Midland Financial Advisors Inc

Fees and Compensation

Asset Management Services

Fees for investment and asset management services are billed directly to your accounts,
unless other payment arrangements have been made prior to a month-end. The fee is
calculated and payable at the end of each calendar month, and is based upon the value of
assets being managed by Midland Financial Advisors, Inc.

Fees are not based on a share of capital gains upon or capital appreciation of the funds or
any portion of the funds. With the exception of the fees charged for management of
Employer Sponsored Plan, the fees for all portfolios utilizing a blended equity-component
generally adhere to the following schedule:

       Assets under Management between:                             Annual Fee as %
       $0        - $1,000,000                                      1.00%
       $1,000,001 - $3,000,000                                     0.80%
       $3,000,001 - $5,000,000                                     0.60%
       Over $5,000,000                                             0.50%

Midland Financial Advisors, Inc. will consolidate accounts by household to determine the
total market value of the household accounts for investment management fee calculation
purposes.

Although Midland Financial Advisors, Inc. has established the aforementioned fee schedule;
we retain the discretion to negotiate alternative fees on a client-by-client basis. Client
circumstances, facts and needs are considered in determining the fee schedule. These
include, but are not limited to, the complexity of the client, amount of assets that Midland
Financial Advisors, Inc. is managing, related accounts, portfolio style, account composition,
reports and other factors. The specific fees schedule are identified and agreed upon on
Schedule B as part of the management contract and signed off by a member of Midland
Financial Advisors, Inc.’s management team prior to engagement.

Fees are due after Investment Services (i.e. at the end of each calendar month) are provided
and shall be calculated on the basis of the average daily market value of the assets in the
Account, including balances in the Account held in a near cash or money market fund. The
initial fee shall be charged from the date of inception of Investment Services through the
end of the first calendar month and based on the average daily market value for the
number of days it was held for the previous month. Thereafter, fees will be payable

                                         8 of 18

                              Midland Financial Advisors, Inc.

monthly based upon the average daily market value of assets each calendar month.
Midland Financial Advisors, Inc. may, in its discretion, aggregate accounts related to the
Account for fee calculation purposes.

In addition to the advisory fees above, you may pay fees for custodial services, account
maintenance fees, transaction fees, and other fees associated with maintaining the Account.
Midland Financial Advisors, Inc. does not share in any portion of such fees. Additionally, you
may pay a proportionate share of the fund’s management and administrative fees and sales
charges as well as the mutual fund adviser’s fee of any mutual fund they purchase. Such
fees are not shared with Midland Financial Advisors, Inc. and are compensation to the fund-
manager.

It is important to note that most of the investment vehicles utilized in Midland Financial
Advisors, Inc.’s portfolios will include some form of underlying internal management
expense. Additionally, the implementation, liquidation, or rebalancing processes that are
present in portfolio management will result in certain transactional costs from the
custodian of choice, and that these expenses are not included within the above fee
schedules. Such transaction costs as stated above are not shared with Midland Financial
Advisors, Inc.

Registered 501(c)3 charitable and not-for-profit organizations are granted a 25% reduction
from the standard fee schedule. A copy of the organization’s 501(c)3 determination may be
required by Midland Financial Advisors, Inc. to confirm the organization’s qualifications for
this discount.

Employees and immediate family members of Midland Financial Advisors, Inc., Midland
States Bank or any affiliate of Midland Holding Company will be granted a 20% reduction
from the standard fee schedule. Proof of employer and relationship may be required by
Midland Financial Advisors, Inc. to confirm the individual’s qualifications for this discount.

Midland Financial Advisors, Inc. will apply a uniform 25% reduction in Investment Services
fees, based upon the above table, to any account that is opened and administered by a
third party, corporate trustee. Please note that this discount only applies to corporate
trustees and not individuals.

Financial Planning

You are advised that fees for planning services are strictly for planning services. Therefore,
you may pay fees and/or commissions for additional services obtained such as asset
management or products purchased such as securities or insurance.

