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ADV Form 197

Berkshire Asset Management, LLC

ADV Part II, Privacy and Proxy Policies

As of 08/17/2009

FORM ADV

Uniform Application for Investment Adviser Registration

Part II - Page 1

Name of Investment Adviser:

Address: (Number and Street) (City) (State) (Zip Code) Area Code: Telephone Number:

This part of FORM ADV gives information about the investment adviser and its business for the use of clients.

The information has not been approved or verified by any government authority.

Table of Contents

Item Number Item Page

1 Advisory Services and Fees .............................................................................................................. 2

2 Types of Clients ................................................................................................................................. 2

3 Types of Investments ........................................................................................................................ 3

4 Methods of Analysis, Sources of Information and Investment Strategies ......................................... 3

5 Education and Business Standards .................................................................................................... 4

6 Education and Business Background ................................................................................................ 4

7 Other Business Activities .................................................................................................................. 4

8 Other Financial Industry Activities or Affiliations ............................................................................ 4

9 Participation or Interest in Client Transactions ................................................................................. 5

10 Conditions for Managing Accounts ................................................................................................... 5

11 Review of Accounts ........................................................................................................................... 5

12 Investment or Brokerage Discretion .................................................................................................. 6

13 Additional Compensation .................................................................................................................. 6

14 Balance Sheet .................................................................................................................................... 6

Continuation Sheet ............................................................................................................. Schedule F

(Schedule A, B, C, D, and E are included with Part I of this Form, for the use of regulatory bodies, and are not distributed to clients.)

Potential persons who are to respond to the collection of information contained in this form

are not required to respond unless the form displays a currently valid OMB control number.

OMB APPROVAL

OMB Number: 3235-0049 Expires: February 28, 2011Estimated Average burden Hours per response..........4.07

Berkshire Asset Management LLC

46 Public Square, Ste 700 Wilkes-Barre PA 18701 570-825-2600

FORM ADV

Part II - Page 2

Applicant: SEC File Number:

801-

Date:

1. A. Advisory Services and Fees. (check the applicable boxes) For each type of service provided, state the approximate % of total advisory billings from

Applicant: that service. (See instruction below.)

(1) Provides investment supervisory services .......................................................................................... %

(2) Manages investment advisory accounts not involving investment supervisory services..................... %

(3) Furnishes investment advice through consultations not included in either service described above... %

(4) Issues periodicals about securities by subscription ..............................................................…........... %

(5) Issues special reports about securities not included in any service described above........................... %

(6) Issues, not as part of any service described above, any charts, graphs, formulas, or other devices

which clients may use to evaluate securities....................................................................................... %

(7) On more than an occasional basis, furnishes advice to clients on matters not involving securities... %

(8) Provides a timing service ...............................................................................................................… %

(9) Furnishes advice about securities in any manner not described above..........................................…. %

(Percentages should be based on applicant’s last fiscal year. If applicant has not completed its first fiscal year,

provide estimates of advisory billings for that year and state that the percentages are estimates.)

_________________________________________________________________________________________________________

Yes No

B. Does applicant call any of the services it checked above financial planning or some similar term? . . . . . . . _________________________________________________________________________________________________________

C. Applicant offers investment advisory services for: (check all that apply)

(1) A percentage of assets under management (4) Subscription fees

(2) Hourly charges (5) Commissions

(3) Fixed fees (not including subscription fees) (6) Other

_________________________________________________________________________________________________________

D. For each checked box in A above, describe on Schedule F:

• the services provided, including the name of any publication or report issued by the adviser on a subscription basis or for

a fee

• applicant’s basic fee schedule, how fees are charged and whether its fees are negotiable

• when compensation is payable, and if compensation is payable before service is provided, how a client may get a refund

or may terminate an investment advisory contract before its expiration date

2. Types of clients - Applicant generally provides investment advice to: (check those that apply)

A. Individuals E Trusts, estates, or charitable organizations

B. Banks or thrift institutions F. Corporations or business entities other than those listed above

C. Investment companies G. Other (describe on Schedule F)

D. Pension and profit sharing plans

Answer all items. Complete amended pages in full, circle amended items and file with execution page (page 1)


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FORM ADV

Part II - Page 3


801-

Date:

3. Types of Investments. Applicant offers advice on the following: (check those that apply)

A. Equity securities H. United States government securities

(1) exchange-listed securities I. Options contracts on:

(2) securities traded over-the-counter (1) securities

(3) Foreign issuers (2) commodities

B. Warrants J. Futures contracts on:

C. Corporate debt securities (other than commercial paper) (1) tangibles

(2) intangibles

D. Commercial paper

E. Certificates of deposit K. Interests in partnerships investing in:

F. Municipal securities (1) real estate

(2) oil and gas interests

G. Investment company securities: (3) other (explain on Schedule F)

(1) variable life insurance

(2) variable annuities L. Other (explain on Schedule F)

(3) mutual fund shares

4. Methods of Analysis, Sources of Information, and Investment Strategies.

A. Applicant’s security analysis methods include: (check those that apply)

(1) Charting (4) Cyclical

(2) Fundamental (5) Other (explain on Schedule F)

(3) Technical

_________________________________________________________________________________________________________

B. The main sources of information applicant uses include: (check those that apply)

(1) Financial newspapers and magazines (5) Timing services

(2) Inspections of corporate activities (6) Annual reports, prospectuses, filings with the

(3) Research materials prepared by others Securities and Exchange Commission

(4) Corporate rating services (7) Company press releases

(8) Other (explain on Schedule F)

_________________________________________________________________________________________________________

C. The investment strategies used to implement any investment advice given to clients include: (check those that apply)

(1) Long term purchases (5) Margin transactions

(securities held at least a year)

(2) Short term purchases (6) Option writing, including covered options,

(securities sold within a year) uncovered options or spreading strategies

(3) Trading (securities sold within 30 days) (7) Other (explain on Schedule F)

(4) Short sales



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FORM ADV

Part II - Page 4


801-

Date:

5. Education and Business Standards.

Are there any general standards of education or business experience that applicant requires of those involved in Yes No

determining or giving investment advice to clients? ...................................................................................................

