TRADING

Although Earl M. Foster Associates has relationships with several major brokerage firms, the client must approve all brokerage arrangements. We believe clients achieve better execution, service, and lower transaction costs from the recommended brokers. While clients may direct the use of a specific broker, volume discounts and best execution cannot be assured.

Brokerage recommendations are based on transaction costs, execution capability, and overall service to the client. Secondary consideration is given to research. However, the Company does receive research and trading services in exchange for commissions generated, including economic and financial data, analysis of company and industry trends, electronic market quotations, and portfolio modeling and asset allocation software.

Research and services received are used for the benefit of all accounts. We do not direct client transactions to a particular broker for the purpose of obtaining products or research services.

Earl M. Foster Associates has a written agreement whereby a fee is paid for participation in a client referral service. This arrangement is disclosed and acknowledged in writing by the client, and we comply with applicable state laws and the Investment Advisors Act of 1940. Clients introduced through this service will not be charged fees or costs greater than any other advisory client. Since the Company will likely execute transactions for clients at the referring firm, a potential conflict of interest could arise. Earl M. Foster Associates acknowledges its duty to select brokers on the basis of best execution for its clients.

To provide the most efficient executions for clients, trades are aggregated into "blocks" from time to time. No account is favored over any other and, when possible, each account participates in the aggregated order at the average price.

All transactions executed for Earl M. Foster Associates or its employees, or for accounts where either have a beneficial interest, are segregated from those of the clients and executed on a "last in" and "last out" basis. Moreover, Earl M. Foster Associates does not buy securities from nor sell securities to clients, receive any compensation as broker for a security transaction, nor does it engage in any transactions between clients.

It is the Company's policy to forbid any trading for itself, its employees, or others based on material nonpublic information. To ensure compliance with Company policies and public laws, all employees must report their transactions to the designated Compliance Officer.