Wynnefield Capital Inc

ITEM 5 - FEES AND COMPENSATION

Fees are calculated by the Funds’ Administrators and deducted from client assets.
Wynnefield is the investment manager of the Funds, and is entitled to receive the following
compensation for its services in that regard.

Management Fees

Both the Domestic Funds and the Offshore Fund charge a management fee, paid quarterly in
advance, based on a percentage of assets under management. The management fee is 1.0%
per annum for limited partners who joined the Domestic Funds and shareholders in the
Offshore Fund who initially purchased their shares prior to February 1, 2011. Investors who
enter into the Funds after that date pay a management fee of 1.5% per annum. The
Management Fee for the Funds is paid by direct deduction from each investor’s account on a
pro-rated quarterly basis, in advance. Wynnefield may, in its sole discretion, waive or reduce
entirely its Management Fee with respect to certain limited partners including, without
limitation, affiliates, employees or family members of the general partner or its principals.

Performance Allocation for the Domestic Funds

The General Partner, is responsible for the Domestic Funds’ investment program, and has
designated Wynnefield as the investment manager of the Funds. Wynnefield does not
receive an incentive fee from the Domestic Funds. Rather, as an incentive to promote the
Domestic Funds’ success, the General Partner is allocated an annual performance share (the
“Performance Share Allocation”) equal to 20% of the appreciation (if any) of the net asset
value of the Domestic Funds that is allocated to each of their limited partners. The
Performance Share Allocation is generally calculated, and made (if applicable), on the last
day of each fiscal year. If a limited partner makes a partial withdrawal of capital or receives
a distribution as of a time other than the end of a fiscal year, the General Partner will receive
a partial Performance Share Allocation at the time of that withdrawal or distribution in
proportion to the reduction in the limited partner’s capital account caused by the

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withdrawal. Once made, the Performance Share Allocation is not subject to reversal if there
is a subsequent loss. The General Partner may, in its sole discretion, reduce or waive entirely
its Performance Share Allocation with respect to certain limited partners including, without
limitation, affiliates, employees or family members of the general partner or its principals.

The General Partner’s Performance Share Allocation is subject to a “high water mark”
provision which prevents the General Partner from receiving a Performance Share Allocation
on profits that simply restore previous losses and ensures that each Performance Share
Allocation is based on the long-term positive performance of a limited partner investor’s
investment in the Domestic Funds. To accomplish this purpose, the partnership agreement
provides that no Performance Share Allocation is made unless the appreciation allocated to
a limited partner increases his year-end closing capital account to an amount that exceeds
his “maximum capital account”. The “maximum capital account” is the limited partner’s
actual capital contributions, reduced by any withdrawals and distributions, and increased by
any appreciation which has previously been credited to his capital account and has already
been subject to a Performance Share Allocation. If a limited partner makes a partial
withdrawal or receives a distribution at a time when he or she has unrecovered losses, the
Maximum Capital Account and Closing Capital Account shall be adjusted in proportion to the
amount withdrawn or distributed.

Performance Allocation for the Offshore Fund

Wynnefield, as investment manager of the Offshore Fund, receives an annual incentive fee
(the “Incentive Fee”) equal to 20% of the net profits (including net unrealized gains and
losses), if any, attributable to each common share of the Fund, subject to a loss carryforward
provision. If a common share has a loss chargeable to it during any year and during a
subsequent year there is a profit allocable to the share, there will be no Incentive Fee
payable with respect to the share until the amount of the loss previously allocated to the
share has been recouped. All or a portion of the Incentive Fee attributable to a shareholder's
Common Shares may be paid by a redemption of a portion of that shareholder's Common
Shares. The management agreement between Wynnefield and the Offshore Fund provides
that Wynnefield will be paid the Incentive Fee no later than 30 days after the end of each
year. In the event that the management agreement is terminated prior to the last day of the
year, the Incentive Fee will be computed as though the termination date were the last day
of the year.

Brokerage, Sales and Redemption Fees

Wynnefield does not charge any sales or redemption fees. Please see Item 12, below for a
discussion of Wynnefield’s brokerage practices and fees.

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Expenses Charged to the Domestic Funds

The expenses for which the Domestic Funds are responsible include the fees paid to the
Administrator of the Funds, fees paid to Wynnefield as investment manager, accounting,
audit, legal and other professional and compliance-related expenses, tax preparation fees,
governmental fees, printing and mailing expenses, costs of Fund reporting, costs of
governance activities (such as obtaining Partner consents if and when necessary and
appropriate), costs and expenses associated with negotiating and entering into contracts and
arrangements in the ordinary course of the Fund’s business, costs and premiums of any
fidelity and performance bonds, extraordinary expenses of the Fund such as litigation costs,
and all investment expenses including commissions, travel expenses incurred by Wynnefield
...

ITEM 7 - TYPES OF CLIENTS

Wynnefield provides investment advisory services to the Funds and not individually to the
investors in the Funds.

Domestic Funds

The Domestic Funds are private investment funds each organized as a Delaware limited
partnership. Each of the Domestic Funds operates under an exemption contained in the
Investment Company Act of 1940, as amended (the “Investment Company Act”). One Fund
operates under a Section 3(c)(1) exemption, which requires that the Fund have no more than
100 “accredited investors” within the meaning of Regulation D under the Securities Act of
1933, as amended (the “Securities Act”). The other Fund operates under an exemption
contained in Section 3(c)(7), which allows the Fund to have more than 100 investors who
are “qualified purchasers”. The Domestic Funds also require that any new investor satisfy
the requirements of a “qualified client” under the Investment Advisers Act of 1940, as
amended.

The Domestic Funds are managed in accordance with the same investment objectives and, to
the maximum extent possible, they make proportional investments in the same portfolio
securities based on the respective assets of each entity.

The minimum initial subscription amount for investment in the Domestic Funds is $250,000,
although the General Partner may waive or reduce this requirement in particular cases and
may change it as to new investors in the future.

Offshore Fund

The Offshore Fund's common shares are offered only to experienced and sophisticated
investors who are neither citizens nor residents of the United States, and to a limited number
of United States investors consisting primarily of tax-exempt entities. Common shares will
not be offered to persons who are members of the public in the Cayman Islands.

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The minimum initial investment per investor in the Offshore Fund is $250,000, subject to
reduction in the sole discretion of the Fund’s Board of Directors, provided, however, that the
absolute minimum subscription for new subscriptions is $50,000.

Domestic and Offshore Funds

The limited partners who invest in the Domestic Funds and the investors in the Offshore
Fund generally consist of high-net-worth individuals, family offices, trusts, funds of hedge
funds, pension plans under ERISA and endowments.

Profit Sharing Plan

Wynnefield also manages the Profit-Sharing Plan account on behalf of its employees.