(If yes, please describe these standards on Schedule F)

6. Education and Business Background.

For:

• each member of the investment committee or group that determines general investment advice to be given to clients, or

• if the applicant has no investment committee or group, each individual who determines general investment advice

clients (if more than five, respond only for their supervisors)

• each principal executive officer of applicant or each person with similar status or performing similar functions.

On Schedule F, give the:

• name • formal education after high school

• year of birth • business background for the preceding five years

7. Other Business Activities. (check those that apply)

A. Applicant is actively engaged in a business other than giving investment advice.

B. Applicant sells products or services other than investment advice to clients.

C. The principal business of applicant or its principal executive officers involves something other than providing

investment advice.

(For each checked box describe the other activities, including the time spent on them, on Schedule F.)

8. Other Financial Industry Activities or Affiliations. (check those that apply)

A. Applicant is registered (or has an application pending) as a securities broker-dealer.

B. Applicant is registered (or has an application pending) as a futures commission merchant, commodity pool operator

or commodity trading adviser.

C. Applicant has arrangements that are material to its advisory business or its clients with a related person who is a:

(1) broker-dealer (7) accounting firm

(2) investment company (8) law firm

(3) other investment adviser (9) insurance company or agency

(4) financial planning firm (10) pension consultant

(5) commodity pool operator, commodity trading (11) real estate broker or dealer

adviser or futures commission merchant

(6) banking or thrift institution (12) entity that creates or packages limited partnerships

(For each checked box in C, on Schedule F identify the related person and describe the relationship and the arrangements.)

Yes No

D. Is applicant or a related person a general partner in any partnership in which clients are solicited to invest?..

(If yes, describe on Schedule F the partnerships and what they invest in.)



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FORM ADV

Part II - Page 5


801-

Date:

9. Participation or Interest in Client Transactions.

Applicant or a related person: (check those that apply)

A. As principal, buys securities for itself from or sells securities it owns to any client.

B. As broker or agent effects securities transactions for compensation for any client.

C. As broker or agent for any person other than a client effects transactions in which client securities are sold to or

bought from a brokerage customer.

D. Recommends to clients that they buy or sell securities or investment products in which the applicant or a related

person has some financial interest.

E. Buys or sell for itself securities it also recommended to clients.

(For each box checked, describe on Schedule F when the applicant or a related person engages in these transactions and

what restrictions, internal procedures, or disclosures are used for conflicts of interest in those transactions.)

Describe, on Schedule F, your code of ethics, and state that you will provide a copy of your code of ethics to any client or

prospective client upon request.

10. Conditions for Managing Accounts. Does the applicant provide investment advisory services, manage Yes No investment advisory accounts or hold itself out as providing financial planning or some similarly termed

services and impose a minimum dollar value of assets or other condition for starting or maintaining an

account?

(If yes, describe on Schedule F)

11. Review of Accounts. If applicant provides investment supervisory services, manages investment advisory account, or holds itself out as providing financial planning or some similarly termed services:

A. Describe below the reviews and reviewers of the accounts. For reviews, include their frequency, different levels, and

triggering factors. For reviewers, include the number of reviewers, their titles and functions, instructions they receive

from applicant on performing reviews, and number of accounts assigned each.

B. Describe below the nature and frequency of regular reports to clients on their accounts.



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Please see Response to Item 11 on Schedule F.

Please see Response to Item 11 on Schedule F.

FORM ADV

Part II - Page 6


801-

Date:

12. Investment or Brokerage Discretion.

A. Does applicant or any related person have authority to determine, without obtaining specific client consent, the:

Yes No

(1) securities to be bought or sold? ...............................................................................................................

Yes No

(2) amount of securities to be bought or sold? .......................................................................................…..

Yes No

(3) broker or dealer to be used? ................................................................................................................

Yes No

(4) commission rates paid? ...........................................................................................................................

________________________________________________________________________________________________________

Yes No

B. Does applicant or a related person suggest brokers to clients? .......................................................................

For each yes answer to A describe on Schedule F any limitations on the authority. For each yes to A(3), A(4)

or B, describe on Schedule F the factors considered in selecting brokers and determining the reasonableness

of their commissions. If the value of products, research and services given to the applicant or a related

person is a factor, describe:

• the products, research and services

• whether clients may pay commissions higher than those obtainable from other brokers in return for those products

and services

• whether research is used to service all of applicant's accounts or just those accounts paying for it; and

• any procedures the applicant used during the last fiscal year to direct client transactions to a particular broker in

return for product and research services received.

13. Additional Compensation.

Does the applicant or a related person have any arrangements, oral or in writing, where it:

A. is paid cash by or receives some economic benefit (including commissions, equipment or non-research Yes No

services) from a non-client in connection with giving advice to clients? . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Yes No

B. directly or indirectly compensates any person for client referrals?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(For each yes, describe the arrangements on Schedule F.)

14. Balance Sheet. Applicant must provide a balance sheet for the most recent fiscal year on Schedule G if applicant:

• has custody of client funds or securities (unless applicant is registered or registering only with the

Securities and Exchange Commission); or

• requires prepayment of more than $500 in fees per client and 6 or more months in advance

Yes No Has applicant provided a Schedule G balance sheet?..............................................................................



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Schedule F of

FORM ADV

Continuation Sheet for Form ADV Part II


801-

Date:

(Do not use this Schedule as a continuation sheet for Form ADV Part I or any other Schedules)

1. Full name of applicant exactly as stated in Item 1A of Part I of Form ADV: IRS Empl. Ident. No.:

Item of Form

(identify) Answer

(Complete amended pages in full, circle amended items and file with execution page (page 1).

