Capstone Investment Financial Group LLC

Fees and Compensation

Fees Charged

All clients will be required to execute a written agreement that will describe the type of services to be provided and the
fees, among other items.

Our Wrap Fees

CIFG offers a number of different options to clients for charging fees. Clients may choose to pay fees based on the value
of their assets under management, choose a fee based on the performance of their accounts, or a combination of the

two. Clients selecting performance-based must be a qualified purchaser, which is defined as a client who has at least
$1,000,000 under management with Capstone Investment Financial Group, LLC immediately after entering into the
contract, or the client must have a net worth of more than $2,000,000.

Generally, fees vary from 0.00% to 2.00% per annum of the market value of a client’s assets managed by CIFG. The fee
range stated is a guide. Fees are negotiable, and may be higher or lower than this range, based on the nature of the
account. Factors affecting fee percentages include the size of the account, complexity of asset structures, and other
factors.

For clients that are qualified, CIFG offers a 20% performance fees based on annual new capital appreciation in the
Client’s account. There are no retainers of flat fees associated with this fee option. The last fee option provided to
clients who are qualified is a combination of the asset based fees and the performance based fee. The fee is typically
1.10% of assets managed and a 10% performance fee based on annual new capital appreciation. For either performance
based fee option, capital appreciation in the Client’s account is based upon a high watermark. Meaning that if your
account goes from $900,000 to $1,000,000 in the first year, but is down to $950,000 in the second, you do not pay a
performance based fee until your account exceeds its highest year-end value. In the example given above, that is
$1,000,000.

The fee range stated is a guide. Fees are negotiable, and may be higher or lower than this range, based on the nature of
the account. Factors affecting fee percentages include the size of the account, complexity of asset structures, and other
factors.

Because our wrap fees are not tied to an account’s frequency of trading and apply generally to all assets in the account,
this fee arrangement is not appropriate for all accounts. For example, a wrap fee arrangement would not be appropriate
for an account that holds primarily cash and cash equivalents, fixed income securities or no-transaction-fee mutual
funds for a substantial period of time.

Investment advisory fees will be debited directly from each client’s account. The advisory fee is paid either annually or
quarterly, in arrears, and the value used for the fee calculation is the daily average balance of the portfolio for the
previous quarter of year. In some cases, the fees are based on the balance of the account as of the end of the previous
quarter or year. The annual payment of fees is only available for performance fee based accounts. This means that if
your annual fee is 1.00%, then each quarter we take the sum of each day’s balance and then divide by the number of the
days in the period to calculate our fee. Once the calculation is made, we will instruct your account custodian to deduct
the fee from your account and remit it to CIFG.

Clients whose fees are directly debited will provide written authorization to debit advisory fees from their accounts held
by a qualified custodian chosen by the client. Clients may request a bill itemizing the fees to be debited, including the
formula used to calculate the fee, the amount of assets upon which the fee is based, and the time period covered by the
fee. The invoice will also state that the fee was not independently calculated by the custodian. The client will also
receive a statement from their account custodian showing all transactions in their account, including the fee.

Other Information about Advisory Fees

Clients may pay margin fees, IRA fees, or other fees not considered trading or custodial fees.

Associated persons may buy or sell for their own accounts the same securities recommended to you. Associated
persons seek to ensure that they do not personally benefit from the short-term market effects of their recommendations
to you, and we monitor their personal trading.

Associated persons are aware of the rules regarding material non-public information and insider trading. Associated

persons may also buy or sell a specific security for their own account based on personal investment considerations,
which the Advisor does not deem appropriate to buy or sell for clients.

We have adopted a Code of Ethics to instruct our personnel in their ethical obligations and to provide rules for their
personal securities transactions. The Firm and our personnel owe a duty of loyalty, fairness and good faith to our clients,
and the obligation to adhere not only to the specific provisions of the code but also to the general principles that guide
the Code. The Code covers a range of topics including general ethical principles, reporting personal securities trading,
exceptions to reporting securities trading, reportable securities, initial public offerings and private placements, reporting
ethical violations, distribution of the Code, review and enforcement processes, amendments to Form ADV and
supervisory procedures. We will provide a copy of the Code to any client or prospective Client upon request.

Other Information about Fees and Services

Generally speaking, the amount of personalized service that you received will vary based upon how you choose to
contract with our firm and which type of service you request, and the level of service you receive will most likely be
commensurate with the amount of compensation you pay for those services. Please discuss your desired level of service
...

Item 7: Types of Clients
We typically work with individuals, investment companies, pension and profit sharing plans, trusts, estates, charities,

corporations, other business entities and other investment advisory firms.
The minimum account balance for one account is $50,000. For an additional account, the two accounts need to add up
to minimum of $65,000. For three accounts, the balance must add up to a minimum of $80,000. This means that each
additional account adds $15,000 to the total of assets required. These balances are for households, or 2 clients residing
at the same address (i.e., husband and wife). For example, the wife might have an account worth $40,000 and the
husband has an account worth $25,000. This would meet the $65,000 requirement for two accounts per household.
Below is a schedule of accounts and the minimum balances required:

                                                                       Number of Accounts in
                                     Dollar Value
                                                                           Household
                                       $50,000                               1 Account
                                       $65,000                               2 Accounts
                                       $80,000                               3 Accounts
                                       $95,000                               4 Accounts
                                       $110,000                              5 Accounts