ORCA Investment Management LLC

Item 5 – Fees and Compensation

Orca does not require a minimum account size. Fees are negotiable based on account size,
servicing requirements and other factors. The range of negotiated fees is based on assets
under management ranging from 1.25% down to zero. The fee rate negotiated with the
client will be noted in the Investment Advisory Agreement, or otherwise in writing. Fees
will generally be quoted at a fixed percentage rate. For some legacy clients, a tiered
schedule is used. Fees are payable quarterly in advance based on the value of your account.
Fees are generally paid directly from the client’s account (known as direct debiting);
however, clients may also select to have Orca invoice them for fees due. If you have
requested to be billed directly, payment is due within 10 days from the date of the invoice.
The fee will be equal to the market value of the account at the end of the previous quarter
times the agreed upon rate per annum divided by four. The market value used for fee
calculation is the sum of the value of all assets in the account including any accrued income,
not adjusted by any margin debit. You are responsible for verifying the accuracy of fee
calculations. The custodian will not receive sufficient information to verify the accuracy of
the fee. For some legacy clients, ORCA has arranged a quarterly fixed fee in lieu of the
management fee based on assets under management. Securities will be sold from your
account for the sole purpose of paying the fee if there is insufficient cash in the account.
Accounts opened or closed during a quarter will be prorated based on the number of days
the account was open during the quarter. If we decide to increase our billing rates, written
notice of the change will be provided. Most clients are charged an asset-based fee which can
create a conflict of interest. The more assets there are in a client’s advisory account, the
more a client will pay in fees, and Orca does therefore have an incentive to encourage the
client to increase the assets in his or her account.

Orca does not take physical possession of your assets (custody), because of this you are
asked to open an account with an independent qualified custodian. A custodian is a
company that has physical possession of your assets. Orca will manage your account by
directing the investments in your account through the custodian. Since your account is
held by a custodian, you generally will incur fees charged by the broker and custodian such
as:

          •   Brokerage commissions,
          •   Transactions fees,
          •   Exchange fees,
          •   Regulatory fees,
          •   Odd-lot differentials,
          •   Wire-transfer and electronic fund processing fees, and
          •   Other related costs and expenses (custodial fees).

                            Orca Investment Management, LLC

The fees and expenses charged by the custodian and broker are in connection with
transactions for the account and are in addition to Orca’s management fee. Such fees will be
paid out of your account, and Orca shall not receive any portion of these commissions, fees,
and costs. Mutual funds and exchange traded funds typically also charge internal
management fees, which are disclosed in a fund’s prospectus (this is calculated into the
daily Net Asset Value – NAV). You are responsible for verifying the accuracy of fee
calculations. Item 12 further describes the factors that Orca considers in selecting or
recommending broker-dealers for client transactions and determining the reasonableness
of their compensation (e.g., commissions).

An investment advisory agreement can be canceled by written notice to the other party, as
provided in the client agreement:

          •   At any time,
          •   By either party, and
          •   For any reason.

Any prepaid, unearned fees in excess of $1.00 will be promptly refunded on a prorated
basis based on the number of days the account was under management during the quarter.
Any earned, unpaid fees will be due and payable. Such refund will be calculated based on
the first business day following account closure. If your account is closed or moved to
another custodian or broker-dealer, the custodian will typically charge you commissions,
account closure fees, and other expenses associated with the liquidation and/or transfer of
the account.

Upon request, we will assist with special projects which may involve lengthy research
and/or communication with the client’s attorney or tax advisor. Any fees for such services
are based on a negotiable fee, due at the time of service or as otherwise negotiated.

Item 7 – Types of Clients

Orca provides asset management services to:

    •   Individuals,

   •    High Net Worth Individuals,

   •    401K Plans and Profit-Sharing Plans,

   •    Other Businesses; and

   •    Trusts, Estates and Charitable Organizations