Letson Investment Management Inc

Item	5	–	Fees	and	Compensation

LIM is typically compensated for its advisory services by charging you a management fee
based on the market value of your assets under management. The fee schedule is set forth
below:

    Client	Assets	                               Annual	Fee	(%)	for	all	assets
    On the first $1,000,000                      1.00%
    On the next $2,000,000                       .75%
    On all amounts in excess of $3,000,000       .50%

All fees are subject to negotiation.

The specific manner in which fees are charged by LIM is established in a client’s written
Investment Management Agreement (Agreement) with LIM. LIM will generally bill its fees
quarterly, in advance, at the beginning of each calendar quarter. Management fees shall
not be prorated for each capital contribution and withdrawal made during the applicable
calendar quarter. Accounts initiated or terminated during a calendar quarter will be
charged a prorated fee. Upon termination of any account, any prepaid, unearned fees will
be promptly refunded, and any earned, unpaid fees will be due and payable. The client has
the right to rescind the Agreement without penalty within five business days after entering
into the Agreement upon written notice to LIM. The client has the right to cancel the
Agreement at any time upon thirty (30) days written notice.

In most cases the management fee is paid directly to LIM by the independent custodian
from the client’s brokerage account. In those cases:

   1. The client has provided written authorization (in the Agreement) permitting the
      fees to be paid directly to LIM from the client’s account held by the independent
      custodian.
   2. The client is sent a bill by LIM showing the amount of the fee, the value of the client’s
      assets on which the fee was based, and the specific manner in which it was
      calculated.
   3. LIM discloses to the client (in the Agreement and in the quarterly billing) that it is
      the client’s responsibility to verify the accuracy of the fee calculation and that the
      custodian will not determine whether the fee is properly calculated.
   4. LIM sends a bill to the custodian indicating only the amount of the fee to be paid by
      the custodian.
   5. The custodian has agreed to send the client a monthly statement indicating all
      amounts disbursed from the account including the amount of advisory fees paid
      directly to LIM.

LIM ’s fees are exclusive of brokerage commissions, transaction fees, and other related
costs and expenses which shall be incurred by the client. Clients may incur certain charges
imposed by custodians, brokers, third party investment and other third parties such as fees
charged by managers, custodial fees, deferred sales charges, odd-lot differentials,
transfer taxes, wire transfer and electronic fund fees, and other fees and taxes on brokerage
accounts and securities transactions. Mutual funds and exchange traded funds also charge
internal management fees, which are disclosed in a fund’s prospectus.
Such charges, fees and commissions are exclusive of and in addition to LIM’s fee, and LIM
shall not receive any portion of these commissions, fees, and costs.

Item 12 further describes the factors that LIM considers in selecting or recommending
broker-dealers for client	transactions and determining the reasonableness of their
compensation (e.g., commissions).

Item	7	–	Types	of	Clients

Our clients include individuals, high net worth individuals, profit sharing plans, individual
retirement accounts, trusts, estates, investment partnerships, and corporations. Generally,

our minimum account size is $1,000,000 although this may be waived based on other
considerations such as the account’s relationship to established clients or other factors.