Majority Asset Management Inc

Item 5: Fees and Compensation

We base our fees on a percentage of assets under management which are described below.

Compensation– Investment Management Services
Investment Management fees are negotiated and determined based on the unique
circumstances of the client, but are generally as follows:

               Account Value        Equity Only Accounts        Balanced Accounts

                $1,000,000+                 1.00%                      0.80%
               $10,000,000+                 0.80%                      0.60%

The asset-based fee is billed on a quarterly basis, in advance, based upon the market value of
the Household Assets, including cash, on the last day of the previous quarter as valued by the
custodian. Accounts are charged at the beginning of the first full calendar quarter of a client
engagement. Upon termination of any account, any prepaid, unearned fees will be promptly
refunded, and any earned, unpaid fees will be due and payable.

Cash Balances
Some of your assets may be held as cash and remain uninvested. Holding a portion of your
assets in cash and cash alternatives, i.e., money market fund shares, may be based on your
desire to have an allocation to cash as an asset class, to support a phased market entrance
strategy, to facilitate transaction execution, to have available funds for withdrawal needs or to
pay fees or to provide for asset protection during periods of volatile market conditions. Your
cash and cash equivalents will be subject to our investment advisory fees unless otherwise
agreed upon. You may experience negative performance on the cash portion of your portfolio if
the investment advisory fees charged are higher than the returns you receive from your cash.

Retirement Plan Rollover Recommendations
As part of our investment advisory services to our clients, we may recommend that clients roll
assets from their employer’s retirement plan, such as a 401(k), 457, or ERISA 403(b) account
(collectively, a “Plan Account”), to an individual retirement account, such as a SIMPLE IRA, SEP
IRA, Traditional IRA, or Roth IRA (collectively, an “IRA Account”) that we will advise on the
client’s behalf. We may also recommend rollovers from IRA Accounts to Plan Accounts, from
Plan Accounts to Plan Accounts, and from IRA Accounts to IRA Accounts.

If the client elects to roll the assets to an IRA that is subject to our advisement, we will charge
the client an asset-based fee as set forth in the advisory agreement the client executed with our
firm. This creates a conflict of interest because it creates a financial incentive for our firm to
recommend the rollover to the client (i.e., receipt of additional fee-based compensation).
Clients are under no obligation, contractually or otherwise, to complete the rollover. Moreover,
if clients do complete the rollover, clients are under no obligation to have the assets in an IRA

advised on by our firm. Due to the foregoing conflict of interest, when we make rollover
recommendations, we operate under a special rule that requires us to act in our clients’ best
interests and not put our interests ahead of our clients’.

Under this special rule’s provisions, we must:

   •    meet a professional standard of care when making investment recommendations (give
        prudent advice);
   •    never put our financial interests ahead of our clients’ when making recommendations
        (give loyal advice);
   •    avoid misleading statements about conflicts of interest, fees, and investments;
   •    follow policies and procedures designed to ensure that we give advice that is in our
        clients’ best interests;
   •    charge no more than a reasonable fee for our services; and
   •    give clients basic information about conflicts of interest.

Many employers permit former employees to keep their retirement assets in their company
plan. Also, current employees can sometimes move assets out of their company plan before
they retire or change jobs. In determining whether to complete the rollover to an IRA, and to
the extent the following options are available, clients should consider the costs and benefits of
a rollover. Note that an employee will typically have four options in this situation:

   1.   leaving the funds in the employer’s (former employer’s) plan;
   2.   moving the funds to a new employer’s retirement plan;
   3.   cashing out and taking a taxable distribution from the plan; or
   4.   rolling the funds into an IRA rollover account.

Each of these options has positives and negatives. Because of that, along with the importance
of understanding the differences between these types of accounts, we will provide clients with
an explanation of the advantages and disadvantages of both account types and document the
basis for our belief that the rollover transaction we recommend is in your best interests.

General Information on Compensation and Other Fees
In certain circumstances, fees and account minimums are negotiable depending on client’s
unique situation.

Our 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 our fees, and we shall
not receive any portion of these commissions, fees, and costs.

All fees paid to us for investment advisory services are separate and distinct from the fees and
expenses charged by mutual funds to their shareholders. These fees and expenses are
...

Types of Clients
In general, we provide our services to individuals (primarily high net worth individuals), trusts,
estates, and charitable organizations.

Account Minimums
We impose a minimum requirement for assets under management of $1,000,000. This
minimum is sometimes waived depending on the circumstances.