SpiderRock Advisors LLC

ITEM 5: FEES AND COMPENSATION

Advisory Fees

For its Advisory Services, SRA typically charges an annual management fee based
on, and calculated as a percentage of, the notional value of the assets in the client
account allocated to SRA (collectively, “Advisory Fees”). In general, fees for these
programs will depend on the client, strategy, amount of assets managed, and
service level. SRA’s Advisory Fees do not include fees charged by intermediaries,
custodians, or other service providers.
Fees are negotiable at SRA’s sole discretion and vary depending on account size,
account parameters, and overall relationship. A minimum annual fee may be
applied in certain cases, which can result in a higher effective fee rate than set
forth below; however, SRA has discretion to lower or waive the minimum at any
time and for any client.

Standard annual advisory fee rates are set forth below, based on the client
account’s chosen investment strategy:

 SpiderRock Hedged Equity
                                          .50% AUM
 Concentrated Stock (SRHEC)
 SpiderRock Hedged Equity Portfolio
                                          .50% AUM
 (SRHEP)
 SpiderRock Managed Index Income
                                          .60% AUM
 (SRMII)
 SpiderRock Cash Secured Put (SRCSP)      .50% AUM
 SpiderRock Exchange Fund Replication
                                          .85% AUM
 (SREFR)
 SpiderRock Opportunistic Yield
                                          .70% AUM
 Enhancement (SROYE)
 SpiderRock Structured Note
                                          .60% AUM
 Replication (SRSNR)
 SpiderRock Index/Stock Replacement
                                          .60% AUM
 (SRISR)
 SpiderRock Capital Efficient Borrowing
                                          .50% AUM
 (SRCEB)

Advisory Fees are generally negotiated with the client’s Advisor. Advisory Fees may
exceed the advisory fee rates listed in the foregoing table and certain clients pay
Advisory Fees that are higher than those paid by other clients. For certain clients,
lower Advisory Fees may be available with a different Advisor.

Advisory Fees are typically assessed on the same schedule as the fees assessed by
the Advisor, if applicable. Advisory Fees can be assessed monthly or quarterly, in
advance or in arrears. In cases where Advisory Fees are paid in advance, any

unearned portion of the Advisory Fee is generally subject to refund if the
relationship is terminated prior to the end of the relevant billing period.

Clients and/or their Advisors may choose to pair certain of SRA’s strategies to be
implemented as an overlay on the same underlying assets in a client’s account. In
such cases, SRA will charge separate Advisory Fees for each strategy implemented
on the same underlying assets under management. Please see Item 11: Code of
Ethics, Participation or Interest in Client Transactions and Personal Trading –
Layered Options Strategies of this Brochure for more information.

Payment of Fees

Typically, Advisory Fees are collected by sending the Advisor or clients, as
applicable, an invoice for services rendered and collecting such fees from either
the Advisor or the underlying client accounts. Alternatively, the fee can be debited
directly from the client’s account.

Other Fees

Clients should understand that the Advisory Fees discussed above are specific to
what SRA charges and do not include certain charges that may be imposed by
third parties, such as custodial fees (including margin fees and borrowing costs, as
applicable), exchange-traded fund and mutual fund fees and expenses, and any
additional fees charged by a client’s Advisor. Client assets also can be, depending
on the type of account and the types of investments in the account, subject to
asset-based transaction fees, brokerage fees and commissions, and other fees and
taxes on brokerage accounts and securities transactions.

Clients should understand that all custodial fees and any other charges, fees, and
commissions incurred in connection with transactions for a client’s account are
generally paid out of the assets in the account and are in addition to the Advisory
Fee charged by SRA. Please refer to Item 12: Brokerage Practices for additional
important information about our brokerage and transactional practices, including
considerations for selecting broker-dealers for client transactions.

Clients should review the fees charged to their account(s) to fully understand the
total amount of all fees charged. Clients should understand that lower fees for
comparable services may be available from other investment advisory firms.

Fees for Other Services

In connection with collateral management services, SRA shall receive an additional
fee equal to 0.15% per annum of the aggregate par amount of all collateral assets
held in a client’s account (or portion thereof) submitted to and accepted by SRA for

its management (“Allocated Sleeve”). In connection with over-the-counter
derivatives assistance services, SRA shall receive an additional fee equal to 0.40%
per annum of the notional value of the assets of a client allocated to such over-the-
counter derivatives.

Negotiability of Fees

SRA can, in its sole discretion, negotiate the fees for its services depending upon
various factors, including account size, investment strategy being used,
responsibilities involved, relationship to SRA, potential growth, and composition of
the portfolio.

