Westchester Capital Management Inc

Item 5 – Fees and Compensation

This item provides details how we charge for our firm’s services, with descriptions of each service’s fees
and compensation arrangements.

Fees for Investment Advisory Services
We have implemented the following fee schedule for our Investment Advisory Services.

Value                                 Annual Rate
First $2,500,000                         1.00%
Next $2,500,000                          0.80%
Next $2,500,000                          0.60%
Next $2,500,000                          0.50%
Next $5,000,000                          0.40%
Next $5,000,000                          0.35%
Over $20,000,000                       Negotiated

The fee schedule listed above is the typical fee schedule applied to clients. However, at the discretion of
Westchester Capital Management, Inc., the fee schedule is negotiable depending on the client’s financial
situation, complexity and relationship with Westchester Capital Management, Inc. (i.e., employees and
family-related accounts may have their fee waived or reduced). Also, accounts of family members not
living in the same household can be combined to receive a lower fee on our tiered schedule. New
accounts will receive a fee reduction for the quarter in which account inception occurred. There are
scenarios for which Westchester Capital Management, Inc. will not bill on certain securities held in the
account (i.e., investment holdings that are not part of the Westchester Capital Management Inc.

Westchester Capital Management Inc.                                                          Disclosure Brochure

Investment Committee’s coverage and/or assets that transferred to our platform for which a subsequent
sale would create current taxation issues).

Westchester Capital Management, Inc. has implemented a policy whereby related accounts are grouped
(i.e., combined) together to aggregate assets under management for fee billing purposes. By doing this,
we will combine multiple accounts to reach breakpoints on our standard tiered fee schedule resulting in a
lower annual fee applied across included accounts. We call this policy “householding” as it is a common
method to group or combine accounts of family members living in the same household. In addition, it is
our policy to extend the opportunity to “household” accounts to family members not living in the same
household and to clients that have a related (for example a business practice) non-family relationship.
For example, we have extended the householding fee policy to clients that have or had a mutual
combined relationship with Westchester Capital Management, Inc. The Exhibit 1 below illustrates a
sample of three accounts billed on Westchester Capital Management, Inc.’s standard fee schedule as
individual accounts in table one. The second table shows the same three accounts under the
“householding” provision.

 EXHIBIT 1 FOR EXAMPLE PURPOSES:                     Market Value   Fee calculation - Quarterly Rate at 0.25%

 Account 1 Quarter End Market Value:                 $2,000,000     $5,000

 Account 2 Quarter End Market Value:                 $750,000       $1,875

 Account 3 Quarter End Market Value:                 $500,000       $1,250

                                Combined FeeTotal:   $3,250,000     $8,125

 At the end of the billing cycle, if the accounts are not householded, their combined
 fees would be $8125. Combining, or "householding" the related accounts, the quarter-
 end value is $3,250,000, making the combined accounts eligible for the graduated
 fee schedule. The fee schedule that would apply would be 1% per annum
 (0.25%/quarter) on the tier $0-$2,500,000 and then 0.80% per annum
 (0.20%/quarter) on the $2,500,001-$5,000,000. In this exhibit, $750,000 of the
 combined account values would be eligible for the discounted fee schedule of
 of 0.20%. With the discounted fee schedule applied to $750,000 of the
 householded value, the Combined Fee Total would be $7750, a savings of $375
 ($8125 - $7750). Each respective household member is responsible for paying
 their share of each accounts' respective percent of the combined discounted fee. In
 this exhibit, Account 1 would pay 62% of $7750 ($4805 a discount of $195).
 Account 2 would pay 23% of $7750 ($1782.50 a discount of $92.50). Account 3
 would pay 15% of $7750 ($1162.50 a discount of $87.50).

Westchester Capital Management Inc.                                                                       Disclosure Brochure

                                                       Market Value     Fee calculation - Discount Rate

                                                       $2,500,000     $6,250
 House Hold Accounts Combined Value

                       $3,250,000                      $750,000       $1,500

                        Combined Discounted FeeTotal                  $7,750

                                                                                                            Share of
                                                                                                            Discounted
                                                                         Percent of combined value          Fee

 House Hold Account 1 Quarter End Market Value:        $2,000,000        $2,000,000 /$3,250,000=62%         $4,805

 House Hold Account 2 Quarter End Market Value:        $750,000           $750,000 /$3,250,000=23%          $1,782.50

 House Hold Account 3 Quarter End Market Value:        $500,000           $500,000 /$3,250,000=15%          $1,162.50

                                                       $3,250,000                   100%                    $7,750

When calculating the value of client assets for purposes of fee billing, it is our policy to round up or down
to the nearest dollar. For example, a client account valued at $775,430.55 will be valued at $775,431 for
...

Item 7 – Types of Clients

Westchester Capital Management, Inc. generally provides investment advice to the following types of
clients:

    •    Individuals (including trusts and estates)
    •    High-Net Worth Individuals
    •    Family limited partnerships
    •    Limited liability companies
    •    Pension and profit sharing plans
    •    Charitable organizations
    •    Corporations such as small businesses

Minimum Investment Amounts Required
We require a minimum account size of $100,000 for our Investment Advisory Services. However, in
certain circumstances, we may waive or negotiate our account minimum level. All clients are required to
execute an agreement for services in order to establish a client arrangement with Westchester Capital
Management, Inc.