Item 5: Fees and Compensation
Current and prospective Fund Investors should consult the governing and offering documents
applicable to each Fund for more details regarding the calculation of fees and expenses. A brief
summary of such fees and expenses is provided below.
Management Fee
Governors Lane is generally entitled to receive a management fee for management services
provided to the Funds (the “Management Fee”). The Management Fee, which is generally 1.5%
per annum, is paid quarterly in arrears and accrued based on the ending balance of each Fund
Investor’s capital account or series of shares as of the end of each calendar month. While
subscriptions and withdrawals or redemptions typically are not permitted other than at the beginning
of a calendar month and at the end of the last calendar month of each calendar quarter, respectively,
the Management Fee will be prorated for subscriptions and withdrawals or redemptions that are
effective other than at the beginning of a calendar month and at the end of the last calendar month
of each calendar quarter, respectively.
Performance Allocation
At the end of each fiscal year, the General Partner is generally entitled to receive a performance
allocation (the “Performance Allocation”). The Performance Allocation ranges generally from 0-
25% of the net capital appreciation (after reduction for the Management Fee and other expenses)
attributable to each Fund Investor’s capital account or series of shares for such fiscal year (the
percentage amount typically determined by the category of interests or shares held by the applicable
Fund Investor), subject to a customary high-watermark. In the event that a Fund Investor is
permitted or required to withdraw or redeem completely or partially other than at the end of the
fiscal year, the Performance Allocation calculated with respect to such Fund Investor for such year
will be determined, at the time of withdrawal or redemption, with respect to the portion being
withdrawn or redeemed through the applicable withdrawal or redemption date.
Fee Waivers
While the Management Fee and Performance Allocation generally are not negotiable, both may be
and have been waived, reduced, or rebated with respect to certain Fund Investors, including with
respect to Fund Investors affiliated with Governors Lane or such person’s family members and close
friends.
Expenses
In addition to the fees and compensation described above, each Fund will generally bear its pro-rata
share of all its expenses as more fully described in its governing and offering documents, including
the following non-exhaustive list: organizational and offering expenses, including all costs and
expenses incurred in connection with the initial and ongoing offer and sale of interests, operating
and other expenses, including but not limited to investment-related expenses (e.g., brokerage
commissions, clearing and settlement charges, custodial fees, interest expenses, initial and variation
margin, broken deal expenses and other transactional charges, fees or costs, consulting, advisory,
investment banking, valuation, legal and other professional fees relating to particular investments
or contemplated investments, research-related expenses, including, without limitation, investment
data warehouse and data analytics systems, research management systems and news and quotation
equipment and services, market data services, and expenses related to obtaining, processing and
analyzing “big data” or “alternative data”, fees to third-party providers of research and/or portfolio
risk management services), legal expenses (including with respect to litigation and threatened
litigation, if any), any expenses associated with regulatory filings made in connection with the
Funds’ operations and portfolio holdings (e.g., filings with the SEC), but excluding the preparation
of Form ADV, Form PF or Form CPO-PQR), expenses related to the maintenance of the Funds’
registered office, corporate licensing, costs relating to communications with investors (including
maintenance of the website for the benefit of investors), accounting, audit and tax advice and
preparation expenses (including compilation and preparation costs of financial statements, tax
returns, reports to the Fund Investors and schedule K-1s), printing and mailing costs, market
information systems and computer software and information expenses, fees of pricing, data and
exchange services, valuation firms and financial modeling services, the costs and expenses of third-
party Profit and Loss or risk analytics, order, trade, and commission management products and
services (including, without limitation, the costs of risk management and trading software or
database packages), Bloomberg data and interface fees and user license fees of the investment
professionals, insurance costs (including, without limitation, directors’ and officers’ liability or
other similar insurance policies, errors and omissions insurance and other similar policies for the
benefit of the Funds), filing and registration fees (e.g., blue sky and corporate filing fees and
expenses), fees of the administrator, directors’ fees (including fees of the independent members of
the Master Fund advisory committee), the Management Fee, any extraordinary expenses (including
indemnification or litigation expenses and any judgments or settlements paid in connection
therewith), all other costs and expenses arising out of the Funds’ indemnification obligations, any
and all taxes and governmental fees or other charges payable by or with respect to or levied against
the Funds, the Funds’ investments, or to federal, state or other governmental agencies, domestic or
foreign, including real estate, stamp or other transfer taxes and expenses related to complying with
tax reporting and withholding regimes, wind-up and liquidation expenses and other similar expenses
related to the Funds. For the avoidance of doubt, “similar expenses” refers to any expenses that are
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