Private Management Group Inc

Item 5 - Fees and Compensation

We currently do not charge for setting up an account, although a charge may occur in certain situations. Our
standard advisory fees are calculated as follows based on assets under management (see other disclosures for
additional information): For account assets up to $100,000 at .40% per quarter (1.60% annually), then .35% per
quarter (1.40% annually) of assets between $100,000 and $1,000,000, plus .25% (1.00% annually) of assets
between $1,000,000 and $2,000,000, plus .20% ( .80% annually) of assets between $2,000,000 and $10,000,000,
and then .15% ( .60% annually) of assets in excess of $10,000,000.

You will be responsible for brokerage commissions (currently $0 for most online equity trades), exchange fees,
stock transfer fees, or other fees charged by the brokerage/custodial firms. These expenses normally are deducted
and paid from assets in the account. Please refer to section heading “Brokerage Practices” for more information.

If you have multiple accounts within your household, you may benefit from having these accounts aggregated to
lower your overall fees. Some exceptions may apply.

Our fees will be billed in advance and payable quarterly. The first payment is due based upon the execution date of
the Agreement. It will be assessed pro-rata in the event the Agreement is not executed on the first day of the new
calendar quarter. Subsequent payments are due and will be assessed from the first day of each calendar quarter
based on the value of the portfolio as of the start of that quarter.

You will authorize the custodian to deduct the advisory fees directly from your account as part of the investment
service. We discourage the payment of fees directly from outside sources because of the costs involved with
collecting and monitoring payments. Keeping collections simple and somewhat automated allows us to reduce
costs and lower expenses. This fee collection from the custodian will be done in accordance with the statements
we prepare. We submit a fee request to the custodian and can provide detailed fee calculations to you upon request.
The custodian will provide periodic account statements to you. These statements will reflect any fee withdrawals by
PMG. It is your responsibility to verify the accuracy of the fee calculation

Fees are not collected for services to be performed more than six months in advance.

Fees are negotiable. Discounts may apply for relatives, associates of PMG, non-supervised account holdings, trial
accounts, long-term client relationships, charitable accounts, or other special circumstances. While we believe
these fees are reasonable and competitive, lower fees for comparable services may be available from other sources.

We generally do not invest in open-ended mutual funds to avoid a duplication of costs – including any fund fees
that would be layered on top of ours. To the extent that we invest in closed-end funds we factor in fund expenses
and attempt to purchase such funds at a discount sufficient to mitigate those expenses and provide a rate of return
sufficient to meet our investment goals.

Your account may be terminated on 10 days written notice by either you or PMG. If your account is terminated
before the last day of a calendar quarter, we will issue to you a pro-rated refund of any unearned fees.

Upon termination, your account will remain at the custodian unless you initiate a transfer to another broker. You
will be responsible for the ongoing management of the account, including providing instructions regarding your
assets. As part of the termination process you may request that we consider certain actions, including liquidating
all or a portion of the account. If PMG declines to sell any or all of your securities, you may be subject to future
losses on any retained securities. You may need to complete any desired trades directly with the custodian/broker-
dealer. Any assistance we provide will be at our sole discretion. Termination of your account may result in
material tax liabilities, large trading costs, and significant opportunity costs. PMG believes that transfers of assets
to new advisors may be harmful to clients. This is due to their propensity to sell most, if not all of the transferred
securities and their willingness to complete trades at fair prices. Particularly problematic would be the sale of small
holdings of corporate bonds, foreign stocks, and other less liquid securities. PMG will no longer be your
investment advisor as of the termination date and our fiduciary relationship with you will cease.

The Advisory Agreement contains a pre-dispute arbitration clause. You understand that the agreement to arbitrate
does not constitute a waiver of the right to seek a judicial forum where such a waiver would be void under federal
securities laws. Arbitration is final and binding on all parties.

Rollover Recommendations
When PMG and our IA Reps provide any rollover recommendations (e.g. from your employer’s retirement plan,
such as a 401(k), 457, or ERISA 403(b) account to individual retirement accounts), we are acting as fiduciaries
within the meaning of Title I of the ERISA and/or the Internal Revenue Code (“IRC”), as applicable, which are
laws governing retirement accounts. If you elect to roll the assets to an IRA we will manage for you, we will
charge you an advisory fee. This financial incentive creates a conflict of interest. You are under no obligation to
complete the rollover. Moreover, if you do complete the rollover, you are under no obligation to have the assets in
an IRA managed by our firm.

Due to the conflict of interest when we make rollover recommendations, we operate under rules that require us to
act in your best interests and not put our interests ahead of yours. These rule’s provisions require us to:

       meet a professional standard of care when making investment recommendations (i.e. give prudent advice);
...

Item 7 - Types of Clients and Account Minimums / Conditions

PMG provides advisory services to individuals, pension and profit-sharing plans and other ERISA accounts, trusts,
estates, business entities, and other similar parties.

We have no set dollar minimum account. We believe $100,000 is the minimum needed to diversify account assets.
We recommend and may impose a minimum account size of $250,000. We may temporarily stop accepting new
accounts at any time.

Small accounts are subject to higher volatility and therefore have a greater risk of potential losses. This volatility
results from the lack of sufficient assets needed for proper diversification. Small accounts may not be able to
efficiently participate in all available investment opportunities, hindering our efforts to maintain a properly
diversified portfolio. Smaller accounts are acceptable and can be successful but may be more concentrated in liquid
securities which can be traded in smaller denominations. For example, some accounts could be too small to
adequately diversify a portfolio of corporate bonds.

If your portfolio consists of more than one account, it will be supervised in a “portfolio context.” This means that
each account will be viewed as a sub-component of the entire portfolio in order to properly evaluate performance
and risk. Some degree of variation in performance of the individual portfolio accounts should be expected, at times
greater than others. Particularly, small sub-accounts (within an overall larger portfolio) may exhibit greater

volatility and potentially sustain greater percentage losses than when viewed in isolation. Conversely, small
accounts may hold a high concentration of cash relative to the rest of a portfolio. While this would ultimately
reduce volatility, it could also lead to a material relative underperformance.