CK Advisors LLC

Item 5: Fees and Compensation

CK Advisors is compensated through investment advisory fees that are based on a percentage of the
market value of assets under management and are calculated in accordance with the following fee
schedule:

Investment advisory fees are charged on a quarterly basis and calculated based on the market value
of the client’s account, including cash and excluding accrued income, on the last day of the quarter
as determined by standard pricing services.

       A.      EQUITIES

The quarterly advisory fee for all assets in the accounts (whether then invested in equities, cash or
fixed income securities) is one quarter of:

                                   1.00% of the first $5 million of market value, and
                                   0.75% of amounts over $5 million

       B.      FIXED INCOME

The quarterly advisory fee for all assets in accounts (whether then invested in cash or fixed income
securities) specifically allocated for 100% investment in fixed income securities is one quarter of:

                                   0.50% of the first $5 million in market value, and
                                   0.25% of amounts over $5 million

Clients with both equity and fixed income accounts will have their assets combined for the
purpose of qualifying for the $5 million fee breakpoint. Breakpoint savings for clients with
multiple accounts are allocated in proportion to the size of each account. The investment
advisory fee for each quarter is normally debited to the account at the beginning of the following
quarter.

The Advisor’s quarterly advisory fees are normally subject to a minimum charge regardless of
account size. Specifically, the minimum quarterly charge for an equity or balanced account is
$2,500, notwithstanding that application of Advisor’s fee schedule set forth above would
otherwise result in a lesser charge. The minimum quarterly charge for an account allocated
100% to fixed income securities is $1,250, notwithstanding that application of the fee schedule
would otherwise result in a lesser charge. This means that an account with a market value of
less than $1,000,000 will be paying at a higher rate than is set forth in the fee schedule. While
the Advisor retains the discretion to waive these minimums based on individual client
circumstances (e.g., the nature of current investments, the expectation of future client
contributions to the account, etc.) the minimum fees are normally not waived, notwithstanding
that the fee schedule would otherwise result in a lesser charge.

Limited Fee Negotiations. Fees are not normally negotiable. Accounts for clients in the same
family or who are otherwise related may be aggregated for fee calculation purposes. Also, the
Advisor may waive or adjust fees for the principals’ family members or when the investment
goals and restrictions for any account substantially limit the nature of the investment supervisory
services provided, (e.g., a quasi-passive liquidating account).

Debiting Advisory Fee. Advisory fees for the ending quarter are deducted directly from client
assets at the beginning of the next quarter. When a client requests and the Advisor consents, the
fee for an account may be debited to another account (e.g., the parents’ account paying the fee
for the account for the benefit of their children).

Termination and Pro-Ration of Fee. Fees for accounts that start or terminate other than at the
start of a calendar quarter are pro-rated on a per diem basis in such starting or ending quarter.
Advisor may, in its sole discretion, reduce or waive the calculated pro-rata fee for accounts that
start or terminate during a calendar quarter. The investment advisory service and the related
advisory fee terminate when active account management terminates, whether as provided in the
notice of termination or when the account is liquidated or the securities are delivered out. Some
clients, by contract, may require advance notice if the Advisor wishes to terminate. Illinois
clients have the right to terminate the investment advisory contract with Advisor, without
penalty, within five (5) business days after entering into the contract.

Others Charge Less. Other investment advisors may charge less and may use brokers to effect
brokerage transactions who charge less.

Mutual Fund Fees and Other Costs. Advisor may invest actively managed accounts in mutual
funds and other investment products (e.g. exchange traded funds) that may charge additional fees

and expenses. The Advisor’s fee is separate and distinct from the fees and expenses charged by
mutual funds/ETFs to their shareholders.

The fees and expenses charged by mutual funds/ETFs are described in each fund’s prospectus.
These fees will generally include a management fee, other fund expenses, and a possible
distribution fee. If the fund also imposes sales charges, the client will pay an initial or deferred
sales charge. Any sales charge with regard to a recommended mutual fund will be called to the
attention of the client. The custodian for Advisor’s client accounts may also charge clients a
transaction fee for the purchase and/or sale of a mutual fund.

A client could invest in a mutual fund/ETF directly, without the services of Advisor and in that
event would not pay Advisor’s advisory fee. In that case, the client would not receive the
services provided by Advisor which are designed, among other things, to assist the client in
determining which mutual funds/ETFs are most appropriate for such client’s financial condition
and objectives. Accordingly, the client should review the fees charged by the funds and
custodian, as well as the fees charged by Advisor, to fully understand the total amount of fees to
be paid by the client and so as to evaluate whether the advisory services being provided by
Advisor merit the additional advisory charges.

