Summit Financial Advisors Inc

Fees and Compensation
Summit Financial Advisors, Inc. charges most of its clients an annual investment management fee
based on the following schedule:
Assets under management                                                 Annual Fee
First $1,000,000,                                                           0.90%
From $1,000,001 & up to $3,000,000,                                         0.75%
From $3,000,001 & up to $5,000,000,                                         0.50%
From $5,000,001 & up                                                        0.35%

Summit Financial Advisors, Inc. has waived or negotiated lower or higher fees for certain clients,
such as charitable organizations or employees’ family members.

Summit Financial Advisors, Inc. imposes a minimum annual fee of $9,000, which may be waived
or reduced.

Summit Financial Advisors, Inc. offers advice on an hourly rate basis for clients who do not meet
the $1,000,000 household minimum. Advice includes investment consulting, education planning,
retirement plan consulting, risk management planning, tax planning and estate planning. The hourly
rate ranges from $250 - $400 per hour. General guidelines for the number of hours needed for each
area are as follows:

       Investment Consulting:                                               3 hours
       Education Planning:                                                  1 hour
       Risk Management Planning:                                            2 hours
       Retirement Plan Consulting:                                          2 hours
       Tax Planning:                                                        2 hours
       Estate Planning:                                                     2 hours

The number of hours in the guidelines above can be lower or higher, depending on client
circumstances.

Summit Financial Advisors, Inc. charges fees quarterly in arrears based on the account value at the

end of the prior quarter. Most clients authorize Summit Financial Advisors, Inc. to deduct fees
automatically from their brokerage accounts, but clients may request that Summit Financial
Advisors, Inc. send quarterly invoices to be paid by check.

If a client terminates the investment management agreement with Summit Financial Advisors, Inc.
in the middle of a billing period Summit Financial Advisors, Inc. will invoice the client for an
amount that is pro-rated based on the number of days that the account was managed.

In addition to Summit Financial Advisors, Inc.’s investment management fees, clients bear trading
costs and custodial fees. To the extent that clients’ accounts are invested in mutual funds, these
funds charge a separate layer of management, trading, and administrative expenses.

Roger Miller and Dennis Vitori, who provide investment advice on behalf of our firm, are licensed
as insurance agents and will earn commission-based compensation for selling insurance products,
including insurance products they sell to you. The commissions received for the sale of insurance
products are in addition to the advisory fees described above. This creates a conflict of interest as
the receipt of commissions creates an incentive to recommend insurance products for the receipt of
the commissions rather than the needs of the client. We mitigate this conflict by only recommending
insurance products to clients when it is in line with the client’s investment objectives and the client
has been fully comprised of any charges involved. Clients are under no obligation to purchase the
insurance products recommended to them.

Performance Based Fees and Side-by-Side Management
Summit Financial Advisors, Inc. does not charge any performance fees. Some investment advisers
experience conflicts of interest in connection with the side-by-side management of accounts with
different fee structures. However, these conflicts of interest are not applicable to Summit Financial
Advisors, Inc.

Types of Clients
Summit Financial Advisors, Inc. primarily provides customized investment management services
to high-net-worth individuals and associated trusts, estates, pension and profit sharing plans, and
other legal entities.

Methods of Analysis, Investment Strategies and Risk of Loss
Methods of Analysis and Investment Strategies Generally

Summit Financial Advisors, Inc.’s personnel work together to conduct fundamental analysis on all
securities recommended for client accounts. This analysis varies depending on the security in
question.

For mutual funds and ETFs the analysis generally includes a review of:

      The fund’s management team;

      The fund’s historical risk and return characteristics;

      The fund’s exposure to sectors and individual issuers;

      The fund’s fee structure; and

      Any other factors considered relevant.

Summit Financial Advisors, Inc.’s Investment Committee is led by Matthew A. Weed, CFA®,
CFP®. It also includes Roger L. Miller, CFP® and Ellen M. Weed, CFP® and Peter B. Miller,
CFP®. The Investment Committee convenes quarterly to discuss global market conditions and
outlooks, as well as existing and prospective investments. Investments are evaluated independently,
as well as in the context of clients’ existing holdings and sector exposures.

Summit Financial Advisors, Inc. primarily invests for relatively long-time horizons, often for a year
or more. However, market developments could cause Summit Financial Advisors, Inc. to
recommend selling securities more quickly.

Depending on a client’s investment objectives, Summit Financial Advisors, Inc. might recommend
option writing. The use of option writing poses additional risks that are discussed in detail with any
clients who are considering the use of these investment vehicles.

Summary of the Principal Investment Risks

Fundamental Analysis - Summit Financial Advisors, Inc. utilizes an investment process based
upon fundamental business and credit analysis; capital structure and liquidation analysis, a review
of documentation surrounding an issuer’s securities and identification of an investment catalyst.

In making its investment decisions, Summit Financial Advisors, Inc. will rely on internally
generated research, derived from annual reports, prospectuses, filings with the SEC, corporate press
releases, inspections of corporate activities, conversations with the firm and/or competitors,
financial newspapers, magazines and other sources. Summit Financial Advisors, Inc. may also use
research materials prepared by others in making an investment decision. During the research
process, Summit Financial Advisors, Inc. makes an assessment of the quality of the security in
question by examining among other things financial metrics of the relevant company, the integrity
and strategic vision of the management team and the ability to execute such strategy, as well as the
attractiveness and risks of the company’s industry.

Stock market risk - The chance that stock prices overall will decline. Stock markets tend to move
in cycles, with periods of rising prices and periods of falling prices.

Information relied on could turn out to be wrong - Summit Financial Advisors, Inc. selects
investments based, in part, on information provided made directly available to Summit Financial
Advisors, Inc. by the issuers or other sources. Summit Financial Advisors, Inc. is not always able
to confirm the completeness or accuracy of such information, and in some cases, complete and
accurate information is not available. Incorrect or incomplete information increases risk and a result
in losses.

Failure to identify successful companies - Identifying undervalued securities and other assets is
difficult, and there are no assurances that such a strategy will succeed. Furthermore, clients may be

forced to hold such investments for a substantial period of time before realizing any anticipated
value.

Investing in securities entails risks associated with the underlying business - Investments in
securities entails all the risks associated with the underlying businesses, including reliance on a
company’s managers and their ability to execute business strategies. In addition, all businesses face
risks such as adverse changes in regulatory requirements, interest rate and currency fluctuations,
general economic downturns, changes in political situations, market competitions and other factors.
Summit Financial Advisors, Inc. will not have day-to-day control over any company in which it
invests for clients.

Investing in securities is inherently risky - An investment in individual securities or in a portfolio
of securities could lose money. The investments selected by Summit Financial Advisors, Inc.
should be deemed speculative investments and are not intended as a complete investment program.
These types of investments are designed for sophisticated investors who fully understand and are
capable of bearing the risk of loss of their entire investment. Summit Financial Advisors, Inc.
cannot give any guarantee that it will achieve its investment objectives or that any client will receive
a return of its investment.

The descriptions of risk factors contained above are a brief overview of different market risks related
to Summit Financial Advisors, Inc.’s investment strategy; however, it is not intended to serve as an
exhaustive list or a comprehensive description of all risks and conflicts that may arise in connection
with the management of client accounts.