION 2.  EFFECTIVE DATES  (CHECK AND COMPLETE OPTION A OR B):

            OPTION A:  [   ]  This is the initial adoption of a money purchase pension plan by the Employer.
                              The Effective Date of this Plan is_______________, 19____.
                              NOTE: THE EFFECTIVE DATE IS USUALLY THE FIRST DAY OF THE
                              PLAN YEAR IN WHICH THIS ADOPTION AGREEMENT IS SIGNED.

            OPTION B:  [   ]  This is an amendment and restatement of an existing money purchase pension plan
                              (a Prior Plan).  The Prior Plan was initially effective on______________, 19____.
                              The Effective Date of this amendment and restatement is______________, 19____.

                              NOTE: THE EFFECTIVE DATE IS USUALLY THE FIRST DAY OF THE PLAN YEAR IN WHICH THIS ADOPTION
                              AGREEMENT IS SIGNED.

SECTION 3.  RELEVANT TIME PERIODS  COMPLETE PARTS A THROUGH C

   PART A.  Employer's Fiscal Year:
            The Employer's fiscal year ends (SPECIFY MONTH AND DATE)
                                                                    ------------------------------------------------------
   PART B.  Plan Year Means:

            OPTION 1: [   ]   The 12-consecutive month period which coincides with the Employer's fiscal year.
            OPTION 2: [   ]   The calendar year.
            OPTION 3: [   ]   Other 12-consecutive month period (SPECIFY)
                                                                         -------------------------------------------------

            NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE SELECTED.
</TABLE>

#4002(6/94) F94            -C-1994 Universal Pensions, Inc., Brainerd, MN  56401

<PAGE>

                                                                      Page 2

            If the initial Plan Year is less than 12 months (a short Plan Year)
            specify such Plan Year's beginning and ending
            dates
                 ---------------------------------------------------------------

   PART C.  Limitation Year Means:

            OPTION 1: [   ]   The Plan Year.
            OPTION 2: [   ]   The calendar year.
            OPTION 3: [   ]   Other 12-consecutive month period. (SPECIFY)
                                                                         -------
                              --------------------------------------------------

            NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
                   SELECTED.

SECTION 4.  ELIGIBILITY REQUIREMENTS   COMPLETE PARTS A THROUGH F
   PART A.  Years of Eligibility Service Requirement:
            An Employee will be eligible to become a Participant in the Plan
            after completing____(ENTER 0, 1, 2 OR ANY FRACTION LESS THAN 2)
            Years of Eligibility Service.

            NOTE: IF  MORE THAN 1 YEAR IS SELECTED, THE IMMEDIATE 100% VESTING
            SCHEDULE OF SECTION 8 WILL AUTOMATICALLY APPLY. IF  LEFT BLANK, THE
            YEARS OF ELIGIBILITY SERVICE REQUIRED WILL BE DEEMED TO BE 0.  IF A
            FRACTION IS SELECTED, AN EMPLOYEE WILL NOT BE REQUIRED TO
            COMPLETE ANY SPECIFIED NUMBER OF HOURS OF SERVICE TO RECEIVE
            CREDIT FOR A FRACTIONAL YEAR.  IF A SINGLE ENTRY DATE IS SELECTED
            IN SECTION 4, PART F, THE YEARS OF ELIGIBILITY SERVICE REQUIRED
            CANNOT EXCEED 1 1/2.

   PART B.  Age Requirement:
            An Employee will be eligible to become a Participant in the Plan
            after attaining age             (NO MORE THAN 21).
                               -------------

            NOTE:  IF LEFT BLANK, IT WILL BE DEEMED THERE IS NO AGE REQUIREMENT
            FOR ELIGIBILITY.  IF A SINGLE ENTRY DATE IS SELECTED IN SECTION 4,
            PART F , THE AGE REQUIRED CANNOT EXCEED 20 1/2.

   PART C.  Employees Employed As of Effective Date:
            Will all Employees employed as of the Effective Date of this Plan
            who have not otherwise met the Years of Eligibility Service and age
            requirements specified above be considered to have met those
            requirements as of the Effective Date?   [   ] Yes  [   ] No

            NOTE:  IF A BOX IS NOT CHECKED, "NO" WILL BE DEEMED TO BE SELECTED.

   PART D.  Exclusion of Certain Classes of Employees:
            All Employees shall be eligible to become a Participant in the Plan,
            except those checked below:

            1. [   ]  Those Employees included in a unit of Employees covered
                      by a collective bargaining agreement between the Employer
                      and Employee representatives, if retirement benefits were
                      the subject of good faith bargaining and if two percent or
                      less of the Employees who are covered pursuant to that
                      agreement are professionals as defined in Section
                      1.410(b)-9 of the regulations.  For this purpose, the
                      term "employee representatives" does not include any
                      organization more than half of whose members are
                      Employees who are owners, officers, or executives of
                      the Employer.

            2. [   ]  Those Employees who are non-resident aliens (within the
                      meaning of Section 7701(b)(1)(B) of the Code) and who
                      received no earned income (within the meaning of Section
                      911(d)(2) of the Code) from the Employer which constitutes
                      income from sources within the United States (within the
                      meaning of Section 861(a)(3) of the Code).

   PART E.  Hours Required For Eligibility Purposes:

            1. ________Hours of Service (NO MORE THAN 1,000) shall be required
               to constitute a Year of Eligibility Service.

            2. ________Hours of Service (NO MORE THAN 500 BUT LESS THAN THE
               NUMBER SPECIFIED IN SECTION 4, PART E, ITEM 1, ABOVE) must be
               exceeded to avoid a Break in Eligibility Service.
#4002 (6/94) F94           -C-1994 Universal Pensions, Inc., Brainerd, MN  56401

<PAGE>

                                                                      Page 3

            3. For purposes of determining Years of Eligibility Service,
               Employees shall be given credit for Hours of Service with the
               following predecessor employer(s): (COMPLETE IF
               APPLICABLE)
                          ------------------------------------------------------

   PART F.  Entry Dates:
            The Entry Dates for participation shall be (CHOOSE ONE):

            OPTION 1: [   ]  The first day of the Plan Year and the first day
                             of the seventh month of the Plan Year.
            OPTION 2: [   ]  Other (SPECIFY)
                                            ------------------------------------

            NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
            SELECTED.  OPTION 2 CAN BE SELECTED ONLY IF THE ELIGIBILITY
            REQUIREMENTS AND ENTRY DATES ARE COORDINATED SUCH THAT EACH EMPLOYEE
            WILL BECOME A PARTICIPANT IN THE PLAN NO LATER THAN THE EARLIER OF:
            (1) THE FIRST DAY OF THE PLAN YEAR BEGINNING AFTER THE DATE THE
            EMPLOYEE SATISFIES THE AGE AND SERVICE REQUIREMENTS OF SECTION
            410(A) OF THE CODE; OR (2) 6 MONTHS AFTER THE DATE THE EMPLOYEE
            SATISFIES SUCH REQUIREMENTS.

SECTION 5.  METHOD OF DETERMINING SERVICE  COMPLETE PART A OR B

   PART A.  Hours of Service Equivalencies:
            Service will be determined on the basis of the method selected
            below.  Only one method may be selected.  The method selected will
            be applied to all Employees covered under the Plan.  (CHOOSE ONE):

            OPTION 1. [   ]   On the basis of actual hours for which an Employee
                              is paid or entitled to payment.

            OPTION 2. [   ]   On the basis of days worked.  An Employee will be
                              credited with 10 Hours of Service if under Section
                              1.24 of the Plan such Employee would be credited
                              with at least 1 Hour of Service during the day.

            OPTION 3. [   ]   On the basis of weeks worked.  An Employee will be
                              credited with 45 Hours of Service if under Section
                              1.24 of the Plan such Employee would be credited
                              with at least 1 Hour of Service during the week.

            OPTION 4. [   ]   On the basis of months worked.  An Employee will
                              be credited with 190 Hours of Service if under
                              Section 1.24 of the Plan such Employee would be
                              credited with at least 1 Hour of Service during
                              the month.

            NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
            SELECTED.  THIS SECTION 5, PART A WILL NOT APPLY IF THE ELAPSED
            TIME METHOD OF SECTION 5, PART B IS SELECTED.

   PART B.  Elapsed Time Method:
            In lieu of tracking Hours of Service of Employees, will the elapsed
            time method described in Section 2.07 of the Plan be used?  (CHOOSE
            ONE)

            OPTION 1: [   ]   No
            OPTION 2: [   ]   Yes

            NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
            SELECTED.

SECTION 6.  EMPLOYER CONTRIBUTION AND ALLOCATION FORMULA  COMPLETE PARTS A AND B

   PART A.  Contribution Formula (CHOOSE ONE):

            OPTION 1: [   ]   Nonintegrated Formula.  For each Plan Year the
                              Employer will contribute for each Qualifying
                              Participant an amount equal to ------% (NOT TO
                              EXCEED 25%) of the Qualifying Participant's
                              Compensation for the Plan Year.


#4002 (6/94) F94           -C-1994 Universal Pensions, Inc., Brainerd, MN  56401

<PAGE>

                                                                      Page 4

            OPTION 2: [   ]   Integrated Formula.  For each Plan Year, the
                              Employer will contribute for each Qualifying
                              Participant an amount equal to the sum of the
                              amounts determined in Step 1 and 2:

                              Step 1.  An amount equal to ______% (THE BASE
                                       CONTRIBUTION PERCENTAGE) of the
                                       Participant's Compensation for the Plan
                                       Year up to the integration level; plus

                              Step 2.  An amount equal to ______% (NOT TO EXCEED
                                       THE BASE CONTRIBUTION PERCENTAGE BY MORE
                                       THAN THE LESSER OF:  (1) THE BASE
                                       CONTRIBUTION PERCENTAGE, OR (2) THE MONEY
                                       PURCHASE MAXIMUM DISPARITY RATE AS
                                       DESCRIBED IN SECTION 3.01(B)(3) OF THE
                                       PLAN) of such Participant's Compensation
                                       for the Plan Year in excess of the
                                       integration level.

                              The integration level shall be (CHOOSE ONE):

                              SUBOPTION (A):  [   ]  The Taxable Wage Base.
                              SUBOPTION (B):  [   ]  $_______ (A DOLLAR AMOUNT
                                                     LESS THAN THE TAXABLE WAGE
                                                     BASE).
                              SUBOPTION (C):  [   ]   _______% (NOT MORE THAN
                                                     100%) of the Taxable Wage
                                                     Base.

                              NOTE:  IF NO OPTION IS SELECTED, SUBOPTION (A)
                              WILL BE DEEMED TO BE SELECTED.

            OPTION 3: [   ]   Hour of Service Formula.

                              The Employer will contribute $_______ for each
                              Hour of Service completed during the Plan Year for
                              each Qualifying Participant as described below.
                              Notwithstanding any other provision of the Plan,
                              the Employer Contribution under this option will
                              only be made for Employees who are in the
                              following classes of Employees and who also meet
                              the conditions required to be a Qualifying
                              Participant:

                              SUBOPTION (A): [   ]  All Qualifying Participants.
                              SUBOPTION (B): [   ]  All Qualifying Participants
                                                    who are hourly Employees.
                              SUBOPTION (C): [   ]  Other (SPECIFY)
                                                                   -------------

                              NOTE:  IF NO OPTION IS SELECTED, SUBOPTION (A)
                              WILL BE DEEMED TO BE SELECTED.

            OPTION 4: [   ]   Frozen Plan.  This Plan is frozen effective_______
                              _______________ and the Employer will not make
                              additional contributions to the Plan after such
                              date.

            NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
            SELECTED.

   PART B.  Qualifying Participants:

            A Participant will be a Qualifying Participant and thus entitled to
            share in the Employer Contribution for any Plan Year only if the
            Participant is a Participant on at least one day of such Plan Year
            and satisfies the following additional conditions (CHECK ONE OR MORE
            OPTIONS):

            OPTION 1: [   ]  No Additional Conditions.
            OPTION 2: [   ]  Hours of Service Requirement.  The Participant
                             completes at least ------ (NOT MORE THAN 500)
                             Hours of Service during the Plan Year.  However,
                             this condition will be waived for the following
                             reasons (CHECK AT LEAST ONE):

                             [   ]  The Participant's Death.
                             [   ]  The Participant's Termination of Employment
                                    after having incurred a Disability.
                             [   ]  The Participant's Termination of Employment
                                    after having reached Normal Retirement Age.
                             [   ]  This condition will not be waived.

                      NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED
                      TO BE SELECTED.


#4002 (6/94) F94           -C-1994 Universal Pensions, Inc., Brainerd, MN  56401

<PAGE>

                                                                      Page 5
SECTION 7.  COMPENSATION   COMPLETE PARTS A THROUGH D

   PART A.  Basic Definition:
            Compensation will mean all of each Participant's (CHOOSE ONE):

            OPTION 1: [   ]  W-2 wages.
            OPTION 2: [   ]  Section 3401(a) wages.
            OPTION 3: [   ]  415 safe-harbor compensation.

            NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
            SELECTED.

   PART B.  Measuring Period for Compensation:
            Compensation shall be determined over the following applicable
            period (CHOOSE ONE):

            OPTION 1: [   ]  The Plan Year.
            OPTION 2: [   ]  The calendar year ending with or within the Plan
                             Year.

            NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
            SELECTED.

   PART C.  Inclusion of Elective Deferrals:
            Does Compensation include Employer Contributions made pursuant to a
            salary reduction agreement which are not includible in the gross
            income of the Employee under Sections 125, 402(e)(3), 402(h)(1)(B),
            and 403(b) of the Code?    [   ] Yes   [   ]  No

            NOTE:  IF NEITHER BOX IS CHECKED, "YES" WILL BE DEEMED TO BE
            SELECTED.

   PART D.  Pre-Entry Date Compensation:
            For the Plan Year in which an Employee enters the Plan, the
            Employee's Compensation which shall be taken into account for
            purposes of the Plan shall be (CHOOSE ONE):

            OPTION 1:  [   ]  The Employee's Compensation only from the time the
                              Employee became a Participant in the Plan.
            OPTION 2:  [   ]  The Employee's Compensation for the whole of
                              such Plan Year.

            NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
            SELECTED.

SECTION 8.  VESTING AND FORFEITURES  COMPLETE PARTS A THROUGH D

   PART A.  Vesting Schedule.  A Participant shall become Vested in his or
            her Individual Account as follows (CHOOSE ONE):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
   YEARS OF                                         VESTED PERCENTAGE
VESTING SERVICE   Option 1 [   ]   Option 2 [   ]   Option 3 [   ]   Option 4   [   ]  Option 5 [   ] (COMPLETE IF CHOSEN)
<S>               <C>              <C>              <C>              <C>               <C>
- --------------------------------------------------------------------------------------------------------------------------
1                   0%                0%              100%             0%              ----%
2                   0%               20%              100%             0%              ----%
3                   0%               40%              100%            20%              ----% (not less than 20%)
4                   0%               60%              100%            40%              ----% (not less than 40%)
5                 100%               80%              100%            60%              ----% (not less than 60%)
6                 100%              100%              100%            80%              ----% (not less than 80%)
7                 100%              100%              100%           100%              ----% (not less than 100%)

</TABLE>

<PAGE>

NOTE:  IF NO OPTION IS SELECTED, OPTION 3 WILL BE DEEMED TO BE SELECTED.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------



#4002 (6/94) F94           -C-1994 Universal Pensions, Inc., Brainerd, MN  56401

<PAGE>

                                                                      Page 6

   PART B.  Hours Required For Vesting Purposes:

          1. _______Hours of Service (NO MORE THAN 1,000) shall be required
             to constitute a Year of Vesting Service.

          2. -------- Hours of Service (NO MORE THAN 500 BUT LESS THAN THE
             NUMBER SPECIFIED IN SECTION 8, PART B, ITEM 1, ABOVE) must be
             exceeded to avoid a Break in Vesting Service.

          3. For purposes of determining Years of Vesting Service, Employees
             shall be given credit for Hours of Service with the following
             predecessor employer(s) (COMPLETE IF
             APPLICABLE)-------------------

- --------------------------------------------------------------------------------

   PART C.     Exclusion of Certain Years of Vesting Service:
          All of an Employee's Years of Vesting Service with the Employer are
          counted to determine the vesting percentage in the Participant's
          Individual Account except (CHECK ANY THAT APPLY):

          [   ]  Years of Vesting Service before the Employee reaches age 18.
          [   ]  Years of Vesting Service before the Employer maintained this
                 Plan or a predecessor plan.

   PART D.     Allocation of Forfeitures:
          Forfeitures shall be (CHOOSE ONE):

          OPTION 1:  [   ]        Allocated to the Individual Accounts of the
                                  Participants specified below in the manner as
                                  described in Section 6, Part A (for Employer
                                  Contributions)

                     The Participants entitled to receive allocations of
                     Forfeitures shall be (CHOOSE ONE):

                     SUBOPTION (a):               [   ]     Only Qualified
                                                            Participants.
                     SUBOPTION (b):               [   ]     All Participants.

                     NOTE: IF NO OPTION IS SELECTED, SUBOPTION (a) WILL BE
                     DEEMED TO BE SELECTED.

          OPTION 2:  [   ]    Applied to reduce Employer Contributions (CHOOSE
                              ONE):

                     SUBOPTION (a):               [   ]     For the Plan Year
                                                            for which the
                                                            Forfeiture arises.
                     SUBOPTION (b):               [   ]     For any Plan Year
                                                            subsequent to the
                                                            Plan Year for which
                                                            the Forfeiture
                                                            arises.
          OPTION 3:  [   ]    Applied first to the payment of the Plan's
                              administrative expenses and any excess applied to
                              reduce Employer Contributions (CHOOSE ONE):

                     SUBOPTION (a):               [   ]     For the Plan Year
                                                            for which the
                                                            Forfeiture arises.
                     SUBOPTION (b):               [   ]     For any Plan Year
                                                            subsequent to the
                                                            Plan Year for which
                                                            the Forfeiture
                                                            arises.

          NOTE:  IF NO OPTION IS SELECTED, OPTION 1 AND SUBOPTION (a) WILL BE
          DEEMED TO BE SELECTED.

SECTION 9.     NORMAL RETIREMENT AGE AND EARLY RETIREMENT AGE

   PART A.     The Normal Retirement Age under the Plan shall be (CHECK AND
          COMPLETE ONE OPTION):

          OPTION 1:  [   ]    Age 65.
          OPTION 2:  [   ]    Age -------- (NOT TO EXCEED 65).
          OPTION 3:  [   ]    The later of age -------- (NOT TO EXCEED 65) or
                              the -------- (NOT TO EXCEED 5TH) anniversary of
                              the first day of the first Plan Year in which the
                              Participant commenced participation in the Plan.

          NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
          SELECTED.

#4002 (6/94) F94          -C-1994 Universal Pensions, Inc., Brainerd, MN  56401

<PAGE>

                                                                      Page 7
   PART B.     Early Retirement Age (CHOOSE ONE OPTION):

          OPTION 1:  [   ]    An Early Retirement Age is not applicable under
                              the Plan.
          OPTION 2:  [   ]    Age ------ (NOT LESS THAN 55 NOR MORE THAN 65).
          OPTION 3:  [   ]    A Participant satisfies the Plan's Early
                              Retirement Age conditions by attaining age
                              -------- (NOT LESS THAN 55) and completing
                              -------- Years of Vesting Service.

          NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
                 SELECTED.

SECTION 10.    DISTRIBUTIONS

          Distributable Events.  Answer each of the following items.

          A. Termination of Employment Before Normal Retirement Age.  May a
             Participant who has not reached Normal Retirement Age request a
             distribution from the Plan upon Termination of Employment?
             [   ]  Yes  [   ]  No

          B. Disability.  May a Participant who has incurred a Disability
             request a distribution from the Plan?
             [   ]  Yes  [   ]  No

          C. Attainment of Normal Retirement Age.  May a Participant who has
             attained Normal Retirement Age but has not incurred a Termination
             of Employment request a distribution from the Plan?
             [   ]  Yes  [   ]  No

          D. Withdrawals of Rollover or Transfer Contributions.  Will Employees
             be permitted to withdraw their Rollover or Transfer Contributions
             at any time?
             [   ]  Yes  [   ]  No

          NOTE:  IF A BOX IS NOT CHECKED FOR AN ITEM, "YES" WILL BE DEEMED TO BE
          SELECTED FOR THAT ITEM.  SECTION 411(d)(6) OF THE CODE PROHIBITS THE
          ELIMINATION OF PROTECTED BENEFITS. IN GENERAL, PROTECTED BENEFITS
          INCLUDE THE FORMS AND TIMING OF PAYOUT OPTIONS.  IF THE PLAN IS BEING
          ADOPTED TO AMEND AND REPLACE A PRIOR PLAN THAT PERMITTED A
          DISTRIBUTION OPTION DESCRIBED ABOVE, YOU MUST ANSWER "YES" TO THAT
          ITEM.

SECTION 11.  JOINT AND SURVIVOR ANNUITY

          The survivor annuity portion of the Joint and Survivor Annuity shall
          be a percentage equal to ----% (AT LEAST 50% BUT NO MORE THAN 100%) of
          the amount paid to the Participant prior to his or her death.

SECTION 12.  OTHER OPTIONS  ANSWER "YES" OR "NO" TO EACH OF THE FOLLOWING
             QUESTIONS BY CHECKING THE APPROPRIATE BOX.  IF A BOX IS NOT
             CHECKED FOR A QUESTION, THE ANSWER WILL BE DEEMED TO BE "NO."

          A. Loans:  Will loans to Participants pursuant to Section 6.08 of the
             Plan be permitted?    [   ] Yes  [   ] No

          B. Insurance:  Will the Plan allow for the investment in insurance
             policies pursuant to Section 5.13 of the Plan?
             [   ] Yes   [   ]No

          C. Employer Securities:  Will the Plan allow for the investment in
             qualifying Employer securities or qualifying Employer real
             property?
             [   ] Yes   [   ] No

          D. Rollover Contributions:  Will Employees be permitted to make
             rollover contributions to the Plan pursuant to Section 3.03 of the
             Plan?
             [   ]  Yes  [   ]  No
             [   ]  Yes, but only
                    after becoming a
                    Participant.

          E. Transfer Contributions:  Will Employees be permitted to make
             transfer contributions to the Plan pursuant to Section 3.04 of the
             Plan?
             [   ]  Yes  [   ]  No
             [   ]  Yes, but only
                    after becoming a
                    Participant.

#4002 (6/94) F94          -C-1994 Universal Pensions, Inc., Brainerd, MN  56401

<PAGE>

                                                                      Page 8

          F. Will Participants be permitted to direct the investment of their
             Plan assets pursuant to Section 5.14 of the Plan?
             [   ] Yes   [   ] No


SECTION 13.  LIMITATION ON ALLOCATIONS - More Than One Plan

          If you maintain or ever maintained another qualified plan (other than
          a paired standardized profit sharing plan using the same Basic Plan
          Document as this Plan) in which any Participant in this Plan is (or
          was) a Participant or could become a Participant, you must complete
          this section.  You must also complete this section if  you maintain a
          welfare benefit fund, as defined in Section 419(e) of the Code, or an
          individual medical account, as defined in Section 415(l)(2) of the
          Code, under which amounts are treated as annual additions with respect
          to any Participant in this Plan.

   PART A.Individually Designed Defined Contribution Plan:
          If the Participant is covered under another qualified defined
          contribution plan maintained by the Employer, other than a master or
          prototype plan:

          1. [   ]   The provisions of Section 3.05(B)(1) through
                     3.05(B)(6) of the Plan will apply as if the other
                     plan were a master or prototype plan.

          2. [   ]   Other method. (PROVIDE THE METHOD UNDER WHICH THE
                     PLANS WILL LIMIT TOTAL ANNUAL ADDITIONS TO THE
                     MAXIMUM PERMISSIBLE AMOUNT, AND WILL PROPERLY
                     REDUCE ANY EXCESS AMOUNTS, IN A MANNER THAT
                     PRECLUDES EMPLOYER
                     DISCRETION.)--------------------------------------

   PART B.Defined Benefit Plan:
          If the Participant is or has ever been a participant in a defined
          benefit plan maintained by the Employer, the Employer will provide
          below the language which will satisfy the 1.0 limitation of Section
          415(e) of the Code.

          1. [   ]   If the projected annual addition to this Plan to the
                     account of a Participant for any limitation year would
                     cause the 1.0 limitation of Section 415(e) of the Code to
                     be exceeded, the annual benefit of the defined benefit
                     plan for such limitation year shall be reduced so that the
                     1.0 limitation shall be satisfied.

                     If it is not possible to reduce the annual benefit of the
                     defined benefit plan and the projected annual addition to
                     this Plan to the account of a Participant for a limitation
                     year would cause the 1.0 limitation to be exceeded, the
                     Employer shall reduce the Employer Contribution which is to
                     be allocated to this Plan on behalf of such Participant so
                     that the 1.0 limitation will be satisfied.  (The provisions
                     of Section 415(e) of the Code are incorporated herein by
                     reference under the authority of Section 1106(h) of the Tax
                     Reform Act of 1986.)

          2. [   ]   Other method.  (PROVIDE LANGUAGE DESCRIBING ANOTHER
                     METHOD.  SUCH LANGUAGE MUST PRECLUDE EMPLOYER
                     DISCRETION.)_____________________________________________

SECTION 14.  TOP-HEAVY MINIMUM  COMPLETE PARTS A AND B
   PART A.Minimum Allocation or Benefit:
          For any Plan Year with respect to which this Plan is a Top-Heavy Plan,
          any minimum allocation required pursuant to Section 3.01(E) of the
          Plan shall be made (CHOOSE ONE):

          OPTION 1:  [   ]   To this Plan.
          OPTION 2:  [   ]   To the following other plan maintained by the
                             Employer (SPECIFY NAME AND PLAN NUMBER OF
                             PLAN) ___________________________________________
          OPTION 3:  [   ]   In accordance with the method described on an
                             attachment to this Adoption Agreement.
                             (ATTACH LANGUAGE DESCRIBING THE METHOD THAT
                             WILL BE USED TO SATISFY SECTION 416 OF THE
                             CODE.  SUCH METHOD MUST PRECLUDE EMPLOYER
                             DISCRETION.)

          NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
          SELECTED.
#4002 (6/94) F94          -C-1994 Universal Pensions, Inc., Brainerd, MN  56401

<PAGE>

                                                                      Page 9
   PART B.Top-Heavy Vesting Schedule:

          Pursuant to Section 6.01(C) of the Plan, the vesting schedule that
          will apply when this Plan is a Top-Heavy Plan (unless the Plan's
          regular vesting schedule provides for more rapid vesting) shall be
          (CHOOSE ONE):

          OPTION 1:  [   ] 6 Year Graded.
          OPTION 2:  [   ] 3 Year Cliff.

          NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
          SELECTED.

SECTION 15.PROTOTYPE SPONSOR

          Name of Prototype Sponsor___________________________________________

          Address_____________________________________________________________

          Telephone Number____________________________________________________


          PERMISSIBLE INVESTMENTS

          The assets of the Plan shall be invested only in those investments
          described below (TO BE COMPLETED BY THE PROTOTYPE SPONSOR):


          ____________________________________________________________________


          ____________________________________________________________________


          ____________________________________________________________________


          ____________________________________________________________________

SECTION 16.TRUSTEE OR CUSTODIAN

          OPTION A.  [   ]  Financial Organization as Trustee or Custodian

          CHECK ONE:  [   ] Custodian,   [   ]  Trustee without full trust
          powers, or  [   ] Trustee with full trust powers


          Financial Organization______________________________________________

          Signature___________________________________________________________

          Type Name___________________________________________________________


          COLLECTIVE OR COMMINGLED FUNDS

          List any collective or commingled funds maintained by the financial
          organization Trustee in which assets of the Plan may be invested
          (COMPLETE IF APPLICABLE).

          ____________________________________________________________________


          ____________________________________________________________________


          ____________________________________________________________________



#4002 (6/94) F94          -C-1994 Universal Pensions, Inc., Brainerd, MN  56401

<PAGE>


                                                                      Page 10
          OPTION B.  [   ]  Individual Trustee(s)

          Signature __________________________________
          Type Name __________________________________

          Signature __________________________________
          Type Name __________________________________

          Signature __________________________________
          Type Name __________________________________

          Signature __________________________________
          Type Name __________________________________

SECTION 17.  RELIANCE

          An Employer who has ever maintained or who later adopts any plan
          (including a welfare benefit fund, as defined in Section 419(e) of the
          Code, which provides post-retirement medical benefits allocated to
          separate accounts for key employees, as defined in Section 419A(d)(3)
          of the Code, or an individual medical account, as defined in Section
          415(l)(2) of the Code) in addition to this Plan (other than a paired
          standardized profit sharing plan using the same Basic Plan Document as
          this Plan) may not rely on the opinion letter issued by the National
          Office of the Internal Revenue Service as evidence that this Plan is
          qualified under Section 401 of the Internal Revenue Code.  If the
          Employer who adopts or maintains multiple plans wishes to obtain
          reliance that his or her plan(s) are qualified, application for a
          determination letter should be made to the appropriate Key District
          Director of Internal Revenue.

          The Employer may not rely on the opinion letter issued by the National
          Office of the Internal Revenue Service as evidence that this Plan is
          qualified under Section 401 of the Code unless the terms of the Plan,
          as herein adopted or amended, that pertain to the requirements of
          Sections 401(a)(4), 401(a)(17), 401(l), 401(a)(5), 410(b) and 414(s)
          of the Code, as amended by the Tax Reform Act of 1986, or later laws,
          (a) are made effective retroactively to the first day of the first
          Plan Year beginning after December 31, 1988 (or such later date on
          which these requirements first become effective with respect to this
          Plan); or (b) are made effective no later than the first day on which
          the Employer is no longer entitled, under regulations, to rely on a
          reasonable, good faith interpretation of these requirements, and the
          prior provisions of the Plan constitute such an interpretation.

          This Adoption Agreement may be used only in conjunction with Basic
          Plan Document No. 04.


SECTION 18.    EMPLOYER SIGNATURE  IMPORTANT:  PLEASE READ BEFORE SIGNING.

          I am an authorized representative of the Employer named above and I
          state the following:

          1.   I acknowledge that I have relied upon my own advisors regarding
               the completion of this Adoption Agreement and the legal tax
               implications of adopting this Plan.

          2.   I understand that my failure to properly complete this Adoption
               Agreement may result in disqualification of the Plan.

          3.   I understand that the Prototype Sponsor will inform me of any
               amendments made to the Plan and will notify me should it
               discontinue or abandon the Plan.

          4.   I have received a copy of this Adoption Agreement and the
               corresponding Basic Plan Document.

          Signature for Employer______________________________________________
          Date Signed__________________

          Type Name___________________________________________________________
          Title________________________



#4002 (6/94) F94          -C-1994 Universal Pensions, Inc., Brainerd, MN  56401
<PAGE>

INTERNAL REVENUE SERVICE                     Department of the
                                             Treasury

Plan Description:  Prototype Standardized Profit Sharing Plan
FFN:  50218352702-001  Case:  9500721  EIN:  42-0623913
BPD:  02   Plan:  001   Letter Serial No:  D264073a
                                        Washington, DC 20224
                                        Person to Contact:  Ms. Arrington
     FARM BUREAU LIFE INSURANCE CO.
                                        Telephone Number:  (202) 622-8173
     5400 UNIVERSITY AVENUE
                                        Refer Reply to:  CP:E:EP:Q:ICU
     WEST DES MOINES, IA  50265
                                        Date:  06/06/95



Dear Applicant:

In our opinion, the form of the plan identified above is acceptable
under section 401 of the Internal Revenue Code for use by employers
for the benefit of their employees.  This opinion relates only to the
acceptability of the form of the plan under the Internal Revenue Code.
It is not an opinion of the effect of other Federal or local statutes.

You must furnish a copy of this letter to each employer who adopts
this plan.  You are also required to send a copy of the approved form
of the plan, any approved amendments and related documents to each Key
District Director of Internal Revenue Service in whose jurisdiction
there are adopting employers.

Our opinion on the acceptability of the form of the plan is not a
ruling or determination as to whether an employer's plan qualifies
under Code section 401(a).  An employer who adopts this plan will be
considered to have a plan qualified under Code section 401(a) provided
all the terms of the plan are followed, and the eligibility
requirements and contribution or benefit provisions are not more
favorable for highly compensated employees than for other employees.
Except as stated below, the Key District Director will not issue a
determination letter with regard to this plan.

Our opinion does not apply to the form of the plan for purposes of
Code section 401(a)(16) if: (1) an employer ever maintained another
qualified plan for one or more employees who are covered by this plan,
other than a specified paired plan within the meaning of section 7 of
Rev. Proc. 89-9, 1989-1 C.B. 780; or (2) after December 31, 1985, the
employer maintains a welfare benefit fund defined in Code section
419(e), which provides postretirement medical benefits allocated to
separate accounts for key employees as defined in Code section
419A(d)(3).

An employer that has adopted a standardized plan may not rely on this
opinion letter with respect to: (1) whether any amendment or series of
amendments to the plan satisfies the nondiscrimination requirements of
section 1.401(a)(4)-5(a) of the regulations, except with respect to
plan amendments granting past service that meet the safe harbor
described in section 1.401(a)(4)-5(a)(5) and are not part of a pattern
of amendments that significantly discriminates in favor of highly
compensated employees; or (2) whether the plan satisfies the effective
availability requirement of section 1.401(a)(4)-4(c) of the
regulations with respect to any benefit, right or feature.

An employer that has adopted a standardized plan as an amendment to a
plan other than a standardized plan may not rely on this opinion
letter with respect to whether a benefit, right or other feature that
is prospectively eliminated satisfies the current availability
requirements of section 1.401(a)-4 of the regulations.

The employer may request a determination (1) as to whether the plan,
considered with all related qualified plans and, if appropriate,
welfare benefit funds, satisfies the requirements of Code section
401(a)(16) as to limitations on benefits and contributions in Code
section 415; (2) regarding the nondiscriminatory effect of grants of
past service; and (3) with respect to whether a prospectively
eliminated benefit, right or feature satisfies the current
availability requirements.

Our opinion does not apply to the form of the plan for purposes of
section 401(a) of the Code unless the terms of the plan, as adopted or
amended, that pertain to the requirements of sections 401(a)(4),
401(a)(5), 401(a)(17), 401(l), 410(b) and 414(s) of the Code, as
amended by the Tax Reform Act of 1986 or subsequent legislation, (a)
are made effective retroactively to the first day of the first plan
year beginning after December 31, 1988 (or such other date on which
these requirements first became effective with respect to this plan);
or (b) are made effective no later than the first day on which the
employer is no longer entitled, under regulations, to rely on a
reasonable, good faith interpretation of these requirements, and the
prior provisions of the plan constitute such an interpretation.

Because you submitted this plan for approval after March 31, 1991, the
continued, interim and extended reliance provisions of sections 13 and 17.03 of
Rev. Proc. 89-9, 1989-1 C.B. 780, are not applicable.

<PAGE>

Because you submitted this plan after the later of December 31, 1994,
or the date that was 90 days after the date on which a favorable
opinion letter was issued for your mass submitter's plan, it does not
meet the requirements for the extension of the remedial amendment
period provided by Rev. Proc. 95-12, 1995-3 I.R.B. 24.

This letter may not be relied upon with respect to whether the plan
satisfies the qualification requirements as amended by Uruguay Round
Agreements Act, Pub. L. 103-465.

If you, the sponsoring organization, have any questions concerning the
IRS processing of this case, please call the above telephone number.
This number is only for use of the sponsoring organization.
Individual participants and/or adopting employers with questions
concerning the plan should contact the sponsoring organization.  The
plan's adoption agreement must include the sponsoring organization's
address and telephone number for inquiries by adopting employers.

If you write to the IRS regarding this plan, please provide your
telephone number and the most convenient time for us to call in case
we need more information.  Whether you call or write, please refer to
the Letter Serial Number and File Folder Number shown in the heading
of this letter.

You should keep this letter as a permanent record.  Please notify us
if you modify or discontinue sponsorship of this plan.

     Sincerely Yours,

     John Swieca  /s/
     Chief, Employee Plans Technical Branch 1




<PAGE>

INTERNAL REVENUE SERVICE                     Department of the Treasury

Plan Description:  Prototype Non-standardized Safe Harbor Profit Sharing Plan
FFN:  50318352702-003  Case:  9500723  EIN:  42-0623913
BPD:  02   Plan:  003   Letter Serial No:  D364075a
                                        Washington, DC 20224
                                        Person to Contact:  Ms. Arrington
     FARM BUREAU LIFE INSURANCE CO.
                                        Telephone Number:  (202) 622-8173
     5400 UNIVERSITY AVENUE
                                        Refer Reply to:  CP:E:EP:Q:ICU
     WEST DES MOINES, IA  50265
                                        Date:  06/06/95



Dear Applicant:

In our opinion, the form of the plan identified above is acceptable under
section 401 of the Internal Revenue Code for use by employers for the benefit of
their employees.  This opinion relates only to the acceptability of the form of
the plan under the Internal Revenue Code. It is not an opinion of the effect of
other Federal or local statutes.

You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.

Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a).  Therefore, an employer adopting the form of the plan should apply for a
determination letter by filing an application with the Key District Director of
Internal Revenue Service on Form 5307, Short Form Application for Determination
for Employee Benefit Plan.

The form of the plan is a nonstandardized safe harbor plan that meets the
requirements of section 3 of Rev. Proc. 93-10, 1993-5 I.R.B. 13.

Because you submitted this plan for approval after March 31, 1991, the
continued, interim and extended reliance provisions of sections 13 and 17.03 of
Rev. Proc. 89-9, 1989-1 C.B. 780, are not applicable.

Because you submitted this plan after the later of December 31, 1994, or the
date that was 90 days after the date on which a favorable opinion letter was
issued for your mass submitter's plan, it does not meet the requirements for the
extension of the remedial amendment period provided by Rev. Proc. 95-12, 1995-3
I.R.B. 24.

This letter may not be relied upon with respect to whether the plan satisfies
the qualification requirements as amended by Uruguay Round Agreements Act, Pub.
L. 103-465.

If you, the sponsoring organization, have any questions concerning the IRS
processing of this case, please call the above telephone number.  This number is
only for use of the sponsoring organization.  Individual participants and/or
adopting employers with questions concerning the plan should contact the
sponsoring organization.  The plan's adoption agreement must include the
sponsoring organization's address and telephone number for inquiries by adopting
employers.

If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information.  Whether you call or write, please refer to the Letter Serial
Number and File Folder Number shown in the heading of this letter.

You should keep this letter as a permanent record.  Please notify us if you
modify or discontinue sponsorship of this plan.

     Sincerely Yours,

     John Swieca  /s/
     Chief, Employee Plans Technical Branch 1




<PAGE>

FLEXIBLE STANDARDIZED PROFIT SHARING PLAN
ADOPTION AGREEMENT
________________________________________________________________________________


SECTION 1.     EMPLOYER INFORMATION

               Name of Employer_________________________________________________

               Address__________________________________________________________

               City____________________________________State_________Zip________

               Telephone ___-______
               Employer's Federal Tax Identification Number___________

               Type of Business (CHECK ONLY ONE)  [   ] Sole Proprietorship
                                                  [   ] Partnership
                                                  [   ] C Corporation
                                                  [   ] S Corporation
                                                  [   ] Other (SPECIFY)_________

               [   ]     Check here if Related Employers may participate in this
                         Plan and attach a Related Employer Participation
                         Agreement for each Related Employer who will
                         participate in this Plan.

               Business Code_______________________________

               Name of Plan_____________________________________________________

               Name of Trust (IF DIFFERENT FROM PLAN NAME)______________________

               Plan Sequence Number_____________(ENTER 001 IF THIS IS THE FIRST
               QUALIFIED PLAN THE EMPLOYER HAS EVER MAINTAINED, ENTER 002 IF IT
               IS THE SECOND, ETC.)

               Trust Identification Number (IF APPLICABLE)__________________

               Account Number (OPTIONAL)______________________________

SECTION 2.     EFFECTIVE DATES

               General Effective Dates (CHECK AND COMPLETE OPTION 1 OR 2):

               Option 1:  [   ]    This is the initial adoption of a profit
                                   sharing plan by the Employer.
                                   The Effective Date of this Plan is
                                   ___________________, 19__.
                         NOTE: THE EFFECTIVE DATE IS USUALLY THE FIRST DAY OF
                         THE PLAN YEAR IN WHICH THIS ADOPTION AGREEMENT IS
                         SIGNED.

               Option 2:  [   ]    This is an amendment and restatement of an
                                   existing profit sharing plan (a Prior Plan).
                                   The Prior Plan was initially effective on
                                   ______________________, 19________.
                                   The Effective Date of this amendment and
                                   restatement is _________________, 19_______.
                                   NOTE: THE EFFECTIVE DATE IS USUALLY THE FIRST
                                   DAY OF THE PLAN YEAR IN WHICH THIS ADOPTION
                                   AGREEMENT IS SIGNED.

SECTION 3.     RELEVANT TIME PERIODS  COMPLETE PARTS A THROUGH C

     PART A.   Employer's Fiscal Year:
               The Employer's fiscal year ends (SPECIFY MONTH AND
               DATE)_________________________________________

     PART B.   Plan Year Means:

               OPTION 1: [   ]     The 12-consecutive month period which
                                   coincides with the Employer's fiscal year.
               OPTION 2: [   ]     The calendar year.

<PAGE>


                                                                          Page 2


               OPTION 3: [   ]     Other 12-consecutive month period.
                                   (SPECIFY)____________________________________

               NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
               SELECTED.

               If the initial Plan Year is less than 12 months (a short Plan
               Year) specify such Plan Year's beginning and ending
               dates____________________________________________________________

     PART C.   Limitation Year Means:

               OPTION 1: [   ]     The Plan Year.
               OPTION 2: [   ]     The calendar year.
               OPTION 3: [   ]     Other 12-consecutive month period.
               (SPECIFY)_______________________________________

               NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
               SELECTED.

SECTION 4.     ELIGIBILITY REQUIREMENTS   COMPLETE PARTS A THROUGH F

     PART A.   Years of Eligibility Service Requirement:
               An Employee will be eligible to become a Participant in the Plan
               after completing ___________ (ENTER 0, 1, 2 OR ANY FRACTION
               LESS THAN 2) Years of Eligibility  Service.

               NOTE: IF  MORE THAN 1 YEAR IS SELECTED, THE IMMEDIATE 100%
               VESTING SCHEDULE OF SECTION 8 WILL AUTOMATICALLY APPLY. IF  LEFT
               BLANK, THE YEARS OF ELIGIBILITY SERVICE REQUIRED WILL BE DEEMED
               TO BE 0.  IF A FRACTION IS SELECTED, AN EMPLOYEE WILL NOT BE
               REQUIRED TO COMPLETE ANY SPECIFIED NUMBER OF HOURS OF SERVICE TO
               RECEIVE CREDIT FOR A FRACTIONAL YEAR.  IF A SINGLE ENTRY DATE IS
               SELECTED IN SECTION 4, PART F, THE YEARS OF ELIGIBILITY SERVICE
               REQUIRED CANNOT EXCEED 1 1/2.

     PART B.   Age Requirement:
               An Employee will be eligible to become a Participant in the Plan
               after attaining age ___________ (NO MORE THAN 21).

               NOTE:  IF LEFT BLANK, IT WILL BE DEEMED THERE IS NO AGE
               REQUIREMENT FOR ELIGIBILITY.  IF A SINGLE ENTRY DATE IS
               SELECTED IN SECTION 4, PART F, THE AGE REQUIRED CANNOT EXCEED 20
               1/2.

     PART C.   Employees Employed As of Effective Date:
               Will all Employees employed as of the Effective Date of this Plan
               who have not otherwise met the Years of Eligibility Service and
               age requirements specified above be considered to have met those
               requirements as of the Effective Date?   [   ] Yes  [   ] No

               NOTE:  IF A BOX IS NOT CHECKED, "NO" WILL BE DEEMED TO BE
               SELECTED.

     Part D.   Exclusion of Certain Classes of Employees:
               All Employees shall be eligible to become a Participant in the
               Plan, except those checked below:

          1.   [   ]     Those Employees included in a unit of Employees covered
                         by a collective bargaining agreement between the
                         Employer and Employee representatives, if retirement
                         benefits were the subject of good faith bargaining and
                         if two percent or less of the Employees who are covered
                         pursuant to that agreement are professionals as defined
                         in Section 1.410(b)-9 of the regulations.  For this
                         purpose, the term "employee representatives" does not
                         include any organization more than half of whose
                         members are Employees who are owners, officers, or
                         executives of the Employer.

          2.   [   ]     Those Employees who are non-resident aliens (within the
                         meaning of Section 7701(b)(1)(B) of the Code) and who
                         received no earned income (within the meaning of
                         Section 911(d)(2) of the Code) from the Employer which
                         constitutes income from sources within the United
                         States (within the meaning of Section 861(a)(3) of the
                         Code).


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                                                                          Page 3

     PART E.   Hours Required For Eligibility Purposes:

          1.   ________ Hours of Service (NO MORE THAN 1,000) shall be required
               to constitute a Year of Eligibility Service.

          2.   ________ Hours of Service (NO MORE THAN 500 BUT LESS THAN THE
               NUMBER SPECIFIED IN SECTION 4, PART E, ITEM 1, ABOVE) must be
               exceeded to avoid a Break in Eligibility Service.

          3.   For purposes of determining Years of Eligibility Service,
               Employees shall be given credit for Hours of Service with the
               following predecessor employer(s) (COMPLETE IF
               APPLICABLE)____________________
               _________________________________________________________________

     PART F.   Entry Dates:
               The Entry Dates for participation shall be (CHOOSE ONE):

          OPTION 1: [   ]     The first day of the Plan Year and the first day
                              of the seventh month of the Plan Year.
          OPTION 2: [   ]     Other (SPECIFY)___________________________________

               NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
               SELECTED.  OPTION 2 CAN BE SELECTED ONLY IF THE ELIGIBILITY
               REQUIREMENTS AND ENTRY DATES ARE COORDINATED SUCH THAT EACH
               EMPLOYEE WILL BECOME A PARTICIPANT IN THE PLAN NO LATER THAN THE
               EARLIER OF: (1) THE FIRST DAY OF THE PLAN YEAR BEGINNING AFTER
               THE DATE THE EMPLOYEE SATISFIES THE AGE AND SERVICE REQUIREMENTS
               OF SECTION 410(A) OF THE CODE; OR (2) 6 MONTHS AFTER THE DATE THE
               EMPLOYEE SATISFIES SUCH REQUIREMENTS.


     SECTION 5.     METHOD OF DETERMINING SERVICE  COMPLETE PART A OR B

      PART A.  Hours of Service Equivalencies:
               Service will be determined on the basis of the method selected
               below. Only one method may be selected.  The method selected
               will be applied to all Employees covered under the Plan.
               (CHOOSE ONE):

          OPTION 1. [   ]     On the basis of actual hours for which an Employee
                              is paid or entitled to payment.

          OPTION 2. [   ]     On the basis of days worked.  An Employee will be
                              credited with 10 Hours of Service if under Section
                              1.24 of the Plan such Employee would be credited
                              with at least 1 Hour of Service during the day.

          OPTION 3. [   ]     On the basis of weeks worked.  An Employee will be
                              credited with 45 Hours of Service if under Section
                              1.24 of the Plan such Employee would be credited
                              with at least 1 Hour of Service during the week.

          OPTION 4. [   ]     On the basis of months worked.  An Employee will
                              be credited with 190 Hours of Service if under
                              Section 1.24 of the Plan such Employee would be
                              credited with at least 1 Hour of Service during
                              the month.

               NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO
               BE SELECTED.  THIS SECTION 5, PART A WILL NOT APPLY IF THE
               ELAPSED TIME METHOD OF SECTION 5, PART B IS SELECTED.

      PART B.  Elapsed Time Method:
               In lieu of tracking Hours of Service of Employees, will the
               elapsed time method described in Section 2.07 of the Plan be
               used?  (CHOOSE ONE)

          OPTION 1: [   ]     No
          OPTION 2: [   ]     Yes

               NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO
               BE SELECTED.


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                                                                      Page 4


SECTION 6.     EMPLOYER CONTRIBUTION AND ALLOCATION FORMULA  COMPLETE PARTS A, B
               AND C

      PART A.  Contribution Formula:
               For each Plan Year the Employer will contribute an Amount to be
               determined from year to year.

      PART B.  Allocation Formula  (CHOOSE ONE):

          OPTION 1: [   ]     Pro Rata Formula.  Employer Profit Sharing
                              Contributions shall be allocated to the Individual
                              Accounts of Qualifying Participants in the ratio
                              that each Qualifying Participant's Compensation
                              for the Plan Year bears to the total Compensation
                              of all Qualifying Participants for the Plan Year.

          OPTION 2: [   ]     Integrated Formula. Employer Profit Sharing
                              Contributions shall be allocated as follows (START
                              WITH STEP 3 IF THIS PLAN IS NOT A TOP-HEAVY PLAN):

                         Step 1.   Employer Profit Sharing Contributions shall
                                   first be allocated pro rata to Qualifying
                                   Participants in the manner described in
                                   Section 6, Part B, Option 1.  The percent so
                                   allocated shall not exceed 3% of each
                                   Qualifying Participant's Compensation.

                         Step 2.   Any Employer Profit Sharing Contributions
                                   remaining after the allocation in Step 1
                                   shall be allocated to each Qualifying
                                   Participant's Individual Account in the ratio
                                   that each Qualifying Participant's
                                   Compensation for the Plan Year in excess of
                                   the integration level bears to all Qualifying
                                   Participants' Compensation in excess of the
                                   integration level, but not in excess of 3%.

                         Step 3.   Any Employer Profit Sharing Contributions
                                   remaining after the allocation in Step 2
                                   shall be allocated to each Qualifying
                                   Participant's Individual Account in the ratio
                                   that the sum of each Qualifying Participant's
                                   total Compensation and Compensation in excess
                                   of the integration level bears to the sum of
                                   all Qualifying Participants' total
                                   Compensation and Compensation in excess of
                                   the integration level, but not in excess of
                                   the profit sharing maximum disparity rate as
                                   described in Section 3.01(B)(3) of the Plan.

                         Step 4.   Any Employer Profit Sharing Contributions
                                   remaining after the allocation in Step 3
                                   shall be allocated pro rata to Qualifying
                                   Participants in the manner described in
                                   Section 6, Part B, Option 1.

                                   The integration level shall be (CHOOSE ONE):

                         SUBOPTION (A): [   ]     The Taxable Wage Base.
                         SUBOPTION (B): [   ]     $________ (A DOLLAR AMOUNT
                                                  LESS THAN THE TAXABLE WAGE
                                                  BASE).
                         SUBOPTION (C): [   ]     ______% (NOT MORE THAN 100%)
                                                  of the Taxable Wage Base.