Berkshire Asset ManagementLLC 68485 8.17.2009

Berkshire Asset Management LLC 26-0256914

Item 1D Berkshire Asset Management, LLC (“Berkshire”) provides portfolio management services to individuals, foundations, endowments, trusts, estates, corporations, and pension and profit sharing plans. Berkshire manages advisory accounts and monitors clients’ accounts on a daily basis. Account supervision is guided by the stated objectives of that client (i.e. growth, safety, income, etc.) Thus, every account is governed by the individual objectives of each client. These objectives may not always take into consideration all of the related factors applicable to the rendering of “investment supervisory services”; rather, individual clients will decide on the specific direction of their account and Berkshire will manage the account under that premise.

For portfolio management services, the client will be charged fees on a quarterly basis. Fees are calculated as a percentage of assets under management.

The maximum annual fee is based on the following schedule:

Equity and Balanced AccountsFirst $2,000,000 of Market Value 1.00%/annumNext $3,000,000 of Market Value 0.75%/annumNext $5,000,000 of Market Value 0.65%/annumOver $10,000,000 of Market Value 0.50%/annum

Fixed Income AccountsFirst $5,000,000 of Market Value 0.50%/annumNext $5,000,000 of Market Value 0.40%/annumOver $10,000,000 of Market Value 0.25%/annum

Berkshire may also provide specialized investment advisory or monitoring services to clients for a negotiated fee. These services are typically tailored to fit the individual client’s needs. Berkshire does not maintain a standard fee schedule for this service and the terms of each arrangement are negotiated with the client.

Schedule F of

FORM ADV



801-

Date:



Item of Form

(identify) Answer




Item 1D (cont) The principal executive officer will quote an exact percentage to each client based on both the nature and dollar value of the account. Fees may be negotiable based upon factors including, but not limited to, the size of the account and other relationships that the client may have with the Applicant.

Except as described below, the fee charged will never be based on the capital gains or the capital appreciation of any funds or any part of any funds of any client. Fees as permitted under Rule 205-3 promulgated under the Investment Advisers Act of 1940 will be permitted for certain sophisticated, accredited investors. Berkshire Partnership, Darkhorse Opportunity Fund, L.P. and at the request of certain qualified clients, as defined by the rule, are the only advisory clients under contract that have the potential to pay a performance fee to the Applicant.

The client Agreement will commence on the date it is accepted by Berkshire and shall remain in effect until termination by either party, for any reason, upon ten days written notice to the other. The client has the right to terminate the Agreement without penalty within five business days after entering into the Agreement. Upon termination, Berkshire will refund any prepaid fees, pro rated from the date of termination through the end of the quarter for which fees were prepaid.

Berkshire may also provide management services to clients through wrap fee programs. The services provided by Berkshire and the fees that Berkshire receives under the program are described in detail in the contract executed by each wrap fee client and in the disclosure document provided to each client by the wrap fee program sponsors.

Schedule F of

FORM ADV



801-

Date:



Item of Form

(identify) Answer




Item 3K

Item 5

Berkshire offers advice about limited partnerships that are affiliated with the Applicant. Berkshire Partnership, Berkshire Growth Fund and Darkhorse Opportunity Fund, L.P. invest substantially all of their assets in equity and debt securities listed on national securities exchanges. Berkshire Partnership may also invest in: option contracts on securities and securities indices. Darkhorse Opportunity Fund, L.P. may also invest in: equity securities of foreign companies including companies in emerging markets; option contracts on securities and securities indices; preferred shares; depository receipts; and money market instruments.

Berkshire requires of those individuals directing or determining investment advice, that they demonstrate their successful completion of a college or university degree in a related field (such as banking, finance, economics) and/or have prior equivalent experience. In addition, all employees of Berkshire annually become a signatory to the Applicant’s Code of Ethics, Policy on Insider Trading and Policy restricting personal security transactions.

All applicable individuals must exhibit a keen understanding of the economic, financial and market factors necessary to make wise and informed decisions regarding portfolio management practices.

Schedule F of

FORM ADV



801-

Date:



Item of Form

(identify) Answer




Item 6 Kenneth J. Krogulski, CFA, born in 1957 in Wilkes-Barre, Pennsylvania, is a graduate of Indiana University of Pennsylvania with a BS in Finance. He received his MBA from Wilkes University in 1982.Mr. Krogulski completed the Chartered Financial Analyst Program sponsored by the Institute of Chartered Financial Analysts. He was designated a CFA in 1986. Prior to joining Berkshire Asset Management, Inc., Mr. Krogulski was employed for 11 years by the First Eastern Bank, NA, Trust Department in Wilkes-Barre, Pennsylvania. At the time of his departure from the bank, Mr. Krogulski was Senior Portfolio Manager/Strategist. Mr. Krogulski joined Berkshire Asset Management, Inc., in May 1990 as Vice-President. Mr. Krogulski currently serves as President, Chief Investment Officer, CEO and Managing Member.

Gerard Mihalick, CFA, born in 1968 in Wilkes-Barre, Pennsylvania, is a graduate of Gettysburg College with a BA in Management and a concentration on Finance and Accounting. Following Mr. Mihalick’s graduation in 1990 from Gettysburg College, he was a registered representative for Capital Analysts in Bethlehem, Pennsylvania until February 1991. From February 1991 until September 1992, he was employed in Wilkes-Barre, Pennsylvania as a Financial Consultant for Merrill-Lynch. From October 1992 through January 1993, Mr. Mihalick was employed by PNC Securities, Scranton, Pennsylvania, as a Registered Representative. He then worked as a Portfolio Manager for Fleet Investment Advisors located in Rochester, New York, from February 1993 through September 1994; and as an Analyst for OCI Asset Management from October 1994 through March 1995 at which time he joined Berkshire Asset Management, Inc. Mr. Mihalick currently serves as Vice President.

Michael Durkin Weaver, CFA, born in 1972 in Kingston, Pennsylvania, is a graduate of the University of Virginia with a BA in Economics. Following Mr. Weaver’s graduation from Virginia, he worked as an analyst with First Security Investments. From May of 1996 to October of 1999, Mr. Weaver worked as a Senior Portfolio Manager for Mellon Private Asset Management. Mr. Weaver joined the Applicant in October of 1999, and currently serves as Vice President.

