Hi Daniel, Ronald Harris, here. Im calling because I just received the latest analyst report and investment rating on C&O Corporation. I was a little surprised that RIS is downgrading its rating on C&O. Im even more surprised that you didnt call me to give me a heads up! As you know, the pension fund has a huge investment in C&O and the changed analysis might affect our investment.

Daniel, I want to remind you that Harris Pension Fund is one of your biggest clients and we pay a lot to you in management fees. When we hired your firm to manage our equity portfolio, your CEO assured us that, given the level of asset management fees we would be paying, we could expect top notch service! Well we are not getting it!

In the future I expect you to provide advanced information on investment recommendations. I also expect daily contact from you, not the occasional letters and emails Ive been getting.

If you cant tell, IM NOT HAPPY! Call me back as soon as you get this message.

In an attempt to mollify Ronald and address the ethical issues generated by his request, RIS implements a two-tiered fee structure for all their clients. Clients generating more than US$100,000 in fees annually, which includes Harris, are given a gold level of service that includes the daily personal contact Ronald has requested. All other clients generating lower annual fees are given a standard level of service whereby most general communication is done through an emailed newsletter and postings on the RIS webpage, with occasional personal contact.

1. The two-tiered structure is:

• Not appropriate, because it potentially treats clients differently
• Appropriate, as long as all clients are given the option to pay for the gold level of service
• Not appropriate, because the actions taken on behalf of the clients receiving the gold level of service clearly disadvantages other clients

2. RIS clients not paying for the gold level of service have a right to complain if RIS:

• Gives gold-level clients advance notice of changed investment recommendations
• Limits interaction with them while giving gold-level clients daily personal attention
• Gives gold-level clients both advance notice of recommendations and daily personal attention ahead of them