Sit Investment Associates Inc

Fees and Compensation Item 5

The specific manner in which fees are calculated and paid to Sit Investment is established in the
investment management agreement with each client. Generally, fees are stated at an annual rate,
calculated quarterly as a percentage of net asset value at the end of each calendar quarter, and payable
quarterly in arrears. Fees paid by investment company clients are generally calculated and paid monthly
in arrears. The net asset value is generally determined based on the aggregate market value of all assets
held in the account. Management fees are prorated for material capital contributions or withdrawals made
during the calendar quarter, and fees are prorated for accounts initiated or terminated during the quarter.

Depending on specific circumstances, such as, for example, a large amount of assets managed for a client,
fees are subject to negotiation.

Sit Investment’s fees are exclusive of brokerage commissions, transaction fees, and other portfolio related
costs and expenses which are incurred by the client. Clients will likely incur charges imposed by
custodians, brokers, and consultants. Item 12 further describes the factors that Sit Investment considers in
selecting or recommending broker-dealers for client transactions and determining the reasonableness of
the commissions.

Clients may request to be billed in advance, and in the event such a client terminates its agreement,
unearned fees will be promptly refunded. Clients may also request that Sit Investment send a copy of its
invoice directly to its custodian, who will in turn direct payment from the client’s account.

Pursuant to the terms of the investment management agreement with each client, clients may terminate
the agreement with Sit Investment on thirty days written notice, or in some cases at any time without
notice. Each registered investment company may terminate the investment management agreement with
Sit Investment on sixty days written notice provided the investment company's Board of Directors
consents or a majority of the investment company's shareholders consent. The investment management
agreements are terminated automatically if assigned. All terminations are without penalty.

Sit Investment provides services to a model delivery program sponsored by an unaffiliated third party on
a nondiscretionary basis. As compensation for model delivery services, Sit Investment is paid a fee by the
program sponsor at a pre-determined rate based on assets under management in the program utilizing the
model. The program sponsor determines the fee to charge its model delivery program clients.

Sit Investment provides investment management services to tax-exempt charitable organizations and
makes a charitable contribution to certain of such organizations. The charitable contributions are
generally equal to a fixed percentage of the investment management fees paid to Sit Investment by the
charitable organizations.

Sit Investment’s most significant fee schedules are presented below.

    Separate Account Management:

                  Large Capitalization, Concentrated,
                  Dividend Growth, and Balanced Portfolios
                  Net Asset Value                     Annual Rate
                  First $10 million                   0.75%
                  Next $10 million                    0.70%
                  Next $10 million                    0.65%
                  Next $10 million                    0.60%
                  Over $40 million                    Negotiable

            Medium Capitalization Portfolios
            Net Asset Value                     Annual Rate
            First $30 million                      1.00%
            Next $70 million                       0.70%
            Over $100 million                      0.50%

            Small Capitalization and Small Capitalization
            Dividend Portfolios
            Net Asset Value                      Annual Rate
            First $50 million                         1.00%
            Next $50 million                          0.60%
            Over $100 million                         0.50%

            International/EAFE+, Global, Global Dividend,
            Global Balanced, and ESG Growth Portfolios
            Net Asset Value                    Annual Rate
            First $10 million                       0.80%
            Next $20 million                        0.75%
            Next $20 million                        0.65%
            Over $50 million                        0.50%

            Developing Markets and Pacific Basin Portfolios
            Net Asset Value                    Annual Rate
            First $10 million                       0.90%
            Next $20 million                        0.85%
            Next $20 million                        0.75%
            Over $50 million                        0.60%

   For certain clients for which Sit Investment manages multiple accounts, Sit Investment has
   negotiated a rate applicable to the total of all assets managed on behalf of the client by Sit
   Investment and its affiliates. For certain clients utilizing the services of certain financial
   consultants or financial intermediaries, Sit Investment has negotiated a rate applicable to the total
   of all assets managed on behalf of the financial consultant or financial intermediary by Sit
   Investment and its affiliates.

Affiliated Registered Investment Company Management (Mutual Funds):

   The Sit Mutual Funds are a family of no-load, open-end registered investment companies (mutual
   funds). Sit Investment serves as the investment adviser and administrator to the Sit Mutual Funds
   pursuant to the investment management agreements with each Fund and with respect to U.S.
   Government Securities Fund, Inc. and Sit Mutual Funds II, Inc., additional separate Supervision
   and Administration Agreements.
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Types of Clients Item 7

Sit Investment manages client assets on a discretionary basis for several types of clients, including public
and private institutional investors, pension funds, Taft-Hartley plans, charitable institutions, foundations,
endowments, corporations, insurance companies, municipalities, registered investment companies, private
investment companies, collective investment trusts and high net worth individuals. As of December 31,
2025, we managed $3.5 billion.

