Fayez Sarofim & Co LLC

Item 5 – Fees and Compensation
Advisory Service Fees

If you open an account at Fayez Sarofim & Co., the fee you will pay for our advisory services is
calculated according to one or more of the schedules presented below. Fees are billed in three
month rolling periods, after the end of each such period, and are based on the market value of the
assets at the end of the last day of such period on which the New York Stock Exchange is open.
Asset-based advisory fees charged for the provision of Fayez Sarofim & Co.’s investment
management services are based upon the valuation of securities and investments provided by
Fayez Sarofim & Co.’s pricing services, which are reflected on its internally generated portfolio
appraisal statements. These statements may show different market values for particular
investments than what is reflected on a client’s custodial statement. Fayez Sarofim & Co.
maintains policies and procedures regarding the valuation of securities and investments held in
client accounts.

        Equity Fees: Large Capitalization Equity Product, Concentrated Equity Product,
                     Equity Income Product, and the Equity Portfolios of Balanced
                     Accounts

    Market Value of Equities             Rate

      First   $2,000,000 is billed at    0.75% (or 75 basis points) per year
                                         (i.e., 0.1875% per quarter)

      Next $18,000,000 is billed at      0.50% (or 50 basis points) per year
                                         (i.e., 0.1250% per quarter)

      Next $20,000,000 is billed at      0.40% (or 40 basis points) per year
                                         (i.e., 0.1000% per quarter)

      Next $20,000,000 is billed at      0.35% (or 35 basis points) per year
                                         (i.e., 0.0875% per quarter)

      Amounts over       $60,000,000 0.20% (or 20 basis points) per year
      are billed at                  (i.e., 0.0500% per quarter)

Fayez Sarofim & Co. Part 2A of Form ADV: Firm Brochure                             Page 13 of 42

        Equity Fees: Global Equity Product and International Equity Product

     Market Value of Equities              Rate

      First   $50,000,000 is billed at    0.60% (or 60 basis points) per year
                                          (i.e., 0.15% per quarter)

      Next $50,000,000 is billed at       0.40% (or 40 basis points) per year
                                          (i.e., 0.1% per quarter)

      Amounts Over $100,000,000 0.30% (or 30 basis points) per year (i.e.
      are billed at             0.075% per quarter)

        Fixed Income Fees

The fee for fixed income securities is 0.20% (20 basis points) per year or 0.05% (5 basis points)
per quarter.

        Cash Fees

Our investment advisory agreements authorize Fayez Sarofim & Co. to bill cash positions in our
portfolios at an annual rate of 0.20%, or 20 basis points. Cash assets may be held temporarily in
money market funds or other short-term interest-bearing arrangements. If this is the case, such
assets may also be subject to fees payable to the manager of these funds in addition to the fees
charged by Fayez Sarofim & Co. Notwithstanding the above, we currently waive our fees on
cash positions in our portfolios for all clients; however, this should not be interpreted as a
permanent waiver, and we reserve the right to reinstitute the above-referenced cash position
billing rate.

        Private Placement Program Fees

Our fee for clients participating in private placement transactions is 0.50% (or 50 bps) of a participating
client’s capital contributions to each investment until such investment is fully liquidated or otherwise
fully disposed of by client.

Our Billing Practices

For the purpose of computing fees, we may agree to treat managed assets in related accounts as if
all the assets were in one account. After the fee is computed in this way, it is divided among the
accounts involved, usually in proportion to the market value of each account. This grouping of
related accounts must be approved in advance by the firm, and approval is not assured.

We generally do not regard our fees as negotiable because we believe our fees are in the low end
of the range of fees in the industry for comparable services. However, in a few instances, the
firm in its sole discretion has granted (and may in the future grant) exceptions to the application
of our regular fee schedules when we believe there are highly unusual factors involved that
justify exceptional treatment. The firm attempts to ensure that other clients having similar
unusual factors are treated in a similar manner for fee purposes, but this cannot be assured. From

Fayez Sarofim & Co. Part 2A of Form ADV: Firm Brochure                                     Page 14 of 42

time to time, the firm will seek to determine if such unusual factors continue to justify deviations
from our regular fee schedule.

As mentioned earlier, the firm’s fees are billed quarterly, in arrears. Our clients may direct their
custodians to deduct Fayez Sarofim & Co.’s fees from the assets in their account. Alternatively,
clients may choose not to have the fees deducted from their accounts and may arrange to pay the
fees by check or wire transfer. The firm does not accept advance fee payments.

Third Party Fees You May Incur

Fayez Sarofim & Co. does not provide custodial services, and we are not affiliated with a
brokerage firm. The firm’s brokerage practices are discussed in Item 12 of this brochure. The
advisory service fee you pay to us does not include other fees or charges you may incur in
connection with your account at Fayez Sarofim & Co. The following is a non-exclusive list of
the types of fees and charges that might be payable to third parties in connection with your
account. This list is not meant to be exhaustive. There may be additional fees that are not
included in this list.

Examples of Fees Paid to Third Parties
...

Item 7 – Types of Clients
Fayez Sarofim & Co. serves as an investment adviser for a broad range of clients, including but
not limited to:

       Private employer pension and profit-sharing plans
       State and local government retirement systems
       Taft-Hartley union plans
       Employee savings and thrift plans
       Keogh plans
       Individuals—retirement accounts
       Individuals—taxable accounts
       Endowments, foundations, or other tax-exempt organizations
       Banks
       Trusts and estates
       Registered investment companies, i.e., mutual funds
       Insurance companies
       Insurance Company Separate Accounts
       Corporations and small businesses

We continue to seek new clients. Generally, the minimum dollar amount for new managed
accounts is $5 million, subject to the firm’s discretion. However, the minimum dollar amount
for new managed accounts in our Global Equity and International Products is $10 million,
subject to the firm’s discretion. The firm may waive size requirements in its sole discretion if
related accounts are currently under management and otherwise on a case-by-case basis.

Fayez Sarofim & Co. Part 2A of Form ADV: Firm Brochure                            Page 18 of 42