Fees are negotiable. Your fees will be dependent on several factors including time spent
with Midland Financial Advisors, Inc., number of meetings, complexity of your situation,
amount of research, services requested and staff resources.

                                         9 of 18

                               Midland Financial Advisors, Inc.

Midland Financial Advisors, Inc.’s hourly fee for consulting services ranges from $125.00 -
$300.00 per hour. One-half of the estimated fee is due at the time the engagement letter is
signed, and the balance is due upon presentation of the completed plan.

Termination Provisions
In the event you opt to discontinue the financial planning arrangement prior to its
completion, Midland Financial Advisors, Inc. will calculate the amount due based upon the
agreement in force and amount of time completed on the project, and will either issue a
...

Types of Clients

Midland Financial Advisors, Inc. offers investment and asset management services to
individuals both high net worth (i.e. clients with a net worth of $1,500,000) and other than
high net worth, for-profit and not-for-profit corporations, trusts, including profit sharing
and pension trusts, estates and other clients in need of such services.

In order to guarantee participation in the Employer-Sponsored Retirement Plan
Management program, the account balance must be equal to or greater than $50,000.
However, Midland Financial Advisors, Inc. reserves the right to waive this requirement.

Methods of Analysis, Investment Strategies and Risk of Loss

Midland Financial Advisors, Inc.’s investment philosophy revolves around the concepts of,
but not limited to, Modern Portfolio Theory. Modern portfolio theory (MPT) is a theory of
investment which attempts to maximize portfolio expected return for a given amount of
portfolio risk, or equivalently minimize risk for a given level of expected return, by carefully
choosing the proportions of various assets. MPT is a mathematical formulation of the
concept of diversification in investing, with the aim of selecting a collection of investment
assets that has collectively lower risk than any individual asset.

Midland Financial Advisors, Inc. analyzes the historical relationship between the risk and
return characteristics of different asset classes to develop its model portfolios. Midland
Financial Advisors, Inc. identifies and diversifies risk through strategic asset class
diversification and may overlay tactical shifts periodically when prudent. Midland Financial

                                         10 of 18

                              Midland Financial Advisors, Inc.

Advisors, Inc. as a general rule will not maintain more than 7% of a cash balance in a
managed account.

Midland Financial Advisors, Inc. uses fundamental and technical methods to analyze
securities. Fundamental analysis generally involves assessing a company’s or security’s
value based on factors such as sales, assets, markets, management, products and services,
earnings, and financial structure. Technical analysis generally involves studying trends and
movements in a security’s price, trading volume, and other market-related factors in an
attempt to discern patterns.

Midland Financial Advisors, Inc. is authorized to purchase and sell certain families of mutual
funds that may not be available through other advisers (“Designated Funds”). The
distributors of Designated Funds allow such funds to be held in accounts serviced only by an
adviser meeting their established standards. As a result, should the Agreement with
Midland Financial Advisors, Inc. terminate, you are required by the terms of the Agreement
to transfer all securities positions, including Designated Funds, to another qualified adviser
and custodian within 30 days of the termination date. If you do not locate another qualified
adviser and complete all transfers within 30 days, Midland Financial Advisors, Inc. has
discretion to sell the securities, including the Designated Funds, and send the proceeds to
you. You should be aware that such sales by Midland Financial Advisors, Inc. may have
adverse tax consequences, and may result in the inability to repurchase such Designated
Funds at a later date.

Midland Financial Advisors, Inc. does not represent, warrantee or imply that the services or
methods of analysis used by Midland Financial Advisors, Inc. can or will predict future
results, successfully identify market tops or bottoms, or insulate you from losses due to
major market corrections or crashes. No guarantees can be offered that your goals or
objectives will be achieved. Further, no promises or assumptions can be made that the
advisory services offered by Midland Financial Advisors, Inc. will provide a better return
than other investment strategies.

Varied fluctuations in the price of investments are a normal characteristic of securities
markets due to a variety of influences. Managed account programs should be considered a
long-term investment and thus long-term performance and performance consistency are
the major goals.

You are advised investing involves risk of loss. You must be prepared to bear the risk of loss
of principal and market fluctuations.