The account minimum for separately managed accounts is generally $10 million.

Sit Investment serves as the adviser, sponsor, general partner or manager for several investment
companies to which it provides investment advisory services. See the response to Item 10 for information
on these affiliated investment companies.

Sit Investment provides services to a model delivery program sponsored by an unaffiliated third party.
The program sponsor has investment discretion and is responsible for execution of transactions for and
monitoring of its participant accounts. Sit Investment delivers to the program sponsor notice of changes
Sit Investment makes to the model portfolio.

Sit Investment’s subsidiary, Sit Fixed Income Advisors II, LLC, manages fixed income assets on a
discretionary basis for the same types of clients. Together, Sit Investment and Sit Fixed Income Advisors
II, LLC manage $18.5 billion in fixed income and equity securities as of December 31, 2025.

Methods of Analysis, Investment Strategies and Risk of Loss Item 8

Analysis

We manage our clients’ assets on a team basis. See the response to Item 1 for information regarding the
Investment Committee.

Investment management decisions are made by the Investment Committee, with Roger J. Sit as the Chief
Investment Officer having final decision-making responsibilities. The Investment Committee’s
investment decisions are implemented using model portfolios with targeted security weightings. The
stock selections for specific client accounts are based on the model portfolios and adjusted for each
client’s unique investment restrictions as set forth in the investment management agreement with each
client. The objective of this process is to produce only small variations in client portfolios that have
similar investment objectives.

The Investment Committee uses a fundamentally based investment process. The research team is
comprised of global industry/sector specialists and geographic specialists who provide stock
recommendations in their respective areas. Quantitative screens are used to assist the research team in
identifying candidates for fundamental research. Our equity professionals perform fundamental research
on individual stocks, and we analyze statistical data to calculate risk and reward potential. Wall Street
research and various economic and governmental policy issue consultants are used to supplement our
internally generated research.

The Investment Committee meets to determine specific sector emphasis and individual holdings.
The entire research team meets daily to discuss new developments. Formal weekly investment meetings
are a forum for reviewing holdings and discussing relevant investment issues. Investment outlook and
strategy are discussed in monthly management meetings.

Investment Strategies and Risk of Loss

Sit Investment manages client accounts with the following general investment strategies. Specific client
objectives and restrictions are set forth in the investment management agreement with each client and
differ from client to client. For example, clients may impose restrictions on investing in certain companies
or types of securities, or may define a benchmark or cap size differently than other clients. The following
descriptions of investment strategies and instruments are not intended to be exhaustive. Sit Investment
may employ various additional strategies and instruments from time to time in a manner consistent with a
client’s investment management agreement.

Our equity investment philosophy targets growth-oriented companies. Generally, we look for companies
with the potential to increase earnings at a faster rate than the representative economy and market index.
We seek industry sectors and companies with high earnings per share and revenue growth purchased at
reasonable valuation in relation to industry peers, historic levels, and earnings growth rates. We believe
that earnings growth is the primary determinant of superior long-term returns. We are opportunistic
investors; we believe in high and consistent growth companies as well as conservative and cyclical
growth companies. The securities in which we invest primarily include:

    •   common stock;
    •   preferred stock;
    •   warrants, rights and debt securities convertible into common stock;

    •   sponsored and unsponsored American Depository Receipts (ADRs) and Global Depository
        Receipts (GDRs);
    •   Publicly traded securities issued by investment funds including Real Estate Investment Trusts
        (REITs), Business Development Companies (BDCs), and Master Limited Partnerships (MLPs);
        and
    •   registered investment companies (open-end funds (mutual funds) and closed-end funds).

With respect to the fixed income portfolios of balanced accounts, the investments may include:
   • mortgage-backed securities (including collateralized mortgage obligations (CMOs));
   • asset-backed securities;
   • obligations of the U.S. government, its agencies and instrumentalities;
   • corporate debt securities;
   • municipal securities issued by U.S. states, territories, and possessions and the District of
        Columbia and their political subdivisions, agencies, and instrumentalities;
   • short-term debt obligations, including commercial paper and bank instruments, such as
        certificates of deposit, time deposits, and bankers’ acceptances; and
   • registered investment companies (open-end funds (mutual funds) and closed-end funds).
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