Welch & Forbes LLC

Item 5 – Fees and Compensation
Standard Fee Schedule
Welch & Forbes is compensated for its investment advisory services through payments of fees
made by our clients. The fee is generally based on the market value of investments under
management, and typically includes cash or its equivalent. The market value of investments is
determined on the basis of the account on the eighth day of the last month of the quarter (for
accounts held in our custody) or quarter-end for accounts held in custody elsewhere. The Firm’s
standard fee schedule is noted below.
               Market Value           Fee Rates Per Annum

               First $3,000,000       1.00%

               Next $2,000,000         .75%

               Thereafter              .50%

               * For relationships of less than $3,000,000, the rate is 1.25% of the aggregate
               market value of account assets under management.

The fees set forth above cover ordinary and customary services. Additional fees may be charged
for administrative services, generating tax information, account maintenance, and other services.
Agreements continue until cancelled by either party. If termination of the ICA occurs in the
middle of a billing period, Welch & Forbes may charge the client a pro-rated amount.
Advisory clients are subject to Welch & Forbes’ minimum account requirements and advisory
fees in effect at the time the client entered the advisory relationship. Therefore, our minimum
account requirements and fees differ among clients.
Notwithstanding this fee schedule, and subject to applicable laws and regulations, Welch &
Forbes retains discretion over the fees that it charges to its clients, as well as any changes in its
fee schedules. The specific annual advisory fee is identified in the ICA between client and Welch
& Forbes. Fees, including administrative fees, may be negotiated in Welch & Forbes’ sole
discretion considering a client’s special circumstances, including, but not limited to, the
complexity of the client’s assets to be placed under management, additional assets anticipated, or
prior assets received, portfolio style and account composition, reporting requirements, and other
facts. In some cases, Welch & Forbes may agree to offer clients a fee schedule that is lower than
that of any other comparable clients in the same investment style. In addition, there may be
historical fee schedules with longstanding clients that differ from those applicable to new client
relationships. Certain accounts have been grandfathered with previously established fee
schedules. Discounted fees are offered to certain family members and employees of our firm.
For comparable services, other investment advisers may charge higher or lower fees than those
charged by Welch & Forbes. Welch & Forbes reserves the right to waive all or a portion of its
management fee and negotiate minimum annual fees. Fees are also prorated at the inception of
the investment advisory agreement to cover only the period of time the account assets were
under management.

Fees for accounts where Welch & Forbes has custody are generally deducted directly from client
accounts. Fees for accounts where Welch & Forbes has not been designated as custodian are
generally deducted by the designated custodian at the client’s direction or billed to the client.
The fees charged to clients generally are computed as a percentage of the value of the assets
under management. To calculate advisory fees, Welch & Forbes generally relies on prices
provided by third-party pricing services, custodians, and/or broker/dealers for purposes of
valuing portfolio securities held in client accounts. Welch & Forbes may, on occasion, be
required to “fair value price” a security when a market price for that security is not readily
available or when Welch & Forbes has reason to believe that the market price is unreliable. In
an event where “fair value pricing” is required, Welch & Forbes will use various sources of
information at its disposal to determine a fair price that the security would obtain in the
marketplace if, in fact, a market for the security existed. For any fair value securities, Welch &
Forbes maintains a policy relating to the pricing process in an effort to mitigate any conflicts of
interest with respect to valuation. Fair valuation occurrences are documented, and such
documentation is maintained by the Welch & Forbes Valuation Committee.
Fees are generally charged in arrears and calculated on the market value of the account on the
eighth day of the last month of the quarter (for accounts held in our custody) or quarter-end for
accounts held in custody elsewhere. The calculated fees are periodically reviewed to determine
that the fee schedule used is consistent with the terms of the ICA as compared to the fee charged
in the previous quarter.
Fees for Specialized Accounts and Advisory Services
Sub-advisory Arrangements

As part of its advisory business, Welch & Forbes manages certain accounts as a “sub-advisor” to
the investment adviser of such accounts. In its capacity as “sub-advisor” to such accounts,
Welch & Forbes’ fees and services are determined by contract with the investment adviser.

Additional Fees and Expenses Payable by Clients

Welch & Forbes’ fees are exclusive of brokerage commissions, transaction fees, service provider
fees, and other related costs and expenses which will be incurred by the client. Execution of
client transactions typically requires payment of brokerage commissions by clients. “Item 12 –
Brokerage Practices” further describes the factors that Welch & Forbes considers in selecting or
recommending broker/dealers for the execution of transactions and determining the
reasonableness of their compensation (e.g., commissions). Investment activity may also involve
other transaction fees payable by clients, such as sales charges, odd-lot differentials, transfer
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Types of Clients
Welch & Forbes provides investment advice primarily to individuals and trusts, including those
for which individual officers of the Firm may serve as trustee or co-trustee. In addition, Welch
& Forbes’ clients also include pension and profit-sharing plans, estates, charitable organizations,
and corporations and other legal entities.
Conditions for Managing Accounts
Generally, Welch & Forbes requires a minimum account size of $3,000,000. However, the
minimum account size is negotiable and may be waived or modified at the Firm’s discretion.
Welch & Forbes requires each client to execute an ICA that details the nature of the discretionary
investment advisory authority given to Welch & Forbes.
Welch & Forbes will not accept an account from an investor whose investment objective or
policy is inconsistent with Welch & Forbes’ fundamental investment philosophy and approach.