Liberty Asset Management Inc

Fees and Compensation

                                                                 Form ADV Part 2A, Item 5
Advisory Fees

Liberty charges an annual fee for its investment advisory services. All fees are agreed upon
prior to entering into a management contract and are detailed within the contract itself.
The tiered fee schedule is outlined below and means that the entire portfolio is charged the
same asset management fee. This schedule is negotiable depending on the complexity of
the client’s plan and the investment style utilized.

                   Assets Under Management               Annual Fee
                   1- $200,000                           1.35%
                   $200,001 - $500,000                   1.20%
                   $500,001- $1,000,000                  1.00%
                   $1,000,001- $2,000,000                 .90%
                   $2,000,001- $5,000,000                 .70%
                   $5,000,001 and above                   .50%

The fee is calculated based on the value of the client’s account at the end of the current
quarter, as determined by the client’s custodian statement. The fees are billed either
monthly or quarterly in arrears. Generally, fees will be debited from a client’s account to
pay the management fees. A client will be asked to allow the custodian to pay the advisory
fees directly to Liberty from the client’s account with the custodian. Clients should note
that the custodian is not responsible for checking the calculation of the fee assessed; it
remains the client’s responsibility to check the amount charged as shown on the statement
sent to the client by the qualified custodian.

Clients may opt to be billed by the Adviser, instead of having the custodial account billed
Clients’ fees will be prorated should they open their accounts mid quarter, or terminate
their relationship and close accounts in the quarter. Fees are not charged on the basis of a
share in any capital gains or upon capital appreciation of the clients’ account(s), but
fluctuate with the quarterly account value.

Fees charged with the use of a sub-advisor may be calculated using the average daily value
of the billing period (month or quarter). For fees based on the average daily value, the fee
is calculated as follows: The Custodian will calculate the average daily value of the AUM
of the period (month or quarter) just ended and will multiply that amount by the respective
fraction of the annual advisory fee (i.e., 1/12 for monthly or 1/4 for quarterly.) Fees are
collected and charged either: (1) monthly in arrears or (2) quarterly in arrears. Fees for any
partial period (month or quarter) will be prorated based upon the number of calendar days
in the period (month or quarter) that the advisory agreement is in effect.

At Liberty, we believe all clients should have the opportunity to utilize our services, therefore
no account minimum has been established at the firm level.

Transaction Costs

Clients pay custodial fees and transaction costs for the purchase and sale of securities in
their accounts. Fidelity will charge 6 basis points (.06 percent), per year, based upon the
value of a client’s assets under management as of that quarter. The asset-based fee shall be
charged quarterly in arrears, based upon the average daily balance of the account for the
previous three months. Assets to be valued under the fee-based arrangement include
equities, options, fixed income, and mutual funds.

Accounts which are subject to transaction-based pricing or non-managed accounts will pay
a flat fee to Fidelity not dependent upon any trading volume. The transaction-based pricing
for these accounts is as follows:

          • Equities – For household accounts under $1M which are
            enrolled for eDelivery and all household accounts over $1M -
            $0. For household accounts under $1M that are not enrolled in
            eDelivery - $4.95.

          • ETFs - For household accounts under $1M which are enrolled
            for eDelivery and all household accounts over $1M - $0. For
            household accounts under $1M that are not enrolled in
            eDelivery - $4.95.

          • DFA Funds - $25 (buy) / $25 (sell)

          • Other Transaction fee funds - $25 (buy) / $25 (sell)

In addition, purchasers of mutual fund shares pay management fees to the investment
advisers of the mutual funds and certain funds have other types of fees or charges,
including 12b-1 fees, administrative fees, or shareholder servicing fees, which may be
deducted from the net asset value of the mutual funds that may be held in a client’s
portfolio. These types of fees are routinely borne by all mutual fund shareholders as an
indirect expense to their account and are in addition to the management fees charged by
Liberty. All fees paid to Liberty for investment advisory services are separate and distinct
from the management fees and expenses charged by any mutual funds utilized in the
implementation of the clients’ financial plan.

