Carolina Wealth Management Inc

Item 5: Fees and Compensation

                                      A. Description and Billing

Investment Management Services
In addition to the information provided in Item 4 (“Advisory Business”), this section provides
details regarding CWM’s services along with a description of each service’s fees and
compensation arrangements. Lower fees for comparable services may be available from other
sources.
CWM’s investment management fee is based on a percentage of the investable assets according to
the following schedule:
               Percentage              Assets
               1.00%                   on the first $1,000,000 ($1 Million)
               0.80%                   on the next $1,000,000 ($1 Million - $2 Million)

               0.70%                  on the next $2 Million - $5 Million
               0.50%                  on the next $5 Million - $10 Million
               Negotiable             Over $10 Million

CWM may charge its investment management fee as a fixed dollar amount. Fixed fees may be
more or less then the above fee schedule, based on the size and complexity of services and will be
disclosed and agreed upon the IMA. Although the Advisory Service Agreement is an ongoing
agreement and constant adjustments are required, the length of service to the Client is at the
Client’s discretion. All fees are negotiable.
Separately Managed Accounts
Clients utilizing SMAs will be charged an annual fee by the SMA provider that is separate from
and in addition to CWM’s advisory fee. The maximum annual fee charged by SMA providers will
not exceed 1.00%.
Financial Planning & Services
CWM provides planning services for Clients who need advice on a limited scope of work on an
hourly or fixed fee basis. The hourly rate for limited scope engagements is $250 (plus expenses).
The maximum fixed fee will not exceed $2,500. No advance payment will be accepted.

Penson Consulting Services

CWM provides Pension Consulting Services for which the fees are negotiated based on the
scope of work and stated in the contract with the client.

                                             B. Billing

Investment management fees are billed monthly or quarterly, in arrears, based on the value of the
account on the last day of the quarter. Individuals are billed on a quarterly basis, while 401(k)
plans are billed on a quarterly or monthly basis, based upon the preference of the record keeper of
the plan. For institutional clients that require invoicing, payment in full is expected upon invoice
presentation. Fees are usually deducted from a designated Client account to facilitate billing. The
Client must consent in advance to direct debiting of their investment account. The asset based fees
you will pay for our services will be a percentage of the market value of the assets in your account

on the last trading day of each calendar month or quarter, as applicable. Fees and timing of
payments negotiated on a per client basis.
CWM, in its sole discretion, may charge a lesser investment advisory fee based upon certain
criteria (e.g., historical relationship, type of assets, anticipated future earning capacity, anticipated
future additional assets, dollar amounts of assets to be managed, related accounts, account
composition, negotiations with Clients, etc.).
SMA providers have their own billing arrangements that will be outlined in their separate
disclosure documents provided to clients. Generally, they will deduct their fee from the client’s
account(s).

                                     C. Other Fees and Payments

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. Schwab does not charge transaction fees for U.S.
listed equities and exchange traded funds.
Assets are invested primarily in no-load mutual funds and exchange-traded funds, usually through
discount brokers. Fund companies charge each fund shareholder an investment management fee
that is disclosed in the fund prospectus. Discount brokerages may charge a transaction fee for the
purchase of some funds.
Stocks and bonds may be purchased or sold through a discount brokerage account when
appropriate. The brokerage firm charges a fee for stock and bond trades. Investments may also
include: equities (stocks), warrants, corporate debt securities, commercial paper, certificates of
deposit, municipal securities, investment company securities (variable life insurance, variable
annuities, and mutual funds shares), U.S. government securities, options contracts, futures
contracts, and interests in partnerships.
Separate Account Managers may be engaged. These managers charge an additional fee. This
additional fee varies by manager. Your exact amount of additional fee will be fully disclosed at
the time of engagement.
Mutual funds and exchange traded funds (ETF) generally charge a management fee for their
services as investment managers. The management fee is called an expense ratio. For example,
an expense ratio of 0.50 means that the fund company charges 0.5% for their services. These
fees are in addition to the fees paid by you to the Firm.
Performance figures quoted by fund companies in various publications are after their fees have
been deducted.

                                 D. Refund and Termination Policy

Clients have right to cancel their respective advisory agreement at any time by notifying us in
writing. We also may cancel this agreement at any time by written notice to you. We offer no
refunds and we may bill you on a pro rata basis for cancelations and account transfers that happen
between billing periods.

                                     E. Other Compensation

CWM does not accept any compensation for the sale of securities or other investment products,
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