Jacobs Equity

Item 5 -- Fees and Compensation
Generally, Palisade is compensated by charging a negotiable fee based on a percentage of the
value of the assets in an account. A sample fee schedule follows:

                          Portfolio Value                      Annual Fee

                           Up to $50,000                           2.0%

                        $50,001 to $100,000                        1.8%

                        $100,001 to $250,000                       1.6%

                        $250,001 to $500,000                       1.4%

                       $500,001 to $1,000,000                      1.2%

                      $1,000,001 to $2,000,000                     0.9%

                      $2,000,001 to $3,000,000                     0.8%

                          Over $3,000,000                          0.7%

The fee is collected on a quarterly basis and is based either on the average portfolio value on the
last day of each month during a quarter, or on the last day of the previous quarter. The fee is
prorated for deposits to and withdrawals from the account.
A client has the option to be invoiced or to have the fee directly debited from the account. Most
clients select the latter for convenience. Regardless of the payment method chosen, the client
receives a statement from Palisade each quarter showing how the fee was calculated.
In addition to Palisade’s management fee, clients may pay for trading commissions, fund expense
ratios, and other administrative fees. Palisade does not receive compensation from any broker or
custodian. Palisade does not receive compensation for the sale of securities or other investment
products, such as asset-based sales charges or service fees from the sale of mutual funds.
For more information about brokerage, please see the section of this brochure discussing same.

Item 7 -- Types of Clients
Palisade provides customized investment management services primarily to individuals. Palisade
has no specific minimum account size. Palisade may in its discretion counsel a prospective client
that its management services may not be cost effective if the account size is too small.