Schedule F of

FORM ADV



801-

Date:



Item of Form

(identify) Answer




Item 6 (cont.) Marilyn D. Millington, born in 1963 in Wilkes-Barre, PA, graduated from King’s College with a BS in Accounting. She has completed executive educational certificate programs at the John F. Kennedy School of Government, Harvard University and the Judge School of Management, Cambridge University. Until 6/30/2007 she held a Series 24, Registered Supervisory Principal, Series 7 Registered Representative. She holds a Series 65, Registered Investment Adviser and Series 63, State Uniform Securities Representative licenses and is licensed by the Pennsylvania Insurance Department in Accident, Health, Life, Fixed and Variable Annuities. Prior to joining Berkshire Asset Management, Inc. in May of 2003, she was a Vice President and Client Relationship Team Advisor with PNC Advisors from June 2002 to May 2003; Director of Marketing and Communications with Prudential Retirement Services, from December 1998 to October 2001; a Smith Barney Financial Adviser, from October 1997 to December 1998; Managing Director at MLB Advertising, from 1993 through 1997; owner of her own consulting business, from 1985 to 1991; and was an accountant with Parente Randolph PC, from 1983 through 1985. Ms. Millington currently serves as a Vice President and Chief Compliance Officer of the Applicant.

Gregory Cameron Weaver, CFA, born in 1974 in Kingston, Pennsylvania, graduated from the University of Central Florida (UCF) with a BS in Business Administration and Finance in 1998.Following Mr. Weaver’s graduation from UCn accountant with MGM Studios from March, 1999 to February, 2000. In February, 2000, he joined Paramount Pictures as a Financial Analyst. From August 2004 to November 2004 Mr. Weaver was an Investment Representative at the Trust Company of the West. From November of 2004 to August of 2007, Mr. Weaver worked as a Wealth Manager for M&T Investment Group. Mr. Weaver joined the Applicant in August of 2007, and currently serves as Vice President.

Schedule F of

FORM ADV



801-

Date:



Item of Form

(identify) Answer




Item 8B Berkshire is the General Partner and investment adviser to Berkshire Partnership (“BP”) and Berkshire Growth Fund (“BGF”). Additionally, BDF Partners, LLC, a Delaware LLC and a wholly owned subsidiary of the Applicant, is the General Partner of Darkhorse Opportunity Fund, L.P. (“DOF”). BP, BGF and DOF are Pennsylvania limited partnerships offered privately to investors that qualify in accordance with the requirements of the applicable offering documents. BP, BGF and DOF invest substantially all their assets in equity and debt securities listed on national securities exchanges. DOF may also invest in: equity securities of foreign companies including companies in emerging markets; option contracts on securities and securities indices; preferred shares; depository receipts; and money market instruments. Some advisory clients of the Applicant may also be investors in BP, BGF and DOF and the Applicant may in the future offer other advisory clients investment interests in the partnerships. The Applicant has a financial investment in BP and BGF and employees of the Applicant may also have financial investments in the partnerships.

Schedule F of

FORM ADV



801-

Date:



Item of Form

(identify) Answer


Berkshire AssetManagement LLC 68485 8.17.2009


Item 9 Berkshire may, from time to time, recommend to clients that they buy or sell securities in which related persons, such as its employees or affiliated entities, have a financial interest. Berkshire generally will be unaware that an affiliated entity has a financial interest in a security. However, if one or more of the Berkshire’s employees has a financial interest in a security recommended to clients, the Berkshire will follow the procedures outlined below regarding employee trading. From time to time, the Berkshire’s employees may have a position in a certain security that may also be recommended to a client. Berkshire has established the following restrictions and disclosure procedures to ensure, at all times, that it fulfills its fiduciary obligation.

(1) Employees and their immediate family residing in the same household are prohibited from acquiring any securities in an initial public offering. The only exception is that employees are permitted to exercise subscription rights in mutual thrift conversions where the employee is a customer.

(2) Employees and their immediate family residing in the same household, acquiring securities in a private placement must receive express prior approval from the President or Chief Compliance Officer. The basis for granting approval or not will take into account whether the investment opportunity should be reserved for the Berkshire’s clients, and whether the opportunity is being offered to the employee by virtue of his or her position with the Berkshire. Employees who have been authorized to acquire securities in a private placement are required to disclose that investment when they play a part in any subsequent consideration by Berkshire to invest on behalf of clients in the issue.

(3) All transactions by employees, either for themselves or members of their immediate family residing in the same household, shall require approval prior to the purchase or sale as stated in the personal securities trading policy.

(4) Blackout Period: Employees and their immediate family residing in the same household are prohibited from executing personal securities transactions on a day during which the

Schedule F of

FORM ADV



801-

Date:



Item of Form

(identify) Answer




Item 9 (cont.) Berkshire has a pending buy or sell order in that same security, until that order is executed or withdrawn. In addition, all employees and their immediate family residing in the same household are prohibited from buying or selling a security if Berkshire executed a trade in the same security the previous trading day. Any profits realized on trades executed in violation of this policy will be disgorged.

(5) All employees and their immediate family residing in the same household are required to disclose all personal securities holdings upon commencement of employment and thereafter on a quarterly basis. This disclosure must be accompanied by a quarter end report from the custodian holding the assets.

(6) All employees are required to certify annually that they have read and understand Berkshire’s policy on personal securities transactions and that they have disclosed or reported all personal securities transactions required to be disclosed pursuant to the requirements of the policy.

In addition to the above procedures, Berkshire maintains and enforces a written Code of Ethics ("Code") pursuant to Rule 204A-1 under the Advisers Act. The Code includes provisions requiring directors, officers and employees of Berkshire to: (1) abide by standards of business conduct; (2) comply with applicable federal securities laws; (3) acknowledge receipt of the Code and any amendments; and (4) report any violations of the Code promptly to the Chief Compliance Officer.

