MZ KARK & Associates Inc

Item 5 Fees and Compensation
Asset Management Services
Our fees for asset management services are generally based on total assets under management on a
quarterly basis. In addition, advisory fees charged by MMs are separate and apart from our advisory
fees. Advisory fees that you pay to the MM are established and payable in accordance with the
brochure provided by each MM to whom you are referred. These fees may or may not be negotiable.
You should review the recommended MM's brochure and take into consideration the MM's fees along
with our fees to determine the total amount of fees associated with this program. All fees are typically
reviewed and discussed with each client in order to maintain complete transparency.

Our asset management fees are paid quarterly, in advance, either through direct billing or through
deductions from assets, at the client's option. If the asset management agreement is executed at any
time other than the first day of a calendar quarter, the billing period will start the following full quarter.

The asset management fees are calculated in one of two ways, depending on the particular
arrangement established with the client:

    Flat rate - fee of 1% or less, depending on the situation and size of portfolio
                                      OR
    Break point - fee begins at 1% per year and is reduced as assets grow as per the following
    schedule:

Up to $ 500,000                Up to $ 500,000 1.000% of assets, plus
$500,001 to $1,500,000         .875% excess over $ 500,000, plus
$1,500,001 to $2,500,000       .750% excess over $1,500,000, plus
$2,500,001 to $5,000,000       .625% excess over $2,500,000, plus
Over $5,000,001                .500% excess over $5,000,000

In addition, clients who have engaged our firm for advisory consulting services pay a consulting fee, in
advance, on a monthly or quarterly basis. The consulting fee is a fixed fee, arranged with the client at
the beginning of the relationship based on the estimated needs of the particular situation.

Advisory fees charged by MMs and SMA managers are separate and apart from our advisory
fees. MMs and SMA manager fees range from .20% to .60% of the value of your advisory account
managed by the MM and SMA managers, depending on the particular SMA manager selected.

At the onset of the relationship, the client is given the option to either pay the fee directly or to have the
fee deducted from their assets. Clients always receive a bill for the fees due to M.Z. Kark & Associates,
even if they elect to have the fee deducted from assets (in which case the bill will indicate the amount
that was deducted). Clients are billed quarterly for the Asset Management Fee and either monthly or
quarterly for the consulting fee, if applicable.

In addition to the fees paid for management of the assets, clients will also incur the wrap fee as
arranged with Morgan Stanley (MS). M.Z. Kark & Associates does not receive any part of this wrap
fee. Clients might also incur a transaction fee for some mutual funds or exchange-traded funds, but MZ
Kark and Associates strives to use funds that do not charge such fees.

No one at MZ Kark and Associates accepts compensation for the sale of securities or other investment
products, including asset-based sales charges or service fees from the sale of mutual funds or
exchange-traded funds.

You may terminate the asset management services and/or consulting agreement upon written notice to
our firm. You will incur a pro rata charge for services rendered prior to the termination of the
agreement, which means you will incur advisory fees only in proportion to the number of days in the
quarter for which you are a client. If you have pre-paid advisory fees that we have not yet earned, you
will receive a prorated refund of those fees. We issue a check and send it directly to the client.
Inquiries regarding any refunds that are payable may be made by calling M.Z. Kark & Associates at
303-623-1818.

You may be required to sign an agreement directly with the recommended MM(s). You may terminate
your advisory relationship with the MM according to the terms of your agreement with the MM. You
should review each MM's brochure for specific information on how you may terminate your advisory
relationship with the MM and how you may receive a refund, if applicable. You should contact the MM
directly for questions regarding your advisory agreement with the MM.

Additional Fees and Expenses
As part of our investment advisory services to you, we may invest, or recommend that you invest, in
mutual funds and 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. Depending on the types of funds, you may also
incur transaction charges and/or brokerage fees when purchasing or selling securities. Transaction
charges may be in the form of asset-based fees in lieu of per transaction fees. These charges and fees
are typically imposed by the broker-dealer or custodian through whom your account transactions are
executed. We do not share in any portion of the brokerage fees or transaction charges/fees imposed
by the broker-dealer or custodian. To fully understand the total cost you will incur, you should review all
the fees charged by mutual funds, exchange traded funds, our firm, and others. For information on our
brokerage practices, refer to the Brokerage Practices section of this brochure.

Item 7 Types of Clients
The client base at M.Z. Kark and Associates is comprised of individuals and the businesses they own.

