Tilden Loucks & Woodnorth LLC

Item 5       Fees and Compensation
                            INVESTMENT SUPERVISORY SERVICES ("ISS")
                             INDIVIDUAL PORTFOLIO MANAGEMENT FEES

The annualized fee for Investment Supervisory Services is a percentage of assets under
management, assessed according to the following schedule:
                         Assets Under Management              Annual Fee
                          The first $1,000,000                   2.00%
                          $1,000,001 and thereafter              1.00%
Our fees are billed quarterly, in advance, at the beginning of each calendar quarter based
upon the value (market value or fair market value in the absence of market value), of the
client's account at the end of the previous quarter. Our fee percentage is factored against all

assets in the client’s account, including cash balances and money market assets. Assets held
away from the account are not included in the fee. Fees are debited from the account by our
Fee Engine system on a quarterly basis. We may, in our sole discretion, charge an annual
minimum assets under management fee of $100.00. In addition to our fee, there are certain
additional charges which customers shall incur. These are discussed further below.
Clients also incur various costs and/or brokerage fees which are charged separate and apart
and in addition to the advisory fee of TLW. These are paid directly to various third parties
from the account. They include, but are not limited to: transaction charges, brokerage
commissions, custodial fees, charges imposed directly by a mutual fund or exchange-traded
fund (including administration fees), fund management fees and expenses, deferred sales
charges, odd-lot differentials, transfer taxes, wire transfer and electronic fund fees, as well as
other fees and charges imposed by broker-dealers through which securities transactions
occur. TLW does not share or receive any portion of these charges. The client is advised to
review all fees and expenses assessed by third parties like mutual funds, exchange-traded
funds, and others by carefully examining all disclosure documents which accompany an
investment, i.e. a prospectus or brochure. In some instances, a mutual or exchange-traded
fund charges costs and expenses for administration and distribution before reporting a "Net
Asset Value" ("NAV") to us. Clients are strongly encouraged to review a fund prospectus our
brochure, their advisor contract, and all periodic account statements received for all costs
and expenses incurred and charged by TLW or third parties.

                         “TICKET CHARGES” ON TRANSACTIONS
                            / SHARING OF MARGIN INTEREST

For the most part, recommendations for investments are executed through LSS, TLW’s sister
company. TLW reserves the right to decline acceptance of any client account for which the
client directs the use of a broker-dealer custodian other than LSS. No commissions for order
execution and clearing trades are charged clients for transactions, unless specifically
otherwise agreed to in writing by the client and TLW.

Instead of transaction-based commissions, LSS and its clearing firm, National Financial
Services (“NFS”), levy a flat fee transaction charge (sometimes referred to as a “ticket
charge”) for transaction services they render, including those related to execution, clearing of
transactions, and costs associated with such transactions. The amount of the ticket charge
varies depending on the investment product. Currently the charges are: equities/fixed income
and mutual funds, $13.00 per order; options $13.00 per order plus $1.00 per contract.

The transaction charge is a flat fee which replaces commissions incurred for each
transaction. It is over and above any other costs assessed as fees to the client by TLW or
otherwise. The charge does not reflect actual costs LSS incurs for execution, clearing, and
any related services. In other words, LSS’s actual cost for executing and clearing client
trades by NFS is less than the flat fee the client pays by way of the ticket charge. LSS
retains as additional income any difference between the transaction charge to clients and
the cost it otherwise pays NFS. This is an additional source of revenue to LSS and indirectly
to TLW. The imposition of the ticket charge is a conflict of interest for LSS and TLW since

there is an incentive to trade client portfolios to incur ticket charges and thereby create
additional revenue for the firm. The amount NFS charges for its services which are
assessed against the ticket charge and included in this charge include execution, clearing of
transactions, and cost associated with such transactions. The ticket charge assessment,
however, does not cover certain other charges such as paper delivery surcharges, custody
expenses, transfer fees, margin interest, IRA fees, check writing service fees, wire transfer
fees, and those fees mandated by law with respect to execution of transactions, such as
SEC fees. The client pays separately for such fees and costs. The client will also be
charged for the costs of these charges over and above other fees and the ticket charge
itself.

Insofar as margin interest is concerned, LSS has entered into a revenue sharing agreement
with its clearing firm, NFS, whereby LSS and NFS have agreed a portion of the margin
interest paid by clients to NFS is paid by NFS to LSS. According to this agreement, LSS
receives a portion of margin interest paid by clients which is in excess of the broker call rate
plus 50 basis points. This also represents an actual and potential conflict of interest for TLW
and its IARs since they are incentivized to recommend margin accounts in certain
circumstances.

Likewise, there are charges over and above ticket charges and TLW’s management fee
made by mutual funds, exchange traded funds, including administrative funds, electronic
...

Item 7      Types of Clients
TLW provides advisory services to various clients, including the following:
• Individuals (other than high net worth individuals)
• High net worth individuals
• Charitable organizations
• Trusts
• Estates
• Corporations or other businesses not listed above
As previously disclosed in Item 5, our firm has established certain initial minimum account
requirements, based on the nature of the service(s) being provided.