Sound Investment Management Inc

Item 5 – Fees and Compensation

A     We are a fee-only advisory firm, meaning we are compensated only by our Clients and do not
      receive compensation or commissions from any other parties. We believe this method of
      compensation minimizes conflicts of interest.
      In consideration for our services, Clients pay us a fee quarterly in advance. The annual fee is
      equal to the percentage shown in Schedule A below. As an example, if the account value is
      $400,000 the annual fee would be 1%. Likewise, if the account value is $1.6 Million the annual
      fee would be .70%. The Fee will be equal to the respective percentage per annum below based
      on the initial account value for the first quarter in which services are provided, and the quarter
      end value of the account, as of the preceding quarter, for all subsequent quarters. Fees for
      partial quarters at the commencement or termination of this Agreement will be prorated based
      on the number of days the Account was open during the quarter. All prepaid but unearned fees
      will be promptly refunded on termination of the Account.
      For purposes of our billing and fee schedule, an “account” includes all accounts currently
      opened along with any accounts that are subsequently opened by a Client with us. For
      example, if a husband and wife that have a joint account, IRA accounts and accounts for minor
      children, those account values would be added together and assessed the same fee rate under
      Schedule A below.
      Compensation for our services is calculated in accordance with “Schedule A” of the
      Investment Advisory Agreement (IAA”) entered into with each Client when we begin our
      professional relationship. The IAA may be amended from time to time by us upon 30-days
      prior written notice to Client.

      Standard Fee Schedule

      Assets Under Management                  Annual Fee
      $ 0 to $ 500,000                         1.00 %
      $ 500,001 to $ 1 million                 0.90 % on all assets below $1 million*
      $ 1 million to $ 1.5 million             0.80 % on all assets below $1.5 million*
      $ 1.5 million to $ 2.0 million           0.70 % on all assets below $2 million*
      $ 2 million to $ 2.5 million             0.60 % on all assets below $2.5 million*
      $ 2.5 million and over                   0.45% on all assets over $2.5 million & .60% below
                                               $2.5 million**

      * On all assets below the upper dollar amount shown. As an example, if the asset amount is
      $900,000, then the fee would be .90% on the entire amount under management.

                          PART 2A OF FORM ADV – FIRM BROCHURE

    ** The fee is .45% on all assets over $2.5 million and .60% on the assets below $2.5 million.
    Fees for clients with assets over $4 million, or at other dollar amounts at the Advisors’s
    discretion, may be negotiated.

    The minimum annual fee for a managed advisory account is $2,000.00. Under certain limited
    circumstances, (e.g., Uniform Gift to Minors Accounts, charities, etc.) we may waive the
    minimum account size or annual fee.

    All security pricing is done by the custodian of Client accounts, Charles Schwab Institutional.
    Schwab uses various pricing services such as Reuters and Standard & Poor’s. For actively
    traded securities these services use the actual last reported sale price. For less actively traded
    securities such as bonds, these services will use the appropriate valuation methodology to
    determine the value of the security.

    Fees for financial planning services are based on an hourly rate of $200.00 per hour, or a flat
    fee as agreed upon with a Client. Clients are billed on a quarterly basis with fees due upon
    receipt of invoice. All fees are due at the time service is completed. Financial planning
    engagements may be terminated at any time by either party. If the planning project is
    terminated prior to completion, a pro-rata refund will be made by Advisor based upon the
    amount of work conducted towards the project’s completion.

B   Our fees may be paid directly to us from the account by the custodian holding a Client’s assets
    upon submission of an invoice to the custodian showing the amount of fees, the value of the
    Client’s assets on which the fees are based, and the specific manner in which the fees are
    calculated. Clients bear the responsibility for verifying the accuracy of fee calculations.

C   In addition to our fee and any sub-advisor’s fees, Clients may be required to pay a proportionate
    share of any mutual fund’s fees and charges brokerage transaction fees, stock transfer fees, and
    other charges incurred in connection with transactions for their account. These fees are paid
    out of the assets in a Client’s account and are in addition to the investment management fees
    paid to us.

D   In the event the contract for services with a Client are terminated, SIMI will be compensated
    for work performed and the remaining fee, if any, is returned to the Client on a pro rata basis.
    Fees for partial quarters at the commencement or termination of this Agreement will be billed
    or refunded on a pro-rata basis contingent on the number of days the account was open during
    the month.

E   We are a fee-only investment advisory firm paid on a percentage of Client assets managed or
    an hourly rate or a combination of both. This means that no supervised person associated with
    us receives or accepts any compensation for the sale or purchase of securities or investment
    products.

                             PART 2A OF FORM ADV – FIRM BROCHURE

Item 7 – Types of Clients
We provide investment advice to the following types of individuals, high-net-worth individuals, family
trusts, living trusts, custodial accounts, estate accounts and Not-for-Profit organizations.

Because each Client is unique, we encourage involvement in the planning and processes involved in
the management of their accounts. Such involvement does not have to be time consuming, however
we want our Clients to remain informed and have a sense of security about their investments.