Frost Investment Advisors LLC

FEES AND COMPENSATION
Advisory fees discussed include payment solely for the investment advisory services provided by
the Adviser, which do not include mark-ups, markdowns, payment of brokerage commissions,
custody fees, and/or other transaction costs. Custody services are provided by many qualified
custodians of the client’s choosing and can include our parent company, Frost Bank. We do not
recommend the use of any specific custodian. Brokerage commissions, mark- ups, markdowns,
custody fees and other transaction costs are charged to the client in addition to the advisory fees
discussed above. Please see the “Brokerage” section for additional information.

FEES AND COMPENSATION FOR FROST FUNDS
For advisory services provided to the Frost Funds, the Adviser receives an asset-based fee, which
is based on the average daily net asset value of each fund. Advisory fees range from 30-50 basis
points (0.30-0.50%) for fixed income management and 50 basis points (0.50%) for equity
management annually. The advisory fees for the initial month are prorated, based upon the
number of calendar days in the month that the advisory agreement is in effect.

FEES AND COMPENSATION FOR SEPARATELY MANAGED ACCOUNTS
For advisory services provided to SMAs, the Adviser receives an asset-based fee, which is based on
the average daily market value of the portfolio’s assets under management at the close of each
business day. When an account has uninvested cash at the end of the day, the daily market value
for that day is adjusted to exclude the uninvested cash from the market value. We bill clients for
advisory fees incurred on a monthly or quarterly basis, dependent on the agreed upon frequency
between the client and the Adviser, after services are provided. Each client has the option to
authorize the Adviser to direct debit their custodian for advisory fees on a monthly or quarterly
basis or invoice the client for payment. For clients choosing to direct debit their custodian, written
authorization is required from the client allowing the Adviser to do so. Advisory fees deducted
from the client’s custodial account is done on a monthly or quarterly basis, dependent on the
agreed upon frequency between the client and the Adviser, after services are provided. A conflict
of interest arises when Frost Funds are purchased in a client’s portfolio, as this would increase the
amount of compensation we receive based on the investment management fee that we receive on

Frost Funds. This conflict of interest is addressed by excluding any assets invested in Frost Funds
from the asset-based fee calculation.
Advisory fees for SMAs are based on the complexity of the selected investment strategy, and the
level of service required by the client and ranges from 4-20 basis points (0.04-0.20%), annually.
The advisory fees for the initial month are prorated, based upon the number of calendar days in
the month that the advisory agreement is in effect.
The Adviser has a financial incentive for clients to purchase Frost Funds over other mutual funds
available based on the compensation we receive which creates a conflict of interest. This conflict
of interest is addressed by reviewing current client accounts for appropriate management
according to a client’s IPS, on an on-going basis. All clients are informed of our advisory
relationship to the Frost Funds. You are not required to purchase Frost Funds or can purchase them
through other brokers or agents that are not affiliated with us.
We reserve the right to change any or all of our fee schedules as agreed upon by the client and
Adviser. We negotiate fees at the sole discretion of our management. Negotiated fees may be
higher or lower than the fees stated above. Comparable services for lower fees may be available
from other sources. There is a minimum annual advisory fee assessed to a client’s account for
investment advisory services. Either party, without penalty, may terminate the advisory
agreement, subject to the terms of the advisory agreement in force at that time. Should either party
terminate the advisory agreement before the end of a billing period, any unpaid fees for services
provided to you will become due and payable immediately. Advisory fees for the final month are
prorated, based upon the number of business days in the month that the advisory agreement was
in effect.

