Smith Asset Management Group LP

Item 5 – Fees and Compensation

Clients pay Smith Group a fee for managing portfolios (the "Advisory Fee") which is based upon
the market value of the portfolio, including cash equivalents, as determined at the close of the
last day of each quarter. The Advisory Fee will be computed quarterly in arrears and the client
will either authorize Smith Group to withdraw the fees from the portfolio or will be billed for the
fee.

Clients pay according to the fee schedule as specified in their Investment Advisory Agreement.
Based on the mandate size and client servicing requirements, fees may be negotiated to a level
lower than the Maximum Advisory fee schedule outlined below. Fees charged for separate

                             Smith Asset Management Group, LP

accounts are based on the assets under management and are negotiated between Smith Group
and the client.

Maximum Advisory Fee Schedules (per annum) are as follows:

Global Equity/International Equity

  Fee Type                     Fee Structure
  Management Fee Only          1.00% on all managed assets

Smith Group fees are exclusive of brokerage commissions, transaction fees, custodial fees and
other related costs and expenses which may be charged by non-affiliated firms to transact trades
and provide custodial services to the client.

Such charges, fees, and commissions are exclusive of and in addition to Smith Group’s fee, and
Smith Group does not receive any portion of these commissions, fees, and costs.

Portfolio values are computed monthly based on the month end market value and multiplied by
the applicable percentage/basis points. This amount is then divided by twelve (12) and deducted
from the portfolio value unless the client chooses to be billed for the fee. All fees and payment
specifications are detailed in the client’s investment advisory agreement.

Item 12 further describes the factors that Smith Group considers in selecting or recommending
broker-dealers for client transactions and determining the reasonableness of their compensation
(e.g., commissions).

Most Favored Nation Clauses for Institutional Separate Accounts

Certain Institutional Separate Account clients have negotiated “most favored nation” clauses in
their investment advisory agreements with Smith Group. These clauses may require Smith Group
to decrease the fees charged to the “most favored nation” client whenever Smith Group enters
into an advisory agreement at a lower fee rate with another Institutional Separate Account client.
The applicability of a “most favored nation” clause may depend on the degree of similarity
between institutional clients, including reporting requirements, investment restrictions, the
amount of assets under management and the particular investment strategy selected by each
client. Smith Group does not agree to “most favored nation” clauses in most circumstances.

Services to Employees, Family and Friends of Smith Group

In most cases, Smith Group provides portfolio management services to Smith Group, Smith Group
affiliates, Smith Group principals, employees, and their family members and friends without
charge, or for fee rates that are lower than the rates available to other clients. Smith Group’s
employees are also eligible to invest in certain other pooled investment vehicles advised by Smith

                              Smith Asset Management Group, LP

Group, despite the fact that Smith Group’s employees may not otherwise satisfy the eligibility
requirements for investment in these pooled vehicles. Furthermore, in most cases, Smith Group
chooses to waive applicable performance-based fees with respect to assets invested by Smith
Group’s principals, affiliates, employees, and their family members and friends.

Termination

Clients shall have the right to terminate the Investment Advisory Contract ("Agreement"),
without penalty, at any time within five (5) business days after the effective date of the
Agreement. Thereafter, either party may terminate the Agreement upon thirty (30) days written
notice to the other party by certified or registered mail to the address set forth in the contract.
In the event the Agreement is terminated, and the client has advanced any fees which have not
been earned as of the effective date of termination, such unearned fees shall be refunded to the
client.

Item 7 – Types of Clients

Smith Group currently provides portfolio management services to Public Pension plans. In the
future, Smith Group may seek to provide services to individuals, high net worth individuals,
banking and thrift institutions, investment companies including mutual funds, corporate pension
and profit-sharing plans, multi-employer plans, other pooled investment vehicles, charitable
institutions, corporations and businesses not listed above, state or municipal government
entities, WRAP platforms and UMA’s.

Smith Group principals, employees and affiliates may invest in Smith Group managed strategies,
mutual funds and private funds which could create an incentive for Smith Group to favor those
accounts over other clients. Although a potential for conflict of interest does exist, Smith Group
maintains policies and procedures designed to mitigate these conflicts.