Fees Associated with ETFs and Affiliated Funds

Clients may hold shares of exchange-traded funds (“ETFs”), including ETFs that
pay fees to an SRA affiliate for providing management, administrative or other
services (“Affiliated Funds”), in their account(s). SRA also buys and/or writes
options on ETFs, including Affiliated Funds, to implement overlay investment
strategies for certain clients. Clients will bear their pro rata portion of the fees and
expenses for such Affiliated Funds that are paid to an SRA affiliate in addition to
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ITEM 7: TYPES OF CLIENTS

SRA offers Advisory Services to a variety of clients, across various different formats.
The Firm provides investment advisory and strategy management services to
Advisors for use with their clients and constituents in several different capacities
as further described below. The Firm also offers Advisory Services directly to high-
net-worth individuals, family offices, pension funds, endowments, private funds,
and other institutional investors through SMAs.

Account minimums are negotiable and can be subject to changes depending on
complexity or other factors with respect to certain strategies.

ITEM 8: METHOD OF ANALYSIS, INVESTMENT STRATEGIES AND RISK OF
LOSS

Investment Strategies Employed by SRA

SRA seeks to create a balance between risk and reward over a given time period by
combining a systematic, technical, and rules-based approach with quantitative
and fundamental considerations when making investment decisions. Investment
parameters are programmed into SRA systems and decisions are driven by SRA
software tools under the oversight of SRA portfolio and risk managers who leverage
these tools. The number of issues traded and positions vary depending upon the
strategy traded and capital allocation to each strategy. SRA, via its technology-
based algorithms, implements strategies based on the clients’ individual

portfolios, the objectives of the chosen strategies, and risk constraints. For each
client, SRA seeks to optimize portfolio risk through the use of rules-based
algorithms, while operating within the agreed-upon risk tolerance parameters
specified by each client. For purposes of this section, references to “clients” herein
include all clients of SRA, as well as Advisors and their end-clients, as appropriate.

The proprietary strategies SRA deploys as part of its Advisory Services are active
and dynamic strategies, typically using single stock and index options as key
components, and where SRA seeks to establish optimal hedges for portfolios and
concentrated positions using a variety of option strategies. For certain strategies
SRA will employ Flexible Exchange® Options on an index or ETF (“FLEX Options”).
FLEX Options are customizable exchange-traded option contracts guaranteed for
settlement by the Options Clearing Corporation. SRA may employ FLEX Options in
any of its strategies.

Based on the client portfolio information provided to SRA by the client, SRA
considers multiple time horizons, (long, medium, and short term) when
determining hedging strategies. SRA tracks a variety of portfolio risk exposures
and attempts to create appropriate option-based strategies to hedge these risk
exposures of the underlying portfolios. As the strategies seek to be dynamic,
portfolio risk is measured in real-time and the strategies are rebalanced with
respect to market exposure and risks at any given time. Finally, SRA attempts to
identify and capitalize on equity market mispricing to allow for a savings on the
costs of the strategy implementation, typically achieved by tracking the valuation
of option contracts in the market, tracking implied and realized volatility of
underlying stocks and indexes, and attempting to place trades intelligently in the
marketplace.

The following summaries are not intended to be a complete statement of the
investment strategies and related risks. More detailed descriptions of the
investment strategies, methods of analysis and risks of a specific ETF are included
in the applicable prospectus.

Discretionary Investment and Trading Solutions

      SpiderRock Hedged Equity Concentrated Stock (SRHEC)

      A risk management option overlay model which seeks to hedge downside
      risks for concentrated stock positions. The strategy uses options and
      combinations of options to construct a hedge structure that aims to protect
      the underlying securities from large downside moves, while at the same time
      seeking to preserve a portion of the upside. The strategy seeks a consistent
      reduction in stock volatility, while also allowing clients to maintain their
      current stock positions and related dividends. The option positions are

dynamically rebalanced during times of market volatility, and systematically
implemented to attempt to take advantage of option pricing inefficiencies.
SRA allows for up to three tickers per Allocated Sleeve.

SpiderRock Hedged Equity Portfolio (SRHEP)

A risk management option overlay model which uses option combinations of
puts and calls to construct a dynamic collar structure that aims to protect
the underlying portfolio from large downside moves, while at the same time
seeking to preserve a portion of the upside. The strategy seeks a consistent
reduction in portfolio volatility, while also allowing clients to maintain
related underlying portfolio positions and dividends.

SpiderRock Cash Secured Put (SRCSP)

The objective of SRCSP is to write puts systematically against cash in clients’
Allocated Sleeves. This allows a client to potentially enhance portfolio yield,
and acquire long positions in the underlying securities, should the price of
the underlying security decline by a predetermined amount. The SRCSP
program can be implemented on 50%, 75%, or 100% allocation of the
Allocated Sleeve in which the SRCSP program is applied, and is available in
taxable and non-taxable Allocated Sleeves.

SpiderRock Managed Index Income (SRMII)

An option overlay model which seeks to profit from the excess premium that
is generally attached to major market, index options. The SRMII program
sells index call options to target a net long market exposure of
approximately between 40-60% for a combined stock-and-options
Allocated Sleeve. The SRMII program has been designed as a cost effective,
hedging vehicle, and can be implemented on a 25%/50%/75%/100 %
allocation of the Allocated Sleeve in which the SRMII program is applied. The
SRMII program is only available in taxable Allocated Sleeves.
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