PRINCIPAL ASSET ALLOCATION QUESTIONNAIRES

(1)

PRINCIPAL

ASSET ALLOCATION QUESTIONNAIRES

FOR GROWTH OR INCOME INVESTORS

ASSET ALLOCATION

(2)

PRINCIPAL ASSET ALLOCATION FOR GROWTH OR INCOME

INVESTORS

CHOOSE YOUR INVESTMENT STRATEGY

The answers to these questions can be different from investor to investor. It all depends on your investment objectives and what stage of life you are in.

INVESTING FOR GROWTH — This strategy is for those seeking long-term growth. Ideally, money should remain invested for at least five years. (Complete the “Principal Growth Asset Allocation Questionnaire” on pages 3 – 6.)

INVESTING FOR INCOME— This strategy balances income and growth, so it typically appeals to those nearing or in retirement. (Complete the “Principal Income Asset Allocation Questionnaire”

on pages 9 – 12.)

Many ingredients go into the making of an effective investment portfolio. When developing an investment program, you need to consider your financial goals and ask yourself these important questions:

MAY LOSE VALUE | NOT A DEPOSIT | NO BANK OR CREDIT UNION GUARANTEE NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY

Each questionnaire is designed to assist you in structuring a portfolio that reflects your personal needs. The questionnaires help address your investment objectives, time horizon, and tolerance for financial risk. Points are assigned to each response and tabulated to suggest an investment strategy consistent with your personal financial goals. If any of this information changes in the future, your financial professional can help you assess the impact such changes might have on your portfolio allocations.

A separate Principal Growth Asset Allocation Questionnaire or Principal Income Asset Allocation Questionnaire should be completed for each of your financial objectives.

How much risk should I take?

What asset classes should I choose?

How should I spread my money among the different categories?

?

(3)

DETERMINE YOUR

INVESTMENT PROFILE

A STEP-BY-STEP GUIDE TO GETTING STARTED

GENERAL INFORMATION STEP 1

STEP 2

STEP 3

Complete the investment questionnaire.

Add up the point totals for each question and match your time horizon and risk tolerance scores to determine your personal investment profile.

Take advantage of the expertise of your financial professional to help you tailor an investment strategy that aligns your goals and objectives.

The information provided in this brochure is not intended to be investment advice and does not constitute a recommendation to buy, hold or sell securities.

NAME

SPOUSE'S NAME

ADDRESS

CITY STATE ZIP

BIRTHDATE (MONTH/DAY/YEAR) NO. OF DEPENDENTS

BUSINESS PHONE HOME PHONE

OCCUPATION SELF-EMPLOYED o YES o NO

EMPLOYER

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TIME HORIZON TOTAL (Sum of questions Q1 – Q2)

INVESTING FOR GROWTH

In how many years will you begin taking withdrawals from your portfolio?

Once you begin making withdrawals, how many years will you be withdrawing your money from the account?

Investment decisions are generally determined by a risk/return tradeoff. Risk is any possibility of loss to the value of your portfolio. Return is the amount earned or profit on an investment. How would

you respond to the following statement?

Protecting my portfolio from loss is more important to me than achieving high returns.

Riskier investments have the potential to experience higher long-term capital appreciation. Likewise, less risky investments have less potential for high long-term capital appreciation.

With this in mind, which of the following statements is most consistent with your investment attitude?

A Less than 1 year B 1 – 2 years

A Lump sum or fully withdraw over a period of less than 1 year

B Over a period of 1 – 2 years C Over a period of 3 – 5 years

D Over a period of 6 – 9 years E Over a period of 10 – 15 years F Over a period of 16 – 25 years G More than 25 years

C 3 – 5 years D 6 – 9 years

E 10 – 15 years F 16 – 25 years

G More than 25 years

A Strongly agree B Agree

C Risk and return are equally important D Disagree

E Strongly disagree

A I am willing to endure losses to maximize the chance of experiencing high long-term capital appreciation.

B I am equally concerned with avoiding losses and experiencing long-term capital appreciation.

