Nicholas Co Inc

Item 5           Fees and Compensation
SEPARATELY MANAGED ACCOUNTS
The management fees for our separately managed accounts are payable quarterly in arrears for most
clients. The basis for the fee calculation is described in detail in each account’s advisory agreement. New
client account fees generally are calculated based on an average of assets at the beginning and ending of
the quarter while some legacy client’s fees are calculated based on the market value of the assets at the
end of each quarter. Nicholas provides clients with a management fee invoice after the end of a quarter
showing the market value of the assets on which the fee is based, the calculation of the fee based on the
fee schedule specific to that account, and the total amount of the management fee due. Assets of related
accounts are combined in determining fees. Clients may choose to have their fees deducted from their
accounts. For fees deducted from the account, we will submit the management fee invoice directly to the
custodian for payment. Fees for partial periods are prorated.

The management fees for certain client accounts who utilize third-party investment advisors with
direction to contract Nicholas as a separate account manager are generally paid quarterly in advance in
accordance with the fee schedule set forth in the client’s advisory agreement and the basis for the
calculation described in the investment management agreement with the third-party advisor. These fees
are directly deducted from the client’s account by the third-party investment advisor. If these agreements
are terminated, the client will receive a pro rata refund of unearned management fees. Refunds will be
credited back to the account from which the advance fee was debited. In the event the account was
transferred to another custodian, the refund will be forwarded to the new custodian. If the advance fee
was paid by check, Nicholas will mail a check in the amount of the refund. Refunds are typically made in
the quarter following termination. Clients who are billed in advance may contact Nicholas if they believe
they are entitled to, but have not received, a refund.

Form ADV Part 2A – Disclosure Brochure Page 6

Below is our standard fee schedule per year:
SEPARATELY MANAGED ACCOUNTS
                                       Multi-cap Growth
                                         0.50% on the first $5,000,000
                                         0.40% in excess of $5,000,000

                                       Mid-cap Growth
                                         0.55% on the first $5,000,000
                                         0.45% in excess of $5,000,000

                                       Small-cap Growth
                                         0.75% on the first $5,000,000
                                         0.65% in excess of $5,000,000

                                       Equity Income
                                         0.50% on the first $5,000,000
                                         0.40% in excess of $5,000,000

Nicholas reserves the right to negotiate fees based on the size and the nature of the account. Our fee
schedules have changed from their original levels and some clients are paying fees under prior
agreements. The fees that we charge for investment management services are specified in an agreement
between Nicholas and each individual client. Nicholas generally requires a minimum of $1 million in
assets to establish a discretionary account. Nicholas will accept lower initial investments provided that the
potential exists for additional investment. The minimum account sizes may not apply to new accounts for
which there is a corporate, family, or other substantial relationship to existing accounts. In addition,
Nicholas reserves the right to negotiate the minimum account size and minimum annual fee.

MUTUAL FUNDS
Nicholas receives investment advisory fees as the investment adviser to the following mutual funds:
Nicholas Fund, Inc., Nicholas II, Inc., Nicholas Limited Edition, Inc., and Nicholas Equity Income Fund,
Inc. (collectively the “Nicholas Family of Funds”). Mutual fund clients are billed monthly based on a
percentage of the average daily net assets of each fund as detailed in each fund’s prospectus. More details
about the investment advisory services and fees received can be found in the registration statements of
those funds.

Form ADV Part 2A – Disclosure Brochure Page 7

OTHER FEES AND EXPENSES
Clients may pay other expenses in addition to the fees paid to Nicholas. For instance, clients may pay
brokerage commissions, transaction fees, custodial fees, bank fees, transfer taxes, wire transfer fees, and
other fees and taxes charged to brokerage accounts, bank accounts, and securities transactions. These fees
are unrelated to the fees collected by Nicholas. For more information on brokerage and other transaction
costs, please see Item 12.

ADDITIONAL COMPENSATION
Nicholas and its employees do not accept compensation from any person or entity for the sale of
securities or other investment products.

Item 7           Types of Clients
Nicholas generally provides investment advice to clients such as individuals, institutions, trusts, estates
and charitable organizations, corporations and other business entities, pensions and profit sharing plans,
and investment companies.

Form ADV Part 2A – Disclosure Brochure Page 8

Nicholas generally requires a minimum of $1 million in assets to establish a discretionary account.
Nicholas will accept lower initial investments provided that the potential exists for additional investment.
The minimum account sizes may not apply to new accounts for which there is a corporate, family, or
other substantial relationship to existing accounts. In addition, Nicholas reserves the right to negotiate the
minimum account size and minimum annual fee. See Item 5 for more details on fees and account sizes for
separately managed accounts.