Malaga Cove Capital LLC

ITEM 5 - FEES AND COMPENSATION
Fee Schedule

Investment Management Services
Malaga charges advisory fees for investment management services. Malaga‘s advisory fees are
charged based on a percentage of the client’s total assets under management and range from 1.00%
to 2.00%, annually. The advisory agreement between Malaga and the client will state the client’s
annual fee. Our standard fee schedule may be negotiable based on a number of factors, which
include but are not limited to “grandfathered” accounts, related accounts, and other structures that
we may consider in special situations. We also manage some family and related accounts at a
discount or without charge.

ERISA PLAN SERVICES
The annual fees are based on the market value of the Included Assets and will not exceed 1%. The
initial fee will be based on the market value of the Plan assets as calculated by the custodian or
record keeper of the Included Assets on the first business day of the initial fee period and will be
due on the first business day of the fee period. If the services to be provided start any time other
than the first day of a quarter, the fee will be prorated based on the number of days remaining in
the initial fee period. Thereafter, the fee will be based on the market value of the Plan assets on the
last business day of the previous fee period (without adjustments for anticipated withdrawals by
Plan participants or other anticipated or scheduled transfers or distribution of assets) and will be
due the following business day. If this Agreement is terminated prior to the end of the fee period,

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Malaga shall be entitled to a prorated fee based on the number of days during the fee period
services were provided. Any unearned fees shall be refunded to the Plan or Plan Sponsor.
The compensation of Malaga for the services is described in detail in Schedule A of the ERISA Plan
Agreement. The Plan is obligated to pay the fees, however the Plan Sponsor may elect to pay the
fees. Malaga does not reasonably expect to receive any additional compensation, directly or
indirectly, for its services under this Agreement. If additional compensation is received, Malaga will
disclose this compensation, the services rendered, and the payer of compensation. Malaga will
offset the compensation against the fees agreed upon under this Agreement.

Billing Method

Investment Management Services
Malaga’s advisory fees are payable quarterly in advance at the beginning of each calendar quarter.
We charge one fourth of the annual fee each quarter based on the market value of the client’s
portfolio as of the last day of the prior calendar quarter. The formula used for the calculation is as
follows: (Annual Rate) x (Total Assets Under Management at Quarter-End) / 4. At our discretion, we
may make pro-rations for additions or withdrawals during a quarter. The client’s quarterly fee
calculation will reflect any pro-rated additions and/or reductions.
For new client accounts, the first payment is a pro-rata calculation payable at the beginning of the
first full quarter under management. The calculation will take into consideration the number of
days remaining in the quarter and the initial value of the portfolio. The formula used to calculate
the initial advisory fee for the partial quarter would be as follows: (Result of Quarterly Calculation) x
(Days Remaining in Quarter) / (Total Number of Days in Quarter).
It is up to the client whether they wish to have the advisory fees withdrawn directly from their
custodian account or pay by check. With client authorization, Malaga will automatically withdraw
Malaga’s advisory fee from the client’s account held by an independent custodian. Typically, the
custodian withdraws advisory fees from the client’s account during the first month of each quarter
based on Malaga’s instruction. All clients will receive brokerage statements from the custodian no
less frequently than quarterly. The custodian statement will show the deduction of the advisory fee
for those clients who authorize the advisory fees to be withdrawn directly from their custodian
account. Clients who choose not to have advisory fees withdrawn directly from their custodian
account are expected to pay Malaga upon receipt of the invoice. The invoice will include the fee
calculation and amount due.

Other Fees and Expenses

Malaga’s fees do not include custodian fees. Clients pay all brokerage commissions, stock transfer
fees, and/or other similar charges incurred in connection with transactions in accounts from the
assets in the account, which are in addition to the fees client pays to Malaga. See Item 12 -
Brokerage Practices below for more information.

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Termination

Either party may terminate the advisory agreement at any time by providing written notice to the
other party. The client may terminate the agreement at any time by writing Malaga at our office.
Malaga will refund any prepaid, unearned advisory fees. Upon termination of the agreement the
client will receive a prorated refund of unearned advisory fees which will be calculated based on
the date Malaga receives notification of the cancelation using the following formula: (Fees Paid) x
(Days Remaining in Quarter)/(Total Number of Days in Quarter).

Other Compensation

Malaga does not accept compensation for the sale of securities or other investment products.
Malaga’s only compensation is the advisory fees clients pay to Malaga.

ITEM 7 - TYPES OF CLIENTS
Malaga offers discretionary investment advisory services to individuals, high net worth individuals,
trusts and estates, and individual participants of retirement plans. In addition, we offer advisory
services to charitable organizations and businesses.