The Code requires all access persons to provide Berkshire with periodic securities holdings reports and periodic transactions reports, and requires Berkshire to review those holdings and transactions. The Code requires access persons to obtain prior approval to effect trades in any Initial Public Offering or security of Limited Offering. The Code prohibits employees from revealing information relating to the investment intentions, activities or portfolios of Berkshire’s clients, except to persons whose responsibilities require knowledge of the information. The Code also requires employees to comply with restrictions regarding the provision and receipt of gifts and entertainment. Clients or prospective clients may obtain a copy of the Code upon request.

Schedule F of

FORM ADV



801-

Date:



Item of Form

(identify) Answer




Item 10

Item 11A

Item 11B

In general, Berkshire will establish a minimum dollar value for client accounts. The standard minimum is $1,000,000. However, this figure may be negotiable, depending upon the client’s objectives and the nature of the account. A suggested minimumannual management fee of $7,500 was implemented for new clients on January 1, 1994.

In response to Item 11 A, due to the nature of our services, most accounts will be reviewed by the investment manager for the account on a daily basis to measure the impact of factors including, but not limited to, daily market activity, general economic or political trends, interest rate movements, and/or changes in the regulatory environment. However, depending upon the current market conditions and the particular position of the account, not all accounts need daily review. Client accounts will be monitored by the investment manager to ensure that the client’s primary objectives are maintained (e.g. growth, safety, income, etc.). Thenumber of accounts assigned to an investment manager will never exceed that number which would compromise the high standards established by Berkshire.

In addition to regular review by the investment manager of each account, all accounts will be reviewed for accuracy on a monthly basis by office support staff. This review will follow strict procedures as approved by Berkshire’s President. Berkshire’s investment policy committee meets periodically to review all portfolios to ensure each account is structured in compliance with client investment policy guidelines.

In response to Item 11 B, all clients will receive, no less than quarterly, reports containing the following information: (1) Portfolio Appraisal Report; (2) Realized Gain/Loss Report; (3) Interest Dividend and Expense Report; (4) Purchase and Sale Report; (5) Performance Report and Performance History Report in compliance with Global Investment Performance (GIPS) standards. Investors in limited partnerships offered privately and managed by the Berkshire will receive reports as described in the applicable offering documents.

Schedule F of

FORM ADV



801-

Date:



Item of Form

(identify) Answer




Item 12 For discretionary accounts, Berkshire receives from such clients written authority empowering Berkshire to determine which securities and amounts thereof to be bought or sold and the broker-dealer to be used to execute transactions. For the selection of broker-dealers and in determining commission rates paid, Berkshire chooses firms it believes provide quality execution, competitive commission rates and other research related services deemed important to Berkshire’s ability to successfully and competitively discharge its fiduciary responsibility to its clients.

In selecting a brokerage firm, Berkshire will not necessarily direct transactions to the broker or dealer offering the lowest commissions. Berkshire may also consider a variety of factors, including the brokerage firm’s execution capabilities, ability to avoid significant market impact, reputation, access to the markets for the securities being traded, and willingness to provide products and services that assist Berkshire in the investment decision-making process. Berkshire may direct transactions to brokers in return for research services that assist it in the investment decision-making process (such as written research reports on companies, sectors, or the economy, or subscriptions to on-line data bases that provide real time and historical pricing information). When Berkshire does so, Berkshire may pay the executing broker a commission greater than another qualified broker (which does not provide research) might charge to effect the same transaction. Such arrangements are generally referred to as “soft dollar arrangements.” Berkshire only enters into a soft dollar arrangement if it determines in good faith that the commission paid is reasonable in relation to the value of the execution and research services provided. Soft dollar arrangements generally take one of two forms: proprietary or third party. Under a proprietary arrangement, the executing broker directly provides research services to Berkshire. Brokers that provide proprietary research generally charge a bundled commission that includes the cost of execution and the additional research services, and they do not typically assign a particular value to their research services.

Berkshire regularly assesses the value of the research services provided by the brokers with which it deals. Over time, Berkshire attempts to direct commission business to a broker in an amount that is fair and reasonable under the circumstances and proportional to Berkshire’s assessment of the value added by that broker. Subject to best execution and the relevant factors reference above, a significant percentage of client trades may be executed with broker-dealers that provide research and brokerage execution services to Berkshire.

Schedule F of

FORM ADV



801-

Date:



Item of Form

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Item 12 (cont.) Berkshire does engage in soft dollar arrangements with certain brokers when and only if the service is believed to provide lawful and appropriate assistance in Berkshire’s investment decision-making process in accordance with Section 28(e)(3) of the Securities Exchange Act of 1934. Research and other lawful services paid for under soft dollar arrangements may be used in servicing some or all of the client accounts and not necessarily just those accounts whose brokerage commissions paid for the research or service. Clientsmay pay brokerage commissions that are used, in part, to purchase research or services that are not used to benefit that specific client. Commission rates paid to execution only brokers and soft dollar brokers for equity securities generally range between $0.01 and $0.07 per share.

On occasion, a broker might furnish Berkshire with research or services that are useful both in making investment decisions for managed accounts and in performing administrative or other non-research functions. Where this occurs, Berkshire reasonably allocates the cost of the service, so that the portion or specific component that assists in the investment decision-making process is obtained with client commissions from managed accounts and the portion or specific component which provides non-research assistance is paid for by the Berkshire with its own resources.

