Foster & Motley Inc

Item 5 Fees and Compensation

Since we are a “fee-only” firm, our only source of compensation comes from the fees
our clients pay us. We do not accept commissions, referral fees, or other payments
from any third parties. We are independent from all financial product providers. Our
compensation system is designed to ensure that our professionals’ main focus is on our
clients, not production, or the generation of commissions. All fees are negotiable in
certain circumstances.

Investment advisory fees will generally be billed quarterly in advance at one fourth of
the annual rate and are based on the market value of the client’s account(s) under
management as of the last business day of the preceding month. Fees are rounded to
the nearest dollar. With previous client consent, investment advisory fees are deducted
from client accounts. There are no termination fees. Clients may terminate their
relationship with FM, without penalty, at any time upon written notice. Accounts
initiated or terminated during a calendar quarter will be charged a prorated fee. At no
time is prepayment of fees of $1200 or more required or solicited more than 6 months
in advance.

In addition to our fees, clients often pay additional charges imposed by their custodian,
other brokers, mutual fund managers, and other third parties. Those charges include:
brokerage commissions, transaction fees, custodial fees, wire transfer and electronic
fund transfer fees, and other fees and taxes on brokerage accounts, securities
transactions, and those related to private investments. FM does not receive any portion
of these commissions or fees.

There can be minor differences between FM’s client appraisals and the custodial
statement due to methods of accruing interest and dividends, reporting dates, and
other factors. The custodial statement is the official record for tax purposes.

The Brokerage Practices section further describes the factors that FM considers in
selecting or recommending broker-dealers for client transactions and determining the
reasonableness of their compensation.

Family accounts may be aggregated for purposes of fee calculations and receiving fee
breakpoints (see fees & breakpoints below). Fees for minimum account sizes may be
negotiable in certain circumstances, for example, for accounts consisting primarily of
low-cost basis securities, family holdings, or other more passively managed securities.
The minimum fee may be temporarily waived if significant additional contributions are

                                  Foster & Motley, Inc.

anticipated. In addition to the foregoing, there are historical fee schedules in place with
long-standing clients that differ from those applicable to new client relationships.

We are not compensated by commissions from load mutual funds or in any other way
directly or indirectly by mutual fund companies. Consequently, we seek to avoid the
natural conflicts of interest that follow when FM makes a selection of a specific mutual
fund. However, each of the no-load or load-waived mutual funds selected by FM does
have a management fee that is paid to the investment adviser of the fund as well as
other expenses, which are disclosed in each fund’s prospectus.

As a result, clients invested in mutual funds pay two layers of advisory fees, a fee to the
mutual fund’s investment adviser and another fee to FM. Although, some of the mutual
funds can only be accessed through an investment adviser, most of the mutual funds
we recommend are available to you by investing directly with the mutual fund
company. Therefore, you are able to avoid the second layer of fees by not using the
advice of FM, making investment decisions on your own, and by purchasing mutual
funds shares directly from the mutual fund companies. We believe that we have priced
our services competitively and our fees are comparable with other advisory firms.

Some other advisory firms are compensated by 12(b)-1 payments, which are paid
directly by mutual funds companies (e.g., those advisers also register as a
broker/dealer). Those advisers may choose to limit their mutual fund selections only to
those mutual funds that make such payments. We do not accept 12(b)-1 payments, so
our mutual fund selections are not limited to those that have 12b-1 fees.

                                   Fees & Breakpoints
A). Wealth Management

This service bundles investment management and financial planning together for one
fee. The fee is based on assets under management. The annual fee structure is as
follows:
      o 1.00% for the first $2 million of assets under management
      o 0.75% for the next $3 million
      o 0.50% for the next $5 million
      o 0.25% thereafter

The minimum fee for this service is $2,500 per quarter.

The minimum account size for wealth management is $2 million, but we will accept
accounts of lower value with a reduced minimum fee, at our discretion.

B). Institutional Investment Management

This service includes investment management for endowments, foundations, charities,
non-profit organizations, insurance companies, corporations, and other institutions.

                                  Foster & Motley, Inc.

The fee for this service is based on assets under management. The annual fee structure
is as follows:

      o   1.00% for the first $1 million of assets under management
      o   0.75% for the next $3 million
      o   0.50% for the next $6 million
      o   0.25% thereafter

The minimum fee for this service is $2,500 per quarter.

(Under some circumstances we can provide stand-alone financial planning advice and
stand-alone investment management advice. The fee for these services is not provided
here. Consult your FM adviser for details).

Item 7 Types of Clients

FM provides advisory services primarily to individuals and families, but does also service
corporations, pension and profit-sharing plans, and charitable organizations. Fee
requirements for wealth management and institutional investment management are
provided in Fees and Compensation.