C Avoiding losses is more important to me than experiencing long-term capital appreciation.

Q3

Q4 Q1

Q2

0 PTS 5 PTS 10 PTS

0 PTS

0 PTS 3 PTS

5 PTS 8 PTS 8 PTS

3 PTS 10 PTS 15 PTS

1 PT

0 PTS 1 PT

5 PTS 15 PTS

8 PTS 2 PTS

4 PTS

8 PTS

0 PTS

RISK TOLERANCE RISK/RETURN TRADEOFF INVESTMENT TIME HORIZON TIME HORIZON

PRINCIPAL GROWTH ASSET ALLOCATION

QUESTIONNAIRE FOR INVESTORS SEEKING LONG-TERM GROWTH

Please keep in mind that this information is just a guideline for educational purposes only; it isn't intended to tell you how to invest. Be sure to complete the Investor Profile Quiz periodically to make sure that the investment options you elected continue to match your risk profile.

(5)

RISK/RETURN TRADEOFF (continued)

RANGE OF RETURNS

VOLATILITY

Historically, investors who have received higher long-term returns have also experienced major changes in the value of their investments. Higher long-term returns come with a greater chance of loss.

Which of the following statements best describes your investment philosophy?

The following table shows the ending values of

$50,000 invested in four hypothetical portfolios over a three-year period. The returns for these portfolios may fall anywhere within these ranges.

Which of the four hypothetical portfolios would you feel most comfortable accepting?

This graph depicts the value of three hypothetical investments over a four-year period. Riskier portfolios experience more frequent and significant changes in value.

Higher levels of risk go along with potentially higher levels of long-term returns.

In which of the portfolios would you feel most comfortable investing?

A I feel most comfortable with stable investments that generate consistent, but lower returns year-to-year. I prefer to assume as little risk as possible.

B I am willing to withstand some fluctuations in the value of my portfolio, but I prefer to be invested in less risky investments that reduce the likelihood of large losses.

C I seek substantial investment returns and am willing to accept occasional short-term declines associated with this strategy.

D I seek potentially high investment returns and am willing to accept the higher risk of potential losses associated with this strategy.

Portfolio A Portfolio B Portfolio C Portfolio D

Portfolio A Portfolio B Portfolio C

0 PTS

Q6

Q7 Q5

10 PTS 3 PTS

4 PTS 6 PTS

0 PTS 9 PTS 3 PTS

7 PTS

10 PTS

VALUE OF $50,000 AFTER THREE YEARS Worst

case value Likely

value Best case value Portfolio A $45,000 $61,000 $74,000 Portfolio B $42,000 $63,000 $81,000 Portfolio C $39,000 $65,000 $89,000 Portfolio D $36,000 $66,000 $98,000

0.80 1.60

$2.40 2.20 2.00 1.80

1.40 1.20 1.00

Dollars

Year 1 Year 2 Year 3 Year 4

PORTFOLIO GROWTH OVER A 4-YEAR PERIOD

The hypothetical example is for illustrative purposes only and does not represent the performance of any specific investment. Results will fluctuate and cannot be guaranteed.

Conservative Investments Lower Risk/Lower Returns Higher Risk/Higher Returns Risky Investments

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VOLATILITY (continued)

Over the course of twenty years, a portfolio will experience a variety of returns. The following question details the range of results for three hypothetical investments.

In which portfolio would you feel most comfortable investing?

Portfolio A – An average return of 6% with one negative year and where the majority of returns ranged from 5% to 10% each year.

Portfolio B – An average return of 8% with four negative years and where the majority of returns ranged from 5% to 15% each year.

Portfolio C – An average return of 10% with increased volatility, five negative years, and several years above 20%.

The table below shows risk and return

characteristics of three hypothetical portfolios.

With higher prospective annual returns, possible losses also increase.

In which portfolio would you want to invest?

0 PTS

Q9

Q10 Q8

10 PTS 2 PTS

5 PTS 6 PTS

0 PTS 8 PTS 4 PTS

8 PTS

Each dot represents a single year of hypothetical market performance.

