Grey Owl Capital Management LLC

Item 5 – Fees and Compensation

A. Fees for Advisory Services

Investment Advisory Services – Grey Owl’s fee for advisory services varies depending on
the total amount of a Client’s assets managed by Grey Owl. With limited exceptions, fees
are individually negotiated and can range from 1.50% for accounts at our minimum
investment level to 0.50% for very large accounts. The fee framework is: Under $1M –
Maximum 1.5%, $1M to $5M – Maximum 1.0%, $5M plus – Maximum 0.8% - Minimum
0.5%. The level of the fee for a given Client can be reduced from the maximum at Grey
Owl’s discretion based on the nature and complexity of the relationship.

Clients are billed quarterly for advisory services. Fees are a fixed percentage of assets under
management, based upon the average daily account value during the quarter as calculated
by Advent Portfolio Exchange (APX). APX is a portfolio management and reporting
system used widely throughout the investment management industry. Fees are paid in
arrears. For accounts opened during the quarter, fees are prorated. There is never a penalty
for cancelling the Investment Management Agreement.

B. Fee Billing

Investment advisory fees are billed quarterly in arrears. As approved in writing by the
Client, Grey Owl generally requests that the custodian debit Grey Owl’s fees directly from
the Client’s account. Grey Owl calculates fees using the Advent Portfolio Exchange
Management Fees Report. The amount due is calculated by applying an annual fee
percentage to the Client’s account value. The account value will be the average daily
account value during the quarter as calculated by Advent Portfolio Exchange. Each billing
will be for one-quarter of the annual fee. Fees for accounts opened after the beginning of a
quarter are prorated. Based on specific Client circumstances, certain exceptions may apply.

It is the Client’s responsibility to verify the accuracy of the fee calculation as the custodian
does not determine whether the fee is properly calculated. All investment advisory fees
paid directly to Grey Owl are clearly reflected on the Client’s monthly brokerage
statements that are prepared and sent to the Client by the custodian unless the Client has
requested to pay fees from outside of the account.

C. Other Fees and Expenses Clients May Pay

Clients may incur certain fees or charges imposed by third parties other than Grey Owl in
connection with investments made by Grey Owl on behalf of Clients. These fees and
charges are separate and distinct from the fees paid to Grey Owl and may include, but are
not limited to: trade commissions, mutual fund 12b-1 fees, certain deferred sales charges
on previously purchased mutual funds transferred into the account, other transaction related
fees, IRA and Qualified Retirement Plan fees, interest charged on margin borrowing, bank
service fees, interest charged on debit balances, “spreads” imposed by brokers and dealers
representing implicit transaction costs and transfer taxes. Grey Owl is not responsible for
and does not receive any portion of these fees or charges.

D. Advance Fees

Grey Owl does not bill Client investment advisory fees in advance. Clients are billed in
arrears.

E. Compensation for Sale of Securities by Supervised Persons

Grey Owl does not buy or sell securities, nor does Grey Owl receive any direct
compensation for the sale of securities.

Item 7 – Types of Clients

Grey Owl may provide services to a variety of client types. Clients may include:

   •   Individuals, Personal Trusts and Estates – Private investors, investing personal
       assets
   •   Pension and Profit Sharing plans – Generally organized as a trust, investing the
       pooled assets of plan participants
   •   Charitable Organizations, Foundations, and Endowments – Non-profit entities
       investing contributions to support a stated mission or mandate
   •   Corporations – Taxable entities organized for a specific business purpose, investing
       cash reserves
   •   Pooled Investment Vehicles, other than mutual funds – Hedge Funds

The actual mix of types of Clients changes over time based upon market conditions,
business plans and other factors. Grey Owl does not specialize in, or actively seek, any
given Client type. Grey Owl is committed to providing services to qualified investors,
regardless of legal or corporate status.

