Palisade Asset Management LLC

ITEM 5 – FEES AND COMPENSATION

Fees are billed and payable quarterly, in advance, based on the market value at the previous quarter end
in accordance with the applicable following fee schedules:

Individual Portfolio Management and Investment Supervisory Services
                                 Assets Under Management Annual Fee

                                      First $2,000,000         1.0%

                                      Next $3,000,000          .75%

                                      Next $5,000,000          .60%

                                     Over $10,000,000          .50%

Company Retirement Plans – Investment Advisory Services
                                 Assets Under Management Annual Fee

                                      First $2,000,000         0.50%

                                      Next $3,000,000          0.40%

                                      Next $5,000,000          0.30%

                                     Next $15,000,000          0.25%

                                     Over $25,000,000          0.20%

Limited Negotiability of Advisory Fees – Although we have established the aforementioned fee schedule,
we retain the discretion to negotiate alternative fees on a client-by-client basis. Client facts,
circumstances, and needs are considered in determining the fee schedule. Other factors include the
complexity of the client, assets to be placed under management, anticipated future additional assets,
related accounts, portfolio style, account composition, and reporting. The specific annual fee schedule
is identified in the contract between the adviser and each client.
We will group certain related client accounts when determining the annualized fee.
Accounts deemed to be complex or requiring additional administrative effort may require additional
fees. Such fees will be determined and agreed upon in advance.
Fees will be billed to the client; however, clients may elect to authorize us to directly debit fees from
their accounts. This ability is granted in the clients’ investment management agreement with us.
Upon termination of any account, any prepaid, unearned fees will be promptly refunded. In calculating
a client’s reimbursement of fees, we will prorate the reimbursement according to the number of days
remaining in the billing period.
All fees paid to Palisade for investment advisory services are separate and distinct from the fees and
expenses charged by mutual funds and/or Exchange Traded Funds (“ETF”) to their shareholders. If the
fund also imposes sales charges, the client will pay the initial or deferred sales charge.
Clients who have opted to use separately managed accounts will be charged various program fees in

addition to the advisory fee charged by us. Such fees include the investment management fees of the
independent advisers, custodial fees, and trading expenses. We will review with clients any separate
program fees that they will be charged.
In addition to our advisory fees, clients are also responsible for the fees and expenses charged by
custodians and imposed by broker-dealers, including, but not limited to, custody fees and any transaction
charges imposed by a broker-dealer with which an independent investment manager effects transactions
for the client's account(s). Please refer to the Item 12 – Brokerage Practices section for additional
information.
We do not receive any compensation as a result of investing in mutual funds or ETFs.

ITEM 7 – TYPES OF CLIENTS

We provide investment advisory services to the following types of clients:
      High-Net-Worth Individuals
      Individuals (other than High-Net-Worth Individuals)
      Nonprofit Organizations
      Corporations or other businesses
      ERISA Company Plans
A minimum of $1,000,000 of assets under management is required for advisory services. The account
size is negotiable under certain circumstances. We will group certain related client accounts for the
purpose of achieving the minimum asset level.

Advisory clients are subject to our minimum account requirements and advisory fees in effect at the time
the client entered into the advisory relationship. Therefore, our minimum account requirements differ
among clients.

ITEM 8 – METHODS OF INVESTMENT STRATEGIES, RISK OF LOSS AND
         INVESTMENT ANALYSIS

METHODS OF ANALYSIS AND INVESTMENT STRATEGIES

We use several different strategies in managing client accounts. The strategies used are determined by
the needs of the client and consistent with the client's investment objectives, risk tolerance, time horizons,
and other considerations.

Equity Strategies

Our strategy is to invest in high-quality stocks that tend to have a steady and historically strong growth
in earnings and dividends. Quality and stability of earnings typically help protect principal value in down
markets. Portfolios in the strategy are diversified across economic sectors and are constructed to hold
stocks for the long term. We strive to purchase companies at the lower end of their historical valuation
range. Our client portfolios exhibit low turnover and are highly tax efficient.

High Quality Growth Equity Strategy
Portfolios hold up to 35 large capitalization companies. A history of consistent earnings and dividend
growth is the focus of this strategy.

Core Growth Equity Strategy
Portfolios hold about 40 companies which have a market cap of $1 billion or greater. Many of the
companies in the strategy have an upper Midwest presence.

Fixed Income Strategies

Taxable Fixed Income
Our investment philosophy stresses a conservative management approach by investing in high quality,
investment grade, taxable bonds. The approach includes corporate, government, and government agency
securities, as well as certificates of deposit up to the limit of the FDIC insurance protection. In some
instances, investment grade municipal bonds may be utilized. Generally, we stagger maturities and
diversifies among non-U.S. government issuers. Credit quality of non-government securities is
monitored as well as a spread history. While maturities are laddered, the client’s liquidity and cash needs
determine the ultimate portfolio structure.
Tax-Exempt Fixed Income
Our investment philosophy targets high quality, investment grade, tax-exempt bonds. Each municipal
bond’s underlying quality and credit enhancements are analyzed. Some of the factors analyzed include
revenue sources, reserves, and debt service capabilities. We generally ladder the bond portfolio, but a
client’s liquidity and cash flow needs determine the ultimate structure of the portfolio. If available, we
also utilize the client’s home state bonds when exempt from state taxes. We will use non-home state
companies when the rate differential more than offsets the client’s tax. The use of client non-home state
securities also diversifies portfolios and may reduce the risk of a geographical problem. When possible,
we avoid purchasing municipal bonds which are subject to the federal Alternative Minimum Tax.

Third-Party Managers and Funds

Occasionally, we will utilize Third-Party Managers, Mutual Funds, and/or ETFs when additional
portfolio diversity is desired, or when a complementary investment structure is sought. These managers
and/or funds may be used as part of an equity, fixed income, or balanced strategy.

Balanced Account Strategy

Based on a client’s need for income, growth, and liquidity, portfolios will be constructed using a
combination of equity, fixed income, and/or third-party strategies.

Investment Vehicles Used

We primarily invest in the following types of securities:
   Exchange-traded securities
   Securities traded over-the-counter
   Corporate debt securities
   United States government and agency securities
   Certificates of deposit
   Municipal securities
   Mutual funds and exchange-traded funds

RISK OF LOSS

Investments are not guaranteed and may lead to a loss of money for the client. There is no assurance that
an investment will provide positive performance over any period of time. Past performance is no
guarantee of future results and different periods and market conditions may result in significantly
different outcomes.

Our investment approach constantly keeps the risk of loss in mind. Dependent on the investment strategy
used, clients face the following investment risks:

Equity and Balanced Strategies
Market Risk. Market risk is the possibility for an investor to experience losses due to factors that affect
the overall performance of the market. Market risk is affected by political factors, interest rate
fluctuations, and changes in the general economy.
Common Stock. Common stocks represent an ownership interest in the issuing company and may decline
due to general market conditions which are not specifically related to a particular company. Common
stocks generally have greater price volatility than most fixed income securities. In addition, there is a
risk that companies that have paid regular dividends opt to decrease or eliminate dividend payments at
some point in the future.
Small and Mid-Cap Securities. Securities of small and mid-capitalization companies tend to be subject
to greater price volatility, lower trading volume and less liquidity than large-cap companies. As a result,
they may be subject to wider price fluctuations and such securities may be affected to a greater extent
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