40%+

35-40 30-35 25-30 20-25 15-20 10-15 5-10 0-5 (0-5) (5-10) (10-15) (15-20) (20-25)

••••

••••••••••

•••••

•

Portfolio A

••

•••••

••••••

•••••

••

Portfolio B

•••

••••

•••••

••••

••

•

Portfolio C

POTENTIAL HIGHER RETURNS MAY COME WITH INCREASED VOLATILITY

Over time, inflation can have a significantly negative impact on what your money can buy. By keeping pace with inflation, investors can maintain their buying power over time.

Which of the following choices best reflects your attitude toward inflation and risk?

A Although I may only keep pace with inflation, my main goal is to avoid loss.

B While accepting a low level of risk, my main goal is to earn slightly more than inflation.

C My main goal is to increase the value of my portfolio. Therefore, I am willing to accept short-term losses associated with more aggressive investment options.

D I am willing to endure large fluctuations in the value of my portfolio for the chance of obtaining a higher return and beating inflation.

INFLATION

LOSS AVERSION

A Strongly disagree B Disagree

C Agree

D Strongly agree

Q11

0 PTS 7 PTS

3 PTS 10 PTS

I am comfortable with investments that may frequently experience large declines in value if there is a potential for higher returns. These frequent and large declines may be experienced at an in opportune time, such as at the end of the investment horizon.

Most likely

annual return Possible annual loss Portfolio A Gain of 11% Loss of 26%

Portfolio B Gain of 9% Loss of 18%

Portfolio C Gain of 6% Loss of 10%

(7)

LOSS AVERSION (continued)

Q12

0 PTS 4 PTS 8 PTS

ABILITY TO STAY THE COURSE

Most investments fluctuate over the short term. Suppose you invested $30,000 in a mutual fund this year with the intention of holding it for ten years.

If this investment lost value during the first year, at what value of your initial $30,000 investment would you sell and move to a more stable investment?

Q13

0 PTS 4 PTS 9 PTS

2 PTS 6 PTS

Compounded

annual return Number of years necessary to recoup worst loss of the period

Portfolio A 8% 0

Portfolio B 10% 4

Portfolio C 12% 6

In some cases, aggressive investments not only have negative returns, but they also experience sustained periods where the value of the investment significantly declines and takes several years to rebuild wealth.

The table below shows the historical performance of three hypothetical portfolios over a 20-year period.

Which portfolio would you be most comfortable with?

RISK TOLERANCE TOTAL (Sum of questions Q3 – Q13) A $28,500

B $27,000

C $25,500 D $24,000 or less

E I would not sell

YOUR PERSONAL INVESTMENT PROFILE

TIME HORIZON SCORE

0-2 3-5 6-7 8-10 11+

Risk Tolerance Score

0-19 Model I Model I Model I Model I Model I

20-39 Model I Model II Model II Model II Model II

40-59 Model I Model II Model III Model III Model III

60-79 Model I Model II Model III Model IV Model IV

80-100 Model I Model II Model III Model IV Model V

TIME HORIZON TOTAL RISK TOLERANCE TOTAL

Now that you have completed the investment questionnaire, record your Time Horizon total (from page 3) and your Risk Tolerance total (from page 6).

Your calculated scores above provide the foundation from which to build the investment solution that maybe right for you. Using the table below, match the Time Horizon total with the Risk Tolerance total to find the investment profile that best matches your investment personality. Then match your profile with the investment choices on the following page – this profile, along with the expertise of your financial professional, can help determine the appropriate strategy to help you meet your goals.

(8)

7

WHICH TYPE OF GROWTH INVESTOR ARE YOU?

Few investors have the time or knowledge to allocate investment assets effectively. The Principal Financial Group^® (The Principal^®) offers asset allocation services which feature models designed by a recognized industry expert—Morningstar Investment Management LLC (Morningstar Investment Management). Morningstar Investment Management employs modern portfolio theory to create appropriate asset allocation models that help you balance the potential for return with the right level of risk for your particular solution.

