Birmingham Capital Management Co Inc

Types of Clients

We provide our services for a variety of clients, including pension and profit sharing
plans, corporations who wish to invest a portion of their corporate assets, endowments
and foundations, trusts of various types, and high net worth individuals. Birmingham
Capital generally imposes a new account minimum asset value of $750,000. This figure
is subject to negotiation.

                                              5.
                        Investment Methodology and Risks

Birmingham Capital employs an investment style that can best be characterized as a large
capitalization value approach. What this means is that the majority of the stocks that
would be purchased or held in our clients' portfolios would be the stocks of very large,
generally well-known companies who are leaders in their field or industry. Furthermore,
we seek to purchase our portfolio holdings at what we believe is a "value" price, meaning
that we try to be attentive to how much we pay for a holding. Our belief is that
overpaying for securities that have high market expectations is counterproductive to the
long term enhancement of asset values. This is where the oovalue" part of our description
is derived. Our research method can best be described as "fundamental." What this means
is that we evaluate the attractiveness of a security based most significantly on the
fundamentals of the underlying company, and not on the basis of market trends or charts.
Our information for these evaluations comes from a variety of sources, including but not
limited to financial periodicals, inspection of documents issued by companies (annual
reports, lOQ's, SEC filings), research materials provided by others (brokerage firms or
other such providers), corporate rating services (such as Moody's), and company press
releases or other information that we may lawfully obtain from company sources.

When we purchase a security for a client's portfolio, and in particular an equity security,
our intention is usually to hold it for an extended period of time (over a year, and usually
well beyond that). On occasion the holding period may be less than ayeat, but such
instances are rare. Generally speaking, we have a low turnover rate in our portfolios
because of this focus on longer term holdings.

In our equity, or common stock investing, we generally purchase individual securities for
our clients' portfolios, and we focus our attention on exchange-listed securities, most of
which will be U.S. corporations. We do use the securities of foreign corporations on
occasion (and they will trade on U.S. exchanges as ADR's, just like U.S. stocks do), but
for the most part, our equity investments will be in U.S. companies. We may on rare
occasions use a mutual fund when it is advantageous to the client to do so, primarily to
achieve diversification within a particular sector. It should be noted, however, that when
a mutual fund is used, the client may be paying a "double fee" in that the mutual fund
will likely be charging an unseen fee which is deducted from the fund value, and the
client will also be paying our fee for asset management.

In our fixed income investing, for the most part we use corporate, government, or
municipal debt securities issued by U.S. companies, the U.S. government, or states and
municipalities within the U.S. V/e may on rare occasions use the debt securities of a
foreign company as we would occasionally buy the common stock of a foreign company.

For the temporary investment of cash within portfolios, we generally use a short term
investment vehicle managed by the custodian of the client's assets. These investment
vehicles will in turn employ certificates of deposit issued by U.S. banks, the commercial

                                                6.

paper of U.S. corporations, or treasury bills issued by the U.S. government, all      with
maturities of less than one year and generally less than 90 days.

As a general rule, we do not use options, futures, or derivatives in managing our clients'
funds. V/e do not sell ooshort" (selling a stock one does not own, and attempting to buy it
back later at a lower price) or trade on "margin" (borrowed money). V/e may on rare
occasions invest our clients' funds in a partnership security or an REIT if it is in our
clients' interest to achieve their goals, but these will be limited to securities that are listed
and traded on U. S. exchanges.

Investing in securities, whether stocks or bonds, entails the risk of loss. Investing in
stocks entails the risk of material loss. Clients and prospective clients must be
financially able to bear the possibility of such losses.

                                            7.
                                Disciplinary Actions

As a part of the information included in this brochure, we are required to disclose any
disciplinary action taken on the part of any regulatory or law enforcement agency against
either our firm or any employee of our firm. Neither Birmingham Capital nor any
employee of Birmingham Capital has ever been subject to any disciplinary action or any
criminal or civil action by any overseeing agency.

                                            8.
                         Other Activities and Affiliations

No employee of Birmingham Capital Management, nor any related person, is engaged in
any business, activity, or relationship that would be material to our advisory business or
to our clients. None of our employees or related persons receives any compensation from
any other source that is in any way related to our business or our clients.

                                              9.
                      Code of Ethics and Conflicts of Interest

SEC rule 204A-l requires that all investment management organizations that are
registered with the SEC adopt and maintain a Code of Ethics that outlines the core values
and objectives of the firm in relation to both the standard and the spirit of the laws that
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