                              NOTE:  IF NO OPTION IS SELECTED, SUBOPTION (A)
                              WILL BE DEEMED TO BE SELECTED.

                              NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE
                              DEEMED TO BE SELECTED.

      PART C.  Qualifying Participants:
               A Participant will be a Qualifying Participant and thus entitled
               to share in the Employer Profit Sharing Contribution for any Plan
               Year only if the Participant is a Participant on at least one day
               of such Plan Year and satisfies the following additional
               conditions (CHECK ONE OR MORE OPTIONS):

          OPTION 1: [   ]     No Additional Conditions.


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                                                            Page 5


          OPTION 2: [   ]     Hours of Service Requirement.  The Participant
                              completes at least ______ (NOT MORE THAN 500)
                              Hours of Service during the Plan Year.  However,
                              this condition will be waived for the following
                              reasons (CHECK AT LEAST ONE):

                         [   ]     The Participant's Death.
                         [   ]     The Participant's Termination of Employment
                                   after having incurred a Disability.
                         [   ]     The Participant's Termination of Employment
                                   after having reached Normal Retirement Age.
                         [   ]     This condition will not be waived.

                                   NOTE:  IF NO OPTION IS SELECTED, OPTION 1
                                   WILL BE DEEMED TO BE SELECTED.


SECTION 7.     COMPENSATION   COMPLETE PARTS A THROUGH D


      PART A.  Basic Definition:
               Compensation will mean all of each Participant's (CHOOSE ONE):

               OPTION 1: [   ]     W-2 wages.
               OPTION 2: [   ]     Section 3401(a) wages.
               OPTION 3: [   ]     415 safe-harbor compensation.

               NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
               SELECTED.


      PART B.  Measuring Period for Compensation:
               Compensation shall be determined over the following applicable
               period (CHOOSE ONE):

               OPTION 1: [   ]     The Plan Year.
               OPTION 2: [   ]     The calendar year ending with or within the
                                   Plan Year.

               NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
               SELECTED.


      PART C.  Inclusion of Elective Deferrals:
               Does Compensation include Employer Contributions made pursuant
               to a salary reduction agreement which are not includible in the
               gross income of the Employee under Sections 125, 402(e)(3),
               402(h)(1)(B), and 403(b) of the Code?   [   ] Yes [   ] No

               NOTE:  IF NEITHER BOX IS CHECKED, "YES" WILL BE DEEMED TO BE
               SELECTED.


      PART D.  Pre-Entry Date Compensation:
               For the Plan Year in which an Employee enters the Plan, the
               Employee's Compensation which shall be taken into account for
               purposes of the Plan shall be (CHOOSE ONE):

          OPTION 1: [   ]     The Employee's Compensation only from the time the
                              Employee became a Participant in the Plan.
          OPTION 2: [   ]     The Employee's Compensation for the whole of such
                              Plan Year.

               NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
               SELECTED.



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                                                                 Page 6

SECTION 8.     VESTING AND FORFEITURES  COMPLETE PARTS A THROUGH D

      PART A.  Vesting Schedule.  A Participant shall become Vested in his or
               her Individual Account as follows (CHOOSE ONE):

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
   YEARS OF                                       VESTED PERCENTAGE
VESTING SERVICE     Option 1 [   ] Option 2 [   ] Option 3 [   ] Option 4 [   ] Option 5 [   ] (COMPLETE IF CHOSEN)
- -------------------------------------------------------------------------------------------------------------------
<S>                 <C>            <C>            <C>            <C>            <C>
   1                   0%             0%          100%              0%          ____%
   2                   0%            20%          100%              0%          ____%
   3                   0%            40%          100%             20%          ____% (not less than 20%)
   4                   0%            60%          100%             40%          ____% (not less than 40%)
   5                  100%           80%          100%             60%          ____% (not less than 60%)
   6                  100%          100%          100%             80%          ____% (not less than 80%)
   7                  100%          100%          100%            100%          ____% (not less than 100%)

</TABLE>

NOTE:  IF NO OPTION IS SELECTED, OPTION 3 WILL BE DEEMED TO BE SELECTED.
- -------------------------------------------------------------------------------

      PART B.  Hours Required For Vesting Purposes:

               1.   ________ Hours of Service (NO MORE THAN 1,000) shall be
               required to constitute a Year of Vesting Service.

               2.   ________ Hours of Service (NO MORE THAN 500 BUT LESS THAN
               THE NUMBER SPECIFIED IN SECTION 8, PART B, ITEM 1, ABOVE) must
               be exceeded to avoid a Break in Vesting Service.

               3.   For purposes of determining Years of Vesting Service,
               Employees shall be given credit for Hours of Service with the
               following predecessor employer(s): (COMPLETE IF APPLICABLE)
               ______________________________________________________________

      PART C.  Exclusion of Certain Years of Vesting Service:
               All of an Employee's Years of Vesting Service with the Employer
               are counted to determine the vesting percentage in the
               Participant's Individual Account except (CHECK ANY THAT APPLY):

              [   ]     Years of Vesting Service before the Employee reaches
                        age 18.
              [   ]     Years of Vesting Service before the Employer maintained
                        this Plan or a predecessor plan.

      PART D.  Allocation of Forfeitures:
               Forfeitures shall be (CHOOSE ONE):

               OPTION 1: [   ]     Allocated to the Individual Accounts of the
                                   Participants specified below in the manner
                                   as described in Section 6, Part B (for
                                   Employer Profit Sharing Contributions).

                                   The Participants entitled to receive
                                   allocations of Forfeitures shall be (CHOOSE
                                   ONE):

                                   SUBOPTION (a): [   ] Only Qualifying
                                                        Participants.
                                   SUBOPTION (b): [   ] All Participants.

               NOTE: IF NO OPTION IS SELECTED, SUBOPTION (a) WILL BE
               DEEMED TO BE SELECTED.

               OPTION 2: [   ]     Applied to reduce Employer Profit Sharing
                                   Contributions (CHOOSE ONE):

                                   SUBOPTION (a): [   ] For the Plan Year for
                                                        which the Forfeiture
                                                        arises.
                                   SUBOPTION (b): [   ] For any Plan Year
                                                        subsequent to the Plan
                                                        Year for which the
                                                        Forfeiture arises.

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                                                                      Page 7

               OPTION 3: [   ]     Applied first to the payment of the Plan's
                                   administrative expenses and any excess
                                   applied to reduce Employer Profit Sharing
                                   Contributions (CHOOSE ONE):

                                   SUBOPTION (A): [   ] For the Plan Year for
                                                        which the Forfeiture
                                                        arises.
                                   SUBOPTION (B): [   ] For any Plan Year
                                                        subsequent to the Plan
                                                        Year for which the
                                                        Forfeiture arises.

               NOTE:  IF NO OPTION IS SELECTED, OPTION 1 AND SUBOPTION (A) WILL
               BE DEEMED TO BE SELECTED.

SECTION 9.     NORMAL RETIREMENT AGE AND EARLY RETIREMENT AGE
     PART A.   The Normal Retirement Age under the Plan shall be (CHECK AND
COMPLETE ONE OPTION):

          OPTION 1: [   ]     Age 65.
          OPTION 2: [   ]     Age ________ (NOT TO EXCEED 65).
          OPTION 3: [   ]     The later of age ________ (NOT TO EXCEED 65) or
                              the ________ (NOT TO EXCEED 5TH) anniversary of
                              the first day of the first Plan Year in which the
                              Participant commenced participation in the Plan.

          NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
          SELECTED.

     PART B.   Early Retirement Age (CHOOSE ONE OPTION):

          OPTION 1: [   ]     An Early Retirement Age is not applicable under
                              the Plan.
          OPTION 2: [   ]     Age ______ (NOT LESS THAN 55 NOR MORE THAN 65).
          OPTION 3: [   ]     A Participant satisfies the Plan's Early
                              Retirement Age conditions by attaining age
                              ________ (NOT LESS THAN 55) and completing
                              ________ Years of Vesting Service.

          NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
          SELECTED.

SECTION 10.    DISTRIBUTIONS

          Distributable Events.  Answer each of the following items.

          A.   Termination of Employment Before Normal Retirement Age.  May a
               Participant who has not reached Normal Retirement Age request a
               distribution from the Plan upon Termination of
               Employment?              [   ]  Yes  [   ]  No

          B.   Disability.  May a Participant who has incurred a Disability
               request a distribution from the Plan?
               [   ]  Yes  [   ]  No

          C.   Attainment of Normal Retirement Age.  May a Participant who has
               attained Normal Retirement Age but has not incurred a
               Termination of Employment request a distribution from the Plan?
               [   ]  Yes  [   ]  No

          D.   In-Service Withdrawals.  Will Participants be permitted to
               request a distribution during service pursuant to Section
               6.01(A)(3) of the Plan?       [   ]  Yes  [   ]  No

          E.   Hardship Withdrawals.  Will Participants be permitted to make
               hardship withdrawals pursuant to Section 6.01(A)(4) of the Plan?
               [   ]  Yes  [   ]  No

          F.   Withdrawals of Rollover or Transfer Contributions.  Will
               Employees be permitted to withdraw their Rollover or Transfer
               Contributions at any time?    [   ]  Yes  [   ]  No

               NOTE:  IF A BOX IS NOT CHECKED FOR AN ITEM, "YES" WILL BE DEEMED
               TO BE SELECTED FOR THAT ITEM.  SECTION 411(D)(6) OF THE CODE
               PROHIBITS THE ELIMINATION OF PROTECTED BENEFITS. IN GENERAL,
               PROTECTED BENEFITS INCLUDE THE FORMS AND TIMING OF PAYOUT
               OPTIONS.  IF THE PLAN IS BEING ADOPTED TO AMEND AND REPLACE A
               PRIOR PLAN THAT PERMITTED A DISTRIBUTION OPTION DESCRIBED ABOVE,
               YOU MUST ANSWER "YES" TO THAT ITEM.

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                                                                 Page 8

SECTION 11.    JOINT AND SURVIVOR ANNUITY

     PART A.   Retirement Equity Act Safe Harbor:
               Will the safe harbor provisions of Section 6.05(F) of the Plan
               apply? (CHOOSE ONLY ONE OPTION)

          OPTION 1: [   ]     Yes.
          OPTION 2: [   ]     No.

          NOTE:  YOU MUST SELECT "NO" IF YOU ARE ADOPTING THIS PLAN AS AN
          AMENDMENT AND RESTATEMENT OF A PRIOR PLAN THAT WAS SUBJECT TO THE
          JOINT AND SURVIVOR ANNUITY REQUIREMENTS.

     PART B.   Survivor Annuity Percentage:  (COMPLETE ONLY IF YOUR ANSWER IN
               SECTION 11, PART A IS "NO.")
               The survivor annuity portion of the Joint and Survivor Annuity
               shall be a percentage equal to ____% (AT LEAST 50% BUT NO MORE
               THAN 100%) of the amount paid to the Participant prior to his or
               her death.


SECTION 12.    OTHER OPTIONS  ANSWER "YES" OR "NO" TO EACH OF THE FOLLOWING
               QUESTIONS BY CHECKING THE APPROPRIATE BOX.  IF A BOX IS NOT
               CHECKED FOR A QUESTION, THE ANSWER WILL BE DEEMED TO BE "NO."

          A.   Loans:  Will loans to Participants pursuant to Section 6.08 of
               the Plan be permitted?   [   ] Yes  [   ] No

          B.   Insurance:  Will the Plan allow for the investment in insurance
               policies pursuant to Section 5.13 of the Plan?
               [   ] Yes   [   ] No

          C.   Employer Securities:  Will the Plan allow for the investment in
               qualifying Employer securities or qualifying Employer real
               property?   [   ] Yes   [   ] No

          D.   Rollover Contributions:  Will Employees be permitted to make
               rollover contributions to the Plan pursuant to Section 3.03 of
               the Plan?                [   ]  Yes  [   ]  No
               [   ]  Yes, but only after becoming a Participant.

          E.   Transfer Contributions:  Will Employees be permitted to make
               transfer contributions to the Plan pursuant to Section 3.04 of
               the Plan?                [   ]  Yes  [   ]  No
               [   ]  Yes, but only after becoming a Participant.

          F.   Will Participants be permitted to direct the investment of their
               Plan assets pursuant to Section 5.14 of the Plan?
               [   ] Yes  [   ] No

SECTION 13.    LIMITATION ON ALLOCATIONS - More Than One Plan
               If you maintain or ever maintained another qualified plan (other
               than a paired standardized money purchase pension plan using the
               same Basic Plan Document as this Plan) in which any Participant
               in this Plan is (or was) a Participant or could become a
               Participant, you must complete this section.  You must also
               complete this section if  you maintain a welfare benefit fund, as
               defined in Section 419(e) of the Code, or an individual medical
               account, as defined in Section 415(l)(2) of the Code, under which
               amounts are treated as annual additions with respect to any
               Participant in this Plan.

     PART A.   Individually Designed Defined Contribution Plan:
               If the Participant is covered under another qualified defined
               contribution plan maintained by the Employer, other than a master
               or prototype plan:

          1.       [   ] The provisions of Section 3.05(B)(1) through 3.05(B)(6)
                         of the Plan will apply as if the other plan were a
                         master or prototype plan.

          2.       [   ] Other method. (PROVIDE THE METHOD UNDER WHICH THE PLANS
                         WILL LIMIT TOTAL ANNUAL ADDITIONS TO THE MAXIMUM
                         PERMISSIBLE AMOUNT, AND WILL PROPERLY REDUCE ANY EXCESS
                         AMOUNTS, IN A MANNER THAT PRECLUDES EMPLOYER
                         DISCRETION.)___________________________________________

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                                                                 Page 9
     PART B.   Defined Benefit Plan:
               If the Participant is or has ever been a participant in a defined
               benefit plan maintained by the Employer, the Employer will
               provide below the language which will satisfy the 1.0 limitation
               of Section 415(e) of the Code.

          1.   [   ]     If the projected annual addition to this Plan to the
                         account of a Participant for any limitation year would
                         cause the 1.0 limitation of Section 415(e) of the Code
                         to be exceeded, the annual benefit of the defined
                         benefit plan for such limitation year shall be reduced
                         so that the 1.0 limitation shall be satisfied.

                         If it is not possible to reduce the annual benefit of
                         the defined benefit plan and the projected annual
                         addition to this Plan to the account of a Participant
                         for a limitation year would cause the 1.0 limitation to
                         be exceeded, the Employer shall reduce the Employer
                         Contribution which is to be allocated to this Plan on
                         behalf of such Participant so that the 1.0 limitation
                         will be satisfied.  (The provisions of Section 415(e)
                         of the Code are incorporated herein by reference under
                         the authority of Section 1106(h) of the Tax Reform Act
                         of 1986.)

          2.   [   ]     Other method.  (PROVIDE LANGUAGE DESCRIBING ANOTHER
                         METHOD.  SUCH LANGUAGE MUST PRECLUDE EMPLOYER
                         DISCRETION.)___________________________________________

SECTION 14.    TOP-HEAVY MINIMUM  COMPLETE PARTS A AND B
     PART A.   Minimum Allocation or Benefit:
               For any Plan Year with respect to which this Plan is a Top-Heavy
               Plan, any minimum allocation required pursuant to Section 3.01(E)
               of the Plan shall be made (CHOOSE ONE):

          OPTION 1: [   ]     To this Plan.
          OPTION 2: [   ]     To the following other plan maintained by the
                              Employer (SPECIFY NAME AND PLAN NUMBER OF PLAN)
                              __________________________________________________
          OPTION 3: [   ]     In accordance with the method described on an
                              attachment to this Adoption Agreement.  (ATTACH
                              LANGUAGE DESCRIBING THE METHOD THAT WILL BE USED
                              TO SATISFY SECTION 416 OF THE CODE.  SUCH METHOD
                              MUST PRECLUDE EMPLOYER DISCRETION.)

                              NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE
                              DEEMED TO BE SELECTED.

     PART B.   Top-Heavy Vesting Schedule:
               Pursuant to Section 6.01(C) of the Plan, the vesting schedule
               that will apply when this Plan is a Top-Heavy Plan (unless the
               Plan's regular vesting schedule provides for more rapid vesting)
               shall be (CHOOSE ONE):

          OPTION 1: [   ]     6 Year Graded.
          OPTION 2: [   ]     3 Year Cliff.

                    NOTE:  IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO
                    BE SELECTED.

SECTION 15.    PROTOTYPE SPONSOR

          Name of Prototype Sponsor___________________________________________


          Address_____________________________________________________________

          Telephone Number____________________________________________________

          PERMISSIBLE INVESTMENTS
          The assets of the Plan shall be invested only in those investments
          described below (TO BE COMPLETED BY THE PROTOTYPE SPONSOR):


          _____________________________________________________________________


          _____________________________________________________________________


          _____________________________________________________________________

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                                                                      Page 10
SECTION 16.    TRUSTEE OR CUSTODIAN
          OPTION A.      [   ]     Financial Organization as Trustee or
                                   Custodian
          CHECK ONE:  [   ]  Custodian,   [   ]  Trustee without full trust
                         powers, or   [   ] Trustee with full trust powers

          Financial Organization_______________________________________________

          Signature____________________________________________________________

          Type Name____________________________________________________________

          COLLECTIVE OR COMMINGLED FUNDS

          List any collective or commingled funds maintained by the financial
          organization Trustee in which assets of the Plan may be invested
          (COMPLETE IF APPLICABLE).

          ____________________________________________________________________


          ____________________________________________________________________

          OPTION B. [   ]     Individual Trustee(s)

          Signature ____________________  Type Name_____________________
          Signature_____________________  Type Name_____________________

          Signature ____________________  Type Name_____________________
          Signature_____________________  Type Name_____________________

SECTION 17.    RELIANCE
          An Employer who has ever maintained or who later adopts any plan
          (including a welfare benefit fund, as defined in Section 419(e) of the
          Code, which provides post-retirement medical benefits allocated to
          separate accounts for key employees, as defined in Section 419A(d)(3)
          of the Code, or an individual medical account, as defined in Section
          415(l)(2) of the Code) in addition to this Plan (other than a paired
          standardized money purchase pension plan using the same Basic Plan
          Document as this Plan) may not rely on the opinion letter issued by
          the National Office of the Internal Revenue Service as evidence that
          this Plan is qualified under Section 401 of the Internal Revenue
          Code.  If the Employer who adopts or maintains multiple plans wishes
          to obtain reliance that his or her plan(s) are qualified, application
          for a determination letter should be made to the appropriate Key
          District Director of Internal Revenue.

          The Employer may not rely on the opinion letter issued by the National
          Office of the Internal Revenue Service as evidence that this Plan is
          qualified under Section 401 of the Code unless the terms of the Plan,
          as herein adopted or amended, that pertain to the requirements of
          Sections 401(a)(4), 401(a)(17), 401(l), 401(a)(5), 410(b) and 414(s)
          of the Code, as amended by the Tax Reform Act of 1986, or later laws,
          (a) are made effective retroactively to the first day of the first
          Plan Year beginning after December 31, 1988 (or such later date on
          which these requirements first become effective with respect to this
          Plan); or (b) are made effective no later than the first day on which
          the Employer is no longer entitled, under regulations, to rely on a
          reasonable, good faith interpretation of these requirements, and the
          prior provisions of the Plan constitute such an interpretation.

          This Adoption Agreement may be used only in conjunction with Basic
          Plan Document No. 04.

SECTION 18.    EMPLOYER SIGNATURE  IMPORTANT:  PLEASE READ BEFORE SIGNING.
          I am an authorized representative of the Employer named above and I
          state the following:

          1.   I acknowledge that I have relied upon my own advisors regarding
               the completion of this Adoption Agreement and the legal tax
               implications of adopting this Plan.
          2.   I understand that my failure to properly complete this Adoption
               Agreement may result in disqualification of the Plan.
          3.   I understand that the Prototype Sponsor will inform me of any
               amendments made to the Plan and will notify me should it
               discontinue or abandon the Plan.
          4.   I have received a copy of this Adoption Agreement and the
               corresponding Basic Plan Document.

          Signature for Employer___________________________________
          Date Signed______________________

          Type Name______________________________________
          Title____________________________



<PAGE>

                                             APPLICATION FORM FOR KEOGH PLAN

                                                  PLEASE COMPLETE AND MAIL TO:

[Logo]                                            FARM BUREAU MUTUAL FUNDS
FARM BUREAU MUTUAL FUNDS                          BOX 9194
                                                  DES MOINES, IOWA 50306-9194

- --------------------------------------------------------------------------------
FUND SELECTION         / / FBL MONEY MARKET FUND $
                                                  ----------------------
- --------------------------------------------------------------------------------

FBL SERIES FUND*
/ / MONEY MARKET           $             / / HIGH GRADE BOND  $
                             --------                            --------
/ / GROWTH COMMON STOCK    $             / / BLUE CHIP        $
                             --------                            --------
/ / HIGH YIELD BOND        $             / / MANAGED          $
                             --------                            --------
                         TOTAL INVESTMENT $
                                            -----------
*If no Portfolio is designated, the Money Market Portfolio will be selected.
- --------------------------------------------------------------------------------
ACCOUNT INFORMATION
- --------------------------------------------------------------------------------
EMPLOYER NAME
             -------------------------------------------------------------------
                           (firm name, if applicable)

ADDRESS
       -------------------------------------------------------------------------
                STREET                    CITY-TOWN          STATE     ZIP CODE

EMPLOYER TAX I.D.#                        DATE OF BIRTH
                  ---------------------                  -----------------------
OR SOCIAL SECURITY #                                        MONTH  DAY  YEAR
- --------------------------------------------------------------------------------
BENEFICIARY INFORMATION
- --------------------------------------------------------------------------------
               DESIGNATED BENEFICIARY     SOCIAL SECURITY #    DATE OF BIRTH

PRIMARY:       ----------------------     ---------------      -----------------

CONTINGENT:    ----------------------     ---------------      -----------------
- --------------------------------------------------------------------------------
CUSTODIAN & CUSTODY FEES
- --------------------------------------------------------------------------------
In accordance with the terms of the Custodial Agreement, the custodial fee is
stated in the current Designated Fund Statement of Additional Information, the
fee for each year (or any part of a Plan Year) will be deducted from all
Participant's accounts, including those Participants receiving periodic
distributions under the Plan and including any Owner-Employee whose account is
being held by the Custodian after termination of the Plan and before
distribution.

ACCEPTED BY:  INVESTORS FIDUCIARY TRUST COMPANY ("IFTC"), OF KANSAS CITY, MO.

BY:                                                 DATE:
   -------------------------------------------            ---------------------
     (FBL INVESTMENT ADVISORY SERVICES, INC.
               AS AGENT FOR IFTC)
- --------------------------------------------------------------------------------
APPOINTMENT OF CUSTODIAN & PLAN ACCEPTANCE BY EMPLOYER
- --------------------------------------------------------------------------------
The Employer hereby establishes a plan and trust upon the respective terms
and conditions contained in the Farm Bureau Prototype Paired Defined
Contribution Plan (the "Plan") and Trust Agreement.  The Employer hereby
acknowledges receipt of the Plan, appropriate Adoption Agreement and annexed
Trust Agreement, Custodial Agreement and current prospectus(es). The Employer
further acknowledges that the appropriate Adoption Agreement has been
executed and appoints Investors Fiduciary Trust Company of Kansas City, MO as
Custodian.  The Employer shall be deemed "Named Fiduciary", "Trustee" and
"Plan Administrator".

SIGNATURES:


- --------------------------------        ---------------------
      Employer or Partner                        Date


- --------------------------------        ---------------------   ---------------
   Registered Representative                     Date              Reg. Rep. #

Retain the attached Custodial    EXCHANGE BETWEEN PORTFOLIOS*
Agreement for your records.      / / Yes   / / No
                                 I authorize exchanges between Portfolios upon
                                 instruction from any person by telephone.  If
                                 neither box is checked, the telephone exchange
                                 privilege will be provided.  Shares held in
                                 certificated form may not be exchanged.
                                 *Subject to $5.00 service charge per exchange.
737-924 (11-91)

<PAGE>

                                CUSTODIAL AGREEMENT

THIS AGREEMENT shall become effective upon its acceptance in writing by the bank
or its agent designated in the Application Form attached hereto of its
appointment to serve as Custodian in accordance with the terms of this
agreement.

SECTION 1 - ESTABLISHMENT OF ACCOUNT

C1.1      Establishment of Custodial and Participant's Account.  The Custodian
          shall open and maintain a Custodial Account and, as a part
          thereof, Participant's Accounts, for such individuals as the
          Employer has set forth in the Application Form and as the
          Employer shall from time to time certify to it as
          Participants in the Plan.

          The Employer shall promptly notify the custodian in writing
          of any change in the name or address or change in employment
          status, where pertinent, of any Participant.  The
          Participants' Accounts shall be kept in a manner which will
          permit an accurate determination of the contributions
          hereafter made by the Employer and of the voluntary
          contributions, if any, hereafter made by the Participants.

SECTION 2 - RECEIPT OF CONTRIBUTIONS

C2.1      The Custodian shall accept and hold in the Custodial Account such
          contributions of money on behalf of the Participants as it
          may receive from time to time from the Employer.  All such
          contributions shall be accompanied by written instructions
          from the Employer specifying the Participant's Account to
          which they are to be credited and shall be so credited upon
          receipt.  Such instructions shall also specify the portion
          of the amount to be so credited which is derived from Employer
          Contributions and Participant's voluntary contributions.  The
          Custodian shall be fully protected in acting on such instructions.
          The minimum initial contribution for this Custodial Account
          which the Custodian shall be required to accept shall be as
          established in the Designated Fund's prospectus.

SECTION 3 - INVESTMENT OF ACCOUNT ASSETS

C3.1      The amount of each contribution credited to a Participant's Account
          shall be applied to the purchase of full and fractional
          shares of the Designated Fund (Fund Shares) as heretofore
          directed by the Employer in the application form attached
          hereto from FBL Investment Advisory Services, Inc.
          (Management Company), the exclusive distributor for such
          Fund Shares, and the shares so purchased shall be credited to
          such account.  Such purchases shall be made daily on the date
          such contributions are received provided shares of the Designated
          Fund are offered for sale on that day; otherwise, on the
          next following business day on which such shares are offered
          for sale.

C3.2      All dividends and capital gain distributions received on the Fund
          Shares held in each Participant's Account shall be reinvested in
          full and fractional shares of the Designated Fund.

C3.3      All Fund shares acquired by the Custodian shall be registered
          in the name of the Custodian or of its registered nominee
          as defined in the Internal Revenue Code and any Regulations
          of the Treasury Department issued thereunder exempting such
          transactions from liability for stock transfer taxes, but the
          beneficial ownership thereof shall be deemed vested in the
          Participant for whose account the shares are credited.

SECTION 4 - DISTRIBUTIONS FROM THE CUSTODIAL ACCOUNT

C4.1      When a Participant's benefit becomes payable pursuant to the Plan the
          Employer shall certify that such benefit is payable and the
          Custodian or its Agent shall as soon as practicable
          thereafter distribute such amount in accordance with the
          terms and conditions of such instructions which shall contain
          all information necessary for the Custodian or its Agent to
          make such distribution; such Employer represents and warrants
          that such instructions shall at all times be in accordance with
          the provisions of the Plan.  In the event of the death of a
          Participant before full distribution of his account, the amount
          credited to his account shall be distributed in kind or in cash
          in the sole discretion of the Custodian in accordance with the
          terms and in the manner provided in the Plan.  The Employer may
          furnish written instructions to the Custodian or its Agent
          specifying a method of payment as provided in the Plan prior
          to the date a benefit becomes distributable, and the last
          such instructions received by the Custodian or its Agent
          shall control unless superseded by written instructions
          accompanying the instructions directing distribution of a
          benefit.

C4.2      Anything herein to the contrary notwithstanding, if the Custodian
          should at any time receive notice (by certified or registered mail)
          from the Internal Revenue Service that any contributions made by or on
          behalf of a Participant was an excess contribution, the Custodian
          shall, on or before the close of the six-month period beginning with
          the date of such notice, distribute to such Participant from his
          Account, Fund Shares equal in value to the net amount of such excess
          contribution and the net income attributable thereto; except that the
          Custodian shall, if the Employer within sixty days of the date of such
          notice so directs in writing and if there has been no notice to the
          Custodian of a determination by the Internal Revenue Service that the
          excess contribution by or on behalf of a Participant was willfully
          made, credit such amount or such portion thereof as the Employer shall
          direct as a contribution for such Participant for the then current
          taxable year.

SECTION 5

C5.1      The Custodian or its Agent shall deliver all notices, prospectus,
          financial statements, proxies and proxy solicitation
          material relating to the Fund Shares held hereunder and
          shall deliver same to the beneficial owners.  The beneficial
          owner shall vote and sign such proxies which represent his
          investment held by the Custodian.

SECTION 6 - REPORTS OF THE CUSTODIAN AND EMPLOYER

C6.1      The Custodian or its Agent shall keep accurate and detailed records of
          all receipts, investments, disbursements and all other
          transactions required to be performed hereunder. At the
          request of the Employer the Custodian or its Agent will,
          within sixty days after the close of each Plan year, furnish
          to the Employer a statement of the transactions mentioned
          herein.

          Within sixty days after the Custodian's resignation or removal
          pursuant to Section 10 hereof, the Custodian or its Agent will upon
          request furnish a statement reflecting the current balance and
          transactions which have been transpired since the previous statement
          furnished to the Employer.

SECTION 7 - CUSTODIAN'S FEES AND EXPENSES OF THE ACCOUNT

C7.1      Any income, gift, estate and inheritance taxes or other tax of any
          kind whatsoever that may be levied or assessed upon or in respect of
          the Custodial Account (other than transfer taxes) shall be paid from
          the assets of the Custodial Account and shall, unless allocable to the
          Accounts of specific Participants, be charged proportionately to the
          Participant's respective accounts.  The Custodian may, at its option,
          collect any amounts so charged from the amount of any contribution or
          earnings to be credited to the Custodial Account or by sale or
          liquidation of the assets credited to such account and if the assets
          of such accounts are insufficient to satisfy such charges, the
          Employer shall pay any deficit therein to the Custodian.  Any transfer
          taxes incurred by the Custodian in connection with the investment and
          reinvestment or transfer of the assets of the Custodial Account and
          all other administrative expenses incurred by the Custodian in the
          performance of its duties, including fees for legal services rendered
          to the Custodian and compensation to the Custodian, shall be charged
          to and paid by the Employer or may, at the Custodian's option, be
          collected by the Custodian from the amount of any contribution or
          earnings to be credited to the Custodial Account or by sale or
          liquidation of the assets credited to such account in which event such
          amounts shall, unless allocable to the accounts of specific
          Participants, be charged proportionately to the Participants'
          respective accounts.  Until otherwise changed in accordance with the
          terms of the Custodial Agreement, the Custodian shall receive fees for
          its services in respect to each Participant's account as provided in
          the current Designated Fund prospectus.

SECTION 8 - CONCERNING THE CUSTODIAN

C8.1      The Custodian shall not be responsible in any way for the collection
          of contributions provided for under the Plan, the purpose or propriety
          of any distribution made pursuant to Section 4 hereof, or any other
          action or nonaction taken pursuant to the Employer's direction nor
          shall the Custodian have any duty or responsibility to determine
          whether information furnished to it by the Employer is correct.  The
          Employer (and his or their legal representatives, heirs, successors,
          or assigns) shall at all times fully indemnify and save harmless the
          Custodian, its successors and assigns, from any liability arising
          from any and all personal liability arising from distributions made or
          actions taken at the Employer's discretion, and from any and all other
          liability whatsoever which may arise in connection with this agreement
          except the obligation of the Custodian to perform the things to be
          done by it under this Agreement.  The

<PAGE>
          Custodian shall be under no duty to take any action other than as
          herein specified with respect to the Custodial Account unless the
          Employer shall furnish the Custodian with instructions in proper form
          and such instructions shall have been specifically agreed to by the
          Custodian in writing to do so and shall have been fully indemnified to
          the satisfaction of the Custodian. The Custodian shall be under no
          duty to defend or engage in any suit with respect to the Custodial
          Account unless the Custodian shall have first agreed in writing to
          do so and shall have been fully indemnified to the satisfaction of the
          Custodian.  The Custodian shall be protected in acting upon any
          written order or direction from the Employer or any other notice,
          request, consent, certificate or other instrument or paper believed by
          it to be genuine and to have been properly executed (including
          designation of beneficiary received from Participants), and so long as
          it acts in good faith in taking or omitting to take any other action.
          Before making any distribution in the case of the death of a
          Participant, the Custodian or its Agent shall be furnished with such
          certified death certificates, inheritance tax releases and other
          documents as may be required by the Custodian, and with such indemnity
          agreement as the Custodian may then request.  No amendment of the Plan
          shall place any greater burden on the Custodian without his written
          consent.  The Custodian shall not be liable for interest on any cash
          or cash balances maintained in the Custodial Account.  The Employer
          shall have the sole authority to enforce this agreement on behalf of
          any and all persons having or claiming any interest in the Custodial
          Agreement by virtue of this agreement or the Plan.  To protect the
          Custodial Account from the expenses which might otherwise be incurred,
          it is imposed as a condition to the acquisition of any interest in the
          Custodial Account, and it is hereby agreed, that no person other than
          the Employer may institute or maintain any action or proceeding
          against the Custodian in the absence of written authority from the
          Employer or a determination of a court of competent jurisdiction that
          in refusing authority the Employer has acted fraudulently or in bad
          faith.

SECTION 9 - AMENDMENT

C9.1      The Custodian reserves the right to amend this agreement including the
          fee schedule set forth in the Designated Fund prospectus in any
          respect, provided, however, except pursuant to Section 15 hereof,
          under no circumstances shall any part of the assets of the Custodial
          Account revert to the Employer (other than in his capacity as
          Owner-Employee under the Plan) or be used for or diverted to purposes
          other than for the exclusive benefit of Participants.  The Employer
          will be notified of any change within 60 days after the adoption of
          any amendment.

SECTION 10 - RESIGNATION OR REMOVAL OF CUSTODIAN

C10.1     The Custodian may resign at any time upon 30 days' notice in writing
          to the Employer, and may be removed by the Employer at any time upon
          30 days' notice in writing to the Custodian.  Upon such resignation or
          removal, the Employer shall appoint a successor custodian, which
          successor shall be a "bank" as defined in Section 401(d)(1) of the
          Internal Revenue Code.  Upon receipt by the Custodian of written
          acceptance of such appointment by the successor custodian, the
          Custodian shall transfer and pay over to such successor the assets of
          the Custodial Account and all records pertaining thereto.  The
          Custodian is authorized, however, to reserve such sum of money as it
          may deem advisable for payment of all its fees, compensation, costs
          and expenses, or for payment of any other liabilities constituting a
          charge on or against the assets of the Custodial Account or on or
          against the Custodian, with any balance of such reserve remaining
          after the payment of all such items to be paid over to the successor
          custodian.  If within 30 days after the Custodian's resignation or
          removal the Employer has not appointed a successor custodian which has
          accepted such appointment the Custodian shall, unless it elects to
          terminate the Custodial Account pursuant to Section 11, appoint such
          successor itself. The Custodian shall not be liable for the acts or
          omissions of any successor custodian, whether or not the Custodian
          makes such appointment itself.

SECTION 11 - TERMINATION OF ACCOUNT

C11.1     The Custodian may elect to terminate the Custodial Account if within
          30 days after its resignation or removal pursuant to Section 10 the
          Employer has not appointed a successor custodian which has accepted
          such appointment.  The Custodian shall terminate the account upon
          receiving written notice of:

          (1)  termination of the Plan by the Employer;

          (2)  the Employer's death, if the Employer is a sole proprietor; or

          (3)  termination of the partnership, if the Employer is a partnership,
               unless in either of the latter two events provision is made by a
               successor to the business of the Employer for the continuation of
               the Plan and this agreement upon terms satisfactory to the
               Custodian.  Termination of the Custodial Account shall be
               effected by distributing all assets thereof to the Participants
               pursuant to written direction of the Employer (who represents and
               warrants that such directions shall be and are in accordance with
               the provisions of the Plan) or, if the Employer was a sole
               proprietor who is dead, such distribution shall be effected in
               such manner as determined by the Custodian, in each instance in
               accordance with and subject to the provisions and limitations of
               the Plan.  Upon the completion of such distribution the Custodian
               shall be relieved from all liability with respect to all amounts
               so paid.

SECTION 12 - PROHIBITED TRANSACTIONS

C12.1     The Custodian shall not, directly or indirectly (and nothing herein
          shall be construed to so require the Custodian):

          (a)  lend any part of the custodial account or the income of such
               account to; or

          (b)  pay any compensation for personal services to; or

          (c)  make any part of its services available on a preferential basis
               to; or

          (d)  acquire for the custodial account any property (other than cash
               contributions permitted by the Plan) from, or sell any property
               to:

               any Employer or any Owner-Employee who controls the trade or
               business of any Employer, a member of the family of any such
               Owner-Employee or a corporation controlled by any such Employer
               or Owner-Employee through the ownership, directly or indirectly,
               of 50% or more of the total combined voting power of all classes
               of stock entitled to vote or 50% or more of the total value of
               shares of all classes of stock of the corporation.

SECTION 13 - PROHIBITION OF DIVERSION

C13.1     At no time shall it be possible for any part of the assets of the
          Custodial Account to be used for or diverted to purposes other than
          for the exclusive benefit of Participants and their beneficiaries.

SECTION 14 - NOTICES TO EMPLOYER AND PARTICIPANTS

C14.1     Any notice from the Custodian or its Agent to the Employer or to any
          Participant provided for in this agreement shall be effective if sent
          by regular mail to the Employer or such Participant, as the case may
          be, at his address as shown on the records of the Custodian.

SECTION 15 - INTERNAL REVENUE SERVICE APPROVAL

C15.1     The Custodial Account is established with the intent that it shall be
          part of a qualified plan under Section 401 of the Internal Revenue
          Code.  All terms and provisions contained herein shall therefore be
          interpreted, whenever possible, so as to be in compliance with the
          requirements for qualification under such Code.  The Custodian is
          authorized, however, to reserve such sum of money as it may deem
          advisable for payment of all its fees, compensation, costs and
          expenses, or for payment of any other liabilities constituting a
          charge on or against the assets of the Custodial Account or on or
          against the Custodian.

SECTION 16 - INALIENABILITY OF BENEFITS

C16.1     The Benefits provided in the Plan shall not be subject to alienation,
          assignment, garnishment, attachment, execution or levy of any kind and
          any attempt to cause such benefits to be so subjected shall not be
          recognized, except by the Custodian for its fees and expenses under
          this Custodial Agreement and except to such extent as may be required
          by law.

SECTION 17 - GOVERNING LAWS

C17.1     This agreement and Designations of Beneficiary, and all property
          rights, including rights to distributions after the death of a
          Participant, under the Plan, shall be construed in accordance with the
          laws of the State of Iowa.


<PAGE>


Form 5305-A           INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT      DO NOT File
(Rev. October 1992)                                                  with the
                (UNDER SECTION 408(A) OF THE INTERNAL REVENUE CODE)  Internal
Department of the Treasury                                       Revenue Service
Internal Revenue Service

- --------------------------------------------------------------------------------
Name of depositor         Date of birth of depositor       Identifying number
                                                           (see instructions)

- --------------------------------------------------------------------------------
Address of depositor
                                                   Check if Amendment       / /
- --------------------------------------------------------------------------------
Name of custodian            Address or principal place of business of custodian

Investors Fiduciary                               Kansas City, Missouri
  Trust Company

- --------------------------------------------------------------------------------

     The Depositor whose name appears above is establishing an individual
retirement account under section 408(a) to provide for his or her retirement
and for the support of his or her beneficiaries after death.

     The Custodian named above has given the Depositor the disclosure
statement required under Regulations section 1.408-6.

     The Depositor assigned the custodial account
______________________________ dollars ($_____________________) in cash.

     The Depositor and the Custodian make the following agreement:

- --------------------------------------------------------------------------------

                                    ARTICLE I

     The Custodian may accept additional cash contributions on behalf of the
Depositor for a tax year of the Depositor. The total cash contributions are
limited to $2,000 for the tax year unless the contribution is a rollover
contribution described in section 402(c) (but only after December 31, 1992),
403(a)(4), 403(b)(8), 408(d)(3), or an employer contribution to a simplified
employee pension plan as described in section 408(k). Rollover contributions
before January 1, 1993, include rollovers described in section 402(a)(5),
402(a)(6), 402(a)(7), 403(a)(4), 403(b)(8), 403(d)(3), or an employer
contribution to a simplified employee pension plan as described in
section 408(k).

                                   ARTICLE II

     The Depositor's interest in the balance in the custodial account is
nonforfeitable.

                                   ARTICLE III

     1. No part of the custodial funds may be invested in life insurance
contracts, nor may the assets of the custodial account be commingled with other
property except in a common trust fund or common investment fund (within the
meaning of section 408(a)(5)).

     2. No part of the custodial funds may be invested in collectibles (within
the meaning of section 408(m)) except as otherwise permitted by section
408(m)(3) which provides an exception for certain gold and silver coins and
coins issued under the laws of any state.

                                   ARTICLE IV

     1. Notwithstanding any provision of this agreement to the contrary, the
distribution of the Depositor's interest in the custodial account shall be made
in accordance with the following requirements and shall otherwise comply with
section 408(a)(6) and Proposed Regulations section 1.408-8, including the
incidental death benefit provisions of Proposed Regulations section
1.401(a)(9)-2, the provisions of which are incorporated by reference.

     2. Unless otherwise elected by the time distributions are required to begin
to the Depositor under paragraph 3, or to the surviving spouse under paragraph
4, other than in the case of a life annuity, life expectancies shall be
recalculated annually. Such election shall be irrevocable as to the Depositor
and the surviving spouse and shall apply to all subsequent years. The life
expectancy of a nonspouse beneficiary may not be recalculated.

     3. The Depositor's entire interest in the custodial account must be, or
begin to be, distributed by the Depositor's required beginning date. (April 1
following the calendar year end in which the Depositor reaches age 70 1/2).
By that date, the Depositor may elect, in a manner acceptable to the Custodian,
to have the balance in the custodial account distributed in:

     (a) A single sum payment.

     (b) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the life of the Depositor.

     (c) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the joint and last survivor lives of the
Depositor and his or her designated beneficiary.

     (d) Equal or substantially equal annual payments over a specified period
that may not be longer than the Depositor's life expectancy.

     (e) Equal or substantially equal annual payments over a specified period
that may not be longer than the joint life and last survivor expectancy of the
Depositor and his or her designated beneficiary.

     4. If the Depositor dies before his or her entire interest is distributed
to him or her, the entire remaining interest will be distributed as follows:

     (a) If the Depositor dies on or after distribution of his or her interest
has begun, distribution must continue to be made in accordance with paragraph 3.

     (b) If the Depositor dies before distribution of his or her interest has
begun, the entire remaining interest will, at the election of the Depositor or,
if the Depositor has not so elected, at the election of the beneficiary or
beneficiaries, either

     (i) Be distributed by the December 31 of the year containing the fifth
anniversary of the Depositor's death, or

     (ii) Be distributed in equal or substantially equal payments over the life
or life expectancy of the designated beneficiary or beneficiaries starting by
December 31 of the year following the year of the Depositor's death.  If,
however, the beneficiary is the Depositor's surviving spouse, then this
distribution is not required to begin before December 31 of the year in which
the Depositor would have turned age 70 1/2.

     (c) Except where distribution in the form of an annuity meeting the
requirements of section 408(b)(3) and its related regulations has irrevocably
commenced, distributions are treated as having begun on the Depositor's required
beginning date, even though payments may actually have been made before that
date.

     (d) If the Depositor dies before his or her entire interest has been
distributed and if the beneficiary is other than the surviving spouse, no
additional cash contributions or rollover contributions may be accepted in the
account.
- --------------------------------------------------------------------------------
                                 Cat. No. 11820G        Form 5305-A (Rev. 10-92)

737-952 (10/92)                                                 11/18/92   2.963

<PAGE>

Form 5305-A (Rev. 10-92)                                                  Page 2
- --------------------------------------------------------------------------------
     5. In the case of a distribution over life expectancy in equal or
substantially equal annual payments, to determine the minimum annual payment for
each year, divide the Depositor's entire interest in the Custodial account as of
the close of business on December 31 of the preceding year by the life
expectancy of the Depositor (or the joint life and last survivor expectancy of
the Depositor and the Depositor's designated beneficiary, or the life expectancy
of the designated beneficiary, whichever applies). In the case of distributions
under paragraph 3, determine the initial life expectancy (or joint life and last
survivor expectancy) using the attained ages of the Depositor and designated
beneficiary as of their birthdays in the year the Depositor reaches age 70 1/2.
In the case of a distribution in accordance with paragraph 4(b)(ii), determine
life expectancy using the attained age of the designated beneficiary as of the
beneficiary's birthday in the year distributions are required to commence.

     6. The owner of two or more individual retirement accounts may use the
"alternative method" described in Notice 88-38, 1988-1 C.B. 524, to satisfy the
minimum distribution requirements described above. This method permits an
individual to satisfy these requirements by taking from one individual
retirement account the amount required to satisfy the requirement for another.

                                    ARTICLE V

     1. The Depositor agrees to provide the Custodian with information necessary
for the Custodian to prepare any reports required under section 408(i) and
Regulations sections 1.408-5 and 1.408-6.

     2. The Custodian agrees to submit reports to the Internal Revenue Service
and the Depositor prescribed by the Internal Revenue Service.

                                   ARTICLE VI

     Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through III and this sentence will be controlling. Any
additional articles that are not consistent with section 408(a) and the related
regulations will be invalid.

                                   ARTICLE VII

     This agreement will be amended from time to time to comply with the
provisions of the Code and related regulations. Other amendments may be made
with the consent of the persons whose signatures appear below.

- --------------------------------------------------------------------------------

NOTE:     THE FOLLOWING SPACE (ARTICLE VIII) MAY BE USED FOR ANY OTHER
          PROVISIONS YOU WANT TO ADD. IF YOU DO NOT WANT TO ADD ANY OTHER
          PROVISIONS, DRAW A LINE THROUGH THIS SPACE. IF YOU DO ADD PROVISIONS,
          THEY MUST COMPLY WITH APPLICABLE REQUIREMENTS OF STATE LAW AND THE
          INTERNAL REVENUE CODE.

- --------------------------------------------------------------------------------

                                  ARTICLE VIII

Contributions to this Custody account shall be applied by the Custodian to the
purchase of shares of the designated Fund and/or Portfolio.  Shares so acquired
by the custodian shall be registered in the name of Custodian or its registered
nominee but beneficially owned by the depositor for whom the investments are
made.  The depositor hereby acknowledges receipt of a current prospectus of the
appropriate fund.  Current Custodial fee: $10.00/Year per account.

- --------------------------------------------------------------------------------

Depositor's signature _______________________________  Date____________________

Custodian's signature _______________________________  Date____________________

Witness _______________________________________________________________________
                 (Use only if signature of the Depositor or the
                     Custodian is required to be witnessed.)
- --------------------------------------------------------------------------------

GENERAL INSTRUCTIONS

(SECTION REFERENCES ARE TO THE INTERNAL REVENUE CODE UNLESS OTHERWISE NOTED.)

PURPOSE OF FORM

Form 5305-A is a model custodial account agreement that meets the requirements
of section 408(a) and has been automatically approved by the IRS. An individual
retirement account (IRA) is established after the form is fully executed by both
the individual (Depositor) and the Custodian and must be completed no later than
the due date of the individual's income tax return for the tax year (without
regard to extensions). This account must be created in the United States for the
exclusive benefit of the Depositor or his or her beneficiaries.

     Individuals may rely on regulations for the Tax Reform Act of 1986 to the
extent specified in those regulations.

     Do not file Form 5305-A with the IRS. Instead, keep it for your records.

     For more information on IRAs, including the required disclosure you can get
from your custodian, get Pub. 590, Individual Retirement Arrangements (IRAs).

DEFINITIONS

CUSTODIAN. - The Custodian must be a bank or savings and loan association, as
defined in section 408(n), or any person who has the approval of the IRS to act
as custodian.

DEPOSITOR. - The Depositor is the person who establishes the custodial account.

IDENTIFYING NUMBER

The depositor's social security number will serve as the identification number
of his or her IRA. An employer identification number is only required for each
participant-directed IRA. An employer identification number is required for a
common fund created for IRAs.

IRA FOR NONWORKING SPOUSE

Form 5305-A may be used to establish the IRA custodial account for a nonworking
spouse.

Contributions to an IRA custodial account for a nonworking spouse must be made
to a separate IRA custodial account established by the nonworking spouse.

SPECIFIC INSTRUCTIONS

ARTICLE IV. - Distributions made under this article may be made in a single sum,
periodic payment, or a combination of both. The distribution option should be
reviewed in the year the Depositor reaches age 70 1/2 to ensure that the
requirements of section 408(a)(6) have been met.

ARTICLE VIII. - Article VIII and any that follow it may incorporate additional
provisions that are agreed to by the depositor and custodian to complete the
agreement. They may include, for example, definitions, investment powers, voting
rights, exculpatory provisions, amendment and termination, removal of the
custodian, custodian's fees, state law requirements, beginning date of
distributions, accepting only cash, treatment of excess contributions,
prohibited transactions with the depositor, etc.  Use additional pages if
necessary and attach them to this form.

NOTE: FORM 5305-A MAY BE REPRODUCED AND REDUCED IN SIZE FOR ADOPTION TO PASSBOOK
PURPOSES.

