Klein Pavlis & Peasley Financial Inc

Item 5 Fees and Compensation
PORTFOLIO MANAGEMENT SERVICES FEES
Fees are deducted from accounts after the end of each quarter and if we only manage your assets for part
of a quarter, then the charge will be prorated. For example, an account valued at $1,000,000 would pay
an effective fee of 1% with the annual fee being $10,000 (a quarterly fee of $2,500). Accounts initiated
or terminated during a calendar quarter will be charged a pro-rated fee based on the amount of time
remaining in the billing period. Additionally, for held-away accounts (e.g., 401(k)s), fees are not

deducted from the plan by default; we bill a linked taxable account or invoice the client. If plan rules
permit, fees may be deducted from the plan. If the client does not have a taxable account, those fees will
be billed directly to the client. These accounts are valued and invoiced in the same fashion as stated
above.
The annualized fee for Portfolio Management Services will be charged as a percentage of assets under
management, according to the following schedule:

 Dynamic Growth/ Disciplined Equity                    Annual Fee     Quarterly Fee
 Program Assets Under Management (AUM)                 X AUM          X AUM
 $0-$249,999                                           2.4%           .60%
 $250,000-$499,999                                     2.2%           .55%
 $500,000-$749,999                                     2.0%           .50%
 $750,000-$999,999                                     1.8%           .45%
 $1,000,000 and over                                1.6%             .40%
   Dynamic Growth
   This strategy utilizes stocks, exchange traded funds, closed end funds and
   American Depository Receipts to gain exposure to companies and asset classes
   that demonstrate good value and strength. This investment strategy allows us to
   be aggressive in bull market phases and transition to a defensive stance when
   bear market periods appear. We will short the market and raise significant cash
   levels when deemed appropriate.

    Disciplined Equity
    This strategy offers consistent exposure to the equity markets by focusing on
    only high-quality companies listed on US exchanges. Although the portfolio is
    concentrated, we limit exposure to any one sector of the market.

                                                   Annual Fee X Quarterly Fee X
 Balanced Income Program
                                                   AUM          AUM
 Assets Under Management (AUM)
 $0-$499,999                                           1.6%           .40%
 $500,000-$749,999                                     1.4%           .35%
 $750,000-$999,999                                     1.2%           .30%
 $1,000,000 and over                              1.0%             .25%
   Balanced Income
   This investment approach primarily focuses on attaining an income stream
   through stable dividend paying companies and quality corporate bonds. We will
   also purchase other income producing securities such as preferred shares or
   treasury bonds and notes. The equity-to-bond mix will range between 40-60
   percent depending on the investment environment.

 Stable Income Program                                 Annual Fee X Quarterly Fee
                                                       AUM          X AUM
 Assets Under Management (AUM)

 All Assets                                        0.75%             0.1875%
  Stable Income
   The strategy provides an opportunity to invest in quality fixed income securities.
   The Stable Income program maintains a diversified allocation of liquid corporate
   bonds as the investment vehicle to drive the income and reduce exposure to
   market swings, protecting capital as a long-term investor.

 Equity Income Plus Program                            Annual Fee X Quarterly Fee
 Assets Under Management (AUM)                         AUM          X AUM

 $0 - $499,999                                         2.2%          0.55%
 $500,000 - $749,999                                   2.0%          0.50%
 $750,000 – $999,999                                   1.8%          0.45%
 $1,000,000 and over                               1.6%              0.40%
   Equity Income +
   This strategy only holds dividend paying stocks and adds an extra boost of
   income by writing covered calls on those positions. Our goal is to add consistent
   income from dividends and option premiums while also participating in equity
   appreciation.

A minimum of $250,000.00 to $500,000.00 of assets under management is required for this service
depending on the program selected. This account size may be negotiable under certain circumstances.

Limited Negotiability of Advisory Fees: Although Klein Pavlis & Peasley Financial, Inc. has established
the aforementioned fee schedule(s), we retain the discretion to negotiate alternative fees on a client by
client basis. Client facts, circumstances and needs will be considered in determining the fee schedule.
These include the complexity of the client, assets to be placed under management, anticipated future
additional assets; related accounts; portfolio style, account composition, reports, among other factors.
The specific annual fee schedule will be identified in the contract between the adviser and each client.
We may group certain related client accounts for the purposes of achieving the minimum account size
requirements and determining the annualized fee.

Discounts, not generally available to our advisory clients, may be offered to family members and
friends of associated persons of our firm.

PUBLICATION OF PERIODICALS OR NEWSLETTERS

Klein Pavlis & Peasley Financial, Inc. charges a subscription fee of $199 annually or $19 monthly. The
subscription fee is waived for advisory clients of our firm.

ONLINE EDUCATIONAL CLASSES

Klein Pavlis & Peasley Financial, Inc. provides weekly online educational classes to clients and the
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Item 7 Types of Clients
Klein Pavlis & Peasley Financial, Inc. provides advisory services to the following types of clients:
   ·     Individuals (other than high net worth individuals)
   ·     High net worth individuals
   ·     Corporations or other businesses not listed above