National Investment Services Inc

Item 5   Fees and Compensation

   A. General Fee Information

   Our management fee for separate accounts is charged primarily in arrears on a quarterly basis.

The fee schedule, manner in which the fee is calculated, billing method and when fees are due
will be detailed in our investment management agreement with each client, and with respect to
the private funds, in the relevant operating agreement. Fees for partial periods, either upon
opening an account or terminating services, will be prorated based on the number of days
services will be or were provided.

In a wrap fee program, the wrap program sponsor charges its clients a bundled fee for a package
of investment services, such as brokerage, advisory, research, custody and management
services. We receive a portion of the bundled fee for our investment management services.

Our management fee for private funds is an asset-based fee and is charged quarterly in arrears.
The specific management fee charged to each private fund is outlined within the private fund’s
offering documents and is a percentage of the private fund’s net asset value. As described in
each private fund’s offering documents, each private fund pays its own operating expenses and
organization expenses which are amortized over a period of time.

Certain of the private funds we manage also pay an incentive fee as described within each
fund’s offering documents. See Item 6 for additional information on incentive fees and potential
conflicts of interest.

When an investor in one of our private funds is also a separate account client of ours and owns
the private fund within the separate account, the client/investor only pays one management
fee, either at the account level or at the private fund level as agreed upon between us and the
client/investor.

Brokerage commissions or mark-ups/mark-downs charged by the executing broker-dealers are
built into the net cost (or proceeds) of each trade. We will not receive any portion of those
commissions or fees. In addition, you may incur charges imposed by third parties other than us
in connection with investments made through the account, including but not limited to,
custodial fees, mutual fund fees, and exchange-traded fund (“ETF”) management fees.

B. Fee Schedules

Our asset-based advisory fees are negotiated with clients (or wrap program sponsors) on a case-
by-case basis and will depend on the characteristics of the account, the relationship with the
client, and other variable factors. The following fee scales may be used as a guide:

       Institutional Fixed Income Strategies:

       Core Strategy
               0.30% of the first $50 million under management
               0.25% of the next $50 million under management
               Negotiable on balance

       Core Plus Strategy
               0.35% of the total market value under management

          Total Absolute Return Strategy*
                  1% of the total market value under management
                  15% incentive fee of net profit

          Dynamic Fixed Income Strategy
                0.60% of the total market value under management

          Preferred Stock Strategy:

          Preferred Stock Strategy*
                  0.60% of the total market value under management
                  15% incentive fee of net profit

          Equity Strategies
                  1.00% per annum on the first $5 million under management
                  0.75% per annum on the next $5 million under management
                  Fees on accounts over $10 million will be quoted upon request

          *Strategy offered only in a private fund.

C. Account Valuation Practices

Pricing
We use account market values to calculate assets under management, client investment
management fees and investment performance, where applicable; therefore, NIS maintains
policies and procedures regarding these practices.

We use pricing information provided by Intercontinental Exchange, Inc. (“ICE”) and our sub-
adviser, with respect to the firm’s sub-advised assets for purposes of valuing client portfolios. In
an instance where ICE is unable to obtain a price, an independent pricing source is used where
possible (generally consisting of independent broker-dealer quotes or a reliable electronic
information service such as Bloomberg). Our pricing policy includes details regarding secondary
pricing sources and reviews are performed periodically to assess the accuracy and
reasonableness of the prices utilized.

Fair Valuation

In the instance where we are unable to determine a price as outlined in our Portfolio Valuation
Policy, our Pricing Committee shall determine a fair value for that security. No single factor or
approach shall be implemented by the Pricing Committee in every case of determining a fair
value for a security, as each case is unique in nature.
There are inherent conflicts of interest when we value client accounts, as higher security prices
increase market values, thereby enhancing performance results and increasing fees. In addition,

    because clients pay different fees based on differing fee schedules or the size of the account, we
    have a theoretical incentive to favor those accounts where we earn the highest fees. We
    maintain investment, trade allocation and account valuation (including fair valuation) policies
    and procedures designed in an effort to address such conflicts of interest.

Item 7   Types of Clients

We manage assets for multi-employer funds (pension and health and welfare), corporations,
individuals, high net worth individuals, state and local governmental entities, ERISA plans, Taft-
Hartley accounts, private funds, unified managed accounts (“UMAs”) and endowment and
foundation funds. Employees through NIS’s retirement plan and our firm owners may invest in the
private funds and/or have separate accounts managed by us. Management fees and related
incentive fees may be less or waived for employees and owners. Managing assets for employees
and owners creates a conflict of interest as we may have an incentive to favor these accounts over
other client accounts. In order to mitigate this conflict of interest, we maintain trading policies and
procedures as well as a Code of Ethics which requires us to treat all clients fairly and act only in the
best interest of our clients.

Generally, with respect to our fixed income strategies, separately managed accounts have a
minimum investment of $20 million and the private funds have minimum initial investment of $5
million. With respect to our equity strategies, separately managed accounts do not have a minimum
investment and the private fund utilizing an equity strategy has a minimum initial investment of $5
million. These minimums may be waived at our discretion.

Interests in the private funds are only offered to persons who meet the eligibility requirements for
investment in privately offered funds, which (1) rely on an exclusion from the definition of
“investment company” under the Investment Company Act of 1940, as amended (“1940 Act”)
provided by either Section 3(c)(1) or Section 3(c)(7) thereunder; and (2) rely on an exemption from
registration under the Securities Act of 1933, as amended ("Securities Act"), provided by Section
4(a)(2) and Rule 506 of Regulation D. Investors and prospective investors in each private fund are
urged to refer to the offering documents of such private fund for detailed information on the
investment requirements.