LFL Advisers LLC

Item 5. Fees and Compensation

LFL Advisers receives compensation from its clients based on the percentage of assets it manages
and by receiving performance-based compensation.

LFL Advisers’ compensation is negotiable and varies, but its standard annual management fee is
0.5% of assets under management, which amount is payable in quarterly installments at the
beginning of each calendar quarter based on the net market value of each client’s account on the
date the fee accrues and becomes payable. LFL Advisers has waived all or part of the management
fee for clients in certain quarters.

LFL Advisers also is typically entitled, from each investor in its investment partnership client (the
fund, LFL Partners, L.P.) or in a separate account, to an incentive allocation or fee of 15% of the
amount by which net profits or net losses (including both realized and unrealized gains and
losses) otherwise allocable to such investor exceed a 6% hurdle return, subject to a high-water
mark provision. Incentive allocations and fees are assessed only to the extent that cumulative net
losses previously allocated to or incurred by investors and clients have been offset by subsequent
net profits, and to the extent that any cumulative underperformance of the benchmark has been
made up by subsequent overperformance. Incentive allocations are assessed in arrears on an
annual basis and upon withdrawals from client accounts. LFL Advisers complies with Rule 205-
3 under the Investment Advisers Act of 1940, to the extent required by applicable law. Incentive
allocations and fees create an incentive for LFL Advisers to make more risky and speculative
investments than it would otherwise make.

LFL Advisers deducts fees directly from its investment partnership client (the fund, LFL Partners,
L.P.). Per its investment management agreements, it may deduct fees directly from its separate
accounts or bill the separate accounts for such amounts. Asset-based fees are deducted or due on
a quarterly basis, at the beginning of each quarter.

LFL Advisers believes that its fees are competitive with fees charged by other investment advisers
for comparable services. Comparable services may be available, however, from other sources for
lower fees.

Although the foregoing is a brief summary of the management fee and incentive compensation
arrangements applicable to LFL Advisers’ clients, please note that this is a brief summary and it
is not a substitute for the detailed terms provided in the offering documents, organizational
agreements or managed account agreements of LFL Advisers’ clients.

LFL Advisers’ relationship with its investment partnership client, LFL Partners, L.P., is
terminable upon the dissolution of any partnership or LFL Advisers’ withdrawal as its general
partner. There are significant restrictions on a limited partner’s ability to transfer or redeem
interests in the partnership, LFL Partners, L.P. Generally, a limited partner may withdraw all or
a part of its capital account balance as of any December 31 if it notifies the general partner in
writing on or before the immediately preceding September 30. If a limited partner is permitted to
withdraw capital on a date other than the last day of a fiscal quarter, that limited partner shall
not receive a refund of any management fee paid in advance.

LFL Advisers’ investment management agreements with its separate account clients are
terminable by either party for cause immediately, or by either party without cause by written
notice to the other party, effective thirty days after receipt of such notice by the addressee or such
later date as may be specified in such notice. If the client withdraws all assets from the Account,
whether on termination of this Agreement or otherwise, on any date other than the last day of a
calendar quarter, the Asset Based Fee previously paid with respect to that calendar quarter shall
be prorated based on the number of days elapsed in that quarter prior to the withdrawal. LFL
Advisers will promptly refund the unearned portion to the client.

Expenses

The expenses paid by clients are set forth in detail in the offering document or investment
management agreement of the relevant client. Such expenses differ among and between clients.
Thus, although the following is a summary of expenses LFL Advisers’ clients will generally bear,
it is not an exhaustive or complete list with respect to all clients. Investors and prospective
investors and clients and prospective clients should therefore review the offering document or
investment management agreement carefully because such documents, and not this brochure
summary, describe the exact expenses such client will bear.

Each client account is responsible for its own costs and expenses, including:
• legal, accounting, auditing and other professional expenses,
• fund administration expenses,

•   all trading costs and investment expenses (such as brokerage commissions, expenses related
    to short sales, interest on margin borrowing or account-related loans, option premiums, and
    clearing and settlement charges),
•   taxes (including income withholding taxes, transfer taxes, and other governmental charges
    and duties),
•   custody-related expenses and custodial fees,
•   charges of clearing agencies and banks, fund administration expenses (such as professional
    fees of the fund administrator),
•   insurance policies that LFL Advisers considers appropriate (insuring LFL Advisers and its
    affiliates against liabilities that may arise in connection with the business or management of
    client accounts),
•   proxy-voting services,
•   costs associated with registering restricted securities,
•   other expenses related to the purchase, sale or transmittal of the account’s assets, and
•   any contingencies or extraordinary expenses that LFL Advisers determines reserves are
    required.

However, LFL Advisers does for certain clients elect to assume certain of these costs for client
...

Item 7. Types of Clients

LFL Advisers’ clients generally include pooled investment vehicles and separate accounts.
Investors may generally include high-net-worth individuals, institutions, trusts, foundations,
endowments, and public and private pension plans.

Currently, LFL Advisers provides investment advisory services to a pooled investment vehicle
operating as a private investment fund and to separate accounts. Investors in the investment fund
are generally required to invest a minimum of $1,000,000, but LFL Partners may waive this
minimum. LFL Advisers generally requires a minimum of $50,000,000 to open a separate (or
individually managed) account but may waive this minimum. The investors in the fund generally
consist of one or more family partnerships, institutional investors, and high-net worth
individuals.