The individuals may have trusts that they are either trustees or beneficiaries of and we assist with
investment advice where requested by the client.

With respect to our clients' businesses, the size varies, but if there is a retirement plan offered to the
employees we often have an opportunity to provide investment advice.

M.Z. Kark and Associates does not filter clients based on the size of their portfolio. We work with those
people interested in setting financial goals and putting forth the effort to reach them. Consequently,
M.Z. Kark & Associates does not, as of the date of this Brochure, have any hard minimum
requirements for opening or maintaining accounts.

Item 8 Investment Strategy, Methodology and Risk of Loss
The investment strategy at M.Z. Kark & Associates is based on a traditional asset allocation model,
which may include the following:

    • Large Growth US stocks in the form of mutual funds and individually managed accounts
    • Small Growth US stocks in the form of mutual funds and individually managed accounts
    • Large Value US stocks in the form of mutual funds and individually managed accounts
    • Small Value US stocks in the form of mutual funds and individually managed accounts
    • International stocks from developed countries, again in the form of mutual funds and
      individually managed accounts
    • International stocks from emerging countries, again in the form of mutual funds and
      individually managed accounts
    • Fixed income which includes a variety of bond funds and individually managed accounts
    • Alternatives which includes hedging opportunities, such as short sale and collaring funds, fund
      of funds managers

    • Other - investments which we categorize as those investments that are not typically directly
      correlated with the traditional stock market. Within this category a client portfolio might have the
      following investments through a mutual fund or individually managed account:
           • Real Estate Investment Trusts (REIT's)
           • Natural and Global Resources, including energy and precious metals
           • Commodities

Mutual funds are professionally managed collective investment systems that pool money from many
investors and invest in stocks, bonds, short-term money market instruments, other mutual funds, other
securities, or any combination thereof. The fund will have a manager that trades the fund's investments
in accordance with the fund's investment objective. While mutual funds generally provide
diversification, risks can be significantly increased if the fund is concentrated in a particular sector of
the market, primarily invests in small cap or speculative companies, uses leverage (i.e., borrows
money) to a significant degree, or concentrates in a particular type of security (i.e., equities) rather than
balancing the fund with different types of securities. The returns on mutual funds can be reduced by
the costs to manage the funds. Also, while some mutual funds are "no load" and charge no fee to buy
into, or sell out of, the fund, other types of mutual funds do charge such fees which can also reduce
returns. Mutual funds can also be "closed end" or "open end". So-called "open end" mutual funds
continue to allow in new investors indefinitely whereas "closed end" funds have a fixed number of
shares to sell which can limit their availability to new investors.

Our investment strategies and advice may vary depending upon each client's specific financial
situation. As such, we determine investments and allocations based upon your predefined objectives,
risk tolerance, time horizon, financial information, liquidity needs and other various suitability factors.
Your restrictions and guidelines may affect the composition of your portfolio. It is important that you
notify us immediately with respect to any material changes to your financial circumstances,
including for example, a change in your current or expected income level, tax circumstances, or
employment status.

Although M.Z. Kark & Associates seeks to adhere to the above methodology, there is no guarantee
that all or any of the above processes and allocations will be used. In every asset class described
above there is at the risk of loss of one's investment. The due diligence that we incorporate into our
practice as well as the due diligence of Schwab, Morgan Stanley, and Greenrock Research (all for
which we are not responsible) does not guarantee that losses will not be incurred.

All clients are made aware of the inherent risks that come with investing in securities and should be
prepared to bear losses. We do not represent or guarantee that our services or methods of analysis
can or will predict future results, successfully identify market tops or bottoms, or insulate clients from
losses due to market corrections or declines. We cannot offer any guarantees or promises that your
financial goals and objectives will be met. Past performance is in no way an indication of future
performance. Certain risks could affect the value of your investment, including, but not limited to:

Market Risk: The value of a portfolio may fluctuate over time in response to overall movements in the
stock market or the value of individual securities in the portfolio.

Equities Securities Risk: The prices of equity securities fluctuate based on changes in a company's
financial condition and overall market and economic conditions. The value of equity securities for your
account could decline if the financial condition of the companies declines or if overall market and
economic conditions deteriorate.

Small-Cap and Mid-Cap Risk: We may invest in companies whose market capitalization is
considered "small-cap" as well as "mid-cap" companies. These companies often are newer or less
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