With respect to fixed income securities (municipal bonds, corporate bonds and government securities) being purchased or sold, the Berkshire solicits competitive bids and offers from a number of dealers and effects each transaction at the highest net bid or lowest net offer price. Berkshire does not include fixed income securities transactions in its soft dollar arrangements. The products, research and other services Berkshire receives from soft dollar brokers in exchange for commissionable order flow may include: written reports or analysis on companies, sectors or the economy; subscriptions to online databases that provide real time and historical pricing information or equity and fixed income analysis; portfolio accounting and trading systems; computer terminals; connections used to retrieve research; and training seminars. When Berkshire intends to purchase or sell the same security for several client accounts at approximately the same time, Berkshire will generally combine the client orders (i.e. enter a “bunched” order) in an effort to obtain best execution or to negotiate a more favorable commission rate. If a bunched order is executed at different prices or commissions, the

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Item 12 (cont.) transactions will be allocated to each client participating in the order at the average execution price and commission. If a bunched order is only partially filled by the end of a trading day, each client participating in the bunched order will generally receive a pro-rata portion of the shares filled based upon the client’s percentage participation in the order. Berkshire may make exceptions to this general policy from time to time, provided Berkshire determines that the allocation is fair and equitable under the circumstances and does not discriminate against any client.

For those clients who have instructed Berkshire to execute all, or a specific portion, of trades at a broker dealer of their choosing (directed brokerage arrangement) it is likely that Berkshire will be unable to negotiate lower commission rates, potentially exposing these clients to higher transaction costs and subsequently potential lower portfolio returns. When Berkshire executes trades for more than one account in the same security, accounts with directed brokerage arrangements and accounts participating in a “wrap” program will be communicated to broker dealers and executed after accounts in which Berkshire has discretion over the broker dealer to be used. These accounts may not obtain the cost and execution benefits of participating in aggregated trades with the Clients who do not direct brokerage.

Generally, due to the nature and risk of initial public offerings (IPOs), these investments will not be appropriate for the Berkshire’s clients. They may be appropriate investments for some of the limited partnerships managed by Berkshire, particularly Darkhorse Opportunity Fund, L.P., which has a riskier investment objective and profile. However, if Berkshire determines that an IPO is appropriate for its separate client accounts and if Berkshire believes that a sufficient number of shares can be obtained to make a meaningful allocation, separate client accounts may be invested in an IPO. If Berkhshire only receives a portion of the number of shares requested in an IPO, the partial fill policies, as described above, will be followed.

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Berkshire AssetManagement LLC 68485 8.17.2009


Item 13B Berkshire may, from time to time, compensate persons for client referrals. Berkshire is aware of the special considerations set forth in Rule 206(4)-3 of the Investment Advisers Act of 1940, as amended, and as such, all referral arrangements will be conducted in accordance with the applicable rules and regulations.

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TPTTRIVACYTT TTPTTOLICYT Berkshire Asset Management, LLC. is committed to keeping nonpublic personal information about you secure and confidential. This notice is intended to help you understand how we fulfill this responsibility. Periodically, we collect a variety of personal information about you, including:

• Account application and registration information on paper or via the telephone or email.

• Transaction and practice information with us, our affiliates, or others (such as your purchases, sales, or account balances).

We do not disclose your personal information unless authorized by you, or required by law or regulation. For example, we may share this information with others in order to process your transactions. We may also provide this information to companies that perform marketing or administrative services on our behalf, such as printing and mailing, or to other financial institutions with whom we have joint marketing agreements. We require these companies to protect the confidentiality of this information and to use it only to perform the services for which we engaged them. We take precautions to ensure your information is protected by implementing strict internal security procedures. Only authorized individuals have access to this information. We maintain physical, electronic, and procedural safeguards to protect your nonpublic personal information. If you decide at some point either to close your account(s) or become an inactive customer, we will continue to adhere to our privacy policies and practices with respect to your nonpublic personal information. This notice is provided by Berkshire Asset Management, LLC.

BERKSHIRE ASSET MANAGEMENT, INC. PROXY VOTING

BACKGROUND

As outlined in the Investment Management Agreement, Berkshire Asset Management, Inc. (“Berkshire”) may assume responsibility for voting proxies for securities held in client accounts unless such responsibility and authority have been expressly retained by the client. Berkshire has adopted and implemented policies and procedures that we believe are reasonably designed to ensure that proxies are voted in the best interest of the clients, in accordance with our fiduciary duties under applicable laws, rules and regulations. If authority to vote proxies is established by the client in the Investment Management Agreement, our proxy voting guidelines have been tailored to reflect this specific contractual obligation. In addition to requirements under the securities laws governing advisers, our proxy voting policies reflect the long-standing fiduciary standards and responsibilities for ERISA accounts. Unless a manager of ERISA assets has been expressly precluded from voting proxies, the Department of Labor has determined that the responsibility for these votes lies with the Investment Manager. In exercising its voting authority, Berkshire will not consult or enter into agreements with officers, directors or employees of Legg Mason Inc. or any of its affiliates (other than Berkshire) regarding the voting of any securities owned by its clients.

POLICY Berkshire’s proxy voting procedures are designed and implemented in a way that is reasonably expected to ensure that proxy matters are handled in the best interest of clients for whom we have voting authority. While the guidelines included in the procedures are intended to provide a benchmark for voting standards, each vote is ultimately cast on a case-by-case basis, taking into consideration Berkshire’s contractual obligations to our clients and all other relevant facts and circumstances at the time of the vote (such that these guidelines may be overridden to the extent Berkshire deems appropriate).

