Bannerstone Capital Management LLC

Fees and Compensation

Bannerstone has adopted a fee structure which we believe is aligned with the economic interests of our clients.

Bannerstone is compensated for an advisory role in the management of a client’s portfolio. We do not charge
commissions, nor do we share in the commissions a client pays to a broker.

Our fees are negotiable. We typically charge our investors 1% per annum for managed equity accounts. Some
accounts pay no fees whatsoever. Fees are billed monthly and collected for the first time on the first business day
of the first full calendar month and on the first business day of each month thereafter. The fee is calculated as a
function of the account’s net worth on the last business day of the prior calendar month. It is generally collected
directly from the account which generated the fee. In some cases we collect from a different account and
occasionally we arrange to bill clients. Clients who terminate a management contract will pay only for the month
preceding the termination notice: the most recent regular monthly fee paid prior to notice of termination will be
refunded in its entirety. We do not typically collect a fee for any portion of a fractional first month. We reimburse
any fee collected for a fractional final month if necessary.

Commissions are, in some cases, collected by the broker-dealer providing transaction services. Commissions on
equity trades have all but disappeared industrywide (See Page 6 for more discussion regarding performance-based
fees). Options and fixed income are typically treated differently than equities with respect to commissions.
Options often experience conventional commissions. Some securities, especially fixed income, such as bonds,
may be “marked up” by the dealer from whom we buy the bond. All transaction expenses are born by the client’s
account. (Please see Page 12 ”Brokerage”.)

The primary source of revenue for Bannerstone Capital Management is the advisory fee income generated from
client accounts. Fees may be negotiable, particularly for advising fixed income portfolios.

We collect no commissions or compensation from investment banks, vendors, broker dealers, insurance
companies or mutual fund distributors.

We have acted as an expert witness, for a fee, in certain proceedings. We have no intention of resuming this
service.

                          Performance-Based Fees and Side-By-Side Management

Bannerstone does not accept performance-based fees or other fees based on a share of capital gains on or capital
appreciation of the assets of a client.

Types of Clients

Bannerstone’s clients are typically affluent individuals and their various affiliates.

                          Methods of Analysis, Investment Strategies and Risk of Loss

Investing with Bannerstone involves significant risks for loss of principal. There can be no assurance investment
goals will be met and investors could suffer drastic and permanent losses of capital when investing with us. Past
performance is never a guarantee of future performance.

Bannerstone Capital is primarily an equity manager, although we also manage fixed income for many clients. We
have developed and maintain proprietary equity strategies we believe provide long term opportunities for long
term capital appreciation and total return. We are not a “fund of funds” manager, although we do aggregate and
manage a small number of accounts composed of mutual funds and exchange traded funds. It is not a significant
portion of our business.

We routinely utilize fundamental and technical analysis. We increasingly augment these traditional analysis
techniques with the findings of the emerging academic area called Behavioral Economics.

While we manage client’s assets on a custom, client-by-client basis, management often entails extensive use of
our two legacy equity portfolio strategies: Thales All Capitalization Total Return (aka “Thales”) and Alloy
Quantitative Total Return (aka “Alloy”).

We also maintain a Dividend Income and Growth (aka “DIG”) portfolio, a Large Cap Growth Portfolio, as well
as some other disparate, more customized portfolios to suit the needs of particular circumstances.

We can and do invest in almost every conceivable exchange-traded asset class and instrument, although our
largest concentration of assets is almost invariably equities. Our portfolios are frequently concentrated in a
relatively few positions which increases both volatility and potential risk of loss. We sometimes sell securities
“short”, a notoriously risky strategy for attempting to profit from falling (rather than rising) prices. Short sales
have unlimited potential risk.

We may use levered and inverse Exchange Traded Funds (ETFs) from time to time. These instruments are fairly
new to the investment community, have unique investment characteristics and short operational histories, making
them significantly riskier than even typical equity investing.

We can and do design and implement unique custom portfolios for clients with particular and unique investment
considerations. For example, a client’s investment criterion might include elements of so-called “Socially
Responsible Investing” or a wish to exclude companies considered non U.S. These are considered on a case by
case basis.