Item 5 – Fees and Compensation
Portfolio Management
The specific manner in which fees are charged by Freeman Capital Management, is established in
a client’s written agreement with Freeman Capital Management (see “Schedule A” of the
Investment Advisory Agreement). Freeman Capital Management, bills its fee on a quarterly basis
in advance of each calendar quarter. Clients may be billed directly for fees or authorize Freeman
Capital Management to directly debit fees from client accounts. Fees are generally negotiable.
Standard Fee Schedule:
1.5% on assets under $500,000
1.25% on assets between $500,000 to $1,000,000
1.0% on assets in excess of $1,000,000
Sample Fee Calculation: Client account balance on December 31, 2010 is $10, 000. The first
quarter 2011 fee will be calculated in the following manner: $10,000 times 1.5% divided by 4
quarters equals $37. This fee will be deducted from the client account and appear on the
brokerage firms monthly or quarterly statement.
Client accounts held at Interactive Brokers are billed quarterly. The exact calculation is
1.5%/252 business days (x) the daily account liquidation value.
Management fees shall be prorated for each capital contribution and withdrawal made during
the applicable calendar quarter (with the exception of de minimis contributions and
Freeman Capital Management, LLC freemancapital@gmail.com
withdrawals). Accounts initiated during a calendar quarter will be charged a prorated fee. Fees
for partial quarters at the commencement or termination of the Client Agreement will be billed
or refunded on a pro-rated basis contingent on the number of days the account was open during
the quarter. Lower fees for comparable services may be available from other sources.
Freeman Capital Management’s fees are exclusive of brokerage commissions, transaction fees,
and other related costs and expenses which shall be incurred by the client. Clients may incur
certain charges imposed by custodians, brokers, third party investment and other third parties
such as fees charged by managers, custodial fees, deferred sales charges, odd-lot differentials,
transfer taxes, wire transfer and electronic fund fees, and other fees and taxes on brokerage
accounts and securities transactions. Mutual funds and exchange traded funds also charge
internal management fees, which are disclosed in a fund’s prospectus. Such charges, fees and
commissions are exclusive of and in addition to Freeman Capital Management’s fee, and Freeman
Capital Management shall not receive any portion of these commissions, fees, and costs.
Item 12 further describes the factors that Freeman Capital Management considers in selecting or
recommending broker-dealers for client transactions and determining the reasonableness of
their compensation (e.g., commissions).
Freeman Capital Management charges only a quarterly management fee and DOES NOT have
surrender or transfer charges, upfront commissions or establishment charges. Freeman Capital
Management is not compensated from the sale or purchase of mutual funds, securities or asset-
based sales charges. Freeman Capital Management does not use annuities or insurance products
and therefore is not compensated by those firms in any way and has no conflict of interest.
Advisor will use its best judgment and good faith efforts in rendering services to Client. Advisor
cannot warrant or guarantee any particular level of account performance, or that account will be
profitable over time. Not every investment decision or recommendation made by Advisor will be
profitable. Client assumes all market risk involved in the investment of account assets under the
Investment Advisory Agreement and understands that investment decisions made for this
account are subject to various market, currency, economic, political and business risks.
Except as may otherwise be provided by law, Advisor will not be liable to Client for (a) any loss
that Client may suffer by reason of any investment decision made or other action taken or
omitted in good faith by Freeman Capital Management with that degree of care, skill, prudence
and diligence under the circumstances that a prudent person acting in a fiduciary capacity would
use; (b) any loss arising from Advisor's adherence to Client's instructions; or (c) any act or
failure to act by a custodian of Client's account. Nothing in this Agreement shall relieve Advisor
from any responsibility or liability Advisor may have under state or federal statutes.
Freeman Capital Management does not have custody of the assets in the account and shall have
no liability to the Client for any loss or other harm to any property in the account, including any
harm to any property in the account resulting from the insolvency of the custodian or any acts of
the agents or employees of the custodian and whether or not the full amount or such loss is
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covered by the Securities Investor Protection Corporation (“SIPC”) or any other insurance which
may be carried by the custodian. The Client understands that SIPC provides only limited
protection for the loss of property held by a broker-dealer.
Financial Consulting Fees: Financial consulting services are charged at an hourly rate of
$200/hour for short-term projects or as a negotiated flat fee for longer projects.
Educational Seminar Fees: Most workshops and seminars by Don Freeman are free of charge;
however, there may be a small fee to cover the cost of the event location. Event fees range from
free to $100 per person depending on the length and complexity of the workshop. When asked
to speak at Rotary International or Lions Club there are no fees paid to Don Freeman but a small
fee to attend the meeting may be charged to its members.
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