Item 5 – Fees and Compensation
The following paragraphs detail the fee structure and compensation methodology for services provided by the
Advisor. Each Client shall sign an Investment Advisory Agreement that details the responsibilities of Grayhawk and
the Client.
A. Fees for Advisory Services
Investment Management Services
Investment advisory fees are paid quarterly, in advance of each calendar quarter, pursuant to the terms of the
investment advisory agreement. Investment Advisory Fees are based on the market value of assets under
management at the end of the prior calendar quarter. Certain Clients may be offered a fee schedule that includes a
performance-based fee. For Clients with a performance-based fee, the investment advisory fee is reduced by
0.05% annually. Fees are based on the following schedules:
Annual Fee (%) with Annual Fee (%) without
Assets Under Management Performance Fee Performance Fee
Up to $10,000,000 0.60% 0.65%
Next $5,000,000 (Up to $15,000,000) 0.45% 0.50%
Next $5,000,000 (Up to $20,000,000) 0.40% 0.45%
Next $5,000,000 (Up to $25,000,000) 0.35% 0.40%
Next $25,000,000 (Up to $50,000,000) 0.30% 0.35%
Next $50,000,000 (Up to $100,000,000) 0.25% 0.30%
Next $100,000,000 (Up to $200,000,000) 0.23% 0.28%
Over $200,000,000 0.20% 0.25%
Fees in the first quarter of service are prorated from the inception date of the account[s] to the end of the first
quarter. Fees may be negotiable at the sole discretion of the Advisor. The Client’s fees will take into consideration
the aggregate assets under management with Advisor. All securities held in accounts managed by Grayhawk will
be independently valued by the Custodian. Grayhawk will not have the authority or responsibility to value portfolio
securities.
Selection of Other Advisors
For Clients referred to the Advisor by an unaffiliated investment advisor, the Client’s fee will be deducted from the
Client’s account[s] with the respective manager and a portion of the investment advisory fee will be provided to
Grayhawk. Please see Item 14 for additional details.
B. Fee Billing
Investment Management Services
Investment Advisory Fees will generally be calculated by the Advisor or its delegate and deducted from the Client’s
account[s] at the Custodian. In such instances, the Advisor will instruct to the Custodian indicating the amount of
the fees to be deducted from the Client’s account[s] at the respective quarter-end end date. The amount due is
calculated by applying the quarterly rate (annual rate divided by four) to the total assets under management with
Grayhawk at the end of the prior quarter. Clients will be provided with a statement, at least quarterly, from the
Custodian reflecting deduction of the investment advisory fee. It is the responsibility of the Client to verify the
accuracy of these fees as listed on the Custodian’s brokerage statement as the Custodian does not assume this
responsibility. Clients provide written authorization permitting Grayhawk to be paid directly from their accounts held
by the Custodian as part of the investment advisory agreement and separate account forms provided by the
Custodian.
C. Other Fees and Expenses
Clients may incur certain fees or charges imposed by third parties, other than Grayhawk, in connection with
investments made on behalf of the Client’s account[s]. The Client is responsible for all custody and securities
transaction fees charged by the Custodian and executing broker-dealer. The investment advisory fee charged by
Grayhawk is separate and distinct from these custody and execution fees.
In addition, all fees paid to Grayhawk for investment advisory services are separate and distinct from the expenses
charged by mutual funds and ETFs to their shareholders, if applicable. These fees and expenses are described in
each fund’s prospectus. These fees and expenses will generally be used to pay management fees for the funds,
other fund expenses, account administration (e.g., custody, brokerage and account reporting), and a possible
distribution fee. A Client could invest in these products directly, without the services of Grayhawk, but would not
receive the services provided by Grayhawk which are designed, among other things, to assist the Client in
determining which products or services are most appropriate for each Client’s financial situation and objectives.
Accordingly, the Client should review both the fees charged by the fund[s] and the fees charged by Grayhawk to
fully understand the total fees to be paid.
D. Advance Payment of Fees and Termination
Grayhawk is compensated for its services in advance of the quarter in which investment advisory services are
rendered. Either party may terminate the investment advisory agreement with Grayhawk, at any time, by providing
advance written notice to the other party. Upon termination, the Client shall be responsible for investment advisory
fees up to and including the effective date of termination. The Advisor will refund any unearned, prepaid investment
advisory fees from the effective date of termination to the end of the quarter. The Client’s investment advisory
agreement with the Advisor is non-transferable without the Client’s prior consent.
E. Compensation for Sales of Securities
Grayhawk does not buy or sell securities and does not receive any compensation for securities transactions in any
Client account, other than the investment advisory fees noted above.