-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RppEW7yDr1/Js4+Thb1Rlp3M8vCefOHOf7oW3F9IzPkQsXpUOXVg0SKBNbxARNcy C+CHWY8o1NNieG8piMwQxA== 0001014108-05-000113.txt : 20050413 0001014108-05-000113.hdr.sgml : 20050413 20050413142941 ACCESSION NUMBER: 0001014108-05-000113 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20050413 DATE AS OF CHANGE: 20050413 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DUCKWALL ALCO STORES INC CENTRAL INDEX KEY: 0000030302 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-VARIETY STORES [5331] IRS NUMBER: 480201080 STATE OF INCORPORATION: KS FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-43827 FILM NUMBER: 05748129 BUSINESS ADDRESS: STREET 1: 401 COTTAGE STREET CITY: ABILENE STATE: KS ZIP: 67410-0129 BUSINESS PHONE: 9132633350 MAIL ADDRESS: STREET 1: DUCKWALL ALCO STORES INC STREET 2: 401 COTTAGE CITY: ABILENE STATE: KS ZIP: 67410 FORMER COMPANY: FORMER CONFORMED NAME: DUCKWALL STORES INC DATE OF NAME CHANGE: 19781020 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MACKE JEFFREY CENTRAL INDEX KEY: 0001067057 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: BUSINESS PHONE: 4157756225 MAIL ADDRESS: STREET 1: 2001 UNION ST CITY: SAN FRANCISCO STATE: CA ZIP: 94123 SC 13D/A 1 das-sch13da_811972v3.txt SCHEDULE 13D/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D/A UNDER THE SECURITIES EXCHANGE ACT OF 1934 (Amendment No. 3) DUCKWALL-ALCO STORES, INC. (Name Of Issuer) Common Stock, par value $.0001 per share (Title of Class of Securities) 264142100 (CUSIP Number) JEFFREY J. MACKE 2001 Union Street, #320 San Francisco, CA 94123 (415) 789-0399 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) April 7, 2005 (Date of Event Which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box if a fee is being paid with this statement [ ]. SCHEDULE 13D/A CUSIP Number 264142100 1. Name of Reporting Persons S.S. or I.R.S. Identification Nos. of Above Persons Jeffrey J. Macke 2. Check the Appropriate Box if a Member of a Group (a) (b) 3. SEC Use Only 4. Source of Funds (See Instructions) OO 5. Check Box if Disclosure of Legal Proceedings Not Applicable is Required Pursuant to Item 2(d) or 2(e) 6. Citizenship or Place of Organization United States 7. Sole Voting Power 44,800 8. Shared Voting Power 2,500 9. Sole Dispositive Power 44,800 10. Shared Dispositive Power 2,500 11. Aggregate Amount Beneficially Owned by Each 47,300 Reporting Person 12. Check Box if the Aggregate Amount in Row (11) Not Applicable Excludes Certain Shares (See Instructions) 13. Percent of Class Represented by Amount In Row (11) 1.1% 14. Type of Reporting Person (See Instructions) IN 2 OF 10 SCHEDULE 13D/A CUSIP Number 264142100 1. Name of Reporting Persons S.S. or I.R.S. Identification Nos. of Above Persons Kathleen O. Macke 2. Check the Appropriate Box if a Member of a Group (a) (b) 3. SEC Use Only 4. Source of Funds (See Instructions) OO 5. Check Box if Disclosure of Legal Proceedings Not Applicable is Required Pursuant to Item 2(d) or 2(e) 6. Citizenship or Place of Organization United States 7. Sole Voting Power 0 8. Shared Voting Power 429,038 9. Sole Dispositive Power 0 10. Shared Dispositive Power 429,038 11. Aggregate Amount Beneficially Owned by Each 429,038 Reporting Person 12. Check Box if the Aggregate Amount in Row (11) Not Applicable Excludes Certain Shares (See Instructions) 13. Percent of Class Represented by Amount In Row (11) 9.6% 14. Type of Reporting Person (See Instructions) IN 3 of 10 SCHEDULE 13D/A CUSIP Number 264142100 1. Name of Reporting Persons S.S. or I.R.S. Identification Nos. of Above Persons Kenneth A. Macke Revocable Trust dated as of December 16, 1986 2. Check the Appropriate Box if a Member of a Group (a) (b) 3. SEC Use Only 4. Source of Funds (See Instructions) OO 5. Check Box if Disclosure of Legal Proceedings Not Applicable is Required Pursuant to Item 2(d) or 2(e) 6. Citizenship or Place of Organization California 7. Sole Voting Power 0 8. Shared Voting Power 399,362 9. Sole Dispositive Power 0 10. Shared Dispositive Power 399,362 11. Aggregate Amount Beneficially Owned by Each 399,362 Reporting Person 12. Check Box if the Aggregate Amount in Row (11) Not Applicable Excludes Certain Shares (See Instructions) 13. Percent of Class Represented by Amount In Row (11) 9.0% 14. Type of Reporting Person (See Instructions) OO 4 OF 10 This Amendment No. 3 to Schedule 13D ("Amended 13D") is being filed jointly by Jeffrey J. Macke ("Jeff Macke"), Kathleen O. Macke and the Kenneth A. Macke Revocable Trust dated as of December 16, 1986 to reflect that Jeff Macke no longer has beneficial ownership of the shares of common stock, par value $.0001 per share owned by his parents, Kathleen O. Macke and Kenneth A. Macke or the Kenneth A. Macke Revocable Trust dated as of December 16, 1986. ITEM 1. SECURITY AND ISSUER ------------------- This Amended 13D relates to the common stock, par value $.0001 per share ("Common Stock"), of Duckwall-Alco Stores, Inc., a Delaware corporation (the "Company"). The address of the Company's principal office is 401 Cottage Street, Abilene, Kansas 67410. ITEM 2. IDENTITY AND BACKGROUND ----------------------- This Amended 13D is being filed by the following persons as a joint filing pursuant to Rule 13D-1(k)(1): Jeffrey J. Macke ("Jeff Macke") Kathleen O. Macke ("Mrs. Macke") Kenneth A. Macke Revocable Trust dated as of December 16, 1986 ("KAM Trust") Jeffrey J. Macke - ---------------- (a)-(f) The business address of Jeff Macke is 98 Main Street, #606, Tiburon, CA 94920. Jeff Macke is a member of the Board of Directors of the Company and a member of the Audit Committee and the Compensation Committee of the Company. Jeff Macke is the controlling member and investment manager for Macke Asset Management, LLC, a Delaware limited liability company. Macke Asset Management, LLC is an investment advisor that provides investment advisory services for various persons. During the last five years, Jeff Macke (i) has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), and (ii) has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Jeff Macke is a United States citizen. Kathleen O. Macke - ----------------- (a)-(f) The address of Mrs. Macke is PO Box 3687, Yountville, CA 94599. Mrs. Macke is a retired individual who also acts as custodian and guardian for her husband, Kenneth A. Macke ("Kenneth Macke"), and is the trustee of the KAM Trust. Kenneth Macke is a retired individual and is the father of Jeff Macke and husband to Mrs. Macke. During the last five years, neither Mrs. Macke nor Kenneth Macke (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), and (ii) has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such 5 OF 10 proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Mrs. Macke is a United States citizen. Kenneth Macke is a United States citizen. Kenneth A. Macke Revocable Trust - -------------------------------- (a)-(f) The principal business of the KAM Trust is managing the assets of Kenneth Macke. The principal business address of KAM Trust is PO Box 3687 Yountville, CA 94599. During the last five years, the KAM Trust (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), and (ii) has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. The KAM Trust is a California trust. ITEM 3. SOURCE AND AMOUNTS OF FUNDS AND OTHER CONSIDERATION --------------------------------------------------- Not