North Star Investment Management Corporation

Item 5 – Fees and Compensation
  A. Fees

     MANAGED ACCOUNTS. Generally, North Star charges fees in accordance with the following
     fee schedule:

         AUM                          Balanced and Equity               Fixed                     Income
         Up to $500,000               1.50%                             1.00%
         Over $500,000                1.00%                             0.75%

     There may be periods of time with low or no transaction activity in a client’s account. Among the
     reasons for this include market conditions, restrictions placed on the account by the client, tax
     considerations, nature of securities held or the investment strategy of the portfolio manager. In
     these low turnover situations, the client would likely have paid lower fees overall if the client had

purchased the same securities in a brokerage-only account with a traditional pay-per-trade
commission structure. Before entering into a management agreement with the Firm, clients should
consider these potential additional costs in relation to the potential benefits of an investment
advisory relationship, including ongoing portfolio monitoring, access to investment strategies, and
performance reporting.

In some cases, North Star charges tiered fees in accordance with the following schedule with a
minimum fee of $10,000 billed as follows:

        Annual Fee                        AUM
        1.00%                             on the first $1 million
        0.75%                             on the next $4 million
        0.50%                             on the next $5 million
        0.40%                             on the next $40 million
        0.30%                             on the remaining balance over $50 million

With these accounts, fees will be pro-rated and charged monthly and in arrears and will be paid
from account assets.

Also, the North Star Mutual Funds generally have expense ratios that are at or above their category
peers. When invested in the funds we manage, the total fees paid by the client (including the Fund
expenses) will likely be higher than the fees the client would have paid if the portfolio was not
invested in the funds we manage. Even taking into account the fact that we do not charge advisory
fees on that portion of the portfolio that is invested in the North Star Mutual Funds, the total
expenses associated with such an investment would exceed the fees set forth in the above fee
schedule.

Managed Fees do not include professional fees identified below. These are two separate fees at
North Star and the client may receive an invoice for management services and a separate invoice
for professional services (i.e.: Financial Planning, Accounting, etc.).

FEES FOR WRAP ACCOUNTS. Generally, the fee for wrap program accounts is charged in
accordance with the following fee schedule:

    AUM                          Balanced and Equity               Fixed                     Income
    Up to $500,000               2.00%                             1.50%
    Over $500,000                1.50%                             1.25%

"AUM" means the assets under the management of North Star for a particular client or client
account. The fees listed in the schedules above are annualized figures. Fees will be charged
quarterly and in arrears. The quarterly fee is based upon the market value of all assets held within
the client's account on the last business day of the calendar quarter. Additional deposits to the
account are subject to the same fee procedures. The client is typically charged a pro rata fee in the
event the client's service is terminated on a day other than the last business day of the month. In
that event, the pro rata fee will be due and payable upon termination of the service.

North Star may adjust the fee schedule upon thirty (30) days' prior written notice to the client. In
certain instances, fees may be negotiable. A negotiated fee schedule must be pre-approved by a
member of the Firm’s Senior Management.

The client's account will be debited for the above-mentioned fees. Fees are collected by the Firm
from the amount of any contribution or transfer, from available cash in the client's account, or by
liquidating the client's assets held in the client's account in an amount equal to the fees that are due.
It is important to note that North Star receives more revenue when the client’s portfolio is invested
in the North Star Mutual Funds (see also, Item 10C).

WRAP ACCOUNTS SPONSORED BY OTHER FINANCIAL INSTITUTIONS. North Star is a
portfolio manager for certain wrap fee programs sponsored by financial institutions or broker/dealer
firms that may make available such programs to their customers. Generally, annualized fees
charged to such financial institutions for the managed accounts are 0.50% of the AUM.

FINANCIAL PLANNING SERVICES. Generally, fees are negotiated with the client at the time
of the engagement. Fixed fees range from $1000 to $3000 depending on the complexity of the
plan. Fifty percent (50%) of the estimated fees are due upon the signing of the financial planning
agreement. The remainder of fees incurred is due upon the delivery of the advisory report to the
client or upon the close of the meeting wherein the advisory recommendations are presented to the
client, whichever occurs earlier. Fees are charged whether or not the recommendation(s) made
result in a profit. Prior to the delivery of the advisory report, the client may terminate the agreement
upon written notice to North Star. Upon termination, North Star is entitled to compensation for
time expended on the consultation and/or preparation of the advisory report and any unearned fees
paid will be refunded to the client.

In certain instances, fees may be negotiable. A negotiated fee schedule must be pre-approved by a
member of the Firm’s Senior Management.

FINANCIAL PLANNING FOR RETIREMENT PLANS. North Star also offers financial planning
...

Item 7 – Types of Clients
North Star offers its advisory services to individuals, including high net worth individuals, pension and
profit sharing plans (including ERISA plans), trusts, estates, charitable organizations, and corporations or
other business entities. North Star also provides investment advice to the North Star Mutual Funds, which
are open-end mutual funds registered under the Investment Company Act of 1940 and to state or municipal
government entities.

When subscribing to the advisory services offered by North Star, generally, the minimum account value is
US$100,000. If the value of a client’s account declines below $100,000 during the advisory relationship,
North Star reserves the right to require the client to deposit additional monies or securities to bring the
account value up to the $100,000 minimum. The Firm may terminate the advisory relationship for failure
to maintain the minimum account value. In some special cases, account minimums may be waived or
negotiated.