- --------------------------------------------------------------------------------


<PAGE>

[LOGO]    Department of the Treasury
          INTERNAL REVENUE SERVICE


PUBLICATION 590
Cat. No. 15160x



INDIVIDUAL
RETIREMENT
ARRANGEMENTS
(IRAs)


For use in preparing 1994 Returns

[graphic: We The People]
- -------------------------------------------------------------------------------
CONTENTS


IMPORTANT CHANGES                                                      2

IMPORTANT REMINDERS                                                    2

INTRODUCTION                                                           2

CHAPTER 1 -- OVERVIEW                                                  3

CHAPTER 2 -- WHO CAN SET UP AN IRA?                                    4
     What Is Compensation?                                             4

CHAPTER 3 -- WHEN AND HOW CAN AN IRA BE SET UP?                        5
     Kinds of IRAs                                                     5
     Required Disclosures                                              6

CHAPTER 4 -- HOW MUCH CAN I CONTRIBUTE AND DEDUCT?                     6
     Contribution Limits                                               7
     Deductible Contributions                                          8
     Nondeductible Contributions                                      13
     Tax-Free Withdrawal of Contributions                             15
     Comprehensive Examples                                           15

CHAPTER 5 -- CAN I TRANSFER RETIREMENT PLAN ASSETS?                   17
     Transfer From One Trustee to Another                             17
     Rollovers                                                        17
     Transfers Incident to Divorce                                    22

CHAPTER 6 -- WHEN CAN I WITHDRAW OR USE ASSETS FROM AN IRA?           22
     Age 59 1/2 Rule                                                  22
     Required Distributions                                           23
     Tax Treatment of Distributions                                   27

CHAPTER 7 -- WHAT ACTS RESULT IN PENALTIES?                           32
     Prohibited Transactions                                          32
     Excess Contributions                                             33
     Premature Distributions                                          34
     Excess Accumulations                                             35
     Excess Distributions                                             36
     Reporting Additional Taxes                                       36

CHAPTER 8 -- SIMPLIFIED EMPLOYEE PENSION (SEP)                        37
     Definitions                                                      37
     Contributions                                                    37
     Salary Reduction Arrangement                                     40
     Distributions                                                    40

APPENDICES                                                            42
     Appendix A - Summary Record of IRA(s) for 1994 and Worksheet for
          Determining Required Annual Distributions from Your IRA(s)  43

<PAGE>

     Appendix B - Worksheets for Social Security Recipients Who
          Contribute to an IRA                                        44
     Appendix C - Filled-in Form 5329                                 56
     Appendix D - Filled-in Forms 8606                                58
     Appendix E - Life Expectancy and Applicable Divisor Tables       60

INDEX                                                                 66

- -------------------------------------------------------------------------------

IMPORTANT CHANGES

SEPS -- NEW COMPENSATION LIMIT.  The compensation of a participant that can be
taken into account for computing contributions to a SEP-IRA is generally limited
to $150,000 for plan years beginning on or after January 1, 1994. See
CONTRIBUTIONS in Chapter 8 for more information.

IRAS -- REVISED DEDUCTION WORKSHEETS FOR SOCIAL SECURITY RECIPIENTS. The
WORKSHEETS FOR SOCIAL SECURITY RECIPIENTS WHO CONTRIBUTE TO AN IRA in Appendix B
have been revised to take into account the effects of the new law increasing the
portion of social security benefits that are taxable.

- -------------------------------------------------------------------------------
IMPORTANT REMINDERS

INTEREST EARNED. Although interest earned from your IRA is generally not taxed
in the year earned, it is NOT TAX-EXEMPT interest.  DO NOT report it on your
return as tax-exempt interest.

PENALTY FOR FAILURE TO FILE FORM 8606. If you make nondeductible IRA
contributions and you do not file Form 8606, NONDEDUCTIBLE IRAS (CONTRIBUTIONS,
DISTRIBUTIONS, AND BASIS),  with your tax return, you may have to pay a $50
penalty.

- -------------------------------------------------------------------------------
INTRODUCTION

This publication begins with a general overview of the IRA rules and then
explains them in greater detail.  The rules are for setting up an IRA,
contributing to it, transferring money or property to and from it, and making
withdrawals from it. Penalties for breaking the rules are also explained.
Worksheets, sample forms, and tables, listed under APPENDICES in the contents,
are included to help you comply with the rules.  These appendices are at the
back of this publication.

RELATED PUBLICATIONS AND FORMS. This publication refers to publications and
forms that you may need. The following list of such USEFUL ITEMS does not
include Forms 1040, 1040A, or 1040EZ.

USEFUL ITEMS
You may want to see:

PUBLICATIONS
/ /  560  Retirement Plans for the Self-Employed

/ /  571  Tax-Sheltered Annuity Programs for Employees of Public Schools and
          Certain Tax-Exempt Organizations

/ /  575  Pension and Annuity Income (Including Simplified General Rule)

/ /  939  Pension General Rule (Nonsimplified Method)

FORMS (AND INSTRUCTIONS)

/ /  W-4P Withholding Certificate for Pension or Annuity Payments

/ /  1099-R    Distributions From Pensions, Annuities, Retirement or
               Profit-Sharing Plans, IRAs, Insurance Contracts, etc.

/ /  5305-SEP  Simplified Employee Pension - Individual Retirement Accounts
               Contribution Agreement

/ /  5305A-SEP Salary Reduction and Other Elective Simplified Employee Pension--
               Individual Retirement Accounts Contribution Agreement

/ /  5329 Additional Taxes Attributable to Qualified Retirement Plans (Including
          IRAs), Annuities, and Modified Endowment Contracts

/ /  5498 Individual Retirement Arrangement Information

/ /  8606 Nondeductible IRAs (Contributions, Distributions, and Basis)

/ /  8815 Exclusion of Interest From Series EE U.S.  Savings Bonds Issued After
          1989

- -------------------------------------------------------------------------------

FREE PUBLICATIONS AND FORMS.  To order other publications and tax forms, call
our toll-free telephone number 1-800-TAX-FORM (829-3676) or write the IRS Forms
Distribution Center for your area as shown in your tax form's instructions.

TELEPHONE HELP FOR HEARING-IMPAIRED PERSONS.  If you have access to TDD
equipment, you can call 1-800-829-4059 with your tax questions or to order forms
and publications. See your tax package for the hours of operation.

Page 2

<PAGE>

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1.
- -------------------------------------------------------------------------------
OVERVIEW


     This chapter contains a brief overview of the rules that apply to IRAs. You
will find the detailed coverage of the rules in the chapters that follow.
     An individual retirement arrangement (IRA) is a personal savings plan that
offers you tax advantages to set aside money for your retirement.  That means
that you may be able to deduct your contributions to your IRA in whole or in
part, depending on your circumstances, and that, generally, amounts in your IRA,
including earnings and gains, are not taxed until distributed to you.
     You can set up an IRA with several types of organizations. Most banks and
similar savings institutions, mutual funds, stock brokerage firms, and insurance
companies offer IRAs that meet Internal Revenue Code (IRC) requirements.  Not
later than the date one of them sets up an IRA for you, it must give you an IRA
disclosure statement. However, if the statement is given to you less than 7 days
before you set up (or purchase, if earlier) your IRA, you can revoke your IRA
during a period ending not less than 7 days after the day you set it up (or
purchase it, if earlier).


- -------------------------------------------------------------------------------
WHO CAN SET UP AN IRA?

You can set up an IRA if you have taxable compensation during the year and have
not reached age 70 1/2 by the end of the year.  Compensation includes wages,
salaries, tips, commissions, fees, bonuses, and taxable alimony and separate
maintenance payments.
     You may also be able to set up an IRA for your spouse.

HOW CAN AN IRA BE SET UP?
You can use the following types of IRAs:

INDIVIDUAL RETIREMENT ACCOUNT.  You set this up with any financial institution
that satisfies the requirements of the Internal Revenue Code.

INDIVIDUAL RETIREMENT ANNUITY.  You set this up by purchasing a special annuity
contract from a life insurance company.

EMPLOYER AND EMPLOYEE ASSOCIATION TRUST ACCOUNT.  Your employer, labor union, or
other employee association can set up an individual retirement account for you.

SIMPLIFIED EMPLOYEE PENSION (SEP).  Under a SEP plan, your employer can set up
an individual retirement account (called a SEP-IRA) for you that generally lets
your employer contribute to it each year and deduct up to 15% of your
compensation or $30,000, whichever is less. A self-employed person is treated as
an employee for this purpose.

HOW MUCH CAN I CONTRIBUTE TO AN IRA?

You can contribute up to $2000 or 100% of your taxable compensation, whichever
is less, to your IRA each year. Your contributions may or may not be fully
deductible. Whether your contributions are deductible or nondeductible, you must
have received taxable compensation to make contributions to an IRA.

HOW MUCH CAN I DEDUCT?

The amount of your deduction depends on whether or not you or your spouse are
covered by a retirement plan at work. If you are covered (or considered
covered), your deduction amount also depends on your filing status, and how much
income you have. The CAN YOU TAKE AN IRA DEDUCTION? chart, in Chapter 4 of this
publication, shows whether you can take a full deduction, a partial deduction,
or no deduction. To figure a partial deduction, see the worksheets provided in
Chapter 4.

NONDEDUCTIBLE IRA CONTRIBUTIONS.  Even if you cannot take a full deduction, you
can still contribute up to $2,000 or 100% of compensation, whichever is less.
The contributions that are not deductible are called "nondeductible
contributions." When you make these, you must attach Form 8606 to your tax
return.

CAN I TRANSFER (ROLL OVER) RETIREMENT PLAN ASSETS?

If you want to move your IRA assets into another IRA, you can.  If you receive
an eligible rollover distribution from an employer's qualified retirement plan
that you want to roll over (transfer) into your IRA, you can do that too. You
can also roll over IRA assets into another employer's qualified plan, if all the
assets transferred to the IRA came from an employer's qualified plan.  However,
there are special rules that you must follow to avoid paying tax on such
transfers.

WHEN CAN I WITHDRAW OR USE THE ASSETS IN MY IRA?

Generally, you can withdraw money or property from your IRA, without additional
tax, only after you reach age 59 1/2. You must start withdrawing your IRA assets
by April 1 of the year after the year in which you reach age 70 1/2, regardless
of whether you have retired.

                                                  Chapter 1  OVERVIEW     Page 3

<PAGE>

WHAT ACTS RESULT IN PENALTIES?

You may have to pay additional taxes or penalties if you:

- -    Contribute too much to your IRA (excess contribution),

- -    Get money or property from your IRA before you reach age 59 1/2 (early
     withdrawal),

- -    Get too much money or property from your IRA (excess distribution),

- -    Do not receive distributions from your IRA soon enough and in the amounts
     required (excess accumulation),

- -    Use your IRA in a way that is not allowed (prohibited transaction), or

- -    Fail to file Form 8606 or overstate nondeductible contributions on it.

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
2.
- -------------------------------------------------------------------------------
WHO CAN SET UP AN IRA?


     You can set up and make contributions to an IRA if you received taxable
COMPENSATION (defined later) during the year and have not reached age 70 1/2 by
the end of the year.

YOUR IRA.  You can have an IRA whether or not you are an active participant in
(covered by) any other retirement plan. However, you may not be able to deduct
all of your contributions if you or your spouse are covered by an employer
retirement plan. See WHO IS COVERED BY AN EMPLOYER PLAN? in Chapter 4.

IRA FOR YOUR SPOUSE.  You may be eligible to set up and contribute to an IRA for
your spouse, whether or not he or she received compensation.  This is called a
SPOUSAL IRA and is generally set up for a nonworking spouse. See CONTRIBUTION
LIMITS in Chapter 4.
     You can use an individual retirement account or annuity, discussed in
Chapter 3, to set up a spousal IRA.
     You CANNOT set up one IRA that you and your spouse own jointly. You and
your spouse must use separate IRAs. If you already have an IRA, you can keep
that IRA and set up another for your spouse.
     You CANNOT roll over (see ROLLOVERS in Chapter 5) assets from your account
to your spouse's account. However, each spouse may be named as beneficiary and
receive the other spouse's IRA when that spouse dies.
     ELIGIBILITY REQUIREMENTS.  To contribute to a spousal IRA:

     You must be married at the end of the tax year,

     Your spouse must be under age 70 1/2 at the end of the tax year,

     You must file a joint return for the tax year,

     You must have taxable compensation for the year, and

     Your spouse must either have no compensation, or choose to be treated as
       having no compensation for the tax year.

The choice to be treated as having no compensation is made by identifying the
spousal IRA contribution on the joint return for the year.


- -------------------------------------------------------------------------------
WHAT IS COMPENSATION?

As stated above, to set up and contribute to an IRA, you must have
received taxable compensation. This rule applies whether your
contributions are deductible or nondeductible.  Generally, what you
earn from working is compensation.

WHAT INCOME IS COMPENSATION?
Compensation includes:

WAGES, SALARIES, ETC.  Wages, salaries, tips, professional fees, bonuses, and
other amounts you receive for providing personal services are compensation.
Alternatively, the IRS treats as compensation any amount properly shown in box 1
of Form W-2, provided that amount is reduced by any amount properly shown in box
11 (nonqualified plans).

COMMISSIONS.  An amount you receive that is a percentage of profits or sales
price is compensation.

SELF-EMPLOYMENT INCOME.  If you are self-employed (a sole proprietor or a
partner), compensation is your net earnings from your trade or business
(provided your personal services are a material income-producing factor),
reduced by your deduction for contributions on your behalf to retirement plans
and the deduction allowed for one-half of your self-employment taxes.
     If you invest in a partnership and do not provide services that are a
material income-producing factor, your share of partnership income is not
compensation.
     Compensation also includes earnings from self-employment that are not
subject to self-employment tax because of your religious beliefs.  See
Publication 533, SELF-EMPLOYMENT TAX, for more information.
     When you have both self-employment income and salaries and wages, your
compensation is the sum of the amounts.
     SELF-EMPLOYMENT LOSS.  If you have a net loss from self-employment, do not
subtract the loss from salaries

Page 4     Chapter 2  WHO CAN SET UP AN IRA?

<PAGE>

or wages you receive when figuring your total compensation.

ALIMONY AND SEPARATE MAINTENANCE.  All taxable alimony and separate maintenance
payments you receive under a decree of divorce or separate maintenance are
treated as compensation.

WHAT INCOME IS NOT COMPENSATION?
Compensation does NOT include:

- -    Earnings and profits from property, such as rental income, interest income,
     and dividend income,

- -    Pension or annuity income,

- -    Any deferred compensation received (compensation payments postponed from a
     past year),

- -    Foreign earned income and/or housing cost amounts that are excluded from
     income, or

- -    Any other amounts that are excluded from income.

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
3.
- -------------------------------------------------------------------------------

WHEN AND HOW CAN AN IRA BE SET UP?


     You can set up an IRA at any time during a year.  However, the time for
making contributions for a year is limited. See WHEN TO CONTRIBUTE in Chapter 4.
     You can set up different kinds of IRAs with a variety of organizations. You
can set up an IRA at a bank or other financial institution, or with a mutual
fund or life insurance company. You can also set up an IRA through your
stockbroker. Any IRA must meet Internal Revenue Code requirements.  The
requirements for the various arrangements are discussed below.


- -------------------------------------------------------------------------------
KINDS OF IRAS

Your IRA can be an individual retirement account or annuity. It can
be part of either a simplified employee pension (SEP) of your employer
or part of an employer or employee association trust account.

INDIVIDUAL RETIREMENT ACCOUNT
An individual retirement account is a trust or 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
document. The document must show that the account meets all of the
following requirements:

 1)  The trustee or custodian must be a bank, a federally insured credit union,
     a savings and loan association, or an entity approved by the IRS to act as
     trustee or custodian.

 2)  The trustee or custodian generally cannot accept contributions of more than
     $2,000 a year. However, rollover contributions and employer contributions
     to a simplified employee pension (SEP), as explained in Chapter 8, can be
     more than $2,000.

 3)  Your contributions must be in cash, except that rollover contributions can
     be property other than cash. See ROLLOVERS in Chapter 5.

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

 5)  Money in your account cannot be used to buy a life insurance policy.

 6)  Assets in your account cannot be combined with other property, 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.  For detailed
     information on distributions from your IRA, see the discussion in Chapter 6
     under REQUIRED DISTRIBUTIONS.


INDIVIDUAL RETIREMENT ANNUITY
You can set up an individual retirement annuity by purchasing an annuity
contract or an endowment contract from a life insurance company.
     An individual retirement annuity must be issued in your name as the owner,
and either you or your beneficiaries who survive you are the only ones who can
receive the benefits or payments.
     An individual retirement annuity must meet the following requirements:

 1)  Your entire interest in the contract must be nonforfeitable.

 2)  It must provide that you cannot transfer any portion of it to any person
     other than the issuer.

 3)  It must have flexible premiums so that if your compensation changes, your
     payment may also change. This provision applies to contracts issued after
     November 6, 1978.

 4)  It must provide that you cannot contribute more than $2,000 in any year,
     and that you must use any refunded premiums to pay for future premiums or
     to buy more benefits before the end of the calendar year after the year you
     receive the refund.

 5)  It must begin distributions by April 1 of the year following the year in
     which you reach age 70 1/2. See REQUIRED DISTRIBUTIONS  in Chapter 6.

                        Chapter 3  WHEN AND HOW CAN AN IRA BE SET UP?     Page 5

<PAGE>

INDIVIDUAL RETIREMENT BONDS

The sale of individual retirement bonds issued by the federal government was
suspended after April 30, 1982. The bonds have these features:

 1)  You are paid interest on them only when you cash them in.

 2)  You are not paid any further interest after you reach age 70 1/2. If you
     die, interest will stop 5 years after your death, or on the date you would
     have reached age 70 1/2, whichever is earlier.

 3)  You may not transfer the bonds.

 4)  You may not sell, discount, or use the bonds as collateral or security.

If you cash (redeem) the bonds before the year in which you reach age 59 1/2,
you may be subject to a 10% penalty. See PREMATURE DISTRIBUTIONS, in Chapter 7.
You can roll over redemption proceeds into IRAs.

EMPLOYER AND EMPLOYEE ASSOCIATION TRUST ACCOUNTS

Your employer, labor union, or other employee association can set up a trust to
provide individual retirement accounts for its employees or members.  The rules
for individual retirement accounts apply to these employer or union-established
IRAs.

SIMPLIFIED EMPLOYEE PENSION (SEP)

A simplified employee pension (SEP) is a written arrangement that allows your
employer to make deductible contributions to an IRA (a SEP-IRA) set up for you
to receive such contributions.  See Chapter 8, SIMPLIFIED EMPLOYEE PENSION (SEP)
for more information.

INHERITED IRAS

If you, as beneficiary, inherit an IRA, that IRA becomes subject to special
rules.  An IRA you inherit from an owner who died after October 22, 1986, will
be included in the estate of the decedent and, unless you are the decedent's
surviving spouse, you cannot treat it as your own.  This means that, unless you
are the surviving spouse, you cannot make contributions (including rollover
contributions) to the IRA and you cannot roll it over.  But, like the original
owner, you generally will not owe tax on the assets in the IRA until you receive
distributions from it.
     If you are a surviving spouse, you can elect to treat an inherited IRA as
your own.  You will be treated as having made this election if you:

- -    Make contributions (including rollover contributions) to the inherited IRA,
     or

- -    Do not make required distributions from it.

     For more information, see the discussions of inherited IRAs in Chapters 5
and 6 and the discussion of distributions to beneficiaries in Chapter 6.

- -------------------------------------------------------------------------------
REQUIRED DISCLOSURES

The trustee or issuer (sometimes called the sponsor) of the IRA you choose
generally must give you a disclosure statement about your arrangement at least 7
days before you set up your IRA.  However, the sponsor can give you the
statement not later than the date you set up (or purchase, if earlier) your IRA,
if you are given at least 7 days from that date to revoke the IRA.  If you
revoke your IRA within the revocation period, the sponsor must return to you the
entire amount you paid.  The sponsor must report on the appropriate IRS forms
both your contribution to the IRA (unless by a trustee-to-trustee transfer) and
the distribution to you upon your revocation of the IRA. These requirements
apply to all sponsors.
     Generally, the sponsor is the bank that is the trustee of the account or
the insurance company that issued the annuity contract.

DISCLOSURE STATEMENT.  The disclosure statement given to you by the plan sponsor
must contain explanations of items required by the income tax regulations in
plain language. For example, the statement should provide information on when
and how you can revoke the IRA, including the name, address, and telephone
number of the person to receive the notice of cancellation. This explanation
must appear at the beginning of the disclosure statement.


- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
4.
- ------------------------------------------------------------------------------
HOW MUCH CAN I CONTRIBUTE AND DEDUCT?


     As soon as your IRA is set up, you can make contributions (put money in)
to it through your chosen sponsor (trustee or other administrator).
CONTRIBUTIONS MUST BE IN THE FORM OF MONEY (cash, check or money order). You
cannot contribute property. However, you may be able to transfer or roll over
certain property from one account to another. See the discussion of rollovers
and other transfers in Chapter 5.
      You can make contributions to your IRA each year that you qualify.  TO
QUALIFY TO MAKE CONTRIBUTIONS you must have compensation (as discussed in
Chapter 2)

Page 6     Chapter 4  HOW MUCH CAN I CONTRIBUTE AND DEDUCT?

<PAGE>

and have not reached age 70 1/2 during the year.  Thus, for any year in which
you do not work, you CANNOT make IRA contributions unless you receive
alimony. EVEN IF YOU DO NOT QUALIFY to make contributions for the current
year, the amounts you contributed for years in which you did qualify can
remain in your IRA.  You can resume making contributions for any years that
you qualify.
     You can make contributions to a SPOUSAL IRA each year that the spousal
IRA requirements are met.  See IRA FOR YOUR SPOUSE in Chapter 2.
     There are limits and other rules that affect the amount you can
contribute and the amount you can deduct.  This chapter discusses those rules.

CONTRIBUTION LIMITS

The most that you can contribute for any year to your IRA is THE SMALLER OF the
following amounts:

- -    Your compensation (defined in Chapter 2) that you must include in income
     for the year, or

- -    $2,000.


     NOTE.  This limit is reduced by any contributions to a 501(c)(18) plan
(generally, a plan created before June 25, 1959, funded entirely by employer
contributions).

     This is the most you can contribute regardless of whether your
contributions are to one or more IRAs or whether all or part of your
contributions are nondeductible (see NONDEDUCTIBLE CONTRIBUTIONS, later).

     EXAMPLES.  Betty, who is single, earns $24,000 in 1994. Her IRA
contributions for 1994 are limited to $2,000.
     John, a college student working part time, earns $1,500 in 1994.  His IRA
contributions for 1994 are limited to $1,500, the amount of his compensation.

SPOUSAL IRA.  The total combined contributions you can make each year to your
IRA and a spousal IRA (discussed earlier) is THE SMALLER OF:

- -    $2,250 or

- -    Your taxable compensation for the year.


     NOTE.  This limit is reduced by any contributions to a 501(c)(18) plan
(generally, a plan created before June 25, 1959, funded entirely by employer
contributions)
     You can divide your IRA contributions between your IRA and the spousal IRA
in any way you choose, as long as you do not contribute more than $2,000 to
either IRA (see examples in next discussion).
     SPOUSE HAS COMPENSATION DURING THE YEAR.  If your spouse also has taxable
compensation during the year and each of you is under age 70 1/2 at the end of
the year, you and your spouse can each have regular IRAs. You each may
contribute up to the $2,000 limit, unless your taxable compensation (or your
spouse's) is less than $2,000.
     However, either you or your spouse can choose to be treated as having no
compensation and use the rules for spousal IRAs. Generally, if one spouse has
compensation of less than $250 for the year, a spousal IRA is more advantageous
than a regular IRA.
     EXAMPLE 1.  Bill and Linda file a joint return for 1994. Bill earned
$27,000 and Linda earned $190 that year. Linda chose to be treated as having no
compensation; therefore, Bill set up a spousal IRA for her. Since he contributed
$1,800 to his IRA, the most he can contribute to the spousal IRA is $450 ($2,250
minus $1,800).
     EXAMPLE 2.  Assume the same facts as in Example 1 except Bill's
contribution to the spousal IRA is $2,000 (the limit for either IRA). The most
he can contribute to his own IRA is $250 ($2,250 minus $2,000).
     SPOUSE UNDER AGE 70 1/2.  You cannot make contributions to your IRA for the
year you reach age 70 1/2 or any later year.  However, for any year you have
compensation, you can continue to make contributions of up to $2,000 to a
spousal IRA until the year your spouse reaches age 70 1/2.

CONTRIBUTIONS NOT REQUIRED.  You do not have to make contributions to your IRA
or a spousal IRA for every tax year, even if you can.

LESS THAN MAXIMUM CONTRIBUTIONS.  If your contributions to your IRA for a year
were less than the smaller of 100% of your compensation or $2,000, YOU CANNOT
CONTRIBUTE MORE IN A LATER YEAR to make up the difference. However, you can
apply an excess contribution in one year to a later year if the contributions
for that later year are less than the maximum allowed for that year. See EXCESS
CONTRIBUTIONS in Chapter 7.
     EXAMPLE.  Paul earns $30,000 in 1994. Although he can contribute up to
$2,000 for 1994, he contributes only $1,000. Paul cannot make up the $1,000
($2,000 minus $1,000) difference between his actual contributions for 1994 and
his 1994 limit by contributing an additional $1,000 (in excess of the limit for
the later year) in 1995 or any later year.

MORE THAN ONE IRA.  If you have more than one IRA, the limit applies to the
total contributions made to your IRAs for the year.

BOTH SPOUSES HAVE COMPENSATION.  If both you and your spouse have compensation,
each of you can set up an IRA.  Both of you cannot participate in the same IRA.
The maximum contribution for each of you is figured separately and depends on
how much each of you earns.
     FILING STATUS has no effect on the amount of the permitted contribution to
an IRA. However, if you or your spouse is covered by a retirement plan at work,
your DEDUCTION may be reduced or eliminated, depending on your filing status and
income. See DEDUCTIBLE CONTRIBUTIONS, later.

                     Chapter 4  HOW MUCH CAN I CONTRIBUTE AND DEDUCT?     Page 7

<PAGE>

     EXAMPLE.  Sam and Helen are married. They both work and each has an IRA.
Sam earned $1,800 and Helen earned $28,000 in 1994. Sam can contribute to his
IRA up to $1,800 for the year. Helen can contribute up to $2,000 to her IRA.
Whether they file a joint return or separate returns, the amount they can
contribute is the same.

IRA CONTRIBUTIONS UNDER COMMUNITY PROPERTY LAWS.  Contributions cannot be made
to your IRA based on the earnings of your spouse, unless you have a spousal IRA.
The contributions must be based on your own compensation, even in community
property states.

INHERITED IRAS.  If you inherit an IRA from your spouse, you can choose to treat
it as your own by making contributions to that IRA. See INHERITED IRAS in
Chapter 3.
     If, however, you inherit an IRA from someone who died after December 31,
1983, and you are not the decedent's spouse, you CANNOT CONTRIBUTE to that IRA,
because you cannot treat it as your own.  See also INHERITED IRA(S) in Chapter
3, under ROLLOVERS in Chapter 5, and in Chapter 6.

ANNUITY OR ENDOWMENT CONTRACTS.  If you invest in an annuity or endowment
contract under an individual retirement annuity, YOU CANNOT CONTRIBUTE MORE THAN
$2,000 toward its cost for the tax year, INCLUDING THE COST OF LIFE INSURANCE
COVERAGE. If you contribute more than $2,000, the annuity or endowment contract
is disqualified.

BROKER'S COMMISSIONS.  Broker's commissions that you paid in connection with
your IRA ARE SUBJECT TO the contribution limit and ARE NOT DEDUCTIBLE as a
miscellaneous deduction on Schedule A (Form 1040).

TRUSTEE'S FEES.  Trustee's administrative fees that are billed separately and
paid by you in connection with your IRA are deductible. They ARE DEDUCTIBLE (to
the extent they are ordinary and necessary) as a miscellaneous deduction on
Schedule A (Form 1040). The deduction is subject to the 2% of adjusted gross
income limit.  These fees ARE NOT SUBJECT TO the contribution limit.

WHEN TO CONTRIBUTE
You can make contributions to your IRA (or to a spousal IRA) for a year at any
time during the year or by the due date for filing your return for that year,
NOT including extensions. For most people, this means that contributions for
1994 must be made by April 17, 1995.

DESIGNATING YEAR FOR WHICH CONTRIBUTION IS MADE.  If you contribute an amount to
your IRA between January 1, 1995, and April 17, 1995, you should tell the
sponsor which year (1994 or 1995) the contribution is for. If you do not tell
the sponsor which year it is for, the sponsor can assume, for reporting to the
IRS, that the contribution is for 1995, the year the sponsor received it.


FILING BEFORE MAKING YOUR CONTRIBUTION.  You can file your return claiming an
IRA contribution before you actually make the contribution. You must, however,
make the contribution by the due date of your return, NOT including extensions.


- -------------------------------------------------------------------------------
DEDUCTIBLE CONTRIBUTIONS

Generally, you can take a deduction for the contributions that you are allowed
to make to your IRA. However, IF YOU OR YOUR SPOUSE ARE COVERED BY AN EMPLOYER
RETIREMENT PLAN at any time during the year, your allowable IRA deduction may be
less than your allowable contributions. Your allowable deduction may be reduced
or eliminated, depending on the amount of your income and your filing status, as
discussed later under DEDUCTION LIMITS. These limits do not affect your
allowable contributions (see NONDEDUCTIBLE CONTRIBUTIONS, later).

WHO IS COVERED BY AN EMPLOYER PLAN?
The Form W-2, WAGE AND TAX STATEMENT, you receive from your employer includes a
box to indicate whether or not you are covered for the year. The form should
have a mark in the "Pension Plan" box if you are covered.
     If you are not certain whether you are covered by your employer's
retirement plan, you should ask your employer.

EMPLOYER PLANS
An employer retirement plan is one that an employer sets up for the benefit of
its employees.  For purposes of the IRA deduction rules, an employer retirement
plan is any of the following:
- -    A qualified (meets Internal Revenue Code requirements) pension,
     profit-sharing, stock bonus, money purchase pension, etc., plan (including
     Keogh plans),
- -    A 401(k) plan (generally an arrangement included in a profit-sharing or
     stock bonus plan that allows you to choose to take part of your
     compensation from your employer in cash or have your employer pay it into
     the plan),
- -    A union plan (a qualified stock bonus, pension, or profit-sharing plan
     created by a collective bargaining agreement between employee
     representatives and one or more employers),
- -    A qualified annuity plan,
- -    A plan established for its employees by the United States, a state or
     political subdivision thereof, or by an agency or instrumentality of any of
     the foregoing (other than an eligible state deferred compensation plan
     (section 457 plan)),
- -    A tax-sheltered annuity plan for employees of public schools and certain
     tax-exempt organizations (403(b) plan),

Page 8     Chapter 4  HOW MUCH CAN I CONTRIBUTE AND DEDUCT?

<PAGE>

Table 4.1 CAN YOU TAKE AN IRA DEDUCTION?  This chart sums up whether you can
          take a full deduction, a partial deduction, or no deduction as
          discussed in Chapter 4.

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
   IF YOUR                                   IF YOU ARE
MODIFIED AGI*                   COVERED BY A RETIREMENT PLAN AT WORK
     IS:                             AND YOUR FILING STATUS IS:
- ---------------------------------------------------------------------------------------
<S>                        <C>                  <C>                   <C>
                           *SINGLE              *MARRIED FILING       MARRIED FILING
                           *HEAD OF              JOINTLY (EVEN        SEPARATELY**
                            HOUSEHOLD            IF YOUR SPOUSE
                                                 IS NOT COVERED
                                                 BY A PLAN AT
                                                 WORK)
                                                *QUALIFYING
                                                 WIDOW(ER)

At Least   But Less
           Than             You Can Take         You Can Take         You Can Take
- ---------------------------------------------------------------------------------------
$0.01      $10,000.00       Full deduction       Full deduction       Partial deduction

$10,000.00 $25,000.01       Full deduction       Full deduction       No deduction

$25,000.01 $35,000.00       Partial deduction    Full deduction       No deduction

$35,000.00 $40,000.01       No deduction         Full deduction       No deduction

$40,000.01 $50,000.00       No deduction         Partial deduction    No deduction

$50,000.00 or over          No deduction         No deduction         No deduction
- ---------------------------------------------------------------------------------------

<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
   IF YOUR                                   IF YOU ARE NOT
MODIFIED AGI*                     COVERED BY A RETIREMENT PLAN AT WORK
     IS:                               AND YOUR FILING STATUS IS:
- -----------------------------------------------------------------------------------------------------------
<S>                         <C>                   <C>                <C>                     <C>
                            MARRIED FILING        *SINGLE            *MARRIED FILING         MARRIED FILING
                            JOINTLY (AND          *HEAD OF            JOINTLY OR             SEPARATELY
                            YOUR SPOUSE IS         HOUSEHOLD          SEPARATELY             (EVEN IF
                            COVERED BY A                              (AND YOUR              YOUR SPOUSE
                            PLAN AT WORK)                             SPOUSE IS NOT          IS COVERED BY
                                                                      COVERED BY A           A PLAN AT
                                                                      PLAN AT WORK)          WORK)***
                                                                     *QUALIFYING
                                                                      WIDOW(ER)
At Least   But Less
           Than             You Can Take          You Can Take       You Can Take            You Can Take
- -----------------------------------------------------------------------------------------------------------
$0.01      $10,000.00       Full deduction

$10,000.00 $25,000.01       Full deduction

$25,000.01 $35,000.00       Full deduction        Full               Full                    Full
                                                  Deduction          Deduction               Deduction
$35,000.00 $40,000.01       Full deduction

$40,000.01 $50,000.00       Partial deduction

$50,000.00 or over          No deduction
- -----------------------------------------------------------------------------------------------------------

</TABLE>
*MODIFIED AGI (adjusted gross income) is: (1) for Form 1040A--the amount on line
14 increased by any excluded series EE bond interest shown on Form 8815,
EXCLUSION OF INTEREST FROM SERIES EE U.S. SAVINGS BONDS ISSUED AFTER 1989, or
(2) for Form 1040--the amount on line 31, figured without taking into account
any IRA deduction or any foreign earned income exclusion and foreign housing
exclusion (deduction), or any series EE bond interest exclusion from Form 8815.

**If you DID NOT live with your spouse AT ANY TIME during the year, your filing
status is considered, for this purpose, as Single (therefore your IRA deduction
is determined under the "Single" column).  ***You are entitled to the full
deduction ONLY IF you DID NOT live with your spouse AT ANY TIME during the year.
If you DID live with your spouse during the year, you are, for this purpose,
treated as though you are covered by a retirement plan at work (therefore, your
IRA deduction is determined under the "Married Filing Separately" column in the
"If You Are Covered by a Retirement Plan..." section of the chart).
- --------------------------------------------------------------------------------

- -    A simplified employee pension (SEP) plan, or

- -    A 501(c)(18) trust (a certain type of tax-exempt trust created before June
     25, 1959, that is funded only by employee contributions), if you made
     deductible contributions during the year.

WHEN ARE YOU COVERED?

Special rules apply to determine whether you are considered to be covered by (an
active participant in) a plan for a tax year. These rules differ depending on
whether the plan is a defined contribution or defined benefit plan. They also
differ because of your marital status.

DEFINED CONTRIBUTION PLAN. Generally, you are considered covered by a defined
contribution plan if amounts are contributed or allocated to your account for
the plan year that ends within your tax year.
     A defined contribution plan is a plan that provides for a separate
account for each person covered by the plan. Benefits are based only
on amounts contributed to or allocated to each account. Types of
defined contribution plans include profit-sharing plans, stock bonus
plans, and money purchase pension plans.

     EXAMPLE. Company A has a money purchase pension plan. Its plan year is from
July 1 to June 30. The plan provides that contributions must be allocated as of
June 30. Bob, an employee, leaves Company A on December 30, 1993. The
contribution for the plan year ending on June 30, 1994, is not made until
February 15, 1995 (when Company A files its corporate income tax return). In
this case, Bob is considered covered by the plan for his 1994 tax year.

DEFINED BENEFIT PLAN.  If you are eligible (meet minimum age and years of
service requirements) to participate in your employer's defined benefit plan for
the plan year that ends within your tax year, you are considered covered by the
plan. This rule applies even if you declined to be covered by the plan, you did
not make a required contribution, or you did not perform the minimum service
required to accrue a benefit for the year.
     A defined benefit plan is any plan that is not a defined contribution plan.
Contributions to a defined benefit plan are based on a computation of what
contributions are necessary to provide definite benefits to plan participants.
Defined benefit plans include pension plans and annuity plans.

                      Chapter 4  HOW MUCH CAN I CONTRIBUTE AND DEDUCT?    Page 9
<PAGE>

     EXAMPLE.  John, an employee of B, is eligible for coverage under B's
defined benefit plan with a July 1 to June 30 plan year. John leaves B on
December 30, 1993. Since John is eligible for coverage under the plan for its
year ending June 30, 1994, he is considered covered by the plan for his 1994
tax year.

NONVESTED EMPLOYEES.  If, for a plan year, an amount is allocated to your plan
account in a defined contribution plan, or you accrue a benefit in a defined
benefit plan, but you have NO VESTED INTEREST (legal right) in such account or
accrual, you are still covered by such plan as an active participant.

MARITAL STATUS.  Generally you are considered covered by an employer retirement
plan because your spouse is covered by one. To determine whether you are
considered covered by an employer retirement plan for the tax year
because of your spouse's coverage, you must wait until the last day of
the year.  This is because your filing status (whether you are considered
married or single) for the year depends on your marital status on the last day
of the tax year.
     IF YOU WERE MARRIED TO TWO DIFFERENT SPOUSES DURING THE SAME YEAR, you are
considered married for the year, for this purpose, to the spouse to whom you
were married at the end of the year.
     IF YOUR SPOUSE DIED DURING THE YEAR, and you file a joint return as the
surviving spouse, coverage by an employer retirement plan for that year is
determined as if your spouse were still alive.
     IF YOU ARE MARRIED FILING A JOINT RETURN.  Both you and your spouse are
considered covered by a plan if either of you is covered by a plan and you file
a joint return.
     IF YOU ARE MARRIED FILING A SEPARATE RETURN and you are not covered by an
employer retirement plan, but your spouse is, you are considered covered if you
and your spouse lived together at any time during the year.

FEDERAL JUDGES are considered covered by an employer retirement plan in figuring
the IRA deduction.

WHEN ARE YOU NOT COVERED?

You are not covered by an employer plan if neither you nor your spouse is
covered for any part of the year. You are also not covered for this purpose in
the following situations.

IF YOU ARE MARRIED FILING A SEPARATE RETURN and you are not covered by an
employer retirement plan, you can be considered not covered, even if your spouse
is covered by a plan. This rule applies only if you and your spouse did not live
together at any time during the year.

COVERAGE UNDER SOCIAL SECURITY OR RAILROAD RETIREMENT (TIER I AND TIER II) does
not count as coverage under an employer retirement plan in figuring the IRA
deduction.

IF YOU RECEIVE RETIREMENT BENEFITS FROM A PREVIOUS EMPLOYER'S PLAN and you are
not covered (or considered covered because of your spouse) under another
employer plan, you are not considered covered by a plan.

RESERVISTS AND VOLUNTEER FIRE FIGHTERS.  Certain members of the reserve units of
the Armed Forces (in general, those members who did not serve more than 90 days
during the year) and certain volunteer fire fighters (in general, those members
whose accrued retirement benefits at the beginning of the year will not exceed
$1800 per year at retirement) are not considered covered by U.S. or local
government retirement plans.

SOCIAL SECURITY RECIPIENTS

If you receive social security benefits, have taxable compensation, contribute
to your IRA, and are covered (or considered covered) by an employer retirement
plan, complete the worksheets in Appendix B of this publication. Use these
worksheets to figure your IRA deduction and the taxable portion, if any, of your
social security benefits.

DEDUCTION LIMITS

As discussed under DEDUCTIBLE CONTRIBUTIONS, earlier, the deduction you can take
for contributions made to your IRA depends on whether you or your spouse is
covered for any part of the year by an employer retirement plan. But your
deduction is also affected by how much income you have and your filing status,
as discussed below under ADJUSTED GROSS INCOME LIMITATION.

FULL DEDUCTION.  If neither you nor your spouse is covered for any part of the
year by an employer retirement plan, you can take a deduction for your total
contributions to one or more IRAs of up to $2,000, or 100% of compensation,
whichever is less.  This limit is reduced by any contributions to a 501(c)(18)
plan.

REDUCED OR NO DEDUCTION.  If either you or your spouse is covered by an
employer retirement plan, you may be entitled to only a partial (reduced)
deduction or no deduction at all, depending on your income and your filing
status.  Your deduction begins to decrease (phase out) when your income rises
above a certain amount and is eliminated altogether when it reaches a higher
amount.  The amounts vary depending on your filing status.

ADJUSTED GROSS INCOME LIMITATION

The effect of income on your deduction, as just described, is sometimes
called the adjusted gross income limitation (AGI limit). To compute your
REDUCED IRA DEDUCTION, you must first determine your modified adjusted gross
income and your filing status.

Page 10     Chapter 4  HOW MUCH CAN I CONTRIBUTE AND DEDUCT?

<PAGE>

MODIFIED ADJUSTED GROSS INCOME (MODIFIED AGI) IS:

- -    If you file FORM 1040 -- the amount on the page 1 "adjusted gross income"
     line, but modified (changed) by figuring it without taking any:

     a)  IRA deduction,

     b)  Foreign earned income exclusion,

     c)  Foreign housing exclusion or deduction, or

     d)  Exclusion of series EE bond interest shown on Form 8815.

- - If you file FORM 1040A -- the amount on the page 1 "adjusted gross income"
     line, but modified by figuring it without any IRA deduction, or any
     exclusion of series EE bond interest shown on Form 8815.


     NOTE:  Do not assume that modified AGI is the same as your compensation.
You will find that your modified AGI may include income in addition to your
taxable compensation such as interest, dividends, and INCOME FROM IRA
DISTRIBUTIONS,  discussed next.

     INCOME FROM IRA DISTRIBUTIONS.  If you received IRA distributions in 1994
and your IRA(s) include(s) only deductible contributions, the distributions are
fully taxable.
     If you made contributions for 1994 that may be nondeductible contributions
(discussed later), depending on whether your IRA deduction for that year is
reduced (see DEDUCTION PHASEOUT, later), the distributions may be partly
tax-free and partly taxable.  IN THAT CASE, YOU MUST FIGURE THE TAXABLE PART OF
THE IRA DISTRIBUTION BEFORE YOU CAN FIGURE YOUR MODIFIED AGI. To do this, you
can use the WORKSHEET TO FIGURE TAXABLE PART OF DISTRIBUTION, under TAX
TREATMENT OF DISTRIBUTIONS in Chapter 6.

FILING STATUS.  Your filing status depends primarily on your marital status. For
this purpose you need to know if your filing status is single (or head of
household), married filing jointly (or qualifying widow(er)), or married filing
separately. If you need more information on filing status, see Publication 501,
EXEMPTIONS, STANDARD DEDUCTION, AND FILING INFORMATION.

     MARRIED FILING SEPARATE EXCEPTION.  If you did not live with your spouse at
any time during the year and you file a separate return, your filing status is
considered, for this purpose, as single.

DEDUCTION PHASEOUT.  Your IRA deduction is reduced or eliminated entirely
depending on your filing status and modified AGI as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
                                   Your IRA deduction            Your
                                   is reduced if your            deduction
                                   MODIFIED AGI                  is eliminated
                                   is within the                 if your
If your FILING                     PHASEOUT RANGE                MODIFIED AGI
  STATUS is:                       of:                           is:
- -------------------------------------------------------------------------------
<S>                                <C>                           <C>
Single, or
  Head of
  household                        $25,000.01 - $35,000          $35,000 or more


Married--
  joint
  return, or
  Qualifying
  widow(er)                        $40,000.01 - $50,000          $50,000 or more


Married--
  separate
  return                           $     0.01 - $10,000          $10,000 or more
</TABLE>
- -------------------------------------------------------------------------------

HOW TO FIGURE YOUR REDUCED IRA DEDUCTION

If you are covered or considered covered by an employer retirement plan and your
modified AGI is within the phaseout range for your filing status (see above
table), your IRA deduction must be reduced.  You can figure your reduced IRA
deduction FOR EITHER Form 1040 or Form 1040A by using the following worksheet.
Also, the instructions for these tax forms include similar worksheets.

     NOTE:  If you were married and both you and your spouse worked and you both
contributed to IRAs, figure the deduction for each of you separately.
     If you were divorced or legally separated (and did not remarry) before the
end of the year, you cannot deduct any contributions you made to your spouse's
IRA. After a divorce or legal separation, you can deduct only the contributions
you made to your own IRA and your deductions are subject to the adjusted gross
income limitation under the rules for single individuals.


DEDUCTIBLE (AND NONDEDUCTIBLE) IRA CONTRIBUTIONS FOR AN IRA OTHER
THAN A SPOUSAL IRA.  Complete lines 1 through 8 to figure your deductible and
nondeductible IRA contributions for the year.


                     Chapter 4  HOW MUCH CAN I CONTRIBUTE AND DEDUCT?    Page 11

<PAGE>

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
                       WORKSHEET FOR REDUCED IRA DEDUCTION
(USE ONLY IF YOU ARE COVERED, OR CONSIDERED COVERED, BY AN EMPLOYER PLAN AND
     YOUR MODIFIED AGI IS WITHIN THE APPLICABLE PHASEOUT RANGE)
- -------------------------------------------------------------------------------

                                And your                         ENTER on
                                MODIFIED AGI                     line 1
If your FILING STATUS is:       is over:                         below:
- -------------------------------------------------------------------------------
<S>                             <C>                              <C>
Single, or Head
  of household                  $25,000                          $35,000


Married-joint return,
  or Qualifying widow(er)       $40,000                          $50,000


Married-separate return         $  -0-                           $10,000
</TABLE>
- -------------------------------------------------------------------------------

     1.  Enter applicable amount from above. . . . . . . . . . .
                                                                ---------------
     2.  Enter your MODIFIED AGI (combined, if married
         filing jointly) . . . . . . . . . . . . . . . . . . . .
                                                                ---------------

     NOTE:  If line 2 is equal to or more than the amount on  line 1, STOP HERE;
your IRA contributions are not deductible; see NONDEDUCTIBLE CONTRIBUTIONS,
later.

     3.   Subtract line 2 from 1.  (IF LINE 3 IS $10,000 OR
          MORE, STOP HERE; you can take a full IRA deduction
          for contributions of up to $2,000 or 100% of your
          compensation, whichever is less.)
                                                                ---------------
     4.   Multiply line 3 by 20% (.20).  If the result is not a
          multiple of $10, round it to the next highest
          multiple of $10. (For example, $611.40 is rounded to
          $620.) However, if the result is less than $200,
          enter $200. . . . . . . . . . . . . . . . . . . . . .

                                                                ---------------

     5.   Enter your compensation.  (DO NOT include your
          spouse's compensation, and, if you file Form 1040, do
          not reduce your compensation by any losses from
          self-employment.). . . . . . . . . . . . . . . . . . .
                                                                ---------------

     6.   Enter contributions you made, or plan to make, to
          your IRA for 1994, but DO NOT enter more than $2,000.
          (If contributions are more than $2,000, see EXCESS
          CONTRIBUTIONS in Chapter 7.) . . . . . . . . . . . . .
                                                                ---------------

     7.   IRA DEDUCTION. Compare lines 4, 5, and 6.  Enter the
          smallest amount (or a smaller amount if you choose)
          here and on the Form 1040 or 1040A line for your IRA,
          whichever applies. (If line 6 is more than line 7 and
          you want to make a nondeductible contribution, go
          to line 8.). . . . . . . . . . . . . . . . . . . . . .
                                                                ---------------

     8.   NONDEDUCTIBLE CONTRIBUTION.  Subtract line 7 from line
          5 or 6, whichever is smaller.  Enter the result here
          and on line 1 of your Form 8606. (See NONDEDUCTIBLE
          CONTRIBUTIONS, later.) . . . . . . . . . . . . . . . .
                                                                ---------------

DEDUCTIBLE (AND NONDEDUCTIBLE) IRA CONTRIBUTIONS FOR A SPOUSAL
IRA.  The deduction phaseout rules that reduce or eliminate your IRA deduction
also apply to a spousal IRA. If you have a spousal IRA, are covered by an
employer retirement plan, and your modified AGI is within the phaseout range,
you can take only a reduced spousal IRA deduction.
     Complete lines 9 through 17 to figure deductible and nondeductible
contributions (discussed later) for the year to a spousal IRA.

     9.   Enter the smaller of (a) $2,250 or (b) the
          amount from line 5 . . . . . . . . . . . . . . . . . .
                                                                ---------------

     10.  Add lines 7 and 8. Enter the total. (IF THIS AMOUNT IS
          EQUAL TO OR MORE THAN LINE 9, STOP HERE; you cannot
          make contributions to a spousal IRA. Also, see EXCESS
          CONTRIBUTIONS  in Chapter 7, later.) . . . . . . . . .
                                                                ---------------

     11.  Subtract line 10 from line 9 . . . . . . . . . . . . .
                                                                ---------------

     12.  Enter the smallest of (a) IRA contributions for 1994
          to your spouse's IRA; (b) $2,000; or (c) the amount
          on line 11. (If contributions are more than $2,000,
          see EXCESS CONTRIBUTIONS, later.). . . . . . . . . . .
                                                                ---------------

     13.  Multiply line 3 by 22.5% (.225).  If the result is not
          a multiple of $10, round it to the next highest multiple
          of $10. However, if the result is less than $200,
          enter $200 . . . . . . . . . . . . . . . . . . . . . .
                                                                ---------------

     14.  Enter the amount from line 7 . . . . . . . . . . . . .
                                                                ---------------

     15.  Subtract line 14 from line 13. Enter the result but
          do not enter more than the amount on line 12 . . . . .
                                                                ---------------

     16.  SPOUSAL IRA DEDUCTION.  Compare lines 4, 5, and 15.
          Enter the smallest amount (or a smaller amount if you
          choose) here and on your Form 1040 or 1040A. (If line
          12 is more than line 16 and you want to make a
          nondeductible contribution for your spouse,
          go to line 17.). . . . . . . . . . . . . . . . . . . .
                                                                ---------------

     17.  SPOUSAL IRA NONDEDUCTIBLE CONTRIBUTIONS.  Subtract
          line 16 from line 12. Enter the result here and on line
          1 of your spouse's Form 8606 . . . . . . . . . . . . .
                                                                ---------------

REPORTING DEDUCTIBLE CONTRIBUTIONS

You do not have to itemize deductions to claim your deduction for IRA
contributions.  For FORM 1040, deduct your IRA contributions for 1994 on line
23a and, if you file a joint return, deduct your spouse's IRA contributions on
line 23b. For FORM 1040A, deduct your contributions on line 15a and, if you file
a joint return, deduct your spouse's IRA contributions on line 15b.  You
can use either form in most cases.
     YOU MUST USE FORM 1040 instead of Form 1040A if you owe tax on any early
distributions from your IRA, any excess contributions made to your IRA, or any
excess accumulations in your IRA account (see Chapter 7, WHAT ACTS RESULT IN
PENALTIES?).
     FORM 1040EZ does not provide for IRA deductions.

IF YOU ARE SELF-EMPLOYED (a sole proprietor or partner) and have a SEP-IRA, take
your deduction for allowable contributions on  line 27, Form 1040.


Page 12     Chapter 4  HOW MUCH CAN I CONTRIBUTE AND DEDUCT?

