Hand Papermaking Inc.

Schedule D, Part V, Line 4

“The Hand Papermaking Endowment was established in 2006. The principal is a restricted fund to ensure the long-term future of the organization; annual earnings are transferred to the general fund to support ongoing publishing programs. The endowment accepts any size donation. Quarterly reports tracking endowment activity, maintained by the organization's executive director, are posted to a website accessible only to the organization's board of directors. The fund is managed internally by the Finance Committee of the current board of directors. The primary investment objective of The Hand Papermaking Endowment is to produce a rate of return which will permit maximum support for the general fund in a manner that is consistent with the following: prudent management of investments, preservation of principal, and socially responsible investment practices. Trustees will act in good faith and with the same care any ordinary, judicious person in like osition would exercise under similar circumstances. Trustees are subject to the organization's Ethics Policy and Conflict-of-Interest Policy. The Hand Papermaking Endowment is technically a "quasi-endowment" since it was established as a restricted fund by the board of directors who, in theory, could un-restrict the fund at any time. In practice since board members are fiscally responsible for the organization, this could only happen during a major financial emergency. Fund earnings are unrestricted and transferred annually to the general fund. As a general rule of prudence, no transfer should decrease the total market value of the endowment below 110% of the original contributions. At the same time, an amount no greater than 10% of the total market value of the endowment should be distributed in a given calendar year. Assets of The Hand Papermaking Endowment may be invested in equity securities (common stocks, preferred stocks, and convertible securities), fixed-income securities (debt instruments), and short-term investments (cash equivalents), or mutual funds comprised of these security types, according to the following asset allocation guidelines. No other securities are permissible investments without the specific approval of the board of directors. The current investment strategy is 60% equity (diversified stock portfolio), 30% fixed-income (US Treasury bond ladder), and 10% short-term (sweep account). The Finance Committee will determine appropriate benchmarks to measure success of the current investment strategy, reporting results to the full board annually. The chair of the Finance Committee serves at the will of the board of directors.”