National Planning Corporation

Item 5. Fees and Compensation
Guaranteed Income Solutions
A “Program Fee” is charged for participation in this Program as negotiated with your Advisor.
Fees will be billed in advance monthly and deducted from your account based on the below
Maximum Program Fee Schedule, according to the fair market value of your account(s) as
reported by the insurance carrier. The Program Fee will automatically be deducted from
either from the brokerage account you may maintain through our clearing firm
arrangement, or via ACH transfer from such other account that you may designate.

Program Fees are applied by asset tier per account with each successive level achieved
receiving the lower fee stated on the Fee Schedule (also referred to as a “blended rate”). Your
actual Program Fee will be determined and outlined within the Asset Management Services
Agreement between you and NPC, which you will receive and sign separate from this
Brochure. As further described below, please note that while the below maximum fee
amounts are the most that you will be charged for our services, additional fees may be
assessed by the insurance carriers and for other services you may receive.

A portion of the Program Fee is applied towards platform administrative costs relative to
NPC] providing access to the Program, and is deducted from the Program Fee amount that
is paid to your Advisor. All fee arrangements are negotiable and NPC may agree to waive or
reduce its Program Fee or any other applicable fees or costs either on an ongoing or a one-
time basis.

8|P a g e

                      Maximum Tiered Program Fee Schedule

                         Portfolio Value                              Annual Fee
                        Up to $49,999.99                                 2.00%
            $50,000 - $249,999.99 (next $199,999.99)                     2.00%
            $250,000 - $499,999.99 (next $249,999.99)                    2.00%
            $500,000 - $999,999.99 (next $499,999.99)                    1.75%
       $1,000,000 - $1,999,999.99 (next $999.999.99)                     1.50%
      $2,000,000 - $4,999,999.99 (next $2,999.999.99)                    1.25%
                        $5,000,000+                                      1.00%

Householding. Your account(s) may be eligible for additional discounting based on account
type and combined household assets invested within the Program having the same address
of record within the Program.

Additional Fee Calculation Information. The initial fee for the first calendar month in
which a client participates in the Program shall be calculated beginning the day after initial
assets are deposited in the Program, and is debited the following month along with the fees
for the next calendar month. Fees are subsequently calculated at the beginning of each
calendar month, based on the fair market value of your account on the last business day of
the prior calendar month. Additionally, if you deposit assets with a market value of ten-
thousand dollars ($10,000) or more in your Account on any given day after the beginning
of a new month, the amount of such deposit shall immediately become subject to an
additional pro-rated fee in accordance with the agreed upon Program Fee Schedule. You shall
be entitled to a fee rebate calculated in the same manner if account assets are withdrawn in
excess of this amount on any given day.

Withdrawal from the Program. You may terminate your participation in the Program at
any time upon written notification to NPC or your Advisor, subject to any termination fees
set forth in the fee schedules in addition to certain administrative fees that may apply, as
applicable, such as those imposed by the government, IRA fees or wire transfer fees. You will
receive a pro-rata refund of any Program fees which you have pre-paid for any period
subsequent to any such termination.

Early Termination Fee. If a client terminates their relationship with NPC within the first
twelve months, an administrative fee of $100 may apply at our discretion to offset associated
termination costs. Any prepaid fees will be refunded to the client on a pro-rata basis in the
event of termination.

Carrier, Insurance Product, Mutual Fund and Miscellaneous Fees. The Program Fees
payable to NPC for participation in the Program are separate from additional fees which are
payable to the insurance carrier or pursuant to the terms governing the insurance products.
NPC reserves the right to pass on to you all fees and other charges imposed by the carrier, the
insurance products and/or any related transactions in connection with your account,
including without limitation, transaction costs associated with trading activity in your

9|P a g e

account, costs associated with insurance carrier riders or benefits, servicing fees such as
termination fees, ACAT fees (which apply to the transfer of assets between financial
institution accounts), wire transfer fees (which apply to the transfer of cash between financial
institution accounts) and such other fees that may apply. In addition, there may be tax effects
relating to fund share redemptions or the cancellation of policies made by or on behalf of
clients, as well as deferred sales charges or redemption fees where underlying sub-account
investment positions are sold prior to the expiration of a specified holding period.

Mutual funds typically have internal fees and costs which are not assessed by NPC and will
not appear on your account statement, such as internal management fees for mutual funds
charged by the fund manager, which can impact the returns on your investments as an
internal operational expense assessed by the investment sponsor for managing the
investment. Higher internal operating expenses will generally have an adverse impact on the
rate of return to investors. We encourage you to consult your Advisor and/or the prospectus,
insurance contract, and any related fee schedules provided by the insurance carrier for the
...

