Lee Danner & Bass Inc

Item 5 – Fees and Compensation

A. LDB will manage Clients’ portfolios on a discretionary basis. For this service an annual fee
   will be charged that is determined by applying a percentage to the market value of assets
   under management in accordance with the schedule of fees below.
                                       Schedule of Fees
                                                              Annual          Quarterly
                   On first $2,000,000                        .75%*           .1875%*
                   On next $3,000,000                         .60%            .15%
                   On excess over $5,000,000                  .50%            .125%
   *The minimum annual fee shall be $7,500 and the minimum quarterly fee shall be $1,875.
B. The fee will be billed quarterly in arrears (with the minimum quarterly fee being $1,875) and
   will be based upon market value of the portfolio as of the end of the Client’s most recent
   calendar quarter. Fees are prorated based on inception date if investment management
   services begin during the quarter. Clients may elect to have fees deducted from their assets
   or be billed directly to their address of record. Fees are negotiable for accounts which are
   fixed income only and firm minimums apply. There will be a proration of the fee if the
   Client or LDB cancels the advisory contract during a quarter. The investment management
   contract may be terminated by either party on ten days written notice. The contract does not
   provide for any termination fees or penalties upon cancellation.
C. Clients may pay other types of fees or expenses in connection with LDB investment
   management, such as custodial fees or mutual fund expenses. (See Item 12 – Brokerage
   Practices)

Item 7 – Types of Clients

LDB provides portfolio management services to high net worth individuals, banks or thrift
institutions, corporate pension and profit-sharing plans, trusts, estates, charitable institutions,
foundations, endowments and corporations. While there are no account relationship minimums
of account size, the annual fee minimum applies.