applicable. ITEM 4. PURPOSE OF TRANSACTION ---------------------- On April 7, 2005, Jeff Macke resigned his position as attorney-in-fact under the Custodianship, Irrevocable Proxy and Power of Attorneys granted on July 27, 1998 by each of Mrs. Macke, Kenneth Macke and the KAM Trust ("Power of Attorneys"), and terminated the Power of Attorneys. Each of the KAM Trust, Mrs. Macke and Mrs. Macke on behalf of Kenneth Macke also terminated each of the Power of Attorneys. As a Director of the Company, the shares of Common Stock which are the subject of this filing and which are beneficially owned by Jeff Macke are deemed to be held by a "controlling person", as defined by the Securities Act of 1933 (the "Act"). As such, limited public market sales may occur pursuant to Rule 144 promulgated under the Act ("Rule 144") and private sales under Section 4 of the Act ("Section 4"). Accordingly, Jeff Macke holds shares of Common Stock for investment, but may from time to time elect to dispose of the Common Stock pursuant to the restrictions of Rule 144 or Section 4. Any determinations of sale will be based on various factors, including but not limited to, the Company's financial condition, business and prospects, other developments concerning the Company, price levels of the Company's common stock, other opportunities available to Jeff Macke, general economic, monetary and stock market conditions, and other applicable business and legal considerations. Except for as described under this Item 4, Jeff Macke has no present plans or proposals that relate to or that would result in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D of the Act. However, Jeff Macke reserves the right to formulate such plans or proposals, and to take such action with respect to any or all of such matters and any other matters as it may determine. 6 of 10 Mrs. Macke, for herself and on behalf of Kenneth Macke, intends to sell from time to time the shares of Common Stock beneficially owned by Mrs. Macke and covered by this Amended 13D. The KAM Trust intends to sell from time to time the shares of Common Stock beneficially owned by it and covered by this Amended 13D. ITEM 5. INTEREST IN SECURITIES OF THE COMPANY ------------------------------------- (a) Currently, Jeff Macke beneficially owns 47,300 shares of Common Stock. Based on the number of shares outstanding as of October 31, 2004 as indicated on the Company's quarterly report on Form 10-Q for the period ended October 31, 2004, Jeff Macke beneficially owns 1.1% of all issued and outstanding shares of Common Stock. Currently, Mrs. Macke, for herself and on behalf of Kenneth Macke beneficially owns 429,038 shares of Common Stock. Based on the number of shares outstanding as of October 31, 2004 as indicated on the Company's quarterly report on Form 10-Q for the period ended October 31, 2004, Mrs. Macke beneficially owns 9.6% of all issued and outstanding shares of Common Stock. Currently, the KAM Trust beneficially owns 399,362 shares of Common Stock. Based on the number of shares outstanding as of October 31, 2004 as indicated on the Company's quarterly report on Form 10-Q for the period ended October 31, 2004, the KAM Trust beneficially owns 9.0% of all issued and outstanding shares of Common Stock. (b) Jeff Macke has the sole power (i) to dispose 44,800 shares of Common Stock; and (ii) to vote 44,800 shares of Common Stock. Mrs. Macke, for herself and on behalf of Kenneth Macke has the sole power to vote and dispose of 38,676 shares of Common Stock held in the Kenneth A. Macke IRA. As trustee of the KAM Trust, Mrs. Macke (i) shares with her investment advisor, K&A Asset Management, LLC ("K&A"), and the KAM Trust the power to dispose of 399,362 shares of Common Stock; and (ii) shares with the KAM Trust the power to vote 399,362 shares of Common Stock. K&A is a California limited liability company and during the last five years, has not been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), and (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. The KAM Trust (i) shares with Mrs. Macke and K&A the power to dispose of 399,362 shares of Common Stock; and (ii) shares with Mrs. Macke the power to vote 399,362 shares of Common Stock. 7 of 10 (c) A list of transactions in the past 60 days. Amount Where and How Party Date Purchased (Sold) Price Per Share Effective ----- ---- ---------------- --------------- --------- Jeff Macke 1/25/2005 (57,200) N/A (1) KAM Trust 1/25/2005 15,368 N/A (1) Jeff Macke 1/25/2005 1,764 N/A (1) Jeff Macke 2/3/2005 (1,764) N/A (2) KAM Trust 3/8/2005 (70,000) $17.9563 (3) (1) Buckshot Capital LLC, a wholly-owned subsidiary of Macke Asset Management, LLC, distributed all of its Company Common Stock to the Buckshot Capital LLC investors which included the transfer of 15,368 shares of Common Stock to the KAM Trust and 1,764 shares of Common Stock to Jeff Macke. (2) Jeff Macke gave 1,764 shares of Company Common Stock to several persons. (3) Public sale on the open market. (d-e) None. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT ---------------------------------------------------------------------- TO SECURITIES OF THE ISSUER --------------------------- On April 7, 2005, Jeff Macke resigned and terminated the Custodianship, Irrevocable Proxy and Power of Attorney Agreements granted on July 28, 1998 by each Kenneth Macke, Mrs. Macke and the KAM Trust pursuant to a Resignation and Termination Agreement between Jeff Macke and each of Kenneth Macke, Mrs. Macke and the KAM Trust. Copies of each of the Resignation and Termination Agreements are attached hereto as Exhibits 2, 3 and 4. On August 6, 2003, Kenneth Macke granted Mrs. Macke a durable power of attorney authorizing her to make all financial and other decisions for Kenneth Macke. If Mrs. Macke is unable or unwilling to serve as the agent for Kenneth Macke, the alternative agent is Jeff Macke. A copy of excerpts of sections 1-4, 5.3, 5.4, 5.18, and 5.34 of this durable power of attorney related to the Common Stock is attached hereto as Exhibit 5.1. On February 14, 2004, Mrs. Macke, for herself and on behalf of Kenneth Macke and as trustee of the KAM Trust, entered into a management agreement with K&A ("Management Agreement") pursuant to which K&A would provide advisory services with respect to Mr. and Mrs. Macke's securities portfolio, including those owned by the KAM Trust and those shares reported by Mrs. Macke and the KAM Trust on this Amended 13D. Under the Management Agreement, K&A has the full power to supervise the investment and reinvestment of Mr. and Mrs. Macke's portfolio in securities, mutual funds, and to make and implement all investment decisions, without prior consultation with Mr. or Mrs. Macke. Pursuant to the Management Agreement, Mrs. Macke has retained the power to vote the shares subject to the Management Agreement. A copy of the Management Agreement is attached hereto as Exhibit 5.2. 