5. Fees and Compensation.
(A) All fees are individually negotiated. Circumstances considered
when negotiating fees may include, without limitation, customary
market rates, specialized guidelines, and other fee arrangements
with the client.
Management fees for separately managed are calculated based on
an annual percentage of the value of the assets under management.
(B) Management fees are billed quarterly as specified in the relevant
investment services agreement. Management fees are billed at the
beginning of the quarter.
(C) Additional Fees.
Clients will incur brokerage and other transaction costs. Clients
should review carefully Section 12, which discusses conflicts of
interest related to brokerage practices. Brokerage commissions
and/or transaction ticket fees charged by the custodian will be
billed directly to the client. LCM will not receive any portion of
such commissions or fees from the custodian or client. In addition,
clients may incur certain charges imposed by third parties other
than Firm in connection with investments made through the
account, including but not limited to, mutual fund sales loads,
12(b)-1 fees, and surrender charges, and IRA and qualified
retirement plan fees. Management fees charged by Firm are
separate and distinct from the fees and expenses charged by
investment company securities that may be recommended to
clients. A description of these fees and expenses are available in
each investment company security’s prospectus.
(D) Fees Paid in Advance. Firm does not permit clients to pay in
advance any fees beyond the current fee quarter.
(E) No Supervised person may accept compensation for the sale of
securities or other investment products, including asset based sales
charges or service fees from the sale of mutual funds unless
specifically approved by the chief compliance officer. If approval
is given, full disclosure is given to the client and written approval
by the client must also be accepted by LCM. An example of this
would be through a Private Placement, but no such occurrence has
taken place in the last year.
(F) Termination of Services.
Either client and/or Firm may terminate the asset management
agreement by providing written notice to the other party.
Termination will be effective upon receipt of notification by the
other party. If services are terminated within 5 business days of
executing the agreement, services will be terminated without
penalty. If a contract is terminated, the unearned portion of any
prepaid fee will be refunded to the client.
6 Types of Clients.
LCM manages portfolio assets for individuals, pensions and profit sharing
plans, trusts and estates and institutional investors. LCM generally
requires new accounts to have assets of $100,000 or greater. Related
accounts may be grouped when determining if the $100,000 minimum is
met. An exception to this rule may be waived at the discretion of the firm.
7 Methods of Analysis, Investment Strategies and Risk of Loss.
LCM offers advice on exchange-listed securities, securities traded over the
counter, foreign issuers, corporate debt securities, US Government
securities, Municipal securities and mutual fund shares (limited).
LCM’s security analysis methods include fundamental and technical from
sources as financial newspapers and magazines, inspections of corporate
activities, research materials prepared by others, annual reports,
prospectuses and filings with the SEC and company press releases.
Investment strategies used to implement any investment advice given to
clients include short term and long term purchases.
Investing in securities involves risk of loss that clients should be prepared
to bear.
8 Disciplinary Information.
Neither Lucas Capital Management nor any supervised person has been
involved in any legal or disciplinary event as it applies to the SEC and US
securities law.
9 Other Financial Industry Activities and Affiliations.
LCM may recommend or select other investment advisers for our clients
and receive compensation from those advisers. This compensation would
not exceed the fee schedule of LCM, therefore this would not create a
conflict of interest. LCM does not have any other business relationships
with such advisers that create a conflict of interest.
10 Code of Ethics, Participation or Interest in Client Transactions and
Personal Trading.
Code of Ethics LCM has adopted a code of ethics pursuant to SEC Rule
204A-1. Such code of ethics is available to any client or prospective client
on request. The Code of Ethics is based upon the premise that all Firm
personnel have a fiduciary responsibility to render professional,
continuous and unbiased investment advisory service. The Code of Ethics
requires all personnel to (1) comply with all applicable laws and
regulations; (2) observe all fiduciary duties and put Client interests ahead
of those of Firm; (3) observe Firm's personal trading policies so as to
avoid “front-running” and other conflicts of interests between Firm and its
Clients; (4) ensure that all personnel have read the Code of Ethics, agreed
to adhere to the Code of Ethics, and are aware that a record of all
violations of the Code of Ethics will be maintained by the Chief
Compliance Officer Brett Flynn and that personnel who violate the Code
of Ethics are subject to sanctions by the Firm, including termination at the
discretion Ralf Sellig or Robert Vogel.
11 Participation or Interest in Client Transactions. Firm recognizes that
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