Merit Investment Management LLC

Item 5 Fees and Compensation

Merit is compensated for its investment management services on the basis of fees calculated as a
percentage of assets under management. Merit’s fees and compensation are described in the advisory
contracts it enters into with its clients.

Except as noted below, Merit’s fees are generally payable quarterly or monthly in arrears. Fees are
generally deducted from client accounts subject to terms and conditions that are detailed in each
client’s Investment Management Agreement (“IMA”). Alternative frequency of payments and/or
methods of calculation may be available, where appropriate and upon the client’s request.

For the Separately Managed Accounts:
Fees based on percentage of assets under management are calculated by multiplying the fair market
value of the cash and securities in the portfolio as of the close of the calendar month by the applicable
fee rate(s) prorated for any partial quarter, including upon the termination of the relevant advisory
contract.

Merit’s standard fee schedule for equity strategies is as follows:
•       A percentage % of assets under management (AUM) of 1.0% per annum, on assets managed by
        Merit. Fees may vary by client and/or the type of account. Client account assets advised in a
        401k or 403b account at a current employer may be managed at a reduced fee.
•       In certain circumstances, fees may be subject to negotiation, and fees may be modified for
        certain clients. The reasons for modifications include the complexity and level of services, the
        number of different accounts and the total assets under management for an investor and its
        related persons, or other circumstances that Merit deems relevant. Certain accounts of persons
        affiliated with Merit may be managed without fees or at reduced fees.

Merit’s fees do not include other expenses incurred by clients in connection with our investment
advisory services such as brokerage costs. See Item 12 entitled Brokerage Practices for additional
information.

                     2 W MARKET STREET, SUITE 100 WEST CHESTER, PA 19382 484.473.8413

Investment management and investment advisory contracts between Merit and its clients can be
terminable at any time or have lock-up agreements depending upon the specific circumstances and
needs of particular clients. In the event of termination, advisory fees will be prorated over the period
during which investment management or investment advisory services were provided.

Merit may allocate a portion of its clients’ capital to money market fund, mutual fund or exchange-
traded fund. In addition to the fees and expenses discussed below, clients will indirectly incur similar
fees and expenses if Merit invests their capital in such fund, as such fund in turn pay similar fees and
expenses to their investment managers and other services providers. Total client fees when using a
third-party investment adviser will not exceed 3% of AUM.

Clients or Merit may terminate the investment management agreement at any time by notifying the
other party in writing. If a MERIT Form ADV Part II is not provided to a client at least 48 hours prior to
signing the agreement, a client has the right to terminate the contract within 5 business days without
penalty.

Item 7:
A. In addition to the events listed in Item 3 of Part 2B, if the supervised person has been involved in
one of the events listed below, disclose all material facts regarding the event.
1. An award or otherwise being found liable in an arbitration claim alleging damages in excess of
$2,500, involving any of the following:
(a) an investment or an investment-related business or activity;
(b) fraud, false statement(s), or omissions;
(c) theft, embezzlement, or other wrongful taking of property;
(d) bribery, forgery, counterfeiting, or extortion; or
(e) dishonest, unfair, or unethical practices.
None.

2. An award or otherwise being found liable in a civil, self-regulatory organization, or administrative
proceeding involving any of the following:
(a) an investment or an investment-related business or activity;
(b) fraud, false statement(s), or omissions;
(c) theft, embezzlement, or other wrongful taking of property;
(d) bribery, forgery, counterfeiting, or extortion; or
(e) dishonest, unfair, or unethical practices.
None.

B. If the supervised person has been the subject of a bankruptcy petition, disclose that fact, the date
the petition was first brought, and the current status.
None.

                 2 W MARKET STREET, SUITE 100 WEST CHESTER, PA 19382 484.473.8413