Palouse Capital Management Inc

Item 5. Fees and Compensation
Management Fees-General Conditions

PCM’s fee for managing portfolios is paid every three months. Clients serviced by Investment Advisor
Representative John H. Krehbiel pay an Annual Fee of up to 1.2%. That fee is, billed quarterly in arrears based on
the market value of the client’s account on the last trading day of the prior quarter. The exact fee and method of
billing is set forth in the Management Agreement executed by each Client.

Fees can be negotiated and may be offered by PCM at lower rates depending upon the circumstances and size of the
account. Lower fees for comparable services may be available from other sources. PCM does not combine or
household the balances of multiple accounts belonging to any one client for the purpose of calculating management
fees.

Either party may terminate the Investment Management Agreement at any time upon written notice. Termination of
the agreement does not affect or preclude the consummation of any transaction initiated prior to termination. In the
event of termination, a pro-rata management fee will be calculated based on the date of notification to PCM or in the
case of a wrap account based on the date as determined by the Program Sponsor. The client will then be charged the
pro-rata fee or refunded the unused portion in the event that the client had already paid their full quarterly management
fee.

PCM's fee (or PCM's portion of a wrap fee) does not include any transaction costs, execution, or other service,
brokerage, or custody charges. Fees may be waived or reduced for the accounts of PCM and PCM employees and
their family members.

Management Fees-Non-Wrap Programs
The annual compensation received by PCM is based upon a percentage of the market value of the assets under
management using trade date accounting. The management fees charged by PCM are separate and distinct from the
fees and expenses charged by the client's broker-dealer, custodian, or fund (if mutual funds are held in a client's
account).

If the account is accepted after the first day of a calendar quarter, the fee for the initial quarter will be pro-rated based
on the number of days left in the quarter and the opening balance of the account as provided by the client's broker-
dealer/custodian. The effective date for billing on new accounts is generally the date in which PCM accepts the
Investment Management Agreement.

Payment of fees can be made directly by the client by check or wire or ACH transfer; or the client may authorize, in
writing, their qualified custodian to debit fees from their account. The client's qualified custodian must send to the
client a statement, at least quarterly, identifying the amount of funds and each security in the account at the end of
the period and set forth all transactions in the account during that period.

Clients occasionally request that their account be placed in a frozen or suspended status and temporarily removed
from active management. In the event of a freeze for legal reasons (for example death, title change, divorce, etc.), a
pro- rata refund of the fee, which had been paid in advance, will be made for the period that the account was in frozen
status. In circumstances that are for non-legal reasons, PCM will continue to charge the management fee. It is the
responsibility of the client to notify PCM when an account is to be placed in or removed from frozen status; however,
PCM will accept indications of account status change from the financial consultant (which are followed with a letter
sent by PCM to the client confirming the change in status).

Management Fees-Wrap Programs
A Wrap Program involves a single fee (wrap fee) paid by the client to the Program Sponsor for all investment
advisory, custodial, and other services. The Program Sponsor is responsible for calculating the wrap fee, a portion of
which is forwarded to PCM as management fees. The annual fee paid by the client to the Program Sponsor can be up
to 2.75% of the client’s assets under management, from which PCM's portion of the fee is paid by the Program
Sponsor. The Program Sponsor may calculate its fees based on trade date or settlement date accounting. New accounts

   Palouse Capital Management, Inc.                                                                  ADV Brochure, Part 2A

are billed based on the date the account is approved (which may differ from the PCM inception date) for eligible
assets (as determined by the Program Sponsor) for a prorated portion of the quarter; the Program Sponsor may include
the next full quarter with the initial billing. Certain Wrap Programs may charge a minimum fee, an additional fee for
contributions during the quarter, and generally do not refund for significant withdrawals, for assets moved to an
unsupervised status, or for periods that an account may be frozen or suspended. Please consult the Program Sponsor's
Disclosure Brochure/Document for details regarding billing procedures.

Brokerage Fees
Fee-in-lieu-of-commission brokerage fee arrangements or Wrap Program Fee arrangements may not include certain
additional costs or charges to clients associated with securities transactions, including but not limited to dealer mark-
ups or mark-downs, auction fees, odd-lot differentials, exchange fees, transfer taxes, electronic fund and wire transfer
fees, specialized account fees (i.e., checking or IRA maintenance fees), interest on debit account balances, fees and
expenses charged or incurred by ownership of mutual funds in the account, any charges mandated by law and, if
applicable, certain prototype/custodial fees in connection with trust services rendered by the client's broker-
dealer/custodian. These brokerage fees (total wrap fee or otherwise) are not controlled in any way by PCM and PCM
may not be aware of the total brokerage compensation.

Clients may wish to consider these types of fee arrangements if they appear suitable to meet the client's investment
...

Item 7. Types of Clients
PCM provides discretionary investment advisory services primarily for individuals, corporations, public and private
pension plans, endowments, and foundations.

PCM's standard minimum account size is $100,000. PCM reserves the right to waive the required minimum based
on individual client needs or circumstances.

All discretionary clients are required to enter into a written Investment Management Agreement, and under such
agreement may be required to provide additional documentation/personal information prior to the establishment of
an advisory relationship. The agreements required by Program Sponsors and/or PCM for wrap-fee accounts may vary
from those listed here.

Clients should note that all or a portion of the securities in their account may be sold during the course of management
of the account. The client is responsible for all tax liabilities arising from such transactions and encouraged to seek
the advice of a qualified tax professional. New accounts and/or additions to existing accounts may not be immediately
fully invested. The level of investment depends on the number of attractive securities that are present at the time the
account is funded. Depending on market conditions it may take 3-6 months to fully integrate an account or additional
funding. Clients that have sought and obtained approval from their broker-dealer/custodian to utilize the writing of
or the purchase of puts and calls must understand that there are tax implications and risks associated with option
trading strategies; such risks are disclosed in the Options Disclosure booklet provided by their broker-
dealer/custodian prior to approval of option trading.

Clients must keep PCM apprised of changes to their address. Clients that fail to do so waive any claims resulting
from the failure to receive communications from PCM. Address changes from the client should be made in writing
and include signatures for all appropriate parties on the account. PCM accepts address changes from client custodians.
Upon receipt, PCM will verify the change with the appropriate custodian. PCM is not able to alter custodial address-
of-record data; clients must contact their custodian to instruct such changes.

To help the government fight the funding of terrorism, money laundering and identity theft activities, PCM has
adopted Anti-Money Laundering and Identity Theft Red Flag policies and procedures. As part of those procedures,
PCM may request clients to provide documentation to verify their identity.

Model Programs
PCM also offers investment advisory services to Model Program Sponsors in the form of model portfolios based on
one or more of its investment strategies. Program Sponsors utilize the model portfolios to provide investment services
to their clients in the same manner as the wrap-fee arrangements described above. However, it is up to the Model
Program Sponsor to accept, modify, or reject PCM’s recommendations. PCM has no role with respect to the execution
of trading in such accounts.

   Palouse Capital Management, Inc.                                                              ADV Brochure, Part 2A