Grey Owl may only implement its investment management recommendations after the
Client has arranged for and furnished Grey Owl with all information and authorizations
regarding accounts with appropriate financial institutions. Financial institutions include,
but are not limited to, Fidelity, any other broker-dealer recommended by Grey Owl, a
broker-dealer directed by the Client, trust companies, banks etc. 1

Grey Owl imposes a minimum account balance of $250,000 when opening an account but
may waive this minimum at its discretion.

Item 8 – Methods of Analyses, Investment Strategies and Risk of Loss

A. Methods of Analyses

Equities, Fixed-Income and Options – Generally, Grey Owl uses fundamental analysis in
making investment decisions with respect to stocks, bonds, options and other exchange
traded securities. Fundamental analysis is the process of looking at economic and business
indicators as investment selection criteria. These criteria are usually ratios and trends that
may indicate the overall strength and financial viability of the entity being analyzed. Grey
Owl considers macroeconomic factors as well as issue specific factors.

Macroeconomic factors considered by Grey Owl include, but are not limited to:

    •   General economic conditions
    •   Inflation trends
    •   Interest rates and the yield curve
    •   Market volatility and trends
    •   Monetary policies
    •   Legislative actions

Issue specific factors include, but are not limited to:

    •   Earnings
    •   Cash flow

1Fidelity Investments and all other custodians used by Grey Owl or its Clients have established
and implemented Anti-Money Laundering (AML) programs reasonably designed to comply with
applicable AML requirements. While Grey Owl is under no obligation to verify information
provided by prospective customers, Grey Owl reserves the right to use reasonable efforts to verify
customer information when the firm believes such verification is appropriate.

   •   Growth estimates and trends
   •   Management strength and stability
   •   Credit rating

Other methods of analysis may be employed by Grey Owl as deemed appropriate.

Mutual Fund – Grey Owl may invest its Clients' assets with mutual funds that pursue
investment approaches that are diversified among multiple strategies, asset classes,
regions, industry sectors and securities. In selecting a fund and allocating assets to them,
Grey Owl considers both quantitative and qualitative factors including:

   •   Relative performance during various time periods and market cycles
   •   Industry reputation
   •   Experience and training of staff investment professionals
   •   The clarity of, and adherence to, a viable investment philosophy
   •   Risk management process
   •   Portfolio management capabilities
   •   Fee structure
   •   Any other factor deemed appropriate by Grey Owl

Alternative Investments – Grey Owl provides advice to certain accredited investors relative
to prospective investments in private investment limited partnerships, or other similar
entities, such as hedge funds, fund of fund hedge funds, private equity funds and venture
capital funds. These funds are offered in accordance with Regulation D of the Securities
Act of 1933. Investment in these types of investments is limited to certain accredited
investor Clients.

Alternative investment due diligence is similar to mutual fund due diligence, outlined
above. However, given the relatively unregulated nature of these investments, additional
emphasis is placed on the examination of the independent oversight of the fund being
analyzed.

B. Risk of Loss

Every effort is made to ensure positive outcomes for Grey Owl Clients. However, all
investments carry the risk of loss. There can be no assurance that Clients will achieve their
investment goals. Clients may lose a substantial portion of their investment. Individual
Grey Owl investment strategies are not designed to be a complete investment program.
Clients should diversify their assets among a variety of investment strategies, classes and
securities.

Equities, Fixed-Income and Options – Prices of equities and fixed income securities are
subject to market risk whereby external factors such as political and economic conditions
or events may trigger a decline in the market which in turn could cause individual security

prices to drop. They also may experience financial risk if the company or municipality has
difficulty meeting its loan obligations.

Additionally, investments in fixed income securities are also subject to certain risks
including but not limited to credit risk, interest rate risk, and reinvestment risk.

Certain investment strategies offered by Grey Owl may make use of call or put options.
Call and put options run the risk of losing value in a relatively short period of time. Option
contracts are leveraged instruments that allow the holder of a single contract to control
many shares of the underlying stock. This imbedded leverage may compound gains and
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