TABLE OF CONTENTS:
*SIP Receives National Recognition
*New Investment Option
*Recent Legislative Changes
*Your Fellow Participants
*Financial Websites
*Your SIP Committee
*Rebalancing Your Account

SIP RECEIVES NATIONAL RECOGNITION

According to a study completed by Access Research of the "best practices" used by companies with participation rates of 80% or more, the Savings Investment Plan was selected as one of their top plans. The results of the study were cited in the August 1996 issue of "Employee Benefit News".

Among the successful plans studied, Access Research found an emphasis on promoting the 401(k) as a savings plan - not simply a retirement plan - and providing access to the money through loans and after-tax deposits.

NEW INVESTMENT OPTION

On October 1, 1996, the plan added the Aggressive Growth Fund to the five investment funds previously available.

The fund is comprised of three individual funds, invested by three separate investment firms. Information and prospsectuses for all three funds were distributed to all employees and plan participants during the first week in September. Money is invested equally in all three funds and re-balanced on a monthly basis. Three funds were selected instead of a single fund to reduce risk through diversification among different managers and different investment philosophies. The three funds are:

John Hancock Special Equities Fund C
PBHG Growth Fund
MFS Emerging Growth Fund A

Because the funds are offered as part of a corporate savings plan, there is no load or sales fee and no minimum deposit was required.

Participants were invited to meet with representatives of the three investment firms on Thursday, September 12 to learn more about the funds. The SIP Committee was also available to explain the selection process and answer general questions about the plan.

Based on interfund transfer requests by 237 participants, an initial deposit of approximately $ 7 million was made October 1.

RECENT LEGISLATIVE CHANGES

President Clinton recently signed the Small Business Job Protection Act of 1996. The Act includes the following which are effective 1/1/97 unless otherwise indicated:

• IRA contributions of up to $2,000 may be made for a spouse (working or non-working) if the combined income of both spouses is at least equal to the contributed amount. However, the salary limitations outlined in the Summer 1996 SIP newsletter still apply to determine how much, if any, of the IRA is tax deductible.
  
• For IRAs only (not defined contribution/401(k) plans), the 10% early withdrawal penalty will not apply to withdrawals used for medical expenses greater than 7.5% of AGI (Adjusted Gross Income) or for individual or family medical insurance premiums if the person received federal or state unemployment compensation for 12 consecutive weeks and the withdrawal is made in that same year or the following year. For a participant faced with significant medical expenses, this new legislation may affect a decision whether to withdraw funds from an IRA (without penalty) or a defined contribution plan (with penalty).
  
• Effective 1/1/98, the allowable contribution limit of 25% of wages will be based on gross wages, not reduced by 401(k) deferrals and deferred insurance deductions currently required. This means employees will be able to contribute a greater total amount (pre-tax and after-tax combined) as a percentage of wages.
  
• The 5-year averaging tax treatment (outlined in your Special Tax Notice) will be discontinued effective 1/1/2000.
  
• The $5,000 death benefit exclusion for benefits paid to beneficiaries will be repealed for participants who die on or after August 20, 1996.

YOUR FELLOW PARTICIPANTS

Participants in the Savings Investment Plan fall into the following groups :

• Full Time Employees 1,195(48%)
• Contract Staff Employees 125 ( 4%)
• Part Time/Temp. Employees 20 ( 1%)
• Former Employees < Age 55 620 ( 29%)
• Retirees/Beneficiaries 470 (17%)
• S&L - Related Companies 32 ( 1%)
• Divorced Spouses 8 ( n/a) Total Participants 2,499

Financial Web Sites

The following excerpts are from an article in the October 1996 issue of "Kiplinger's Personal Finance Magazine", reprinted with permission . The opinions of the authors, Elizabeth Razzi and Ronaleen R. Roha, may or may not reflect those of the SIP Committee.

Surf the World Wide Web awhile and you may forget that computers were designed to be timesaving devices. True, there's a world of valuable information online, but it's easy to miss among the digital billboards, glorified brochures and do-it-yourself home pages.

In the realm of personal finances alone, having spent uncountable hours searching for information, checking out tips and leads, and evaluating sites, we figure that the ho-hum and simply awful outweigh the valuable by a thousand to one.

The sites offer information that, pre-Web, was difficult to get, expensive, or both. Most are free. And when you're on the Web, don't forget to type http:// followed by the address to get where you're going.

Investing CNNfn (cnnfn.com) Pop in for a quick review of the day's business and market news, or check out the "Your Money" section for personal-finance features. Has guest experts who will answer e-mail questions and links to extensive information about major companies.

INVESTools (www.investools.com) A cafeteria of more than 30 financial newsletters and publications that you can buy piecemeal. Type the name or symbol of the company or other information into the search engine and all references are displayed - along with the hypertext links to them and how much they cost.

Mutual Funds Interactive -(www.brill.com) The inside scoop on funds - lots of experts' commentary, fund-manager profiles, basics of fund investing, and links to fund home pages and other fund-related Web sites, such as the "money Talks" site of investment columnists.

NETworth (networth.galt.com) An all-in-one Web site for investment research. Call up one-sentence descriptions of funds goals and short manager bios. Click on the links to fund families' home pages, many of which allow you to download a prospectus. (Skip the "Financial Planning" forum, which is mainly sites of firms hawking their services .) Free, but you'll have to register for a password to access some sites.

AWWS Financial Network (pawws.com) Serious investors, take note: You can sign up for one of three online brokerages or get services such as Hoover's Company Profiles (30 portfolios per month for $5), Stock Market Index's technical-analysis tools ($7.95 per month) or daily e-mail updates on as many as 150 securities ($8.95 per month). Or track the tax basis of your securities - which will make filling out your income-tax forms easier. Give the nonsubscription services a free trot for 60 days.

YOUR SIP COMMITTEE

• Ed Alsamsam
• Bruce Oswald
• Mike Callahan
• Greg Rataj
• Sam Lissner
• Mary Ann Welusz
• Alex J. Cudzewicz ..........Chairman
  
• SIP Administrators: Kathy Davis - (312) 269-2130
• Donna Mangrum - (312) 269-2369
  
• Rates of return hotline - (312) 269-2145
• SIP Fax Number (312) 269-3562

REBALANCING YOUR ACCOUNT

You now have the option of rebalancing the existing funds in your account.

The SIP administrators now have the capability to reallocate the funds in your account according to the percentages you select.

For example: you may currently have money in the Magellan, InterCap and Bond funds. You could simply specify the new investment percentages to be:

• Stable Asset 30%
• S&P 500 10%
• Magellan 15%
• InterCap 25%
• Agg. Growth 20%

Your account would then be reallocated to reflect these percentages. All you need to decide is how you want the funds to be invested. The SIP Office will do the rest.

If you don't want this new option of rebalancing your account, you can still request a transfer the old fashioned way: as a percentage of the existing funds. For example, you could transfer any percentage from 1% to 100% from a specific fund to another fund (or funds). In that case, you need to determine the percentage you want transferred OUT of a particular investment fund (or funds) and how you want that amount reinvested. Keep in mind we must reinvest 100% of the transferred amount.

Transfers can be done any month. You can also change the investment percentages of your payroll contributions any month. Either visit or call the SIP Office to initiate any changes. If you are not in the Chicago office, you must call the office first before any changes will be made.

Fall, 1996.