Harbor Island Capital LLC

Item 5         Fees and Compensation
The fee is charged as a percentage of assets under management, reconciled with the qualified
custodian as of the last trading day of each calendar quarter, and based on the following schedule:

           Assets Under Management                                      Annual Fee
               All Assets                                                 1.00%

The fee is paid quarterly in arrears and is due no later than 30 days after the receipt of the bill. Most
clients authorize the Company to deduct fees automatically from their brokerage accounts, but
clients may request that the Company send quarterly invoices to be paid by check. Fees may vary
from the above schedule as they are negotiable from time to time.

If a client terminates the investment management agreement with the Company in the middle of a
billing period, the Company will invoice the client for an amount that is pro-rated based on the
number of days that the account was managed.

In addition to the Company’s investment management fees, clients bear trading costs and custodial
fees. A summary of these expenses will be available at the time an account is opened with a broker
dealer. To the extent that clients’ accounts are invested in mutual funds including money market
funds, these funds pay a separate layer of management, trading, and administrative expenses.

Item 7         Types of Clients
The Company primarily provides customized investment management services to high-net-worth
individuals and associated trusts, and other legal entities.