Terril Brothers Inc

Item 5 – Fees and Compensation

Terril generally provides investment advisory services for a fee based on the percentage of assets
under management as follows:

Amount of Assets Under Management                       Fee
First $1,000,000                                        1% of assets under management
Next $2,000,000                                         .75 of 1% of assets under management
Next $2,000,000                                         .6 of 1% of assets under management
Balance over $5,000,000                                 .5 of 1% of assets under management

The above fees are guidelines only and may be negotiated with each client. Fees are payable
quarterly in arrears based on the market value of invested assets on the last business day of March,
June, September and December, time weighted to reflect deposits and withdrawals. We use market
values received from electronic sources that we consider to be reliable, but they may differ from
time to time from a custodian’s valuations. Electronic pricing services vary slightly on the price
of fixed income securities. Terril & Co. uses this information and determines the price of fixed
income securities on performance reports.

On a case-by-case basis, Terril may provide consulting services on an hourly fee basis, if requested
by a client. Terril charges $250 per hour payable as mutually agreed with a client.

Clients may pay fees using one of two options for our services:

   •   Direct debit: At the time we enter into an advisory agreement with you, we will solicit
       your authorization for direct debit payments through a separate authorization agreement.
       Each quarter thereafter, we will notify your custodian of the amount of the fee due and
       payable to us. The custodian does not validate or check our fee.

   •   Check or wire transfer: Each quarter, we will issue an invoice for our services. You may
       pay us by check or wire transfer, promptly following receipt of our invoice.

Terril requires that all clients enter into an investment advisory agreement, which may be
terminated at will upon written notice or by telephone or electronic mail by either party to the other
party. Termination shall not affect any fees resulting from transactions initiated before Terril
received written or telephonic notice of termination of the advisory agreement.

Additional Fees and Expenses

In addition to the advisory fees paid to us, you will pay fees or expenses to third parties, as
described below, when we purchase, sell or hold securities for your account. We do not receive,
directly or indirectly, any of the third-party fees described below. They are paid to your broker-
dealer, custodian, mutual fund or other third party, based on the types of investments you hold.
Terril does everything possible to negotiate and keep the fees at a minimum.

   •   Brokerage commissions

   •   Transaction fees

   •   Exchange fees

   •   SEC fees

   •   Advisory fees and administrative fees charged by mutual funds and exchange traded
       funds

   •   Storage fees

   •   Custodial fees

   •   Deferred sales charges on some mutual funds

   •   Odd-lot differentials

   •   Transfer taxes

   •   Wire transfer and electronic fund processing fees

We do not have any potential conflicts of interest relating to the fees charged for the operation of
our clients’ portfolios because we do not accept commissions or other compensation from the sale
of securities or other investment products. Terril’s total compensation is derived from fees charged
directly to clients, as described in this Section 5. Please see Item 12 regarding our brokerage
practices.

Item 7 – Types of Clients

Terril provides investment advisory services to the following types of clients:

   •   High net worth individuals

   •   Individuals (other than high net worth individuals)

   •   Pension and profit-sharing plans

   •   Corporations, trusts, estates and charitable organizations or other business entities not
       listed above

   •   Other investment advisors.

As a condition for starting and maintaining an advisory relationship, we generally require a
minimum portfolio size of $250,000. However, Terril at its sole discretion, may accept clients
with smaller portfolios based upon certain factors including anticipated future earning capacity,
anticipated future additional assets, account composition, related account, and pre-existing client
relationships.