May not reflect current allocations. All investment products involve risk. The investment, when redeemed, may be worth more or less than the original investment.

Small/Mid U.S. Equity

5%

Large U.S. Equity

10%

Model I Model II Model III Model IV Model V

Short-Term Fixed Income ⁴⁴⁵ Fixed Income ⁵⁴⁸³ Asset Allocation ¹⁴⁵ Large U.S. Equity ²⁹⁴ Small/Mid U.S. Equity _70%⁵⁵⁶ International Equity 173

Other ²⁹⁴

50%

Real Estate 1225 Short-Term

Fixed Income 45%

Fixed Income

35%

International Equity

5%

Short-Term Fixed Income

32%

28%

18%

11%

21%

19%

Large U.S.

Equity 25%

24% International

Equity 24%

Large U.S. Equity

32% Short-Term

Fixed Income 9%

39%

11%

17%

18%

11% Small/Mid

U.S. Equity 31%

30%

5%

10%

Other ²⁹⁴

50%

35%

5%

32%

28%

18%

11%

21%

19%

Large U.S.

Equity 25%

24%

Large U.S.

Equity 32%

9%

39%

11%

17%

18%

11% Small/Mid

U.S. Equity 31%

30%

5%

10%

Other ²⁹⁴ Real Estate 1225 Short-Term

35%

5%

32%

28%

18%

11%

21%

19%

Large U.S.

Equity 25%

24%

Large U.S.

Equity 32%

9%

Large U.S.

Equity 39%

11%

17%

18%

11% Small/Mid

U.S. Equity 31%

30%

Model I – Is designed for the more cautious investor, one with sensitivity to short-term losses and/or a shorter time horizon. It is targeted toward the investor seeking investment stability from his or her investable assets, but still expecting to beat inflation over the long term. The main objective of the Model I investor is to preserve capital while providing income potential. Investors may expect fluctuations in the values of this portfolio to be smaller and less frequent.

Model II – Is appropriate for the investor who seeks both modest capital appreciation and income potential from his or her portfolio.

This investor will have either a moderate time horizon or a slightly higher risk tolerance than the more conservative investor in the previous model. While Model II is still designed to preserve capital, fluctuations in the values of this portfolio may occur from

year to year.

Model III – Will best suit the investor who seeks relatively stable growth with a lower level of income potential. An investor in the moderate risk range will have a higher tolerance for risk and/or a longer time horizon than either of the previous investors. The main objective of a Model III investor is to achieve steady growth while limiting fluctuation to less than that of the overall stock markets.

n Short-Term Fixed Income n Fixed Income n Large U.S. Equity n Small/Mid U.S. Equity n International Equity

INVESTING FOR GROWTH

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8

*May not reflect current allocations.

5%

10%

Other ²⁹⁴

50%

35%

5%

32%

28%

18%

11%

21%

19%

Large U.S.

Equity 25%

24%

Large U.S.

Equity 32%

7%

Large U.S.

Equity 39%

11%

17%

18%

13% Small/Mid

U.S. Equity 31%

30%

5%

10%

35%

5%

32%

28%

18%

11%

21%

19%

Large U.S.

Equity 25%

24%

Large U.S.

Equity 32%

9%

Large U.S.

Equity 39%

11%

17%

18%

11% Small/Mid

U.S. Equity 31%

30%

Model IV – Is designed for investors with a relatively high tolerance for risk and a longer time horizon. These investors have little need for current income and seek above-average growth from their Investable assets. The main objective of Model IV is capital appreciation, and its investors should be able to tolerate moderate fluctuations in their portfolio values.

Model V – Is appropriate for investors who have both a high tolerance for risk and a long investment time horizon. The main objective of Model V is to provide high growth without providing current income.

Their portfolios may have larger and more frequent fluctuations from year to year, making Model V unsuitable for investors who do not have an extended investment horizon.

