Citadel Investment Advisory Inc

Item 5   Fees and Compensation

Citadel is compensated based on assets under management. Citadel's fee schedule is as follows:

Investment accounts are subject to the following general fee schedule:

Annual Rate Schedule                   Account Value

1.50% (150 basis points)               First $500,000
1.25% (125 basis points)               thereafter

However, the above fees are subject to negotiation, and may be more or less than the general rate. Fees
are charged quarterly in advance based on the beginning period asset value. Clients may terminate an
investment advisory contract before its expiration, in writing, at any time, and will receive a refund of fees
pro rated for the time remaining until the end of the quarter. Other investment advisory services are
provided on a negotiated fee basis. Citadel believes charging its fee in advance is to the client's advantage
as it will result in a lower fee over time if Citadel meets its objective of growth.

Other fees:

Clients are subject to other fees in the investment process. Custodians charge commissions and markups
for the purchase and sale of securities. Custodians also charge various administrative fees depending on
clients activities such as, custody fees, margin interest, reorganization fees, expedited delivery fees,
management fees and account fees. In addition, the SEC charges a tax for selling certain securities. Most
fees are presented to the clients through account statements and confirmations. However, some fees are
hidden within the cost of the investment, such as markups. Citadel reviews the competitiveness of fees
charge to clients and feels that the fees charged by custodians are competitive.

Mutual funds and money market funds have their own fees for management and operations embedded in
their results. A fund's gross return is reduced by all the fees associated with running the fund and investors
earn the net return. Investors wanting a complete accounting of the cost of various funds need to review
the fund's prospectus.

Item 7       Types of Clients

Citadel primarily provides investment advisory services to individuals and their tangential accounts such as
IRA's, trusts, and individual retirement plans. To a lesser extend, other clients would include incorporated
entities, trusts, estates, retirement accounts. Citadel does not work with banks, thrifts, or investment
companies.

Citadel does not have any minimum account value. However, accounts under $100,000 would be
managed in an even less diversified manner than accounts of greater value. A client can avoid this
situation by purchasing a mutual fund.