Makrod Investment Associates Inc

Item 5: Fees and Compensation

A. How Makrod Is Compensated
   Makrod is compensated for its advisory services by a percentage of assets under
   management. Though the fee is negotiable, the standard fee schedule is as follows:

               1% of the first $1,000,000
               ¾ of 1% of the next $1,000,000
               .6 of 1% of the next $3,000,000
               .45 of 1% of the balance

B. Fee Deduction or Direct Billing
   Makrod deducts fees from Clients’ accounts or bills Clients for fees incurred. The Clients
   may select either method. Clients generally have fees deducted and are billed semi-
   annually; however, some have requested to pay the bill directly and/or have quarterly
   billing.

C. Other Types of Fees
   Clients generally also pay fees to their qualified custodian such as brokerage and other
   transaction costs and should review the section(s) of this brochure that discusses
   brokerage. These costs may include, but are not limited to, brokerage commissions on
   trading, costs for wire transfers or overnight mail of funds, check printing fees, account
   maintenance fees, etc. Additionally, as part of our investment advisory services to you, we
   may invest, or recommend you invest, in mutual funds and/or exchange traded funds. The
   fees that you pay to our firm for investment advisory services are separate and distinct from
   the fees and expenses charged by mutual funds or exchange traded funds (described in
   each fund's prospectus) to their shareholders. These fees will generally include a
   management fee and other fund expenses. Please see discussions of brokerage under Item
   12 beginning on Page 9 to fully understand the total cost you will incur.

D. Pre-payment of Fees and Refunds
   Clients generally pay fees in advance although a Client may request to pay at the end of the
   billing cycle. For purposes of calculating the fee the value is based on the Client’s custodian
   report. Fees are generally paid five months in advance for a semi-annual billing cycle. In

                              Makrod Investment Associates, Inc.

   practice, this means that if a Client is billed in the month of January, that bill covers the
   management period of December to May and is based on the November 30th market value.
   On a quarterly billing cycle fees are generally paid two months in advance.

   If the advisory contract is terminated before the end of the billing period, a Client will
   obtain a refund of a pre-paid fee. Makrod will determine the amount of the refund by
   calculating back to the date of the end of the termination of the advisory relationship and
   will refund the unused portion of the advisory fee.

E. Compensation for the Sale of Securities
    Makrod and its supervised persons are not compensated for the sales of securities or other
    investment products, including asset-based sales charges or service fees from the sale of
    mutual funds.

Item 7: Types of Clients

Makrod provides advisory services to high net worth individuals, individuals, pension and profit-
sharing plans, trusts and charitable organizations. Makrod prefers that new accounts (i.e. new
client relationships) have a minimum size of $500,000; however, exceptions are made for
referrals from existing clients.