The Principal Growth Asset Allocation Questionnaire is meant to offer suggestions you may wish to consider. The final decision is yours, based on your individual situation. At a minimum, you should review your allocation decisions on an annual basis. This review should take into account your changing needs,existing and any additional goals, and your current financial status.

I/we understand the suggested investment strategy is based on the information that I/we have provided and that subsequent changes in my/our financial situation may cause these suggestions to change.

SIGNATURE DATE

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TIME HORIZON TOTAL To what age group do you belong?

Sometimes investment losses are permanent, sometimes they are prolonged, and sometimes they are short-lived.

How might you respond when you experience investment losses?

A I would sell my risky investments immediately if they suffered substantial declines.

B Although declines in investment value make me uncomfortable, I would wait at least three months before adjusting my portfolio.

C I can endure significant declines in the value of my investment and would wait at least one year before adjusting my portfolio.

D Even if my investment suffered a significant decline over several years, I would continue to follow my long-term investment strategy and not adjust my portfolio.

Q2 Q1

0 PTS 6 PTS

11 PTS

17 PTS

RISK TOLERANCE RISK/RETURN TRADEOFF INVESTMENT TIME HORIZON TIME HORIZON

PRINCIPAL INCOME ASSET ALLOCATION

QUESTIONNAIRE FOR INVESTORS SEEKING A BALANCE OF INCOME AND GROWTH

Please keep in mind that this information is just a guideline for educational purposes only; it isn't intended to tell you how to invest. Be sure to complete the Investor Profile Quiz periodically to make sure that the investment options you elected continue to match your risk profile.

1 PT 3 PTS 5 PTS

2 PTS 4 PTS

A Under 60 B 61 – 65

C 66 – 70 D 71 – 75

E 76 and older

INVESTING FOR INCOME

(11)

RISK/RETURN TRADEOFF (continued)

Over time, inflation can have a significant negative impact on how much your money can buy. By keeping pace with inflation, investors can maintain the buying power of their money over time. This means that your money will be able to purchase the same basket of goods year after year, even while prices have increased. Inflation also eats away the real returns of your investments.

For instance, if you could have invested $1 in an investment similar to the S&P 500 Stock Index in December 1974, the dollar would have grown to $57.00 by the end of the year 2011. However, after you take into account inflation, the real return on that dollar investment would only be $13.10.

Generally, higher returns can only be achieved by accepting greater risk.

Which of the following choices best reflects your attitude toward inflation and risk?

Source: Morningstar Investment Management. The S&P 500 Composite Total Return is an unmanaged, market capitalization-weighted price index composed of 500 widely held common stock listed on the New York Stock Exchange, American Stock Exchange, and Over-The-Counter market. The index includes dividends reinvestments. The value of the index varies with the aggregate value of the common equity of each of the 500 companies. The S&P 500 (Inflation Adjusted) REAL is an unmanaged index that is adjusted for inflation.

Indices are unmanaged and not available for direct investment. This is for illustrative purposes only and not indicative of any investment option.

Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data shown.

A My main goal is to avoid loss, although I may only keep pace with inflation.

B My main goal is to earn slightly more than inflation, while taking on a low level of risk.

C My main goal is to increase my portfolio’s value. Therefore, I am willing to accept shorter losses, but I am not comfortable with extreme performance shifts that may be experienced in the most aggressive investment options.

D My main goal is to maximize my portfolio value and I am willing to take on extreme levels of risk and performance shifts in my portfolio to do so.

0 PTS

Q3

6 PTS 10 PTS

16 PTS

1.0

$87.87

$19.56 10.0

100.0

Index Values (USD)

INDEX LINE GRAPH

Frequency: Annually

Dec 1974

S&P 500 TR USD S&P 500 TR USD REAL TIME

Dec 1976 Dec 1978

Dec 1980 Dec 1982

Dec 1984 Dec 1986

Dec 1988 Dec 1990

Dec 1992 Dec 1994

Dec 1996 Dec 1998

Dec 2000 Dec 2002

Dec 2004 Dec 2006

Dec 2008 Dec 2010

Dec 2011 Dec 2012

Dec 2013

(12)

ABILITY TO STAY THE COURSE

All investments have some amount of risk, or price fluctuation, associated with them. Downside risk, when your portfolio value declines, means your income stream from your portfolio will also decline.

