Baxter Brothers Inc

Item 5 – Fees and Compensation

All fees are subject to negotiation.

Our investment advisory fees for all advisory services are calculated as a percentage of assets under
management. In general, the firm’s annual fee is calculated as follows:
   •   One (1.0%) percent of the market value of the portfolio under management. The annual
       percentage fee is payable in advance on a quarterly basis, based upon the prior quarter-end
       market value.
   •   Fees are deducted from the portfolio or billed to the client which is determined in advance.
   •   Individual accounts in a family group may be treated as one account for purposes of
       computing the fee payable.
   •   Fees and account minimums may vary due to particular circumstances of the client or as
       otherwise negotiated with particular clients.
The above fee schedule reflects Baxter’s management fee. It does not include the fees for brokerage
commissions and custodial charges, which are not charged by, or payable to, Baxter. Holdings in a
client’s account may include mutual funds or exchange-traded funds (“ETFs”) for which a separate
investment management fee is charged by the mutual fund manager or ETF. Such fees are not
charged by, or payable to, Baxter. Our fees may be deducted from the client’s account by the client’s
account custodian or, alternatively, may be paid directly by the client. We will seek to determine the
most advantageous share class available to you. While institutional share classes are usually the
lowest cost alternative, under certain circumstances you may be better served to pay a higher annual
expense ratio and avoid a transaction fee on each trade. When selecting a mutual fund for your
advisory account, we have a fiduciary duty to select the share class that helps manage the overall fee
structure of your account. We will perform an analysis to determine which class is most beneficial
to you. We will review mutual fund positions that you may transfer “in kind” to be included in the
assets managed by us. We will advise you as to alternatives available to you regarding share classes
if available. We recognize that in some situations alternative share classes may not be available such
as in 401k plans that limit the array of investments or funds that require certain investment amounts,
or custodial platforms that do not provide alternative classes. When you transfer assets into a
managed account, we will review your mutual fund holdings. If a holding is not one of our
recommended funds, the mutual fund will generally be sold unless you need to avoid a taxable gain

or direct us to hold the position. In some circumstances, if the legacy holding fits into the asset
allocation of your portfolio, it may be held going forward. If we determine it is in your best interest
to convert to an alternative share class and the position meets the minimum investment and eligibility
criteria, we will place instructions for the custodian to convert the position on its next available share
class conversion date.

Upon written request at any time clients may terminate Baxter’s advisory service. Upon termination
of the contract, the fees described above will be prorated. If Baxter’s advisory services are terminated
before the end of the billing period, the client will receive a refund of the unearned portion (if any)
of client’s prorated prepaid advisory fee. Within five (5) business days of execution of Baxter’s
customer agreement, clients may terminate the contract upon written notice to the firm and receive
a full refund of the fee paid. Upon termination, securities positions in the terminated client’s
portfolios will not be liquidated unless specifically requested by the client.

Item 7 – Types of Clients

Baxter Investment Management provides portfolio management services to individuals, high net
worth individuals, corporate pension and profit-sharing plans, charitable organizations, and
corporations.

We are deemed to be a fiduciary to advisory clients that are employee benefit plans or individual
retirement accounts (IRAs) pursuant to the Employee Retirement Income and Securities Act
(“ERISA”), and regulations under the Internal Revenue Code of 1986 (the “Code”), respectively. As
such, we are subject to specific duties and obligations under ERISA and the Code that include, among
other things, restrictions concerning certain forms of compensation.

Each client will be required to sign an advisory agreement with Baxter that sets forth the terms and
conditions of their relationship.