Flagship Capital Management Inc

Item 5   Fees and Compensation

Flagship charges an annual fee for its investment advisory services which is payable quarterly in
advance based on the market value of the client's portfolio at the end of each fiscal quarter.
Typically, these fees are as follows:

Amount Invested                               Annual Fee

$0-$1 million                                 up to 1.0%
next $4 million                               1.0%
next $5 million                               0.75%
over $10 million                              0.50%

FCM’s Management Agreement and the custodian account forms grant FCM authority to deduct
the quarterly advisory fees from the client accounts held by third-party custodians. The itemized
invoices are billed directly to the custodian of the client’s accounts indicating the account to be
charged. The client is sent a copy of the invoice by the custodian, noting that it is a copy and
that they do not need to remit any funds. Fees are then deducted from the client’s accounts by the
custodian and forwarded directly to Flagship. Clients can, at their discretion, elect to be billed
and pay the fees directly.

Flagship’s fees for self directed 401(k) plan accounts generally include an initial one- time setup
fee of $2,500 or $ 40 per eligible participant. An annual monitoring fee of up to 1.0% is also
due. This annual fee is payable quarterly in advance, based on the market value of the portfolio
at the end of each fiscal quarter.

Clients and/or participants investing in mutual funds pay additional fees assessed at the mutual
fund level, which vary by fund.

All fees are fully disclosed via the management agreement and/or solicitation agreement.

Clients may terminate the management agreement within 5 business days of signing the
agreement without penalty. A client may terminate the management agreement with Flagship at
any time, by giving 60 days prior written notice. Unearned fees will be refunded on a pro-rata
basis. There are no fees charged by Flagship to terminate an account.

All accounts may be subject to normal transaction costs (e.g., brokerage commissions, exchange
fees). Flagship does not directly or indirectly participate in any of these fees.

Item 7    Types of Clients

As stated in Item 4, Flagship provides investment management services for individuals,
corporations, pension and profit-sharing plans, foundations, trusts, and endowment funds.
Individual accounts may be both taxable and tax deferred. Flagship’s minimum account size is
typically $250,000.00, which can be a combination of more than one brokerage account within a
family and then managed as one composite account.