MRD Inc

ITEM 5 – FEES AND COMPENSATION
Fee Schedule

Investment Management Services
MRD charges advisory fees for investment management services. We charge advisory fees at a rate not
to exceed 1.00% annually based on the market value of the portfolio. This rate is negotiable at the
discretion of MRD. We determine each client’s rate according to the size of the account and the scope &
complexity of the contracted management services. Some accounts are under different fee
arrangements honoring prior agreements. Generally, Michael DeKovner only waives fees for his own
accounts. In addition, MRD may also occasionally waive advisory fees for client-directed positions held in
accounts, solely at the firm’s discretion. Lower fees for comparable services may be available from other
sources.

Billing Method
MRD’s advisory fees are payable quarterly in arrears based on the account market value on the last
business day of the calendar quarter. The first payment is due after the first quarter under management.
The formula used for the calculation is as follows: (Annual Rate) x (Total Assets Under Management at
Quarter-End) / 4. When applicable, "tiered rates” are applied to each quarterly billing as agreed to by
MRD and the client in accordance with prior agreements, and in such cases, MRD aggregates related
account balances of clients within the same household for purposes of achieving the advisory fee tiers.

MRD, Inc.                                            8                                      Part 2A Brochure

Fees billed on assets held in client accounts that receive valuations less than quarterly will be calculated
using the most recent pricing data available through the product sponsor and/or the client’s custodian.
We make pro-rata fee adjustments for additions or withdrawals during a quarter. The client’s quarterly
fee calculation will reflect any pro-rated additions and/or reductions.

For advisory fee calculation purposes, a calendar quarter is a period beginning on January 1, April 1,
July 1, or October 1 and ending on the day before the next quarter. A day is any calendar day including
weekends and holidays. For new accounts and terminations, the number of days remaining in the
quarter is the number of calendar days following the date a new account is funded or the date MRD
receives a termination notification.

With client authorization, MRD will automatically withdraw MRD’s advisory fee from the client’s account
held by an independent custodian. Typically, the custodian withdraws advisory fees from the client’s
account during the first month of each quarter based on MRD’s instruction. All clients will receive
brokerage statements from the custodian no less frequently than quarterly. The custodian statement
will show the deduction of the advisory fee. Clients cannot elect to have fees invoiced separately.

MRD will send an invoice to each client who authorizes MRD to withdrawal fees directly from the
custodian. The invoice will include the value of the account upon which we calculated the fee, the fee
calculation, and the fee amount debited. It is the client’s responsibility to verify the accuracy of the fee
calculation. The custodian will not determine whether the fee is properly calculated.

Other Fees and Expenses
MRD’s fees do not include custodian fees. Clients pay all brokerage commissions, stock transfer fees,
and/or other similar charges incurred in connection with transactions in accounts from the assets in the
account, which are in addition to the fees client pays to MRD. See Item 12 - Brokerage Practices below
for more information.

In addition, any fund shares held in a client’s account are subject to fund-related expenses and, if
applicable, early redemption fees. Each fund’s prospectus fully describes its fees and expenses. All fees
paid to MRD for investment advisory services are separate and distinct from the fees and expenses
charged by funds. Funds also pay advisory fees to their managers, which are indirectly charged to all
holders of the fund shares.

Termination
Either party may terminate the advisory engagement at any time by providing written notice to the
other party. The client may terminate the engagement at any time by writing MRD at our office. Upon
termination of the engagement, any earned, unpaid advisory fees will be due and payable. The client
will receive an invoice showing the advisory fees due for services rendered and not yet paid.

Other Compensation
MRD does not 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.

MRD, Inc.                                             9                                      Part 2A Brochure

ITEM 7 - TYPES OF CLIENTS
MRD offers discretionary investment advisory services to individuals, high net worth individuals, trusts
and estates, and individual participants of retirement plans. In addition, we offer advisory services to
owners of single-participant 401k plans and 403b plans, charitable organizations, and businesses.
Generally, MRD requires clients to maintain a minimum account size of $1,000,000. Withdrawal of
significant funds may result in a request for additional fund deposits to continue with management of
accounts. At our discretion, we may combine family accounts to meet the account size minimum or
reduce or waive the account minimum requirements.