Kempner Capital Management Inc

Item 5 : Fees and Compensation
KCM’s standard fee schedule for discretionary clients is based on the market value of the
portfolio managed at market close on the last day the New York Stock Exchange is open
for business during each quarter end and is negotiable. Fees are deducted from accounts
and are charged quarterly. The current quarterly fee schedule for equity accounts is:
    • 0.1875% of the first $5,000,000
    • 0.1250% of the next $20,000,000
    • 0.10% of the market value of assets in excess of $25,000,000

The current quarterly fee schedule for discretionary fixed income accounts is 0.0875%
and is based on the market value of the portfolio managed at quarter end and is
negotiable.

Some clients have negotiated fees at lower rates, so some clients pay different fees for
the same service from KCM. This means some clients pay more than other clients with
the same amount or same type of assets under our management. KCM does not
differentiate its service to clients based on their fees. A statement of fees due is prepared
at the end of each quarter based on the value of the portfolio assets at market close on
the last day the New York Stock Exchange is open for business during each quarter. The
fee is payable within 15 days after the date of the statement.

Cash is generally swept regularly by the custodian and is invested in short-term mutual
funds or money market instruments. In these cases the client may be charged an internal
management fee which is included in the internal expenses of the fund. These expenses
are disclosed in each fund prospectus which is provided to the clients by the account
custodian. Clients are also responsible for additional fees and expenses associated with
their account, such as custodial fees, brokerage commissions, wire fees, etc.

Kempner Securities, LP, which is a current KCM discretionary client, pays KCM a quarterly
fee of $15,000 in addition to the fee paid to KCM under an Investment Advisory
Agreement. These fees are for administrative, accounting and specialized record-keeping
services provided by KCM. The Estate of Harris L. Kempner, Jr. also has an interest in
Kempner Securities, LP.

Galveston Finale LP, a partnership in which The Estate of Harris L. Kempner, Jr. has an
interest, pays a quarterly fee of $5,000 to KCM. These fees are for administrative,
accounting and specialized record-keeping services provided by KCM.

Item 7: Types of Clients
KCM provides investment advice to the following types of clients:
  • Individuals
  • Investment companies
  • Trusts, estates or charitable organizations
  • Limited Partnerships

KCM negotiates minimum account sizes on a case-by-case basis.