8 of 10 ITEM 7. EXHIBITS -------- 1. Joint Filing Agreement dated as of April 12, 2005 2. Resignation and Termination Agreement between Jeffrey Macke and Kathleen O. Macke dated as of April 7, 2005 3. Resignation and Termination Agreement between Jeffrey Macke and Kenneth A. Macke signed by Kathleen O. Macke as attorney in fact dated as of April 7, 2005 4. Resignation and Termination Agreement between Jeffrey Macke and Kenneth A. Macke signed by Kathleen O. Macke as attorney in fact dated as of April 7, 2005 5.1 Excerpts of sections 1-4, 5.3, 5.4, 5.18, and 5.34 Durable Power of Attorney for Financial Management dated as of August 6, 2003 5.2 K&A Asset Management, LLC Agreement dated as of February 14, 2004 9 of 10 SIGNATURE --------- After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. April 12, 2005 /s/ Jeffrey J. Macke ---------------------------------------- Jeffrey J. Macke April 12, 2005 Kenneth A. Macke Revocable Trust dated as of December 16, 1986 By: /s/ Kathleen O.Macke ------------------------------------ Kathleen O. Macke, Trustee April 12, 2005 /s/ Kathleen O. Macke ---------------------------------------- Kathleen O. Macke 10 of 10 EX-1 2 das-ex1sch13da_811972v3.txt JOINT FILING AGREEMENT Exhibit 1 Joint Filing Agreement Pursuant to Reg. Section 240.13d-1(k)(1)(iii) of the Securities Exchange Act of 1934, the foregoing Schedule 13D is filed on behalf of Jeffrey J. Macke, Kathleen O. Macke and Kathleen O. Macke, as Trustee for the Kenneth A. Macke Revocable Trust dated as of December 16, 1986. April 12, 2005 /s/ Jeffrey J. Macke ---------------------------------------- Jeffrey J. Macke April 12, 2005 Kenneth A. Macke Revocable Trust dated as of December 16, 1986 By: /s/ Kathleen O.Macke ------------------------------------ Kathleen O. Macke, Trustee April 12, 2005 /s/ Kathleen O. Macke ---------------------------------------- Kathleen O. Macke EX-2 3 das-ex2sch13da_811972v3.txt TERMINATION AGREEMENT (KAM) Exhibit 2 Resignation and Termination Agreement (Kenneth A. Macke) TERMINATION OF CUSTODIANSHIP, IRREVOCABLE PROXY AND POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: WHEREAS, Kenneth A. Macke signed a Custodianship, Irrevocable Proxy and Power of Attorney (the "Power of Attorney") on July 27, 1998 appointing Jeffrey Macke as Kenneth A. Macke's Custodian, Proxy and Attorney-in-fact with respect to all shares of Duckwall Alco Stores, Inc. common stock owned or subsequently acquired by Kenneth A. Macke; WHEREAS, the Durable Power of Attorney, by its terms, is irrevocable and may only be terminated or modified by the written agreement between Kenneth A. Macke and Jeffrey Macke; NOW THEREFORE, the undersigned do hereby agree that the appointment of Jeffrey Macke as Kenneth A. Macke's Custodian, Proxy and Attorney-in-fact is terminated as of April 7, 2005. [signature page follows] IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed on the date indicated below. Date: April 6, 2005 /s/ Kathleen O. Macke ------------------------ ------------------------------------ Kenneth A. Macke signed by Kathleen O. Macke as attorney-in-fact Date: April 7, 2005 /s/ Jeffrey Macke ------------------------ ------------------------------------ Jeffrey Macke STATE OF California ) ) SS. COUNTY OF Napa ) On this 6th day of April 2005, before me, a Notary Public in and for said state, personally appeared Kenneth A. Macke, known to me to be the person who executed the within Termination of Custodianship, Irrevocable Proxy and Power of Attorney and acknowledged to me that she executed the same for the purposes therein stated. /s/ Sandra J. Re ------------------------------------ Notary Public My commission expires: 3/1/2006 ------------------- 2 STATE OF California ) ) SS. COUNTY OF Marin ) On this 7th day of April 2005, before me, a Notary Public in and for said state, personally appeared Jeffrey Macke, known to me to be the person who executed the within Termination of Custodianship, Irrevocable Proxy and Power of Attorney and acknowledged to me that she executed the same for the purposes therein stated. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal on the day and year last above written. /s/ Laura Johnstone ----------------------------------- Notary Public in and for California County, Marin My commission expires: 11/4/07 ------------------- 3 EX-3 4 das-ex3sch13da_811972v3.txt TERMINATION AGREEMENT (KOM) Exhibit 3 Resignation and Termination Agreement (Kathleen O. Macke) TERMINATION OF CUSTODIANSHIP, IRREVOCABLE PROXY AND POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: WHEREAS, Kathleen O. Macke signed a Custodianship, Irrevocable Proxy and Power of Attorney (the "Power of Attorney") on July 27, 1998 appointing Jeffrey Macke as Kathleen O. Macke's Custodian, Proxy and Attorney-in-fact with respect to all shares of Duckwall Alco Stores, Inc. common stock owned or subsequently acquired by Kathleen O. Macke; WHEREAS, the Durable Power of Attorney, by its terms, is irrevocable and may only be terminated or modified by the written agreement between Kathleen O. Macke and Jeffrey Macke; NOW THEREFORE, the undersigned do hereby agree that the appointment of Jeffrey Macke as Kathleen O. Macke's Custodian, Proxy and Attorney-in-fact is terminated as of April 7, 2005. [signature page follows] IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed on the date indicated below. Date: April 6, 2005 /s/ Kathleen O. Macke ------------------------ ------------------------------------ Kathleen O. Macke Date: April 7, 2005 /s/ Jeffrey Macke ------------------------ ------------------------------------ Jeffrey Macke STATE OF California ) ) SS. COUNTY OF Napa ) On this 6th day of April 2005, before me, a Notary Public in and for said state, personally appeared Kathleen O. Macke, known to me to be the person who executed the within Termination of Custodianship, Irrevocable Proxy and Power of Attorney and acknowledged to me that she executed the same for the purposes therein stated. /s/ Sandra J. Re ------------------------------------ Notary Public My commission expires: 3/1/2006 ------------------- 2 STATE OF California ) ) SS. COUNTY OF Marin ) On this 7th day of April 2005, before me, a Notary Public in and for said state, personally appeared Jeffrey Macke, known to me to be the person who executed the within Termination of Custodianship, Irrevocable Proxy and Power of Attorney and acknowledged to me that she executed the same for the purposes therein stated. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal on the day and year last above written. /s/ Laura Johnstone ----------------------------------- Notary Public in and for California County, Marin My commission expires: 11/4/07 ------------------- 3 EX-4 5 das-ex4sch13da_811972v3.txt TERMINATION AGREEMENT (KAM TRUST) Exhibit 4 Resignation and Termination Agreement (KAM Trust) TERMINATION OF CUSTODIANSHIP, IRREVOCABLE PROXY AND POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: WHEREAS, Kathleen O. Make, as trustee for the Kenneth A. Macke Trust dated December 16, 1986 (the "Trust") signed a Custodianship, Irrevocable Proxy and Power of Attorney (the "Power of Attorney") on July 27, 1998 appointing Jeffrey Macke as the Trust's Custodian, Proxy and Attorney-in-fact with respect to all shares of Duckwall Alco Stores, Inc. common stock owned or subsequently acquired by the Trust; WHEREAS, the Durable Power of Attorney, by its terms, is irrevocable and may only be terminated or modified by the written agreement between the Trust and Jeffrey Macke; NOW THEREFORE, the undersigned do hereby agree that the appointment of Jeffrey Macke as the Trust's Custodian, Proxy and Attorney-in-fact is terminated as of April 7, 2005. [signature page follows] IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed on the date indicated below. Kenneth A. Macke