How will you help me determine my investment goals and how do I become a client?

1. An initial phone conversation allows the prospective client, without obligation, to outline their financial situation, and to ask questions to the portfolio managager about HCMI's history, strategy & performance.

2. The client provides additional information about his or her financial situation, which may include filling out a client questionnaire, faxing or mailing in copies of the statements of their current investments, and providing additional information about cash flows such as insurance, early retirement, pension and Social Security payments.

3. The portfolio manager reviews the current investments, if any, reviews their historic performance and reviews the suitability of these investments to the client's stated goals.

4. Additional conversations, by phone, e-mail or in person flesh out the details, particularly how much risk (volatility in the portfolio) a client can truly stomach.

5. The portfolio manager makes a proposal about how HCMI would reconfigure the client's assets to meet investment objectives.

6. The client may freely ask additional questions about the strategy.

7. When the client is satisfied with HCMI's proposal, HCMI will send the paperwork necessary to open the relationship which includes:
   1. HMCI Investment Advisory Agreement, which outlines the responsibilities of both parties
   2. Fidelity documents for any mix of individual, joint, trust, business, and retirement accounts
   3. Fidelity documents to transfer assets from other firms to the new custodian

8. HCMI will advise the client when the assets are transferred over, when the investment strategy has been executed.

9. Advisory fees are payable each quarter end, and are pro-rated for the first quarter.

How will you help me evaluate my risk tolerance?
We will evaluate the results of client questionnaire and your personal interview, combined with pragmatic projections of likely volatility of stocks, bonds, and mutual funds, to explain the risks of different investments.

Can you give some examples of work you have done for other clients?

1. Client receives a bequest, a large bonus, sells a property or company. The client is fully employed, has no need to use the funds for at least 5 years, and is comfortable with the volatility typical of the US stock market.
   1. Aside from keeping three months salary in ready cash, we would invest the assets 100% in stocks.
   2. We would make sure client took full advantage of at-work retirement programs such as a 401K or 403B.

2. Client has variable income from freelance or performance work and is not covered by traditional retirement programs.
   1. We would place about 20-30% of the clients assets in cash and readily accessible short term bond funds (government and corporate) to cover income shortfalls.
   2. The balance of the account would be placed in equities.
   3. We would work with the client's accountant to determine the most efficient retirement vehicle (regular, Roth, SEP IRA's, or Keogh Profit Sharing Plans.)

3. Client is offered an early retirement package and wants to know his or her alternatives.
   1. We prepare a balance sheet of the client's liquid and illiquid assets.
   2. We prepare a multi-year projection of cash flow, taking into account early retirement payouts, social security, pension payouts, client's estimated expenses and investment returns from taxable and retirement assets.
   3. We prepare a simulation of both likely and possible investment outcomes, based on 85 years of investment returns in US stock and bond markets. This simulation helps the client understand the impact of allocation strategy, the probability of their assets failing to meet their retirement needs, and the effect of changing their situation by, for example, buying a vacation home.
   4. This simulation also informs the client as to whether he or she can retire for good, or whether additional employment should be obtained.

4. Client needs to recalibrate life plan as a result of a divorce or death of spouse. This situation requires great sensitivity, and is typically worked out over a year.
   1. We counsel the client to avoid making drastic financial decisions until his or her personal situation stabilizes.
   2. We inventory the client's financial assets, including in some cases tracking down lost accounts.
   3. We estimate the client's cash flow based on a single income and from investment returns.
   4. We counsel the client on how to allocate one time payments from a divorce settlement or insurance among paying off mortgages, setting up education (529) accounts for children and setting up investment accounts.

5. Client is approaching retirement and wants to know his or her alternatives.
   1. As our clients approach within 10 years of retirement, we gradually increase their fixed income exposure from 0-20% to 30-40% - this reduces overall portfolio returns, but also reduces risk (volatility.)
   2. We counsel the client to assume a drawdown rate of 5% (conservative) to 8% (aggressive) of their liquid assets.
   3. We prepare a balance sheet and statement of cash flows to help the client understand how much money is available to work with.
   4. We set up automatic distributions from taxable and retirement accounts to minimize income taxes.

How much time do I need to achieve my goals?
The longer the time horizon, the more risk we can take on to achieve the goal. In general, for needs of less than a year, we recommend money market instruments only, fixed income for goals of a year to 5 years, equities for longer time periods.

What types of investment services do you provide?
Separately managed accounts in US listed equities, bonds and mutual funds.

Do you or does someone in your firm offer special services (e.g., estate planning, tax counseling, personal portfolio management)?
HMCI offers basic advice on estate and retirement planning, and tax counseling, and will work with your attorney and accountant to resolve complex issues. If needed, we can recommend appropriate professionals to you.

Do you provide "socially responsible" investing?
HCMI does not invest in alcohol or tobacco companies, or companies which are primarily defense contractors. We can further restrict investments to those companies approved by KLD Research & Analytics, an advisory firm specializing in socially responsible investing.

How are you paid?
1%/year of the first $2 million in assets, 0.75%/year above $2 million invoiced directly to the client's account. We receive compensation from no other source to ensure that HCMI's interests are completely aligned with the client's.

How can you help me reduce my tax burden?
We focus our stock selection on those companies we can hold for at least 18 months (average holding is 5 years.) We typically take profits in January, which leaves the whole year to find offseting capital losses. We maximize use of tax-deferred accounts for taxable fixed income investments. Where appropriate, we will recommend tax-exempt fixed income securities.

How often will I make changes to my investments?
The less trading we do in your accounts, the lower the drag on your returns from taxes, trading spreads and commissions. Turnover in general is 20%/year or less. However, we will rebalance your account in the event that a particular sector in your investments (for example, technology in late 1999-early 2000) becomes an imprudently large part of your investments. We will also rebalance your account in response to life changes (e.g. retirement, career change.)

How do I make changes to my investments?
HCMI has your authorization to make changes for you. We will consult with you before making substantial changes.

Are there any restrictions on taking money out of my account?
It's your money - there are no restrictions on withdrawing or depositing funds. Our services include the ability to write checks or wire funds from your account, and to make automatic monthly or quarterly deposits to or withdrawals from your account. We ask that you don't treat this account as your primary checking account, because frequent deposits and withdrawals distort the calculation of performance on your account. We also ask that you alert us sooner rather than later about large deposits (e.g. upcoming bonus) or large withdrawals (e.g. downpayment on a house) so that we can ensure your asset allocation is properly configured.

How often will you contact me?
You will received monthly statements, confirms and year end tax reports directly from Fidelity Investments, the custodian. You will receive quarterly performance and realized gains reports from HCMI. Client accounts are under continuous review, and we will call or e-mail a client as appropriate. In particular, client communication will increase during periods of volatility (e.g. the period immediately following the 9/11 attacks.) In addition to quarterly reports, clients will receive 1-2 intermediate reports/quarter, deliverd via e-mail.

If I call you, when can I expect you to return my call?
Our clients are paying to have access to the person with his hands on their money. We attempt to answer calls by the second ring. If not immediately available, the portfolio manager will return the call at the first available opportunity.

Do you use e-mail for communications?
Yes, especially to answer complex questions and for our international clients.

Can I access my account information over the Internet?
Yes, 24/7 through www.Fidelity.com, the custodian's website.

How long, on average, have you worked with the majority of your clients?
Over 5 years.

Do you require your clients to have a net worth above a specific amount?
No, but the account minimum is $250,000.

Do you provide references from current clients?
Cheerfully, matched to your situation.