<PAGE>

                                    FORM 1040
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
<S>            <C>                                                         <C>                      <C>
               23A  Your IRA deduction (see page 19) . . . . . . . . . .   23A
                                                                               ---------------
ADJUSTMENTS      B  Spouse's IRA deduction (see page 19) . . . . . . . .   23B
                                                                               ---------------
TO INCOME      24   Moving expenses.  Attach Form 3903 or 3903-F . . . .   24
                                                                               ---------------
               25   One-half of self-employment tax. . . . . . . . . . .   25
                                                                               ---------------
CAUTION:  See  26   Self-employed health insurance deduction (see page 21) 26
                                                                               ---------------
instructions.. 27   Keogh retirement plan and self-employed SEP deduction  27
                                                                               ---------------
               28   Penalty on early withdrawal of savings . . . . . . .   28
                                                                               ---------------
               29   Alimony paid.  Recipient's SSN                         29
                                                   ----------------------      ---------------
               30   Add lines 23a through 29.  These are your TOTAL ADJUSTMENTS . . . . . . . .     30
- ------------------------------------------------------------------------------------------------------------------------
ADJUSTED       31   Subtract line 30 from line 22.  This is your ADJUSTED GROSS INCOME  If less
GROSS               than $25,296 and a child lived with you (less than $9,000 if a child didn't live
INCOME              with you), see "Earned Income Credit" on page 27                                31
- ------------------------------------------------------------------------------------------------------------------------
                                     Cat. No. 11320B                                                    Form 1040 (1994)
                                       FORM 1040A

               14   Add lines 7 through 13b (far right column).  This is your TOTAL INCOME.          14           ,
- ------------------------------------------------------------------------------------------------------------------------
               15A  Your IRA deduction (see page 34).                      15a
                    ------------------------------------------------------------------------------
FIGURE
YOUR             B  Spouse's IRA deduction (see page 34).                  15b
                    ------------------------------------------------------------------------------
ADJUSTED         C  Add lines 15a and 15b.   These are your TOTAL ADJUSTMENTS.                      15c
                    ----------------------------------------------------------------------------------------------------
GROSS          16   Subtract line 15c from line 14.  This is your ADJUSTED GROSS INCOME.
INCOME              If less than $25,296 and a child lived with you (less than $9,000 if a child
                    didn't live with you), see "Earned income credit" on page 44.                   16
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
                                Cat. No. 112327A          1994 FORM 1040A PAGE 1


WITHHOLDING ALLOWANCES.  To figure the number of additional withholding
allowances on your Form W-4, EMPLOYEE'S WITHHOLDING ALLOWANCE CERTIFICATE, you
can take into account your estimated deductible IRA contributions.  For this
purpose, however, do not take into account any of your employer's regular
contributions to your SEP-IRA, discussed later (they generally are not
included in your income and you cannot deduct them). For more information on
withholding, see Publication 505, TAX WITHHOLDING AND ESTIMATED TAX.

FORM 5498.  You should receive by May 31, 1995, Form 5498 or a similar statement
from plan sponsors, showing all the contributions made to your IRA for 1994.

- -------------------------------------------------------------------------------
NONDEDUCTIBLE CONTRIBUTIONS

Although your DEDUCTION for IRA contributions may be reduced or eliminated
because of the adjusted gross income limitation (see DEDUCTIBLE CONTRIBUTIONS,
earlier), you can still make CONTRIBUTIONS to your IRA of up to $2,000 ($2,250
for a regular and a spousal IRA combined) or 100% of compensation, whichever is
less. The difference between your total permitted contributions and your total
deductible contributions, if any, is your NONDEDUCTIBLE CONTRIBUTION.

     EXAMPLE.  Sonny Jones is single. In 1994, he is covered by a retirement
plan at work. His salary is $52,312. His modified adjusted gross income (MAGI)
is $55,000. Sonny makes a $2,000 IRA contribution that year.  Because he is
covered by a retirement plan and his MAGI is above $35,000, he cannot deduct his
$2,000 IRA contribution. However, he may choose to either:

     1)   Designate this contribution as a NONDEDUCTIBLE contribution by
          reporting it on his tax return, as explained later under REPORTING
          NONDEDUCTIBLE CONTRIBUTIONS, or

     2)   Withdraw the contribution as explained later under TAX-FREE WITHDRAWAL
          OF CONTRIBUTIONS.

     As long as your contributions are within the contribution limits just
discussed, none of the earnings on any contributions (deductible or
nondeductible) will be taxed until they are distributed. See Chapter 6, WHEN CAN
I WITHDRAW OR USE ASSETS FROM AN IRA?

COST BASIS.  You will have a cost basis in your IRA if you make nondeductible
contributions. Your BASIS is the sum of the nondeductible amounts you have
contributed to your IRA less any distributions of those amounts.  When you
withdraw (or receive distributions of) these amounts, as discussed later in
Chapter 6, you can do so tax-free.

                     Chapter 4  HOW MUCH CAN I CONTRIBUTE AND DEDUCT?    Page 13

<PAGE>

     NOTE.  Generally, you cannot withdraw only the amounts representing your
basis. If you have basis, your withdrawals will generally include both taxable
and nontaxable amounts.  See Chapter 6 for more information.

REPORTING NONDEDUCTIBLE CONTRIBUTIONS

You must report nondeductible contributions, but you do not have to designate a
contribution as nondeductible until you file your tax return. When you file, you
can even designate OTHERWISE DEDUCTIBLE CONTRIBUTIONS as nondeductible.
     TO DESIGNATE CONTRIBUTIONS AS NONDEDUCTIBLE, you must file Form 8606,
NONDEDUCTIBLE IRAs (CONTRIBUTIONS, DISTRIBUTIONS, AND BASIS). (See the filled-in
Forms 8606, in Appendix D.) You must file Form 8606 to report nondeductible
contributions even if you do not have to file a tax return for the year.
     FILE FORM 8606 IF:

- - You made nondeductible contributions to your IRA for 1994, or

- - You received IRA distributions in 1994 and you have ever made nondeductible
  contributions to any of your IRAs.

IF YOU DO NOT REPORT NONDEDUCTIBLE CONTRIBUTIONS, all of your IRA contributions
will be treated as deductible. Thus, when you make withdrawals from your IRA,
the amounts you withdraw will be taxed unless you can show, with satisfactory
evidence, that nondeductible contributions were made.
     There is a recordkeeping worksheet, Appendix A, SUMMARY RECORD OF IRA(s)
FOR 1994, that you can use to keep records of your deductible and nondeductible
IRA contributions.

PENALTY FOR OVERSTATEMENT.  If you overstate the amount of your nondeductible
contributions on your Form 8606 for any tax year, you must pay a penalty of $100
for each overstatement, unless it was due to reasonable cause.

PENALTY FOR FAILURE TO FILE FORM 8606.  You will have to pay a $50 penalty if
you do not file a required Form 8606, unless you can prove that the failure was
due to reasonable cause.
<TABLE>
<CAPTION>
<S>     <C>
FORM 8606                                   NONDEDUCTIBLE IRAs                                         OMB No. 1545-1007
                                                                                                       -----------------
                                (CONTRIBUTIONS, DISTRIBUTIONS, AND BASIS)                                      1994
Department of the Treasury      PLEASE SEE WHAT RECORDS MUST I KEEP? ON PAGE 2                            Attachment
Internal Revenue Service        ATTACH TO FORM 1040, FORM 1040A, OR FORM 1040NR.                          Sequence No. 47
- --------------------------------------------------------------------------------------------------------------------------------
Name.  If married, file a separate Form 8606 for each spouse.  See instructions.                  Your social security number

- --------------------------------------------------------------------------------------------------------------------------------
Fill in Your Address Only            Home address (number and street, or P.O. box if                            Apt. no.
If You Are Filing This               mail is not delivered to your home
Form by Itself and Not
                                ------------------------------------------------------------------------------------------------
With Your Tax Return                 City, town or post office, state, and ZIP code

- --------------------------------------------------------------------------------------------------------------------------------
                              CONTRIBUTIONS, NONTAXABLE DISTRIBUTIONS, AND BASIS
 1   Enter your IRA contributions for 1994 that you choose to be nondeductible.
     Include those made during 1/1/95-4/17/95 that were for 1994.  See instructions . . . . . . . . .  1
                                                                                                      --------------------------
 2   Enter your total IRA basis for 1993 and earlier years.  See instructions . . . . . . . . . . . .  2
                                                                                                      --------------------------
 3   Add lines 1 and 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3
                                                                                                      --------------------------
          ---------------
          DID YOU RECEIVE-------------------------NO-----------------Enter the amount from line 3 on
          ANY IRA                                                    line 12.  Then, stop and read WHEN
          DISTRIBUTIONS                                              AND WHERE TO FILE on page 2.
          (WITHDRAWLS)
          IN 1994?       -------------------------YES----------------Go to line 4.
          ---------------
 4   Enter only those contributions included on line 1 that were made during 1/1/95-4/17/95.  This
     amount will be the same as line 1 if all of your nondeductible contributions for 1994 were
     made in 1995 by 4/17/95.  See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . .  4
                                                                                                      --------------------------
 5   Subtract line 4 from line 3  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5
                                                                                                      --------------------------
 6   Enter the total value of ALL your IRAs as of 12/31/94 plus any outstanding
     rollovers.  See instructions . . . . . . . . . . . . . . . . . . . . . . . .  6
                                                                                  --------------------------
 7   Enter the total IRA distributions received during 1994.  Do not include
     amounts rolled over before 1/1/95.  See instructions . . . . . . . . . . . .  7
                                                                                  --------------------------
 8   Add lines 6 and 7. . . . . . . . . . . . . .  8
                                                  --------------------------
 9   Divide line 5 by line 8 and enter the result as a decimal (to at least two
     places).  Do not enter more than "1.00". . . . . . . . . . . . . . . . . . .  9            X       .
                                                                                  --------------------------
10   Multiply line 7 by line 9.  This is the amount of your nontaxable
     distributions for 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
                                                                                                      --------------------------
11   Subtract line 10 from line 5.  This is the basis in your IRA(s) as of 12/31/94 . . . . . . . . .  11
                                                                                                      --------------------------
12   Add lines 4 and 11.  This is your total IRA basis for 1994 and earlier years . . . . . . . . . .  12
                                                                                                      --------------------------

                                          TAXABLE DISTRIBUTIONS FOR 1994
13   Subtract line 10 from 7.  Enter the result here and on Form 1040, line 15b; Form 1040A, line 10b;
     or Form 1040NR, line 16b, whichever applies. . . . . . . . . . . . . . . . . . . . . . . . . . .  13
- --------------------------------------------------------------------------------------------------------------------------------
SIGN HERE ONLY IF YOU      Under penalties of perjury, I declare that I have examined this form, including accompanying
ARE FILING THIS FORM       statements, and to the best of my knowledge and belief, it is true, correct, and complete.
BY ITSELF AND NOT WITH
                                       -----------------------------------------------------------        ----------------------
YOUR TAX RETURN                        Your signature                                                     Date
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Page 14     Chapter 4  HOW MUCH CAN I CONTRIBUTE AND DEDUCT?
<PAGE>
- -------------------------------------------------------------------------------
TAX-FREE WITHDRAWAL OF CONTRIBUTIONS

If you made IRA contributions for 1994, you can withdraw them tax
free (except for any earnings on them) by April 17, 1995 (or a later
date, if you have an extension to file your return). YOU CAN DO THIS IF:

- -    You did not take a deduction for the contributions you withdraw, AND
- -    You also withdraw any interest or other income earned on the contributions.
     You must report this income on your 1994 return.

IRA trustees must include these amounts in box 1 and, if applicable, in box 2a
of Form 1099-R. You must report these amounts on line 15a, Form 1040. If there
is an amount in box 2a of Form 1099-R, include it on line 15b of Form 1040.
     PREMATURE WITHDRAWALS TAX.  The 10 percent additional tax on withdrawals
made before you reach age 59 1/2  does not apply to these withdrawals of your
contributions. (See EXCEPTIONS in Chapter 6.) However, your withdrawal of the
interest or other income may be subject to this tax.  (See EXCESS CONTRIBUTIONS
and PREMATURE DISTRIBUTIONS (EARLY WITHDRAWALS) in Chapter 7.)
     EXCESS CONTRIBUTIONS TAX.  If any part of these contributions is an excess
contribution, it will be subject to a 6% excise tax. You will not have to pay
the 6% tax if any 1993 excess contribution is withdrawn by April 15, 1994 (plus
extensions), and if any 1994 excess contribution is withdrawn by April 17, 1995
(plus extensions). See EXCESS CONTRIBUTIONS in Chapter 7.

- -------------------------------------------------------------------------------

COMPREHENSIVE EXAMPLES -- DEDUCTIBLE AND NONDEDUCTIBLE CONTRIBUTIONS

The following examples illustrate the use of the IRA deduction worksheet shown
earlier under HOW TO FIGURE YOUR REDUCED IRA DEDUCTION.

     EXAMPLE 1.  For 1994, Tom and Betty Smith file a joint return on Form 1040.
They both work and Tom is covered by his employer's retirement plan.  Tom's
salary is $40,000 and Betty's is $6,555. They each have an IRA and their
combined modified AGI is $46,555. Since their modified AGI is between $40,000
and $50,000 and Tom is covered by an employer plan, each of them is subject to
the deduction limits (see DEDUCTION LIMITS, earlier).
     For 1994, Tom contributed $2,000 to his IRA and Betty contributed $500 to
hers. Even though they file a joint return, they must use separate worksheets to
figure the reduced IRA deduction for each of them.
     Tom can take a deduction of only $690 (see the worksheet below). Even
though he contributed the maximum ($2,000), $1,310 ($2,000 minus $690) of his
contributions must be treated as nondeductible.
     He can choose to treat the $690 as either deductible or nondeductible
contributions. He can either leave the $1,310 of nondeductible contributions
in his IRA or withdraw them by April 17, 1995. He decides to treat the $690
as deductible contributions and leave the $1,310 of nondeductible
contributions in his IRA.
     Betty can treat all or part of her contributions as either deductible or
nondeductible. This is because her $500 contribution for 1994 is less than the
$690 deduction limit for her IRA contributions that year (see line 4 of her
worksheet, later). She decides to treat her $500 IRA contributions as
deductible.

     Using the WORKSHEET FOR REDUCED IRA DEDUCTION, Tom figures his deductible
and nondeductible amounts as follows:
<TABLE>
<CAPTION>

                       WORKSHEET FOR REDUCED IRA DEDUCTION

(USE ONLY IF YOU ARE COVERED, OR CONSIDERED COVERED, BY AN EMPLOYER PLAN AND
     YOUR MODIFIED AGI IS WITHIN THE APPLICABLE PHASEOUT RANGE)
- -------------------------------------------------------------------------------
                                         And your                 ENTER on
                                         MODIFIED AGI             line 1
If your FILING STATUS is:                is over:                 below:
- -------------------------------------------------------------------------------

<S>                                      <C>                      <C>
Single, or Head
   of household                             $25,000                $35,000

Married-joint return,
   or Qualifying widow(er)                  $40,000                $50,000

Married-separate return                     $   -0-                $10,000
- -------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>

   <S>                                                               <C>
   1. Enter applicable amount from above . . . . . . . . . . . . . . $50,000
                                                                     -------
   2. Enter your MODIFIED AGI (combined, if married filing
      jointly) . . . . . . . . . . . . . . . . . . . . . . . . . . .  46,555
                                                                     -------
   NOTE:  If line 2 is equal to or more than the amount on line 1, STOP HERE;
your IRA contributions are not deductible; see NONDEDUCTIBLE CONTRIBUTIONS,
earlier.

   3. Subtract line 2 from 1. (If line 3 is $10,000 or more,
STOP HERE; you can take a full IRA deduction for contributions of
up to $2,000 or 100% of your compensation, whichever is less.) . . . $ 3,445
                                                                     -------
   4. Multiply line 3 by 20% (.20).  If the result is not a
      multiple of $10, round it to the next highest
      multiple of $10. (For example, $611.40 is
      rounded to $620.) However, if the result
      is less than $200, enter $200  . . . . . . . . . . . . . . . .     690
                                                                     -------
                   Chapter 4   HOW MUCH CAN I CONTRIBUTE AND DEDUCT?     Page 15

<PAGE>

   5. Enter your compensation.  (DO NOT include your spouse's compensation,
and, if you file Form 1040, do not reduce your compensation by any losses
from self-employment.) . . . . . . . . . . . . . . . . . . . . . . .  40,000
                                                                     -------
   6. Enter contributions you made, or plan to make,
      to your IRA for 1994, but DO NOT enter more than
      $2,000. (If contributions are more than $2,000,
      see EXCESS CONTRIBUTIONS in Chapter 7.). . . . . . . . . . . .   2,000
                                                                     -------
   7. IRA DEDUCTION.  Compare lines 4, 5, and 6.  Enter
      the smallest amount (or a smaller amount if you
      choose) here and on the Form 1040 or 1040A
      line for your IRA, whichever applies. (If line 6 is
      more than line 7 and you want to make
      a nondeductible contribution, go to line 8.) . . . . . . . . .     690
                                                                     -------
   8. Nondeductible contribution.  Subtract line 7
      from line 5 or 6, whichever is smaller.  Enter
      the result here and on line 1 of your Form 8606. . . . . . . .   1,310
                                                                     -------
</TABLE>

Betty figures her IRA deduction as follows:
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                       WORKSHEET FOR REDUCED IRA DEDUCTION


(USE ONLY IF YOU ARE COVERED, OR CONSIDERED COVERED, BY AN
   EMPLOYER PLAN AND YOUR MODIFIED AGI IS WITHIN THE APPLICABLE
   PHASEOUT RANGE)
- -------------------------------------------------------------------------------
                                          And your               ENTER on
                                          MODIFIED AGI           line 1
If your FILING STATUS is:                 is over:               below:
- -------------------------------------------------------------------------------
<S>                                       <C>                    <C>
Single, or Head
   of household                               $25,000             $35,000

Married-joint return, or
   Qualifying widow(er)                       $40,000             $50,000

Married-separate return                       $   -0-             $10,000
- -------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
<S>                                                                     <C>
 1.   Enter applicable amount from above. . . . . . . . . . . . . . . . $50,000
                                                                        -------
 2.   Enter your MODIFIED AGI (combined, if married filing jointly) . .  46,555
                                                                        -------
</TABLE>

   NOTE:  If line 2 is equal to or more than the amount on line 1, STOP HERE;
your IRA contributions are not deductible; see NONDEDUCTIBLE CONTRIBUTIONS,
earlier.
<TABLE>
<CAPTION>
<S>                                                                     <C>
 3.  Subtract line 2 from 1.  (IF LINE 3 IS $10,000 OR MORE, STOP HERE;
     you can take a full IRA deduction for contributions of up to
     $2,000 or 100% of your compensation, whichever is less.) . . . . .   3,445
                                                                        -------
 4.  Multiply line 3 by 20% (.20).  If the result is not a multiple
     of $10, round it to the next highest multiple of $10. (For
     example, $611.40 is rounded to $620.) However, if the result
     is less than $200, enter $200. . . . . . . . . . . . . . . . . . .     690
                                                                        -------
 5.  Enter your compensation.  (DO NOT include your spouse's
     compensation, and, if you file Form 1040, do not reduce your
     compensation by any losses from self-employment.). . . . . . . . .   6,555
                                                                        -------
 6.  Enter contributions you made, or plan to make, to your IRA for
     1994, but DO NOT enter more than $2,000. (If contributions are
     more than $2,000, see EXCESS CONTRIBUTIONS in Chapter 7.). . . . .     500
                                                                        -------
 7.  IRA DEDUCTION.  Compare lines 4, 5, and 6.  Enter the smallest
     amount (or a smaller amount if you choose) here and on the Form
     1040 or 1040A line for your IRA, whichever applies. (If line 6
     is more than line 7 and you want to make a nondeductible
     contribution, go to line 8.) . . . . . . . . . . . . . . . . . . .     500
                                                                        -------
 8.  NONDEDUCTIBLE CONTRIBUTION.  Subtract line 7 from line 5 or 6,
     whichever is smaller.  Enter the result here and on line 1 of
     your Form 8606.                                                          0
                                                                        -------
</TABLE>

   The IRA deductions of $690 and $500 on the joint return for Tom and Betty
total $1,190. Betty's unused IRA deduction limit of $190 ($690 minus $500)
cannot be transferred to Tom to increase his deduction.

   EXAMPLE 2.  Assume the same facts as in Example 1, except that Tom
contributed $250 to a spousal IRA because Betty had no compensation for the year
and did not contribute to an IRA. Their modified AGI remains at $46,555. Tom
uses lines 1 through 8 of his worksheet to complete the spousal IRA portion of
the WORKSHEET FOR REDUCED IRA DEDUCTION as follows:
<TABLE>
<CAPTION>
<S>                                                                     <C>

 9.  Enter the smaller of (a) $2,250 or (b) the amount from line 5. . .  $2,250
                                                                        -------
10.  Add lines 7 and 8. Enter the total. (IF THIS AMOUNT IS EQUAL TO
     OR MORE THAN LINE 9, STOP HERE; you cannot make contributions to
     a spousal IRA. Also, see EXCESS CONTRIBUTIONS in Chapter 7,
     later.)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2,000
                                                                        -------
11.  Subtract line 10 from line 9 . . . . . . . . . . . . . . . . . . .     250
                                                                        -------


12.  Enter the smallest of (a) IRA contributions for 1994 to your
     spouse's IRA; (b) $2,000; or (c) the amount on line 11. (If
     contributions are more than $2,000, see EXCESS CONTRIBUTIONS,
     later.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     250
                                                                        -------
13.  Multiply line 3 by 22.5% (.225).  If the result is not a multiple
     of $10, round it to the next highest multiple of $10. However, if
     the result is less than $200, enter $200 . . . . . . . . . . . . .     780
                                                                        -------
14.  Enter the amount from line 7 . . . . . . . . . . . . . . . . . . .     690
                                                                        -------
15.  Subtract line 14 from line 13.  Enter the result but do not
     enter more than the amount on line 12. . . . . . . . . . . . . . .      90
                                                                        -------
16.  SPOUSAL IRA DEDUCTION.  Compare lines 4, 5, and 15. Enter the
     smallest amount (or a smaller amount if you choose) here and on
     your Form 1040 or 1040A. (If line 12 is more than line 16 and
     you want to make a nondeductible contribution for your spouse, go
     to line 17.) . . . . . . . . . . . . . . . . . . . . . . . . . . .      90
                                                                        -------
17.  SPOUSAL IRA NONDEDUCTIBLE CONTRIBUTIONS.  Subtract line 16
     from line 12.  Enter the result here and on line 1 of your
     spouse's Form 8606.                                                    160
                                                                        -------
</TABLE>
   The IRA deductions of $690 and $90 on the joint return for Tom and Betty
total $780. In this case, the full


Page 16     Chapter 4  HOW MUCH CAN I CONTRIBUTE AND DEDUCT?
<PAGE>
spousal IRA deduction of $2,250 (limited to $2,000 for either spouse's IRA) has
been reduced by the IRA deduction phaseout rules to $780.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
5.
- -------------------------------------------------------------------------------
CAN I TRANSFER RETIREMENT PLAN ASSETS?

     IRA rules permit you to transfer, tax-free, assets (money or property) from
other retirement programs (including IRAs) to an IRA. The rules permit the
following kinds of transfers:

    -Transfers from one trustee to another,

    -Rollovers, and

    -Transfers incident to a divorce.


     This chapter discusses all three kinds of transfers.
- -------------------------------------------------------------------------------
TRANSFER FROM ONE TRUSTEE TO ANOTHER

     A transfer of funds in your IRA from one trustee DIRECTLY to another,
either at your request or at the trustee's request, is NOT A ROLLOVER. Because
there is no distribution to you, the transfer is tax-free. Since it is not a
rollover, it is not affected by the one-year waiting period that is required
between rollovers, discussed later, under ROLLOVER FROM ONE IRA INTO
ANOTHER.

     For information about direct transfers from retirement programs
other than IRAs, see DIRECT ROLLOVER OPTION, later.
- -------------------------------------------------------------------------------

ROLLOVERS

Generally, a rollover is a tax-free distribution to you of cash or other assets
from one retirement program that you contribute to another program. The amount
you roll over tax-free, however, is generally taxable later when the new program
pays that amount to you or your beneficiary.

KINDS OF ROLLOVERS TO AN IRA.  There are two kinds of rollover contributions to
an IRA. In one, you put amounts you receive from one IRA into another. In the
other, you put amounts you receive from an employer's qualified retirement plan
for its employees (see  EMPLOYER PLANS  under WHO IS COVERED BY AN EMPLOYER
PLAN? in Chapter 4) into an IRA.

TREATMENT OF ROLLOVERS.  You cannot deduct a rollover contribution, but you must
report the rollover distribution on your tax return as discussed later under
REPORTING ROLLOVERS FROM IRAs, and REPORTING ROLLOVERS FROM EMPLOYER PLANS.

ROLLOVER NOTICE.  A written explanation of rollover treatment must be given to
you by the plan making the distribution.

TIME LIMIT FOR MAKING A ROLLOVER CONTRIBUTION

You must make the rollover contribution by the 60th day after the day you
receive the distribution from your IRA or your employer's plan. However, see
EXTENSION OF ROLLOVER PERIOD, later.

ROLLOVERS COMPLETED AFTER THE 60-DAY PERIOD.
Amounts not rolled over within the 60-day period do not qualify for tax-free
rollover treatment and must be treated as a taxable distribution from either
your IRA or your employer's plan. The amount not rolled over is taxable in the
year distributed, not in the year the 60-day period expires. You may also have
to pay a 10% tax on premature distributions and a 15% tax on excess
distributions as discussed in Chapter 7.
     Treat a contribution after the 60-day period as a regular contribution to
your IRA. Any part of the contribution that is more than the maximum amount you
could contribute may be an excess contribution, as discussed in Chapter 7.

EXTENSION OF ROLLOVER PERIOD

If an amount distributed to you from an IRA or a qualified employer retirement
plan becomes a FROZEN DEPOSIT in a financial institution during the 60-day
period allowed for a rollover, a special rule extends the period. The period
during which the amount is a frozen deposit is not counted in the 60-day period,
nor can the 60-day period end earlier than 10 days after the deposit is no
longer frozen. To qualify under this rule, the deposit must be frozen on at
least one day during the 60-day rollover period.
     A FROZEN DEPOSIT is any deposit that cannot be withdrawn
because:

1)   The financial institution is bankrupt or insolvent, or

2)   The state where the institution is located restricts withdrawals
because one or more financial institutions in the state are (or are
about to be) bankrupt or insolvent.

                  Chapter 5    CAN I TRANSFER RETIREMENT PLAN ASSETS?    Page 17

160-455 0 - 94 - 2
<PAGE>


ROLLOVER FROM ONE IRA INTO ANOTHER

You may withdraw, tax free, all or part of the assets from one IRA, if you
reinvest them within 60 days in another IRA. Because this is a rollover, you
cannot deduct the amount that you reinvest in the new IRA.

WAITING PERIOD BETWEEN ROLLOVERS.  You can take (receive) a distribution from an
IRA and make a rollover contribution (of all or part of the amount received) to
another IRA only once in any one-year period. The one-year period begins on the
date you receive the IRA distribution, not on the date you roll it over into
another IRA.
     This rule applies separately to each IRA you own. For example, if you have
two IRAs, IRA-1 and IRA-2, and you roll over assets of IRA-1 into a new IRA-3,
you may also make a rollover from IRA-2 into IRA-3, or into any other IRA within
one year after the rollover distribution from IRA-1. These are both rollovers
because you have not received more than one distribution from either IRA within
one year. However, you cannot, within the one-year period, again roll over the
assets you rolled over into IRA-3 into any other IRA.
     Later distributions from an IRA within a one-year period will not qualify
as rollovers. They are taxable and may be subject to the 10% tax on premature
distributions and the 15% tax on excess distributions.
     EXCEPTION.  An exception to the one-year waiting period rule has been
granted by the IRS for distributions made from a failed financial institution by
the Federal Deposit Insurance Corporation (FDIC) or the Resolution Trust
Corporation (RTC) as receiver for the institution.  To qualify for the
exception, the distribution must satisfy the following requirements:

(1)  It must NOT be initiated by either the custodial institution or the
depositor;

(2)  It must be made because:

     a)   The custodial institution is insolvent, and
     b)   The receiver is unable to find a buyer for the institution.

THE SAME PROPERTY MUST BE ROLLED OVER.  You must roll over into a new IRA the
same property you received from your old IRA.

PARTIAL ROLLOVERS.  If you withdraw assets from an IRA, you may roll over part
of the withdrawal tax free into another IRA and keep the rest of it. The amount
you keep will generally be taxable (except to the extent it is a return of
nondeductible contributions) and may be subject to the 10% tax on premature
distributions and the 15% tax on excess distributions discussed in Chapter 7.

REQUIRED DISTRIBUTIONS.  Amounts that must be distributed during a particular
year under the required distribution rules (discussed in Chapter 6) ARE NOT
ELIGIBLE FOR ROLLOVER treatment.

INHERITED IRAs

If you inherit an IRA FROM YOUR SPOUSE, you generally
can roll it over into an IRA established for you, or you can choose to
make it your own as discussed in Chapter 3 under INHERITED IRAs.
Also see DISTRIBUTIONS RECEIVED BY A SURVIVING SPOUSE
later in this chapter.

IF YOU INHERITED AN IRA FROM SOMEONE OTHER THAN YOUR SPOUSE, you cannot roll
it over, or allow it to receive a rollover contribution.

REPORTING ROLLOVERS FROM IRAS

Report any rollover from one IRA to another IRA on lines 15a and 15b, Form 1040
or lines 10a and 10b, Form 1040A.  Enter the total amount of the distribution on
line 15a, Form 1040 or line 10a, Form 1040A.  If the total amount on line 15a,
Form 1040 or line 10a, Form 1040A was rolled over, enter zero on line 15b, Form
1040 or line 10b, Form 1040A.  Otherwise, enter the taxable portion of the part
that was not rolled over on line 15b, Form 1040 or line 10b, Form 1040A. See
DISTRIBUTIONS FULLY OR PARTLY TAXABLE in Chapter 6.

ROLLOVER FROM EMPLOYER'S PLAN INTO AN IRA

If you receive an ELIGIBLE ROLLOVER DISTRIBUTION, from your (or your deceased
spouse's) employer's qualified (meets Internal Revenue Code requirements)
pension, profit-sharing or stock bonus plan, annuity plan, or tax-sheltered
annuity plan (403(b) plan), you can roll over all or part of it into an IRA.

ELIGIBLE ROLLOVER DISTRIBUTION.  Generally, an eligible rollover distribution is
any distribution from a qualified retirement plan EXCEPT:

1)   A required minimum distribution, or
2)   Any of a series of substantially equal periodic distributions paid at least
once a year over:

     a)   Your lifetime or life expectancy

     b)   The lifetimes or life expectancies of you and your beneficiary, or

     c)   A period of 10 years or more.


The taxable parts of most other distributions are eligible rollover
distributions. See MAXIMUM ROLLOVER, later.

WITHHOLDING REQUIREMENT

If an eligible rollover distribution is paid directly to you, the payer must
withhold 20% of it.  This applies even if you plan to roll over the distribution
to an IRA (or another qualified plan as discussed in Publication 575). However,
you can avoid withholding by choosing the DIRECT ROLLOVER OPTION, discussed
later.

EXCEPTIONS.  Withholding from an eligible rollover distribution paid to you is
not required if:

Page 18    Chapter 5 CAN I TRANSFER RETIREMENT PLAN ASSETS?

<PAGE>

     1)   The distribution and all previous eligible rollover distributions you
received during your tax year from the same plan (or, at the payor's option,
from all your employer's plans) total less than $200, or

     2)   The distribution consists solely of employer securities, plus cash of
$200 or less in lieu of fractional shares.

OTHER WITHHOLDING RULES.  If you receive a distribution that is not an eligible
rollover distribution, the 20% withholding requirement does not apply. However,
other withholding rules apply to these distributions. The rules that apply
depend on whether the distribution is a PERIODIC DISTRIBUTION or a NONPERIODIC
DISTRIBUTION that is not an eligible rollover distribution. For either of these
distributions, you can still choose not to have tax withheld.
     PERIODIC DISTRIBUTIONS.  Unless you choose no withholding, your annuity or
periodic payments will be treated like wages for withholding purposes. Periodic
payments are amounts paid at regular intervals, such as weekly, monthly, or
yearly, over a certain period of time, such as for 15 years or for life.
     NONPERIODIC DISTRIBUTIONS.  For a nonperiodic distribution (a payment other
than a periodic payment) that is not an eligible rollover distribution, the
withholding is 10% of the distribution, unless you choose not to have tax
withheld. The part of any loan treated as a distribution (except an offset
amount to repay a loan), as explained in Publication 575, is subject to
withholding under this rule.

DIRECT ROLLOVER OPTION

Your employer's qualified plan must give you the option to have any part of an
eligible rollover distribution paid directly to an IRA (or to an eligible
retirement plan as discussed in Publication 575).  Under this option, all or
part of the distribution can be paid directly to an IRA (or another eligible
retirement plan that accepts rollovers).  This option is not required for
distributions that are expected to total less than $200 for the year.

NO TAX WITHHELD.  If you choose the direct rollover option, no tax is withheld
from any part of the designated distribution that is directly paid to the
trustee of the IRA (or other plan).  If any part is paid to you, the payer must
withhold 20% of that part's taxable amount. Since most distributions are fully
taxable, payers will generally withhold 20% of the entire amount designated for
distribution to you.

OTHER ROLLOVER LIMITS AND SPECIAL RULES

MAXIMUM ROLLOVER.  The most you can roll over is the taxable part of any
eligible rollover distribution from your employer's qualified plan (see ELIGIBLE
ROLLOVER DISTRIBUTION, earlier). The distribution you receive generally will be
all taxable unless you have made nondeductible employee contributions to the
plan.
     CONTRIBUTIONS YOU MADE TO YOUR EMPLOYER'S PLAN.  You cannot roll over a
distribution of contributions you made to your employer's plan, except voluntary
deductible employee contributions (DECs as defined below), which are treated
like employer contributions.  If you do, you must treat them as regular
contributions and you may have to pay an excess contributions tax (discussed in
Chapter 7) on all or part of them.
     DECs. If you receive a distribution from your employer's qualified plan of
any part of the balance of your DECs and the earnings from them, you can roll
over any part of the distribution.  DEC is the short name for voluntary
deductible employee contributions.  Prior to January 1, 1987, employees could
make and deduct these contributions to certain qualified employers' plans and
government plans. These are not the same as an employee's elective contributions
to a 401(k) plan, which are not deductible by the employee.

TIME LIMIT.  You must complete the rollover within 60 days after the day you
receive the eligible rollover distribution. However, see EXTENSION OF ROLLOVER
PERIOD, earlier.

NO WAITING PERIOD BETWEEN ROLLOVERS.  You can make more than one rollover of
employer plan distributions within a year.  The once-a-year limit on IRA-to-IRA
rollovers does not apply to these distributions.

IRA AS A HOLDING ACCOUNT (CONDUIT IRA) FOR ROLLOVERS TO OTHER
ELIGIBLE PLANS.  If you receive an eligible rollover distribution from your
employer's plan and roll over part or all of it into one or more conduit IRAs,
you can later roll over those assets into a new employer's plan. Your IRA
qualifies as a conduit IRA if it serves as a holding account or conduit for
those assets. The conduit IRA must be made up of only those assets received from
the first employer's plan and gains and earnings on those assets. You must not
have mixed regular contributions or funds from other sources with them.

PROPERTY AND CASH RECEIVED IN A DISTRIBUTION.  If you receive property and
cash in an eligible rollover distribution from your employer's plan, you can
roll over either the property or the cash, or any combination of the two that
you choose.

TREATMENT IF THE SAME PROPERTY IS NOT ROLLED OVER.  Your contribution to an
IRA of cash representing the fair market value of property received in a
distribution from a qualified retirement plan DOES NOT QUALIFY as a rollover
IF YOU KEEP THE PROPERTY. You must either roll over the property or sell it
and roll over the proceeds, as explained next.

SALE OF PROPERTY RECEIVED IN A DISTRIBUTION FROM A QUALIFIED PLAN.  Instead of
rolling over a distribution of

                  Chapter 5   CAN I TRANSFER RETIREMENT PLAN ASSETS?     Page 19

<PAGE>

property other than cash from a qualified employer retirement plan, YOU CAN sell
all or part of the property and roll over the amount you receive into an IRA.
YOU CANNOT substitute your own funds for property you receive from your
employer's retirement plan.

   EXAMPLE. You receive a total distribution from your employer's plan
consisting of $10,000 cash and $15,000 worth of property. You decided to keep
the property. You can roll over to an IRA the $10,000 cash received, but you
cannot roll over an additional $15,000 representing the value of the property
you choose not to sell.

   TREATMENT OF GAIN OR LOSS. If you sell the distributed property and roll
over all the proceeds into an IRA, no gain or loss is recognized. The sale
proceeds (including any increase in value) are treated as part of the
distribution and are not included in your gross income.

   EXAMPLE. On September 4, 1994, John received a lump-sum distribution
from his employer's retirement plan of $50,000 in cash and $50,000 in stock.
The stock was not stock of his employer. On September 26, 1994, he sold the
stock for $60,000. On October 3, 1994, he rolled over $110,000 in cash
($50,000 from the original distribution and $60,000 from the sale of stock).
John does not include the $10,000 gain from the sale of stock as part of his
income because he rolled over the entire amount into an IRA.

   NOTE: Special rules may apply to distributions of employer securities. For
more information, get Publication 575.

IF YOU ROLL OVER PART OF THE AMOUNT RECEIVED FROM THE SALE OF PROPERTY, see
Publication 575.

LIFE INSURANCE CONTRACT
You cannot roll over a life insurance contract from a qualified
plan into an IRA.

DISTRIBUTIONS RECEIVED BY A SURVIVING SPOUSE
Your surviving spouse can roll over into an IRA part or all of any eligible
rollover distribution (defined earlier) received from your employer's
qualified plan because of your death. For information about estate tax
consequences of certain rollovers, see Publication 448, FEDERAL ESTATE AND
GIFT TAXES.

DEATH BENEFIT EXCLUSION. In certain situations, your spouse can exclude from
income up to $5,000 of the distribution from a qualified plan or
tax-sheltered annuity. Your spouse cannot roll over into an IRA any part of
the distribution that qualifies for the $5,000 death benefit exclusion. For
more information on the death benefit exclusion, see Publication 575.

NO ROLLOVER INTO ANOTHER EMPLOYER QUALIFIED PLAN. Your surviving spouse who
receives an eligible rollover distribution from your employer's qualified
plan or tax-sheltered annuity can roll over all or any part of it (or all or
any part of a distribution of deductible employee contributions) into an IRA.
He or she cannot roll over a distribution into another qualified employer
plan or annuity.

DISTRIBUTIONS UNDER DIVORCE OR SIMILAR PROCEEDINGS
(ALTERNATE PAYEES)
If you (as a spouse or former spouse of the employee) receive FROM A
QUALIFIED EMPLOYER PLAN a distribution that results from divorce or similar
proceedings, you may be able to roll over all or part of it into an IRA. To
qualify, the distribution must be:

   One that would have been an ELIGIBLE ROLLOVER DISTRIBUTION
   (defined earlier) if it had been made to an employee, and
   Made under a QUALIFIED DOMESTIC RELATIONS ORDER.

QUALIFIED DOMESTIC RELATIONS ORDER. A domestic relations order is a judgment,
decree, or order (including approval of a property settlement agreement) that
is issued under the domestic relations law of a state. A "qualified domestic
relations order" gives to an alternate payee (a spouse, former spouse, child,
or dependent of a participant in a retirement plan) the right to receive all
or part of the benefits that would be payable to a participant under the
plan.  The order requires certain specific information, and it may not alter
the amount or form of the benefits of the plan.

TAX TREATMENT IF ALL OF AN ELIGIBLE DISTRIBUTION IS NOT ROLLED OVER. If you
roll over only part of an eligible rollover distribution, the amount you keep
is taxable in the year you receive it. If you roll over none of it, the
special rules for lump-sum distributions (5- or 10-year tax option or 20%
capital gain treatment) may apply (see Publication 575). The 10% additional
tax on premature distributions, discussed in Chapter 7, does not apply.

KEOGH PLANS AND ROLLOVERS
If you are self-employed, you are generally treated as an employee for
rollover purposes. Consequently, if you receive an eligible rollover
distribution from a Keogh plan, you CAN roll over all or part of the
distribution (INCLUDING A LUMP-SUM DISTRIBUTION) into an IRA (or another
eligible retirement plan as discussed in Publication 575).

LUMP-SUM DISTRIBUTIONS. A distribution to you of your complete share from
your Keogh plan IS NOT a lump-sum distribution if you are self-employed,
under age 59 1/2 and are not disabled.  Consequently, such distributions do
not qualify for the special tax treatment available to lump-sum
distributions. For information on lump-sum distributions, get Publication 575.

FOR MORE INFORMATION ABOUT KEOGH PLANS, get Publication 560.

Page 20   Chapter 5 CAN I TRANSFER RETIREMENT PLAN ASSETS?

<PAGE>

DISTRIBUTION FROM A TAX-SHELTERED ANNUITY
If you receive an eligible rollover distribution from a tax-sheltered annuity
plan it can be rolled over into an IRA.  It cannot be rolled over into
another eligible retirement plan unless that plan is a tax-sheltered annuity
plan.

IF YOU RECEIVE PROPERTY OTHER THAN MONEY, you can sell the property and roll
over the proceeds as discussed earlier.

CONDUIT IRA. If your IRA contains only assets (including earnings and gains)
that were rolled over from a tax-sheltered annuity, you may roll over these
assets into another tax-sheltered annuity.  If you plan another rollover into
another tax-sheltered annuity, DO NOT COMBINE the assets in your IRA from the
rollover with assets from another source.  DO NOT ROLL OVER an amount from a
tax-sheltered annuity into a qualified pension plan.

FOR MORE INFORMATION ABOUT TAX-SHELTERED ANNUITIES, get Publication 571.

ROLLOVER FROM BOND PURCHASE PLAN
If you redeem retirement bonds that were distributed to you under a QUALIFIED
BOND PURCHASE PLAN, you can roll over tax free part of the amount you receive
from the redemption into an IRA.
   You can redeem these bonds even if you have not reached age 59 1/2. In
addition, you can roll over the proceeds, tax free, into a qualified employer
plan. However, when you receive a distribution at a later time, it will not
be eligible for special 5- or 10-year averaging or 20% capital gain treatment.

REPORTING ROLLOVERS FROM EMPLOYER PLANS
Do not use lines 15a or 15b, Form 1040, or lines 10a or 10b, Form 1040A, to
report a rollover from an employer retirement plan to an IRA; use lines 16a
and 16b, Form 1040, or lines 11a and 11b, Form 1040A, instead.

WRITTEN EXPLANATION TO RECIPIENTS
The administrator of a qualified employer plan must, within a reasonable
period of time before making an eligible rollover distribution, provide a
written explanation to you. It must tell you about:

- -Your right to have the distribution paid tax free directly to an
IRA or another eligible retirement plan,
- -The requirement to withhold tax from the distribution if it is not
paid directly to an IRA or another eligible retirement plan,
- -The nontaxability of any part of the distribution that you roll
over to an IRA or another eligible retirement plan within 60 days
after you receive the distribution, and
- -Other qualified employer plan rules, if they apply, including
those for lump-sum distributions, alternate payees, and cash or
deferred arrangements.

REASONABLE PERIOD OF TIME. The plan administrator must provide you with a
written explanation no earlier than 90 days and no later than 30 days before the
distribution is made.
   However, you can choose to have a distribution made less than 30 days after
the explanation is provided as long as the following two requirements are met:

1) You must have the opportunity to consider whether or not you want to make a
   direct rollover for at least 30 days after the explanation is provided, and
2) The information you receive must clearly state that you have the right to
   have 30 days to make a decision.

Contact the plan administrator if you have any questions regarding this
information.

CHOOSING THE RIGHT OPTION. As explained earlier, you can have all or part of
the distribution from your employer's plan made either as a DIRECT ROLLOVER
to an IRA or another eligible retirement plan, or as a PAYMENT TO YOU.
   Also, you generally can leave all or part of the distribution in the plan.
If you do not leave the distribution in your employer's plan, the following
comparison chart may help you decide which distribution option to choose.
   COMPARISON CHART. To help ensure that you choose the distribution option
that is best for you, carefully compare the following tax effects of each:

DIRECT ROLLOVER                    PAYMENT TO YOU
- ---------------                    --------------
No withholding                     Payer must withhold
                                   income tax of 20% on
                                   the taxable part (even
                                   if you roll it over to
                                   an IRA or other plan).

No 10% additional tax              If you are under age 59 1/2
     (see PREMATURE                a 10% additional tax may
     DISTRIBUTIONS,                apply to the taxable part
     later).                       (including an amount
                                   equal to the tax withheld)
                                   that is not rolled over.

Not income until later             Taxable part (including an
     distributed to you            amount equal to the tax
     from the IRA or               withheld) is income to the
     other plan.                   extent not rolled over.


   IMPORTANT:  If you decide to roll over tax free any part of a distribution,
the DIRECT ROLLOVER option, as indicated above, will generally be to your
advantage, because you will not have 20% withholding or be subject to the 10%
additional tax under that option.
   If you have a lump-sum distribution and do not plan to roll over any part, it
may be eligible for special tax treatment that could lower your tax for the
distribution year (see LUMP-SUM DISTRIBUTIONS, earlier).  In that case, you



               Chapter 5      CAN I TRANSFER RETIREMENT PLAN ASSETS?  Page 21

<PAGE>

may want to get Form 4972, TAX ON LUMP-SUM DISTRIBUTIONS, and its
instructions to determine whether your distribution qualifies for special tax
treatment and, if so, to figure your tax under the special methods.
   You can then compare any advantages from using Form 4972 to figure your
tax on the lump-sum distribution with any advantages from rolling over tax
free all or part of the distribution. If you roll over any part of the
lump-sum distribution, however, you cannot use the Form 4972 special tax
treatment for the distribution at all.

- --------------------------------------------------------------------------------
TRANSFERS INCIDENT TO DIVORCE

If an interest in an IRA is transferred from your spouse or former spouse to
you by a divorce or separate maintenance decree or a written document related
to such a decree, starting from the date of the transfer, the interest in the
IRA is treated as your IRA. THE TRANSFER IS TAX-FREE. For transfer of
interests in employer plans, see DISTRIBUTIONS UNDER DIVORCE OR SIMILAR
PROCEEDINGS (ALTERNATE PAYEES), under ROLLOVERS, earlier.

TRANSFER METHODS. If you are required to transfer some or all of the assets
in an IRA to your spouse or former spouse, there are two commonly used
methods that you can use to make the transfer. The methods (explained below)
are:
- -Changing the name on the IRA, and
- -Making a DIRECT TRANSFER of IRA assets.

   CHANGING THE NAME ON THE IRA.  If all the assets in an IRA are to be
transferred, you can make the transfer by changing the name on the IRA from
your name to the name of your spouse or former spouse, whichever applies.
   DIRECT TRANSFER.  Under this method, you direct the trustee of the IRA to
transfer the affected assets directly to the trustee of a new or existing IRA
set up in the name of your spouse or former spouse, whichever applies. Or, if
your spouse or former spouse is allowed to keep his or her portion of the IRA
assets in your existing IRA, you can direct the trustee to transfer the
assets you are permitted to keep directly to a new or existing IRA set up in
your name. The name on the IRA containing your spouse's or former spouse's
portion of the assets would then be changed to show his or her ownership.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6.
- --------------------------------------------------------------------------------
WHEN CAN I WITHDRAW OR USE ASSETS FROM AN IRA?

   Because an IRA is a tax-favored means of saving for your retirement, there
are rules limiting the withdrawal and use of your IRA assets. Also, if during
a year you receive DISTRIBUTIONS from an IRA, you MUST GENERALLY INCLUDE THEM
IN YOUR GROSS INCOME for the year. A properly handled rollover, as discussed
in Chapter 5, is an exception to this rule. This chapter discusses this and
other rules affecting distributions from your IRA.

FAILED FINANCIAL INSTITUTIONS.  The general rule (you must include IRA
distributions in your gross income unless properly rolled over) applies to
distributions made (with or without your consent) by a state agency as
receiver of an insolvent savings institution. For an exception to the
one-year waiting period rule for rollovers of certain distributions from
failed financial institutions, see EXCEPTION under ROLLOVER FROM ONE IRA INTO
ANOTHER in Chapter 5.

- --------------------------------------------------------------------------------
AGE 59 1/2 RULE

Generally, you cannot withdraw assets (money or other property) from your IRA
without having to pay a 10% additional tax (that is, a 10% tax on the taxable
distribution in addition to the regular income tax), until you reach age 59
1/2. However, there are a number of exceptions to this rule as discussed
below.  Also see PREMATURE DISTRIBUTIONS (EARLY WITHDRAWALS) in Chapter 7.

   NOTE: If you receive a distribution from an IRA that includes a return of
NONDEDUCTIBLE CONTRIBUTIONS, the additional tax does not apply to the portion
of the distribution that is considered to be nontaxable.  See FIGURING THE
NONTAXABLE AND TAXABLE AMOUNTS under TAX TREATMENT OF DISTRIBUTIONS, later in
this chapter.

EXCEPTIONS

The exceptions to the age 59 1/2 rule for distributions are in part designed
to provide relief from hardship situations such as disability and death. But
there is also an exception for distributions that are a part of a series of
substantially equal payments as discussed below under ANNUITY EXCEPTION.

Page 22 Chapter 6 WHEN CAN I WITHDRAW OR USE ASSETS FROM AN IRA?

<PAGE>

   NOTE:  Distributions that are rolled over, as discussed in Chapter 5, are
not subject to regular income tax or the 10% additional tax.

DISABILITY EXCEPTION.  You can withdraw amounts from your IRA, without having
to pay the 10% additional tax, if you become disabled before you reach age 59
1/2.
   You are considered disabled if you cannot do any substantial gainful
activity because of your physical or mental condition. A physician must
determine that the condition has lasted or can be expected to last
continuously for 12 months or more, or that the condition can be expected to
lead to death. For more information, see Publication 524, CREDIT FOR THE
ELDERLY OR THE DISABLED.

DEATH EXCEPTION. If you die before reaching age 59 1/2, the assets in your
IRA can be distributed to your beneficiary or to your estate without either
having to pay the 10% additional tax.
   However, if you inherit an IRA from your deceased spouse and elect to
treat it as your own (as discussed under  INHERITED IRAS in Chapter 3), any
distribution you later receive before you reach age 59 1/2 may be subject to
the 10% additional tax.

