Hound Partners LLC

Item 5 – Fees and Compensation

The Long/Short Funds pay Hound a quarterly management fee (a “Fixed Fee”) in advance in an amount
equal to 0.375% (i.e., 1.5% per annum) of the net assets. If Hound does not act as investment manager
for the entire quarter, we will prorate the Fixed Fee to reflect the portion of the quarter during which
Hound was acting as investment manager. In addition, Hound or the General Partner can earn an annual
performance based fee (the “Incentive Fee”). The Incentive Fee is 20% of net profits (including net
unrealized gains or losses) as of the end of a fiscal year unless there are net losses from the prior year, in
which instance the Client may pay a reduced Incentive Fee.

The Variable Beta Funds pay Hound a monthly Fixed Fee in advance in an amount equal to 0.125% (i.e.,
1.5% per annum) or 0.167% (i.e., 2% per annum) of the net assets. In the extremely rare instance that
Hound does not act as investment manager for the entire month, we will prorate the Fixed Fee to reflect
the portion of the month during which Hound was acting as investment manager. The Incentive Fee is
20% of the net profits (including net unrealized gains or losses) that exceed the rate of return of the
Hound Index multiplied by the applicable target exposure unless there are net losses from the prior
year, in which instance the Client may pay a reduced Incentive Fee. The Hound Index is a 50/50 blend,
rebalanced monthly, of the total return of the S&P 500 Index and the total return of the Russell 2000
Index.

The 167 Funds pay Hound a monthly Fixed Fee in advance in an amount equal to 0.125% (i.e., 1.5% per
annum) of the net assets. In the extremely rare instance that Hound does not act as investment
manager for the entire month, we will prorate the Fixed Fee to reflect the portion of the month during
which Hound was acting as investment manager. The Incentive Fee is 20% of the net profits (including
net unrealized gains or losses) that exceed the rate of return of the Hound Index unless there are net
losses from the prior year, in which instance the Client may pay a reduced Incentive Fee.

Hound may waive, reduce or enter into alternative arrangements the Fixed Fee and/or Incentive Fee for
investors that are members, principals, or employees or affiliates of Hound and for certain large or
strategic investors.

Hound is responsible for and pays all office overhead expenses, which for a fiscal year include overhead
expenses of an ordinarily recurring nature such as rent, supplies, secretarial expenses, stationery,
charges for furniture and fixtures, employee insurance, payroll taxes and compensation of analysts and
certain other personnel. All other expenses involving the management and operation of Client accounts
are borne by Clients. Other Client expenses include, without limitation, accounting, administration,
middle-back office and trading expenses (including all expenses of the trading desk, such as technology,
trader compensation, health insurance and other benefits, rent and other overhead expenses) , the fees
paid to Hound and the administrator, organizational expenses, expenses of regulatory compliance,
filings and reporting (including but not limited to Form PF, Section 13 and 16 filings), Form D, FATCA,
anti-money laundering compliance, state security filings and non-US position reporting and other filings)
to the extent they are in connection with, relate to or derive from a Client or its investment activities,
legal, audit and other professional research expenses (including consultants' fees and success fees,
research service fees, investigative service fees and research related foreign travel expenses), the
Client’s pro-rata portion of Client-related insurance costs (including the Client’s pro-rata portion of

directors and officers insurance, errors and omissions insurance and other similar policies covering the
General Partner and/or Hound), portfolio exposure and management systems, research management
systems, and investment expenses such as commissions, interest on margin accounts, custodial fees,
bank service fees and other reasonable expenses related to the purchase, sale or transmittal of Client
assets.

Hound’s allocation of expenses between it and any Client and among Clients represents a conflict of
interest for Hound. As such, Hound has adopted an expense allocation policy that is designed to address
this conflict. To the extent expenses relate to a specific Client account, the expense will be borne
entirely by the specific Client. In the case of expenses which relate to more than one Client account,
each Client will bear their pro rata share of the expense, typically based upon each Client’s net assets.
The Funds shall also bear their pro rata share of the Master Fund’s expenses.

Investors are encouraged to refer to each Fund’s offering documents for a more detailed discussion of
the various fees and expenses associated with each Fund. The General Partner deducts fees and
expenses, as appropriate, directly from the Funds’ assets upon review by the Administrator.

Clients will also incur brokerage and other transaction costs. See Item 12, Brokerage Practices for a
detailed discussion of Hound’s brokerage practices.

Item 7 – Types of Clients

As noted in Item 4, Advisory Business, Hound provides investment advisory services to the Funds and
SMAs.

The minimum investment in the Long/Short Funds is $5,000,000, in the Variable Beta Funds is
$10,000,000, and in the 167 Funds is $10,000,000, subject to waiver at the discretion of the Funds’
General Partner or board of directors, as applicable.

Interests in the Funds are offered on a private placement basis, and in reliance on Section 3(c)7 of The
Investment Company Act of 1940 (“Company Act”) to persons who generally are “accredited investors”
as defined under The Securities Act of 1933 and “qualified purchasers” as defined under the Company
Act, and who are subject to certain other conditions, which are fully set forth in its offering documents.

The Funds may from time to time enter into agreements with one or more prospective investors
whereby the Funds grant favorable rights not afforded to other investors in consideration for the
prospective investor agreeing to invest certain amounts in the Funds or other consideration deemed
material by the General Partner or the Funds’ board of directors, as applicable. The Fund and the
General Partner may generally enter into such agreements without the consent of or notice to the
existing investors. No other investor shall be entitled to participate in any such special arrangement
without the approval of the General Partner or the Funds’ board of directors, as applicable, and they
shall typically have no obligation to offer any special arrangement to any other investor.