PROCEDURES

RESPONSIBILITY AND OVERSIGHT The Berkshire proxy voting committee (the “Proxy Committee”) is responsible for administering and overseeing the proxy voting process. Berkshire’s proxy coordinator (the “Proxy Coordinator”) coordinates the gathering of proxies. The chairman of the Proxy Committee is responsible for determining appropriate voting positions on each proxy utilizing any applicable guidelines contained in these procedures. CLIENT AUTHORITY Each client Investment Management Agreement is reviewed at account startup or upon amendment to determine proxy voting responsibility. If the Investment Management Agreement so provides or if the account represents assets of an ERISA plan and Berkshire has not received written instruction from the client that precludes the firm from voting proxies, Berkshire will assume responsibility for proxy voting. The Portfolio Accounting Administrator maintains a matrix of proxy voting authority and will regularly provide the Proxy Coordinator with the most current information. PROXY GATHERING Registered owners of record, client custodians, client banks and trustees (“Proxy Recipients”) that receive proxy materials on behalf of clients should forward them to the Proxy Coordinator. Proxy Recipients for new clients (or, if Berkshire becomes aware that the applicable Proxy Recipient for an existing client has changed) are notified at start-up of appropriate routing to the Proxy Coordinator of proxy materials received and also reminded of their responsibility to forward all proxy materials on a timely basis. If Berkshire personnel other than the Proxy Coordinator receive proxy materials, they should promptly forward the materials to the Proxy Coordinator. PROXY VOTING Once proxy materials are received, the Proxy Coordinator will initiate the following actions:

a. Proxies are reviewed to determine accounts impacted. b. Impacted accounts are checked to confirm Berkshire’s voting authority. c. The Chairman of the Proxy Committee reviews proxy issues to determine any material conflicts of interest. (See Conflicts of Interest Section of these

procedures for further information on determining material conflicts of interest.) d. If a material conflict of interest exists (i) to the extent reasonably practicable and permitted by applicable law, the client is promptly notified, the conflict is

disclosed and Berkshire obtains the client’s proxy voting instructions, and (ii) to the extent to which it is not reasonably practicable and permitted by applicable law to notify the client and obtain such instructions (e.g., the client is a mutual fund or other commingled vehicle or is an ERISA plan client), Berkshire seeks voting instructions from an independent third party.

e. The Chairman of the Proxy Committee determines votes on a case-by-case basis taking into account the voting guidelines contained in these procedures. Subject to the best interest of each individual client, Berkshire votes proxies in the same way for similarly situated clients. The Chairman of the Proxy Committee’s basis for decision is documented and maintained by the Proxy Coordinator.

f. The Proxy Coordinator votes the proxy pursuant to the instructions received in (d) or (e) and returns the voted proxy as indicated in the proxy materials. TIMING

Berkshire personnel act in such a manner to ensure that, absent special circumstances, the proxy gathering and proxy voting steps noted above can be completed before the applicable deadline for returning proxy votes.

RECORD KEEPING

Berkshire maintains records of proxies voted pursuant to applicable securities laws, rules and regulations and ERISA DOL Bulletin 94-2. These records include:

1. A copy of Berkshire’s policies and procedures. 2. Copies of proxy statements received regarding client securities. 3. A copy of any document created by Berkshire that was material to making a decision how to vote proxies. 4. Each written client request for proxy voting records and Berkshire’s written response to both verbal and written client requests.

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A proxy log including:

1. Issuer Name; 2. Exchange ticker symbol of the issuer’s shares to be voted; 3. Council on Uniform Securities Identification Procedures (“CUSIP”) number for the shares to be voted; 4. A brief identification of the matter voted on; 5. Whether the matter was proposed by the issuer or by a shareholder of the issuer; 6. Whether a vote was cast on the matter; 7. A record of how the vote was cast; and 8. Whether the vote was cast for or against the recommendation of the issuer’s management team.

Records are maintained in an easily accessible place for five years, the first two in Berkshire’s offices. DISCLOSURE New clients will be provided a copy of these policies and procedures upon account inception. In addition, upon request, clients may receive reports on how their proxies have been voted by contacting Berkshire. CONFLICTS OF INTEREST All proxies are reviewed for potential material conflicts of interest by the Chairman of the Proxy Committee. Issues to be reviewed include, but are not limited to:

1. Whether Berkshire manages assets for the issuer, a shareholder proponent or an employee group of the issuer or otherwise has a current or potential business relationship with the issuer;

2. Whether Berkshire, an officer or director of the adviser or the applicable portfolio manager, analyst or other person(s) responsible for

recommending the proxy vote (together, “Voting Persons”) is a close relative of or has any personal or business relationship with the issuer (excluding normal commercial transactions and investment relationships where there is not special treatment), with an officer, director or other executive person at the issuer, with a candidate for election to the board of the issuer or with a shareholder proponent;

3. Whether there is any other material business or personal relationship as a result of which a Voting Person has an interest in the outcome of the

matter before shareholders; or 4. Whether an affiliate of Berkshire has a conflict as described in # 1-3 above and such conflict is known to the adviser’s Voting Persons.

All of the conflicts noted above should be deemed material. If the conflict resides with an individual Voting Person, that person will exclude himself or herself from the vote determination process in order to shield the adviser and the other Voting Persons from the conflict, provided that the other Voting Persons can determine a vote without undue influence from the conflicted Voting Person. If the conflict cannot be walled off, the vote will be passed on to a neutral party such as a third-party service provider or to the client directly. Any time a material conflict is encountered, Berkshire will keep records on the nature of the conflict, the actual vote and the basis for the vote determination. VOTING GUIDELINES Berkshire’s substantive voting decisions turn on the particular facts and circumstances of each proxy vote and are evaluated by the Chairman of the Proxy Committee. The examples outlined below are meant as guidelines to aid in the decision making process. Guidelines are grouped according to the types of proposals generally presented to shareholders. Part I deals with proposals which have been approved and are recommended by a company’s board of directors; Part II deals with proposals submitted by shareholders for inclusion in proxy statements; Part III addresses issues relating to voting shares of investment companies; Part IV addresses unique considerations pertaining to foreign issuers.

I. BOARD APPROVED PROPOSALS

The vast majority of matters presented to shareholders for a vote involve proposals made by a company itself that have been approved and recommended by its board of directors. In view of the enhanced corporate governance practices currently being implemented in public companies, Berkshire generally votes in support of decisions reached by independent boards of directors. More specific guidelines related to board-approved proposals are as follows:

Matters Relating to the Board of Directors

Berkshire votes proxies for the election of a company’s nominees for directors and for board approved proposals on matters relating to the board of directors with the following exceptions:

Votes are withheld for the entire board of directors if the board does not have a majority of independent directors or the board does not have nominating, audit and compensation committees composed solely of independent directors. Votes are withheld for any nominee director who is considered an independent director by the company and who has received compensation from the company other than for service as a director. Votes are withheld for any nominee for director who attends less than 75% of board and committee meetings without valid reasons for absences. Votes are cast on a case-by-case basis in contested elections of directors.