ANNUITY EXCEPTION.  You can receive distributions from your IRA that are part
of a series of substantially equal payments over your life (or your life
expectancy), or over the lives of you and your beneficiary (or your joint
life expectancies), without having to pay the 10% additional tax, even if you
receive such distributions before you are age 59 1/2. You must use an
IRS-approved distribution method and you must take at least one distribution
annually for this exception to apply. See FIGURING THE MINIMUM DISTRIBUTION,
later, for one IRS-approved distribution method. Unlike for minimum
distribution purposes, this method, when used for this purpose, results in
the exact amount required, not the minimum amount.
   The payments under this exception must continue for at least 5 years, or
until you reach age 59 1/2, whichever is the longer period. This 5-year rule
does not apply if a change from an approved distribution method is because of
the death or disability of the IRA owner.
   If the payments under this exception are changed before the end of the
above required periods for any reason other than the death or disability of
the IRA owner, he or she will be subject to the 10% additional tax.  For
example, if you made a lump-sum distribution of the balance in your IRA
before the end of the required period for your annuity distributions and you
did not make it because you were disabled, you would be subject to the 10%
additional tax. The tax would apply to the lump-sum distribution and all
previous distributions made under the exception rule.

TIMELY CONTRIBUTION WITHDRAWAL.  If you make a contribution to your IRA for a
year, take no education for it, and withdraw it before the due date
(including extensions) of your income tax return for that year, as discussed
earlier under TAX-FREE WITHDRAWAL OF CONTRIBUTIONS in Chapter 4, the
withdrawal of the contribution is NOT A TAXABLE DISTRIBUTION.
   However, any interest or other income earned on the contribution, which
also must be withdrawn, is treated as income in the year the contribution was
made. This withdrawn interest or other income also may be subject to the 10%
additional tax on early withdrawals discussed in Chapter 7.

- --------------------------------------------------------------------------------
REQUIRED DISTRIBUTIONS

You cannot keep funds in an IRA indefinitely.  Eventually you MUST withdraw
them. See EXCESS ACCUMULATIONS, in Chapter 7. The requirements for
withdrawing IRA funds differ, depending on whether you are the IRA owner or
the beneficiary of a decedent's IRA.

IRA OWNERS

If you are an IRA owner, you must choose to withdraw the balance in your IRA
in one of the following two ways:

- -By withdrawing the ENTIRE BALANCE in your IRA by the REQUIRED BEGINNING DATE
(defined later), or
- -By starting to withdraw PERIODIC DISTRIBUTIONS of the balance in your IRA by
the required beginning date.

PERIODIC DISTRIBUTIONS. If you do not withdraw the entire balance in your IRA
by the required beginning date, you must start to withdraw periodic
distributions over one of the following periods:

1) Your life,
2) The lives of you and your DESIGNATED BENEFICIARY (defined later),
3) A period that does not extend beyond your life expectancy, or
4) A period that does not extend beyond the joint life and last survivor
expectancy of you and your designated beneficiary.

See DETERMINING LIFE EXPECTANCY, later, for more details.
   A DESIGNATED BENEFICIARY, for these purposes, is any INDIVIDUAL you name to
receive your IRA upon your death.
   IF YOU HAVE MORE THAN ONE BENEFICIARY AND ALL ARE INDIVIDUALS, the
beneficiary with the shortest life expectancy will be the designated
beneficiary used to determine the period over which your withdrawals must be
made. Also, see MINIMUM DISTRIBUTION INCIDENTAL BENEFIT REQUIREMENT (MDIB
REQUIREMENT), later.

REQUIRED BEGINNING DATE (RBD) -- AGE 70 1/2 RULE.  You
must receive the entire balance in your IRA or start receiving periodic
distributions from your IRA by April 1 of the year following the year in
which you reach age 70 1/2.

               CHAPTER 6 WHEN CAN I WITHDRAW OR USE ASSETS FROM AN IRA?  PAGE 23

<PAGE>

   If you choose to receive periodic distributions, you must receive at least
a minimum amount for each year starting with the year you reach age 70 1/2
(your 70 1/2 year). If you did not receive that minimum amount in your 70 1/2
year, then you must receive distributions for your 70 1/2 year that reach the
minimum amount by April 1 of the next year. See MINIMUM DISTRIBUTIONS, later.
   DISTRIBUTIONS AFTER THE RBD. The required minimum distribution for any year
after your 70 1/2 year must be made by December 31 of that later year.
   EXAMPLE.  You reach age 70 1/2 on August 20, 1994. For 1994 (your 70 1/2
year), you must receive the required minimum distribution from your IRA no
later than April 1, 1995. You must receive the required minimum distribution
for 1995 (the first year after your 70 1/2 year) by December 31, 1995.

BENEFICIARIES
If you are the beneficiary of a decedent's IRA, the requirements for withdrawing
the IRA funds differ, depending on whether distributions that satisfy the
minimum distribution requirements have begun.

DISTRIBUTIONS BEGUN BEFORE OWNER'S DEATH. If periodic distributions that
satisfy the minimum distribution requirements have begun and the owner dies,
any undistributed amounts at the IRA owner's death must be distributed at
least as rapidly as under the method being used at the owner's death.
   EXCEPTION.  This rule does not apply if the designated beneficiary is the
owner's surviving spouse who becomes the new owner by choosing to treat the
IRA as his or her own IRA (see INHERITED IRAS in Chapter 3). In that case,
the surviving spouse can designate beneficiaries and should follow the
required distribution rules for IRA owners in the preceding discussion.

OWNER DIES BEFORE DISTRIBUTIONS BEGUN. If the owner dies before distributions
that satisfy the minimum distribution requirements have begun, the ENTIRE
INTEREST must be distributed under either:

   RULE 1.  By December 31 of the fifth year following the year of the
     owner's death, or

   RULE 2.  Over the life of the designated beneficiary or over a period not
     extending beyond the life expectancy of the designated beneficiary.
     (See Table 1 (Single Life Expectancy) in Appendix E.)

The IRA terms can specify whether rule 1 or 2 applies, or they can permit
either the owner or beneficiary to choose which rule applies. If the owner
or beneficiary can choose which rule applies, the choice must generally be
made by December 31 of the year following the year of the owner's death.
   Under rule 2, at least a minimum amount must be distributed each year.
   IF NO RULE HAS BEEN SPECIFIED OR CHOSEN, distribution must be made under
rule 2 if the beneficiary is the surviving spouse (and he or she did not
choose to treat the IRA as his or her own), or under rule 1 if the
beneficiary is not the surviving spouse.
   IF RULE 2 HAS BEEN SPECIFIED OR CHOSEN AND THE BENEFICIARY IS NOT THE
SURVIVING SPOUSE, distribution must begin by December 31 of the year
following the year of the owner's death.
   IF RULE 2 HAS BEEN SPECIFIED OR CHOSEN AND THE BENEFICIARY IS THE SURVIVING
SPOUSE (and he or she did not choose to treat the IRA as his or her own),
distribution must begin by the later of:

- -December 31 of the year the IRA owner would have reached age 70 1/2, or
- -December 31 of the year following the year of the owner's death.

   A special rule applies IF THE SPOUSE DIES BEFORE THE DATE DISTRIBUTIONS TO
THE SPOUSE MUST BEGIN. In this case, distributions may be made to the
spouse's beneficiary as if the spouse's beneficiary were the IRA owner's
spouse and the owner died on the spouse's date of death.
   However, IF THE SPOUSE HAS REMARRIED SINCE THE OWNER'S DEATH and the new
spouse is designated as the spouse's beneficiary, the special rules that
apply to surviving spouses would not apply to the new spouse.

MINIMUM DISTRIBUTIONS
If you are the owner of an individual retirement ACCOUNT, you must figure the
minimum amount required to be distributed each year (see FIGURING THE MINIMUM
DISTRIBUTION, below).
   If your IRA is an individual retirement ANNUITY, special rules apply to
figuring the minimum distribution required. For more information on rules for
annuities, get proposed regulation sections 1.401(a)(9)-1, 1.401(a)(9)-2, and
1.408-8.

FIGURING THE MINIMUM DISTRIBUTION
Figure your required minimum distribution for each year by dividing the IRA
ACCOUNT BALANCE as of the close of business on December 31 of the preceding
year by the APPLICABLE LIFE EXPECTANCY. Or, if because you have a nonspouse
beneficiary who is more than 10 years younger than you the distribution must
satisfy the minimum distribution incidental benefit requirement (MDIB),
discussed later, compare the APPLICABLE DIVISOR (see TABLE FOR DETERMINING
APPLICABLE DIVISOR FOR MDIB*, in Appendix E) and the applicable life
expectancy and use the lower number.

APPLICABLE LIFE EXPECTANCY.  The applicable life expectancy is:

- -The owner's remaining life expectancy (single life expectancy),
- -The remaining joint life expectancy of the owner and the owner's
designated beneficiary, or

Page 24        CHAPTER 6      WHEN CAN I WITHDRAW OR USE ASSETS FROM AN IRA?

<PAGE>

*If the owner dies before distributions have begun, the remaining life
 expectancy of the designated beneficiary.

For more information, see DETERMINING LIFE EXPECTANCY, later.

FIGURING SUBSEQUENT YEAR DISTRIBUTIONS. To figure the required minimum
distribution after the first distribution year (the owner's 70 1/2 year), reduce
the IRA account balance as of December 31 of that first year by any distribution
for that first year made by April 1 of the following year.

  EXAMPLE 1.  Joe, born October 1, 1923, reached 70 1/2 in 1994. His wife (his
beneficiary) turned 56 in September 1994. He must begin receiving distributions
by April 1, 1995. Joe's IRA account balance as of December 31, 1993, is $29,000.
Based on their ages at year end (December 31, 1994), the joint life expectancy
for Joe (age 71) and his beneficiary (age 56) is 29 years (see Table II in
Appendix E). The required minimum distribution for 1994, Joe's first
distribution year (his 70 1/2 year), is $1,000 ($29,000 divided by 29).  This
amount is distributed to Joe on April 1, 1995.
  Joe's IRA account balance as of December 31, 1994, is $29,725.
  To figure the minimum amount that must be distributed for 1995, the IRA
account balance (as of December 31, 1994) of $29,725 is reduced by the $1,000
minimum required distribution for 1994 that was made on April 1, 1995. Thus, the
account balance for determining the required distribution for 1995 is $28,725.

DETERMINING LIFE EXPECTANCY

Life expectancies are determined using life expectancy tables like Tables I and
II in APPENDIX E. More extensive tables are in Publication 939.
  To determine your annual minimum distribution, use the applicable life
expectancy in Table I (Single Life Expectancy) if the periodic payments are for
your life only. Use the applicable life expectancy in Table II (Joint Life and
Last Survivor Expectancy) if the payments are for the lives of you and your
designated beneficiary.
  IF YOU DESIGNATE AS YOUR BENEFICIARY SOMEONE OTHER THAN YOUR SPOUSE, who is
more than 10 years younger than you, and the distributions are not made as
annuity payments under an annuity contract, be sure to see MINIMUM DISTRIBUTION
INCIDENTAL BENEFIT REQUIREMENT (MDIB REQUIREMENT), later.

FOR DISTRIBUTIONS BEGINNING BY THE REQUIRED BEGINNING DATE (RBD) (see PERIODIC
DISTRIBUTIONS under IRA OWNERS, earlier), determine life expectancies using the
ages of the owner and the designated beneficiary (assuming you are using Table
II) as of their birthdays in the owner's 70 1/2 year.
  IF THE OWNER DIES BEFORE DISTRIBUTIONS HAVE BEGUN, the life expectancy of the
designated beneficiary is determined using Table I and the age as of the
beneficiary's birthday in the year distributions must begin.
  LIFE EXPECTANCY FOR SUBSEQUENT YEAR DISTRIBUTIONS.  Unless you choose to
REFIGURE your (or your spouse's) life expectancy each year (as discussed next),
it must be reduced by one for each year that has passed since the date the life
expectancy was initially determined. Use of this rule is said to result
in distributions under the TERM CERTAIN method.
  ELECTION TO REFIGURE OR NOT TO REFIGURE LIFE EXPECTANCY. Your IRA terms may
permit you and your spouse to elect whether to refigure one or both of your life
expectancies. You must make this election by the date of the first required
minimum distribution (see REQUIRED BEGINNING DATE (RBD) -- AGE 70 1/2 RULE,
earlier).
  REFIGURING LIFE EXPECTANCY. If you own an IRA and elect to refigure your life
expectancy (and that of your spouse, if it applies), it must be REFIGURED
ANNUALLY unless your IRA terms provide otherwise. If you refigure life
expectancy annually, the reduction of it by one for each year after it was
initially determined does not apply.
  TO REFIGURE YOUR LIFE EXPECTANCY FOR EACH YEAR, use your age as of your
birthday during the year. Then find your "refigured" life expectancy amount on
Table I.
  TO REFIGURE THE JOINT LIFE AND LAST SURVIVOR EXPECTANCY OF YOU AND YOUR SPOUSE
FOR EACH YEAR, use your and your spouse's ages as of your birthdays during the
year. Then find your "refigured" life expectancy amount on Table II.
  IF YOUR BENEFICIARY IS NOT YOUR SPOUSE OR IF EITHER (BUT NOT
BOTH) YOU OR YOUR SPOUSE ELECT NOT TO REFIGURE, do not use this method to
refigure your life expectancy. You must use a special computation method that is
discussed under MINIMUM DISTRIBUTION INCIDENTAL BENEFIT REQUIREMENT, and
illustrated in Example 3, later.
  See FURTHER INFORMATION, later, for relevant regulation citations.
  You can use the worksheet provided at the bottom of Appendix A for determining
your required distribution whether or not you REFIGURE life expectancy.
  IF YOU OR YOUR SPOUSE DIES.  If the joint life expectancy of you and your
spouse is refigured annually and either of you dies, then only the survivor's
life expectancy is used to figure distributions for the years after the year in
which the death occurred.
  IF YOU AND YOUR SPOUSE DIE.  If the life expectancies of both you and your
spouse are refigured and both of you die after the date distributions must
start, the entire interest must be distributed before the last day of the year
following the year of the second death.

MINIMUM DISTRIBUTION
INCIDENTAL BENEFIT REQUIREMENT
(MDIB REQUIREMENT)
Distributions from an IRA during the owner's lifetime must satisfy the MDIB
requirement. This is a requirement that must be met to ensure that the IRA is
used primarily

        CHAPTER 6     WHEN CAN I WITHDRAW OR USE ASSETS FROM AN IRA?    PAGE 25

<PAGE>

to provide retirement benefits to the IRA owner. After the owner's death, only
"incidental" benefits are expected to remain for distribution to the owner's
beneficiary (or beneficiaries).
  IF YOUR SPOUSE IS YOUR ONLY BENEFICIARY, you will satisfy the MDIB requirement
if you satisfy the general minimum distribution requirements just discussed.
  IF SOMEONE OTHER THAN YOUR SPOUSE IS YOUR BENEFICIARY AND IS MORE
THAN 10 YEARS YOUNGER THAN YOU, or if you have one or more beneficiaries in
addition to your spouse and the youngest is more than 10 years younger than you,
there are additional steps to figure your required minimum distribution that
satisfies the MDIB requirement.  If you have two or more beneficiaries,
including your spouse, the rule in the preceding paragraph applies only if his
or her portion of your benefit is in a separate account.
  To figure a minimum distribution that meets the MDIB requirements, you must
complete the following additional steps:

  1) Find the APPLICABLE DIVISOR for a person your age in Appendix E under TABLE
FOR DETERMINING APPLICABLE DIVISOR FOR MDIB. Use your age as of your birthday in
the year that you are figuring the minimum distribution.

  2) Compare your applicable divisor and your APPLICABLE LIFE EXPECTANCY (see
DETERMINING LIFE EXPECTANCY, earlier) for the year, and determine which number
is smaller.

  3) To figure your required minimum distribution, DIVIDE THE IRA ACCOUNT
BALANCE as of the close of business of the December 31 of the preceding year BY
THE SMALLER NUMBER (your applicable divisor or your applicable life expectancy).

  EXAMPLE 2. Assume the same facts as in Example 1, earlier, except that Joe's
beneficiary is his brother. Because Joe's beneficiary is not his spouse, he must
use the TABLE FOR DETERMINING APPLICABLE DIVISOR FOR MDIB (see Appendix E) and
compare the applicable divisor from that table to the life expectancy determined
using TABLE II (JOINT LIFE AND LAST SURVIVOR EXPECTANCY) in Appendix E.  Joe
must use the smaller number from the tables.  In this example, the required
minimum distribution for 1994 is $1,146 ($29,000 divided by 25.3) instead of the
$1,000 computed in Example 1. Joe's adjusted December 31, 1994, account balance
to be used for determining the required distribution for 1995 is $28,579
($29,725 minus $1,146).
  EXAMPLE 3. Assume the same facts as in Example 2, except that, because Joe's
IRA terms do not provide otherwise, he must refigure life expectancies to figure
his required minimum distribution for 1995. Joe's minimum distribution for 1995
is figured by dividing his adjusted account balance as of December 31, 1994
($28,579) by his and his brother's joint life and last survivor expectancy.
Their joint life and last survivor expectancy can be refigured as follows:

1) Life expectancy of nonspouse beneficiary (from Table I in Appendix E)
using his or her age as of his or her birthday in calendar year 1994.... 27.7
2) Number of years that have passed since 1994 (use whole number).......    1
3) Remaining life expectancy period.  Subtract line 2 from line 1....... 26.7
4) Find the divisor amount in Table 1 that is closest to, but less than
the amount on line 3.  Enter the age shown for that divisor amount......   58
5) IRA owner's age as of his or her birthday in calendar year 1995......   72
6) Joint life and last survivor expectancy (from Table II in Appendix)
using the ages on lines 4 and 5......................................... 27.3
7) Applicable divisor (from Table for Determining Applicable Divisor for
MDIB)................................................................... 24.4
8) REFIGURED LIFE EXPECTANCY.  Compare lines 6 and 7.  Enter the smaller
number here............................................................. 24.4

Joe's required minimum distribution for 1995 using the refigured life expectancy
(line 8 above) is $1,171 ($28,579 divided by 24.4).
  EFFECT OF THE IRA OWNER'S DEATH. The MDIB requirement does not apply to
distributions in years after the death of the original IRA owner. Consequently,
if you hold an IRA as the beneficiary of the IRA owner, minimum distributions
from this IRA can be figured using the general rules for minimum distributions
discussed earlier.

FURTHER INFORMATION. Required distribution rules are explained more fully in
sections 1.401(a)(9)--1, 1.401(a)(9)--2, and 1.408 of the proposed Income Tax
Regulations. These regulations can be read in many libraries and IRS offices.

MISCELLANEOUS RULES FOR
MINIMUM DISTRIBUTIONS

The following rules may apply to your minimum distribution.

INSTALLMENTS ALLOWED. The yearly minimum required distribution can be taken in a
series of installments (monthly, quarterly, etc.)  as long as the total
distributions for the year equal the minimum required amount.

IF YOU HAVE MORE THAN ONE IRA, you must determine the required minimum
distribution separately for each IRA; however, you can total these minimum
amounts and take the total from any one or more of the IRAs.

  EXAMPLE. Mary, born August 1, 1923, became 70 1/2 on February 1, 1994. She has
two IRAs. She must begin receiving her IRA distributions by April 1, 1995. On
December 31, 1993, Mary's account balance from IRA A was $10,000; her account
balance from IRA B was $20,000. Mary's brother, age 64 as of his birthday in
1994, is the beneficiary of IRA A. Her husband, age 78 as of his birthday in
1994, is the beneficiary of IRA B.

PAGE 26   CHAPTER 6      WHEN CAN I WITHDRAW OR USE ASSETS FROM AN IRA?

<PAGE>

  Mary's required minimum distribution from IRA A is $427 ($10,000 divided by
23.4, the joint life and last survivor expectancy of Mary and her brother per
Table II in Appendix E). The amount of the required minimum distribution from
IRA B is $1,143 ($20,000 divided by 17.5, the joint life and last survivor
expectancy of Mary and her husband per Table II in Appendix E). The required
distribution that must be withdrawn by Mary from either one, or both, of her IRA
accounts by April 1, 1995, is $1,570.

IF YOU RECEIVE MORE, IN ANY YEAR, THAN THE REQUIRED MINIMUM AMOUNT FOR THAT
YEAR, you will not receive credit for the additional amount when determining the
required minimum amounts for future years. However, any amount distributed in
your 70 1/2 year will be credited toward the amount that must be distributed by
April 1 of the following year.

ANNUITY DISTRIBUTIONS FROM AN INSURANCE COMPANY. Special rules apply if you
receive distributions from your IRA as an annuity purchased from an insurance
company.  See FURTHER INFORMATION, earlier.

- --------------------------------------------------------------------------------
TAX TREATMENT OF DISTRIBUTIONS

In general, include IRA distributions in your gross income in the year you
receive them. Exceptions to this general rule are rollovers and timely
withdrawals of contributions, discussed earlier, and the return of nondeductible
contributions, discussed next under DISTRIBUTIONS FULLY OR PARTLY TAXABLE.

ORDINARY INCOME.  IRA distributions that you must include in income are taxed as
ordinary income.

NO SPECIAL TREATMENT.  In figuring your tax, you cannot use the special
averaging or capital gain treatment that applies to lump-sum distributions from
qualified employer plans.

DISTRIBUTIONS FULLY
OR PARTLY TAXABLE
Your IRA distributions may be fully or partly taxable, depending on whether your
IRA includes only deductible contributions or any nondeductible contributions.

FULLY TAXABLE.  If only deductible contributions were made to your IRA (or IRAs,
if you have more than one) since it was set up, you have NO BASIS in your IRA.
Because you have no basis in your IRA, any distributions are fully taxable when
received. See REPORTING AND WITHHOLDING REQUIREMENTS FOR TAXABLE AMOUNTS later.

PARTLY TAXABLE.  If you made nondeductible contributions to any of your IRAs,
you have a COST BASIS (investment in the contract) to the extent of
those contributions. These nondeductible contributions are NOT TAXED when they
are distributed to you.  They are a return of your investment in your IRA.
  When IRA distributions are made, special rules apply in figuring the tax on
the distributions if:
*Only nondeductible IRA contributions were made and there are any earnings or
 gains, or
*If both deductible and nondeductible IRA contributions were made.

Only the part of the distribution that represents nondeductible contributions
(your cost basis) is tax-free. Once nondeductible contributions have been made,
distributions consist partly of nondeductible contributions (basis) and partly
of deductible contributions, earnings, or gains. Until you run out of basis,
each distribution is partly taxable and partly nontaxable.

FORM 8606. You must complete, and attach to your return, Form 8606 if you
receive an IRA distribution and, at any time, have made nondeductible IRA
contributions. Using the form, you will figure the nontaxable distributions for
1994, and your total IRA basis for 1994 and earlier years. See the illustrated
Forms 8606 in Appendix D.

FIGURING THE NONTAXABLE AND TAXABLE
AMOUNTS

If your IRA includes nondeductible contributions and you received a distribution
from it in 1994, you must use Form 8606 to figure how much of your 1994 IRA
distribution is tax free.
  IF YOU MADE IRA CONTRIBUTIONS FOR 1994 THAT MAY BE NONDEDUCTIBLE because you
are covered by an employer retirement plan, you also need to use a special
worksheet (See COVERED BY EMPLOYER PLAN?, next). You can then determine how much
you must include in taxable income for any part of the IRA distribution that
represents deductible contributions, earnings or gains. If you have more than
one IRA, you must consider them together, as if they were a single IRA.

COVERED BY EMPLOYER PLAN?  If you are covered by an employer retirement plan and
you made IRA contributions for 1994 that may be nondeductible, depending on
whether your IRA deduction for that year is reduced (see DEDUCTION LIMITS, in
Chapter 4), you can use the following worksheet to figure how much of your 1994
IRA distribution(s) is tax-free and how much is taxable.  Use the related
instructions, under REPORTING YOUR NONTAXABLE DISTRIBUTION ON FORM 8606, later,
to figure your remaining basis after the distribution.

     CHAPTER 6      WHEN CAN I WITHDRAW OR USE ASSETS FROM AN IRA?    PAGE 27

<PAGE>

                               WORKSHEET TO FIGURE
                          TAXABLE PART OF DISTRIBUTION

(Use only if you have to figure the taxable part of your 1994 distributions to
 determine your modified AGI for that year;
  see DEDUCTIONS LIMITS in Chapter 4.)
- --------------------------------------------------------------------------------
1) Enter the basis in your IRA(s) as of 12/31/93
 ................................................  $
                                                  ----------
2) Enter all IRA contributions made for 1994,
   WHETHER OR NOT DEDUCTIBLE.  Include
   contributions made during 1/1/95 - 4/15/95
   for the 1994 year, but exclude contributions
   rolled over from retirement plans............  $
                                                  -----------
3) Add lines 1 and 2............................  $
                                                  -----------
4) Enter the value of ALL your IRA(s) as of 12/
   31/94 (include any outstanding rollovers)....  $
                                                  -----------
5) Enter the total IRA distributions received in
   1994 (Do not include outstanding rollovers)..  $
                                                  -----------
6) Add lines 4 and 5 ...........................  $
                                                  -----------
7) Divide line 3 by line 6.  Enter the result as
   a decimal (to at least two places). Do not
   enter more than 1.00 ........................  $
                                                  -----------
8) NONTAXABLE PORTION of the distribution.
   Multiply line 5 by line 7 ...................  $
                                                  -----------
9) TAXABLE PORTION of the distribution.  Subtract
   line 8 from line 5 ..........................  $
                                                  -----------

  REPORTING YOUR NONTAXABLE DISTRIBUTION ON FORM 8606. To report your nontaxable
distribution and to figure the remaining basis in your IRA after distributions,
you can:

1) Use the worksheet in the Form 1040 instructions to figure your deductible IRA
   contributions to report on lines 23a and 23b of Form 1040 or lines 15a and
   15b of Form 1040A.

2) After you complete the worksheet in the Form 1040 or Form 1040A instructions,
   enter your nondeductible IRA contributions on line 1 of Form 8606.

3) Complete lines 2-5 of Form 8606. If your IRA basis before 1994 distributions
   (line 5 of Form 8606) is less than the nontaxable part of those distributions
   (line 8 of the above worksheet), complete lines 6-13 of Form 8606 and STOP
   HERE. If line 5 of Form 8606 is equal to or greater than line 8 of the above
   worksheet, follow instructions 4 and 5, next. Do not complete lines 6-9 of
   Form 8606.

4) Enter the amount from line 8 of the above worksheet on line 10 of Form 8606.
   Enter the amount from line 9 on line 13 of Form 8606.

5) Complete lines 11 and 12 of Form 8606.

  EXAMPLE. Rose Green has made the following contributions to her IRAs--

<TABLE>
Year                     Deductible               Nondeductible
- ----                     ----------               -------------
<S>                      <C>                      <C>
1987                     $2,000                        -0-
1988                     $2,000                        -0-
1989                     $2,000                        -0-
1990                     $1,000                        -0-
1991                     $1,000                        -0-
1992                     $1,000                        -0-
1993                     $  700                       $300
                   -----------------------  --------------------
Totals                   $9,700                       $300
</TABLE>

In 1994, Rose, whose IRA deduction for that year may be reduced or eliminated,
makes a $2,000 contribution that may be partly nondeductible. She also withdraws
$5,000. At the end of that year, the fair market value of her accounts,
including earnings, total $20,000. She did not have any tax-free withdrawals in
earlier years. The amount she includes in income is figured as follows:


                               WORKSHEET TO FIGURE
                          TAXABLE PART OF DISTRIBUTION

(Use only if you have to figure the taxable part of your 1994 distributions to
  determine your modified AGI for that year;
  see DEDUCTION LIMITS in Chapter 4.)
- --------------------------------------------------------------------------------
<TABLE>
<S>                                                <C>
1)  Enter the basis in your IRA(s) as of 12/31/93
    .............................................  $    300
2)  Enter all IRA contributions made for 1994,
    WHETHER OR NOT DEDUCTIBLE.  Include
    contributions made during 1/1/95 - 4/15/95
    for the 1994 year, but exclude contributions
    rolled over from retirement plans............  $   2,000
                                                   ---------
3)  Add lines 1 and 2............................  $   2,300
                                                   ---------
4)  Enter the value of ALL your IRA(s) as of 12/
    31/94 (include any outstanding rollovers)....  $  20,000

5)  Enter the total IRA distributions received in
    1994 (Do not include outstanding rollovers)..  $   5,000
                                                   ---------
6) Add lines 4 and 5.............................  $  25,000
                                                   ---------
7) Divide line 3 by line 6.  Enter the result as a
   decimal (to at least two places). Do not enter
   more than 1.00................................       .092
                                                   ---------
8) NONTAXABLE PORTION of the distribution.
   Multiply line 5 by line 7.....................  $     460
                                                   ---------
9) TAXABLE PORTION of the distribution.  Subtract
   line 8 from line 5............................  $   4,540
                                                   ---------
</TABLE>

  The following illustrated Form 8606 for Rose shows the information required
when you need to use the above worksheet to figure your nontaxable distribution.
Assume that the amount used on line 1 of Form 8606 is the amount Rose figured
using instructions 1) and 2) given earlier under REPORTING YOUR NONTAXABLE
DISTRIBUTION ON FORM 8606.

PAGE 28        CHAPTER 6      WHEN CAN I WITHDRAW OR USE ASSETS FROM AN IRA?

<PAGE>

<TABLE>
<CAPTION>
<S>     <C>
FORM 8606                                   NONDEDUCTIBLE IRAs                                         OMB No. 1545-1007
                                                                                                       -----------------
                                (CONTRIBUTIONS, DISTRIBUTIONS, AND BASIS)                                      1994
Department of the Treasury      PLEASE SEE WHAT RECORDS MUST I KEEP? ON PAGE 2                            Attachment
Internal Revenue Service        ATTACH TO FORM 1040, FORM 1040A, OR FORM 1040NR.                          Sequence No. 47
- --------------------------------------------------------------------------------------------------------------------------------
Name.  If married, file a separate Form 8606 for each spouse.  See instructions.                  Your social security number
                      Rose Green                                                                       001:00:0000
- --------------------------------------------------------------------------------------------------------------------------------
Fill in Your Address Only            Home address (number and street, or P.O. box if                            Apt. no.
If You Are Filing This               mail is not delivered to your home
Form by Itself and Not
                                ------------------------------------------------------------------------------------------------
With Your Tax Return                 City, town or post office, state, and ZIP code

- --------------------------------------------------------------------------------------------------------------------------------
                              CONTRIBUTIONS, NONTAXABLE DISTRIBUTIONS, AND BASIS
 1   Enter your IRA contributions for 1994 that you choose to be nondeductible.
     Include those made during 1/1/95-4/17/95 that were for 1994.  See instructions . . . . . . . . .  1    500.00
                                                                                                      --------------------------
 2   Enter your total IRA basis for 1993 and earlier years.  See instructions . . . . . . . . . . . .  2    300.00
                                                                                                      --------------------------
 3   Add lines 1 and 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3    800.00
                                                                                                      --------------------------
          ---------------
          DID YOU RECEIVE-------------------------NO-----------------Enter the amount from line 3 on
          ANY IRA                                                    line 12.  Then, stop and read WHEN
          DISTRIBUTIONS                                              AND WHERE TO FILE on page 2.
          (WITHDRAWLS)
          IN 1994?       -------------------------YES----------------Go to line 4.
          ---------------
 4   Enter only those contributions included on line 1 that were made during 1/1/95-4/17/95.  This
     amount will be the same as line 1 if all of your nondeductible contributions for 1994 were
     made in 1995 by 4/17/95.  See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . .  4      0
                                                                                                      --------------------------
 5   Subtract line 4 from line 3  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5    800.00
                                                                                                      --------------------------
 6   Enter the total value of ALL your IRAs as of 12/31/94 plus any outstanding
     rollovers.  See instructions . . . . . . . . . . . . . . . . . . . . . . . .  6
                                                                                  --------------------
 7   Enter the total IRA distributions received during 1994.  Do not include
     amounts rolled over before 1/1/95.  See instructions . . . . . . . . . . . .  7
                                                                                  --------------------
 8   Add lines 6 and 7. . . . . . . . . . . . . .  8
                                                  --------------------------
 9   Divide line 5 by line 8 and enter the result as a decimal (to at least two
     places).  Do not enter more than "1.00". . . . . . . . . . . . . . . . . . .  9            X    .
                                                                                  --------------------
10   Multiply line 7 by line 9.  This is the amount of your nontaxable
     distributions for 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10   460.00*
                                                                                                      --------------------------
11   Subtract line 10 from line 5.  This is the basis in your IRA(s) as of 12/31/94 . . . . . . . . .  11   340.00
                                                                                                      --------------------------
12   Add lines 4 and 11.  This is your total IRA basis for 1994 and earlier years . . . . . . . . . .  12   340.00
                                                                                                      --------------------------

                                          TAXABLE DISTRIBUTIONS FOR 1994
13   Subtract line 10 from line 7.  Enter the result here and on Form 1040, line 15b; Form 1040A, line 10b;
     or Form 1040NR, line 16b, whichever applies. . . . . . . . . . . . . . . . . . . . . . . . . . .  13 4,540.00*
- --------------------------------------------------------------------------------------------------------------------------------
SIGN HERE ONLY IF YOU      Under penalties of perjury, I declare that I have examined this form, including accompanying
ARE FILING THIS FORM       statements, and to the best of my knowledge and belief, it is true, correct, and complete.
BY ITSELF AND NOT WITH
                                       -----------------------------------------------------------        ----------------------
YOUR TAX RETURN                        Your signature                                                     Date
- --------------------------------------------------------------------------------------------------------------------------------

*From worksheet in IRS Publication 590

</TABLE>


RECOGNIZING LOSSES
ON IRA INVESTMENTS

If you have a loss on your IRA investment, you can recognize the loss on your
income tax return, but only when all the amounts in all your IRA accounts have
been distributed to you and the total distributions are less than your
unrecovered basis, if any. Your basis is the total amount of the nondeductible
contributions in your IRAs. You claim the loss as a miscellaneous itemized
deduction, subject to the 2 percent limit, on Schedule A, Form 1040.

  EXAMPLE. Bill King has made nondeductible contributions to an IRA totaling
$2,000, giving him a basis at the end of 1993 of $2,000. By the end of 1994, his
IRA earns $400 in interest income. In that year, Bill withdraws $600, reducing
the value of his IRA to $1,800 at year's end. Bill figures the taxable part of
the distribution and his remaining basis on Form 8606 (ILLUSTRATED IN APPENDIX
D).
  In 1995, Bill's IRA has a LOSS of $500. At the end of that year, Bill's IRA
balance is $1,300. Bill's remaining basis in his IRA is $1,500. Bill withdraws
the $1,300 balance remaining in the IRA. He can claim a loss for 1995 of $200
(the $1,500 basis minus the $1,300 withdrawn IRA balance).

INHERITED IRAS

The beneficiaries of your IRA must include distributions to them in their gross
incomes.

BENEFICIARIES. Your beneficiaries can be your estate, dependents, and anyone you
choose to receive the benefits of your IRA after you die.
  SPOUSE. If you inherit an interest in an IRA from your spouse, you can elect
to treat the entire inherited interest as your own IRA as discussed under
INHERITED IRAS in Chapter 3. See the discussion earlier under REQUIRED
DISTRIBUTIONS for the rules on when you must begin to make withdrawals from the
IRA.
  BENEFICIARY OTHER THAN SPOUSE.  If you inherit an IRA from someone other than
your spouse, you cannot treat it as though you established it. The IRA may not
be rolled over into, or receive a rollover from, another IRA. No deduction will
be allowed for amounts paid into that inherited IRA, nor can nondeductible
contributions be made to an inherited IRA.

       CHAPTER 6      WHEN CAN I WITHDRAW OR USE ASSETS FROM AN IRA?    PAGE 29

<PAGE>

IRA WITH BASIS. If you inherit an IRA from a person who had a basis in the IRA
because of nondeductible contributions, that basis remains with the IRA. Unless
you are the decedent's spouse and choose to treat the IRA as your own, you
cannot combine this basis with any basis you have in your own IRA(s) or any
basis in IRA(s) you inherited from other decedents. If you take a distribution
from an inherited IRA and your IRA, and each has basis, you must complete
separate Forms 8606 to determine the taxable and nontaxable portions of those
distributions.

DEATH BENEFIT EXCLUSION.  Your beneficiaries cannot claim a death benefit
exclusion for any part of a distribution from your IRA.

FEDERAL ESTATE TAX DEDUCTION. Your beneficiary may be able to claim a deduction
for estate tax attributable to certain distributions from your IRA after you
die. The beneficiary can deduct the part of the estate tax paid on any part of a
distribution that the beneficiary must include in income as income in respect of
a decedent. He or she can take the deduction for the tax year the beneficiary
reports that income. For information on claiming this deduction, see OTHER TAX
INFORMATION in Publication 559, TAX INFORMATION FOR SURVIVORS, EXECUTORS, AND
ADMINISTRATORS.
     Any taxable part of a distribution that is not income in respect of a
decedent is a payment the beneficiary must include in income. However, the
beneficiary cannot take any estate tax deduction for this part.
     If the beneficiary is your spouse, he or she can, as the surviving spouse,
roll over the distribution to another IRA and avoid including it in income for
the year received.

OTHER SPECIAL IRA SITUATIONS
There are other special IRA situations that you may encounter. They include
the following:

DISTRIBUTION OF AN ANNUITY CONTRACT FROM YOUR IRA ACCOUNT. You may tell the
trustee or custodian of your IRA account to use the amount in the account to
buy an annuity contract for you. You are not taxed when you receive the
annuity contract from your account. You are taxed when you start receiving
payments from that annuity contract.
     TAX TREATMENT. If only deductible contributions were made to your IRA
since it was set up (this includes all your IRAs, if you have more than one),
the annuity payments are fully taxable.
     If your IRA includes both deductible and nondeductible contributions, the
annuity payments are taxed as explained earlier under DISTRIBUTIONS FULLY OR
PARTLY TAXABLE.

CASHING IN RETIREMENT BONDS. When you cash in retirement bonds, you are taxed on
the entire amount you receive. If you do not cash in your bonds before the end
of the year in which you reach age 70 1/2, you will be taxed on the entire value
of the bonds at that time.  This is the amount you would have received if you
had cashed in the bonds at that time. When the bonds are cashed later, you will
not be taxed again.

REPORTING AND WITHHOLDING REQUIREMENTS FOR TAXABLE AMOUNTS
If you receive a distribution from your IRA, you will receive FORM 1099-R,
DISTRIBUTIONS FROM PENSIONS, ANNUITIES, RETIREMENT OR PROFIT-SHARING PLANS,
IRAS, INSURANCE CONTRACTS, ETC., or a similar statement. IRA distributions are
shown in Boxes 1 and 2 of Form 1099-R. A number or letter code in Box 7 tells
you what type of distribution you received from your IRA. THE NUMBER CODES MEAN:

1) Early (premature) distribution, no known exception.
2) Early (premature) distribution, exception applies.
3) Disability.
4) Death.
5) Prohibited transactions.
6) Section 1035 exchange (a tax-free exchange of
   insurance contracts).
7) Normal distribution.
8) Excess contributions plus earnings/
   excess deferrals (and/or earnings)
   taxable in 1994.
9) PS-58 costs (premiums paid by a trustee or
   custodian for current insurance protection,
   taxable to you currently).

THE LETTER CODES MEAN:
P--Excess contributions plus earnings/
excess deferrals taxable in 1993.
A--Eligible for 5-year/10-year averaging.
B--Eligible for death benefit exclusion.
C--Eligible for both A and B.
D--Excess contributions plus earnings/
excess deferrals taxable in 1992.
E--Excess annual additions under section 415.
F--Charitable gift annuity.
G--Direct rollover to IRA.
H--Direct rollover to qualified plan or
tax-sheltered annuity.

If the distribution shown on Form 1099-R is from your IRA (or
SEP-IRA), the small box in box 7 (labeled IRA/SEP) should be checked.

WITHHOLDING. Federal income tax is withheld from IRA distributions unless you
choose not to have tax withheld. (See also, ROLLOVER FROM EMPLOYER'S PLAN INTO
AN IRA, in Chapter 5.) The tax withheld from an annuity or a similar periodic
payment is based on your marital status and the number


Page 30   Chapter 6 WHEN CAN I WITHDRAW OR USE ASSETS FROM AN IRA?

<PAGE>

of withholding allowances you claim on your withholding certificate (Form
W-4P). If you have not filed a certificate, the tax withheld will be
determined by treating you as a married individual claiming three withholding
allowances.
     Generally, tax will be withheld at a 10% rate on lump-sum distributions.
     WITHHOLDING FROM IRA DISTRIBUTIONS OUTSIDE THE UNITED STATES.
In general, if you are a U.S. citizen or resident alien and your home address
is outside the United States or its possessions, you cannot choose exemption
from withholding on your IRA distributions.
     To choose exemption from withholding on your IRA, you must:
- - Give the payer of the IRA distributions your home address in the United
  States or in a U.S. possession, or

- - Certify under penalties of perjury that you are not a U.S. citizen, a resident
  alien of the United States, or a tax-avoidance expatriate.

OTHERWISE, THE PAYER MUST WITHHOLD TAX.
     For more information, see WITHHOLDING ON PENSIONS AND ANNUITIES in
Publication 505, TAX WITHHOLDING AND ESTIMATED TAX. See also Publication 515,
WITHHOLDING OF TAX ON NONRESIDENT ALIENS AND FOREIGN CORPORATIONS.

REPORTING TAXABLE DISTRIBUTIONS ON YOUR RETURN. Report fully taxable
distributions, including premature distributions, on line 15b, Form 1040 (no
entry is required on line 15a) or line 10b, Form 1040A. If only part of the
distribution is taxable, enter the total amount on line 15a, Form 1040 (or line
10a, Form 1040A) and the taxable part on line 15b (or 10b). You cannot report
distributions on Form 1040EZ.

ESTATE TAX. For information on how estate tax laws relate to certain IRAs, get
Publication 448, FEDERAL ESTATE AND GIFT TAXES.


<TABLE>
<CAPTION>
                                                              FORM 1040

- --------------------------------------------------------------------------------------------------------------------
<C>  <S>                                                                       <C>
INCOME
Attach Copy B of your Forms W-2, W-2G, and 1099-R here.

If you did not get a W-2, see page 15.

Enclose, but do not attach, any payment with your return.

 7   Wages, salaries, tips, etc. Attach Form(s) W-2                                                  7
                                                                                                  ------------------
 8a  Taxable interest income (see page 15). Attach Schedule B if over $400                           8a
                                                                                                  ------------------
  b  Tax-exempt interest (see page 16). DON'T include on line 8a   8b
                                                                 -------------------------------
 9   Dividend income. Attach Schedule B if over $400                                                 9
                                                                                                  ------------------
10   Taxable refunds, credits, or offsets of state and local income taxes (see page 16)             10
                                                                                                  ------------------
11   Alimony received                                                                               11
                                                                                                  ------------------
12   Business income or (loss). Attach Schedule C or C-EZ                                           12
                                                                                                  ------------------
13   Capital gain or (loss). If required, attach Schedule D (see page 16)                           13
                                                                                                  ------------------
14   Other gains or (losses). Attach Form 4797                                                      14
                                                                                                  ------------------
15a  Total IRA distributions  .   15a                              b Taxable amount (see page 17)   15b
                                 --------------------------------                                 ------------------
16a  Total pensions and annuities 16a                              b Taxable amount (see page 17)   16b
                                 --------------------------------                                 ------------------
17   Rental real estate, royalties, partnerships, S corporations, trusts, etc.  Attach Schedule E    17
                                                                                                  ------------------
18   Farm income or (loss).  Attach Schedule F. . . . . . . . . . . . . . . . . . . . . . . . . .    18
                                                                                                  ------------------
19   Unemployment compensation (see page 18). . . . . . . . . . . . . . . . . . . . . . . . . . .    19
                                                                                                  ------------------
20a  Social security benefits     20a                              b Taxable amount (see page 18)    20b
                                 --------------------------------                                 ------------------
21   Other income.  List type and amount--see page 18 . . . . . . . . . . . . . . . . . . . . . .    21
                                                                                                  ------------------
22   Add the amounts in the far right column for lines 7 through 21.  This is your total income ->   22
</TABLE>

<TABLE>
<CAPTION>
                                                             FORM 1040A

- --------------------------------------------------------------------------------------------------------------------
<C>  <S>                                                                        <C>
FIGURE YOUR TOTAL INCOME

Attach Copy B of your Forms W-2 and 1099-R here.

If you didn't get a W-2, see page 25.

Enclose, but do not attach, any payment with your return.

 7   Wages, salaries, tips, etc.  This should be shown in box 1 of your W-2
     form(s).  Attach Form(s) W-2.                                               7
- --------------------------------------------------------------------------------------------------------------------
 8a  Taxable interest income (see page 25).  If over $400, attach
     Schedule 1.                                                                 8a
     ----------------------------------------------------------------------------------------------------------------
  b  Tax-exempt intest.  DO NOT include on line 8a.      8b
- -----------------------------------------------------------------------------
 9   Dividends.  If over $400, attach Schedule 1.                                9
- --------------------------------------------------------------------------------------------------------------------
10a  Total IRA                                         10b  Taxable amount
     distributions.      10a                                (see page 26).      10b
- --------------------------------------------------------------------------------------------------------------------
11a Total pensions                                    11a  Taxable amount
    and annuities       11a                                (see page 27).       11b
- --------------------------------------------------------------------------------------------------------------------
12  Unemployment compensation (see page 30).                                    12
- --------------------------------------------------------------------------------------------------------------------
13a Social security                                   13b  Taxable amount
    benefits            13a                                (see page 31).       13b
- --------------------------------------------------------------------------------------------------------------------

14  Add lines 7 thorugh 13b (far right column).  This is your total income.->   14
- --------------------------------------------------------------------------------------------------------------------
</TABLE>


            Chapter 6  WHEN CAN I WITHDRAW OR USE ASSETS FROM AN IRA?    Page 31
<PAGE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7.
- --------------------------------------------------------------------------------
WHAT ACTS RESULT IN PENALTIES?


     The tax advantages of using IRAs for retirement savings can be offset by
additional taxes and penalties if you do not follow the rules. For example,
there are additions to the regular tax for using your IRA funds in prohibited
transactions. There are also additional taxes for:

- - Making excess contributions,

- - Making early withdrawals (taking premature distributions),

- - Allowing excess amounts to accumulate (failing to make required withdrawals),
  or

- - Receiving excess distributions.

     There are penalties for overstating the amount of nondeductible
contributions and for failure to file Form 8606, NONDEDUCTIBLE IRAS
(CONTRIBUTIONS, DISTRIBUTIONS, AND BASIS), if required.
     This chapter discusses those acts that you should avoid and the additional
taxes and other costs, including loss of IRA status, that apply if you don't.


- --------------------------------------------------------------------------------
PROHIBITED TRANSACTIONS

Generally, a prohibited transaction is any improper use of your IRA account or
annuity by you or any DISQUALIFIED PERSON.
     Some examples of disqualified persons for this purpose are:

     Your fiduciary, or

     Members of your family (spouse, ancestor, lineal descendant and any spouse
of a lineal descendant).

Some examples of prohibited transactions with an IRA are:

1) Borrowing money from it,

2) Selling property to it,

3) Receiving unreasonable compensation for managing it,

4) Using it as security for a loan, and

5) Buying property for personal use (present or future) with IRA funds.

EFFECT ON AN IRA ACCOUNT. Generally, if YOU OR YOUR BENEFICIARY engage in a
prohibited transaction in connection with your IRA account at any time during
the year, IT WILL NOT BE TREATED AS AN IRA as of the first day of the year.

EFFECT ON YOU (OR YOUR BENEFICIARY). If you (or your beneficiary) engage in a
prohibited transaction in connection with your IRA account at any time during
the year, you (or your beneficiary) must include the fair market value of all
(or part, in certain cases) of the IRA assets in your gross income for that
year. The fair market value is the price at which the IRA assets would change
hands between a willing buyer and a willing seller, when neither has any need to
buy or sell, and both have reasonable knowledge of the relevant facts.
     You must use the fair market value of the assets as of the first day of the
year you engaged in the prohibited transaction. You may also have to pay the 10%
tax on premature distributions and the 15% tax on excess distributions,
discussed later.
     BORROWING ON AN ANNUITY CONTRACT. If you borrow money against your IRA
annuity contract, you must include in your gross income the fair market value
of the annuity contract as of the first day of your tax year. You may also
have to pay the 10% additional tax on premature distributions and the 15% tax
on excess distributions discussed later.
     PLEDGING AN ACCOUNT AS SECURITY. If you use a part of your IRA account
as security for a loan, THAT PART is treated as a distribution and is
included in your gross income. You may have to pay the 10% additional tax on
premature distributions, and the 15% tax on excess distributions discussed
later.

TRUST ACCOUNT SET UP BY AN EMPLOYER OR AN EMPLOYEE ASSOCIATION. Your account or
annuity DOES NOT LOSE ITS IRA TREATMENT IF your employer or employee
association, with whom you have your IRA, engages in a prohibited transaction.
     IF YOU PARTICIPATE in the prohibited transaction with your employer or
association, your account is no longer treated as an IRA.

EXCISE TAXES. If someone other than the owner or beneficiary of an IRA engages
in a prohibited transaction, that person may be liable for certain excise taxes.
In general, there is a 5% tax on the amount of the prohibited transaction, and a
100% additional tax if the transaction is not corrected.
     IF THE IRA CEASES TO BE AN IRA because of a prohibited transaction by you
(or your beneficiary), you (or your beneficiary) are not liable for these excise
taxes. However, you (or your beneficiary) may have to pay other taxes as
discussed above under EFFECT ON YOU (OR YOUR BENEFICIARY).

OTHER ACTS TO AVOID
The following acts are also prohibited:

INVESTMENT IN COLLECTIBLES. If your IRA invests in collectibles, the amount
invested is considered distributed


Page 32    Chapter 7  WHAT ACTS RESULT IN PENALTIES?

<PAGE>

to you in the year invested. You may also have to pay the 10% tax on premature
distributions, the 15% tax on excess distributions, and the excise taxes
discussed earlier.
     COLLECTIBLES include art works, rugs, antiques, metals, gems, stamps,
coins, alcoholic beverages, and certain other tangible personal property.

     EXCEPTION. Your IRA can invest in one, one-half, one-quarter, or one-tenth
ounce U.S. gold coins, or one-ounce silver coins minted by the Treasury
Department.

EXEMPTIONS
Certain transactions that have been viewed previously as prohibited
transactions, have been granted exemption from prohibited transaction penalties
by the Department of Labor. Recently, exemptions have been granted for the
following, if they meet the requirements for exemption:

- -  Payments by an IRA sponsor of cash, property, or other consideration to an
   individual (or members of his family) for whose benefit the IRA is
   established or maintained.

- -  Receipt of services from a bank at reduced or no cost by an individual for
   whose benefit an IRA is established or maintained.

EXEMPTION FOR PAYMENTS OF CASH, PROPERTY, OR OTHER CONSIDERATION.  The following
requirements must be satisfied for this exemption to apply:

1) The payments must be given for establishing an IRA or for making additional
   contributions to it;

2) The IRA must be established solely to benefit you, your spouse, and
   beneficiaries (yours and your spouse's);

3) During the year the total of the fair market value of the payments you
   receive cannot exceed:

   a)  $10 for IRA deposits of less than $5,000, or

   b)  $20 for IRA deposits of $5,000 or more;

4) If the consideration you are provided is group term life insurance, then the
   previous two conditions do not apply provided that no more than $5,000 of the
   face value of the insurance is based on a dollar for dollar basis on the
   assets in your IRA.

