Novak & Powell Financial Services Inc

Item 5: Fees and Compensation

NPFS’ investment advisory fee is computed as a percentage of the value of client assets under management.
The fee schedule for new clients of NPFS is stated below. The minimum portfolio value is generally set at
$500,000. NPFS may, at its sole discretion, make exceptions to this minimum portfolio value or the below
annual fee schedule. These fees are at breakpoint levels.

Fee Schedule

Account Value                         Quarterly Fee                  Annualized Fee
$500,000 - $750,000                   0.5625%                            2.25%
$750,001 - $1,000,000                 0.375%                             1.50%
$1,000,001 - $5,000,000               0.3125%                            1.25%
        > $5,000,000                          fee is negotiable

For any existing clients that are being charged a different fee schedule than above, that fee schedule was noted
on the advisory agreement originally signed by those clients.

The investment advisory fee for clients using Raymond James & Associates, Inc, member New York Stock
Exchange/SIPC (“RJ”) as a qualified custodian is billed and payable quarterly in arrears or advance, based on
the value of the client’s account on the last day of the previous quarter. The investment advisory fee for clients
using Charles Schwab & Co., Inc., (“Schwab”) as a qualified custodian is billed and payable quarterly in
advance, based on the value of the client’s account on the last day of the previous quarter.

If the investment advisory agreement is executed at any time other than the first day of a calendar quarter, the
fees paid by clients to NPFS will be applied on a pro rata basis, which means that the advisory fee is payable in
proportion to the number of days in the quarter for which investment advisory services were rendered.

The investment advisory agreement may be terminated in writing by either party at any time. In the event of
termination, clients will incur a pro rata charge for the number of days in the quarter that services were rendered
prior to the termination of the investment advisory agreement. If the investment advisory contract for an
account in which fees are payable in advance is terminated, NPFS will issue the client a prorated refund of the
fees for the remaining portion of the quarter.

NPFS deals primarily in exchange-traded funds (ETF’s) and open-end mutual funds. In some cases, NPFS may
also trade in individual stocks, corporate and government debt securities, CDs, and municipal securities. The
fees that clients pay to NPFS for investment advisory services are separate and distinct from the fees and
expenses charged by ETF’s and mutual funds to their shareholders. These fees will generally include a
management fee and other fund expenses which are internal to the fund. Clients should also be aware that in
some cases investment transactions will incur a nominal transaction fee, which is imposed by the qualified
custodian through which client account transactions are executed. NPFS does not receive any portion of this
fee. For more information regarding NPFS’ relationship with its preferred qualified custodians, please see

Item 7: Types of Clients

NPFS offers investment advisory services to individuals, families, trusts, pension & profit sharing plans,
charitable organizations, and businesses.