Portfolio Management LLC

Item 5 – Fees and Compensation

For providing the investment management services as described above, PortMgmt
charges a fee based on the amount of assets under management.
The standard fee for customized portfolios is ¼ of 1% of the value of the managed
assets at the beginning of each quarter. The standard fee for model portfolios is ¼ of
0.75% of the value of the managed assets at the beginning of each quarter. Advisor
fees are not set or supervised by any custodian.

All Advisor fees are automatically deducted from client accounts on a quarterly basis,
and a prorated fee may be charged for any assets under management for a partial
quarter. PortMgmt may discount fees at its discretion, and fees are subject to
negotiation.

For variable annuity accounts with fee debiting, fees are debited on the last day of
each quarter. For 529 accounts with fee debiting, fees are based on the average daily
net asset value of the account for the quarter. Fees are debited in arrears for each
quarter on the last business day of February, May, August, and November.

The client has five business days from the date of initial service to terminate the
service without any cost. Thereafter, the client is free to discontinue his or her
relationship with PortMgmt at any time, being eligible for a pro rata refund of any
unearned investment management fees paid during the quarter if written request is
made.

PortMgmt’s fees are separate from fees and administrative expenses which may be
incurred by the client at the custody and investment instrument level. Mutual funds,
exchange traded funds and unit investment trusts charge their own management
and/or administrative fees, which are disclosed in the prospectus for each such
investment. Clients may incur nominal brokerage commissions, transactions fees,
and/or short-term redemption fees at the account level. Custodians may also charge
various types of administrative expenses, such as wire transfer fees and account
transfer fees.

Such charges, fees, and commissions are in addition to PortMgmt’s fee, and the

Advisor does not receive any portion of these charges. PortMgmt recognizes its
fiduciary capacity of undivided loyalty to the client, and in this regard, will place the
interests of the client ahead of its own at all times. Investment management fees are
the sole source of income to PortMgmt, and the Advisor earns more when other
expenses are kept low and client accounts increase in value.

Item 7 – Types of Clients

PortMgmt is available to provide portfolio management services to individuals, high net
worth individuals, trusts, estates, corporate pension and profit-sharing plans, charitable
institutions, foundations, endowments, municipalities, private investment funds, and
other institutions.

The minimum investment amount required to establish a relationship with PortMgmt is
$100,000. This can be waived in certain circumstances.