Pentegra Investors Inc

Item 5 - Fees and Compensation
A.     Fees Charged

       1.     Negotiability

       All fees are negotiable depending on the type of services, the type of client, the size of an
       account, the relationship of the client to Pentegra Investors, the nature of the services to
       be performed, the number of related accounts being managed, the percentage of client

holdings in fixed income assets and/or the length of time the account has been under
management by Pentegra Investors. As described above, Pentegra Investors documents
all of its services with a written agreement that describes the services to be provided and
the fees to be charged for those services. For some services other than asset management
services, the services may be part of a single contract that provides for a group of services
for the client, only a part of which are provided by Pentegra Investors (bundled
contracts). See Subsection 3, below.

2.     Asset Management Fees

       a.      Fee Schedule

       The following is the basic fee schedule for assets being managed by Pentegra
       Investors. As noted above, the fees are negotiable and may vary from the following
       fee schedule based on the factors noted above. Generally, absent other factors,
       the following fee schedule describes the maximum fees that Pentegra Investors
       would charge for the size of the account. All fees below are the annual rate
       charged based on the value of the assets at the end of the preceding period.

               Up to $10,000,000                .80%
               Next $15,000,000                 .35%
               Over $25,000,000                 .30%
               Over $50,000,000                 .25%
               Over $100,000,000                .20%

       b.      Determination of Value of Assets

       The above fees are calculated on the value of the securities managed by Pentegra
       Investors on a periodic basis. Pentegra Investors relies on the value of the assets
       reported by the custodian of the assets to calculate its fees. If the custodian does
       not provide the values, Pentegra Investors will attempt to obtain a value from a
       third-party pricing agent.

       c.      Minimum

       Pentegra Investors does not have a minimum fee or minimum account size;
       however, Pentegra Investors may decline to accept a client if the amount of assets
       to be managed is not large enough to allow Pentegra Investors to manage them
       effectively.

       d.      Determination of Value for Asset-Based Fees

       For purposes of calculating asset-based fees, Pentegra Investors determines the
       value of the assets based on the fair market value of securities in the account as of
       the last day of the preceding period. Pentegra Investors determines the value of
       the securities based on prices provided by the account custodian or other sources
       that Pentegra Investors deems reliable. Although it is never part of a strategy
       used for retirement plans, if a client were to use margin in its account, fees are
       based on the gross market value of the securities in the account, without

            consideration of any liabilities against those securities resulting from the margin.

     3.     Fees for Education and Consulting Services

     For some services, the fees of Pentegra Investors may be part of a bundled contract
     providing for a number of retirement plan services. In those circumstances, the client is
     charged a flat fee for all of the services. Those fees are negotiated separately for each
     client and are based on all the services to be provided, including any to be provided by
     Pentegra Investors. Where education and consulting services are billed separately, the
     fees for those services generally range from $2,000 to $15,000 per project, depending on
     the number of participants, the extent of the education or training, the Pentegra personnel
     involved and the topics to be discussed.

B.   Payment of Fees

     1.     Payment of Asset Management Fees

     All asset-based fees are payable either monthly, quarterly or semi-annually, depending on
     the needs of the client. All fees are due within 30 days following the last day of the
     billing period. All fees for management of retirement plan assets are billed by separate
     invoice to the plan and paid directly by the sponsor. If both the client and Pentegra
     Investors agree, the fees due to Pentegra Investors for managing non-retirement plan
     assets may be deducted from client assets and paid to Pentegra Investors by the custodian
     of the assets. In that case, the custodian of the assets must provide quarterly reports to
     the client indicating the amount of fees deducted from the account that are payable to
     Pentegra Investors and how the fees were calculated.

     2.     Payment of Fees for Education and Consulting Services

     The terms of payment for education and consulting services are negotiated for each
     project. Fees may be payable (i) at the end of a project, (ii) in advance or (iii) periodically
     over the term of a project. If fees are paid in advance, any unearned fees would be
     refunded within 30 days after the consulting relationship ends, if the relationship ends
     before all fees have been earned.

C.   Other Fees Paid by Clients

     1.     Service Fees

     Pentegra Investors reserves the right to charge fees for services it may provide that are in
     addition to the ordinary services involved in managing a client’s account. For example,
     Pentegra Investors may charge extra for providing additional copies of account
     statements or providing statements at other times than those ordinarily provided to clients.

     2.     Investments in Mutual Funds

     Clients investing in securities of investment companies, such as mutual funds should be
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Item 7 - Types of Clients
Pentegra Investors provides its institutional services primarily to qualified and nonqualified
retirement plans, many of which are sponsored by financial institutions, such as banks or thrift
institutions, but also include governmental entities, educational institutions and other corporate
plan sponsors. Pentegra Investors also offers its advisory services to other types of
institutional investors.