Directional Asset Management LLC

Item 5: Fees and Compensation

A. Fee Schedule

Investment Supervisory Services Fees

           Total Assets Under Management                   Annual Fee

                   First $1,000,000                           1.00%

                   Next $2,000,000                            0.90%

           Total Assets Under Management                  Annual Fee

                   Next $2,000,000                           0.80%

                   Next $5,000,000                           0.70%

                 Above $10,000,000                           0.65%

Fees will be calculated on a blended tier schedule. For example, a $5,000,000 account fee
would be calculated quarterly as follows: ($1,000,000 x 1.00%) + ($2,000,000 x 0.90%) +
(2,000,000 x 0.80%) = ($10,000 + $18,000 + $16,000) / 4 = $11,000 per quarter. The use of a
blended fee schedule represents a conflict of interest for the Advisor in that the blended
fee schedule results in higher fees for the Advisor than are collected by advisors who use
a breakpoint schedule for the same or similar services. Fees that are charged through a
blended fee schedule result in additional revenue for the adviser as the value of the
account increases. Although new money or increases in the account’s values may be
managed at lower rates, the total values of assets in the earlier tiers continue to be
managed at their initial higher rates. Higher asset under management fees have an
adverse effect on client returns and client portfolios over time.

These fees are negotiable and the final fee schedule is attached as Exhibit II of the
Investment Advisory Contract. Fees are paid in arrears, and clients may terminate their
contracts with one day written notice. Because fees are charged in arrears, no refund
policy is necessary. Clients may terminate their accounts without penalty within 5
business days of signing the advisory contract. Advisory fees are withdrawn directly from
the client’s accounts with client written authorization.

Financial Planning Fees

Hourly Fees

The hourly fee for these services is $175. The fees are negotiable and the final fee schedule
will be attached as Exhibit II of the Financial Planning Agreement. Fees are paid in arrears
upon completion. Because fees are charged in arrears, no refund is necessary. Clients
may terminate their contracts without penalty within five business days of signing the
advisory contract.

Selection of Other Advisers Fees

DAM may direct clients to third-party investment advisers. DAM will be compensated
via a fee share from the advisers to which it directs those clients. This relationship will be
memorialized in each contract between DAM and each third-party adviser. The fees
shared will not exceed any limit imposed by any regulatory agency. The notice of
termination requirement and payment of fees for third-party investment advisers will
depend on the specific third-party adviser selected.

B. Payment of Fees

Payment of Investment Supervisory Fees

Advisory fees are withdrawn directly from the client’s accounts with client written
authorization. Fees are paid in arrears.
Some Custodians do not collect Management Fee's on behalf of the DAM. In those cases
DAM will invoice the client quarterly in arrears.

Payment of Financial Planning Fees

Hourly Financial Planning fees are paid via check in arrears upon completion. Because
fees are charged in arrears, no refund is necessary.

Payment of Selection of Other Advisers Fees

Fees are paid quarterly in arrears.

The timing, frequency, and method of paying fees for selection of third-party managers
will depend on the specific third-party adviser selected and will be disclosed to the client
prior to entering into a relationship with the third-party advisor.

C. Clients Are Responsible For Third Party Fees

Clients are responsible for the payment of all third party fees (i.e. custodian fees, mutual
fund fees, transaction fees, etc.). Those fees are separate and distinct from the fees and
expenses charged by DAM. Please see Item 12 of this brochure regarding
broker/custodian.

D. Prepayment of Fees

DAM collects its fees in arrears. It does not collect fees in advance.

E. Outside Compensation For the Sale of Securities to Clients

Neither DAM nor its supervised persons accept any compensation for the sale of securities
or other investment products, including asset-based sales charges or service fees from the
sale of mutual funds.

Item 7: Types of Clients

DAM generally provides investment advice and/or management supervisory services to the
following Types of Clients:

           Individuals
           High-Net-Worth Individuals

Minimum Account Size

There is an account minimum, $100,000, which may be waived by the investment advisor, based
on the needs of the client and the complexity of the situation.