Capital Wealth Management LLC

Item 5: Fees and Compensation

Compensation – Asset Management Services
The annual fees for Capital Wealth Management portfolio management services are as follows:

                        Assets Under Management              Annual Fee
                             Up to $1,000,000                  1.25%
                         $1,000,000 to $2,000,000              1.00%
                         $2,000,000 to $5,000,000              0.85%
                             Over $5,000,000                   0.50%

Clients will be invoiced in advance at the beginning of each calendar quarter based upon the
market value, including cash, of the client’s account at the end of the previous quarter.

Compensation – Financial Planning and Consulting Services
Financial Planning and Consulting fees will be charged as a fixed fee, typically ranging from $500
to $5,000, depending on the nature and complexity of each client’s circumstances.

All financial planning fees are due in advance or arrears, upon presentation of the financial plan
or consulting engagement for the client.

Compensation - Retirement Plan and Participant Services
Capital Wealth Management charges an annualized fee of up to 1.25% of the plan's assets for the
pension consulting services described above, generally payable quarterly in advance. In lieu of an
asset-based fee, Capital Wealth Management may charge a fixed annual fee, typically $20,000,
payable quarterly in advance. Generally, a fixed fee will not exceed 1.00% of the plan's assets
unless there are special circumstances warranting a higher fee. The type and amount of the fees
charged to the client are negotiable and are generally based on the size and complexity of the
plan, the number of plan participants, the location of the participants, the estimated number of
meetings required, and other factors that may be deemed relevant by Capital Wealth
Management when negotiating with the client. An estimate of the total cost will be determined at
the start of the advisory relationship.

Other Fees
Custodians may charge transaction fees on purchases or sales of certain mutual funds and
exchange-traded funds. 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.

Agreement Terms
Either the client or Capital Wealth Management may terminate the agreement at any time by
notification in writing. If the client made an advance payment, Capital Wealth Management will
refund any unearned portion of the advance payment.

Other Compensation
As disclosed in Item 10, several management persons are Registered Representatives of a
broker dealer, Osaic Wealth, Inc. As Registered Representatives, these individuals accept
compensation for the sale of securities and other investment products.

This practice may present a conflict of interest and gives registered representatives an incentive
to recommend investment products based on the compensation received rather than on a
client’s needs. Clients have the option to purchase investment products that the firm
recommends through other brokerage or agents that are not affiliated with the firm.
Commissions and other sales-related compensation are not Capital Wealth Management’s
primary compensation.

Cash Balances
Some of your assets may be held as cash and remain uninvested. Holding a portion of your
assets in cash and cash alternatives, i.e., money market fund shares, may be based on your
desire to have an allocation to cash as an asset class, to support a phased market entrance
strategy, to facilitate transaction execution, to have available funds for withdrawal needs or to
pay fees or to provide for asset protection during periods of volatile market conditions. Your
cash and cash equivalents will be subject to our investment advisory fees unless otherwise
agreed upon. You may experience negative performance on the cash portion of your portfolio if
the investment advisory fees charged are higher than the returns you receive from your cash.

Retirement Plan Rollover Recommendations
As part of our investment advisory services to our clients, we may recommend that clients roll
assets from their employer’s retirement plan, such as a 401(k), 457, or ERISA 403(b) account
(collectively, a “Plan Account”), to an individual retirement account, such as a SIMPLE IRA, SEP
IRA, Traditional IRA, or Roth IRA (collectively, an “IRA Account”) that we will advise on the
client’s behalf. We may also recommend rollovers from IRA Accounts to Plan Accounts, from
Plan Accounts to Plan Accounts, and from IRA Accounts to IRA Accounts.

If the client elects to roll the assets to an IRA that is subject to our advisement, we will charge
the client an asset-based fee as set forth in the advisory agreement the client executed with our
firm. This creates a conflict of interest because it creates a financial incentive for our firm to
recommend the rollover to the client (i.e., receipt of additional fee-based compensation).
Clients are under no obligation, contractually or otherwise, to complete the rollover. Moreover,
if clients do complete the rollover, clients are under no obligation to have the assets in an IRA
advised by our firm. Due to the foregoing conflict of interest, when we make rollover
recommendations, we operate under a special rule that requires us to act in our clients’ best
interests and not put our interests ahead of our clients’.

Under this special rule’s provisions, we must:

   •   meet a professional standard of care when making investment recommendations (give
       prudent advice);

   •    never put our financial interests ahead of our clients’ interests when making
        recommendations (give loyal advice);
   •    avoid misleading statements about conflicts of interest, fees, and investments;
   •    follow policies and procedures designed to ensure that we give advice that is in our
...

Types of Clients
As described in Item 4, Capital Wealth Management’s clients may include individuals, high net
worth individuals, pension and profit-sharing plans, charitable organizations, corporations,
trusts, and estates.

Account Minimums
Capital Wealth Management requires a minimum account of $750,000 for investment advisory
clients, although this may be negotiable under certain circumstances. Capital Wealth
Management may group certain related client accounts for the purposes of achieving the
minimum account size.