Scott Conyers Capital Management Inc

5. Fees and Compensation – The rm's only source of income is a fee of a
     percent of assets under management. The assets are gured for all of a client's
     accounts taken together, and the rate is 1% for the rst $1 million of equities
     plus uninvested cash, .75% for the next million and .5% for everything over
     $2 million, and half those rates for bonds and money market funds (all annual
     rates), payable after the end of each quarter based on the average of the
     month-end portfolio values for the quarter. These fees are usually deducted
     from one or more of a client’s accounts but clients may choose to pay them
     separately. Clients with more than $20 million under management by the rm
     may choose to negotiate fees so as to be performance based.

     A con ict of interest exists in this fee schedule in that the rm earns twice as
     much for stock investments as for bonds but the rm’s duciary
     responsibility and ethos always puts clients’ interests rst. An example of this
     in action, going into the 2008 market/economic debacle clients had
     proportionally large bond allocations, which earned the rm less in fees but
     served clients very well. On the other hand, in 2012-23, with interest rates
     having nowhere to go but up, which is bad for bonds, they owned a large
     percentage of stocks and at times held relatively large cash positions. In 2023
     cash was moved into money market funds (then nally earning even more
     than the rate of in ation) and are counted as bonds for fee calculation.
     Clients’ accounts are also assessed brokerage commissions when trading
     occurs, although not these days thanks to competition from Robinhood, but
     portfolio turnover is almost always less than 15% per year and brokerage
     ages now earn their money via cryptic channels rather than overt
     commissions; the rm does not share in any commissions like a traditional
     stockbroker would. If mutual funds or exchange-traded funds (ETFs) are
     used, which is usually only for investments for which the rm has limited
     expertise, such as foreign investments, they charge management fees of their
     own. Similarly, money market funds, where our uninvested cash generally
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          resides, charge management fees on top of the rm’s fees. Cash is counted for
          performance measurement and fee-calculation purposes as an equity because
          it represents an equity-investment allocation decision. Even if the client
          decides to have fees deducted from one or more managed account, a billing
          statement detailing how fees are calculated and paid is prepared immediately
          after each quarter-end and available upon request.

7. Types of Clients – While no explicit minimum account size exists,
          accounts are accepted if their size, from additions and capital growth, has the
          potential to exceed $1 million in approximately ve years. Client types are
          characterized in section 4.