Edgemoor Investment Advisors Inc

Item 5: Fees and Compensation

Compensation

Edgemoor bases its fees on a percentage of assets under management. Edgemoor also
charges a fee on client assets on margin and on accrued interest. In certain circumstances
Edgemoor’s fees and account minimums may be negotiated (see Item 7 below for
minimum asset requirements). Edgemoor’s standard fee schedules are described below.

Compensation – Investment Advisory Services

Fees are deducted directly from client accounts in advance at the beginning of each
calendar quarter based upon the quarter end values (market value or fair market value
plus any credit balance or minus any debit balance) of the client’s account for the
previous quarter. Edgemoor may invoice certain clients for advisory fees to be paid.
Edgemoor’s standard fee schedule is as follows:

              Value of Client Assets                     Annual Percentage Fee

                 First $5,000,000                                1.00%

                 Next $5,000,000                                 0.75%

                Above $10,000,000                                0.60%

Compensation – Equity Mutual Fund

For its advisory services to the Meehan Focus Fund, Edgemoor receives an annualized
fee equal to 0.80% of the daily average net assets of the fund, such fee to be computed
daily and payable by the fund on the last day of each month. This arrangement creates a
conflict of interest, as Edgemoor has an incentive to recommend investments in funds for
which it serves as investment adviser.

Edgemoor does not charge clients a separate management fee for any client funds
invested in any mutual fund managed by Edgemoor.

Edgemoor Investment Advisors, Inc.                                                  Page 5

Compensation – Financial Planning Services

Edgemoor does not charge its clients for financial planning services and does not offer
stand-alone, fee-based financial planning services.

General Information on Advisory Services and Fees

Edgemoor’s management fee is exclusive of brokerage commissions, transactions fees,
and other related custodial costs and expenses. Item 12 below describes the factors that
Edgemoor considers in selecting the broker-dealers for client transactions and
determining the reasonableness of their compensation (e.g. commissions).

A portion of client accounts may be invested in mutual funds, exchange traded funds or
similar securities. These securities carry fees and expenses (including advisory fees) that
are in addition to fees charged by Edgemoor for our services. The client should review
both the fees charged by the funds and the fees charged by Edgemoor to fully understand
the total amount of fees to be paid by the client and to evaluate the advisory services
being provided. If the client invests in a mutual fund for which Edgemoor is the adviser,
no separate advisory fee will be charged by Edgemoor.

Accounts for employees and their family members or others may be managed for reduced
fees or no fee. Exceptions to our standard fees may result in a conflict of interest and
possibly variation in the degree to which the accounts are managed. Edgemoor strives to
provide our services consistently to all clients, including those described here.

Termination of Advisory Relationship

A client agreement may be terminated at any time, by either party, for any reason upon
receipt of 5 days’ written notice. Upon termination of any account, any prepaid,
unearned fees will be promptly refunded. Clients will pay management fees prorated
through the date that Edgemoor ceases management of those assets.

Item 7: Types of Clients
Edgemoor provides investment advisory services to high-net-worth individuals,
retirement plans, corporations, trusts, estates, non-profit organizations, foundations, and a
registered investment company (mutual fund).

Account Minimums

Edgemoor requires a minimum account of $1,000,000 for investment advisory clients.
This minimum may be negotiable under certain circumstances.