If you have an initial $1,000 monthly income stream from your portfolio, at what point in time in the first year would you consider changing the makeup of your portfolio in favor of a more stable investment?

Portfolios with the highest average returns also tend to have the highest chance of short-term losses. Short-term losses are a concern in the disbursement phase due to the short time horizon an investor has to make up any losses. The table below provides the average dollar return of five hypothetical portfolios of $50,000 and the possibility of losing money over a one-year holding period. Please select the portfolio with which you are most comfortable.

Q5

Q6 Q4

If the U.S. stock portion of my portfolio were to lose 10% of its value over a one month period, consistent with the overall market, I would prefer to cut my losses and shift into a more conservative investment strategy.

How do you feel about the previous statement?

LOSS AVERSION

PROBABILITIES AFTER ONE YEAR Portfolio Possible Average

Value at the End of One Year

Chance of Losing Money at the End

of One Year

Portfolio A $51,750 19%

Portfolio B $52,250 22%

Portfolio C $52,750 25%

Portfolio D $53,250 27%

Portfolio E $53,750 29%

Portfolio A Portfolio B Portfolio C Portfolio D Portfolio E

0 PTS 4 PTS 8 PTS 14 PTS 17 PTS

0 PTS 8 PTS

6 PTS 16 PTS

A Strongly Agree B Agree

C Disagree

D Strongly Disagree

$820

$900

$940

$970

$700

$750

$800

$850

$900

$950

$1,000

Monthly Income

A B C D

A When my portfolio income stream declines to $970 (3% decline).

B When my portfolio income stream declines to $940 (6% decline).

C When my portfolio income stream declines to $900 (10% decline).

D When my portfolio income stream declines to $820 (18% decline).

E I would not sell, choosing to maintain my long-term portfolio.

0 PTS

4 PTS

8 PTS

12 PTS

17 PTS

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YOUR PERSONAL INVESTMENT PROFILE

TIME HORIZON SCORE

1 2 3 4 5

Risk Tolerance Score

0-17 Model I Model I Model I Model I Model I

18-35 Model II Model II Model II Model II Model I

36-54 Model III Model III Model III Model II Model I

55-79 Model IV Model IV Model III Model II Model I

80-100 Model V Model IV Model III Model II Model I

TIME HORIZON TOTAL RISK TOLERANCE TOTAL

Now that you have completed the investment questionnaire, record your Time Horizon total (from page 9) and your Risk Tolerance total (from page 12).

Your calculated scores above provide the foundation from which to build the investment solution that maybe right for you. Using the table below, match the Time Horizon total with the Risk Tolerance total to find the investment profile that best matches your investment personality. Then match your profile with the investment choices on the following page – this profile, along with the expertise of your financial professional, can help determine the appropriate strategy to help you meet your goals.

INFLATION

Q7

Portfolio A Portfolio B Portfolio C Portfolio D Portfolio E

0 PTS 4 PTS 8 PTS 14 PTS 17 PTS

The graph below shows the range of possible gains and losses for five hypothetical $50,000 portfolios. The bars show the potential gain or loss of the portfolio above or below that of inflation after five years.

RISK TOLERANCE TOTAL (Sum of questions Q2 – Q7)

$15,560.82

Range of Gains and Losses Above and Below Inflation ($3,523.70)

Portfolio A

Portfolio B

Portfolio C

Portfolio D

Portfolio E

$(30,000) $(20,000) $(10,000)

$-

$10,000 $20,000 $30,000 $40,000 $50,000

$23,366.42

$32,043.99 ($5,701.03)

($8,434.14)

$40,101.62 ($10,363.53)

$48,653.55 ($12,494.01)

POSSIBLE FIVE-YEAR PERFORMANCE: $50,000 INVESTMENT

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13

WHICH TYPE OF INCOME INVESTOR ARE YOU?