Trust dated December 16, 1986 Date: April 6, 2005 /s/ Kathleen O. Macke ------------------------ ------------------------------------ By: Kathleen O. Macke Trustee Date: April 7, 2005 /s/ Jeffrey Macke ------------------------ ------------------------------------ Jeffrey Macke STATE OF California ) ) SS. COUNTY OF Napa ) On this 6th day of April 2005, before me, a Notary Public in and for said state, personally appeared Kathleen O. Macke, Trustee for Kenneth A. Macke Trust dated December 16, 1986 known to me to be the person who executed the within Termination of Custodianship, Irrevocable Proxy and Power of Attorney and acknowledged to me that she executed the same for the purposes therein stated. /s/ Sandra J. Re ----------------------------------- Notary Public My commission expires: 3/1/2006 ------------------- 2 STATE OF California ) ) SS. COUNTY OF Marin ) On this 7th day of April 2005, before me, a Notary Public in and for said state, personally appeared Jeffrey Macke, known to me to be the person who executed the within Termination of Custodianship, Irrevocable Proxy and Power of Attorney and acknowledged to me that she executed the same for the purposes therein stated. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal on the day and year last above written. /s/ Laura Johnstone --------------------------------- Notary Public in and for California County, Marin My commission expires: 11/4/05 ------------------- 3 EX-5.1 6 das-ex5sch13da_811972v3.txt EXCERPTS DURABLE POA Exhibit 5.1 Excerpts of Durable Power of Attorney for Financial Management dated August 6, 2003 1. Creation of Durable Power of Attorney. By this document I intend to create a durable power of attorney as permitted by the California Probate Code. This durable power of attorney shall become effective only as set forth below. 2. Designation of Agent. I, KENNETH A. MACKE, presently a resident of Napa County, California, appoint my spouse, KATHLEEN MACKE, as my true and lawful attorney-in-fact ("agent"), to act for me and in my name, place, and stead on my incapacity. When you, as my agent, sign on my behalf under the powers I give you in this document, you shall use the following form as authorized by the California Probate Code: "KENNETH A. MACKE, by KATHLEEN MACKE, his Attorney in Fact." 3. Designation of Alternate Agents. If for any reason KATHLEEN MACKE is unable or unwilling to act as my agent, then I designate my son, JEFFREY MACKE, to serve as my successor agent with the powers authorized in this instrument. To demonstrate the inability of an agent to act, one of the following documents shall be attached to this durable power of attorney: resignation or declination to serve signed by the agent; a written and signed declaration under penalty of perjury from a licensed physician that the agent is physically or mentally incapable of serving; a certified court order as to the incapacity or inability of the agent; or a certified death certificate for such agent. Third parties who deal with a successor agent shall be entitled to rely on the original power of attorney instrument with any such document(s) attached. 4. Effective Date and Duration. This durable power of attorney shall become effective only on my incapacity. I shall be conclusively presumed to lack capacity when one of my treating physicians, licensed to practice medicine in the State of California, executes a written declaration regarding my incapacity, under penalty of perjury. The declaration shall state that, in the physician's opinion, I do not have sufficient understanding of ability to make or communicate decisions about my property, financial, or business affairs. The effective date of incapacity shall be the date of receipt of such declaration by my agent. Such declaration, when received, shall be attached to the original of this power of attorney. Any person may act in reliance on this instrument with such declaration attached without liability to me or to any other person regardless of whether I am later determined to have become incapacitated. No licensed physician who executes a declaration regarding my incapacity shall be subject to liability because of such execution. I hereby waive any privilege that may apply to release of information included in such a declaration or to the execution of such a declaration. This power of attorney shall continue after my incapacity in accordance with its terms. On my death, this power of attorney shall terminate. 5. Statement of Authority Granted. My agent is authorized to take the following actions for me: . . . 5.3 Negotiate Sale of Property: to represent me in negotiations for the sale of any property, real or personal, which I may own, including but not limited to entering into listing agreements with brokers or other agents regarding such sale. 5.4 Execute Documents: to execute, acknowledge, and deliver contracts of sale, escrow instructions, deeds, covenants, agreements, assignments of agreements, and all other documents needed with respect to the sale of any real or personal property I own. . . . 5.18 Estate Planning: to create a trust, including an irrevocable trust; to modify or revoke a trust; to fund with my property a trust not created by me or a person authorized to create a trust on my behalf; to make or revoke a gift of my property in trust or otherwise; to create or change survivorship interests in my property or in property in which I may have an interest; and to designate or change the designation of beneficiaries to receive any property, benefit, or contract right on my death. . . . 5.34 General Authority as to All Other Matters: to do, execute, and perform any other act, deed, matter, or thing, that in the opinion of the agent ought to be done, executed, or performed in conjunction with this power of attorney, of every kind and nature, as fully and effectively as I could do if personally present. The enumeration of specific items, acts, rights, or powers in this instrument does not limit or restrict, and is not to be construed or interpreted as limiting or restricting, the general powers granted to the agent except where powers are expressly restricted. EX-5.2 7 das-ex52sch13da_811972v3.txt MANAGEMENT AGREEMENT Exhibit 5.2 K&A Asset Management, LLC Agreement K&A Asset Management, LLC Letterhead This Agreement is made this 14th, day of February, 2004 by and between K&A Asset Management, LLC (Advisor), and the undersigned client (Client) for the following account number (Portfolio). Kenneth and Kathy Macke (Client) All Accounts with K & A Asset Management, LLC Advisor agrees to provide investment supervisory services and act as an investment advisor under the following terms and conditions: I. General Service Provisions Client retains K&A to provide professional advisory services for the Client's Portfolio(s). These services are further described in K&A's Form ADV, Part II. The Portfolio(s) shall initially consist of cash and securities as designated by Client and shall be subject to such additions and/or withdrawals as Client may from time to time direct. Such securities may include common or preferred stocks; convertible stocks or bonds; mutual funds; options; collective trusts; sub-accounts of variable annuities; sub-accounts of variable universal life insurance; foreign securities; American Depositary Receipts; unit investment trusts; money market