Stembrook Asset Management LLC

Item 5 – Fees and Compensation
Portfolio Management Services

The annual fee for portfolio management services is billed quarterly in arrears based on the last business
day of the previous calendar quarter. Fees will be assessed pro rata in the event the portfolio
management agreement is executed at any time other than the first day of a calendar quarter. On an
annualized basis, our fees for portfolio management services, subject to negotiation, are based on the
following fee schedule:

   Assets Under Management              Annualized Fee
        First $2,000,000                   1.00%
        Next $3,000,000                    0.80%
        Over $5,000,000                    0.50%

For all managed liquidity assets held at the request of the client, fees will be based on the following
percentages of account assets under management:

     Assets Under Management            Annualized Fee
       All Managed Liquidity                0.25%

At our discretion, we may allow accounts of members of the same household to be aggregated for
purposes of determining the advisory fee. We may allow such aggregation, for example, where we
service accounts on behalf of your minor children, individual and joint accounts for a spouse, and other
types of related accounts. This consolidation practice is designed to allow you the benefit of an increased
asset total, which could potentially cause the accounts to be assessed a reduced advisory fee based on
the breakpoints available in our fee schedule as stated above.

We will either invoice you directly for payment of management fees or payment will be made by the
custodian holding your funds and securities as follows:

    • We deliver quarterly fee invoices to you and your custodian by mail, email, or other agreed
      means.
    • Unless you instruct your custodian otherwise, your custodian is authorized to automatically
      withdraw invoiced fees from your account without requiring separate written authorization for
      each payment.
    • You are responsible for verifying fee calculations and may dispute any amount by promptly
      notifying us and your custodian in writing before withdrawal.
    • Your custodian provides account statements at least quarterly, showing all disbursements
      including advisory fees paid to us.

Selection of Other Advisers

Advisory fees charged by Third Party Investment Advisers ("TPA") are separate and apart from our
advisory fees. Assets managed by TPAs will be included in calculating our advisory fee, which is based
on the fee schedule set forth in the "Portfolio Management Services" section in this brochure. Advisory
fees that you pay to the TPA are established and payable in accordance with the brochure provided by
each TPA to whom you are referred. These fees may or may not be negotiable. You should review the
recommended TPA's brochure and take into consideration the TPA's fees along with our fees to
determine the total amount of fees associated with this program. Therefore, you will pay advisory fees
to both us and directly to the TPA, resulting in multiple layers of advisory fees. We do not charge

Item 7 – Types of Clients
We offer investment advisory services to individuals, trusts, estates, charitable organizations,
corporations, and other business entities.

In general, we do not require a minimum dollar amount to open and maintain an advisory account.