Performance Fees Performance fees are one of the ways Mohlman Asset Management put clients' interest first. By having a performance fee option clients will only pay a fee if their account results are successful. The performance fee option shows the level of confidence that Mohlman Asset Management has in our portfolio management skills. There are two performance fee options: 1. Absolute Return: If the account has a positive return the fee is 1%. If the account has a negative return or a return of zero there is no fee. 2. Profit Sharing: If the account has a positive return a percentage of the profit is the fee. If the account has a negative return or a return of zero there is no fee. 3. Relative Return: Step 1. A performance objective and relevant market index is selected Step 2. Account results are compared to the market index Step 3. If the account return is less than or equal to the index there is no fee because there is no added value Step 4. If the account return is more than the index, the fee is 40% of the amount of extra profit greater than the index. Example: if the index return was 10% and the account return was 12% the fee is .80% (2% extra profit X 40%) Both Absolute, Profit Sharing, and Relative return formulas are calculated on a one-year cycle. State and Federal regulations allow performance fees for accredited investors.