FEES AND COMPENSATION FOR ASSET ALLOCATION MODELS
For investment advisory services provided to affiliated or non-affiliated financial institutions
utilizing our asset allocation models, the Adviser receives a single, asset-based fee, which is based
on the client’s assets under management as of the close of business each month. A conflict of
interest arises when Frost Funds are recommended for purchase within the asset allocation models
provided to our clients, as this would increase the amount of compensation we receive, based on
the investment management fee that we receive on Frost Funds. This conflict of interest is
addressed by excluding any assets invested in Frost Funds from the asset-based fee calculation at
the close of business each month. Advisory fees for asset allocation models are based on the
selected investment product and level of service required by each client and range from 15-25
basis points (0.15-0.25%), annually. Advisory fees for the initial month are prorated at month or
quarter end, based upon the number of calendar days in the month that the advisory agreement is
in effect.
We reserve the right to change any or all of our fee schedules as agreed upon by the financial
institution and Adviser. We may negotiate fees at the sole discretion of our management.
Negotiated fees may be higher or lower than the fees stated above. Comparable services for lower
fees may be available from other sources.
Either party, without penalty, may terminate the advisory agreement, subject to the terms of any
advisory agreement in force at that time. Should either party terminate the advisory agreement
...

TYPES OF CLIENTS
We offer investment advisory services to the following types of clients:
     •   Investment companies;
     •   Financial advisors or other platforms that offer models;
     •   Corporations; and
     •   Endowments.
The Adviser has the option to impose a minimum account size at the time of account opening. The
basis of an imposed minimum account size will be dependent upon the time and complexity
involved in the development and implementation of the strategy. For accounts imposing
investment guidelines and investment restrictions specifically in relation to a strategy, the
minimum account size is $10 million.

METHODS OF ANALYSIS, INVESTMENT STRATEGIES AND RISK OF LOSS
We use the following methods of analysis and investment strategies in formulating our investment
advisory services or managing assets: technical analysis, fundamental analysis and cyclical
analysis.
Technical analysis is a method of evaluating securities by analyzing statistics generated by market
activity, such as past prices and volume. Technical analysts do not attempt to measure a security’s
value, but instead use charts and other tools to identify patterns that can suggest future activity.
Fundamental analysis is a method of evaluating a company that has issued a security by
attempting to measure the value of its underlying assets. It involves studying overall economic

and industry conditions, as well as the financial condition of the company and the quality of its
management. Earnings, expenses, assets and liabilities are all important factors for determining
the value of a company. This value is then compared to the current price of the company’s security
to contribute towards the determination of whether to purchase, sell or hold the security.
Cyclical analysis is a form of fundamental analysis that involves making investment decisions
based on the different stages of an economic cycle and the potential strength of that industry at a
given point in time.
Investing in securities involves risk of loss that you should be prepared to bear.
We use the following investment strategies in implementing each client’s investment objective:
long-term purchases (securities held at least a year); and short-term purchases (securities held less
than a year). A client may place restrictions on the strategies to be used and the characteristics of
assets to be held in their portfolio if agreed upon by the Adviser and the client in the executed
advisory agreement.
Material risks involved with the methods of analysis and investment strategies we use include, but
are not limited to:
     •   Absolute loss of principal;
     •   A reduction in earnings (including interest, dividends and other distributions);
     •   Loss of future earnings;
     •   Market risk, the possibility for an investor to experience losses due to factors that affect
         the overall performance of the financial markets in which the investor is involved;
     •   Interest rate risk, the risk that an investment’s value will change due to a change in the
         absolute level of interest rates, in the spread between two rates, in the shape of the yield
         curve, or in any other interest rate relationship;
     •   Issuer risk, the probability of loss resulting from the default of the issuer of a security;
     •   Management risk, the risk that the investment techniques and risk analyses applied by the
         Adviser will not produce the desired results and the legislative, regulatory, or tax
         developments may affect the investment techniques available to the Adviser and the
         individual portfolio manager in connections with managing the investment strategies.
         There is no guarantee that the investment objective of the investment strategies will be
         achieved; and
     •   General economic risk, the risk that macroeconomic conditions like exchange rates,
         government regulation, or political stability will affect an investment.

For a detailed list of risks associated with investing in Frost Funds, please refer to the prospectuses
and statement of additional information, which can be obtained from the Adviser’s website or
upon request.
We believe we manage portfolios with a level of risk that is consistent with each client’s stated
investment objective, though we cannot guarantee that our efforts will be successful. You should
be prepared to bear the risk of loss of your investment.