Chapman Investment Management LLC

Item 5 – Fees and Compensation

CIM charges a tiered, percentage-based fee, based on the market value of the assets in the client’s
account. All assets in the account are included in the fee assessment unless specifically identified
in writing for exclusion. When CIM manages multiple accounts for a particular client, fee
calculations may be based on the total assets under management across the multiple accounts. The
management fee is billed quarterly in arrears and is calculated by multiplying the fair market value
of cash and securities in the portfolio as of the close of the quarter, valued according to recognized
and independent pricing sources, by the applicable quarterly percentage.
Clients customarily authorize CIM to deduct management fees directly from the client’s custodial
account. This authorization is granted under the terms of the client’s investment management
agreement and the client’s instructions to the custodian. Clients, at their discretion, may choose
to be billed directly and pay fees by check or wire.
Accounts that open or close during the quarter will be billed on a prorated basis for the partial
quarter. The investment advisory agreement between CIM and its clients may be terminated at
any time by either party upon the giving of thirty days written notice.
The management fee is determined in accordance with the fee structure below. In general, the fees
are not negotiable.

  Market Value of Account         Annual Fee
  Assets                          Rate
  On the first $10,000,000        1.00%, plus
  Above $10,000,000               0.50%
  Fixed Income Accounts           0.50%

General Fee Disclosures
In addition to CIM’s management fees, clients may incur charges imposed by their custodians and
other third parties such as trading, brokerage, custodial, wire transfer fees and other transaction
costs. Please refer to Item – 12 Brokerage Practices for additional details.
To the extent that client’s accounts are invested in mutual funds or exchange-traded funds, the
assets will incur a separate layer of management fees, trading, administrative, and other expenses
which are described in each fund’s offering documents. Clients will receive from the custodian or
fund sponsor a copy of a fund prospectus for each fund in which they invest; CIM does not
independently furnish any prospectuses. As required by law, a prospectus represents the fund’s
disclosure of its management and fee structure. In addition, a fund’s prospectus can be obtained
directly from the fund.
In response to adverse or unusual market or economic conditions, CIM may take temporary
defensive positions in clients’ accounts (e.g., cash). Clients should be aware that CIM’s fees are
greater than fees charged by firms that are focused primarily on cash management.
Clients whose assets are invested in bonds purchased directly from an underwriter may pay a sales
credit or sales concession to the underwriter in lieu of a sales commission.
CIM receives no commissions or other compensation on investment products purchased or sold
for client accounts.
Lower fees for comparable services may be available from other sources.

Item 7 – Types of Clients

CIM provides investment advisory and portfolio management services through separately-
managed accounts to high net worth individuals, individuals, trusts, estates, endowments,
foundations, charitable organizations, corporations and other business entities.
CIM generally requires a minimum of $500,000 in assets under management for the establishment
and maintenance of an investment advisory account. At its discretion, CIM may waive the

minimum amount size based on the nature of the account and other factors, such as the historical
relationship with the client, the number of related accounts, the account composition, the
anticipated future earnings potential, and anticipated future additional assets.