Few investors have the time or knowledge to allocate investment assets effectively. The Principal^® offers asset allocation services which feature models designed by a recognized industry expert—Morningstar Investment Management. Morningstar Investment Management employs modern portfolio theory to create appropriate asset allocation models that help you balance the potential for return with the right level of risk for your particular solution.

May not reflect current allocations. All investment products involve risk. The investment, when redeemed, may be worth more or less than the original investment.

Other ²⁹⁴

50%

41%

2%

40%

35%

Large U.S.

Equity 13%

Small/Mid U.S. Equity Small/Mid 6%

U.S. Equity 2%

32%

28%

Large U.S.

Equity 22%

8%

25% Fixed Income

25%

20%

27%

10%

Equity 13%

Equity 17%

6%

Other ²⁹⁴

50%

41%

2%

40%

35%

Large U.S.

Equity 13%

Small/Mid U.S. Equity Small/Mid 6%

U.S. Equity 2%

32%

28%

Large U.S.

Equity 22%

8%

25%

20%

27%

10%

12%

13%

Equity 17%

6%

41%

International Equity 2%

40%

35%

Large U.S.

Equity 15%

4%

32%

28%

Large U.S.

Equity 22%

8%

25%

20%

Large U.S.

Equity 27%

10%

12%

13%

16%

17%

6%

8%

Model I – Is for the most conservative investor who seeks greater protection from risk. While not immune from downturns, the portfolio is oriented toward fixed-income investments with some exposure to equity markets for return enhancement and risk diversification. This model is most appropriate for someone who feels that protection from potential downside risk is much more important than potential upside return, and feels uncomfortable with greater equity investing.

Model II – Is for the conservative income-seeking investor who seeks protection from risk with the goal of slightly outpacing inflation over the long term. The model is dominated by fixed-income investments and has limited exposure to equity markets to potentially enhance long-term returns. Investors may expect fluctuations in the values of this portfolio to be smaller and less frequent.

Model III – Best suits long-term investors who seek income stability but also desire some growth in their investments. The portfolio does have risks that could affect short-term performance and is appropriate for investors comfortable with a chance of seeing account values decline in a given year.

n Short-Term Fixed Income n Fixed Income n Large U.S. Equity n Small/Mid U.S. Equity n International Equity

INVESTING FOR INCOME

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14

*May not reflect current allocations.

Other ²⁹⁴

50%

41%

40%

35%

Large U.S.

Equity 15%

4%

32%

28%

Large U.S.

Equity 22%

8%

25%

20%

Large U.S.

Equity 27%

10%

12%

13%

16%

17%

6%

8%

41%

40%

35%

Large U.S.

Equity 15%

4%

32%

28%

Large U.S.

Equity 22%

8%

25%

20%

Large U.S.

Equity 27%

10%

12%

13%

16%

17%

6%

8%

Model IV – Is appropriate for longer-term investors who want a more balanced approach to risk and return in their investments. This portfolio is for those who seek reasonable but relatively stable growth over the long term. The investor should feel more comfortable with swings in annual returns and a chance of seeing account values decline in a given year.

Model V – Will work for long-term moderate investors familiar with equity investing and the risk it involves. The portfolio still seeks relatively stable investment growth, but has slightly higher risk associated with it. The portfolio is appropriate for investors comfortable with swings in annual returns, accepting of the possibility of account value declines in any given year and who consider potential return as being slightly more important than balancing risk.

The Principal Income Asset Allocation Questionnaire is meant to offer suggestions you may wish to consider for your asset allocation needs. The final decision is yours, based on your individual situation. At a minimum, you should review your allocation decisions on an annual basis. This review should take into account your changing needs, existing and additional goals, and your current financial status.

I/we understand the suggested investment strategy is based on the information that I/we have provided and that subsequent changes in my/our financial situation may cause these suggestions to change.

SIGNATURE DATE