Argyle Capital Management LLC

Item 5   Fees and Compensation

Description of How Argyle is Compensated For Advisory Services

    Argyle’s sole compensation from clients is an investment advisory fee, calculated as a percentage of
clients’ assets under management and paid in advance on a quarterly basis (based on quarterly portfolio
valuations). The maximum annual management fee is 1% of clients’ assets under management. We retain
the discretion to negotiate alternative fee rates with existing and prospective clients on a case-by-case
basis. Notwithstanding this, Argyle may occasionally provide one-off services at the request of clients
where it would receive additional agreed-upon compensation. Quarterly portfolio values are based on
trade date accounting using the valuation services of an independent third-party pricing service. The
portfolio value is based on all assets including cash/money market balances. At times the yield on the
cash/money market balances may be less than the management fee. Argyle provides each client with a
quarterly billing statement which allows them to review the fee calculation. Billing statements are usually
sent to clients during the first month of the quarter for which the client is being billed. Argyle will, only with
client authorization and after the client has been given the opportunity to review the fee calculation, directly
deduct fees from the client’s investment account. Clients may also remit payment of management fees
directly to Argyle through other means.

   Argyle's standard form of Investment Advisory Agreement used for new clients may be terminated at any
time by the client through written notice to us. We may terminate the agreement with ten (10) days’ written
notice to the client. Fees paid in advance will be pro-rated to the date of termination and any unearned
portion will be refunded to the client. Argyle will not be responsible for trading in a client account following
the termination date.

   While Argyle’s sole compensation is the investment advisory fee, clients may pay fees to others in
connection with Argyle's advisory services. These may include custodian fees (generally charged by
banks/custodians to hold/safeguard assets and report on securities/brokerage accounts) and mutual
fund/ETF expenses (generally charged by entities in connection with managing, servicing and distributing a
mutual fund/ETF). Clients will incur brokerage and other transaction costs related to trades directed by
Argyle in client accounts (see Item 12 - Brokerage Practices, below).

   Argyle and its supervised persons do not receive compensation for the sale of securities or other
investment products, including asset-based sales charges or service fees from the sale of mutual funds.
Such “transaction based” compensation has typically been earned by registered representatives of a
broker/dealer and is an arrangement that Argyle has not sought given its potential to conflict its investment
advice to clients.

                                   Argyle Capital Management, LLC                                          Page 7

Item 7       Types of Clients

Types of Clients To Whom Argyle Generally Provides Investment Advice

    Argyle best serves the client or fiduciary who desires professional management, personal service,
responsiveness and close communication. The minimum for new client assets to be managed is commonly
$1,000,000, which may be negotiable in certain circumstances. We believe that we combine the
advantages of a smaller, regional advisory firm with the experience and expertise found in larger firms.
Emphasis is placed on managing portfolios comprised of stocks, fixed income, and cash for a variety of
clients including individuals, families, trusts, foundations, endowments, profit-sharing plans, pension funds,
and individual retirement accounts.

                                  Argyle Capital Management, LLC                                       Page 9