funds; corporate, municipal, or government bonds; and corporate, municipal, or government notes or bills, as applicable. Client is responsible for notifying K&A in writing when capital is added to the Portfolio; new capital may be in the form of cash, securities, or both. K&A is not responsible for the immediate investment of new capital when there is no such notification Client authorizes K&A at their discretion to aggregate purchases and sales of securities for the Portfolio(s) with purchases and sales of securities of the same issuer for other clients of K&A occurring on the same day. If K & A believes that the purchase or sale of a security is in the Client's best interest along with the best interest of other clients, K & A may, but shall not be obligated to, aggregate the securities to be sold or purchased to obtain favorable execution or lower brokerage commissions, to the extent permitted by applicable laws and regulations. K & A will allocate securities so purchased or sold, as well as the expense incurred in the transaction, in the manner that it considers to be equitable and consistent with its fiduciary obligations to Client and its other clients. When transactions are aggregated, the actual prices applicable to the aggregated transaction may be averaged, and the Portfolio(s) and the other accounts of K&A may be deemed to have purchased or sold their proportionate shares of the securities involved at the average price then calculated. Although K&A will pursue investment strategies consistent with the Client's investment policy, the Portfolio(s) may deviate from the written investment policy due to market conditions, Client instructions, and other factors. Client represents that the information contained in the Signature & Information Page section of this Agreement is complete and accurate. Client agrees to notify K&A promptly of any material changes in that information, or any other material changes in Client's financial circumstances or investment objectives that might affect the manner in which the investment advisory services contemplated by this Agreement are provided. Client also agrees to provide K&A with such additional information as K&A may request from time to time to assist in providing the services for the Portfolio(s). Client authorizes K&A to provide a copy of this Agreement to the Broker/Dealer, the Custodian, or any other party to a transaction for the Portfolio(s), as evidence of K&A's authority to act for Client. II. Portfolio Management Provisions K&A shall have full power to supervise and direct the investment and reinvestment of the Portfolio(s) (including all additions, substitutions, and alternations thereto) in securities, mutual funds, sub-accounts, collective trusts, and cash or cash equivalents, making and implementing all investment decisions, without prior consultations with Client. When third-party Portfolio Manager(s) are utilized for the Client(s) Portfolio(s), Client hereby appoints K&A as Client's agent and attorney-in-fact and authorizes K&A to hire, monitor, and terminate the discretionary investment management services of the Portfolio Manager(s) or mutual funds at its sole discretion for any reason whatsoever without consulting Client in advance. III. Unmanaged Assets As a general rule, K&A does not allow unmanaged securities to be commingled with Management Portfolio(s). On rare occasions, and to overcome a specific problem for the Client, K&A may agree to hold unmanaged assets in a Portfolio(s) for a limited period at the request of the Client. Client understands and agrees that K&A will hold the assets on a best efforts basis only and is not responsible for providing the services contemplated under this Agreement for the assets. Client agrees that all decisions in regard to the assets are the sole responsibility of the Client. K&A does not assume any responsibilities whatsoever for the inclusion of the assets in the Portfolio(s). 2 IV. Money Market Mutual Funds Some of the assets in your account will be held in cash or cash equivalents temporarily, pending investment or as a defensive strategy. Cash equivalents may include money market mutual funds managed by various issuers and/or custodians. Detailed information regarding each money market fund can be found in the prospectus for each such fund. You should read each prospectus carefully prior to making a selection. V. Custody The Client shall appoint a separate Custodian acceptable to the Advisor to take possession of the cash, securities and other assets in the account(s). Advisor will have no access to the assets in the account or to the income produced therefrom and will not be responsible for any acts or omissions of the Custodian. The Client shall direct the Custodian to send a statement at least quarterly indicating all amounts disbursed from the account (including the amount of any fees paid to Advisor), all transactions occurring in the account during the period covered by the statement, and a summary of the account positions and portfolio value at the end of the period. The Client shall direct the Custodian to send copies of the account statements to Advisor, along with an indication that statements have been sent to the Client. Client agrees that Advisor may require that assets be held at National Financial Services (NFS), Charles Schwab & Co., or another custodian. Client agrees that the choice of custodian will be at the discretion of Advisor. Advisor will notify client in advance of any requirement to change custodian. VI. Compensation and Fees Compensation for services shall be as described below: Portfolio with assets less than $100,000: For Portfolio(s) smaller than $100,000, K&A may decide that the best strategy to diversify is through the use of mutual funds. In this case, K&A will invest the Portfolio(s) in Class C shares of various mutual funds. K&A will be compensated directly from the mutual fund and will not draw any additional management fee off of the account. Depending on the fund, the Client may pay no up front commissions or, in some cases, a small up front commission may apply. The Fund Company may pay a 12b-1 servicing fee to K&A. The total fees paid to K&A on Class C shares may exceed total fees paid to and commissions received by K&A for Class A shares of the same Fund. Deferred Sales Charges may apply if the funds are redeemed prior to the minimum holding period (typically 1 year to 18 months). Generally the expense fees are higher than Class A shares. Class C shares may convert to Class A shares. It is the Client's responsibility to carefully review the mutual fund prospectus before investing any money. Billing cycles and payment will be determined by the mutual fund. It is the Client's responsibility to verify the accuracy of the fee calculation. The Custodian will not determine whether the fee is properly calculated. 