Marshfield Associates Inc

Item 5 - Fees and Compensation

Separately Managed Accounts
Marshfield generally receives fees from SMA clients based upon a percentage of the assets under
management, calculated according to a schedule agreed upon in writing between Marshfield and
the client and included in the client’s investment advisory agreement. Upon the specific request
of an SMA client, Marshfield may enter into a performance-based fee arrangement as discussed
in Item 6 – Performance-Based Fees and Side-By-Side Management below. All fees charged by
Marshfield are documented in writing in the client’s investment management agreement with
Marshfield, as such agreement may be amended from time to time.

Management fees for SMA clients are typically invoiced quarterly in advance, based upon the
previous calendar quarter-end market value of all assets (including cash) held in the account.
Marshfield will consider other methods of payment and/or fee calculation at the client’s request,
including billing in arrears. If an advance billed client account is terminated during the service
period, fees paid in advance are refunded promptly, without further request by the client, on a
pro-rata basis (based upon the number of days such account is active for such quarter using a ratio
in which (i) the numerator is equal to the number of days such account is active for the applicable
quarter and (ii) the denominator is equal to the number of days in the applicable quarter).

Marshfield generally will not bill less than $100 for a partial quarter when an account opens and,
unless otherwise agreed in writing, will not refund a client for pre-paid advisory services when an
account closes if the amount to return is $25 or less.

SMA clients may choose to pay fee invoices from the assets of the accounts managed by
Marshfield or from another source including billing directly to the client’s custodian.
Marshfield’s advisory fees are exclusive of brokerage commissions, transaction fees, and other
related costs and expenses, which shall be incurred by the client. In addition, SMA clients will
incur certain additional expenses imposed by custodians, broker-dealers, and other third-party
providers, such as custody fees, odd-lot differentials, transfer taxes, wire transfer and electronic
fund fees, and other fees and taxes on brokerage accounts, securities transactions or money
market mutual funds. Neither Marshfield nor any of its supervised persons receive any portion of
these commissions, fees, costs, etc., that are charged by custodians, broker-dealers, and other
third-party providers. See Item 12 - Brokerage Practices below for a description of the factors
that Marshfield considers in selecting or recommending broker-dealers for client transactions and
determining the reasonableness of their compensation (e.g., commissions).

Marshfield’s standard asset-based fee schedules for SMA clients are as follows:

    More than 60% allocated to equity securities:
                1.25% for accounts from $1 million - $10 million
                1.00% for accounts of at least $10 million

    60% or less allocated to equity securities:
                   1.00% for accounts from $1 million - $10 million
                   0.90% for accounts of at least $10 million

Marshfield’s minimum account size for opening a separately managed account is $1 million,
which we can waive at our discretion based on circumstances such as multiple accounts or friends
or family accounts.

Fees for SMA clients may be negotiated or modified in light of a client’s special circumstances,
asset levels, service requirements, or other factors in Marshfield’s sole discretion. Marshfield may
agree to offer certain clients a fee schedule that is lower than that of comparable clients in the
same investment style. Marshfield reserves the right to change its standard fee schedules and is
not required to change the fee schedules of existing clients to match such updated fee schedules,
even if such updated fee schedules would be more advantageous to existing clients. Marshfield
may also choose to waive all or a portion of negotiated fees for a given period. Also, for fee
calculation purposes, Marshfield may agree to aggregate the assets of related client accounts and
such accounts may receive the benefit of a lower effective fee rate due to such aggregation. In
addition, certain accounts with long-standing clients may be charged fees based on an older fee

schedule that is no longer available, and Marshfield may offer reduced or waived advisory fees
for accounts of employees or their friends and families.

Marshfield will review each SMA client’s assets under management annually to determine if
assets have increased or decreased above or below the agreed asset-based fee schedule threshold
amounts. Notice will be provided to the client if a new fee is warranted as a result of this review.
The fee change will be increased or decreased, as appropriate, as of the end of such quarter
following the fee review and shall remain in effect until a subsequent annual review reflects that a
further adjustment in the fee charged should be made. Marshfield may waive fee increases in its
sole discretion. A client may request an ad hoc fee review at any time other than the annual
review.

Wrap Fee Programs
For clients in wrap fee programs, Marshfield negotiates the fees paid to us directly with the wrap
fee program’s sponsor and not with individual program participants. Under a single contract
program, the wrap program client pays an asset-based wrap fee to the program sponsor, and the
program sponsor pays Marshfield a portion of this fee. Under a dual contract program, the wrap
program client pays an asset-based wrap fee to the program sponsor and a separate asset-based
management fee to Marshfield. Fees and features of wrap fee programs are established by the
program sponsor and not by Marshfield, and wrap fee program clients should carefully review the
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Item 7 - Types of Clients
Marshfield provides investment management services to a wide range of institutional and
individual clients including high net worth individuals, corporate pension and profit-sharing
plans, banking and or thrift institutions, insurance companies, hospitals, Taft-Hartley funds,
charitable institutions, foundations, endowments, professional and religious organizations, state
or municipal government entities, registered mutual funds and other U.S. and international
institutions. In addition, Marshfield provides investment advice to retail investors through wrap
fee programs sponsored by unaffiliated broker-dealers, investment advisers, or other financial
institutions.

Marshfield’s minimum account size for opening a separately managed account is $1 million,
which we can waive at our discretion based on circumstances such as multiple accounts or friends
or family accounts. The minimum account size for a wrap fee program account is generally
determined by the agreement between Marshfield and the wrap fee program’s sponsor.