Salem Investment Counselors Inc

Item 5 – Fees and Compensation

Salem's normal fee for services is 1% of assets under management per year. Discounts and
premiums to the fee schedule may be negotiated with each client. In addition, Salem may utilize
a flat annual fee in lieu of the percentage of assets under management. Salem's fees are billed in
arrears at the end of each calendar quarter. The fees for marketable securities are based on the
account's market value, as determined by Salem’s portfolio accounting system at the end of the
calendar quarter. The portfolio accounting system receives pricing data on all marketable
securities from the account custodians.

The fees for private investments are based on the most recent partner statement issued by the
investment, and Salem then updates them in the portfolio accounting system.
Private investments for which no partner statement has been issued within the most recent
twelve-month period will not be billed by Salem.

At the client's option, this fee may be paid directly from the account. The fee is debited from the
client's account or paid by the client outside of the account, typically within two months of the
end of the quarter. Accounts initiated or terminated during a calendar quarter will be charged a
prorated fee. Clients may request a billing statement from Salem that shows the fee calculation
methodology and the final amount of fees charged to the client.

In addition to the management fee charged by Salem, clients may incur other fees and expenses
associated with account management. Salem's fees are exclusive of brokerage commissions,
transaction fees, and other related costs and expenses that may be incurred by the client. Clients
may incur charges imposed by custodians, brokers, and third-party investment advisors,
including management fees, custodial fees, transfer fees, transaction fees, wire transfer and
electronic fund fees, and other fees and taxes on brokerage accounts and securities transactions.
Mutual funds, exchange-traded funds, master limited partnerships, and private equity managers
may also charge internal management fees. The details of these fees may be found in each
investment's prospectus or website. Such charges, fees, and commissions are exclusive of and in
addition to Salem's fee, and Salem shall not receive any portion of these commissions, fees, or
charges.

For pooled investment funds such as mutual funds and exchange-traded funds that charge annual
expense fees, Salem seeks investment options that charge reasonable expenses and meet client
investment needs. For investment accounts with margin enabled, Salem will bill only on the net
amount of the account (i.e., the balance after subtracting the amount outstanding on the margin
loan). Item 12 further describes the factors that Salem considers in selecting or recommending
broker-dealers for client transactions and determining the reasonableness of their compensation.

Item 7 – Types of Clients
Salem Investment Counselors provides portfolio management services to individuals,
corporations, corporate retirement and profit-sharing plans, charitable institutions, foundations,
irrevocable trusts, and estates.