3 Portfolio with assets greater than $100,000: May be invested in a combination of stocks, bonds, or other fixed income investments, mutual funds or cash positions as represented by money market accounts. The advisory fee will be calculated using an average daily balance billed in advance, at the beginning of the quarter. The fee is effective the day the account is accepted and prorated for the remaining days in the quarter. The fee is deducted directly from the clients account in accordance with the Fee Schedule attached and/or incorporated by reference. Advisor or Advisor's designated affiliate will bill Client for fees within 15 days of the close of each calendar quarter. Fees will be due and payable immediately upon billing. Applicable to ALL Portfolios: Margin accounts will be billed on the sum value of the portfolio's assets, and will not be reduced by the amount of the loan. Thus, margin accounts result in a higher fee compared to non-margin accounts billed on portfolio value. The initial deposit of cash or securities into the Portfolio(s) will be charged a prorated fee based on the number of days during the billing period that the account is open, at the percentage rate specified in the Fee Schedule. Additional deposits of cash or securities into the Portfolio(s) shall be charged a prorated fee based on the number of days remaining in each billing period in accordance with the Fee Schedule. Subsequent fee payments shall be assessed at the beginning of each billing period of this agreement. Unless otherwise agreed to in writing, Client authorizes K&A to debit Client's Portfolio(s) for fees as applicable. Client hereby authorizes the Custodian to deduct K&A's initial and subsequent fees from the Portfolio(s) upon receipt of the invoice, if applicable, and hereby agrees to hold the Custodian harmless for payment of such fees. If the fees are not paid directly from the Portfolio(s), K&A shall directly invoice Client for the fee and Client shall immediately pay K&A upon receipt of the invoice. Client understands that the Portfolio(s) assets may be invested in shares of mutual funds that will be included in calculating the value of the Portfolio(s) for purposes of computing K&A's fee. Mutual Fund and sub-account assets will also be subject to additional management fees and other expenses, and may be subject to "12b-1" fees to offset distribution expenses as described in the prospectuses of those funds and sub-accounts. These amounts may be paid by the funds and sub-accounts, but ultimately borne by the Client. Client expressly acknowledges that transactions in mutual fund shares and sub-accounts purchased and sold for the Portfolio(s) could be subject to ongoing expenses in the form of 12b-1 fees or other expenses from the mutual fund or sub-account. Client is advised that mutual funds purchased directly from the fund company typically would not incur a transaction fee, and Client would not incur the management or consulting fees under this Agreement in such case. Client understands that K&A shall not be paid on the basis of a share of capital gains or capital appreciation of the Portfolio(s). It is Client's responsibility to verify the accuracy of the fee calculation. The Custodian will not determine whether the fee is properly calculated. 4 Client agrees all fees are subject to change upon thirty (30) days' prior written notice to Client. Further, Client expressly understands and agrees that Advisor may charge a non-refundable one-time setup fee for Advisor's management and consulting services and that certain minimum asset amounts and fees may apply to various services provided by Advisor. Client agrees that, if Client terminates this Agreement and requests a liquidation of the portfolio, the portfolio will be subject to transaction charges to liquidate the portfolio. VII. Conflicts of Interest From time to time, a representative of Advisor may also serve Client as a Registered Representative. If so, Client will be charged commissions for transactions made as a registered representative. Any payment of securities commissions is independent of any advisory fees charged. It is the responsibility of Advisor to report all such conflicts to Client. From time to time, a representative of Advisor may also serve Client as an Investment Advisor Representative (IAR) of both K&A Asset Management and another Registered Investment Advisor (RIA). In this dual capacity, a potential conflict of interest could be the percentage of fee income paid out by each Investment Advisor to the IAR. This potential conflict would not affect the management fee schedule to be paid by the client to either Investment Advisor. VIII. Brokerage Advisor is not affiliated with London Pacific Securities, Inc.. Client understands that Advisor's representatives may also be registered representatives with London Pacific Securities, Inc., a Registered Broker/Dealer, member NASD/SIPC. In a registered representative capacity, Advisor's representatives may receive commission income from said broker/dealer for the sale of securities and insurance products to Client. Brokerage Services: All commissions and other charges with respect to transactions for the Client will be payable by Client. All transactions authorized by this Agreement shall be made for the Client and at the risk of the Client and carried out through brokers or dealers selected by the Advisor. In making any such selection, the Advisor will consider a number of factors, including, without limitation, the overall direct net economic result to the Client assets (including commissions, which may not be the lowest available but which ordinarily will not be higher than the generally prevailing competitive range), the financial strength and stability of the broker, the efficiency with which the transaction is effected, the ability to effect the transaction where a large block or other complicating factors are involved, the availability of the broker to stand ready to execute possible difficult transactions in the future, and other matters involved in the receipt of brokerage and research services if Advisor determines in good faith that the commissions are reasonable in relation to the value of the brokerage and research services provided as contemplated by section 28(e) of the Securities Exchange Act of 1934, as amended, and the regulations and interpretations of the Securities and Exchange Commission promulgated thereunder, without having to demonstrate that any such factor is of a direct benefit to the Client. The Advisor shall not be liable to Client for any act, conduct or omission of any broker, dealer or custodian. 5 Advisor shall enter orders for the Account(s) of Client with the broker or custodian the Advisor selects. Client understands and agrees that the broker or custodian may charge fees to Client that are independent of fees charged by Advisor. It is the responsibility of the Client to be aware of such charges and fees. IX. Receipt of Disclosure Document Including Disclosure of Interest and Capacity Client acknowledges receipt of the Form ADV, Part II including Schedule H (wrap fee disclosure brochure) or a brochure or brochures containing the same information less than 48 hours prior to, but not later than the date of execution of this Agreement. Accordingly, Client shall have the option to terminate this Agreement without penalty within five (5) business days after the date of execution, provided however, that any investment action taken by Advisor with respect to Client's account(s), prior to the effective date of such termination shall be at Client's risk. X. Reports to Advisor Client will appoint Advisor the advisor of record with Custodian so that Advisor may receive copies of all reports available to the Client. XI. Voting of Portfolio Securities and ERISA Bond If the account is subject to Employment Retirement Income Security of 1974 ("ERISA"), as