Stock Management LLC

Item 5) Fees and Compensation.
   You may choose to pay by direct billing or deduction by the custodian from your account or by direct billing.
   Fees are not negotiable. Fees may be waived or decreased for employees and non-profit organizations at the
   discretion of the company. Fees are billed quarterly, in arrears, based on the account value as of the last day of
   the quarter. Bonds are not assessed fees and so are not included in the billable assets for the purpose of fees.
   Only half of the mutual fund total is considered as billable assets for the purpose of fees. In all instances, the
   Adviser will send the client a written invoice, including the fee, the formula used to calculate the fee, the fee
   calculation itself, the time period covered by the fee, and, if applicable, the amount of assets under management
   on which the fee was based and the name of the custodian(s) on your fee invoice. The Adviser will send these to
   the client concurrent with the request for payment or payment of the Adviser’s advisory fees. We urge the client
   to compare this information with the fees listed in the account statement.”
   The fee schedule is:
      Billable Assets                                                                         Quarterly Fee
      Portion over $1,000,001 ......................................................................... 0.0625%
      Portion between $100,001 and $1,000,000 ............................................ 0.125%
      Portion between $50,001 and $100,000 ................................................. 0.250%
      Portion between $15,001 and $50,000 ................................................... 0.500%
      Portion below $15,000 ........................................................................... 0.625%

   For example: A $500,000 account of 50% bonds, 40% stocks, and 10% mutual funds at the end of a quarter
   might have $250,000 in bonds, $200,000 in stocks and $50,000 in mutual funds. The billable assets would be
   $225,000 consisting of zero in bonds, $25,000 (half of the mutual funds) plus $200,000 in stocks. Fees are
   based on the billable assets ($225,000), not the $500,000 total assets.

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For this example, the fee would be $550. The calculation would be: $93.75 (first $15000 x .00625); plus $175
(next $35,000 x .0050); plus $125 (next $50,000 x .0025); plus $156.25 (next $125,000 x .00125).
The quarterly fee rate for this example is the $550 divided by the $500,000 which is 0.11%. Multiplying the
quarterly fee by 4 would give an annual rate for fees of 0.44% in the example.

Custodians/broker will charge commission, transaction fees, NSF Check Fees, Wire Transfer Fees, ADR
Fees on foreign stocks, Non-standard asset fees, outgoing transfer fees, statement mailing fees, and other
maintenance fees. Mutual Fund Expense Ratios are disclosed immediately upon purchase by the broker.
Stock Management LLC receives no part of the broker’s fees or commissions. Load mutual funds (A
shares, B shares, C shares) are never recommended by us, and we never collect sales charges or
incentives. The lowest OER class for which the client qualifies is normally recommended. Each
brokerage has its own standards, trade pricing policies, breakpoints and thresholds, annual fees, etc.
These are discussed before the account is opened at that brokerage to assist the client in choosing their
custodian. Lower fees for comparable services may be available from other sources. Sincere efforts are
made to minimize costs and keep fees and services comparable or better.
Monthly balance sheets contain the formula for how billable assets are calculated and the fee table and the
quarterly fee rate for the account. We generally have small accounts mainly in mutual funds and small accounts
should never contain all individual stocks. If they did, the 0.625% quarterly fee, and corresponding 2.5%
annual rate would be too expensive. In practice since only half of the mutual fund assets are included in billable
assets, small accounts actually are managed for a lesser annual rate than that. At the top of each balance sheet,
three performance figures are calculated: A return of the portfolio since inception (or long term), a year-to-date
ratio, and the most recent quarterly return. If there have been no deposits or withdrawals in the period, the
current value is simply subtracted from the closing value at the end of the last period and that result divided by
the closing value at the end of last period. When deposits or withdrawals occur during the period, appropriate
pro-rated adjustments are made so that the timing of the transfers is not a factor in the performance figures.
Performance returns are net of fees since fees are deducted before performance is calculated. Dividends and
interest are included since they are part of the performance of the portfolio. Clients will incur brokerage and
mutual fund expenses in addition to our fees. We never recommend load mutual funds unless the loads are
waived. Each time a fee is directly deducted from your client’s account, you will concurrently send your client
an invoice itemizing the fee. For all clients, including direct fee billing to clients, you will be provided written
billing information containing the fee(s), the formula used to calculate the fee(s), and the time period covered by
the fee(s) written on each monthly or quarterly statement.
The client has the right to terminate the contract without penalty within five business days after entering into the
contract. Services may also be terminated at any time by either party by giving written notification. Stock
Management LLC shall immediately discontinue all trading (but may settle open transactions and execute
additional trades upon instruction from client). After receiving a termination request, Stock Management LLC
...

