The Lynde and Harry Bradley Foundation, Inc.

Securities Lending Program

December 31, 1995

During 1995 the Bradley Foundation had a security lending program with Firstar Trust Company (FTC). Security lending revenue from FTC totaled $107,170.

The initial security lending program permitted FTC authority to lend all available securities under their custody. This authority was modified on August 29, 1995 to limit the securities on loan to $100 million and further reduced to $75 million on November 29, 1995. The latter reduction was in anticipation of entering into a security lending program with Chase Manhattan for those international securities under their custodianship. The Chase security lending program will initially limit lending up to a maximum amount of $25 million. The Chase security lending program should be operational in April, 1996.

The security lending agreement was reviewed by Foley & Lardner to establish legal credibility and ensure the Bradley Foundation was protected to the extent possible. A key provision in the agreement is that FTC will indemnify the Bradley Foundation against loss due to broker default. Additional procedures to control the security lending program include:

1)	Strict investment guidelines included in agreement.

2)	An annual credit review of borrowing broker/dealers is conducted by Firstar's Credit Administration Department.

3)	All loans are market-to-market on a daily basis. FTC collects 102% of the loaned securities' market value for collateral.

4)	The existence of an industry accepted contract with each broker/dealer outlines the "rules" for conducting securities lending activity.

5)	The ability to recall securities on loan at any time and the ability to buy-in a broker that may be unable to return recalled securities.

6)	Limit on amount of securities on loan and a monthly report of the security lending activity is provided to the Foundation for review and analysis.

Exhibit I provides a summary of the procedures used by FTC to administer the security lending program.

The amount of securities on loan at December 31, 1995 approximates $49,686,800.