Private Banking

morgan stanley priVate Bank, n.a.

Welcome to Private Banking. No decision about wealth should be made in isolation.How you borrow and how you manage cash can be as important to the success of your wealth plans as having an appropriate investment strategy.

Knowing this, we have thoughtfully crafted our private banking capability from the ground up. Private Bankers1 partner exclusively with Morgan Stanley Smith Barney Financial Advisors to help you unlock the value of your portfolio through customized strategies for borrowing and liquidity management, tailored to your needs and risk profile.

Working together, your Private Banker and Financial Advisor can introduce you to a suite of lending and cash management services offered by Morgan Stanley Private Bank or through Morgan Stanley Smith Barney. These services can complement your investing strategies and deliver more holistic wealth management.1 Private Bankers are employees of Morgan Stanley Private Bank, National Association, member FDIC.

1

4

10

3

9an inteGRated aPPROacHtO unlOcKinG Value / P3 /The value of assets you already own can make new things possible.

eValuatinG “tRue cOSt” / P4 /Liquidating fi nancial assets tocover a large expense can carry costs that are not obvious.

undeRStandinG tHe cOMPleXitieSOF RiSK / P9 / In managing wealth, risk and reward must be carefully balanced across both sides of the balance sheet.

OPtiMiZinG caSH FlOW / P10 /A strategic approach can give you cash when you need it.

Value

3

An Integrated Approach to Unlocking Value

Value / finding opportunity

All the assets that you own —  your home, your investment portfolio, your business and your investment properties —  are sources of value. For many people, the challenge is to unlock this value in a way that makes new things possible.

Value is both personal and practical, and the needs in all areas of your life are best met with a comprehensive view. Working with a Private Banker, your Financial Advisor can show you how you might leverage the value in your bond portfolio to give your daughter the down payment for her first home. Another strategy may use the value of your business to finance an investment in new equipment. That investment, in turn, could reduce operat-ing costs and make your company even more valuable in the future.

An integrated approach is vital as your needs become more complex. You

may be tempted to sell assets that have performed well over a long period —  such as real estate, securities or equity in a business —  to secure your income stream or make a gift to a charitable cause. However, an outright sale might trigger a significant tax bill.

A Private Banker can work with your Financial Advisor and other specialists from Morgan Stanley Private Bank —  as well as with your own tax and legal advisors —  to customize solutions that leverage these assets to provide you with both the income you need and a gift for that favorite cause.

4

Evaluating True CostStRateGy / preserVing Value

Liquidating fi nancial assets to cover a large expense can carry costs that are not obvious, such as tax consequences on gains, the potential loss of future growth or an imbalance in your portfolio’s asset allocation.

A Private Banker can team up with your Financial Advisor to explore a range of borrowing and cash man-agement strategies. In the end, it may make more sense to keep your portfolio intact and use it as collateral for your purchase —  or to use your real estate or other nonfi nancial assets to increase your borrowing power.

Certain transactions require more than just expert lending advice. For instance, you may wish to make a major purchase outside the US. Your Financial Advisor, together with a Private Banker, can work with you to weigh these considerations and help execute the purchase in a way that best fits your needs and goals.

Strategy

Fuller Perspective, Broader PossibilitiesWorking with a Private Banker, your Financial Advisor will look at your net worth, asset allocation, outstanding loan balances and lines of credit, cash flow and potential liquidity sources in the context of what you want to acquire, achieve and experience.

Family and Lifestyle

Finance the purchase, renovation or remodeling of a home, including opportunistic real estate investments.

Transfer wealth through customized banking and lending strategies.

Leverage assets, such as a concentrated or restricted stock position or a separately managed account, to finance lifestyle purchases — such as a boat, a second home or a college education.

Income and Cash Flow

Manage day-to-day transactions and bill payment.

Automate the handling of multiple sources of income, including retirement accounts.

Convert highly appreciated assets into a retirement income stream.

Establish deposit accounts for your business through your brokerage account.

Develop executive compensation cash flow strategies, including monetizing restricted stock.

Business Liquidity Management

Speed and simplify receivables and reduce operating expenses with cash flow strategies.

Execute commercial borrowing solutions, including term loans and credit lines that recognize your full financial picture.

Access commercial finance strategies.

Balance

9

Understanding the Complexities of Risk

Balance / risk and reward

In managing wealth, risk and reward must be carefully balanced. We apply a broad definition to what constitutes risk across both sides of the balance sheet.

Corporate executives or business owners may hold equity stakes in their compa-nies that account for a large portion of their net worth. Restrictions on how and when such stakes can be sold may disadvantage these individuals, causing them to miss opportunities in other areas and potentially creating risk. Having an appropriate liquidity management

strategy in place can help counterbal-ance that risk by working to gain access to additional funds when unforeseen opportunities arise.

Similarly, rate fluctuations in variable rate credit vehicles —  like home equity lines and credit cards —  may prove to be unpredictable and costly in the long term. Something as simple as a line of credit

backed by your securities portfolio may be a more strategic, less costly approach.

Your Financial Advisor can draw on a Private Banker’s expertise to show you ways you may be able to monetize and diversify these illiquid holdings.1

1 Diversification does not guarantee a profit or protect against a loss.

10

Optimizing Cash Flowliquidity / income planning

Not every income is a steady income. It may come in sizeable amounts at unpredictable times. As a result, you may be occasionally forced to pass up an attractive acquisition or investment. A Private Banker can work with your Financial Advisor to explore a standby line of credit so that you don’t miss these opportunities —  or find yourself forced to liquidate assets at the wrong time.

