Capsouth Partners Inc

Item 5 - Fees and Compensation
5.A - Description & Standard Fee Schedule

      CapSouth Partners, Inc. primarily bases its fees on a percentage of client assets under
      management. Alternatively, we have the ability to base fees on assets under advisement, or
      net worth, or may charge flat fees or hourly fees. All fees are negotiable with the exception
      of the 0.06% (6 basis point) fee charged by CapSouth to participating employer’s plan
      assets that are in a Pooled Employer Plan (PEP) for which CapSouth serves as the ERISA
      3(38) advisor. Investment advisor representatives of CapSouth have the ability to increase
      or decrease standard fees dependent upon the scope of services a client requests. Fees
      among clients will differ depending on the services provided to them and the complexity of
      their situations. Fees for each service are explained in more detail below.

      5.A.i – Investment Management Services Fees

      The standard fee for investment management only services is charged as a percentage of
      assets under management. There is a minimum annual fee of $2,500 per household. The
      minimum fee may be reduced or increased at the discretion of an investment advisor
      representative. An increase or decrease can be applied to the fee schedule based on the
      services a client would like CapSouth to provide and the client’s assets under management
      with CapSouth. The client’s exact fee schedule is shown on the client’s signed contract. A
      client may be charged a flat percentage fee or dollar fee, instead of utilizing the fee
      schedule, if the client and investment advisor representative choose to do so.
      ●       Fees are charged in advance at the beginning of each quarter.
      ●       Fees are based on the account values as of the end of the previous quarter (unless
              otherwise stated in the contract).
      ●       Fees are prorated based on the number of days in which the account was
              under management for the quarter.
      ●       Additions and withdrawals that affect fees more than $10 will result in a prorated
              fee adjustment during the quarter of the addition or withdrawal.
      ●       Account Balances are totaled together for clients in the same household to
              determine the blended fee (see the sample fee calculation below).
      ●       Some clients may be grandfathered into older fee schedules that CapSouth has
              used in the past.

      Investment Management Services Fee Schedule
        AUM                                    Fee
        $0 to $250,000                         1.15%
        $250,000 to $1,000,000                 0.85%
        $1,000,000 to $2,500,000               0.65%
        Over $2,500,000                        0.50%

      Sample Fee Calculation Based on the Investment Management Services Fee Schedule:
      A typical quarterly fee for a client with two investment management accounts and who is
      subject to this fee schedule would be calculated as follows:

Acct # 1 Balance as of billing date:       $350,000
Acct # 2 Balance as of billing date:       $400,000

        Total Assets Under Management (AUM):             $750,000
        Blended Fee Rate                                 0.95% per year
        Quarterly fee                                    $1781.25
        Annualized Fee                                   $7125

5.A.ii – Planning Services Fees

Guidance Services
The fee for this service can be a flat fee or be based on a percentage of the client’s total
assets under management with CapSouth. The fees are determined based upon the services
to be provided and the complexity of each case. Initial fees are determined at the
beginning of the relationship and are stated in the signed client agreement. There is a
minimum annual fee of $4,000 per household. The minimum fee may be reduced or
increased at the discretion of an investment advisor representative. Fees will normally be
calculated and billed in advance at the beginning of each quarter. The client may choose
whether to have fees billed directly to them or be deducted from their accounts managed by
CapSouth. Total client fees will vary from client to client depending on the agreed upon
services and a client’s assets under management.

At the advisor’s discretion and depending on the complexity of the client needs, the fees
for this service may be included in the services CapSouth offers under its Planning Fee
Schedule (detailed below) if the client has at least $350,000 of assets under management
with CapSouth. The fee arrangement will be detailed in the advisory agreement with
CapSouth that the client signs. If a client has assets under management with CapSouth of
under $350,000, the client will likely sign an agreement placing the assets under
management on the Investment Management Fee Schedule and will have a separate
planning agreement that will provide fees for the Guidance Services.

A typical Guidance Fee ranges from $5,000 to $12,000 per year.

Wealth Management Services
The fee for this service can be a flat fee or be based on a percentage of the client’s total
assets under management with CapSouth. The fees are determined based upon the services
to be provided and the complexity of each case. Initial fees are determined at the
beginning of the relationship and are stated in the signed client agreement. There is a
minimum annual fee of $10,000 per household. The minimum fee may be reduced or
increased at the discretion of an investment advisor representative. Fees will normally be
calculated and billed in advance at the beginning of each quarter. The client may choose
whether to have fees billed directly to them or be deducted from their accounts managed by
CapSouth. Total client fees will vary from client to client depending on the agreed upon
services and a client’s assets under management.
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