Item 7) Types of Clients.
    We provide investment advisory services to individuals, pension and profit-sharing plans, trusts, estates,
    charitable organizations, and corporations.

    There are no requirements for opening or maintaining an account, such as minimum account size or number of
    transactions.

Item 8a) Methods of analysis.
    We use fundamental analysis to pick stocks to your goals. We mainly buy stocks with data from Value Line.
    We tend to think data from other sources may have a bias. We do listen to the news and read the Wall Street
    Journal, Barron’s, Fortune, Money Magazine and such, but we are skeptical of this information. Our first
    screening of a potential stock is the company’s financial strength. We screen out a company if it does not have
    at least a B+ financial strength. We are bargain hunters by instinct. We want to buy the most growth at a
    reasonable price. We use the Value Line survey data to do a comparative analysis of all of the stocks, that have
    proper financial strength, to give us a current list (candidate list) sorted in order of the growth versus price.
    Dividends are considered in this analysis, of course, as applicable.
    If a stocks financial strength is decreased to C+ or lower we generally sell off all of our positions.

Item 8b) Investment Strategies.
    We invest mainly in exchange-listed securities, mutual funds, ETFs and in corporate bonds and CDs. If
    appropriate, we will buy municipal bonds and government bonds. We will help you with your existing variable
    annuities and may help buy fixed annuities, in the rare case that they are appropriate. We try to keep costs down
    and have an incentive to do so.
    We set goals with clients for a balance of stocks and fixed income taking liquidity needs into consideration. We
    believe in diversification within the portfolios. We use the candidate list (described above) to buy stocks for the
    portfolios. We use no-load, no-transaction fee mutual funds to invest both the stock and fixed income portions
    of the portfolios.
    We buy the stocks with the intent of holding for at least a year, but will sell earlier if our sell targets are met.
    We very seldom use margin, and typically at a client’s request.

Item 8c) Risk of Loss.
    Material Risk - Investing in securities and bonds involves risk of loss that clients should be prepared to bear. As
    discussed above, our discussions will yield targets for a balance of stocks, fixed income and money market
    funds. No matter how well chosen, many stocks will go down when the market goes down. Since we are

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   usually not in stocks only, the entire portfolio should not lose as much as the stocks alone. Bonds go down
   when interest rates go up or the quality of the company decreases. We mitigate this by having mainly bonds
   that mature and have the intent to hold to maturity. This is called a bond ladder and it reduces interest rate risk.
   If the portfolio is too small for individual bonds, we use bond funds. Money Market Funds are not FDIC
   insured and pay very small interest. We keep these levels small and in line with the next few months liquidity
   needs. The market fluctuates, up and down. We review the portfolio’s goals at least monthly and reinvest if the
   goals are out of balance significantly. This means that we harvest gains when we have them and have the
   money to invest when there are losses.
   Although all investments involve risk, including the potential loss of principal, some securities (such as equities)
   involve more risk than other securities (treasury bonds). Higher-risk investments have the potential for higher
   returns, but also for greater losses. It is noted that, if the percentage of equities is too low there is a risk that the
   portfolio will not meet its growth goal. Maintaining a balanced portfolio is one way we mitigate risk.