LB Partners LLC

Item 5 – Fees and Compensation

A.     Fee Schedule
The range of fees and compensation payable to LB Partners is generally as follows:
       1.      Management Fee
LB Partners typically receives a quarterly asset-based management fee calculated as a percentage of
each Investor’s capital account, payable quarterly in advance. The management fee is generally
between 0.5% per annum to 1.0% per annum. LB Partners may, in its sole discretion, reduce, waive
or calculate differently the management fee with respect to any Investor.
       2.      Incentive Allocation
Subject to the terms of the applicable Client’s Constituent Documents, LB Partners may receive an
incentive allocation equal to a percentage of the net income allocated to each Investor for the year.
This incentive allocation may be subject to a hurdle rate and is generally between 10% and 15% and
is typically made at the end of each calendar year; however, the incentive allocation may be received
upon distribution of realized gains or withdrawals by Investors. LB Partners also manages a fixed
income-biased fund that does not accrue any incentive allocations. LB Partners or its affiliates may,
in its sole discretion, reduce, waive or calculate differently the incentive allocation with respect to
any Investor.
The incentive allocation will only be charged to accounts of those Investors who are “qualified
clients” as defined in Rule 205-3 of the Investment Adviser Act of 1940, as amended (the “Advisers
Act”).
       3.      Fee Comparison
The expenses of each Client, including the management fee and incentive allocation, may constitute
a higher or lower percentage of average net assets than would be found in other investment vehicles
or with other investment advisers.

B.     Payment of Fees
Management fees, incentive allocations and third-party fees (discussed below) are deducted from
Client assets. Management fees, which are paid in advance, are withdrawn at the beginning of the
quarter. Incentive allocations are generally allocated as of the end of the calendar year or as of any
date on which an Investor makes a withdrawal or receives a distribution from such Investor’s capital
account(s).

C.     Third-Party Fees
The Clients shall pay such costs and expenses as LB Partners shall reasonably determine to be
necessary, appropriate, advisable or convenient to realize the Clients’ investment objective, including
but not limited to: (i) management fees; (ii) all general investment expenses; (iii) all operating and
administration expenses, including but not limited to, all custodial fees, accounting and audit,

                                                                                        Part 2A of ADV:
                                                                                LB Partners LLC Brochure

brokerage commissions, clearing fees, borrowing charges, legal expenses, interest on margin and
other borrowings, and taxes incurred in connection with the Clients’ account; and (iv) such other
expenses as may be set forth in the Constituent Documents.
LB Partners’ fees are exclusive of brokerage commissions, transaction fees, and other related costs
and expenses which shall be incurred by the Clients. Such charges, fees and commissions are
exclusive of and in addition to LB Partners’ management fee, and LB Partners shall not receive any
portion of these commissions, fees, and costs.
Please see Item 12 of this Brochure regarding brokerage practices.

D.      Prepayment of Fees
LB Partners will pro rate the management fee for Interests held for less than a full quarter. Prepaid
but unearned fees are refunded to the Clients and/or Investors, as the case may be.

E.      Outside Compensation for the Sale of Securities
Neither LB Partners nor its supervised persons accepts compensation for the sale of securities or
other investment products outside of its association with LB Partners.
The foregoing discussion in Item 5 represents LB Partners’ basic compensation
arrangements. The management fees and incentive allocations described above are
structured to comply with Rule 205-3 under the Advisers Act. Fees and other compensation
are negotiable in certain circumstances and arrangements with any particular Investor may
vary. Although LB Partners believes its fees are competitive, lower fees for comparable
services may be available from other investment advisers.

Item 7 – Types of Clients
LB Partners provides investment advice and management to the Clients.
LB Partners intends to restrict the number of Investors and will offer Interests only through non-
public transactions in order to maintain the Clients’ exclusion from “investment company” status
under the Investment Company Act of 1940, as amended (the “Investment Company Act”).
Prospective Investors generally must be “accredited investors,” as defined in Regulation D under the
Securities Act of 1933, “qualified clients”, as defined in Rule 205-3 under the Advisers Act, and must
meet other eligibility criteria as specified in the Constituent Documents. LB Partners may, in its sole
discretion, waive any admission standard with respect to any Investor.
The minimum initial investment by an Investor depends on the Client and generally ranges between
$500,000 to $1,000,000; provided however that, LB Partners or its affiliates may modify or waive
any such minimums in its sole discretion.