Annual fees are based on the account valuation as follows:

.75 of 1% on the first $5,000,000 of valuation
.60 of 1% on next $5,000,000 of valuation
.40 of 1% on valuations over $10,000,000

The above schedule pertains to a balanced investment account where a substantial portion of the account is invested in both equities and fixed income assets.  The rate schedule would be increased by .25% of 1% at each level for an all equity account.  Occasionally, fees are negotiated lower than the schedule shown above. 

Semi-annual fees are computed based on the five-month average account balances for the periods ending April 30 and October 31.  Bills are prepared during the months of June and December, and mailed to clients in early June and December.  On rare occasions, we purchase mutual funds on behalf of clients or hold mutual funds from legacy managers in clients’ accounts.  In this circumstance, the client will be charged management and other fees by the mutual fund company in addition to Stewart and Patten fees.

In recent years, Stewart and Patten has had non-affiliated investment advisers join the firm, or refer their clients to Stewart and Patten.  For these accounts, fees are calculated and paid differently from traditional Stewart and Patten accounts in order to continue the billing procedure at prior firms. For accounts that have come to Stewart and Patten in this way, fees are based on the market value of supervised assets at the beginning of each three-month reporting period and are payable in advance.  In addition, J. Stewart Investments, Inc. will be paid 25% of earned investment management fees as a referral fee for 3 years beginning October 1, 2009, for accounts that transfer to Stewart and Patten.  The fee paid to J. Stewart Investments will not result in an additional fee being charged to the clients transferring to Stewart and Patten.

Stewart & Patten Co., LLC operates under an Investment Management Agreement. Following the initial execution of this agreement, it may be terminated at anytime by either party on five calendar days’ written notice delivered to the other without payment of penalty and without liability of either party to the other.  After the five-day period this agreement can be terminated on 10 calendar days’ written notice.  On termination of this Agreement, fees will be prorated.  A client account or Agreement may not be assigned to a third party without specific approval from the client.  Clients are notified of any change in the structure of Stewart & Patten Co., LLC as soon as practicable after such change.

Minimum dollar valuation for starting an account is $1,000,000.  Under special circumstances, smaller accounts are occasionally accepted.  We believe these fees are similar to those charged by many other investment counseling firms for similar services; however, comparable service may be available from other sources for lower fees