Kimelman & Baird LLC

Item 5 – Fees and Compensation

K&B offers investment advisory services for a percentage of assets under management. Fees are
subject to negotiation on a case-by-case basis and are based on a percentage of asset value. Fees are
billed quarterly in advance, based upon asset value as of the last day of the immediately preceding
quarter. Investment advisory accounts usually require a minimum dollar value of
$500,000. Under special circumstances, accounts under $500,000 are accepted. The client’s
investment philosophy must be consistent with that of K&B.

Fee and Compensation Schedules
Asset Based Fee Program (ABFP)

Under the asset-based fee program, the client pays a single fee to K&B, which covers K&B’s
investment advisory services, custody of securities, trade execution, as well as clearance and
settlement. ABFP may be higher than if the client paid for the transaction charges separately. The
maximum annual fee for ABFP is 1.50% of the market value of the securities in the account.

Fees for Assets Under Management

Under $1,000,000                                 1.50%
$1,000,000 - $5,000,000                          1.25%
Over $5,000,000                                  1.00%

Asset and Transactional Based Fee Program (ATBFP)

K&B also offers an Asset and Transactional Based Fee Program, in which clients are charged for
transaction costs in addition to investment advisory fees. In this case, the client is charged the fees
below for assets under management based on the market value of securities in the account. In
addition, clients pay transactional charges on each trade of $.07 to $.15 per share.

Fees for Assets Under Management               Equities          Fixed Income and Cash

Under $1,000,000                                1.25%                    0.25%
Over $1,000,00
  First $5,000,000                              1.00%                    0.25%
  $5,000,001-10,000,000                         0.75%                    0.25%
  Over $10,000,000                              0.50%                    0.25%

Transaction Charges:
Clients pay brokerage commissions that are subject to negotiation on each transaction.           On
occasion, K&B waives brokerage commission on mutual funds or low-priced securities transactions,
where commission charges are minimal. K&B’s commission rates are comparable to other firms of
similar size in the industry. In addition, fees such as exchange fees, SEC fees and other regulatory
fees are passed through at the cost for transactions that incur such fees.

Due to the common ownership between the Adviser and K&B broker dealer, K&B accepts
transaction-based compensation related to securities purchased/sold in client accounts. This
presents a conflict of interest in that it gives supervised persons an incentive to purchase/sell
investment products based on compensation received, rather than solely on a client’s needs. K&B
maintains compliance policies and procedures to ensure that employee compensation programs do
not interfere with its fiduciary duty to its clients. Where applicable, K&B does not reduce its advisory
fees to offset the transaction-based commissions it receives on trades.

K&B does not engage in principal transactions; therefore, it does not receive compensation from
mark-ups on transactions.

Accounts under a fee-only program are not charged transaction costs. Whereas, some managed
accounts pay transaction charges separately, in addition to advisory fees.

Financial Planning Service

K&B offers the use of a digitally generated technology solution by FinLife Partners (“FinLife”) as a
financial guidance service as part of an advisory account establishment with K&B. This service is
offered at no additional cost to a client opening an advisory account at K&B. K&B pays FinLife
Partners a flat fee for FinLife technology services.

K&B also uses Foundation Financial Planning to assist with parts of the financial planning process for
modeling and data processing services which are not advisory in nature, i.e. general asset allocation,
financial plan development including retirement planning, estate planning, and education planning.

ERISA Accounts

When K&B provides investment advice to you regarding your retirement plan account or individual
retirement account, we are fiduciaries within the meaning of Title 1 of the Employee Retirement
Income Security Act (“ERISA”) and/or the Internal Revenue Code, as applicable, which are laws
governing retirement accounts. The way we make money creates some conflicts with your interests,
so we operate under a special rule that requires us to act in your best interest and not put our interest
ahead of yours. ERISA accounts include those established by pension plans, profit sharing plans and
401(k) plans and their trusts, defined benefit plans, defined contribution plans such as 401K and
403(b) plans (Title 1 accounts). Specifically excluded from ERISA qualification are traditional and
Roth IRAs, SEP IRA, Savings Incentive Match Plan for Employees (SIMPLE IRAs), and EZ-K plans (non-
Title 1 accounts).

Qualified retirement plans that are subject to Title 1 of ERISA must meet Department of Labor (DOL)
408(b)(2) regulations pertaining to fees and compensation disclosure. Title 1 generally refers to
multi-participant qualified retirement plans for which at least one participant is not the owner’s
spouse. The intent of the regulation is to help plan sponsors fulfill their fiduciary duties and
determine the reasonableness of the fees that are charged to their plans. Disclosure of fees and
compensation is permissible in the investment management agreement and Form ADV Part 2.

K&B is subject to specific duties and obligations under ERISA, which includes restrictions concerning
certain forms of compensation. To avoid engaging in prohibited transactions, K&B can only charge
fees for investment advice about products for which the firm and/or related persons do not receive
...

Item 7 – Types of Clients
K&B provides portfolio management services to individuals, trusts, estates, charitable institutions,
corporations and business entities. If a client’s account is a pension or other employee benefit plan
governed by ERISA, K&B may be a fiduciary to the plan. In providing services, the standard of care
imposed upon us is to act with care, skill, prudence and diligence under the circumstances then
prevailing that a prudent person would use in such matters.

For the ATBFP clients, K&B will act as an executing broker on a fully disclosed basis with National
Financial Services, LLC, on behalf of the client and will execute such transactions for the
compensation disclosed in Item 5 above. For the ABFP clients, K&B will utilize the services of Fidelity
Brokerage Services as a broker dealer. K&B as investment adviser, may transact business in stocks
and bonds of every kind and related contracts and options (if specifically permitted) without
obtaining specific client consent.

Investment advisory accounts usually have a minimum dollar value of $500,000. Under special
circumstances, accounts under $500,000 are accepted. Client’s investment philosophy must be
consistent with that of K&B.