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Matters Relating to Executive Compensation Berkshire generally favors compensation programs that relate executive compensation to a company’s long-term performance. Votes are cast on a case-by-case basis on board-approved proposals relating to executive compensation except as follows:

Except where the firm is otherwise withholding votes for the entire board of directors, Berkshire votes for stock option plans that will result in a minimal annual dilution. Berkshire votes against stock option plans or proposals that permit replacing or repricing of underwater options. Berkshire usually votes against stock option plans that permit issuance of options with an exercise price below the stock’s current market price. Except where the firm is otherwise withholding votes for the entire board of directors, Berkshire votes for employee stock purchase plans that limit the discount for shares purchased under the plan to no more than 15% of their market value, have an offering period of 27 months or less and result in dilution of 10% or less.

Matters Relating to Capitalization

The management of a company’s capital structure involves a number of important issues, including cash flows, financing needs and market conditions that are unique to the circumstances of each company. As a result, Berkshire votes on a case-by-case basis on board-approved proposals involving changes to a company’s capitalization except where Berkshire is otherwise withholding votes for the entire board of directors. Berkshire votes for proposals relating to the authorization of additional common stock. Berkshire votes for proposals to effect stock splits (excluding reverse stock splits). Berkshire votes for proposals authorizing share repurchase programs. Matters Relating to Acquisitions, Mergers, Reorganizations and Other Transactions Berkshire votes these issues on a case-by-case basis on board-approved transactions. Matters Relating to Anti-Takeover Measures Berkshire votes against board-approved proposals to adopt anti-takeover measures except as follows:

Berkshire votes on a case-by-case basis on proposals to ratify or approve shareholder rights plans. Berkshire votes on a case-by-case basis on proposals to adopt fair price provisions.

Other Business Matters

Berkshire votes for board-approved proposals approving such routine business matters such as changing the company’s name, ratifying the appointment of auditors and procedural matters relating to the shareholder meeting. Berkshire votes on a case-by-case basis on proposals to amend a company’s charter or bylaws. Berkshire votes against authorization to transact other unidentified, substantive business at the meeting.

II. SHAREHOLDER PROPOSALS

SEC regulations permit shareholders to submit proposals for inclusion in a company’s proxy statement. These proposals generally seek to change some aspect of a company’s corporate governance structure or to change some aspect of its business operations. Berkshire votes in accordance with the recommendation of the company’s board of directors on all shareholder proposals, except as follows:

Berkshire votes for shareholder proposals to require shareholder approval of shareholder rights plans. Berkshire votes for shareholder proposals that are consistent with Berkshire’s proxy voting guidelines for board-approved proposals.

Berkshire votes on a case-by-case basis on other shareholder proposals where the firm is otherwise withholding votes for the entire board of directors.

III. VOTING SHARES OF INVESTMENT COMPANIES

Berkshire may utilize shares of open or closed-end investment companies to implement its investment strategies. Shareholder votes for investment companies that fall within the categories listed in Parts I and II above are voted in accordance with those guidelines. Berkshire votes on a case-by-case basis on proposals relating to changes in the investment objectives of an investment company taking into account the original intent of the fund and the role the fund plays in the clients’ portfolios. Berkshire votes on a case-by-case basis all proposals that would result in increases in expenses (e.g., proposals to adopt 12b-1 plans, alter investment advisory arrangements or approve fund mergers) taking into account comparable expenses for similar funds and the services to be provided.

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IV. VOTING SHARES OF FOREIGN ISSUERS

In the event Berkshire is required to vote on securities held in foreign issuers – i.e. issuers that are incorporated under the laws of a foreign jurisdiction and that are not listed on a U.S. securities exchange or the NASDAQ stock market, the following guidelines are used, which are premised on the existence of a sound corporate governance and disclosure framework. These guidelines, however, may not be appropriate under some circumstances for foreign issuers and therefore apply only where applicable. Berkshire votes for shareholder proposals calling for a majority of the directors to be independent of management. Berkshire votes for shareholder proposals seeking to increase the independence of board nominating, audit and compensation committees. Berkshire votes for shareholder proposals that implement corporate governance standards similar to those established under U.S. federal law and the listing requirements of U.S. stock exchanges, and that do not otherwise violate the laws of the jurisdiction under which the company is incorporated. Berkshire votes on a case-by-case basis on proposals relating to (1) the issuance of common stock in excess of 20% of a company’s outstanding common stock where shareholders do not have preemptive rights, or (2) the issuance of common stock in excess of 100% of a company’s outstanding common stock where shareholders have preemptive rights.

VOTING PROCEDURES WHEN BERKSHIRE UTILIZES A THIRD PARTY PROXY SERVICE If Berkshire is utilizing a third party proxy service in connection with certain client accounts, the Proxy Coordinator will ensure that the proxy service receives updated holdings for the affected accounts. The Proxy Coordinator will also ensure that the proxy service delivers its recommendations on a timely basis and that such information is provided to the Proxy Voting Chairman. After the Proxy Voting Chairman authorizes the proxy service to vote, the Proxy Coordinator will maintain records of the proxy service recommendations and voting reports. CORPORATE ACTIONS All corporate action related material will be delivered to Berkshire’s corporate action coordinator (the “Corporate Action Coordinator”), who will pay strict attention to any pending corporate actions that may be undertaken by, or with respect to, the issuers of securities held in client accounts. When the Corporate Action Coordinator receives notice of a pending corporate action, that party will be responsible for coordinating with the Proxy Voting Chairman to determine the firm’s desired course of action and communicating the firm’s instructions to the custodian in a timely manner. The Corporate Action Coordinator will also keep accurate records of each corporate action and the steps that were taken by the firm in a corporate actions log.

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