At a minimum, the IPS should contain the following sections:

• Heading
• Summary of Plan Information
• Statement of Purpose for the Policy and the Plan
• 404(c) Statement
• Plan Investment Options
• Investment Objectives and Performance Standards
• Approach to Selection and Termination
• Monitoring of Investment Options
• Approval and Signature

Investment Policy Statement for the XYZ 401(k) Profit Sharing Plan

The XYZ 401(k) Profit Sharing Plan Investment Committee (Committee) adopts this statement to provide a clear understanding of the Committee's investment policies, guidelines and objectives. XYZ 401(k) Profit Sharing Plan (Plan) is a defined contribution retirement plan available to all eligible employees. The Plan’s purpose is to provide a vehicle to accumulate assets to fund retirement needs on an individual basis for eligible employees. It is the intent of the Committee to provide a range of investment options that will enable participants to invest according to varying risk tolerance, savings time horizon, and other financial goals.

The Plan is designed to qualify in accordance with the requirements of the Employee Retirement Income Security Act of 1974 (ERISA), as amended, and Sections 401(a) and 501(a) of the Internal Revenue Code of 1986 (Code), as amended. The Committee intends also that employees’ before tax salary deferral contributions qualify under the qualified cash or deferred arrangement rules of Section 401(k) of the Code. The Committee further intends the Plan qualify as a "404(c) Plan" within the meaning of the Department of Labor Regulations under Section 404(c) of ERISA and therefore, no fiduciary shall be liable for any loss that results from a participant’s exercise of control over the investment of his or her participant accounts established pursuant to the 401(k) Plan.

The Committee intends to comply with the provisions of Section 404(c) of the Employee Retirement Income Security Act of 1974, as amended, (ERISA) and will select suitable investment funds intended to meet the "safe harbor" investment fund provisions of ERISA.

Because participants in the Plan ultimately are responsible for their investment decisions, the Committee aims to provide participants with the following capabilities:

• Choose from a minimum of five diverse investment categories, each with materially different risk and return characteristics, at least one of which will provide for a high degree of safety and capital preservation.
• Make investment decisions at least quarterly.
• Receive or have access to the following information, as updated:
• A description of the investment alternatives available under the plan including a general description of the investment objectives, risk and return characteristics, and type and diversification of assets comprising each alternative;
• A description of any transaction fees or expenses charged to the participant's account, and information on fund costs and fees that reduce the rate of return to participants (expense ratios); and
• Fund prospectuses, annual reports, and semiannual reports.

The primary investment objective of the Plan is to maximize the value of Plan assets, which represent the separate accounts of each Plan participant. Since the Plan’s purpose is to provide retirement benefits, the Plan’s investment objectives shall be focused primarily toward maximizing investment returns over the longer term.

In order to maximize diversification potential and offer Plan participants the opportunity to appropriately manage risk, the Plan Sponsor will offer investment funds within the following five broad asset classes:

• Money Market/Stable Value
• Fixed Income
• Large Company Stock
• Small Company Stock
• International Stock

In addition to offering investment funds within these broad asset classes, the Plan Sponsor may offer pre-mixed (balanced) funds for use by participants who do not want to completely select their own asset allocation mix. The Committee reserves the right to review the above asset classes and add or delete asset classes over time. A mutual fund will be the investment vehicle used for each investment option, where appropriate.

The Committee will review the investment objectives and risk characteristics, historical performance, and expenses related to each investment option made available under the Plan. Each option will be chosen on the basis of its compatibility with the Plan’s objectives, to satisfy the investment goals of both passive and active investors, and to facilitate the development of individual asset allocation strategies.

Generally, all funds are expected to perform as well as or better than their prescribed performance standards, net of fees. In any case, the Committee reserves the right to terminate an investment option at any time, for any reason. Once the decision to terminate an investment option is made, asset transfer and liquidation should be handled to the best advantage of the plan.

The Committee will review periodically the investment managers' progress in meeting the Plan's investment objectives. Generally, however, the Committee realizes investment managers should be given a full market cycle to achieve stated objectives, therefore greater weight will be given to three and five year performance. Investment options that consistently under perform in terms of risk and return will be carefully reviewed to determine if any action is warranted.

ON BEHALF OF THE XYZ INC. 401K PROFIT SHARING PLAN:

Name:
Title:
Date:

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