amended, decisions on voting of Proxies will be made by (please check the appropriate box): N/A ____ Advisor ____ Trustee of Client's Account(s) or a Named Fiduciary of Client's Account(s) If the Account(s) is subject to ERISA, Client acknowledges that it is a named fiduciary with respect to the management or control of the assets of the Account and Client agrees to maintain an "ERISA Bond" under Section 412 of ERISA listing ADVISOR among those insured under the bond. XII. Confidentiality All information and advice furnished by either party to the other shall be treated as confidential and shall not be disclosed to any person, firm, or entity without the other party's prior consent, unless such disclosure is required by law. However, Client information may be shared with the Custodian, the Broker/Dealer, the Mutual Fund, and any other financial institution the Advisor deems necessary in order to transact business on the Client's behalf. For example, we regularly share information with unaffiliated third parties such as our Introducing Broker/Dealer, London Pacific Securities, Inc. No Client consent will be required prior to such disclosure(s). Client authorizes Advisor to provide a copy of this Agreement to the Broker/Dealer, the Custodian, the Mutual Fund, or any other party to a transaction for the Client, as evidence of Advisor's authority to act for Client. 6 XIII. Non-Exclusivity, Affiliations Client understands that Advisor performs investment advisory services for other clients and may give advice and take action with respect to any such client, which may differ from the advice given, or the timing, or nature of action taken with respect to Client. Advisor shall have no obligation to purchase or sell for Client, or recommend for purchase or sale by the Portfolio(s) of Client, any security that Advisor's principals, affiliates, or employees may purchase or sell for themselves or any other clients. XIV. Pricing of Securities and Timing of Trades Client recognizes that transactions in a specific security may not be accomplished for all Client purchases or accounts at the same time or at the same price. XV. Risk Acknowledgments and Limitation of Liability Advisor does not guarantee the future performance of the Portfolio(s) or any specific level of performance or the success of any investment decision or strategy that Advisor may exercise in managing the Portfolio(s). In addition, Client understands that certain Asset Management Services may require the establishment of a margin account and/or the use or derivative instruments to execute the investment strategy. Margin involves the extension of credit by the clearing Broker/Dealer for which interest will normally be charged on the credit balance. The financial exposure in a margin account can exceed the value of the securities in the Portfolio(s). Derivative instruments such as options can carry special risks including loss of premium, loss of principal and loss of opportunity to participate in the appreciation of the underlying security. Although Advisor intends to utilize options to manage risk and does not intend to use riskier option strategies such as writing uncovered calls, several principal risks still exist with the use of these instruments. Advisor does not guarantee that the use of margin or derivatives will be successful or that these investment strategies will enhance performance. Except as may otherwise be provided by law, Advisor shall not be liable to Client for (i) any loss Client may suffer by reason of any investment decision made or other action taken or omitted in good faith by Advisor with the degree of care, skill, prudence, and diligence under the circumstances that a prudent person acting in a fiduciary capacity would use; (ii) any loss arising from Advisor's adherence to Client's written instructions that Advisor reasonably believes to be genuine; or (iii) any act or failure to act by the Custodian, the Broker/Dealer to which Advisor directs transactions for the portfolio, or by any other third party. The federal and state securities laws impose liabilities under certain circumstances on persons who act in good faith, and therefore, nothing in this Agreement shall waive or limit any rights that Client may have under those laws. XVI. Performance Reports Advisor will provide Client with an appraisal of the Account as of the last day of each calendar quarter on which the New York Stock Exchange is open ("Appraisal Date"). Such appraisal shall be in the form of a written summary of assets of the Account on the Appraisal Date. Securities traded on a national securities exchange will be valued at the last sale price on the exchange, or, if there has been no sale that day, at the last known bid price. Securities that are traded over-the-counter and on a stock exchange will be valued according to the broadest and most representative market. Securities for which market quotations are readily available will be valued at the known current bid price believed by the Advisor most nearly to represent current market value. 7 Other securities and all other assets will be valued at fair value as determined in good faith by the Advisor. XVII. Headings Paragraph headings contained in this agreement are for the convenience of reference only and shall not be used in the interpretation or enforcement of the Agreement. XVIII. Governing Law This Agreement and its interpretation and enforcement shall be governed and controlled by the laws of the State of California and any applicable Federal Law. XIX. Entire Agreement This Agreement constitutes the entire agreement between the parties. There are merged herein all prior and collateral representations, promises, and conditions with the subject matter of this Agreement. Any representation, warranty, promise, or condition not expressly incorporated herein shall not be binding upon either party to the Agreement. XX. Waiver The waiver by either party of any breach of any provision of this agreement by the other party shall not constitute a waiver of any other provision of this Agreement, nor shall waiver extend to future breaches of the same or other provisions of this Agreement. XXI. Joint and Several Obligations In the event more than one person executes this Agreement as Client, each person signing for the Client agrees to be jointly and severally bound by each obligation assumed by the Client. XXII. Agreement to Arbitrate Controversies It is agreed that any controversies between Advisor and Client arising out of business conducted under the terms of this Agreement, except for those disputes between Advisor and the Client arising under Federal Securities Laws which are held to be nonarbitrable as a matter of law, shall be submitted to arbitration conducted under the provisions of the commercial arbitration rules of the American Arbitration Association. Arbitration must be commenced by service on either party of the written demand for arbitration or a written notice of intention to arbitrate, therein electing the arbitration tribunal. In the event Client does not make such election within five (5) days of such demand or notice then the Client authorizes Paul Krsek and/or Robert Andreae to make such election on the Clients behalf. Judgment upon any award rendered by the arbitrators shall be final and may be entered in any court having jurisdiction thereof. 