Mengis Capital Management Inc

Item 5 – Fees and Compensation
Our Fees
We charge our clients advisory fees calculated as a percentage of the market value of the assets in
their household accounts, without adjustment for any margin debt. All fees are specified in your
advisory agreement with us.
The standard fee schedule for discretionary managed accounts is as follows:
              1.00% on the first $2,000,000, plus
              0.85% on the next $3,000,000, plus
              0.70% on the next $5,000,000, plus
              0.50% on the next $20,000,000, plus
              0.30% on the amount over $30,000,000.
If a client requests services beyond our standard investment advisory services (for example,
financial planning services, consulting or client driven account management), we may charge the
client for such services at an hourly rate, based on the services requested and the person providing
the additional services. For clients that invest specifically in treasuries, those fees are separately
negotiated but will in no event exceed the standard fee schedule set forth above.
Fees may vary and are negotiable, but will not exceed, the rates set out in the standard schedule
based on the type and size of the account, the range of additional services provided to the client,
and the total amount of assets managed for a group of related clients.
For nondiscretionary client accounts, fees are negotiable depending on the level of service
provided to the client, heightened compliance oversight and management of the account, and the
types of investments requested by the client. Fees for such accounts may exceed the maximum
fee stated in the above schedule.
Billing and Payment
Investment Management
Fees are paid quarterly in advance. Generally, fees for a particular quarter are deducted from the
clients' accounts on the first business day of each quarter based on the value of assets in the account
as of the close of business on the last business day of the preceding quarter. For clients where we
are not able to deduct fees, we instead send direct invoices to these clients on 30 day terms. We

send clients their account reports showing the balance as of the last day of each quarter and the
advisory fees charged for that quarter.
If you do not have enough cash in your account to pay our fee, we may liquidate some of your
account assets to pay the advisory fee.
Financial Planning
If financial planning is provided separately, the fee is generally based on the estimated amount of
time required multiplied by a negotiated hourly rate of generally between $200 and $300
depending on the particular complexities involved and specific credentials required. As
circumstances warrant an hourly rate may be less than $200 or more than $300. Payment is
generally 50% in advance and the balance upon completion. In the event that a client terminates
the services they will be entitled to a refund of any unearned fees by subtracting the earned fees
from the amount paid in advance. Financial planning fees are payable by check to Mengis Capital
Management, Inc. A financial planning engagement is considered terminated upon delivery of a
plan (written or non-written).
Expenses
In addition to our advisory fees, clients are responsible for certain other fees and expenses as
follows:
         Mutual Funds; ETFs. We may exercise our discretion to invest a portion of client assets
in Funds. In our judgment, investment in Funds offer diversified investment opportunities due to
greater diversification, and/or focused research analysis in areas such as emerging growth, foreign
markets and higher- yield investments. If we conclude that Funds are appropriate additions to a
client's portfolio, such investments may increase the cost to the client. In addition to our fee, the
client may incur a commission or transaction fee when the Funds are purchased and will incur an
annual management fee by the manager of the Funds. We do not receive any part of such fees.
These fees and expenses are described in each Fund's prospectus, and generally include a
management fee, other related expenses, and a possible distribution fee. When considering an
investment in a Fund, we always evaluate the relative annual costs as a part of the decision.
        A client could invest in a Fund directly, without our involvement. In that case, the client
would not receive the benefit of our services, which include, among other things, identifying the
Funds, if any, that are most appropriate to that client's financial condition and objectives and
continuous monitoring of market conditions. Accordingly, clients should review the fees charged
by the Fund, and our fees, to fully understand the total amount of fees to be paid and to evaluate
the advisory services being provided. In addition, Mengis may receive a lower institutional rate
then is available to a retail investor.
        Brokerage. We may enter into an agreement with a broker-dealer, which would provide
research to us in exchange for us executing certain trades through that broker-dealer. If client
assets are not custodied with that broker-dealer, clients may pay the broker-dealer a brokerage
commission and may also pay the custodian a separate fee. See Item 12 below for a detailed
discussion of brokerage commissions. We place equity and fixed income transactions with Charles
Schwab & Co., Inc. (“Schwab”) and Fidelity Investments, Inc. (“Fidelity”), both independent and
unaffiliated broker-dealers, unless otherwise directed by client. We acknowledge our duty to seek
best execution of trades for our clients and, consistent with that duty, use other brokers from time

to time. Research received pursuant to any such arrangement is expected to benefit all of our
clients.
       Custodians. We require each client to have a third-party custodial relationship. The
custodian will charge its own fee separate from our advisory fee in the form of (1) order routing
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Item 7 – Types of Clients
We provide investment advice to individuals, high net worth individuals, pension plans, charitable
organizations and corporations/other businesses. Before entering into an advisory relationship
with a client, we generally require that accounts under our management have a minimum aggregate
value of $500,000. The values in the accounts beneficially owned by related person(s) and/or
entities (such as, accounts held by husband and wife individually, by their IRAs and trust(s) for
the benefit of their children) are aggregated for purposes of the minimum balance requirement,
and fee apportionment. In addition, we may waive these requirements under certain
circumstances.