Advisor’s clients will also incur other costs charged by Advisor’s broker. Please see Item 12:
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Item 7: Types of Clients

Advisor’s clients are high net worth individuals, their family members, their trusts and may also
include family limited partnerships, endowments and corporations. Advisor also manages
retirement assets in the form of Individual Retirement Accounts and profit sharing plans. Please
see “Fees and Compensation” above in Item 5 for a discussion of the Advisor’s minimum
quarterly advisory fee charge and its impact on accounts with a market value below $1 million.

The Advisor does not require a minimum account size for client accounts, but accounts of all
sizes may be subject to minimum quarterly advisory fee charges.

                              Item 8: Method of Analysis, Investment
                                    Strategies and Risk of Loss

Fundamental Analysis of Companies. Advisor’s primary focus is investing in publicly traded
equities using fundamental company analysis as the core element in the investment decision
process. Normally, the purchase, the continued holding of a security and the sale of a security
are all subject to such analysis. Such analysis may be supplemented by other methods such as
technical analysis when Advisor deems such other methods are appropriate.

Advisor believes that independent analysis, a focus on the long-term, and valuation discipline,
will enable Advisor to exploit market inefficiencies, producing superior results over time, while
minimizing risk.

Advisor’s investment process starts with a research approach to identify undervalued securities.
Advisor prefers well-managed companies in good businesses. With patience and discipline,
Advisor believes that even high quality firms can be purchased at compelling prices. Advisor
will also sometimes buy undervalued cyclical companies.

In determining the quality of a company and its valuation, Advisor typically analyzes the
following criteria: the long-term, sustainable earnings growth rate of the company; the riskiness
of the company’s earnings; the quality of the businesses in which the company competes; the
strength of the company’s management; and the company’s financial attributes, including
whether it has stable to improving margins and return on capital, strong free cash flow
generation, a good balance sheet, the ability to internally finance growth, and conservative
accounting.

Advisor attempts to manage risk in a number of ways, which may include maintaining a
diversified portfolio, regularly monitoring individual security weightings and changes in
company fundamentals, maintaining a limited number of holdings so that Advisor can better
know its investments, and purchasing companies with strong balance sheets and conservative
accounting. Advisor will consider selling or reducing a position in a security if it has become
fully valued, becomes too large a position in the portfolio, Advisor finds a more compelling
alternative investment idea or the original thesis fails to hold.

Advisor is a bottom-up, fundamental investor. However, as part of its fundamental analysis,
Advisor may attempt to take into account the financial impact of world events on securities
markets, specific industries and specific securities.

To make informed decisions Advisor reviews a variety of information sources which may
include annual reports, prospectuses, filings with the SEC, research material prepared by others,
charts, statistical material and analyses, financial newspapers and magazines, trade journals,
corporate activities and valuations by rating services. Advisor may participate in company
presentations and interviews with company officers.

Investment Strategy. Because Advisor focuses on fundamental analysis in the security
selection process, most of the investments are intended to be held for the long-term, that is, for
more than a year. Nevertheless, a security bought on its fundamentals for long-term investment
may be sold shortly after purchase for any of a number of reasons, of which the following are
examples: there may have been a quick run up in the security’s market price to its projected
valuation; an intervening event may have occurred which Advisor thinks will have a negative
impact; Advisor may become disenchanted with management; subsequent to investment,
Advisor may be unhappy with a major business decision by the company.

Advisor will, at times, engage in trading (holding securities for less than 30 days) and short term
investment (holding securities for less than a year). In unusual situations, at a client’s request,
Advisor might invest on margin. Based on Advisor’s overall view of macroeconomic matters,
it may elect to increase or decrease the percentage of client accounts invested in equities at a
particular point in time. While Advisor does not attempt to predict and trade on market
fluctuations (e.g. market timing), Advisor is mindful of the adage that a rising tide tends to raise
all ships (and the corollary with respect to an ebbing tide). However, the Advisor’s level of
equity investment is normally driven by its success in finding attractively valued securities.

Risk of Loss. Advisor tries to reduce risk by avoiding what it regards as an undue concentration
in any security, industry or economic sector. At the time of investment, with regard to the market
value of the account, no more than 7% will be invested in a particular company-issued security,
no more than 25% will be invested in a particular industry, and, no more than 40% will be
invested in a particular sector.

Advisor tends to avoid securities priced on the expectation of unusually high growth since often
modest shortfalls in such companies’ results create major reductions in the prices of such
securities. There are exceptions but in general Advisor tends to hold securities in companies in
the mid capitalization and large capitalization range. In the universe of those investing in equities
Advisor sees itself as more conservative. Advisor is prepared to do less well than more
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