8 XXIII. Assignment Advisor shall not assign this Agreement without the prior written consent of Client. XXIV. Termination and Duration This Agreement will be for an indefinite term. Either party may terminate this Agreement at any time upon 30 days prior written notice. Fees will be pro-rated to date of termination and any unearned portion of pre-paid fees will be refunded to the client. Termination of this Agreement shall not affect (i) the validity of any action previously taken by Advisor under this agreement; (ii) liabilities or obligations of the parties from transactions initiated before termination of this Agreement; or (iii) Client's obligation to pay the consulting fees prorated through the date of termination. Upon termination of this Agreement, Advisor has no obligation to recommend or take any action with regard to the securities, cash, or other investments in the Portfolio(s). If the Client is a natural person, the death, disability or incompetence of Client shall not terminate or change the terms of this Agreement. However, Client's executor, guardian, attorney-in-fact, or other authorized representative may terminate this agreement by giving written notice to Advisor. XXV. Notices Any notice or report to be given to Advisor under this Agreement shall be delivered by overnight courier or certified mail, return receipt requested, as follows: Attn: K&A Asset Management, LLC 1306 Oak Avenue St. Helena, CA 94574 Any notice to be given to client under this agreement shall be delivered by overnight courier or certified mail, return receipt requested, to Client at the address set forth below, or at such other address as Client sets forth in writing. Any other form of delivery of notice to either party shall not constitute good delivery. 9 XXVI. Miscellaneous If any provision of this Agreement is or should become inconsistent with any law or rule of any governmental or regulatory body having jurisdiction over the subject matter of this Agreement, the provision shall be deemed to be rescinded or modified in accordance with any such law or rule. In all other respect, this Agreement shall continue and remain in full force and effect. No term or provision of this Agreement may be waived or changed except in writing signed by the party against whom such waiver or change is sought to be enforced. Advisor's failure to insist at any time upon strict compliance with this Agreement or with any of the terms of this Agreement, or any continued course of conduct on their part, shall not constitute or be considered a waiver by Advisor of any of their rights or privileges. This Agreement contains the entire understanding between Client and Advisor concerning the subject matter of this Agreement. 10 Signature & Information Page Client Kenneth and Kathleen Macke ------------------------------------------------------------------- Client Address 20 Campbell Creek Road, Oakville, CA 94599 ------------------------------------------------------------------- Telephone Number(s)__________________________________________________________________ Fax Number______________________________ Email Address___________________________ Tax I.D. # of Client____________________ Client Signature Kathleen Macke ----------------------- Print Name Kathleen Macke Joint Client Signature /s/ Kenneth A. Macke by Kathleen Macke his attorney-in-fact ------------------------------------------------------------ Print Name Kenneth Macke Date of Agreement 2/14/2004 ---------------- Advisor Representative Paul J. Krsek Robert Andreae ------------------------------- Print Name Signature of Advisor /s/ Paul J. Krsek /s/ Robert Andreae ------------------------------- Fee Schedule: ( X ) Equity & Balanced ( ) "C" Shares ( ) Fixed Income K & A Asset Management, LLC 1306 Oak Avenue St. Helena, Ca 94574 Tel: (707) 963-2107 Fax: (707) 968-0601 www.kaassets.com 11 Exhibit B: Privacy Policy In November 2000, Congress passed legislation to modernize the laws governing the financial services industry. Included were several provisions to enhance the customer privacy protections that have been the hallmarks of securities firms, banks, and insurance companies. As of July 1, 2001, all financial institutions had to clearly, conspicuously, and annually disclose their policies for collecting and sharing nonpublic personal information. Specifically, these policies must disclose: o The types of information we share o The types of third parties we share information with o Information about our privacy policies and practices We collect a variety of nonpublic personal information from you, including: o Information we receive from your applications or other forms o Information about your transactions with us or others o Information you provide to us from telephone conversations This information is required in order to conduct business on your behalf. The information we gather is available to departments and employees of K&A on a "need to know" basis. We may also share our database with various corporate affiliates also engaged in financial services. We may also share information with certain unaffiliated third parties with whom we must in order to conduct business on your behalf. These third parties may include our clearing broker/dealers, the custodians of the assets held in your account(s), mutual fund companies, and portfolio managers. We do not provide, disclose, or sell any nonpublic information to unaffiliated third parties for marketing purposes. Our internal security procedures include physical, electronic, and procedural safeguards to protect your nonpublic personal information. Our computer database has firewalls installed to protect against threats or hazards to the security and/or integrity of customer records, and protect against unauthorized access to records that may harm or inconvenience our customers. If you discontinue using our services, we will continue to adhere to our privacy policies and practices with regard to your nonpublic personal information. 12 Schedule of Fees Managed Accounts Annualized Fee Schedules for Equity and Balanced Portfolios First $250,000 1.500 % Next 250,000 1.375 % Next 500,000 1.250 % Next 1,000,000 1.125 % Next 1,000,000 1.000 % Next 2,000,000 0.800 % Over 5,000,000 0.500 % Fee Schedule for "C" Share Investments For Portfolio(s) smaller than $100,000, K&A may decide that the best strategy to diversify is through the use of mutual funds. In this case, K&A will invest the Portfolio(s) in Class C shares of various mutual funds. K&A will be compensated directly from the mutual fund and will not draw an additional fee off of the account. The client may pay no up front commissions or, in some cases, a small up front commission may apply. The Fund Company may pay a 12b-1 servicing fee (higher than Class A shares) to the representative. Deferred Sales Charges may apply if the funds are withdrawn prior to the minimum holding period (typically 1 year to 18 months). Generally the expense fees are higher than Class A shares. Class C shares may convert to Class A shares. Annualized Fee Schedules for Fixed Income Portfolios First $1,000,000 0.700 % Next $2,000,000 0.500 % Next $2,000,000 0.350 % Over $5,000,000 0.250 % Set-Up Fee: There will be a one-time set-up fee of 10 basis points assessed upon receipt of assets in account, not to exceed $375.00 Updated April 1, 2002 13 -----END PRIVACY-ENHANCED MESSAGE-----