Working together, a Private Banker and your Financial Advisor can craft a strategy for your assets based on your income goals. They can ensure your Morgan Stanley Smith Barney accounts are integrated with easy-to-use online bill payment and debit cards that will help give you the flexibility to access funds how and when you need them.

This type of brokerage account structure can provide robust cash management as assets are transitioned to income.

If you own a business, you may feel more pressures on income than most. To answer this, we craft and execute solutions that can create value for you both as a manager with business needs and an owner with wealth goals.

With your Financial Advisor, a Private Banker can analyze your company’s cash flow —  including your receivables, your disbursements and the structure of your debts. Then, they can help you access the funds you need to efficiently run your business by implementing strategies that leverage both your busi-ness and personal assets.

Liquidity

12

Private Banking services are a vital part of managing your financial life, and you can certainly get the basics from many firms. Morgan Stanley Smith Barney is an investment firm with access to private banking solutions shaped through the lens of wealth management needs. A Private Banker can partner with your Financial Advisor to create customized solutions tailored specifically for you.

Banking and credit products and services are provided by Morgan Stanley Pri-vate Bank, National Association (“Morgan Stanley Private Bank”), Member FDIC; Morgan Stanley Bank, N.A., Member FDIC; or other affiliates or third parties.

Morgan Stanley Smith Barney LLC (“Morgan Stanley Smith Barney”), member SIPC, is a registered broker-dealer, not a bank. Where appropriate, Morgan Stanley Smith Barney has entered into arrangements with banks, in-cluding Morgan Stanley Private Bank and Morgan Stanley Bank, N.A., and other third parties to assist in offering certain banking related products and services.

Unless specifically disclosed in writing, investments and services offered through Morgan Stanley Smith Barney are not insured by the FDIC, are not deposits or other obligations of, or guaranteed by, a bank and involve invest-ment risks, including possible loss of principal amount invested.

Morgan Stanley Private Bank, Morgan Stanley Smith Barney, their affiliates and employees (including Private Bankers and Financial Advisors, respective-ly) are not in the business of providing tax or legal advice, and these materials and any statements contained herein should not be construed as tax or legal advice. Individuals are urged to consult their personal tax advisor or attorney for matters involving taxation and tax planning and their personal attorney for matters involving trust and estate planning and other legal matters.

Securities Based Lending: Borrowing against securities may not be suitable for everyone. You should be aware that securities based loans involve a high degree of risk and that market conditions can magnify any potential for loss. Most importantly, you need to understand that: (a) The loan can be called at any time and for any reason. (b) Sufficient collateral must be maintained to support your loan(s) and to take future advances. (c) You may have to deposit additional eligible securities or funds for investment on short notice. (d) Some or all of your securities may be sold without prior notice in order to maintain ac-count equity at required maintenance levels. You will not be entitled to choose the securities that will be sold. These actions may interrupt your long-term in-vestment strategy and may result in adverse tax consequences or in additional fees being assessed. (e) Morgan Stanley Smith Barney or its affiliates (the Firm) reserves the right not to fund any advance request due to insufficient collateral or for any other reason. (f) Your collateral maintenance requirements can be

increased at any time without notice. Funds drawn may not be used to purchase, carry or trade marketable securities, or to repay margin debt.

All loans are subject to application and approval. All loans are subject to credit approval. The information contained herein should not be construed as a commitment to lend.

Home Loans are made by Morgan Stanley Private Bank, an Equal Housing Lender, or other affiliated lenders, not Morgan Stanley Smith Barney. The Home Loans referenced herein are made by Morgan Stanley Private Bank. A Morgan Stanley Smith Barney investment relationship does not have to be established or maintained to obtain the products or services offered as part of the Home Loans program.

Proceeds from mortgage loan transactions including initial draws and advances from HELOCs are not permitted to be used to purchase trade or carry marginable securities, repay margin debt or to make payments on any amounts owed under the Note or HELOC loan agreement.

These products may not be available in all states and are limited to U.S. citizens and permanent resident aliens only. Residential loans are not avail-able in Guam, Puerto Rico and the Virgin Islands. Other restrictions may ap-ply. Morgan Stanley Private Bank underwriting guidelines will apply. Loans are subject to credit application and loan approval. Rates, terms and pro-grams are subject to change without notice.

Morgan Stanley Smith Barney LLC. 2000 Westchester Avenue, Purchase, NY 10577. Tel: 800-869-3326. Nationwide Mortgage Licensing System Unique Identifier No. 171760. Arizona Mortgage Broker License No. 0910887. California Department of Corporations Finance Lenders Law License No.  603H431. Georgia Residential Mortgage Licensee No.  23976. Kansas Licensed Mortgage Company No.  MC.0025024. Massachusetts Mortgage Broker License No. MB5439. Montana Mortgage Broker License No. 171760. Licensed by the New Hampshire Banking Department. Licensed by the New Jersey Department of Banking and Insurance. Registered Mortgage Broker–NYS Banking Department. Ohio Mortgage Broker Act Certificate of Registration No. MB.804039.000. Rhode Island Licensed Loan Broker. Mortgage brokers may not make loans.

© 2012 Morgan Stanley Smith Barney LLC. Member SIPC. PB6690145 CRC 430292 01/2012 6990145 01/12