Item 7. Types of Clients
With respect to the Program, we provide advisory services to clients that include individuals,
trusts, pension plans, and corporate entities.
10 | P a g e

You are required to have an Advisor to participate in the Program. If your Advisor terminates
his or her participation in the Program or you terminate your relationship with your Advisor,
we may recommend a replacement Advisor for you to serve as your interim Advisor until a
replacement can be found. If NPC is required to provide intermediary services related to a
client’s participation in the Program in the absence of an Advisor or waive the account
minimum for a client, we may retain a portion or all of the fees that would otherwise be
payable to the Advisor. If you are unable to find a replacement Advisor with NPC’s assistance,
we have the right to terminate your participation in the Program.

Benefit Plan Accounts. Program accounts may be established for (a) employee benefit plans
described in Section 401(a) or 403(a) of the Internal Revenue Code of 1986, as amended (the
“Code”); (b) individual retirement accounts or annuities as defined in Section 408 of the Code
(“IRAs”); or (c) other plans or arrangements subject to the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”) or Section 4975 of the Code (collectively, “Benefit
Plan”). We provide Services to responsible plan fiduciaries or their designees, as well as
participants of self-directed retirement plans. For plan level arrangements, an investment
strategy is chosen by an independent fiduciary that is responsible for overseeing the
respective Benefit Plan (or the Benefit Plan participant for certain self-directed participant
accounts, IRAs or other accounts that do not have independent fiduciaries). The selected
Model Portfolio and restrictions, if any, then serve as the Investment Policy Statement for the
Program account. We do not serve as the trustee or plan administrator for any Benefit Plan.

For Program accounts established for Benefit Plans, the investments and fees under the
Program are intended to comply with applicable exemptive relief under ERISA and the Code
permitting our receipt of such fees. In connection with that relief, as it applies to
arrangements involving the furnishing of services to Benefit Plans that are “covered plans”
within the meaning of U.S. Department of Labor Regulation §2550.408b-2(c)(1)(ii), the
following disclosures are provided:

    •    The Services provided under the Program are described in your investment advisory
         account agreements with NPC, together with this Brochure.

    •    In providing Services under the Program, NPC is acting as an investment adviser
         registered under the Investment Advisers Act of 1940, as amended.

    •    In providing Services under the Program, NPC is also acting as a fiduciary (within the
         meaning of Section 3(21) of ERISA) with respect to the Program.

    •    The “direct compensation” (within the meaning of U.S. Department of Labor
         regulation §2550.408b-2(c)(1)(iii)(D)(2)) that NPC (together with our Advisor)
         expects to receive in connection with the provision of services under the Program
         consists of the Program Fee, as described under Item 4 of this Brochure and within
         the Fee Schedule to your investment advisory agreement with us. As noted under
         “Miscellaneous Fees” of Item 4, you may also pay various fees for special services that
         are not covered by the Program Fee, a portion of which may be paid to NPC in certain
         situations. A detailed list of these fees is available through your Advisor. NPC does
         not expect to receive any “indirect compensation” under the Program (within the
         meaning of U.S. Department of Labor Regulation §2550.408b-2(c)(1)(iii)(D)(2). In
         the case of insurance products offered by Jackson National Life Insurance Company
         under the Guaranteed Income Solutions Program, and affiliate of NPC], our related
11 | P a g e

         entities receive a portion of fees paid relative to the insurance products as further
         described under Item 14 below.

    •    Upon termination of your participation in the Program, you will receive a pro-rata
         rebate of any Program Fees which have been paid in advance.

    •    Neither NPC, our Advisors nor our respective affiliates or subcontractors provide
         recordkeeping services under the Program.

    •    If you are an individual account plan (as defined in Section 3(34) of ERISA) that
         permits participants and beneficiaries to direct the investment of their accounts and
         one or more designated investment alternatives for the plan is provided through the
         Program, you will be provided a copy of the prospectus or other offering materials for
         each such designated investment alternative that describes (i) any compensation
         charged directly against investment in the designated investment alternative; (ii) the
         total annual operating expenses for the designated investment alternative, expressed
         as a percentage and calculated in accordance with U.S. Department of Labor
         §2550.404a-5(h)(5); and (c) any other material information that is required for the
         administrator of the plan to comply with the disclosure obligations described in U.S.
         Department of Labor §2550.404a-5(d)(1).

    •    If there is any material change to information described in the above Benefit Plan
         disclosures, to this Brochure more generally or in relation to your investment
         advisory and brokerage agreements with NPC, you will be notified of such change
         within at least thirty (30) days from the date on which we learn of the change.

    •    For retirement plan sponsors, we will arrange, upon the reasonable request of your
...