SUPERVISORY METHOD

Mr. Francis M. Hogle, III is President and CEO of BASE. Mr. Hogle, born in 1944, graduated with a BS in Physics from Carnegie Institute of Technology in 1967. He has been a licensed professional in the securities business since 1973. There are no other licensed personnel. BASE requires of its personnel securities knowledge, securities experience as well as a compatible investment philosophy. Because BASE's investment philosophy is and has been supplied by Mr. Hogle, he and(or) related entities may own securities or may trade in securities that BASE clients own. BASE does not accept non-discretionary accounts for an asset based fee, but it may charge an appropriate hourly fee. BASE does not have a minimum account size, per se. BASE will deal with a client only if, in the sole opinion of Mr. Hogle, it can reasonably provide the services that the account requires, and if, in the sole opinion of Mr. Hogle, that BASE and the prospective client can conduct a mutually beneficial relationship.

Mr. Hogle conducts all reviews of client accounts either alone on a continuing basis, or in conjunction with clients. Informal reviews of accounts are triggered by a number of factors: price action and news may trigger such reviews at any time; pricing and the portfolio accounting process (usually on a daily cycle) may trigger such reviews. Formal reviews occur jointly with the client and are scheduled depending on the needs of the client. Formal reviews typically occur annually but can occur at almost any reasonable time or frequency. In addition to statements sent from independent custodians all clients receive from BASE a full accounting of cash and securities, sources and uses of funds as well as billing information shortly after the end of each calendar quarter. Clients may receive more informal information in a monthly mailing and can call and receive information informally over the telephone. BASE will provide preliminary tax or other information to clients or to their designated agents; however, 1099's and other final tax information is provided by custodians. BASE is not a custodian of client assets and does not take possession of client assets unless it is acting in the capacity of a trustee. Where custodians have the capability to allow BASE to vote proxies, BASE will vote those proxies in the interests of its clients. BASE maintains records of its proxy activities; and, upon a client's request, will share its rationale as well as specific votes on a client's behalf.

Brokers and custodians may be suggested to clients by BASE. Clients are not required to follow such suggestions but must choose a custodian that is reasonably compatible with BASE's computer systems and BASE's operating procedures. BASE needs direct access to account and transaction information on an electronic basis, and it needs the fluid ability to cause transactions to be cleared. Clients may make non-binding broker designations; however, BASE will deal with brokers and dealers only if, in the sole opinion of Mr. Hogle, they are competitive in 'net' executions for the trades to be done, or if such broker's or dealer's research services are of material value to BASE's clients. In all cases BASE attempts to operate in an economical manner on behalf of its clients. Commissions and trading capability are inextricably linked as 'net' execution capability is more important than commissions alone. BASE will attempt to deal with brokers and dealers on a 'net' execution basis. Valuable sources of information in the broker-dealer community would be closed if they were not compensated. BASE does not make commission compensation arrangements with brokers and dealers (other than with Fidelity, see the Conflicts of Interest section below); but instead, attempts to ration sparse resources in a manner that benefits its clients most.

BASE by its nature is a generalist. BASE selects and follows securities on its own and does not rely on others for those functions. Research of value to BASE lies in suggesting structures of analysis and relationships so that BASE can accomplish its own functions. Clients might pay higher 'net' prices to these sources of information.

BASE bunches orders for its clients. When orders are bunched, BASE will average execution prices for the aggregate each day. When bunched orders take more than one day to fill, BASE will prorate executions on a daily basis to round lots, where each, filled and unfilled portions of an order, is roughly 1000 shares or more; then the unprorated shares are used to fill the unfilled orders on a rotating basis, favoring orders with the least percentage previously filled, and attempting not to break orders for any account.

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