All mutual fund fees and expenses are detailed in the funds’ prospectuses and should be
carefully reviewed by the client so that they fully understand the total fees and expenses
involved in their financial plan. Neither Liberty nor any of its advisory representatives
receive any compensation from the purchase or sale of mutual funds.

Please note that clients may, by law, terminate the advisory agreement within five working
days of signing the agreement without loss of any fees paid in advance.

              Performance-Based Fees and Side-By-Side Management

                                                     Form ADV Part 2A, Item 6

Liberty does not charge performance-based fees.

Types of Clients

                                                                 Form ADV Part 2A, Item 7

Liberty provides investment advice to individuals, corporations or other business entities,
trusts, estates, charitable organizations and retirement, pension and profit-sharing accounts.

             Methods of Analysis, Investment Strategies and Risk of Loss

                                                                   Form ADV Part 2A, Item 8

Liberty uses fundamental and technical methods of analysis to formulate investment
advice based on various sources of information, including financial newspapers and
magazines, research materials not prepared by Liberty, and corporate ratings services, as
well as the various filings companies make with the Securities and Exchange Commission,
including annual reports, prospectuses and other filings.

Liberty utilizes different methods of analyzing and researching appropriate investment
strategies depending on the focus of the client and the area of emphasis of the individual
advisor. One of the focuses of Liberty as a company, however, is the theory of Modern
Portfolio Management. This Nobel Prize winning theory is based on the belief that proper
diversification and risk management will provide the client with a more stable and
consistent return over time. Furthermore, it has been statistically proven that a properly
diversified portfolio consisting of an appropriate weighting in different asset classes will
outperform any single asset class over time. The practice of Modern Portfolio Theory does
not employ market timing or stock selection methods of investing but rather a long term
buy and hold strategy with periodic rebalancing of the account to maintain desired risk
levels.

Clients of Liberty face two principal risks: first, general investment risk wherein the
financial markets in general deteriorate, and second, strategy risk, the risk of the failure of
the Adviser’s investment strategy. Regardless of the type of investment strategy used,
investing in securities involves risk of loss of part of or the entire principal invested, and
which clients should be prepared to bear.

All investment programs have certain risks that are borne by the investor. Our investment
approach constantly keeps the risk of loss in mind. Investors face the following investment
risks:

   • Interest-rate Risk: Fluctuations in interest rates may cause investment prices to
     fluctuate. For example, when interest rates rise, yields on existing bonds become
     less attractive, causing their market values to decline.

   • Market Risk: The price of a security, bond, or mutual fund may drop in reaction
     to tangible and intangible events and conditions. This type of risk is caused by
     external factors independent of a security’s particular underlying circumstances.
     For example, political, economic and social conditions may trigger market events.

   • Inflation Risk: When any type of inflation is present, a dollar today will not buy as
     much as a dollar next year, because purchasing power is eroding at the rate of
     inflation.

   • Currency Risk: Overseas investments are subject to fluctuations in the value of the
     dollar against the currency of the investment’s originating country. This is also
     referred to as exchange rate risk.

   • Reinvestment Risk: This is the risk that future proceeds from investments may
     have to be reinvested at a potentially lower rate of return (i.e. interest rate). This
     primarily relates to fixed income securities.

   • Business Risk: These risks are associated with a particular industry or a particular
     company within an industry. For example, oil-drilling companies depend on
     finding oil and then refining it, a lengthy process, before they can generate a profit.
     They carry a higher risk of profitability than an electric company, which generates
     its income from a steady stream of customers who buy electricity no matter what
     the economic environment is like.

   • Liquidity Risk: Liquidity is the ability to readily convert an investment into cash.
     Generally, assets are more liquid if many traders are interested in a standardized
     product. For example, Treasury Bills are highly liquid, while real estate properties
     are not.

   • Financial Risk: Excessive borrowing to finance a business’ operations increases the
     risk of profitability, because the company must meet the terms of its obligations
     in good times and bad. During periods of financial stress, the inability to meet
     loan obligations may result in bankruptcy and/or a declining market value.

Different types of investments involve varying degrees of risk, and it should not be
assumed that future performance of any specific investment or investment strategy
(including the investments and/or investment strategies recommended or undertaken by
Liberty) will be profitable or equal any specific performance level(s).