Hamel Associates Inc

Fees and Compensation

The specific manner in which fees are charged by Hamel Associates, Inc. is established in a
written agreement by and between the client and Hamel Associates, Inc. Hamel Associates,
Inc. bills its fees on a quarterly basis, in arrears. Clients may elect to be billed directly for
fees or to authorize Hamel Associates, Inc. to directly debit fees from client accounts.
Hamel Associates, Inc. generally bills most clients according to a fee schedule based on
assets under management. Unless otherwise negotiated, the fee charged by Hamel
Associates, Inc. is 1% of the first $1,000,000.00 under management,¾ of 1 % of the next
$1,000,000.00 under management, and ½ of 1 % of all assets over $2,000,000.00 under
management. The amount of assets under management is re-determined on a quarterly
basis. Additionally, Hamel Associates, Inc. will, from time to time, negotiate fee
arrangements other than one based on assets under management, such as a negotiated flat
fee. Accounts initiated or terminated during a calendar quarter will be charged a prorated
fee. Upon termination of any account, any unpaid fees will be due and payable or if
invoiced in advance, a pro-rata fee will be promptly refunded.

Fees charged by Hamel Associates, Inc. do not include brokerage commissions, transaction
fees, and other related costs and expenses which shall be incurred by the client. Clients
may incur certain charges imposed by custodians, brokers, third party investment
companies and other third parties such as fees charged by managers, custodial fees,
deferred sales charges, odd-lot differentials, transfer taxes, wire transfer and electronic
fund fees, and other fees and taxes on brokerage accounts and securities transactions.
Mutual funds and exchange traded funds (ETFs) also charge internal management fees,
which are disclosed in a fund's prospectus. Such charges, fees and commissions are
exclusive of and in addition to the fee charged by Hamel Associates, Inc., and Hamel

Associates, Inc. shall not receive any portion of these commissions, fees, and costs.

For a discussion of Brokerage Fees, see the section "Brokerage Practices."
Performance-Based Fees and Side-By-Side Management

Hamel Associates, Inc. does not charge any performance-based fees (fees based on a share
of capital gains on or capital appreciation of the assets of a client) and therefore, does not
engage in side-by-side management.

Types of Clients

Hamel Associates, Inc. provides portfolio management services to individuals, which
generally meet the definition of high-net-worth individuals, corporations, pension plans
and foundations. The majority of the clients for whom Hamel Associates, Inc. provides
investment advisory services have assets under management of at least $1,000,000;
however, Hamel Associates, Inc. does not mandate that a client maintain a minimum
account size in order to retain the services of Hamel Associates, Inc.

If an account is subject to the Employee Retirement Income Security Act of 1974, as
amended, ("ER/SA"), Hamel Associates acknowledges that Adviser is a fiduciary within the
meaning of the Act and the ERISA.

Retirement Plan Rollovers: Hamel Associates is a fiduciary to each of its clients. The way
our firm earns compensation (asset-based fees for managed accounts) creates some
conflicts with your interests. Therefore, we must operate under a special rule that requires
us to act in your best interest and not put our interests ahead of yours. At the time of a
rollover recommendation, we will provide you with a written disclosure discussing the
reasons the rollover is in your best interests. Also, under this special rule's provisions, we
must: (1) Meet a professional standard of care when making investment recommendations
(give prudent advice), (2) Never put our financial interests ahead of yours when making
recommendations (give loyal advice), (3) Provide basic information about conflicts of
interests and fees while avoiding misleading statements about these topics and
investments, (4) Follow policies and procedures designed to ensure that we give advice
that is in your best interest and, (5) Charge no more than is reasonable for our services.

When Hamel Associates recommends that a client roll their retirement plan assets from a
retirement account into a new or existing account (e.g., rollover IRA) to be managed by
Hamel Associates, this recommendation creates a conflict of interest. The conflict exists
because Hamel Associates will receive an investment management fee if the funds are
rolled over. Obviously, the conflict is eliminated if the recommendation is not accepted.

Our clients are never under any obligation to rollover retirement plan assets to an account
managed by Hamel Associates. Our chief compliance officer remains available to address
any questions that a client or prospective client may have regarding retirement assets,
rollover recommendations, and conflicts of interest.
Methods of Analysis, Investment Strategies and Risk of Loss

Hamel Associates, Inc. employs a value-oriented approach to investing in common stocks.
When determining which stocks to purchase for a particular portfolio, Hamel Associates,
Inc. gives significant consideration to the price of a stock vis-a-vis the value of the
underlying business. Hamel Associates, Inc. is very cognizant of the market's perception of
a particular stock and is more inclined to invest in stocks that are currently out of favor in
the market. Hamel Associates, Inc. generally tends to favor dividend paying large
capitalized stocks with strong balance sheets and focuses on a company's long-term
fundamentals. Hamel Associates, Inc. generally purchases securities for the portfolios that
it manages with the expectation that such securities will be held for a period of 2 to 5 years.

Fixed income investments generally are utilized as a portfolio diversification element as
well as for income deriving investments outside of equity exposure. Hamel Associates, Inc.
tends to invest a large portion of the fixed income portion of portfolios in investment grade
bonds or bond funds. Maturities of the bonds and bond funds held in portfolios are
predicated, to a large extent, by the prevailing interest rate environment.

While Hamel Associates, Inc. endeavors to limit the risk of the portfolios that it manages,
virtually all asset classes contain some type of risk and no strategy can guarantee against a
loss. These include market risk which is the risk associated with day-to-day fluctuations in
the price of securities, interest rate risk which is the risk of investments which are
sensitive to the fluctuation of interest rates, reinvestment risk which is the ability to
reinvest at the same rate, purchasing power risk which is how inflation reduces the buying
power of a dollar, and exchange rate risk which is the uncertainty that the value of foreign
currency or the domestic currency will fluctuate. Investments in private equity, venture
capital, and real estate that may be appropriate for very high net worth individuals
contain a higher level of risk due to the illiquid nature of these investments, as well as the
leverage that may be inherent in these investments. It is important to understand that
investing in securities involves a risk of loss that a client should be prepared to bear.
Clients who invest should also be prepared to bear a loss of investment proceeds.

There are certain risks involved in investing in all types of bonds: Government,
Municipal, and Corporate. The following is an overview of the types of risks that one
should consider in terms of bond investments: Interest rate risk; reinvestment risk;
inflation risk; mark risk, selection risk, timing risk, and price risk. Additional risks for

some government agency, corporate and municipal bonds may include Legislative risk
(a change in the tax code could affect the value of taxable or tax-exempt interest
income); Call risk (some corporate, municipal and agency bonds have a "call provision"
entitling their issuers to redeem them at a specified price on a date prior to maturity.
Declining interest rates may accelerate the redemption of a callable bond, causing an
investor's principal to be returned sooner than expected. In that scenario, investors have
to reinvest the principal at the lower interest rates. If the bond is called at or close to par
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