Main Street Research LLC

Item 5. Fees and Compensation

FEES FOR WEALTH MANAGEMENT SERVICES

We offer clients two fee options for our Wealth Management service: a Traditional Fee Schedule
and a Performance Fee Schedule. Our Traditional Fee Schedule consists solely of a fee based on a
percentage of the amount of assets under management with MSR (a “management fee”). Our
Performance Fee Schedule has two fee components: (i) management fee; and (ii) a performance-
Upon initially choosing a fee schedule a client may request at any time to change their fee
schedule, however, future changes are subject to a 24-month commitment. Performance Fee
Schedule qualification will still apply under a potential change request. Under certain
circumstances, this 24- month commitment is negotiable or can differ between clients.

Subadvisor Fees
If appropriate, MSR will enroll a portion or all of a client’s assets with a sub-advisor manager. The
fees consist solely of a fee based on a percentage of the amount of assets under the sub-advisor's
management. MSR and the sub-advisor share the proceeds of the fee deducted.

For some of our clients we manage several accounts which could include accounts of their family
members and/or their business accounts. In these cases, MSR’s default is to aggregate the entire
amount of assets under management of that client’s accounts, family member and/or business
accounts to determine the appropriate fee threshold on our tiered fee schedule described below.
Family members include parents, grandparents, siblings, children, grandchildren, and in-laws.
All family members must be on the same fee schedule to aggregate. This is employed in an effort
to provide the client with the most advantageous fee schedule given that our fees are generally
lower on a percentage basis for clients with higher amounts of assets under management. This
aggregation method is limited, however, when applied to our performance-based fee option
described below. The performance-based fee schedule, rather, is available only to each client that
is a “qualified client” as defined in Rule 205-3 of the Investment Advisers Act of 1940. Family
member accounts are not aggregated in cases where the individual family member does not
independently meet the “qualified client” criteria. Some fee schedules have been negotiated in
select circumstances, depending on several factors unique to each client, including the client’s
needs/choice, nature, and complexity of the services required.

TRADITIONAL FEE SCHEDULE:

All fees are based on net assets under management and will be computed on the market value of
net assets under management on the last business day of the preceding quarter. This fee schedule
shall be deemed to be part of the Wealth Management Agreement. The annual management fee
will be calculated as follows and billed and payable in advance quarterly:

                                 1.2500%    1st    $2,000,000
                                 1.0000%    next   $3,000,000
                                 0.7500%    next   $5,000,000
                                 0.5000%    next   $10,000,000
                                 0.2500%    next   $20,000,000
                                 0.1500%    next   $20,000,000
                                 0.1000%    over   $60,000,000

PERFORMANCE FEE SCHEDULE:

MSR requires that clients electing to pay the Performance Fee Schedule be “qualified clients” as
defined in Rule 205-3 of the Investment Advisers Act of 1940. These clients must therefore have at
least $1,100,000 under management with MSR or demonstrate a net worth of at least $2,200,000,
excluding the value of a natural person’s primary residence and including as liability any debt
secured by the primary residence in the 60 days prior or entering into an investment management
contract with MSR.

Management fees

All management fees are based upon net assets under management and will be computed
quarterly on the market value of net assets under management on the last business day of the
preceding quarter. This fee schedule shall be deemed to be part of the Wealth Management
Agreement. The annual management fee will be calculated as follows and billed and payable in
advance on a quarterly basis:

                                 0.7500%    1st    $ 2,000,000
                                 0.6250%    Next   $ 3,000,000
                                 0.5000%    Next   $ 5,000,000
                                 0.2500%    Next   $ 10,000,000
                                 0.1500%    Next   $ 20,000,000
                                 0.1000%    Over   $ 40,000,000

Performance Allocation

MSR will be specifically allocated a percentage of the net profit allocated to the Client based upon
the schedule below:

                                  Assets less than $5M         5%
                                  Assets $5M-$10M              4%
                                  Assets $10-$20M              3%
                                  Assets $20M-$60M             2%
                                  Assets over $60M             1%

This performance allocation will be made at the end of each calendar quarter. All performance
allocations are based upon the net profit derived from the Portfolio and will be computed on the
last business day of each quarter based upon the net profit derived during that quarter. To ensure
that the performance allocation is based upon the long-term performance of the Client’s
investment, the performance allocation is subject to a “high water mark.” This limitation prevents
MSR from receiving a performance allocation as to “net” profits that simply “restore” net losses
previously allocated to the Client that have not been recovered (the loss carryforward). When the
Client withdraws capital, any loss carryforward will be adjusted downward in proportion to the
withdrawal.

Performance-based Fee Disclosures
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Item 7. Types of Clients

MSR provides its advisory services, where appropriate, to individuals, trusts, estates, charitable
organizations, foundations, pension and profit-sharing plans, corporations, and other business
entities.

As previously disclosed in Item 5, our firm has established certain initial minimum account
requirements based on the nature of the service(s) being provided.