EXEMPTION FOR SERVICES YOU RECEIVE AT REDUCED OR NO COST.  After May 11, 1993,
the following conditions must be satisfied for this exemption to apply:

  1) The IRA taken into account for purposes of qualifying to receive the
     services must be established and maintained for the benefit of you, your
     spouse, or beneficiaries (yours and your spouse's).

  2) The services must be services the bank itself can legally offer.

  3) The services must be provided in the ordinary course of business by the
     bank (or a bank affiliate) to customers who qualify but do not maintain an
     IRA (or a Keogh plan).

  4) For an IRA, the determination of who qualifies for these services must be
     based on an IRA (or a Keogh plan) deposit balance equal to the lowest
     qualifying balance for any other type of account.

  5) The rate of return on an IRA investment that qualifies cannot be less than
     the return on an identical investment that could have been made at the same
     time at the same branch of the bank by a customer who is not eligible for
     (or does not receive) these services.


- --------------------------------------------------------------------------------
EXCESS CONTRIBUTIONS

Generally, an excess contribution is the amount contributed to your IRAs that is
more than the smaller of the following amounts:

  1) Your taxable compensation for the year, or

  2) $2,000.

The taxable compensation limit applies whether your contributions are deductible
or nondeductible.
   CONTRIBUTIONS FOR THE YEAR YOU REACH AGE 70 1/2 and any later year are also
excess contributions.
   An excess contribution could be the result of your contribution, your
spouse's contribution, your employer's contribution, or an improper rollover
contribution. If your employer makes contributions on your behalf to a SEP-IRA,
see Chapter 8, SIMPLIFIED EMPLOYEE PENSION (SEP).

TAX ON EXCESS CONTRIBUTIONS. If the excess contribution for a year is not
withdrawn by the date your return for the year is due (including extensions) as
explained later, you are subject to a 6% tax. You must pay the 6% tax each year
on excess amounts that remain in your IRA at the end of your tax year. The
excess is taxed for the year of the excess contribution and for each year after
that, until you correct it. The tax cannot be more than 6% of the value of your
IRA as of the end of your tax year.
   The excise tax is figured on FORM 5329.  For information on filing Form 5329,
see REPORTING ADDITIONAL TAXES, later.
   EXAMPLE.  For 1994, Paul Jones is single, his compensation is $31,000, and he
contributed $2,500 to his IRA. Paul has made an excess contribution to his IRA
of $500 ($2,500 minus the $2,000 limit). The contribution earned $5 interest in
1994 and $6 interest in 1995 before the due date of the return, including
extensions. He does not withdraw the $500 or the interest it earned by the due
date of his return, including extensions.
   Paul figures his excess contribution tax by multiplying the excess
contribution ($500) shown on line 12, Form 5329, by .06, giving him an
additional tax liability of $30. He enters the tax on line 13, Form 5329, and on
line 51,


                            Chapter 7  WHAT ACTS RESULT IN PENALTIES?    Page 33

<PAGE>

Form 1040. See Paul's filled-in Form 5329 in Appendix C, later.

EXCESS CONTRIBUTIONS YOU WITHDRAW BY THE DATE YOUR RETURN IS DUE. You will not
have to pay the 6% tax if you withdraw an excess contribution made during a tax
year AND interest or other income earned on it by the date your tax return for
that year is due, including extensions.
   DO NOT INCLUDE in your gross income an excess contribution that you withdraw
from your IRA before your tax return is due if:

  1) No deduction was allowed for the excess contribution, and

  2) The interest or other income earned on the excess was also withdrawn.

However, YOU MUST INCLUDE in your gross income the interest or other income that
was earned on the excess contribution. Report it on your return for the year in
which the excess contribution was made. Your withdrawal of interest or other
income may be subject to an additional 10% tax on early withdrawals, discussed
later.
   FORM 1099-R. You will receive Form 1099-R indicating the amount of the
withdrawal. If the excess contribution was made in a previous tax year, these
forms will indicate the year in which the earnings are taxable.

EXCESS CONTRIBUTIONS YOU WITHDRAW AFTER YOUR RETURN IS DUE. If the total
contributions (other than rollover contributions) for the year to your IRA are
$2,250 or less, and there are no employer contributions for the year, 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 applies only to the part of the excess for which you did
not take a deduction. The 6% tax applies to the excess contribution amount that
remains in your IRA at the end of a year (this includes the year of the
contribution and any later year).
   EXCESS CONTRIBUTION DEDUCTED IN AN EARLIER YEAR. If you deducted an excess
contribution in an earlier year for which the total contributions were $2,250 or
less, and for which there were no employer contributions, you can still remove
the excess from your IRA and not include it in your gross income. To do this,
file Form 1040X, AMENDED U.S. INDIVIDUAL INCOME TAX RETURN, for that year and do
not deduct the excess contribution on the amended return. Generally, you can
file an amended return within 3 years after you filed your return, or 2 years
from the time the tax was paid, whichever is later.
   EXCESS DUE TO INCORRECT ROLLOVER INFORMATION. If an excess contribution in
your IRA is the result of a rollover, and the excess occurred because you had
incorrect information required to be supplied by the plan, you can withdraw the
excess contribution. The $2,250 limit, mentioned above, is increased by the
amount of the excess that is due to the incorrect information. You will have to
amend your return for the year in which the excess occurred to correct the
reporting of the rollover amounts in that year. Do not include in your gross
income, in the year you withdraw it, the excess contribution that was the result
of the incorrect information.

TAKING A DEDUCTION IN A LATER YEAR FOR AN EXCESS CONTRIBUTION. You cannot reduce
an excess by applying it against an earlier year in which less than the maximum
amount allowable was contributed. But 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.
   EXAMPLE. Terry was entitled to contribute to her IRA and deduct $1,000 in
1993 and $1,500 in 1994, the amounts of her taxable compensation for these
years. In 1993, she actually contributed $1,400 but could deduct only $1,000. In
1993, $400 is an excess contribution, subject to the 6% tax. However, she would
not have to pay the 6% tax if she withdrew the excess (including any earnings)
before the due date of her 1993 return. Since Terry did not withdraw the excess,
she owes excise tax of $24 for 1993. To avoid the excise tax for 1994, she can
correct the $400 excess amount from 1993 in 1994 if her actual contributions are
only $1,100 in 1994 (the allowable deductible contribution of $1,500 minus the
$400 excess from 1993 she wants to treat as a deductible contribution in 1994).
Terry can deduct $1,500 in 1994 (the $1,100 actually contributed plus the $400
excess contribution from 1993).
   CLOSED TAX YEAR.  A special rule applies if you incorrectly deducted part of
the excess contribution in a closed tax year (one for which the period to assess
a tax deficiency has expired). The amount allowable as an IRA deduction for a
later correction year (the year you contribute less than the allowable amount)
must be reduced by the amount of the excess contribution deducted in the closed
year.


- --------------------------------------------------------------------------------
PREMATURE DISTRIBUTIONS
(EARLY WITHDRAWALS)

You must include in your gross income premature distributions (sometimes called
early withdrawals or early distributions) from your IRA. They are also subject
to an additional tax, as discussed below.

Premature distributions are amounts you withdraw from your IRA account or
annuity before you are age 59 1/2, or amounts you receive when you cash in
retirement bonds before you are age 59 1/2.


Page 34     Chapter 7  WHAT ACTS RESULT IN PENALTIES?

<PAGE>

   EXCEPTIONS. In certain circumstances, the additional tax does not apply to
distributions from your IRA, even though they are made before you are
age 59 1/2. There are exceptions for:

- - Disability,

- - Death, and

- - Annuity distributions.

The exceptions are discussed in detail near the beginning of Chapter 6 under
EXCEPTIONS.
   RECEIVERSHIP DISTRIBUTIONS. Premature distributions (with or without your
consent) from savings institutions placed in receivership are subject to this
tax unless one of the exceptions discussed above applies. This is true even if
the distribution is from a receiver that is a state agency.

ADDITIONAL TAX. The additional tax on premature distributions is equal to 10% of
the amount of the premature distribution that you must include in your gross
income. This tax is in addition to any regular income tax that is due.
   Use FORM 5329 to figure the tax. See the discussion of Form 5329, later,
under REPORTING ADDITIONAL TAXES, for information on filing the form.

   EXAMPLE. Tom, who is 35 years old, withdraws $3,000 from his IRA account. The
$3,000 is a premature distribution. Tom must include the $3,000 in his gross
income for that year and pay income tax on it. Tom must also pay an additional
tax of $300 (10% x $3,000). See the filled-in Form 5329, in Appendix C.

NONDEDUCTIBLE CONTRIBUTIONS. The tax on premature distributions does not apply
to the part of a distribution that represents a return of your nondeductible
contributions (basis).

ROLLOVERS. Distributions that are rolled over, as discussed in Chapter 5, can be
made without your having to pay the regular income tax or the 10% additional
tax.


- --------------------------------------------------------------------------------
EXCESS ACCUMULATIONS (INSUFFICIENT DISTRIBUTIONS)

Amounts contributed to your IRA cannot be kept in it indefinitely. In general,
you must begin receiving distributions by April 1 of the year following the year
in which you reach age 70 1/2. The required minimum distribution for any year
after your 70 1/2 year must be made by December 31 of that later year.
   TAX ON EXCESS. If distributions are less than the required MINIMUM
DISTRIBUTION for the year, discussed in Chapter 6, you may have to pay a 50%
EXCISE TAX for the year on the amount not distributed as required.

REPORTING THE TAX. Use FORM 5329 to report the tax on excess accumulations. See
the discussion of Form 5329, later, under REPORTING ADDITIONAL TAXES, for more
information on filing the form.

REQUEST TO EXCUSE THE TAX. If the excess accumulation is due to reasonable
error, and you have taken, or are taking, steps to remedy the insufficient
distribution, you can request that the tax be excused.
   HOW TO FILE THE REQUEST. File Form 5329 with your Form 1040 and pay any tax
you owe on excess accumulations. Attach an explanation for the excess
accumulation and show when you removed the excess or what you have done that
will result in its withdrawal.
   If the IRS approves your request, it will refund the excess accumulations tax
you paid.

EXEMPTION FROM TAX. If you are unable to make required distributions because you
have an IRA invested in a contract issued by an insurance company that is in
state insurer delinquency proceedings, the 50% excise tax does not apply if the
CONDITIONS and REQUIREMENTS of Revenue Procedure 92-10 are satisfied. Those
conditions and requirements are summarized below. You can read the full text of
the revenue procedure at most IRS offices and at many public libraries.
   CONDITIONS. To qualify for exemption from the tax, the assets in your IRA
must include an AFFECTED INVESTMENT. Also, the amount of your required
distribution must be determined as discussed in Chapter 6.
   AFFECTED INVESTMENT means an annuity contract or a guaranteed investment
contract (with an insurance company) for which payments under the terms of the
contract have been reduced or suspended because of state insurer delinquency
proceedings against the contracting insurance company.
   REQUIREMENTS. If your IRA (or IRAs) includes other assets in addition to your
affected investment, all IRA assets, including the AVAILABLE PORTION of your
affected investment, must be used to satisfy, to the extent possible, your IRA
distribution requirement. If the affected investment is the only asset in your
IRA, the required distribution, to the extent possible, must come from the
available portion, if any, of your affected investment.
   AVAILABLE PORTION. The available portion of your affected investment is the
amount of payments remaining after they have been reduced or suspended because
of state insurer delinquency proceedings.
   MAKE UP OF SHORTFALL IN DISTRIBUTION. If the payments to you under the
contract increase because all or part of the reduction or suspension is
canceled, you must make up the amount of any shortfall in a prior distribution
because of the proceedings. You make up (reduce or eliminate) the shortfall with
the increased payments you receive.
   You must make up the shortfall no later than December 31 of the calendar year
following the year that you receive increased payments.


                            Chapter 7  WHAT ACTS RESULT IN PENALTIES?    Page 35
<PAGE>

- --------------------------------------------------------------------------------
EXCESS DISTRIBUTIONS

If you received RETIREMENT DISTRIBUTIONS during the year of more than $150,000,
you may have to pay a 15% tax ON THE DISTRIBUTIONS EXCEEDING THAT AMOUNT. The
term RETIREMENT DISTRIBUTIONS means your distributions from any qualified
employer plan (including a tax-sheltered annuity plan), or IRA.
   Use Form 5329 to figure the tax. See the discussion of Form 5329, later,
under  REPORTING ADDITIONAL TAXES.
   THIS EXCISE TAX IS REDUCED BY any tax on premature distributions that applies
to the excess distribution. See PREMATURE DISTRIBUTIONS, discussed earlier.
   EXCLUDED DISTRIBUTIONS.  The excess distribution tax does not apply to the
following distributions:

1) Distributions after the death of the IRA owner (or employee in the case of
   employer plans),

2) Distributions that are rolled over,

3) Distributions that represent nondeductible contributions,

4) Distributions to an alternate payee under a qualified domestic relations
   order, if includable in the alternate payee's income,

5) Corrective distributions of excess deferrals under a salary reduction
   arrangement (or a similar qualified plan) discussed in Chapter 8,

6) Corrective distributions of excess contributions and excess aggregate
   contributions, and

7) Corrective distributions of excess annual additions.

COMBINING DISTRIBUTIONS. If distributions with regard to a person are made to
that person and others, the distributions must be combined to figure the amount
of excess distributions for the year.

SPECIAL LIMITATION ON TAX. On a return filed for a tax year ended before January
1, 1989, you could have chosen not to pay the 15% tax on the part of any
distribution that is related to your accrued benefits on August 1, 1986. This
rule APPLIES ONLY IF the accrued benefit as of August 1, 1986, exceeded
$562,500.
   However, if you made this choice to exclude from the tax on excess
distributions a distribution amount allocable to your August 1, 1986, benefit
accruals, your other retirement distributions are subject to the tax to the
extent they are more than $148,500 for 1994 (instead of $150,000). Furthermore,
this $148,500 amount is reduced (but not below zero) by any distributions
received during the year that are allocable to the August 1, 1986, benefit
accruals.
   If you did not elect to apply this rule, then the 15% tax will apply to the
part of the distribution that exceeds $150,000.

INCREASE IN ESTATE TAX. For decedents dying after December 31, 1986, the estate
tax will be increased by 15% of the excess retirement accumulation. A person's
excess retirement accumulation, if any, is the value of the decedent's interests
in all qualified employee plans, tax-sheltered annuities, qualified annuity
plans, individual retirement accounts, and any other plans that the Internal
Revenue Service may include, OVER the "present value" of a single life annuity
with payments equal to the annual ceiling ($150,000), and payable for a period
equal to the decedent's life expectancy immediately before death. The tax may
not be offset by any credits against the estate tax, such as the unified credit.


- --------------------------------------------------------------------------------
REPORTING ADDITIONAL TAXES

Generally you must use FORM 5329 to report the tax on excess contributions,
premature (early) distributions, excess distributions, and excess accumulations.
   YOU MUST FILE FORM 5329 IF YOU receive excess distributions from a qualified
retirement plan, whether or not you owe tax on them.
   YOU DO NOT HAVE TO USE FORM 5329 IF:

- -  Distribution code 1 (early distribution) is shown in box 7 of Form 1099-R.
   Instead, multiply the taxable part of the early distribution by 10% and enter
   the result on line 51 of Form 1040. HOWEVER, if you owe this tax and also owe
   any other additional tax on a distribution, do not enter this 10% additional
   tax directly on your Form 1040. You must file Form 5329 to report your
   additional taxes.

- -  You qualify for an exception to the premature distributions tax. You need not
   report the exception if distribution code 2, 3, or 4 is shown in box 7 of
   Form 1099-R. HOWEVER, if one of those codes is not shown, or the code shown
   is incorrect, you must file Form 5329 to report the exception.

- -  You properly rolled over all distributions you received during the year.

IF YOU FILE FORM 1040, complete Form 5329 and attach it to your Form 1040. Enter
the total amount of IRA tax due on line 51, Form 1040.

IF YOU DO NOT HAVE TO FILE A FORM 1040 but do have to pay one of the IRA taxes
mentioned earlier, file the completed Form 5329 with IRS at the time and place
you would have filed Form 1040. Include a check or money order payable to
Internal Revenue Service for the tax you owe, as shown on Form 5329. Write your
social security number, tax form number, and tax year on your check or money
order.


Page 36    Chapter 7  WHAT ACTS RESULT IN PENALTIES?
<PAGE>
- -----------------------------------------------------------------
8.
- -----------------------------------------------------------------
SIMPLIFIED EMPLOYEE PENSION (SEP)

   A simplified employee pension (SEP) is a written arrangement (a plan) that
allows an employer to make contributions toward his or her own (if a
SELF-EMPLOYED INDIVIDUAL) and employees' retirement, without becoming
involved in more complex retirement plans. The contributions are made to IRAs
(SEP-IRAs) of the participants in the plan. Under a SEP, IRAs are set up for,
at a minimum, each QUALIFYING EMPLOYEE (defined below). IRAs may have to be
set up for LEASED EMPLOYEES (defined below), but they do not have to be set
up for EXCLUDABLE EMPLOYEES (defined below).

   An employer can use FORM 5305-SEP to satisfy the written arrangement
requirement for a SEP. A SEP can be established at any time during a year.
However, the time for making contributions for a year under a SEP agreement
is limited. See TIME LIMIT FOR CONTRIBUTIONS, later.

   NOTE. The SEP plan under which contributions are made can be set up after
the close of the year for which contributions are made. However, the plan
must exist at the time the contributions are made and they must be made
within the time limit.

   An employer who signs a SEP agreement does not have to make any
contribution to the SEP-IRAs that are set up. But, if the employer does make
contributions, the contributions must be based on a written allocation
formula and must not discriminate in favor of HIGHLY COMPENSATED EMPLOYEES
(defined below).
- -----------------------------------------------------------------
DEFINITIONS

A SELF-EMPLOYED INDIVIDUAL is an employee for SEP purposes. He or she is also
the employer. Even if the self-employed individual is the only qualifying
employee, he or she can have a SEP-IRA.

   A QUALIFYING EMPLOYEE is one who:

   Is at least 21 years old,

   Has worked for the employer during at least 3 of the 5 years
     immediately preceding the tax year, and

   Has received from the employer at least $396 in compensation
     in the tax year.

   NOTE. An employer can establish less restrictive participation
requirements for its employees than those listed, but not more restrictive
ones.

LEASED EMPLOYEES. The person or firm for whom you perform services (the
recipient) may have to include you in a SEP if you are a "leased employee"
and are treated as an employee of the recipient. A leased employee is any
person who is not an employee of the recipient and who is hired by a leasing
organization, but who performs services for another (the recipient of the
services). You are a leased employee if:

  1) Your services are provided under an agreement between the
     recipient and the leasing organization,

  2) Your services are performed for the recipient, or for the
     recipient and related persons, on a substantially full-time
     basis, for a period of at least one year, and

  3) Your services are of a type historically performed by
     employees in the recipient's field of business.

For more information on leased employees, see the discussion in
Publication 560.

EXCLUDABLE EMPLOYEES. The following employees can be excluded from coverage
under a SEP:

   Employees covered by a union agreement and whose retirement benefits were
   bargained for in good faith by their union and their employer, and

   Nonresident alien employees who have no U.S. source earned
   income from their employer. For more information about
   nonresident aliens, see Publication 519, U.S. TAX GUIDE FOR ALIENS.

A HIGHLY COMPENSATED EMPLOYEE is an employee who during the year
or preceding year:

  1) Owns more than 5% of the capital or profits interest in the
     employer (if not a corporation); or more than 5% of the
     outstanding stock or more than 5% of the total voting power
     of all stock of the employer corporation;

  2) Received annual compensation from the employer of more than $99,000;

  3) Received annual compensation from the employer of more than
     $66,000 and was a member of the top-paid group (20%) of
     employees during the year; or

  4) Is an officer whose annual compensation exceeds $59,400.
- -----------------------------------------------------------------
CONTRIBUTIONS

The SEP rules permit an employer to contribute (and deduct) each year to each
participating employee's SEP-IRA up to 15% of the employee's compensation OR
$30,000, whichever is less. These contributions are funded by the employer.

FIGURING THE 15% LIMIT. For purposes of determining the 15%
limit, COMPENSATION is generally limited to

                 Chapter 8  SIMPLIFIED EMPLOYEE PENSION (SEP)  Page 37

<PAGE>

$150,000, NOT INCLUDING your employer's contribution to your SEP-IRA.

   NOTE. For employees in a collective bargaining unit covered by a SEP for
which the $150,000 limit is not effective for the plan year beginning in
1994, the compensation limit is $242,280.

   EXAMPLE. Barry's nonunion employer has a SEP for its employees. Barry's
compensation for 1994, before his employer's contribution to his SEP-IRA, was
$160,000. Barry's employer can contribute up to $22,500 (15% X $150,000) to
Barry's SEP-IRA.

DEDUCTION LIMIT FOR A SELF-EMPLOYED PERSON. If you are self-employed and
contribute to your own SEP-IRA, special rules apply when figuring your
maximum deduction for these contributions.

   FOR DETERMINING THE 15% LIMIT ON CONTRIBUTIONS, discussed above, your
COMPENSATION is your NET EARNINGS FROM SELF-EMPLOYMENT. See NET EARNINGS FROM
SELF-EMPLOYMENT, below. Note that, for SEP purposes, your net earnings
(compensation) must take into account your deduction for contributions to
your own SEP-IRA. Because your deduction amount and your net earnings amount
are each dependent on the other, this adjustment presents a problem.

   To solve this problem, you make the adjustment to net earnings indirectly
by, in figuring your maximum deduction, reducing the contribution rate called
for in the plan. Use the following worksheets to find this reduced
contribution rate and your maximum deduction. Make no reduction to the
contribution rate for any common-law employees.

                 SELF-EMPLOYED PERSON'S RATE WORKSHEET

1) Plan contribution rate as a decimal (for example,
10 1/2% would be 0.105)..............................
                                                        ---------

2) Rate in line 1 plus one (for example, 0.105
plus one would be 1.105).............................
                                                        ---------

3) Self-employed rate as a decimal (divide line 1
by line 2) ..........................................
                                                        ---------
                                                        ---------

                SELF-EMPLOYED PERSON'S DEDUCTION WORKSHEET

STEP 1
  Enter your rate from the SELF-EMPLOYED PERSON'S
  RATE WORKSHEET....................................
                                                        ---------

STEP 2
  Enter your net earnings from line 3, Schedule C-EZ
  (Form 1040), line 31, Schedule C (Form 1040),
  line 36, Schedule F (Form 1040), or line 15a,
  Schedule K-1 (Form 1065)........................     $
                                                        ---------

STEP 3
  Enter your deduction for self-employment tax from
  line 25, Form 1040.................................  $
                                                        ---------
STEP 4
  Subtract Step 3 from Step 2 and enter the
  result.............................................  $
                                                        ---------
STEP 5
  Multiply Step 4 by Step 1 and enter the
  result.............................................  $
                                                        ---------
STEP 6
  Multiply $150,000 by your plan contribution rate.
  Enter the result but not more than $30,000.........  $
                                                        ---------
STEP 7
  Enter the smaller of Step 5 or Step 6. This is
  your MAXIMUM DEDUCTIBLE CONTRIBUTION. Enter your
  deduction on line 27, Form 1040....................  $
                                                        ---------
                                                        ---------

   EXAMPLE. You are a sole proprietor and have employees. The terms of your
plan provide that you contribute 10 1/2% (.105) of your compensation, and 10
1/2% of your common-law employees' compensation. Your net earnings from line
31, Schedule C (Form 1040) is $200,000. In figuring this amount, you deducted
your common-law employees' compensation of $100,000 and contributions for
them of $10,500 (10 1/2% x $100,000). This net earnings amount is now reduced
to $193,565 by subtracting your self-employment tax deduction of $6,435. You
figure your self-employed rate and maximum deduction for employer
contributions on behalf of yourself as follows:

                 SELF-EMPLOYED PERSON'S RATE WORKSHEET

1) Plan contribution rate as a decimal (for example,
   10 1/2% would be 0.105)...........................       0.105
                                                        ---------
2) Rate in line 1 plus one, (for example, 0.105
   plus one would be 1.105).............................    1.105
                                                        ---------
3) Self-employed rate as a decimal (divide line 1
   by line 2) ..........................................   0.0950
                                                        ---------
                                                        ---------

                SELF-EMPLOYED PERSON'S DEDUCTION WORKSHEET

STEP 1
  Enter your rate from the SELF-EMPLOYED PERSON'S
  RATE WORKSHEET.....................................      0.0950
                                                        ---------
STEP 2
  Enter your net earnings from line 3, Schedule
  C-EZ (Form 1040), line 31, Schedule C (Form 1040),
  line 36, Schedule F (Form 1040), or line 15a,
  Schedule K-1 (Form 1065)...........................   $ 200,000
                                                        ---------

Page 38  Chapter 8 SIMPLIFIED EMPLOYEE PENSION (SEP)

<PAGE>

STEP 3
  Enter your deduction for self-employment tax from
  line 25, Form 1040.................................   $  6,435
                                                        --------
STEP 4
  Subtract Step 3 from Step 2 and enter the result...   $193,565
                                                        --------
STEP 5
  Multiply Step 4 by Step 1 and enter the result.....   $ 18,389
                                                        --------
STEP 6
  Multiply $150,000 by your plan contribution rate.
  Enter the result but not more than $30,000........    $ 15,750
                                                        --------
STEP 7
  Enter the smaller of Step 5 or Step 6. This is
  your MAXIMUM DEDUCTIBLE CONTRIBUTION. Enter your
  deduction on line 27, Form 1040.                      $ 15,750
                                                        --------
                                                        --------

   NET EARNINGS FROM SELF-EMPLOYMENT. For SEP purposes, your net earnings are
your gross income from your business minus allowable deductions for that
business. Allowable deductions include contributions to your employees'
SEP-IRAs. You also take into account the deduction allowed for one-half of
your self-employment tax, and the deduction for contributions to your own
SEP-IRA. Net earnings do not include tax-free items (or deductions related to
them), but do include foreign earned income and housing cost amounts. Net
earnings include a partner's distributive share of partnership income or loss
(other than separately treated items such as capital gains or losses). If
paid for services to or for the partnership, net earnings include guaranteed
payments to a limited partner. They do not include distributions of income or
loss to a limited partner.

TIME LIMIT FOR CONTRIBUTIONS. To deduct contributions for a year, the
employer must make the contributions not later than the due date (including
extensions) of the employer's return for the year.

OVERALL LIMIT -- EMPLOYER WITH DEFINED CONTRIBUTION AND SEP PLANS. If an
employer contributes to a defined contribution retirement plan (a plan under
which an individual account is set up for each participant), annual additions
to an account are limited to the lesser of (1) $30,000 or (2) 25% of the
participant's compensation. Moreover, for purposes of these limits,
contributions to more than one such plan must be added. Since a SEP is
considered a defined contribution plan for purposes of these limits, employer
contributions to a SEP must be added to other contributions to defined
contribution plans.

TAX TREATMENT OF EMPLOYER'S CONTRIBUTIONS

Unlike your contributions to IRAs, contributions to your SEP-IRA by your
employer are EXCLUDED from your income rather than deducted from it. Your
employer's contributions to your SEP-IRA should not be included in your wages
on your Form W-2, WAGE AND TAX STATEMENT, unless there are contributions in
excess of the limit that applies, or unless there are contributions under a
salary reduction arrangement.

   CONTRIBUTIONS UNDER A SALARY REDUCTION ARRANGEMENT. Form W-2 should
include contributions under a salary reduction arrangement (discussed later)
for social security and Medicare tax purposes only.

   IF THERE ARE NO EXCESS CONTRIBUTIONS, you do not include any contributions
in your gross income; nor do you deduct any of them.

   IF THERE ARE EXCESS EMPLOYER CONTRIBUTIONS, you must include them in your
gross income, without any offsetting deduction, and your Form W-2 should
include the amount.

EXCESS EMPLOYER CONTRIBUTIONS YOU WITHDRAW BEFORE YOUR RETURN IS DUE. If your
employer contributes more to your SEP-IRA than 15% of your compensation or
$30,000, whichever is less, you will not have to pay the 6% tax (discussed in
Chapter 7) on it if you withdraw this excess amount (and any interest or
other income earned on it) from your SEP-IRA before the date for filing your
tax return, including extensions. However, you may have to pay an additional
10% tax (discussed in Chapter 7) on the early withdrawal of the interest or
other income earned on the excess contribution.

EXCESS EMPLOYER CONTRIBUTIONS YOU WITHDRAW AFTER YOUR RETURN IS DUE. If
employer contributions for the year are $30,000 or less, you may withdraw any
excess employer contributions from your SEP-IRA after the due date for filing
your tax return, including extensions, free of the 10% tax on premature
distributions, discussed earlier. However, the excess contribution is subject
to the annual 6% excise tax. Also, you may have to pay the additional 10% tax
on the early withdrawal of interest or other income earned on the excess
contribution.

CONTRIBUTIONS YOU MAKE TO YOUR SEP-IRA

If you make contributions to your SEP-IRA independent of employer SEP
contributions, you can deduct them the same way as contributions to a regular
IRA. However, your deduction may be reduced or eliminated because, as a
participant in a SEP, you are covered by an employer retirement plan. See
Chapter 4, HOW MUCH CAN I CONTRIBUTE AND DEDUCT?

              Chapter 8 SIMPLIFIED EMPLOYEE PENSION (SEP) Page 39

<PAGE>

EXCESS CONTRIBUTIONS YOU MAKE. For information on excess contributions you
make to your SEP-IRA independent of employer SEP contributions, see Chapter
7, WHAT ACTS RESULT IN PENALTIES?

TAX TREATMENT BY SELF-EMPLOYED INDIVIDUALS.

If you are self-employed (a sole proprietor or partner) and have a SEP plan,
take your deduction for employer contributions to your own SEP-IRA on line
27, Form 1040. If you also make deductible contributions to your SEP-IRA (or
any other IRA you own) independent of your employer contributions, take your
deduction on line 23, Form 1040.

   For more employer information on SEP-IRAs get Publication 560.

- -----------------------------------------------------------------

SALARY REDUCTION ARRANGEMENT


A SEP may include a salary reduction arrangement. Under the arrangement, you
can elect to have your employer contribute part of your pay to your SEP-IRA.
Only the remaining portion of your pay is currently taxable. The tax on the
contribution is deferred. Thus, this choice is called an ELECTIVE DEFERRAL.
Form 5305A-SEP can be used by an employer to set up such an arrangement.

RESTRICTIONS ON ELECTION. You can choose elective deferrals only
if:

- - At least 50% of employees eligible to participate choose
  elective deferrals,

- - There were no more than 25 eligible employees at any time
  during the preceding year, and

- - The amount deferred each year by each eligible highly
  compensated employee as a percentage of pay is no more than
  125% of the average deferral percentage of all other eligible
  employees (ADP TEST). Generally, compensation in excess of
  $150,000 cannot be considered in figuring an employee's
  deferral percentage.

   NOTE. For collectively bargained SEPs for which the $150,000 limit is not
effective for the plan year beginning in 1994, the compensation limit for
covered bargaining unit employees is $242,280.

EXCEPTIONS. An elective deferral arrangement is not available for a SEP
maintained by a state or local government, or any of their political
subdivisions, agencies, or instrumentalities, or to a tax-exempt organization.

LIMITS ON DEFERRALS. In general, the total income you can defer under a
salary reduction arrangement included in your SEP and certain other elective
deferral arrangements, for 1994, is limited to $9,240. This limit applies
only to the amounts that represent a reduction from your salary, not to any
contributions from employer funds.

   Elective deferrals, not exceeding the ADP test, are excluded from your
income in the year of deferral, but are included in wages for social
security, Medicare, and unemployment (FUTA) tax purposes.

OVERALL LIMITS ON SEP CONTRIBUTIONS

Contributions, including elective deferrals (salary reductions), made by your
employer to the SEP-IRA are subject to the overall limit of 15% of your
compensation (generally up to $150,000 for 1994) or $30,000, whichever is
less.

- -----------------------------------------------------------------

DISTRIBUTIONS (WITHDRAWALS)

An employer cannot prohibit withdrawals from a SEP-IRA. Also, an employer
cannot condition contributions to a SEP-IRA on the keeping of any part of
them in the account.

   Distributions (withdrawals) from a SEP-IRA are subject to IRA rules. For
information on these rules, including tax treatment of distributions,
tax-free rollovers, required distributions, and income tax withholding, see
Chapter 6, WHEN CAN I WITHDRAW AND USE ASSETS FROM AN IRA?

Page 40 Chapter 8  SIMPLIFIED EMPLOYEE PENSION (SEP)

<PAGE>

Table 8.1. CONTRIBUTION/DISTRIBUTION QUICK REFERENCE CHART -- IRAS
AND SEPS

<TABLE>
<CAPTION>

            CAN CONTRIBUTE FOR THE YEAR     MAXIMUM CONTRIBUTION FOR   MUST BEGIN DISTRIBUTIONS (1)
            BY                              THE YEAR LIMITED TO:       BY:
<S>         <C>                             <C>                        <C>
- ----------------------------------------------------------------------------------------------------
IRA         Due date of return              The lesser of $2000 or     April 1 of the year following
            (NOT including extensions)      owner's taxable            the year in which owner
                                            compensation (2)           reaches age 70 1/2

SEP-IRA     Due date of return              The lesser of $30,000 or   April 1 of the year following
            (including extensions)          15% of participant's       the year in which owner
                                            compensation (3)           reaches age 70 1/2

</TABLE>


(1) The entire balance or periodic distributions of the balance. See Chapter
    6 for additional rules.

(2) If owner also has a SEP-IRA (or only a SEP-IRA) this contribution can be
    made instead to the SEP-IRA (in addition to the employer's contributions
    under the SEP plan).

(3) Compensation does not include your employer's contribution to your
    SEP-IRA and generally is limited to $150,000 in 1994. A special
    computation is required to figure the self-employed participant's
    contribution limit. See Chapter 8.

                          Chapter 8 SIMPLIFIED EMPLOYEE PENSION (SEP) Page 41

<PAGE>

APPENDICES

To help you complete your tax return, the following appendices include the
following chart, worksheets, sample forms, and tables:

- - APPENDIX A -- SUMMARY RECORD OF IRA(s) FOR 1994 and WORKSHEET FOR DETERMINING
  REQUIRED ANNUAL DISTRIBUTIONS FROM YOUR IRA(s).

- - APPENDIX B -- contains worksheets that you use if you receive social security
  benefits and are subject to the IRA deduction phaseout rules. A filled-in
  example is included.

  a) Worksheet 1, COMPUTATION OF MODIFIED AGI
  b) Worksheet 2, COMPUTATION OF IRA DEDUCTION
  c) Worksheet 3, COMPUTATION OF TAXABLE SOCIAL SECURITY BENEFITS
  d) Example and completed worksheets

- - APPENDIX C -- Filled-in Form 5329, ADDITIONAL TAXES ATTRIBUTABLE TO QUALIFIED
  RETIREMENT PLANS (INCLUDING IRAs), ANNUITIES, AND MODIFIED ENDOWMENT
  CONTRACTS

- - APPENDIX D -- Filled-in Forms 8606, NONDEDUCTIBLE IRAs (CONTRIBUTIONS,
  DISTRIBUTIONS, AND BASIS)

- - APPENDIX E -- LIFE EXPECTANCY TABLES and the TABLE FOR DETERMINING APPLICABLE
  DIVISOR FOR MDIB (MINIMUM DISTRIBUTION INCIDENTAL BENEFIT). These tables are
  included to assist you in computing your required minimum distribution amount
  if you have not taken all your assets from all your IRA(s) before age 70 1/2.

Page 42
<PAGE>

APPENDIX A. SUMMARY RECORD OF IRA(S) FOR 1994 (You May Keep This for Your
Records)

    Name ____________________________________

    I was / / covered / / not covered by my employer's retirement plan during
    the year.

    I became age 59 1/2 on ________________________.
                           (month)    (day)   (year)

    I became age 70 1/2 on ________________________.
                           (month)    (day)   (year)

    CONTRIBUTIONS
    -------------

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
                                                                                             Fair Market value of
                                                                       Check, if rollover    IRA as of December 31,
    Name of IRA             Date         Amount contributed for 1994   contribution          1994, from Form 5498
- ---------------------------------------------------------------------------------------------------------------------
<S>                 <C>                 <C>                           <C>                    <C>
1.
- ---------------------------------------------------------------------------------------------------------------------
2.
- ---------------------------------------------------------------------------------------------------------------------
3.
- ---------------------------------------------------------------------------------------------------------------------
4.
- ---------------------------------------------------------------------------------------------------------------------
5.
- ---------------------------------------------------------------------------------------------------------------------
    Total
- ---------------------------------------------------------------------------------------------------------------------

Total contributions deducted on tax return                            $
                                                                       ---------
Total contributions treated as nondeductible on Form 8606             $
                                                                       ---------
</TABLE>

DISTRIBUTIONS
- -------------

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
                                                        Reason                                Taxable
                                                        (e.g., for retirement,                amount          Nontaxable
                                                        rollover, withdrawal    Income        reported on     amount from
                                           Amount of    of excess               earned on     income tax      Form 8606,
       Name of IRA            Date       distribution   contributions, etc.)    IRA           return          line 10
- ---------------------------------------------------------------------------------------------------------------------------
<S>                      <C>            <C>            <C>                      <C>           <C>             <C>
1.
- ---------------------------------------------------------------------------------------------------------------------------
2.
- ---------------------------------------------------------------------------------------------------------------------------
3.
- ---------------------------------------------------------------------------------------------------------------------------
4.
- ---------------------------------------------------------------------------------------------------------------------------
    Total
- ---------------------------------------------------------------------------------------------------------------------------

Basis of all IRAs as of 12/31/94 (from Form 8606, line 11)   $
                                                              ---------
Basis of all IRAs for 1994 (from Form 8606, line 12)         $
                                                              ---------
</TABLE>

NOTE: You should keep copies of your income tax return, and Forms W-2, 8606, and
5498.

                                   WORKSHEET
                                      FOR
           DETERMINING REQUIRED ANNUAL DISTRIBUTIONS FROM YOUR IRA(S)
<TABLE>
- -------------------------------------------------------------------------------------------------------------------
<S>                              <C>            <C>            <C>            <C>            <C>            <C>
- -------------------------------------------------------------------------------------------------------------------
1. Age                           70 1/2         71 1/2         72 1/2         73 1/2         74 1/2         75 1/2
- -------------------------------------------------------------------------------------------------------------------
2. Year age was reached
- -------------------------------------------------------------------------------------------------------------------
3. Value of IRA at the
   close of business on
   December 31 of the
   year immediately prior
   to the year on line 2(1)
- -------------------------------------------------------------------------------------------------------------------
4. Divisor from Life
   Expectancy Table I or
   Table II(2)
- -------------------------------------------------------------------------------------------------------------------
5. Required distribution
   (divide line 3 by
   line 4)(3)
- -------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) If you have more than one IRA, you must figure the required distribution
    separately for each IRA.

(2) Use the appropriate divisor for each year and for each IRA. You can either
    (a) use the appropriate divisor from the table each year, or (b) use the
    appropriate divisor from the table for your 70 1/2 year and reduce it by 1
    (one) for each subsequent year. To find the appropriate divisor, use your
    age (and that of your beneficiary, if applicable) as of your birthday(s) in
    the year shown on line 2. If your beneficiary is someone other than your
    spouse, see MINIMUM DISTRIBUTION INCIDENTAL BENEFIT REQUIREMENT in
    Chapter 6.

(3) If you have more than one IRA, you must withdraw an amount equal to the
    total of the required distributions figured for each IRA. You can, however,
    withdraw the total from one IRA or from more than one IRA.


                                                                        Page 43

<PAGE>

APPENDIX B. WORKSHEETS FOR SOCIAL SECURITY RECIPIENTS WHO CONTRIBUTE TO AN IRA

     If you receive social security benefits, have taxable compensation,
contribute to your IRA, and are covered (or considered covered) by an
employer retirement plan, complete the following worksheets.(See WHO IS
COVERED BY AN EMPLOYER PLAN? in Chapter 4.)

     Use Worksheet 1 to figure your modified adjusted gross income. This
amount is needed in the computation of your IRA deduction, if any, which is
figured using Worksheet 2.

     The IRA deduction figured using Worksheet 2 is entered on your tax
return.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
                                   WORKSHEET 1
                           COMPUTATION OF MODIFIED AGI
             (FOR USE ONLY BY TAXPAYERS WHO RECEIVE SOCIAL SECURITY BENEFITS)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

FILING STATUS -- Check only one box:

     / /  A. Married filing a joint return

     / /  B. Single, Head of Household, Qualifying Widow(er), or Married
             filing separately and LIVED APART from your spouse during the
             ENTIRE YEAR

     / /  C. Married filing separately and LIVED WITH your spouse at ANY TIME
             during the year

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<TABLE>
  <S>  <C>                                                                <C>
   1)  Adjusted gross income (AGI) from Form 1040 or Form 1040A (not
       taking into account any social security benefits from Form
       SSA-1099 or RRB-1099, any deduction for an IRA, or any exclusion
       of interest from savings bonds to be reported on Form 8815).......
                                                                          -------
                                                                          -------
   2)  Enter the amount in Box 5 of all Forms SSA-1099 and Forms
       RRB-1099..........................................................
                                                                          -------
                                                                          -------

   3)  Enter one half of line 2..........................................
                                                                          -------
                                                                          -------

   4)  Enter the amount of any foreign earned income exclusion, foreign
       housing exclusion, U.S. possessions income exclusion, or exclusion
       of income from Puerto Rico you claimed as a bona fide resident
       of Puerto Rico.....................................................
                                                                          -------
                                                                          -------
   5)  Enter the amount of any tax-exempt interest reported on line
       8b of Form 1040 or 1040A...........................................
                                                                          -------
                                                                          -------

   6)  Add lines 1, 3, 4, and 5...........................................
                                                                          -------
                                                                          -------

   7)  Enter the amount listed below for your filing status...............
                                                                          -------
                                                                          -------
       - $32,000 if you checked box A above, or

       - $25,000 if you checked box B above, or

       - $-0- if you checked box C above.

   8)  Subtract line 7 from line 6. If zero or less, enter 0 on this
       line...............................................................
                                                                          -------
                                                                          -------

Page 44

<PAGE>

APPENDIX B. (CONTINUED)

  <S>  <C>                                                                <C>
   9)  If line 8 is zero, STOP HERE. None of your social security benefits
       are taxable. If line 8 is more than 0, enter the amount listed below
       for your filing status.............................................
                                                                          -------
                                                                          -------
         $12,000 if you checked box A above

         $ 9,000 if you checked box B above

         $-0- if you checked box C above

  10)  Subtract line 9 from line 8. If zero or less, enter -0-...........
                                                                          -------
                                                                          -------
  11)  Enter the smaller of line 8 or line 9..............................
                                                                          -------
                                                                          -------
  12)  Enter one half of line 11..........................................
                                                                          -------
                                                                          -------
  13)  Enter the smaller of line 3 or line 12............................
                                                                          -------
                                                                          -------
  14)  Multiply line 10 by .85. If line 10 is zero, enter -0-............
                                                                          -------
                                                                          -------
  15)  Add lines 13 and 14...............................................
                                                                          -------
                                                                          -------
  16)  Multiply line 2 by .85............................................
                                                                          -------
                                                                          -------
  17)  TAXABLE BENEFITS to be included in MODIFIED AGI for IRA deduction
       purposes. Enter the smaller of line 15 or line 16.................
                                                                          -------
                                                                          -------
  18)  Enter the amount of any foreign earned income exclusion and
       foreign housing exclusion or deduction that you claimed............
                                                                          -------
                                                                          -------
  19)  MODIFIED AGI for determining you reduced IRA Deduction--add lines
       1, 17, and 18. Enter here and on line 2 of Worksheet 2, next.......
                                                                          -------
                                                                          -------

</TABLE>



                                                                         Page 45
<PAGE>

APPENDIX B (CONTINUED)

                                  WORKSHEET 2
                         COMPUTATION OF IRA DEDUCTION
       (FOR USE ONLY BY TAXPAYERS WHO RECEIVE SOCIAL SECURITY BENEFITS)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

    IF YOUR FILING         AND YOUR MODIFIED AGI         ENTER ON LINE 1
      STATUS IS:                  IS OVER:                    BELOW:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

 Married-joint return,
 or qualifying widow(er)          $40,000*                    $50,000

 Single, or Head
 of household                     $25,000*                    $35,000

 Married-separate return**        $   -0-*                    $10,000

  * If your modified AGI is NOT over this amount, you can take an IRA
    deduction for your contributions of up to the lesser of $2,000 or your
    taxable compensation. Skip this worksheet and proceed to Worksheet 3.

 ** If you did NOT live with your spouse AT ANY TIME during the year,
    consider your filing status as single.

 NOTE: If you were married and both you and your spouse worked and you both
       contributed to IRAs, figure the deduction for each of you separately.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

  1. Enter the applicable amount from above...........................
                                                                      --------
                                                                      --------
  2. Enter your MODIFIED AGI from Worksheet 1, line 19................
                                                                      --------
                                                                      --------
 NOTE: If line 2 is equal to or more than the amount on line 1, STOP HERE;
       your IRA contributions are NOT deductible. Proceed to Worksheet 3.

  3. Subtract line 2 from line 1.....................................
                                                                      --------
                                                                      --------
  4. Multiply line 3 by 20% (.20). If the result is not a multiple
     of $10, round it to the next highest multiple of $10. (For
     example, $611.40 is rounded to $620.) However, if the result
     is less than $200, enter $200....................................
                                                                      --------
                                                                      --------
  5. Enter your compensation. (Do not include your spouse's
     compensation.)...................................................
                                                                      --------
                                                                      --------

  6. Enter contributions you made, or plan to make, to your IRA for
     1994, but do not enter more than $2,000..........................
                                                                      --------
                                                                      --------
  7. IRA DEDUCTION. Compare lines 4, 5, and 6. Enter the smallest
     amount here (or a smaller amount if you choose). Enter this
     amount on the Form 1040 or 1040A line for your IRA. (If the
     amount on line 6 is more than the amount on line 7, complete
     line 8.)........................................................
                                                                      --------
                                                                      --------
  8. NONDEDUCTIBLE CONTRIBUTIONS. Subtract line 7 from line 5 or 6,
     whichever is smaller. Enter the result here and on line 1 of
     your Form 8606, NONDEDUCTIBLE IRAS (CONTRIBUTIONS, DISTRIBUTIONS,
     AND BASIS)......................................................
                                                                      --------
                                                                      --------
 NOTE: If you qualify to contribute to a SPOUSAL IRA, continue with
       line 9.

  9. Compare the amount on line 5 to $2,250 and enter the smaller
     amount..........................................................
                                                                      --------
                                                                      --------
 10. Add lines 7 and 8...............................................
                                                                      --------
                                                                      --------
 11. Subtract line 10 from line 9....................................
                                                                      --------
                                                                      --------
 NOTE: If line 11 is zero or less, STOP HERE. You cannot make contributions
       to an IRA for your spouse. If line 11 is more than zero, go to line 12.

<PAGE>

APPENDIX B (CONTINUED)

 12. Enter the smallest of...........................................
                                                                      --------
                                                                      --------
     A. IRA contributions you made, or plan to make, for 1994 to your
        spouse's IRA;
     B. The amount on line 11; or
     C. $2,000.

 13. Multiply line 3 by 22.5% (.225). If the result is not a
     multiple of $10, round it up to the next multiple of $10. If
     the result is less than $200, enter $200........................
                                                                      --------
                                                                      --------
 14. Enter the amount from line 7....................................
                                                                      --------
                                                                      --------
 15. Subtract 14 from line 13........................................
                                                                      --------
                                                                      --------
 16. Compare the amounts on lines 12 and 15. Enter the
     smaller amount..................................................
                                                                      --------
                                                                      --------
 17. SPOUSAL IRA DEDUCTION. Compare the amounts on lines 4, 5,
     and 16. Enter the smallest amount (or a smaller amount if you
     choose) here and on Form 1040 or 1040A..........................
                                                                      --------
                                                                      --------
 NOTE: If line 12 is more than line 17, Complete line 18.

 18. MAXIMUM SPOUSAL IRA NONDEDUCTIBLE CONTRIBUTIONS. Subtract
     line 17 from line 12. Enter the result here and on line 1 of
     your spouse's Form 8606.........................................
                                                                      --------
                                                                      --------

                                                                       Page 47
<PAGE>

APPENDIX B. (CONTINUED)

                                  WORKSHEET 3
                  COMPUTATION OF TAXABLE SOCIAL SECURITY BENEFITS
                     (FOR USE BY TAXPAYERS WHO RECEIVE SOCIAL
                   SECURITY BENEFITS AND TAKE AN IRA DEDUCTION)

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

FILING STATUS--Check only one box:

     / /  A. Married filing a joint return

     / /  B. Single, Head of Household, Qualifying Widow(er), or Married
             filing separately and LIVED APART from your spouse during the
             ENTIRE YEAR

     / /  C. Married filing separately and LIVED WITH your spouse at ANY TIME
             during the year

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<TABLE>
<S>    <C>                                                                 <C>
   1)  Adjusted gross income (AGI) from Form 1040 or Form 1040A (NOT
       TAKING INTO ACCOUNT any IRA deduction, any social security
       benefits from Form SSA-1099 or RRB-1099, or any exclusion of
       interest from savings bonds to be reported on Form 8815)..........
                                                                           -------
                                                                           -------
   2)  IRA deduction(s) from line 7, and, if applicable, line 17 of
       Worksheet 2.......................................................
                                                                           -------
                                                                           -------
   3)  Subtract line 2 from line 1.......................................
                                                                           -------
                                                                           -------
   4)  Enter amount in Box 5 of all Forms SSA-1099 and Forms RRB-1099....
                                                                           -------
                                                                           -------
   5)  Enter one half of line 2..........................................
                                                                           -------
                                                                           -------
   6)  Enter the amount of any foreign earned income exclusion, foreign
       housing exclusion, exclusion of income from U.S. possessions, or
       exclusion of income from Puerto Rico you claimed as a bona fide
       resident of Puerto Rico...........................................
                                                                           -------
                                                                           -------
   7)  Enter the amount of any tax-exempt interest reported on line 8b
       of Form 1040 or 1040A.............................................
                                                                           -------
                                                                           -------
   8)  Add lines 3, 5, 6, and 7..........................................
                                                                           -------
                                                                           -------
   9)  Enter the amount listed below for your filing status..............
                                                                           -------
                                                                           -------
       - $32,000 if you checked box A above, or

       - $25,000 if you checked box B above, or

       - $-0- if you checked box C above.

