Legion Partners Asset Management LLC

ITEM 5: FEES AND COMPENSATION

A. Advisory Fees

1. Types of Advisory Fees

The terms of each investor’s agreement with Legion Partners (“Investor Agreement”)
will govern the advisory fees they pay Legion Partners. Legion Partners typically
charges investors a combination of Management Fees and performance-based fees,
although, at times, it may only charge investors a performance-based fee as described
more fully below.

a. Management Fees

Legion Partners typically charges investors an annual “Management Fee” based
upon a percentage of net asset value determined by the terms of the Investor
Agreement.

b. Performance-•• Based (or Incentive) Fees

Legion Partners, LLC and/or its affiliates may receive a performance-based fee from
its Clients on an annual basis and/or upon an investor’s exit from a Client. For co-
investments, a performance fee will only be charged upon the sale of all of the
Client’s assets. This performance-based fee is a percentage of the realized and/or
unrealized investment profits (typically calculated as gross gains net of any
management fees and expenses for which the Client is responsible under the
applicable advisory agreement and any other reasonable expenses incurred by the
Client related to the investment) based on either an absolute return or hurdle-based
methodology. CalSTRS, as Legion Partners’ seed investor, is entitled to receive a
share of the performance-based fees.

In the absolute return model, if the absolute return is less than an agreed upon
percentage (the “absolute return floor”) during the applicable performance period,
no performance-based fee is realized; if the absolute return is greater than the
absolute return floor during the applicable performance period, the
performance-based fee to which Legion Partners is entitled is an agreed upon
percent of the gain that is higher than the absolute return floor.

In the hurdle-based model, no performance-based fee is realized until the investors
have received an amount equal to 100% return of their capital contributions and a
preferred return of an agreed upon percentage (the “hurdle”). Once the hurdle is met,
an agreed upon percentage is provided to the investors and another agreed upon
percentage is provided to Legion Partners, LLC.

2. Negotiability

Advisory fees may be negotiable in certain circumstances, including, but not limited
to, investor portfolios that contain a substantial amount of assets.

A. Calculating and Billing Advisory Fees

Management Fees, if applicable, are typically calculated and become payable
quarterly in advance. All calculations are subject to pro rata adjustments to reflect
contributions to or withdrawals from an investor’s account or termination of services
during a month.

Performance-based fees may be charged on realized and/or unrealized net profits
and are net of expenses depending upon the terms of the Investor Agreement.

Legion Partners bills Clients for all Management Fees incurred, if applicable. Clients
can elect to pay Management Fees directly or authorize their deduction from Client
assets. Performance-based fees will be deducted prior to distribution of any funds to
the investors.

B. Other Fees and Expenses

Investor Agreements typically require Clients to reimburse Legion Partners for
certain expenses Legion Partners incurs in connection with performing its investment
management services. These expenses are set out in the applicable offering
documents and include, for example: brokerage and other transaction costs in the
Client’s account, all custodial and similar charges and third party charges (e.g., legal
and accounting fees, proxy solicitors, etc.). Legion Partners’ brokerage practices are
described in Item 12 below.

C. Payment of Management Fees

Management Fees, if any, are typically payable in advance.

Legion Partners may require investors to provide advance notice (e.g., 45 days in
advance) in order to terminate an Investor Agreement. If this occurs, Legion
Partners will adjust its Management Fees, if any, accordingly on a pro rata basis.
Such notice will be specific to the individual agreement between Legion Partners
and the particular investor.

D. Non• receipt of Brokerage Compensation

Legion Partners and its employees do not receive brokerage compensation for
selling investments to Clients.