Warnke/Nichols Ltd

Item 5        Fees and Compensation

We perform our investment advisory services for a percentage of assets under management.
Fees are billed quarterly, in arrears, at the end of the quarter, based on the market value of your
account. The fee schedule is as follows:

       1.00% per year on portfolio market value up to $1,000,000;
       0.75% per year on the portion of portfolio market value from $1,000,001 to $3,000,000
       0.50% per year on the portion of portfolio market value from $3,000,001 to $5,000,000

The fee on the portion of portfolio market value above $5 million is negotiable. Accounts holding
solely mutual funds are charged 0.50% annually. We recommend only “no-load” mutual funds to
clients. These are mutual funds that can be bought without paying a commission. There is no
minimum account size and no minimum fee on fund-only accounts.

In most cases, management fees are deducted directly from your account. You may choose
whether to have management fees deducted directly from your account or be billed quarterly.
Almost all our clients opt for an automatic deduction of fees.

If the investment advisory agreement is executed at any time other than the first day of a
calendar quarter, our fees will apply on a pro rata basis, which means that the advisory fee is
payable in proportion to the number of days in the quarter for which you are a client.
The investment advisory agreement between the client and Warnke/Nichols will continue in effect
until either party terminates the agreement in accordance with the terms of the agreement.
Warnke/Nichols’s annual fee will be pro-rated through the date of termination. Should
termination occur at any time other than the end of a billing period, any unearned prepaid fee will
be refunded.

We reserve the right to maintain courtesy accounts that do not incur management fees and to
exclude certain positions from being included in the account balance for purposes of calculating
the management fee.

Accounts belonging to members of the same household will be aggregated for the purpose of
determining the advisory fee. This consolidation practice is designed to allow you the benefit of
an increased asset total, which could potentially cause the accounts to be assessed with a
reduced advisory fee based on the tiers available in our fee schedule as stated above.

IRA Rollovers
As a normal extension of financial advice, we provide education or recommendations related to
the rollover of an employer-sponsored retirement plan. A plan participant leaving employment
has several options. Each choice offers advantages and disadvantages, depending on desired
investment options and services, fees and expenses, withdrawal options, required minimum
distributions, tax treatment, and the investor's unique financial needs and retirement plans. The
complexity of these choices may lead an investor to seek assistance from us.

An Associated Person who recommends an investor move plan assets into an IRA Rollover may
earn an asset-based fee as a result, but no compensation if assets are retained in the plan. Thus,
we have an economic incentive to encourage an investor to roll plan assets into an IRA. In most
cases, fees and expenses will increase to the investor as a result as the above-described fees will
apply to assets rolled over to an IRA, and outlined ongoing services will be extended to these
assets.

We are fiduciaries under the Investment Advisers Act of 1940 and when we provide investment
advice to you regarding your retirement plan account or individual retirement account, we are
also fiduciaries within the meaning of Title I of the Employee Retirement Income Security Act
(ERISA) and/or the Internal Revenue Code, as applicable, which are laws governing retirement
accounts. We must act in your best interest and not put our interests ahead of yours. At the
same time, the way we make money creates some conflicts with your interests.

From time to time, we might give investment advice to people who don’t wish to enter a formal
investment advisory relationship. These consultations are done for either a negotiated flat fee or
hourly fee, at the rate of $125 per hour, payable when the services are rendered.

Additional Fees and Expenses
Our fee is exclusive of, and in addition to, brokerage commissions, transaction fees, and other
related costs and expenses. You are responsible for the brokerage costs incurred. However,
Warnke/Nichols will not receive any portion of the commissions, fees, and costs. Please see Item

Item 7        Types of Clients

We generally provide investment management and advice to (1) individuals/families that have
long-term savings, Individual Retirement Arrangements (IRAs), or trusts; (2) companies that
sponsor pension, profit-sharing, or 401(k) retirement plans for employees; and (3) nonprofit
organizations like charities or foundations.