   10) Subtract line 9 from line 8. If zero or less, enter 0 on this line..
                                                                           -------
                                                                           -------
</TABLE>


Page 48

<PAGE>

APPENDIX B. (CONTINUED)

<TABLE>
<S>    <C>                                                                 <C>
   11) If line 10 is zero, STOP HERE. None of your social security
       benefits are taxable. If line 10 is more than 0, enter the amount
       listed below for your filing status...............................
                                                                           -------
                                                                           -------
         $12,000 if you checked box A above

         $ 9,000 if you checked box B above

         $-0- if you checked C above

   12) Subtract line 11 from line 10. If zero or less, enter -0-.........
                                                                           -------
                                                                           -------
   13) Enter the smaller of line 10 or line 11...........................
                                                                           -------
                                                                           -------
   14) Enter one half of line 13.........................................
                                                                           -------
                                                                           -------
   15) Enter the smaller of line 5 or line 14............................
                                                                           -------
                                                                           -------
   16) Multiply line 12 by .85. If line 12 is zero, enter -0-............
                                                                           -------
                                                                           -------
   17) Add lines 15 and 16...............................................
                                                                           -------
                                                                           -------
   18) Multiply line 4 by .85............................................
                                                                           -------
                                                                           -------
   19) TAXABLE SOCIAL SECURITY BENEFITS. Enter the smaller of line 17
       or line 18........................................................
                                                                           -------
                                                                           -------
</TABLE>


                                                                         Page 49



<PAGE>

APPENDIX B. (CONTINUED)

                               COMPREHENSIVE EXAMPLE
              DETERMINING YOUR IRA DEDUCTION AND THE TAXABLE PORTION OF YOUR
                             SOCIAL SECURITY BENEFITS

     John Black is married and files a joint return. He had 1994 wages of
$42,500. His wife did not work in 1994. He also received social security
benefits of $7,000 and made a $2,000 contribution to his IRA and a $250
contribution to a spousal IRA for his wife for the year. He had no foreign
income, no tax-exempt interest, and no adjustments to income on lines 24
through 29 on his Form 1040. He participated in a section 401(k) retirement
plan at work.

     John completes Worksheets 1 and 2. Worksheet 2 shows that his 1994 IRA
deduction is $460 and the spousal IRA deduction of $60. He must either
withdraw the excess amounts ($1,540 shown on line 8 and $190 shown on line 18
of Worksheet 2), or treat that excess amounts as nondeductible contributions
(in which case he must complete two Forms 8606 and attach them to his Form
1040).

     The completed worksheets that follow show how John figured his modified
AGI to determine the IRA deductions and the taxable social security benefits
to report on his Form 1040.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                                   WORKSHEET 1
                           COMPUTATION OF MODIFIED AGI
             (FOR USE ONLY BY TAXPAYERS WHO RECEIVE SOCIAL SECURITY BENEFITS)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

FILING STATUS -- Check only one box:

     /X/  A. Married filing a joint return

     / /  B. Single, Head of Household, Qualifying Widow(er), or Married
             filing separately and LIVED APART from your spouse during the
             ENTIRE YEAR

     / /  C. Married filing separately and LIVED WITH your spouse at ANY TIME
             during the year

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<TABLE>
  <S>                                                                     <C>
   1)  Adjusted gross income (AGI) from Form 1040 or Form 1040A (not
       taking into account any social security benefits from Form
       SSA-1099 or RRB-1099, any deduction for an IRA, or any exclusion
       of interest from savings bonds to be reported on Form 8815)....... $42,500
                                                                          -------
                                                                          -------
   2)  Enter the amount in Box 5 of all Forms SSA-1099 and Forms
       RRB-1099..........................................................   7,000
                                                                          -------
                                                                          -------

   3)  Enter one half of line 2..........................................   3,500
                                                                          -------
                                                                          -------
   4)  Enter the amount of any foreign earned income exclusion, foreign
       housing exclusion, U.S. possessions income exclusion, or exclusion
       of income from Puerto Rico you claimed as a bona fide resident
       of Puerto Rico.....................................................   -0-
                                                                          -------
                                                                          -------
   5)  Enter the total amount of any tax-exempt interest reported on line
       8b of Form 1040 or 1040A...........................................   -0-
                                                                          -------
                                                                          -------

   6)  Add lines 1, 3, 4, and 5........................................... 46,000
                                                                          -------
                                                                          -------

   7)  Enter the amount listed below for your filing status............... 32,000
                                                                          -------
                                                                          -------
       - $32,000 if you checked box A above, or

       - $25,000 if you checked box B above, or

       - -0- if you checked box C above.

   8)  Subtract line 7 from line 6. If zero or less, enter zero on this
       line............................................................... 14,000
                                                                          -------
                                                                          -------

Page 50

<PAGE>

APPENDIX B (CONTINUED)

  <S>                                                                     <C>
   9)  If line 8 is zero, STOP HERE. None of your social security benefits
       are taxable. If line 8 is more than 0, enter the amount listed
       below for your filing status....................................... 12,000
                                                                          -------
                                                                          -------
         $12,000 if you checked box A above

         $9,000 if you checked box B above

         $-0- if you checked box C above

  10)  Subtract line 9 from line 8. If zero or less, enter -0-............  2,000
                                                                          -------
                                                                          -------
  11)  Enter the smaller of line 8 or line 9.............................. 12,000
                                                                          -------
                                                                          -------
  12)  Enter one half of line 11..........................................  6,000
                                                                          -------
                                                                          -------
  13)  Enter the smaller of line 3 or line 12............................   3,500
                                                                          -------
                                                                          -------
  14)  Multiply line 10 by .85. If line 10 is zero, enter -0-............   1,700
                                                                          -------
                                                                          -------
  15)  Add lines 13 and 14...............................................   5,200
                                                                          -------
                                                                          -------
  16)  Multiply line 2 by .85............................................   5,950
                                                                          -------
                                                                          -------
  17)  TAXABLE BENEFITS to be included in MODIFIED AGI for IRA deduction
       purposes. Enter the smaller of line 15 or line 16.................   5,200
                                                                          -------
                                                                          -------
  18)  Enter the amount of any foreign earned income exclusion and
       foreign housing exclusion or deduction that you claimed............   -0-
                                                                          -------
                                                                          -------
  19)  MODIFIED AGI for determining your reduced IRA Deduction--add lines
       1, 17, and 18. Enter here and on line 2 of Worksheet 2, next....... 47,700
                                                                          -------
                                                                          -------

</TABLE>



                                                                        Page 51

<PAGE>

APPENDIX B. (CONTINUED)

                                  WORKSHEET 2
                         COMPUTATION OF IRA DEDUCTION
       (FOR USE ONLY BY TAXPAYERS WHO RECEIVE SOCIAL SECURITY BENEFITS)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

    IF YOUR FILING         AND YOUR MODIFIED AGI         ENTER ON LINE 1
      STATUS IS:                  IS OVER:                    BELOW:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

 Married-joint return,
 or qualifying widow(er)          $40,000*                    $50,000

 Single, or Head
 of household                     $25,000*                    $35,000

 Married-separate return**        $   -0-*                    $10,000

  * If your modified AGI is NOT over this amount, you can take an IRA
    deduction for your contributions of up to the lesser of $2,000 or your
    taxable compensation. Skip this worksheet and proceed to Worksheet 3.

 ** If you did NOT live with your spouse AT ANY TIME during the year,
    consider your filing status as single.

 NOTE: If you were married and both you and your spouse worked and you both
       contributed to IRAs, figure the deduction for each of you separately.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

  1. Enter the applicable amount from above...........................$50,000
                                                                      -------
                                                                      -------
  2. Enter your MODIFIED AGI from Worksheet 1, line 19................ 47,700
                                                                      -------
                                                                      -------
 NOTE: If line 2 is equal to or more than the amount on line 1, STOP HERE;
       your IRA contributions are NOT deductible.

       Proceed to worksheet 3.

  3. Subtract line 2 from line 1.....................................  2,300
                                                                      -------
                                                                      -------
  4. Multiply line 3 by 20% (.20). If the result is not a multiple
     of $10, round it to the next highest multiple of $10. (For
     example, $611.40 is rounded to $620.) However, if the result
     is less than $200, enter $200....................................    460
                                                                      -------
                                                                      -------
  5. Enter your compensation. (Do not include your spouse's
     compensation.)................................................... 42,500
                                                                      -------
                                                                      -------
  6. Enter contributions you made, or plan to make, to your IRA for
     1994, but do not enter more than $2,000..........................  2,000
                                                                      -------
                                                                      -------
  7. IRA DEDUCTION. Compare lines 4, 5, and 6. Enter the smallest
     amount here (or a smaller amount if you choose). Enter this
     amount on the Form 1040 or 1040A line for your IRA. (If the
     amount on line 6 is more than the amount on line 7, complete
     line 8.)........................................................     460
                                                                      -------
                                                                      -------
  8. NONDEDUCTIBLE CONTRIBUTIONS. Subtract line 7 from line 5 or 6,
     whichever is smaller. Enter the result here and on line 1 of
     your Form 8606, NONDEDUCTIBLE IRAS (CONTRIBUTIONS, DISTRIBUTIONS,
     AND BASIS)......................................................   1,540
                                                                      -------
                                                                      -------
 NOTE: If you qualify to contribute to a SPOUSAL IRA, continue with
       line 9.

  9. Compare the amount on line 5 to $2,250 and enter the smaller
     amount..........................................................   2,250
                                                                      -------
                                                                      -------
 10. Add lines 7 and 8...............................................   2,000
                                                                      -------
                                                                      -------
 11. Subtract line 10 from line 9....................................     250
                                                                      -------
                                                                      -------
 NOTE: If line 11 is zero or less, STOP HERE. You cannot make contributions
       to an IRA for your spouse. If line 11 is more than zero, go to line 12.


Page 52

<PAGE>

APPENDIX B. (CONTINUED)

 12. Enter the smallest of:..........................................     250
                                                                      -------
                                                                      -------
     A. IRA contributions you made, or plan to make, for 1994 to your
        spouse's IRA;
     B. The amount on line 11; or
     C. $2,000.
 13. Multiply line 3 by 22.5% (.225). If the result is not a
     multiple of $10, round it up to the next multiple of $10. If
     the result is less than $200, enter $200........................     520
                                                                      -------
                                                                      -------
 14. Enter the amount from line 7....................................     460
                                                                      -------
                                                                      -------
 15. Subtract line 14 from line 13...................................      60
                                                                      -------
                                                                      -------
 16. Compare the amounts on lines 12 and 15. Enter the
     smaller amount..................................................      60
                                                                      -------
                                                                      -------
 17. SPOUSAL IRA DEDUCTION. Compare the amounts on lines 4, 5,
     and 16. Enter the smallest amount (or a smaller amount if you
     choose) here and on Form 1040 or 1040A..........................      60
                                                                      -------
                                                                      -------
 NOTE: If line 12 is more than line 17, complete line 18.
 18. MAXIMUM SPOUSAL IRA NONDEDUCTIBLE CONTRIBUTIONS. Subtract
     line 17 from line 12. Enter the result here and on line 1 of
     your spouse's Form 8606.........................................     190
                                                                      -------
                                                                      -------

                                                                      Page 53
<PAGE>

APPENDIX B. (CONTINUED)

                                  WORKSHEET 3
                  COMPUTATION OF TAXABLE SOCIAL SECURITY BENEFITS
                     (FOR USE BY TAXPAYERS WHO RECEIVE SOCIAL
                   SECURITY BENEFITS AND TAKE AN IRA DEDUCTION)

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

FILING STATUS--Check only one box:

     /X/  A. Married filing a joint return

     / /  B. Single, Head of Household, Qualifying Widow(er), or Married
             filing separately and LIVED APART from your spouse during the
             ENTIRE YEAR

     / /  C. Married filing separately and LIVED WITH your spouse at ANY TIME
             during the year

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<TABLE>
   <S>                                                                     <C>
   1)  Adjusted gross income (AGI) from Form 1040 or Form 1040A (NOT
       TAKING INTO ACCOUNT any IRA deduction, any social security benefits
       from Form SSA-1099 or RRB-1099, or any exclusion of interest from
       savings bonds to be reported on Form 8815)........................  $42,500
                                                                           -------
                                                                           -------
   2)  IRA deduction(s) from line 7, and, if applicable, line 17 of
       Worksheet 2.......................................................      520
                                                                           -------
                                                                           -------
   3)  Subtract line 2 from line 1.......................................   41,980
                                                                           -------
                                                                           -------
   4)  Enter amount in Box 5 of all Forms SSA-1099 and Forms RRB-1099....    7,000
                                                                           -------
                                                                           -------
   5)  Enter one half of line 4..........................................    3,500
                                                                           -------
                                                                           -------
   6)  Enter the amount of any foreign earned income exclusion, foreign
       housing exclusion, exclusion of income from U.S. possessions, or
       exclusion of income from Puerto Rico you claimed as a bona fide
       resident of Puerto Rico...........................................     -0-
                                                                           -------
                                                                           -------
   7)  Enter the amount of any tax-exempt interest reported on line 8b
       of Form 1040 or 1040A.............................................     -0-
                                                                           -------
                                                                           -------
   8)  Add lines 3, 5, 6, and 7..........................................   45,480
                                                                           -------
                                                                           -------
   9)  Enter the amount listed below for your filing status..............   32,000
                                                                           -------
                                                                           -------
       - $32,000 if you checked box A above, or

       - $25,000 if you checked box B above, or

       - $-0- if you checked box C above.

   10) Subtract line 9 from line 8. If zero or less, enter 0 on this line.. 13,480
                                                                           -------
                                                                           -------
</TABLE>


Page 54

<PAGE>

APPENDIX B. (CONTINUED)

<TABLE>
   <S>                                                                     <C>
   11) If line 10 is zero, STOP HERE. None of your social security
       benefits are taxable. If line 10 is more than 0, enter the amount
       listed below for your filing status...............................   12,000
                                                                           -------
                                                                           -------
         $12,000 if you checked box A above

         $ 9,000 if you checked box B above

         $-0- if you checked box C above

   12) Subtract line 11 from line 10. If zero or less, enter -0-.........    1,480
                                                                           -------
                                                                           -------
   13) Enter the smaller of line 10 or line 11...........................   12,000
                                                                           -------
                                                                           -------
   14) Enter one half of line 13.........................................    6,000
                                                                           -------
                                                                           -------
   15) Enter the smaller of line 5 or line 14............................    3,500
                                                                           -------
                                                                           -------
   16) Multiply line 12 by .85. If line 12 is zero, enter -0-............    1,258
                                                                           -------
                                                                           -------
   17) Add lines 15 and 16...............................................    4,758
                                                                           -------
                                                                           -------
   18) Multiply line 4 by .85............................................    5,950
                                                                           -------
                                                                           -------
   19) TAXABLE SOCIAL SECURITY BENEFITS. Enter the smaller of line 17
       or line 18........................................................    4,758
                                                                           -------
                                                                           -------
</TABLE>


                                                                         Page 55


<PAGE>

APPENDIX C. FILLED-IN FORM 5329

FORM 5329                                                OMB NO. 1545-0203
                                                                1994
Department of the Treasury                                   Attachment
Internal Revenue Service                                   Sequence No. 29

                  ADDITIONAL TAXES ATTRIBUTABLE TO QUALIFIED
                 RETIREMENT PLANS (INCLUDING IRAs), ANNUITIES,
                   AND MODIFIED ENDOWMENT CONTRACTS
    (UNDER SECTIONS 72, 4973, 4974 AND 4980A OF THE INTERNAL REVENUE CODE)
                ATTACH TO FORM 1040. SEE SEPARATE INSTRUCTIONS.

Name of individual subject to additional tax (if married filing jointly, see
instructions)

/s/ Paul Jones

Your social security number
003:00:0000

FILL IN YOUR ADDRESS ONLY IF YOU ARE FILING THIS FORM BY ITSELF AND NOT WITH
YOUR TAX RETURN
Home address (number and street), or P O box if mail is not delivered to your
home
Apt. no
City, town or post office, state, and ZIP code
If this is an amended return, check here / /

          If you are subject to the 10% tax on early distributions ONLY, see
          WHO MUST FILE in the instructions before continuing. You may be
          able to report this tax directly on Form 1040 without filing Form
          5329.

PART I  TAX ON EARLY DISTRIBUTIONS
COMPLETE THIS PART IF A TAXABLE DISTRIBUTION WAS MADE FROM YOUR QUALIFIED
RETIREMENT PLAN (INCLUDING AN IRA), ANNUITY CONTRACT, OR MODIFIED ENDOWMENT
CONTRACT BEFORE YOU REACHED AGE 59 1/2 (OR WAS INCORRECTLY INDICATED AS SUCH
ON YOUR FORM 1099-R--SEE INSTRUCTIONS). NOTE: YOU MUST INCLUDE THE AMOUNT OF
THE DISTRIBUTION ON LINE 15B OR 16B OF FORM 1040 OR ON THE APPROPRIATE LINE
OF FORM 4972.

1 Early distributions included in gross income
 (see instructions)............................................   1   3,000.00
2 Distributions excepted from additional tax (see
  instructions). Enter appropriate exception number from
  instructions__...............................................   2     -0-

3 Amount subject to additional tax. Subtract line 2 from line 1   3   3,000.00
4 TAX DUE. Multiply line 3 by 10% (.10). Enter here and on
  Form 1040, line 51...........................................   4     300.00

PART II TAX ON EXCESS CONTRIBUTIONS TO INDIVIDUAL RETIREMENT
        ARRANGEMENTS
COMPLETE THIS PART IF, EITHER IN THIS YEAR OR IN EARLIER YEARS, YOU
CONTRIBUTED MORE TO YOUR IRA THAN IS OR WAS ALLOWABLE AND YOU HAVE AN EXCESS
CONTRIBUTION SUBJECT TO TAX.

5  Excess contributions for 1994 (see instructions). Do not
   include this amount on Form 1040, line 23a or 23b.......        5    500.00

6  Earlier year excess contributions not previously
   eliminated (see instructions)....................               6
7  Contribution credit. If your actual contribution
   for 1994 is less than your maximum allowable
   contribution, see instructions; otherwise
   enter -0-........................................               7
8  1994 distributions from your IRA account that are
   includible in taxable income.....................               8
9  1993 tax year excess contributions (if any)
   withdrawn after the due date (including extensions)
   of your 1993 income tax return, and 1992 and
   earlier tax year excess contributions withdrawn in
   1994.............................................               9
10 Add lines 7, 8 and 9............................               10
11 Adjusted earlier year excess contributions. Subtract line
   10 from from line 6. Enter the result, but not less than
   zero.......................................................    11
12 Total excess contributions. Add lines 5 and 11.............    12    500.00
13 TAX DUE. Enter the SMALLER of 6% (.06) of line 12 or 6%
   (.06%) of the value of your IRA on the last day of 1994.
   Also enter this amount on Form 1040, line 51...............    13     30.00

FOR PAPERWORK REDUCTION ACT NOTICE, SEE PAGE 1 OF SEPARATE INSTRUCTIONS.
Cat. No 133290   Form 5329 (1994)

PAGE 56

<PAGE>

APPENDIX C. (CONTINUED)

Form 5329 (1994)                                                         Page 2
PART III  TAX ON EXCESS ACCUMULATION IN QUALIFIED RETIREMENT PLANS
          (INCLUDING IRAs)

14 Minimum required distribution (see instructions)...........    14
15 Amount actually distributed to you.........................    15
16 Subtract line 15 from line 14. If line 15 is more than line
   14, enter -0-..............................................    16
17 TAX DUE. Multiply line 16 by 50% (.50). Enter here and on
   Form 1040, line 51.........................................    17

PART IV TAX ON EXCESS DISTRIBUTIONS FROM QUALIFIED RETIREMENT
        PLANS (INCLUDING IRAs)

COMPLETE COLUMN A FOR REGULAR DISTRIBUTIONS. COMPLETE   COLUMN A      COLUMN B
COLUMN B FOR LUMP-SUM DISTRIBUTIONS.                    REGULAR       LUMP-SUM
                                                        DISTRIBU-     DISTRIBU-
                                                        TIONS         TIONS

18 Total amount of regular retirement or
   lump-sum distributions.......................    18
19 Amount excluded from additional tax. Enter
   appropriate exception number from
   instructions__...............................    19
20 Subtract line 19 from line 18................    20
21 Enter the GREATER of the threshold amount or
   the 1994 recovery of the grandfather amount
   (from Worksheet 1 or 2). See instructions....    21
22 Excess distributions. Subtract line 21 from
   line 20. If less than zero, enter -0-........    22
23 Tentative tax. Multiply line 22 by 15% (.15).    23

24 Early distributions tax offset (see
   (instructions)...............................    24
25 Subtract line 24 from line 23................    25
26 TAX DUE. Combine columns (a) and (b) of line 25.
   Enter here and on Form 1040, line 51.......................    26

ACCELERATION ELECTIONS (SEE THE INSTRUCTIONS FOR PART IV)

1 If you elected the discretionary method in 1987 or 1988 and wish to make an
  acceleration election beginning in 1994 under Temporary Regulations section
  54.4981A-1T, Q&A b-12, check here / /.
2 If you previously made an acceleration election and wish to revoke that
  election, check here / /.

SIGNATURE. COMPLETE ONLY IF YOU ARE FILING THIS FORM BY ITSELF AND NOT WITH
YOUR TAX RETURN.

PLEASE  Under penalties of perjury, I declare that I have examined this form,
SIGN    including accompanying schedules and statements, and to the best of my
HERE    knowledge and belief, it is true, correct and complete. Declaration of
        preparer (other than taxpayer) is based on all information of which
        preparer has any knowledge.

        Your signature                                   Date

PAID         Preparer's           Date    Check if self-    Preparer's
PREPARER'S   signature                    employed / /      social security no.
USE ONLY

Firm's name (or yours,         E.f. No.
if self employed) and          ZIP code
address.


                       [LOGO] PRINTED ON RECYCLED PAPER

                                                                    Page 57


<PAGE>

APPENDIX D.  FILLED-IN FORM 8606


<TABLE>
<C>  <S>                                  <C>  <C>                        <C>  <C>             <C>  <C>
Form 8606                                     NONDEDUCTIBLE IRAS                               OMB No. 1545-1007
                                   (CONTRIBUTIONS, DISTRIBUTIONS AND BASIS)                           1994

Department of the Treasury     - Please see What Records Must I Keep? on page 2.               Attachment
Internal Revenue Service       - Attach to Form 1040, Form 1040A, or Form 1040NR.             Sequence No. 47

Name. If married, file a separate Form 8606 for each spouse. See instructions.            Your social security number
     /s/  Bill King                                                                                 002 00 0000
______________________________________________________________________________            ___________________

FILL IN YOUR ADDRESS ONLY   Home address (number and street, or P.O. box if mail is not delivered to your home)       Apt. no.
IF YOU ARE FILING THIS      __________________________________________________________________________________        ________
FORM BY ITSELF AND NOT      City, town or post office, state, and ZIP code
WITH YOUR TAX RETURN        __________________________________________________________________________________________________

                     CONTRIBUTIONS, NONTAXABLE DISTRIBUTIONS, AND BASIS

 1   Enter your IRA contributions for 1994 that you choose to be nondeductible. Include
     those made during 1/1/95-4/17/95 that were for 1994. See instructions. . . . . . . . .     1       0.00

 2   Enter your total IRA basis for 1993 and earlier years. See instructions. . . . . . . .     2   2,000.00

 3   Add lines 1 and 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     3   2,000.00

     DID YOU RECEIVE                      NO               ENTER THE AMOUNT FROM LINE 3 ON
     ANY IRA                                               LINE 12. THEN, STOP AND READ WHEN
     DISTRIBUTIONS                                         AND WHERE TO FILE ON PAGE 2.
     (WITHDRAWALS)
     IN 1994?                             YES              GO TO LINE 4.

 4   Enter only those contributions included on line 1 that were made during 1/1/95-4/17/95.
     This amount will be the same as line 1 if all of your nondeductible contributions for
     1994 were made in 1995 by 4/17/95. See instructions. . . . . . . . . . . . . . . . . .     4       0.00

 5   Subtract line 4 from line 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     5   2,000.00

 6   Enter the total value of ALL your IRAs as of 12/31/94 plus any
     outstanding rollovers. See instructions. . . . . . . . . . . . . .   6    1,800.00

 7   Enter the total IRA distributions received during 1994. Do not
     include amounts rolled over before 1/1/95. See instructions. . . .   7      600.00

 8   Add lines 6 and 7. . . . . . . . .   8    2,400.00

 9   Divide line 5 by line 8 and enter the result as a decimal (to at
     least two places). Do not enter more than "1.00" . . . . . . . . .   9      0.8333

10   Multiply line 7 by line 9. This is the amount of your NONTAXABLE DISTRIBUTIONS FOR
     1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      10     500.00

11   Subtract line 10 from line 5. This is the BASIS IN YOUR IRA(S) as of 12/31/94. . . .      11   1,500.00

12   Add lines 4 and 11. This is your TOTAL IRA BASIS FOR 1994 AND EARLIER YEARS. . . . .      12   1,500.00


                                TAXABLE DISTRIBUTIONS FOR 1994

13   Subtract line 10 from line 7. Enter the result here and on Form 1040, line 15b;
     Form 1040A, line 10b; or Form 1040NR, line 16b, whichever applies . . . . . . . . .       13     100.00


SIGN HERE ONLY IF YOU     Under penalties of perjury, I declare that I have examined this form, including
ARE FILING THIS FORM      accompanying attachments, and to the best of my knowledge and belief, it is true,
BY ITSELF AND NOT WITH    correct, and complete.
YOUR TAX RETURN           --   _________________________________________      --  _________________________
                               Your signature                                     Date
</TABLE>


Page 58

<PAGE>

APPENDIX D.  (CONTINUED)

IN THIS ILLUSTRATION, WE HAVE USED THE 1994 FORM BECAUSE THE 1995 FORM WILL NOT
BE AVAILABLE UNTIL 1995.


<TABLE>
<C>  <S>                                  <C>  <C>                        <C>  <C>             <C>  <C>
Form 8606                                     NONDEDUCTIBLE IRAS                               OMB No. 1545-1007
                                   (CONTRIBUTIONS, DISTRIBUTIONS AND BASIS)                           1994

Department of the Treasury     - Please see What Records Must I Keep? on page 2.               Attachment
Internal Revenue Service       - Attach to Form 1040, Form 1040A, or Form 1040NR.             Sequence No. 47

Name. If married, file a separate Form 8606 for each spouse. See instructions.            Your social security number
     /s/  Bill King                                                                               002 00 0000
______________________________________________________________________________            ________________
FILL IN YOUR ADDRESS ONLY   Home address (number and street, or P.O. box if mail is not delivered to your home)       Apt. no.
IF YOU ARE FILING THIS      ___________________________________________________________________________________       ________
FORM BY ITSELF AND NOT      City, town or post office, state and ZIP code
WITH YOUR TAX RETURN        __________________________________________________________________________________________________

                     CONTRIBUTIONS, NONTAXABLE DISTRIBUTIONS, AND BASIS

 1   Enter your IRA contributions for 1994 that you choose to be nondeductible. Include
     those made during 1/1/95-4/17/95 that were for 1994. See instructions. . . . . . . . .     1       0.00

 2   Enter your total IRA basis for 1993 and earlier years. See instructions. . . . . . . .     2   1,500.00

 3   Add lines 1 and 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     3   1,500.00

     DID YOU RECEIVE                      NO               ENTER THE AMOUNT FROM LINE 3 ON
     ANY IRA                                               LINE 12. THEN, STOP AND READ WHEN
     DISTRIBUTIONS                                         AND WHERE TO FILE ON PAGE 2.
     (WITHDRAWALS)
     IN 1994?                             YES              GO TO LINE 4.

 4   Enter only those contributions included on line 1 that were made during 1/1/95-4/17/95.
     This amount will be the same as line 1 if all of your nondeductible contributions for
     1994 were made in 1995 by 4/17/95. See instructions. . . . . . . . . . . . . . . . . .     4       0.00

 5   Subtract line 4 from line 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     5   1,500.00

 6   Enter the total value of ALL your IRAs as of 12/31/94 plus any
     outstanding rollovers. See instructions. . . . . . . . . . . . . .   6        0.00

 7   Enter the total IRA distributions received during 1994. Do not
     include amounts rolled over before 1/1/95. See instructions. . . .   7     1,300.00

 8   Add lines 6 and 7. . . . . . . . . . . . . . . . . .  8     1,300.00

 9   Divide line 5 by line 8 and enter the result as a decimal (to at
     least two places). Do not enter more than "1.00" . . . . . . . . .   9         1.00

10   Multiply line 7 by line 9. This is the amount of your NONTAXABLE DISTRIBUTIONS FOR
     1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      10   1,300.00

11   Subtract line 10 from line 5. This is the BASIS IN YOUR IRA(S) as of 12/31/94. . . .      11     200.00

12   Add lines 4 and 11. This is your TOTAL IRA BASIS FOR 1994 AND EARLIER YEARS. . . . .      12     200.00


                                TAXABLE DISTRIBUTIONS FOR 1994

13   Subtract line 10 from line 7. Enter the result here and on Form 1040, line 15b;
     Form 1040A, line 10b; or Form 1040NR, line 16b, whichever applies . . . . . . . . .      13        0.00


SIGN HERE ONLY IF YOU     Under penalties of perjury, I declare that I have examined this form, including
ARE FILING THIS FORM      accompanying attachments, and to the best of my knowledge and belief, it is true,
BY ITSELF AND NOT WITH    correct, and complete.
YOUR TAX RETURN           --   _________________________________________      --  _________________________
                               Your signature                                     Date
</TABLE>


                                                                         Page 59

<PAGE>

APPENDIX E.  TABLE FOR DETERMINING APPLICABLE DIVISOR FOR MDIB*
             (MINIMUM DISTRIBUTION INCIDENTAL BENEFiT)

- -------------------------------------------------------------------------------

                      APPLICABLE                                 APPLICABLE
    AGE                DIVISOR                 AGE                 DIVISOR
- -------------------------------------------------------------------------------
    70                   26.2                   93                   8.8
    71                   25.3                   94                   8.3
    72                   24.4                   95                   7.8
    73                   23.5                   96                   7.3
    74                   22.7                   97                   6.9
    75                   21.8                   98                   6.5
    76                   20.9                   99                   6.1
    77                   20.1                  100                   5.7
    78                   19.2                  101                   5.3
    79                   18.4                  102                   5.0
    80                   17.6                  103                   4.7
    81                   16.8                  104                   4.4
    82                   16.0                  105                   4.1
    83                   15.3                  106                   3.8
    84                   14.5                  107                   3.6
    85                   13.8                  108                   3.3
    86                   13.1                  109                   3.1
    87                   12.4                  110                   2.8
    88                   11.8                  111                   2.6
    89                   11.1                  112                   2.4
    90                   10.5                  113                   2.2
    91                    9.9                  114                   2.0
    92                    9.4              115 and older             1.8
- -------------------------------------------------------------------------------
* Use this table if your beneficiary is someone other than your spouse.  For
  additional instructions, see MINIMUM DISTRIBUTION INCIDENTAL BENEFIT
  REQUIREMENT in Chapter 6.


                                                                        Page 60


<PAGE>

APPENDIX E.  LIFE EXPECTANCY TABLES

- -------------------------------------------------------------------------------
                                     TABLE I
                           (SINGLE LIFE EXPECTANCY)*

- -------------------------------------------------------------------------------
       AGE            DIVISOR                     AGE            DIVISOR
- -------------------------------------------------------------------------------
        35              47.3                       73              13.9
        36              46.4                       74              13.2
        37              45.4                       75              12.5
        38              44.4                       76              11.9
        39              43.5                       77              11.2
        40              42.5                       78              10.6
        41              41.5                       79              10.0
        42              40.6                       80               9.5
        43              39.6                       81               8.9
        44              38.7                       82               8.4
        45              37.7                       83               7.9
        46              36.8                       84               7.4
        47              35.9                       85               6.9
        48              34.9                       86               6.5
        49              34.0                       87               6.1
        50              33.1                       88               5.7
        51              32.2                       89               5.3
        52              31.3                       90               5.0
        53              30.4                       91               4.7
        54              29.5                       92               4.4
        55              28.6                       93               4.1
        56              27.7                       94               3.9
        57              26.8                       95               3.7
        58              25.9                       96               3.4
        59              25.0                       97               3.2
        60              24.2                       98               3.0
        61              23.3                       99               2.8
        62              22.5                      100               2.7
        63              21.6                      101               2.5
        64              20.8                      102               2.3
        65              20.0                      103               2.1
        66              19.2                      104               1.9
        67              18.4                      105               1.8
        68              17.6                      106               1.6
        69              16.8                      107               1.4
        70              16.0                      108               1.3
        71              15.3                      109               1.1
        72              14.6                      110               1.0
- -------------------------------------------------------------------------------
* Table I does not provide for IRA owners younger than 35 years of age.  For
  additional life expectancy tables, see Publication 939.


                                                                        Page 61
<PAGE>

APPENDIX E. (CONTINUED)

                                     TABLE II
                        (JOINT LIFE AND LAST SURVIVOR EXPECTANCY)*


- ------------------------------------------------------------------------------
AGES     35      36     37     38      39     40     41     42     43     44
- ------------------------------------------------------------------------------
 35     54.0    53.5   53.0   52.6    52.2   51.8   51.4   51.1   50.8   50.5
 36     53.5    53.0   52.5   52.0    51.6   51.2   50.8   50.4   50.1   49.8
 37     53.0    52.5   52.0   51.5    51.0   50.6   50.2   49.8   49.5   49.1
 38     52.6    52.0   51.5   51.0    50.5   50.0   49.6   49.2   48.8   48.5
 39     52.2    51.6   51.0   50.5    50.0   49.5   49.1   48.6   48.2   47.8
 40     51.8    51.2   50.6   50.0    49.5   49.0   48.5   48.1   47.6   47.2
 41     51.4    50.8   50.2   49.6    49.1   48.5   48.0   47.5   47.1   46.7
 42     51.1    50.4   49.8   49.2    48.6   48.1   47.5   47.0   46.6   46.1
 43     50.8    50.1   49.5   48.8    48.2   47.6   47.1   46.6   46.0   45.6
 44     50.5    49.6   49.1   48.5    47.8   47.2   46.7   46.1   45.6   45.1
 45     50.2    49.5   48.8   48.1    47.5   46.9   46.3   45.7   45.1   44.6
 46     50.0    49.2   48.5   47.8    47.2   46.5   45.9   45.3   44.7   44.1
 47     49.7    49.0   48.3   47.5    46.8   46.2   45.5   44.9   44.3   43.7
 48     49.5    48.8   48.0   47.3    46.6   45.9   45.2   44.5   43.9   43.3
 49     49.3    48.5   47.8   47.0    46.3   45.6   44.9   44.2   43.6   42.9
 50     49.2    48.4   47.6   46.8    46.0   45.3   44.6   43.9   43.2   42.6
 51     49.0    48.2   47.4   46.6    45.8   45.1   44.3   43.6   42.9   42.2
 52     48.8    48.0   47.2   46.4    45.6   44.8   44.1   43.3   42.6   41.9
 53     48.7    47.9   47.0   46.2    45.4   44.6   43.9   43.1   42.4   41.7
 54     48.6    47.7   46.9   46.0    45.2   44.4   43.6   42.9   42.1   41.4
 55     48.5    47.6   46.7   45.9    45.1   44.2   43.4   42.7   41.9   41.2
 56     48.3    47.5   46.6   45.8    44.9   44.1   43.3   42.5   41.7   40.9
 57     48.3    47.4   46.5   45.6    44.8   43.9   43.1   42.3   41.5   40.7
 58     48.2    47.3   46.4   45.5    44.7   43.8   43.0   42.1   41.3   40.5
 59     48.1    47.2   46.3   45.4    44.5   43.7   42.8   42.0   41.2   40.4
 60     48.0    47.1   46.2   45.3    44.4   43.6   42.7   41.9   41.0   40.2
 61     47.9    47.0   46.1   45.2    44.3   43.5   42.6   41.7   40.9   40.0
 62     47.9    47.0   46.0   45.1    44.2   43.4   42.5   41.6   40.8   39.9
 63     47.8    46.9   46.0   45.1    44.2   43.3   42.4   41.5   40.6   39.8
 64     47.8    46.8   45.9   45.0    44.1   43.2   42.3   41.4   40.5   39.7
 65     47.7    46.8   45.9   44.9    44.0   43.1   42.2   41.3   40.4   39.6
 66     47.7    46.7   45.8   44.9    44.0   43.1   42.2   41.3   40.4   39.5
 67     47.6    46.7   45.8   44.8    43.9   43.0   42.1   41.2   40.3   39.4
 68     47.6    46.7   45.7   44.8    43.9   42.9   42.0   41.1   40.2   39.3
 69     47.6    46.6   45.7   44.8    43.8   42.9   42.0   41.1   40.2   39.3
 70     47.5    46.6   45.7   44.7    43.8   42.9   41.9   41.0   40.1   39.2
 71     47.5    46.6   45.6   44.7    43.8   42.8   41.9   41.0   40.1   39.1
 72     47.5    46.6   45.6   44.7    43.7   42.8   41.9   40.9   40.0   39.1
 73     47.5    46.5   45.6   44.6    43.7   42.8   41.8   40.9   40.0   39.0
 74     47.5    46.5   45.6   44.6    43.7   42.7   41.8   40.9   39.9   39.0
 75     47.4    46.5   45.5   44.6    43.6   42.7   41.8   40.8   39.9   39.0
 76     47.4    46.5   45.5   44.6    43.6   42.7   41.7   40.8   39.9   38.9
 77     47.4    46.5   45.5   44.6    43.6   42.7   41.7   40.8   39.8   38.9
 78     47.4    46.4   45.5   44.5    43.6   42.6   41.7   40.7   39.8   38.9
 79     47.4    46.4   45.5   44.5    43.6   42.6   41.7   40.7   39.8   38.9
 80     47.4    46.4   45.5   44.5    43.6   42.6   41.7   40.7   39.8   38.8
 81     47.4    46.4   45.5   44.5    43.5   42.6   41.6   40.7   39.8   38.8
 82     47.4    46.4   45.4   44.5    43.5   42.6   41.6   40.7   39.7   38.8
 83     47.4    46.4   45.4   44.5    43.5   42.6   41.6   40.7   39.7   38.8
 84     47.4    46.4   45.4   44.5    43.5   42.6   41.6   40.7   39.7   38.8
 85     47.4    46.4   45.4   44.5    43.5   42.6   41.6   40.7   39.7   38.8
 86     47.3    46.4   45.4   44.5    43.5   42.5   41.6   40.6   39.7   38.8
 87     47.3    46.4   45.4   44.5    43.5   42.5   41.6   40.6   39.7   38.7
 88     47.3    46.4   45.4   44.5    43.5   42.5   41.6   40.6   39.7   38.7
 89     47.3    46.4   45.4   44.4    43.5   42.5   41.6   40.6   39.7   38.7
 90     47.3    46.4   45.4   44.4    43.5   42.5   41.6   40.6   39.7   38.7
 91     47.3    46.4   45.4   44.4    43.5   42.5   41.6   40.6   39.7   38.7
 92     47.3    46.4   45.4   44.4    43.5   42.5   41.6   40.6   39.7   38.7

* Table II does not provide for IRA owners or survivors younger than 35 years
of age. For additional life expectancy tables, see IRS Publication 939.




Page 62

<PAGE>

APPENDIX E. (CONTINUED)

                                TABLE II (CONTINUED)
                      (JOINT LIFE AND LAST SURVIVOR EXPECTANCY)

- -------------------------------------------------------------------------------
AGES     45     46     47     48     49     50     51     52     53     54
- -------------------------------------------------------------------------------
 45     44.1   43.6   43.2   42.7   42.3   42.0   41.6   41.3   41.0   40.7
 46     43.6   43.1   42.6   42.2   41.8   41.4   41.0   40.6   40.3   40.0
 47     43.2   42.6   42.1   41.7   41.2   40.8   40.4   40.0   39.7   39.3
 48     42.7   42.2   41.7   41.2   40.7   40.2   39.8   39.4   39.0   38.7
 49     42.3   41.8   41.2   40.7   40.2   39.7   39.3   38.8   38.4   38.1
 50     42.0   41.4   40.8   40.2   39.7   39.2   38.7   38.3   37.9   37.5
 51     41.6   41.0   40.4   39.8   39.3   38.7   38.2   37.8   37.3   36.9
 52     41.3   40.6   40.0   39.4   38.8   38.3   37.8   37.3   36.8   36.4
 53     41.0   40.3   39.7   39.0   38.4   37.9   37.3   36.8   36.3   35.8
 54     40.7   40.0   39.3   38.7   38.1   37.5   36.9   36.4   35.8   35.3
 55     40.4   39.7   39.0   38.4   37.7   37.1   36.5   35.9   35.4   34.9
 56     40.2   39.5   38.7   38.1   37.4   36.8   36.1   35.6   35.0   34.4
 57     40.0   39.2   38.5   37.8   37.1   36.4   35.8   35.2   34.6   34.0
 58     39.7   39.0   38.2   37.5   36.8   36.1   35.5   34.8   34.2   33.6
 59     39.6   38.8   38.0   37.3   36.6   35.9   35.2   34.5   33.9   33.3
 60     39.4   38.6   37.8   37.1   36.3   35.6   34.9   34.2   33.6   32.9
 61     39.2   38.4   37.6   36.9   36.1   35.4   34.6   33.9   33.3   32.6
 62     39.1   38.3   37.5   36.7   35.9   35.1   34.4   33.7   33.0   32.3
 63     38.9   38.1   37.3   36.5   35.7   34.9   34.2   33.5   32.7   32.0
 64     38.8   38.0   37.2   36.3   35.5   34.8   34.0   33.2   32.5   31.8
 65     38.7   37.9   37.0   36.2   35.4   34.6   33.8   33.0   32.3   31.6
 66     38.6   37.8   36.9   36.1   35.2   34.4   33.6   32.9   32.1   31.4
 67     38.5   37.7   36.8   36.0   35.1   34.3   33.5   32.7   31.8   31.2
 68     38.4   37.6   36.7   35.8   35.0   34.2   33.4   32.5   31.8   31.0
 69     38.4   37.5   36.6   35.7   34.9   34.1   33.2   32.4   31.6   30.8
 70     38.3   37.4   36.5   35.7   34.8   34.0   33.1   32.3   31.5   30.7
 71     38.2   37.3   36.5   35.6   34.7   33.9   33.0   32.2   31.4   30.5
 72     38.2   37.3   36.4   35.5   34.6   33.8   32.9   32.1   31.2   30.4
 73     38.1   37.2   36.3   35.4   34.6   33.7   32.8   32.0   31.1   30.2
 74     38.1   37.2   36.3   35.4   34.5   33.6   32.8   31.9   31.1   30.2
 75     38.1   37.1   36.2   35.3   34.5   33.6   32.7   31.8   31.0   30.1
 76     38.0   37.1   36.2   35.3   34.4   33.5   32.6   31.8   30.9   30.1
 77     38.0   37.1   36.2   35.3   34.4   33.5   32.6   31.7   30.8   30.0
 78     38.0   37.0   36.1   35.2   34.3   33.4   32.5   31.7   30.8   29.9
 79     37.9   37.0   36.1   35.2   34.3   33.4   32.5   31.6   30.7   29.9
 80     37.9   37.0   36.1   35.2   34.2   33.4   32.5   31.6   30.7   29.8
 81     37.9   37.0   36.0   35.1   34.2   33.3   32.4   31.5   30.7   29.8
 82     37.9   36.9   36.0   35.1   34.2   33.3   32.4   31.5   30.6   29.7
 83     37.9   36.9   36.0   35.1   34.2   33.3   32.4   31.5   30.6   29.7
 84     37.8   36.9   36.0   35.1   34.2   33.2   32.3   31.4   30.6   29.7
 85     37.8   36.9   36.0   35.1   34.1   33.2   32.3   31.4   30.5   29.6
 86     37.8   36.9   36.0   35.0   34.1   33.2   32.3   31.4   30.5   29.6
 87     37.8   36.9   35.9   35.0   34.1   33.2   32.3   31.4   30.5   29.6
 88     37.8   36.9   35.9   35.0   34.1   33.2   32.3   31.4   30.5   29.6
 89     37.8   36.9   35.9   35.0   34.1   33.2   32.3   31.4   30.5   29.6
 90     37.8   36.9   35.9   35.0   34.1   33.2   32.3   31.3   30.5   29.6
 91     37.8   36.8   35.9   35.0   34.1   33.2   32.2   31.3   30.4   29.5
 92     37.8   36.8   35.9   35.0   34.1   33.2   32.2   31.3   30.4   29.5



                                                                    Page 63
<PAGE>

APPENDIX E. LIFE EXPECTANCY TABLES (CONTINUED)

                             TABLE II (CONTINUED)
                  (JOINT LIFE AND LAST SURVIVOR EXPECTANCY)


<TABLE>
- ---------------------------------------------------------------------------------------------------------------------------
AGES  55    56    57    58    59    60    61    62    63    64    65    66    67    68    69    70    71    72    73    74
- ---------------------------------------------------------------------------------------------------------------------------
<S>  <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>
 55  34.4  33.9  33.5  33.1  32.7  32.3  32.0  31.7  31.4  31.1
 56  33.9  33.4  33.0  32.5  32.1  31.7  31.4  31.0  30.7  30.4
 57  33.5  33.0  32.5  32.0  31.6  31.2  30.8  30.4  30.1  29.6
 58  33.1  32.5  32.0  31.5  31.1  30.6  30.2  29.8  29.5  29.2
 59  32.7  32.1  31.6  31.1  30.6  30.1  29.7  29.3  28.9  28.6
 60  32.3  31.7  31.2  30.6  30.1  29.7  29.2  28.6  28.4  28.0
 61  32.0  31.4  30.8  30.2  29.7  29.2  28.7  28.2  27.8  27.4
 62  31.7  31.0  30.4  29.9  29.3  28.6  28.3  27.8  27.3  26.9
 63  31.4  30.7  30.1  29.5  28.9  28.4  27.8  27.3  26.9  26.4
 64  31.1  30.4  29.8  29.2  28.6  28.0  27.4  26.9  26.4  25.9
 65  30.9  30.2  29.5  28.9  28.2  27.6  27.1  26.5  26.0  25.5  25.0  24.6  24.2  23.8  23.4  23.1  22.8  22.5  22.2  22.0
 66  30.6  29.9  29.2  28.6  27.9  27.3  26.7  26.1  25.6  25.1  24.6  24.1  23.7  23.3  22.9  22.5  22.2  21.9  21.6  21.4
 67  30.4  29.7  29.0  28.3  27.6  27.0  26.4  25.8  25.2  24.7  24.2  23.7  23.2  22.8  22.4  22.0  21.7  21.3  21.0  20.8
 68  30.2  29.5  28.8  28.1  27.4  26.7  26.1  25.5  24.9  24.3  23.8  23.3  22.8  22.3  21.9  21.5  21.2  20.8  20.5  20.2
 69  30.1  29.3  28.6  27.8  27.1  26.5  25.8  25.2  24.6  24.0  23.4  22.9  22.4  21.9  21.5  21.1  20.7  20.3  20.0  19.6
 70  29.9  29.1  28.4  27.6  26.9  26.2  25.6  24.9  24.3  23.7  23.1  22.5  22.0  21.5  21.1  20.8  20.2  19.8  19.4  19.1
 71  29.7  29.0  28.2  27.5  26.7  26.0  25.3  24.7  24.0  23.4  22.8  22.2  21.7  21.2  20.7  20.2  19.8  19.4  19.0  18.6
 72  29.6  28.8  28.1  27.3  26.5  25.8  25.1  24.4  23.8  23.1  22.5  21.9  21.3  20.8  20.3  19.8  19.4  18.9  18.5  18.2
 73  29.5  28.7  27.9  27.1  26.4  25.6  24.9  24.2  23.5  22.9  22.2  21.8  21.0  20.5  20.0  19.4  19.0  18.5  18.1  17.7
 74  29.4  28.6  27.8  27.0  26.2  25.5  24.7  24.0  23.3  22.7  22.0  21.4  20.8  20.2  19.6  19.1  18.6  18.2  17.7  17.3
 75  29.3  28.5  27.7  26.9  26.1  25.3  24.6  23.8  23.1  22.4  21.8  21.1  20.5  19.9  19.3  18.8  18.3  17.9  17.3  16.9
 76  29.2  28.4  27.6  26.8  26.0  25.2  24.4  23.7  23.0  22.3  21.6  20.9  20.3  19.7  19.1  18.5  18.0  17.5  17.0  16.5
 77  29.1  28.3  27.5  26.7  25.9  25.1  24.3  23.6  22.8  22.1  21.4  20.7  20.1  19.4  18.8  18.3  17.7  17.2  16.7  16.2
 78  29.1  28.2  27.4  26.6  25.8  25.0  24.2  23.4  22.7  21.9  21.2  20.5  19.9  19.2  18.8  18.0  17.5  16.9  16.4  15.9
 79  29.0  28.2  27.3  26.5  25.7  24.8  24.1  23.3  22.6  21.8  21.1  20.4  19.7  19.0  18.4  17.8  17.2  16.7  16.1  15.6
 80  29.0  28.1  27.3  26.4  25.6  24.8  24.0  23.2  22.4  21.7  21.0  20.2  19.5  18.9  18.2  17.6  17.0  16.4  15.9  15.4
 81  28.9  28.1  27.2  26.4  25.5  24.7  23.9  23.1  22.3  21.6  20.8  20.1  19.4  18.7  18.1  17.4  16.8  16.2  15.7  15.1
 82  28.9  28.0  27.2  26.3  25.5  24.6  23.8  23.0  22.3  21.5  20.7  20.0  19.3  18.6  17.9  17.3  16.6  16.0  15.5  14.9
 83  28.8  28.0  27.1  26.3  25.4  24.6  23.8  23.0  22.2  21.4  20.6  19.9  19.2  18.5  17.8  17.1  16.5  15.9  15.3  14.7
 84  28.8  27.9  27.1  26.2  25.4  24.5  23.7  22.9  22.1  21.3  20.5  19.8  19.1  18.4  17.7  17.0  16.3  15.7  15.1  14.5
 85  28.8  27.9  27.0  26.2  25.3  24.5  23.7  22.8  22.0  21.3  20.5  19.7  19.0  18.3  17.6  16.9  16.2  15.6  15.0  14.4
 86  28.7  27.9  27.0  26.1  25.3  24.5  23.6  22.8  22.0  21.2  20.4  19.6  18.9  18.2  17.5  16.8  16.1  15.5  14.8  14.2
 87  28.7  27.8  27.0  26.1  25.3  24.4  23.6  22.8  21.9  21.1  20.4  19.6  18.8  18.1  17.4  16.7  16.0  15.4  14.7  14.1
 88  28.7  27.8  27.0  26.1  25.2  24.4  23.5  22.7  21.9  21.1  20.3  19.5  18.8  18.0  17.2  16.6  15.9  15.3  14.6  14.0
 89  28.7  27.8  26.9  26.1  25.2  24.4  23.5  22.7  21.9  21.1  20.3  19.5  18.7  18.0  17.2  16.5  15.8  15.2  14.5  13.9
 90  28.7  27.8  26.9  26.1  25.2  24.3  23.5  22.7  21.8  21.0  20.2  19.4  18.7  17.9  17.2  16.5  15.8  15.1  14.5  13.8
 91  28.7  27.8  26.9  26.0  25.2  24.3  23.5  22.6  21.8  21.0  20.2  19.4  18.6  17.9  17.1  16.4  15.7  15.0  14.4  13.7
 92  28.6  27.8  26.9  26.0  25.2  24.3  23.5  22.6  21.8  21.0  20.2  19.4  18.6  17.8  17.1  16.4  15.7  15.0  14.3  13.7
 93  28.6  27.8  26.9  26.0  25.1  24.3  23.4  22.6  21.8  20.9  20.1  19.3  18.6  17.8  17.1  16.3  15.6  14.9  14.3  13.6
 94  28.6  27.7  26.9  26.0  25.1  24.3  23.4  22.6  21.7  20.9  20.1  19.3  18.5  17.8  17.0  16.3  15.6  14.9  14.2  13.6
 95  28.6  27.7  26.9  26.0  25.1  24.3  23.4  22.6  21.7  20.9  20.1  19.3  18.5  17.8  17.0  16.3  15.6  14.9  14.2  13.5
 96  28.6  27.7  26.9  26.0  25.1  24.2  23.4  22.6  21.7  20.9  20.1  19.3  18.5  17.7  17.0  16.2  15.5  14.8  14.2  13.5
 97  28.6  27.7  26.8  26.0  25.1  24.2  23.4  22.5  21.7  20.9  20.1  19.3  18.5  17.7  17.0  16.2  15.5  14.8  14.1  13.5
 98  28.6  27.7  26.8  26.0  25.1  24.2  23.4  22.5  21.7  20.9  20.1  19.3  18.5  17.7  16.9  16.2  15.5  14.8  14.1  13.4
 99  28.6  27.7  26.8  26.0  25.1  24.2  23.4  22.5  21.7  20.9  20.0  19.2  18.5  17.7  16.9  16.2  15.5  14.7  14.1  13.4
100  28.6  27.7  26.8  26.0  25.1  24.2  23.4  22.5  21.7  20.8  20.0  19.2  18.4  17.7  16.9  16.2  15.4  14.7  14.0  13.4
101  28.6  27.7  26.8  25.9  25.1  24.2  23.4  22.5  21.7  20.8  20.0  19.2  18.4  17.7  16.9  16.1  15.4  14.7  14.0  13.3
102  28.6  27.7  26.8  25.9  25.1  24.2  23.3  22.5  21.7  20.8  20.0  19.2  18.4  17.6  16.9  16.1  15.4  14.7  14.0  13.3
103  28.6  27.7  26.8  25.9  25.1  24.2  23.3  22.5  21.7  20.8  20.0  19.2  18.4  17.6  16.9  16.1  15.4  14.7  14.0  13.3
104  28.6  27.7  26.8  25.9  25.1  24.2  23.3  22.5  21.6  20.8  20.0  19.2  18.4  17.6  16.9  16.1  15.4  14.7  14.0  13.3
105  28.6  27.7  26.8  25.9  25.1  24.2  23.3  22.5  21.6  20.8  20.0  19.2  18.4  17.6  16.8  16.1  15.4  14.6  13.9  13.3
106  28.6  27.7  26.8  25.9  25.1  24.2  23.3  22.5  21.6  20.8  20.0  19.2  18.4  17.6  16.8  16.1  15.3  14.6  13.9  13.3
107  28.6  27.7  26.8  25.9  25.1  24.2  23.3  22.5  21.6  20.8  20.0  19.2  18.4  17.6  16.8  16.1  15.3  14.6  13.9  13.2
108  28.6  27.7  26.8  25.9  25.1  24.2  23.3  22.5  21.6  20.8  20.0  19.2  18.4  17.6  16.8  16.1  15.3  14.6  13.9  13.2
109  28.6  27.7  26.8  25.9  25.1  24.2  23.3  22.5  21.6  20.8  20.0  19.2  18.4  17.6  16.8  16.1  15.3  14.6  13.9  13.2
110  28.6  27.7  26.8  25.9  25.1  24.2  23.3  22.5  21.6  20.8  20.0  19.2  18.4  17.6  16.8  16.1  15.3  14.6  13.9  13.2
111  28.6  27.7  26.8  25.9  25.0  24.2  23.3  22.5  21.6  20.8  20.0  19.2  18.4  17.6  16.8  16.0  15.3  14.6  13.9  13.2
112  28.6  27.7  26.8  25.9  25.0  24.2  23.3  22.5  21.6  20.8  20.0  19.2  18.4  17.6  16.8  16.0  15.3  14.6  13.9  13.2
113  28.6  27.7  26.8  25.9  25.0  24.2  23.3  22.5  21.6  20.8  20.0  19.2  18.4  17.6  16.8  16.0  15.3  14.6  13.9  13.2
114  28.6  27.7  26.8  25.9  25.0  24.2  23.3  22.5  21.6  20.8  20.0  19.2  18.4  17.6  16.8  16.0  15.3  14.6  13.9  13.2
115  28.6  27.7  26.8  25.9  25.0  24.2  23.3  22.5  21.6  20.8  20.0  19.2  18.4  17.6  16.8  16.0  15.3  14.6  13.9  13.2

