Franklin Street Advisors Inc

Item 5 Fees and Compensation
The specific annual investment management fee (“Annual Fee”) a client will incur for accessing
FSA’s investment management services is listed as an exhibit to each client’s Agreement. FSA
charges an Annual Fee based on a fixed percentage of assets under management and, in some
cases, a tiered fee structure. Tiered means the fee is calculated by applying different rates to
different portions of the total assets. When the account assets reach a new threshold, only those
assets above the threshold are charged the lower percentage.

The Annual Fee is assessed quarterly in arrears, based on the market value of account assets as of
the last business day of the previous calendar quarter. For accounts that begin at any time other
than the beginning of a calendar quarter, the first management fee shall be prorated based on the
number of days in the quarter. If an account terminates during a calendar quarter, a pro rata fee
will be assessed based on the number of days in the quarter the account was under management.
When a client contributes cash or assets to their account (inflow) or withdraws cash or assets from
their account (outflow) during a quarter, FSA will prorate the quarterly fees whenever there is an
inflow or outflow that exceeds 10% of the beginning balance for the quarter. For inflows, the fee
is reduced on a pro-rata basis to account for the time that the cash and/or assets were not in the
account. For outflows, the fee is increased on a pro-rata basis for the time that the cash and/or
assets were in the account.

Where applicable, account asset values will be determined based on the trade date and the
security valuations provided by the custodians or fund managers. The account asset value(s) used
to calculate the Annual Fee can differ from that shown on the client’s account statement(s) due to
settlement date accounting, treatment of accrued income, distributions and/or necessary
adjustments.

Form ADV – Part 2A

FSA usually deducts fees from clients’ assets, but a client can elect to receive a bill for fees
incurred.

FSA Current Fee Schedules:

       Fee Schedule: Accounts Holding Equity, Cash and/or Mixed* Accounts

       Assets $5 million or less                       1.00% annual fee

       Assets over $5 million                          0.75% annual fee

       Minimum Annual Fee                              $7,500

       *Includes accounts holding assets other than only fixed income securities and/or
       cash.

       Accounts below $750,000 that are charged the minimum fee would, therefore,
       experience a fee as a percentage of their assets that is greater than the
       published fee schedule.

       Fee Schedule: Accounts Holding Fixed Income and Cash Assets Only

       All assets $5 million or less                   0.50% annual fee

       All assets over $5 million                      0.375% annual fee

       Minimum Annual Fee                              $7,500

       Accounts below $1,500,000 that are charged the minimum fee would, therefore,
       experience a fee as a percentage of their assets that is greater than the
       published fee schedule.

FSA may, at its sole discretion, negotiate fees based on various factors, including but not limited to
anticipated future earning capacity, expected additional assets, the dollar amount of assets to be
managed, related or aggregated accounts, account composition, prior client relationships, and
account retention considerations. FSA may also choose, at its discretion, to establish a flat-fee
arrangement.

FSA may additionally waive the minimum account size and/or the minimum Annual Fee at its sole
discretion, resulting in minimum fees that may be higher than the published schedule.

Actual fees paid by current clients may differ, either higher or lower, from the fee schedules
shown above, depending on the schedule that was in effect or negotiated at the time the account
was opened.

Form ADV – Part 2A

Either the client or FSA may terminate the relationship at any time, provided written notice is
given

Fee schedules that vary by asset class (equities, fixed income and cash) create a conflict of interest
because it can incentivize FSA to allocate to asset classes that generate higher fees (e.g., equity
investments). However, FSA’s fiduciary duty is to act in each client’s best interest with an
obligation to select the asset classes and underlying investments that align with the client’s stated
investment objectives, regardless of the fee associated with any particular asset class.

For a select number of clients, FSA is hired to provide due diligence on client-directed investments.
For a consulting relationship, FSA will be paid a flat fee or other negotiated fee. FSA also manages
assets on a discretionary basis for the same clients that pay a fee for consulting services.

Additional Fees
In addition to the Annual Fee, clients incur additional fees and costs associated with the
investments held in their accounts. These may include:
     Transaction costs – such as usual and customary transaction charges on the liquidation of
        investments deemed ineligible for this investment management program, certain other
        costs or charges that may be imposed by third parties (including, among other things, bid-
        ask spreads, odd lot differentials, exchange fees, transfer taxes, foreign custody fees,
        supplemental transaction fees, regulatory fees and other fees or taxes that may be
        imposed by pursuant to law, rule, or regulation;
     Custodial Charges - costs of custody and execution services by any third-party custodian;
     Transfer agency fees;
     Tax consequences related to investment activity;
     Non-sponsored alternative investment processing and maintenance fees;
     Costs and expenses of unit investment trusts, (“UITs”) (e.g., organization costs, operating
...

Item 7 Types of Clients
FSA provides investment management services for: individuals, including high net worth
individuals, pooled investment vehicles, corporations, pension plans, non-profit entities, insurance
companies, governmental entities, trusts and endowments. FSA also provides investment advisory
services for select model-based separately managed account programs. In these programs, FSA
typically provides a model portfolio to the program manager, who is then responsible for
executing transactions and coordinating account guidelines and restrictions with the underlying
separate account client. In exchange for these services, FSA receives a fee negotiated between
FSA and the program manager.

Minimum relationship size is $1 million, subject to waiver at FSA’s sole discretion.