Passive Management LLC

Item 5 Fees and Compensation

In addition to the information provided in the Advisory Business section, this section provides details
regarding Firm services along with descriptions of each service’s fees and compensation arrangements.

A. Advisory Services Compensation Description

Investment Advisory Service Fees
Our annual fee for portfolio management services is 2% based upon the market value of your assets
under our management. Lower fees for comparable services may be available from other sources.

PM, in it its sole discretion, may charge a lesser investment advisory fee based upon certain criteria
(e.g., historical relationship, types of assets, anticipated future additional assets, dollar amounts of
assets to be managed, related accounts, account composition, etc.). Our advisory fees are higher
compared to industry standard. Clients should be aware that lower fees for comparable services may be
available from other sources.

14 Wall Street
20th Floor
New York, NY 10005

Retirement Plan Service Fees
The annual fees are based on the market value of the Included Assets and will not exceed 0.75%. The
annual fee is negotiable. Fees may be charged quarterly or monthly in arrears or in advance based on
the assets as calculated by the custodian or record keeper of the Included Assets (without adjustments
for anticipated withdrawals by Plan participants or other anticipated or scheduled transfers or
distribution of assets) on the last business day of the previous billing period. If the services to be
provided start any time other than the first day of a billing period, the fee will be prorated based on the
number of days remaining in the billing period. If this Agreement is terminated prior to the end of the
billing period, PM shall be entitled to a prorated fee based on the number of days during the billing
period services were provided. The Plan is obligated to pay the fees; however, the Plan Sponsor may
elect to pay the fees. Client may elect to be billed directly or have fees deducted from Plan Assets.

B. Payment of Fees

Investment management fees are billed monthly, in arrears, meaning that we invoice you after the
month’s billing period has ended. Payment in full is expected upon invoice presentation. You may
terminate the portfolio management agreement upon 30 days written notice to our firm. You will incur
a pro rata charge for services rendered prior to the termination of the portfolio management agreement,
which means you will incur advisory fees only in proportion to the number of days in the month for
which you are a client. Fees may be deducted from a designated client account to facilitate billing. The
client must consent in advance to direct debiting of their investment account. Clients may also choose
to pay by check.

C. Third Party/ Custodian Fees

Custodians may charge transaction fees on purchases or sales of securities. These transaction charges
are usually small and incidental to the purchase or sale of a security. The selection of the security is
more important than the nominal fee that the custodian charges to buy or sell the security. Please refer
to Item 12 – Brokerage Practices for additional information regarding brokerage practices and related
costs.

Use of Margin

Passive Management may use margin or derivative transactions in the management of the client’s
investment portfolio when a client wishes to engage in such transactions. When engaging in the use of
margin, the fee payable will be assessed net of margin such that the market value of the client’s
account and corresponding fee payable by the client to Passive Management will not be increased.

D. Fees and Compensation

Passive Management nor any of our supervised persons accepts compensation for the sale of securities
or other investment products, including asset-based sales charges or service fees from the sale of
mutual funds.

Item 7 Types of Clients

Passive Management provides investment advice to many different types of clients. These clients
generally include individuals, high-net worth individuals, trusts, estates, corporations, and other types
of business entities.

A. Minimum Account Size

The Firm does not require a minimum account size.