</TABLE>


Page 64


<PAGE>

APPENDIX E. LIFE EXPECTANCY TABLES (CONTINUED)

                             TABLE II (CONTINUED)
                  (JOINT LIFE AND LAST SURVIVOR EXPECTANCY)


<TABLE>
- ---------------------------------------------------------------------------------------------------------------------------
AGES  75    76    77    78    79    80    81    82    83    84    85    86    87    88    89    90    91    92    93    94
- ---------------------------------------------------------------------------------------------------------------------------
<S>  <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>




















 75  16.5  16.1  15.8  15.4  15.1  14.9  14.6  14.4  14.2  14.0
 76  16.1  15.7  15.4  15.0  14.7  14.4  14.1  13.9  13.7  13.5
 77  15.8  15.4  15.0  14.6  14.3  14.0  13.7  13.4  13.2  13.0
 78  15.4  15.0  14.6  14.2  13.9  13.5  13.2  13.0  12.7  12.5
 79  15.1  14.7  14.3  13.9  13.5  13.2  12.8  12.5  12.3  12.0
 80  14.9  14.4  14.0  13.5  13.2  12.8  12.5  12.2  11.9  11.6
 81  14.6  14.1  13.7  13.2  12.8  12.5  12.1  11.8  11.5  11.2
 82  14.4  13.9  13.4  13.0  12.5  12.2  11.8  11.5  11.1  10.9
 83  14.2  13.7  13.2  12.7  12.3  11.9  11.5  11.1  10.8  10.5
 84  14.0  13.5  13.0  12.5  12.0  11.6  11.2  10.9  10.5  10.2
 85  13.8  13.3  12.8  12.3  11.8  11.4  11.0  10.6  10.2   9.9   9.6   9.3   9.1   8.9   8.7   8.5   8.3   8.2   8.0   7.9
 86  13.7  13.1  12.6  12.1  11.6  11.2  10.8  10.4  10.0   9.7   9.3   9.1   8.8   8.6   8.3   8.2   8.0   7.8   7.7   7.6
 87  13.5  13.0  12.4  11.9  11.4  11.0  10.6  10.1   9.8   9.4   9.1   8.8   8.5   8.3   8.1   7.9   7.7   7.5   7.4   7.2
 88  13.4  12.8  12.3  11.8  11.3  10.8  10.4  10.0   9.6   9.2   8.9   8.6   8.3   8.0   7.8   7.6   7.4   7.2   7.1   6.9
 89  13.3  12.7  12.2  11.6  11.1  10.7  10.2   9.8   9.4   9.0   8.7   8.3   8.1   7.8   7.5   7.3   7.1   6.9   6.8   6.6
 90  13.2  12.6  12.1  11.5  11.0  10.5  10.1   9.6   9.2   8.8   8.5   8.2   7.9   7.6   7.3   7.1   6.9   6.7   6.5   6.4
 91  13.1  12.5  12.0  11.4  10.9  10.4   9.9   9.5   9.1   8.7   8.3   8.0   7.7   7.4   7.1   6.9   6.7   6.5   6.3   6.2
 92  13.1  12.5  11.9  11.3  10.8  10.3   9.8   9.4   8.9   8.5   8.2   7.8   7.5   7.2   6.9   6.7   6.5   6.3   6.1   5.9
 93  13.0  12.4  11.8  11.3  10.7  10.2   9.7   9.3   8.8   8.4   8.0   7.7   7.4   7.1   6.8   6.5   6.2   6.1   5.9   5.8
 94  12.9  12.3  11.7  11.2  10.6  10.1   9.6   9.2   8.7   8.3   7.9   7.6   7.2   6.9   6.6   6.4   6.2   5.9   5.8   5.6
 95  12.9  12.3  11.7  11.1  10.6  10.1   9.6   9.1   8.6   8.2   7.8   7.5   7.1   6.8   6.5   6.3   6.0   5.8   5.6   5.4
 96  12.9  12.2  11.6  11.1  10.5  10.0   9.5   9.0   8.5   8.1   7.7   7.3   7.0   6.7   6.4   6.1   5.9   5.7   5.5   5.3
 97  12.8  12.2  11.6  11.0  10.5   9.9   9.4   8.9   8.5   8.0   7.6   7.3   6.9   6.6   6.3   6.0   5.8   5.5   5.3   5.1
 98  12.8  12.2  11.5  11.0  10.4   9.9   9.4   8.9   8.4   8.0   7.5   7.2   6.8   6.5   6.2   5.9   5.6   5.4   5.2   5.0
 99  12.7  12.1  11.5  10.9  10.4   9.8   9.3   8.8   8.3   7.9   7.5   7.1   6.7   6.4   6.1   5.8   5.5   5.3   5.1   4.9
100  12.7  12.1  11.5  10.9  10.3   9.8   9.2   8.7   8.3   7.8   7.4   7.0   6.6   6.3   6.0   5.7   5.4   5.2   5.0   4.8
101  12.7  12.1  11.4  10.8  10.3   9.7   9.2   8.7   8.2   7.8   7.3   6.9   6.6   6.2   5.9   5.6   5.3   5.1   4.9   4.7
102  12.7  12.0  11.4  10.8  10.2   9.7   9.2   8.7   8.2   7.7   7.3   6.9   6.5   6.2   5.8   5.5   5.3   5.0   4.8   4.6
103  12.6  12.0  11.4  10.8  10.2   9.7   9.1   8.6   8.1   7.7   7.2   6.8   6.4   6.1   5.8   5.5   5.2   4.9   4.7   4.5
104  12.6  12.0  11.4  10.8  10.2   9.6   9.1   8.6   8.1   7.6   7.2   6.8   6.4   6.0   5.7   5.4   5.1   4.8   4.6   4.4
105  12.6  12.0  11.3  10.7  10.2   9.6   9.1   8.5   8.0   7.6   7.1   6.7   6.3   6.0   5.6   5.3   5.0   4.8   4.5   4.3
106  12.6  11.9  11.3  10.7  10.1   9.6   9.0   8.5   8.0   7.5   7.1   6.7   6.3   5.9   5.6   5.3   5.0   4.7   4.5   4.2
107  12.6  11.9  11.3  10.7  10.1   9.6   9.0   8.5   8.0   7.5   7.1   6.6   6.2   5.9   5.5   5.2   4.9   4.6   4.4   4.2
108  12.6  11.9  11.3  10.7  10.1   9.5   9.0   8.5   8.0   7.5   7.0   6.6   6.2   5.8   5.5   5.2   4.9   4.6   4.3   4.1
109  12.6  11.9  11.3  10.7  10.1   9.5   9.0   8.4   7.9   7.5   7.0   6.6   6.2   5.8   5.5   5.1   4.8   4.5   4.3   4.1
110  12.5  11.9  11.3  10.7  10.1   9.5   9.0   8.4   7.9   7.4   7.0   6.6   6.2   5.8   5.4   5.1   4.8   4.5   4.3   4.0
111  12.5  11.9  11.3  10.7  10.1   9.5   8.9   8.4   7.9   7.4   7.0   6.5   6.1   5.7   5.4   5.1   4.8   4.5   4.2   4.0
112  12.5  11.9  11.3  10.6  10.1   9.5   8.9   8.4   7.9   7.4   7.0   6.5   6.1   5.7   5.4   5.0   4.7   4.4   4.2   3.9
113  12.5  11.9  11.2  10.6  10.0   9.5   8.9   8.4   7.9   7.4   6.9   6.5   6.1   5.7   5.4   5.0   4.7   4.4   4.2   3.9
114  12.5  11.9  11.2  10.6  10.0   9.5   8.9   8.4   7.9   7.4   6.9   6.5   6.1   5.7   5.3   5.0   4.7   4.4   4.1   3.9
115  12.5  11.9  11.2  10.6  10.0   9.5   8.9   8.4   7.9   7.4   6.9   6.5   6.1   5.7   5.3   5.0   4.7   4.4   4.1   3.9

</TABLE>


                                                                         Page 65


<PAGE>

INDEX

A
Adjusted gross income limitation............................ 10
 Deduction phaseout......................................... 11
 Filing status.............................................. 11
 Modified AGI............................................... 10
AGI limit................................................... 10

- ---------------------------------------------------------------
- ---------------------------------------------------------------
B
Basis....................................................... 27
Broker's commissions......................................... 8

- ---------------------------------------------------------------
- ---------------------------------------------------------------
C
Can you take an IRA deduction chart.......................... 8
Collectibles................................................ 33
 Exception.................................................. 33
Community property laws...................................... 8
Compensation................................................. 4
 Alimony and separate maintenance............................ 5
 Commissions................................................. 4
 Not Compensation............................................ 5
 Self-employment income...................................... 4
 Self-employment loss........................................ 4
 Wages, salaries, etc........................................ 4
Contribution limits.......................................... 7
 Spousal IRA................................................. 7
Contributions................................................ 6
 Annuity or endowment contracts.............................. 8
 Both spouses have compensation.............................. 7
 Designating the year........................................ 8
 Filing before making your contribution...................... 8
 Filing status............................................... 7
 Form of..................................................... 6
 Less than maximum........................................... 7
 Not required................................................ 7
 Tax-free withdrawal........................................ 15
 When to contribute.......................................... 6
Cost basis.................................................. 27

- ---------------------------------------------------------------
- ---------------------------------------------------------------
D
Death benefit exclusion..................................... 30
Deductible contributions..................................... 8
 Reporting.................................................. 12
Deduction limits............................................ 10
 Full deduction............................................. 10
 Reduced or no deduction.................................... 10
 Spousal IRA................................................ 12
Deduction phaseout.......................................... 11
Disclosures, required........................................ 6
Distributions............................................... 22
 Age 59 1/2 rule............................................ 22
 Annuity contracts.......................................... 30
 Beneficiaries.............................................. 29
 Beneficiary other than spouse.............................. 29
 Designated beneficiary..................................... 23
 Exceptions to age 59 1/2 rule.............................. 22
 Fully or partly taxable.................................... 27
 Inherited IRAs............................................. 29
 Losses on IRA investments.................................. 29
 Minimum.................................................... 24
 Reporting and withholding requirements..................... 30
 Required................................................... 23
 Required beginning date.................................... 23
 Retirement bonds........................................... 30
 Rollovers............................................... 17,18
 Tax treatment.............................................. 27
Divorce..................................................... 20


 Qualified domestic relations order......................... 20
 Rollovers.................................................. 20
 Transfer of interest....................................... 22
 Transfers incident to...................................... 22

- ---------------------------------------------------------------
- ---------------------------------------------------------------
E
Employer and employee association trust accounts............. 6
Employer plans............................................... 8
 Defined benefit plan........................................ 9
 Defined contribution plan................................... 9
 Federal judges............................................. 10
 Marital status............................................. 10
 Married filing a joint return.............................. 10
 Married filing separate return............................. 10
 Nonvested employees........................................ 10
 Receiving retirement benefits.............................. 10
 Reservists and volunteer fire fighters..................... 10
 Social Security and railroad retirement coverage........... 10
 Spouse died................................................ 10
 When are you covered?....................................... 9
 When are you not covered?.................................. 10
Example, comprehensive...................................... 15
Excess accumulations........................................ 35
Excess Contributions........................................ 33
Excess distributions........................................ 36

- ---------------------------------------------------------------
- ---------------------------------------------------------------
F
Filing status............................................... 11
 Married filing separate exception.......................... 11
Forms:
 1099-R..................................................... 30
 5329....................................................... 35
 5498....................................................... 13
 8606....................................................... 14
 W-2......................................................... 8

- ---------------------------------------------------------------
- ---------------------------------------------------------------
I
Individual retirement account................................ 5
Individual retirement annuity................................ 5
Individual retirement arrangement............................ 3
Inherited IRAs..............................................6,8
 Contributions............................................... 8
 Distributions.............................................. 24
 In general.................................................. 6
 Making it your own.......................................... 8
 MDIB requirement exception................................. 26
 Premature distribution penalty exception................... 23
 Rollovers.................................................. 18
 Taxation of Distributions.................................. 29
Insufficient Distributions.................................. 35
Investment in collectibles.................................. 32
IRA.......................................................... 3
 As a holding account....................................... 19
 Conduit..................................................19,21

- ---------------------------------------------------------------
- ---------------------------------------------------------------
K
Kinds of IRAs................................................ 5

- ---------------------------------------------------------------
- ---------------------------------------------------------------
M
Minimum distributions....................................... 24
 Incidental benefit requirement............................. 25
 Life expectancy............................................ 25
 Miscellaneous rules........................................ 26
More than one IRA............................................ 7

- ---------------------------------------------------------------
- ---------------------------------------------------------------
N
Nondeductible contributions................................. 13
 Basis...................................................... 13
 Otherwise deductible....................................... 14
 Penalty for overstatement.................................. 14
 Reporting.................................................. 14

Page 66
<PAGE>

Withdrawals............................................... 15
- --------------------------------------------------------------
- --------------------------------------------------------------
P

Penalties.................................................. 32
 Excess accumulations...................................... 35
 Excess contributions...................................... 33
 Excess distributions...................................... 36
 Premature distributions (early withdrawals)............... 34
 Prohibited transactions................................... 32
 Reporting.............................................. 35,36
Premature distributions (early withdrawals)................ 34
 Annuity exception......................................... 23
 Death exception........................................... 23
 Disability exception...................................... 23
Prohibited transactions.................................... 32
 Borrowing on an annuity contract.......................... 32
 Pledging an account as security........................... 32

- --------------------------------------------------------------
- --------------------------------------------------------------
Q

Qualified domestic relations order......................... 20

- --------------------------------------------------------------
- --------------------------------------------------------------
R

Reduced IRA deduction, how to figure....................... 11
Required distributions..................................... 23
 Beneficiaries............................................. 24
 IRA owners................................................ 23
Retirement bonds...........................................  6
Rollovers............................................... 17,18
 Conduit IRA............................................ 19,21
 Direct rollover option.................................... 19
 Distributions received by a surviving spouse.............. 20
 Distributions under divorce proceedings................... 20
 Eligible rollover distribution............................ 18
 Extension of rollover period.............................. 17
 From employer's plan into an IRA.......................... 18
 From one IRA into another................................. 18
 Frozen deposit............................................ 17
 Keogh plans............................................... 20
 Partial rollovers......................................... 18
 Reporting.............................................. 18,21
 Required distributions.................................... 18
 Tax-sheltered annuity..................................... 21
 Time limit................................................ 17
 Waiting period between rollovers.......................... 18
 Withholding requirements.................................. 18

- --------------------------------------------------------------
- --------------------------------------------------------------
S

SEP...................................................... 6,37
Simplified employee pension.............................. 6,37
 Contributions............................................. 37
 Contributions you make.................................... 39
 Definitions............................................... 37
 Elective deferrals........................................ 40
 Employer's contributions.................................. 39
 Excess employer contributions............................. 39
 Excludable employees...................................... 37
 Highly compensated employee............................... 37
 Leased employees.......................................... 37
 Limits.................................................... 37
 Limits on deferrals....................................... 40
 Overall limits on employer contributions.................. 40
 Qualifying employee....................................... 37
 Salary reduction arrangement.............................. 40
 Self-employed individual.................................. 37
Social Security Recipients................................. 10
Spousal IRA............................................... 4,7
 Eligibility requirements................................... 4
 Spouse has compensation.................................... 7
 Spouse under age 70 1/2.................................... 7
Surviving spouse........................................... 20
 Distributions received.................................... 20

- --------------------------------------------------------------
- --------------------------------------------------------------
T

Transfers.................................................. 17
 Rollovers................................................. 17
Transfers incident to divorce.............................. 22
Trustee's fees.............................................. 8

- --------------------------------------------------------------
- --------------------------------------------------------------
W

When are you covered?........................................ 9
Withdrawals................................................. 15
 Tax-free................................................... 15
Withholding................................................. 30
 Withholding from IRA distributions outside the United
 States..................................................... 31
Withholding allowances...................................... 13

                              Page 67
<PAGE>

- -------------------------------------
- -------------------------------------
HOW TO GET IRS FORMS AND PUBLICATIONS
- --------------------------------------------------------------------------------
You can visit your local IRS office or order tax forms and publications from
the IRS Forms Distribution Center listed for your state at the address on this
page. Or, if you prefer, you can photocopy tax forms from reproducible copies
kept at participating public libraries. In addition, many of these libraries
have reference sets of IRS publications that you can read or copy.

WHERE TO MAIL YOUR ORDER BLANK FOR FREE FORMS AND PUBLICATIONS

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
IF YOU LIVE IN:                                  MAIL TO:             OTHER LOCATIONS:
- ---------------------------------------------------------------------------------------------------------
<S>                                              <C>                  <C>
Alaska, Arizona, California, Colorado, Hawaii,   Western Area         FOREIGN ADDRESSES-
Idaho, Kansas, Montana, Nevada, New              Distribution Center  Taxpayers with mailing addresses
Mexico, Oklahoma, Oregon, Utah,                  Rancho Cordova, CA   in foreign countries should mail
Washington, Wyoming, Guam, Northern                95743-0001         this order blank to either: Eastern
Marianas, American Samoa                                              Area Distribution Center, P.O. Box
- --------------------------------------------------------------------  25866, Richmond, VA 23286-8107;
Alabama, Arkansas, Illinois, Indiana, Iowa,      Central Area         or Western Area Distribution
Kentucky, Louisiana, Michigan, Minnesota,        Distribution Center  Center, Rancho Cordova, CA
Mississippi, Missouri, Nebraska, North           P.O. Box 8903        95743-0001, whichever is closer.
Dakota, Ohio, South Dakota, Tennessee,           Bloomington, IL      Mail letter requests for other forms
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- --------------------------------------------------------------------  Distribution Center, P.O. Box
Connecticut, Delaware, District of Columbia,     Eastern Area         25866, Richmond, VA 23286-8107.
Florida, Georgia, Maine, Maryland,               Distribution Center
Massachusetts, New Hampshire, New                P.O. Box 85074
Jersey, New York, North Carolina,                Richmond, VA         PUERTO RICO--Eastern Area
Pennsylvania, Rhode Island, South Carolina,        23261-5074         Distribution Center,
Vermont, Virginia, West Virginia                                      P.O. Box 25866,
                                                                      Richmond, VA 23286-8107.

                                                                      VIRGIN ISLANDS--V.I. Bureau of
                                                                      Internal Revenue, Lockhart
                                                                      Gardens, No. 1-A
                                                                      Charlotte Amalie,
                                                                      St. Thomas, VI 00802
</TABLE>
         DETACH AT THIS LINE
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- -------------
- -------------
Order Blank

We will send you 2 copies of each form and 1 copy of each publication or set
of instructions you circle. Please cut the order blank on the dotted line
above and BE SURE TO PRINT OR TYPE YOUR NAME AND ADDRESS ACCURATELY ON THE
BOTTOM PORTION.

  Enclose this order blank in your own envelope and address your envelope to
the IRS address shown above for your state.

  To help reduce waste, please order only the forms, instructions, and
publications you think you will need to prepare your return.

  Use the blank spaces to order items not listed. If you need more space,
attach a separate sheet of paper listing the additional forms and publications
you may need.

  You should either receive your order or notification of the status of your
order within 7-15 work days after we receive your request.

<TABLE>
<S>           <C>           <C>           <C>           <C>           <C>          <C>
- -------------------------------------------------------------------------------------------
1040          Schedule F    1040EZ        2441 &        8822 &        Pub. 505     Pub. 554
                (1040)                    Instructions  Instructions
- -------------------------------------------------------------------------------------------
Instructions  Schedule R    Instructions  3903 &        8829 &        Pub. 508     Pub. 575
for 1040 &    (1040)&       for 1040EZ    Instructions  Instructions
Schedules     Instructions
- -------------------------------------------------------------------------------------------
Schedules     Schedule      1040-ES       4562 &        Pub. 1        Pub. 521     Pub. 590
A&B (1040)    SE (1040)     (1995) &      Instructions
                            Instructions
- -------------------------------------------------------------------------------------------
Schedule C    1040A         1040X &       4868 &        Pub. 17       Pub. 523     Pub. 596
(1040)                      Instructions  Instructions
- -------------------------------------------------------------------------------------------
Schedule      Instructions  2106 &        5329 &        Pub. 334      Pub. 525     Pub. 910
C-EZ (1040)   for 1040A &   Instructions  Instructions
              Schedules
- -------------------------------------------------------------------------------------------
Schedule D    Schedule 1    2106-EZ &     8283 &        Pub. 463      Pub. 527     Pub. 917
(1040)        (1040A)       Instructions  Instructions
- -------------------------------------------------------------------------------------------
Schedule E    Schedule 2    2119 &        8582 &        Pub. 501      Pub. 529     Pub. 929
(1040)        (1040A)       Instructions  Instructions
- -------------------------------------------------------------------------------------------
Schedule      Schedule 3    2210 &        8606 &        Pub. 502      Pub. 550     Pub. 936
EIC (1040A    (1040A) &     Instructions  Instructions
or 1040)      Instructions
- -------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Number and street
- --------------------------------------------------------------------------------
City or town                     State                      ZIP Code
- --------------------------------------------------------------------------------


<PAGE>
                                                                    Exhibit 15a




                              FBL SERIES FUND, INC.
                     DISTRIBUTION AND SHAREHOLDER SERVICING
                               PLAN AND AGREEMENT



      PLAN AND AGREEMENT made as of the 1st day of December, 1987, by and
between FBL SERIES FUND, INC., a Maryland corporation (the "Fund"), and FBL
INVESTMENT ADVISORY SERVICES, INC., a Delaware corporation (the "Underwriter").

      WHEREAS, Rule 12b-1 under the Investment Company Act of 1940 (the "Act"),
provides that a registered open-end management investment company may act as a
distributor of securities of which it is the issuer, provided that any payments
made by such company in connection with such distribution are made pursuant to a
written plan describing all material aspects of the proposed financing of
distribution; and

      WHEREAS, the Fund is a registered open-end investment company; the
Underwriter acts as the underwriter in selling shares of the Fund; and the
Underwriter and various securities dealers (the "Dealers") sell shares of the
Fund and provide services to existing shareholders;

      WHEREAS, the Board of Directors of the Fund has determined that the Fund
should make direct payments to the Underwriter to compensate the Underwriter and
to permit it to compensate Dealers in connection with the selling of Fund shares
and the rendering of shareholder services and that such payments should be
separate from the investment advisory and management fee paid to FBL Investment
Advisory Services, Inc.  pursuant to a separate agreement; and

      WHEREAS, the Fund wants to adopt this FBL Series Fund, Inc. Distribution
and Shareholder Servicing Plan and Agreement (the "Plan") in the manner and on
the terms and conditions hereinafter set forth pursuant to Rule 12b-1 under the
Act;

      WHEREAS, the Underwriter wants to enter into the Plan on said terms and
conditions; and

      WHEREAS, the Board of Directors of the Fund has determined that there is a
reasonable likelihood that the adoption of the Plan will benefit the Fund and
its shareholders;

      NOW, THEREFORE, the following shall constitute the written Plan:

      SECTION 1.  The Fund is hereby authorized to make payments from its
assets to the Underwriter pursuant to this Plan to compensate the Underwriter
and to permit it to compensate Dealers for (i) providing shareholder services to
existing and prospective fund shareholders, including, without limitation,
assisting in the establishment and maintenance of shareholder accounts and
records, furnishing information as to the status of shareholder accounts,
processing shareholder service


<PAGE>



requests, forwarding purchase and redemption requests, responding to telephone
and written inquiries, and assisting shareholders with tax information, and (ii)
rendering assistance in the distribution and promotion of the sale of Fund
shares to the public.

      In consideration of the activities described above, the Fund shall pay the
Underwriter a fee after the end of each month at the annual rate of 0.75% of the
average daily net assets of the Fund.  The Underwriter shall pay to the Dealers
a service fee of 0.15% of the average daily net assets that have been maintained
and serviced in recognition of their services and assistance described above.
The Underwriter may compensate Dealers for sales of Fund shares in amounts up to
4% of the amount invested.  The Underwriter shall be entitled to retain any
contingent deferred sales charges imposed pursuant to the Fund's prospectus.

      SECTION 2.  This Plan shall not take effect until it has been approved
by a vote of at least a majority (as defined in the Act) of the outstanding
shares of the Fund.

      SECTION 3.  This Plan shall not take effect until it has been approved
together with any related forms of agreement by votes of the majority of both
(a) the Board of Directors of the Fund, and (b) those Directors of the Fund who,
except for their positions as Directors of the Fund, are not "interested
persons" (as defined in the Act) of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or any agreements related to
this Plan (the "Disinterested Directors"), cast in person at a meeting called
for the purpose of voting on this Plan or such agreements.

      SECTION 4.  Unless sooner terminated pursuant to Section 6, this Plan
shall continue in effect until November 30, 1988 and thereafter shall continue
in effect so long as such continuance is specifically approved at least annually
in the manner provided for approval of this Plan in Section 3.

      SECTION 5.  The President of the Underwriter, or such other person as he
may designate, shall provide to the Board and the Board shall review at least
quarterly a written report of the amounts so expended and purposes for which
such expenditures were made.

      SECTION 6.  This Plan may be terminated at any time by vote of a
majority of the Disinterested Directors, or by vote of a majority (as defined in
the Act) of the Fund's outstanding shares.

      SECTION 7.  Any agreement of the Fund related to this Plan shall be in
writing and shall provide:

      A.    That such agreement may be terminated at any time, without payment
            of any penalty, by vote of a majority of the members of the Board of
            Directors of the Fund who are not interested persons of the Fund and
            have no direct or indirect financial interest in the operation of
            the Plan or in any agreements related to the Plan


<PAGE>



            or by a vote of a majority (as defined in the Act) of the Fund's
            outstanding shares on not more than sixty days' written notice to
            any other party to the agreement; and

      B.    That such agreement shall terminate automatically in the event of
            its assignment.

      SECTION 8.  While the Plan is in effect, the selection and nomination of
Directors who are not interested persons (as defined in the Act) of the Fund
shall be committed to the discretion of the Fund Directors who are not
interested persons.

      SECTION 9.  The fund shall preserve copies of this Plan and any related
agreements and all reports made pursuant to Section 5, for a period of not less
than six years from the date of the Plan, or the agreements or such report, as
the case may be, the first two years in an easily accessible place.

      SECTION 10.  This Plan may not be amended to increase materially the
amount of distribution expenses provided for in Section 1 hereof unless such
amendment is approved in the manner provided for initial approval in Sections 2
and 3 hereof and no other material amendment to this Plan shall be made unless
approved in the manner provided for initial approval in Section 3 hereof.

      IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Plan as of the first date written above.

                                          FBL SERIES FUND, INC.


                                          BY:
                                             ----------------------------------


                                          FBL INVESTMENT ADVISORY SERVICES, INC.


                                          BY:
                                             ----------------------------------




<PAGE>

                                                                     Exhibit 15b

                              FBL SERIES FUND, INC.
                     AMENDED DISTRIBUTION PLAN AND AGREEMENT



     PLAN AND AGREEMENT amended as of the 25th day of November, 1991, by and
between FBL SERIES FUND, INC., a Maryland corporation (the "Fund"), and FBL
INVESTMENT ADVISORY SERVICES, INC., a Delaware corporation (the "Underwriter").

     WHEREAS, Rule 12b-1 under the Investment Company Act of 1940 (the "Act"),
provides that a registered open-end management investment company may act as a
distributor of securities of which it is the issuer, provided that any payments
made by such company in connection with such distribution are made pursuant to a
written plan describing all material aspects of the proposed financing of
distribution;

     WHEREAS, the Fund is a registered open-end investment company; the
Underwriter acts as the underwriter in selling shares of the Fund; and the
Underwriter and various securities dealers (the "Dealers") sell shares of the
Fund and provide services to existing shareholders;

     WHEREAS, the Board of Directors of the Fund has determined that the Fund
should make direct payments to the Underwriter to compensate the Underwriter and
to permit it to compensate Dealers in connection with the selling of Fund
shares, and that such payments should be separate from the investment advisory
and management fee and the administrative service fee paid to FBL Investment
Advisory Services, Inc. pursuant to separate agreements;

     WHEREAS, the original Plan and Agreement between the Fund and the
Underwriter, which is amended hereby, was approved by the vote of at least a
majority (as defined in the Act) of the outstanding shares of the Fund and
became ineffective on December 1, 1987;

     WHEREAS, the Fund wants to enter into this FBL Series Fund, Inc.  Amended
Distribution Plan and Agreement (the "Plan") in the manner and on the terms and
conditions hereinafter set forth pursuant to Rule 12b-1 under the Act;

     WHEREAS, the Underwriter wants to enter into the Plan on said terms and
conditions; and

     WHEREAS, the Board of Directors of the Fund has determined that there is a
reasonable likelihood that the Plan will benefit the Fund and its shareholders;

     NOW, THEREFORE, the following shall constitute the written Plan:

     SECTION 1.     The Fund is hereby authorized to make payments from its
assets to the Underwriter pursuant

<PAGE>

to this Plan to compensate the Underwriter and to permit it to compensate
Dealers for rendering assistance in the distribution and promotion of the sale
of Fund shares to the public.

     In consideration of the activities described above, the Fund shall pay the
Underwriter a fee after the end of each month at the annual rate of 0.50% of the
average daily net assets of the Fund.  The Underwriter may compensate Dealers
for sales of Fund shares in amounts up to 4% of the amount invested.  The
Underwriter shall be entitled to retain any contingent deferred sales charges
imposed pursuant to the Fund's prospectus.

     SECTION 2.     This Plan, which in its original form had an initial term
that ended November 30, 1988, is to continue in effect in its amended form until
November 30, 1992 and shall thereafter continue in effect so long as such
continuance is specifically approved at least annually by votes of the majority
of both (a) the Board of Directors of the Fund, and (b) those Directors of the
Fund who, except for their positions as Directors of the Fund, are not
"interested persons" (as defined in the Act) of the Fund and who have no direct
or indirect financial interest in the operation of this Plan or any agreements
related to this Plan (the "Disinterested Directors"), cast in person at a
meeting called for the purpose of voting on this Plan or such agreements.

     SECTION 3.     The President of the Underwriter, or such other person as he
may designate, shall provide to the Board and the Board shall review at least
quarterly a written report of the amounts so expended and purposes for which
such expenditures were made.

     SECTION 4.     This Plan may be terminated at any time by vote of a
majority of the Disinterested Directors, or by vote of a majority (as defined in
the Act) of the Fund's outstanding shares.

     SECTION 5.     Any agreement of the Fund related to this Plan shall be in
writing and shall provide:

     A.   That such agreement may be terminated at any time, without payment of
          any penalty, by vote of a majority of the members of the Board of
          Directors of the Fund who are not interested persons of the Fund and
          have no direct or indirect financial interest in the operation of the
          Plan or in any agreements related to the Plan or by a vote of a
          majority (as defined in the Act) of the Fund's outstanding shares on
          not more than sixty days' written notice to any other party to the
          agreement; and

     B.   That such agreement shall terminate automatically in the event of its
          assignment.

     SECTION 6.     While the Plan is in effect, the selection and nomination of
Directors who are not interested persons (as defined in the Act) of the Fund
shall be committed to the discretion of the Fund Directors who are not
interested persons.

<PAGE>

     SECTION 7.     The Fund shall preserve copies of this plan and any related
agreements and all reports made pursuant to Section 3, for a period of not less
than six years from the date of the Plan, or the agreements or such reports, as
the case may be, the first two years in an easily accessible place.

     SECTION 8.     This Plan may not be amended to increase materially the
amount of distribution expenses provided for in Section 1 hereof unless such
amendment is approved in the manner provided for in Section 2 as well as being
approved by a vote of at least a majority (as defined in the Act) of the
outstanding shares of the Fund and no other material amendment to this Plan
shall be made unless approved in the manner provided for in Section 2 hereof.

     SECTION 9.     This Plan supersedes all prior distribution plans and
agreements between the Fund and the Underwriter.

     IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Plan as of the first date written above.

                              FBL SERIES FUND, INC.


                              By:
                                 ----------------------------------------------
                              Title:
                                    -------------------------------------------


                              FBL INVESTMENT ADVISORY SERVICES, INC.


                              By:
                                  ---------------------------------------------
                              Title:
                                    -------------------------------------------

<TABLE> <S> <C>

<PAGE>
<ARTICLE> 6
<SERIES>
   <NUMBER> 1
   <NAME> GROWTH COMMON STOCK
       
<S>                             <C>
<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                          JUL-31-1995
<PERIOD-END>                               JUL-31-1995
<INVESTMENTS-AT-COST>                       68,687,815
<INVESTMENTS-AT-VALUE>                      70,997,899
<RECEIVABLES>                                  268,737
<ASSETS-OTHER>                                   2,499
<OTHER-ITEMS-ASSETS>                            26,742
<TOTAL-ASSETS>                              71,295,877
<PAYABLE-FOR-SECURITIES>                       312,050
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                       37,324
<TOTAL-LIABILITIES>                            349,374
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                    66,985,376
<SHARES-COMMON-STOCK>                        5,441,946
<SHARES-COMMON-PRIOR>                        4,920,212
<ACCUMULATED-NII-CURRENT>                    1,457,162
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                        188,440
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                     2,310,084
<NET-ASSETS>                                70,946,503
<DIVIDEND-INCOME>                            2,473,760
<INTEREST-INCOME>                              888,498
<OTHER-INCOME>                                       0
<EXPENSES-NET>                               1,077,115
<NET-INVESTMENT-INCOME>                      2,285,143
<REALIZED-GAINS-CURRENT>                     2,239,764
<APPREC-INCREASE-CURRENT>                    1,538,922
<NET-CHANGE-FROM-OPS>                        6,063,829
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                    1,942,351
<DISTRIBUTIONS-OF-GAINS>                     3,592,463
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                        456,086
<NUMBER-OF-SHARES-REDEEMED>                    399,968
<SHARES-REINVESTED>                            465,616
<NET-CHANGE-IN-ASSETS>                       6,631,875
<ACCUMULATED-NII-PRIOR>                      1,114,370
<ACCUMULATED-GAINS-PRIOR>                    1,541,139
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                          331,615
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                              1,077,115
<AVERAGE-NET-ASSETS>                        66,088,723
<PER-SHARE-NAV-BEGIN>                            13.07
<PER-SHARE-NII>                                   0.43
<PER-SHARE-GAIN-APPREC>                           0.65
<PER-SHARE-DIVIDEND>                              0.39
<PER-SHARE-DISTRIBUTIONS>                         0.72
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                              13.04
<EXPENSE-RATIO>                                   1.62
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>

<TABLE> <S> <C>

<PAGE>
<ARTICLE> 6
<SERIES>
   <NUMBER> 3
   <NAME> HIGH GRADE BOND
       
<S>                             <C>
<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                          JUL-31-1995
<PERIOD-END>                               JUL-31-1995
<INVESTMENTS-AT-COST>                        7,872,647
<INVESTMENTS-AT-VALUE>                       8,091,828
<RECEIVABLES>                                  170,601
<ASSETS-OTHER>                                     237
<OTHER-ITEMS-ASSETS>                            98,811
<TOTAL-ASSETS>                               8,361,477
<PAYABLE-FOR-SECURITIES>                             0
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                       16,448
<TOTAL-LIABILITIES>                             16,448
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                     8,163,783
<SHARES-COMMON-STOCK>                          813,312
<SHARES-COMMON-PRIOR>                          749,541
<ACCUMULATED-NII-CURRENT>                            0
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                       (38,748)
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                       219,181
<NET-ASSETS>                                 8,345,029
<DIVIDEND-INCOME>                                    0
<INTEREST-INCOME>                              652,064
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                 156,397
<NET-INVESTMENT-INCOME>                        495,667
<REALIZED-GAINS-CURRENT>                      (33,881)
<APPREC-INCREASE-CURRENT>                      170,813
<NET-CHANGE-FROM-OPS>                          632,599
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                      495,667
<DISTRIBUTIONS-OF-GAINS>                        24,669
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                         97,267
<NUMBER-OF-SHARES-REDEEMED>                     71,483
<SHARES-REINVESTED>                             37,987
<NET-CHANGE-IN-ASSETS>                         749,215
<ACCUMULATED-NII-PRIOR>                              0
<ACCUMULATED-GAINS-PRIOR>                       19,802
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                           31,381
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                156,397
<AVERAGE-NET-ASSETS>                         7,821,174
<PER-SHARE-NAV-BEGIN>                            10.13
<PER-SHARE-NII>                                   0.64
<PER-SHARE-GAIN-APPREC>                           0.16
<PER-SHARE-DIVIDEND>                              0.64
<PER-SHARE-DISTRIBUTIONS>                         0.03
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                              10.26
<EXPENSE-RATIO>                                   1.99
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>

<TABLE> <S> <C>

<PAGE>
<ARTICLE> 6
<SERIES>
   <NUMBER> 4
   <NAME> HIGH YIELD BOND
       
<S>                             <C>
<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                          JUL-31-1995
<PERIOD-END>                               JUL-31-1995
<INVESTMENTS-AT-COST>                        6,457,065
<INVESTMENTS-AT-VALUE>                       6,453,172
<RECEIVABLES>                                  177,038
<ASSETS-OTHER>                                     190
<OTHER-ITEMS-ASSETS>                            75,367
<TOTAL-ASSETS>                               6,705,767
<PAYABLE-FOR-SECURITIES>                             0
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                       15,260
<TOTAL-LIABILITIES>                             15,260
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                     6,700,925
<SHARES-COMMON-STOCK>                          666,735
<SHARES-COMMON-PRIOR>                          642,497
<ACCUMULATED-NII-CURRENT>                            0
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                        (7,192)
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                       (3,893)
<NET-ASSETS>                                 6,690,507
<DIVIDEND-INCOME>                                    0
<INTEREST-INCOME>                              626,932
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                 127,329
<NET-INVESTMENT-INCOME>                        499,603
<REALIZED-GAINS-CURRENT>                        10,150
<APPREC-INCREASE-CURRENT>                       87,293
<NET-CHANGE-FROM-OPS>                          597,046
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                      499,603
<DISTRIBUTIONS-OF-GAINS>                        66,536
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                         85,943
<NUMBER-OF-SHARES-REDEEMED>                     97,585
<SHARES-REINVESTED>                             35,880
<NET-CHANGE-IN-ASSETS>                         265,095
<ACCUMULATED-NII-PRIOR>                              0
<ACCUMULATED-GAINS-PRIOR>                       49,195
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                           35,015
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                146,139
<AVERAGE-NET-ASSETS>                         6,326,047
<PER-SHARE-NAV-BEGIN>                            10.00
<PER-SHARE-NII>                                   0.78
<PER-SHARE-GAIN-APPREC>                           0.13
<PER-SHARE-DIVIDEND>                              0.78
<PER-SHARE-DISTRIBUTIONS>                         0.10
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                              10.03
<EXPENSE-RATIO>                                   2.00
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>

<TABLE> <S> <C>

<PAGE>
<ARTICLE> 6
<SERIES>
   <NUMBER> 6
   <NAME> MANAGED
       
<S>                             <C>
<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                          JUL-31-1995
<PERIOD-END>                               JUL-31-1995
<INVESTMENTS-AT-COST>                       20,487,970
<INVESTMENTS-AT-VALUE>                      20,961,847
<RECEIVABLES>                                  131,492
<ASSETS-OTHER>                                     592
<OTHER-ITEMS-ASSETS>                            63,039
<TOTAL-ASSETS>                              21,156,970
<PAYABLE-FOR-SECURITIES>                             0
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                       52,144
<TOTAL-LIABILITIES>                             52,144
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                    20,789,151
<SHARES-COMMON-STOCK>                        1,780,492
<SHARES-COMMON-PRIOR>                        1,644,166
<ACCUMULATED-NII-CURRENT>                        1,272
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                      (161,255)
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                       473,877
<NET-ASSETS>                                21,104,826
<DIVIDEND-INCOME>                              846,078
<INTEREST-INCOME>                              499,625
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                 384,089
<NET-INVESTMENT-INCOME>                        961,614
<REALIZED-GAINS-CURRENT>                       176,989
<APPREC-INCREASE-CURRENT>                      671,829
<NET-CHANGE-FROM-OPS>                        1,810,432
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                      963,801
<DISTRIBUTIONS-OF-GAINS>                       400,478
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                        206,561
<NUMBER-OF-SHARES-REDEEMED>                    178,193
<SHARES-REINVESTED>                            107,958
<NET-CHANGE-IN-ASSETS>                       2,004,525
<ACCUMULATED-NII-PRIOR>                          3,459
<ACCUMULATED-GAINS-PRIOR>                       62,234
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                          118,526
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                384,089
<AVERAGE-NET-ASSETS>                            19,649
<PER-SHARE-NAV-BEGIN>                            11.62
<PER-SHARE-NII>                                   0.56
<PER-SHARE-GAIN-APPREC>                           0.47
<PER-SHARE-DIVIDEND>                              0.56
<PER-SHARE-DISTRIBUTIONS>                         0.24
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                              11.85
<EXPENSE-RATIO>                                   1.94
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>

<TABLE> <S> <C>

<PAGE>
<ARTICLE> 6
<SERIES>
   <NUMBER> 7
   <NAME> BLUE CHIP
       
<S>                             <C>
<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                          JUL-31-1995
<PERIOD-END>                               JUL-31-1995
<INVESTMENTS-AT-COST>                        6,202,994
<INVESTMENTS-AT-VALUE>                       9,570,468
<RECEIVABLES>                                   15,265
<ASSETS-OTHER>                                     284
<OTHER-ITEMS-ASSETS>                            87,907
<TOTAL-ASSETS>                               9,673,924
<PAYABLE-FOR-SECURITIES>                             0
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                       16,653
<TOTAL-LIABILITIES>                             16,653
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                    62,522,283
<SHARES-COMMON-STOCK>                          422,597
<SHARES-COMMON-PRIOR>                          359,664
<ACCUMULATED-NII-CURRENT>                       41,475
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                        (4,384)
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                     3,367,474
<NET-ASSETS>                                 9,657,271
<DIVIDEND-INCOME>                              179,229
<INTEREST-INCOME>                               33,968
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                 140,430
<NET-INVESTMENT-INCOME>                         72,767
<REALIZED-GAINS-CURRENT>                            80
<APPREC-INCREASE-CURRENT>                    1,636,574
<NET-CHANGE-FROM-OPS>                        1,709,421
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                       53,615
<DISTRIBUTIONS-OF-GAINS>                             0
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                         91,343
<NUMBER-OF-SHARES-REDEEMED>                     31,209
<SHARES-REINVESTED>                              2,799
<NET-CHANGE-IN-ASSETS>                       2,912,656
<ACCUMULATED-NII-PRIOR>                         22,323
<ACCUMULATED-GAINS-PRIOR>                      (4,464)
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                           19,647
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                140,430
<AVERAGE-NET-ASSETS>                         7,836,918
<PER-SHARE-NAV-BEGIN>                            18.75
<PER-SHARE-NII>                                   0.19
<PER-SHARE-GAIN-APPREC>                           4.05
<PER-SHARE-DIVIDEND>                              0.14
<PER-SHARE-DISTRIBUTIONS>                            0
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                              22.85
<EXPENSE-RATIO>                                   1.78
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>

<TABLE> <S> <C>

<PAGE>
<ARTICLE> 6
<SERIES>
   <NUMBER> 8
   <NAME> MONEY MARKET
       
<S>                             <C>
<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                          JUL-31-1995
<PERIOD-END>                               JUL-31-1995
<INVESTMENTS-AT-COST>                        2,440,038
<INVESTMENTS-AT-VALUE>                       2,440,038
<RECEIVABLES>                                    3,579
<ASSETS-OTHER>                                      68
<OTHER-ITEMS-ASSETS>                             6,356
<TOTAL-ASSETS>                               2,450,041
<PAYABLE-FOR-SECURITIES>                             0
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                       11,191
<TOTAL-LIABILITIES>                             11,191
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                     2,436,411
<SHARES-COMMON-STOCK>                        2,438,850
<SHARES-COMMON-PRIOR>                        2,626,602
<ACCUMULATED-NII-CURRENT>                            0
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                              0
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                             0
<NET-ASSETS>                                 2,438,850
<DIVIDEND-INCOME>                                    0
<INTEREST-INCOME>                              138,122
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                  50,174
<NET-INVESTMENT-INCOME>                         87,948
<REALIZED-GAINS-CURRENT>                             0
<APPREC-INCREASE-CURRENT>                            0
<NET-CHANGE-FROM-OPS>                           87,948
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                       87,948
<DISTRIBUTIONS-OF-GAINS>                             0
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                        194,697
<NUMBER-OF-SHARES-REDEEMED>                    402,160
<SHARES-REINVESTED>                             19,711
<NET-CHANGE-IN-ASSETS>                       (187,752)
<ACCUMULATED-NII-PRIOR>                              0
<ACCUMULATED-GAINS-PRIOR>                            0
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                           10,035
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                 55,122
<AVERAGE-NET-ASSETS>                         2,495,001
<PER-SHARE-NAV-BEGIN>                             1.00
<PER-SHARE-NII>                                   0.04
<PER-SHARE-GAIN-APPREC>                              0
<PER-SHARE-DIVIDEND>                              0.04
<PER-SHARE-DISTRIBUTIONS>                            0
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                               1.00
<EXPENSE-RATIO>                                   2.00
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>


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