JCSD Capital LLC

Item 5 – Fees and Compensation

A.     Fee Schedule
The fees and compensation payable to JCSD are negotiable and vary among its Investors. However,
the range of compensation is generally as follows:
       1. Management Fee
JCSD typically receives a quarterly asset-based management fee calculated as a percentage of each
Investor’s capital account, payable quarterly in advance. The management fee is generally 1.0%
annually (or 0.25% per quarter). JCSD currently does not charge a management fee to the Account;
however, with the consent of the Account holder, may charge a management fee in the future.
       2. Special Profit Allocation
JCSD generally receives a special profit allocation equal to a percentage of the net income allocated
to each Investor for the year, but only to the extent net income allocated to that Investor exceeds any
cumulative losses that were allocated to that Investor for earlier periods and that have not been
recovered (a “high water mark”). This special profit allocation is generally 20% and is typically made
at the end of each calendar year. JCSD currently does not charge a profit allocation to the Account;
however, with the consent of the Account holder, may charge a profit allocation in the future.
The special profit allocation will only be charged to accounts of those Investors who are “qualified
clients” as defined in Rule 205-3 of the Investment Advisers Act of 1940, as amended (“Advisers Act”),
in accordance with applicable state law.
       3. Fee Comparison
The expenses of the Clients, including the management fee and special profit allocation may
constitute a higher percentage of average net assets than would be found in other investment
vehicles.
B.     Payment of Fees.
Management fees, incentive allocations, and third-party fees (discussed below) are deducted from
Client assets and Account assets. Management fees, which are paid in advance, are withdrawn at the
beginning of the quarter. Incentive allocations are generally allocated as of the last business day of
the calendar year and as of any date on which an Investor makes a withdrawal or receives a
distribution from such Investor’s capital account(s). The fees discussed herein are generally paid on
a similar cadence for Accounts; however, JCSD may agree to a different cadence with Account holders.
C.     Third-Party Fees
The Clients and Account holders bear all costs of their operation including all trading costs and
expenses (for example, brokerage commissions, expenses related to short sales, and clearing and
settlement charges), all compliance costs and all ongoing legal, accounting and bookkeeping fees and
expenses. These expenses also include the fees and expenses of attorneys for JCSD, research
consultants, and the costs of service contracts related to online research, portfolio management and
quotation services and equipment related thereto.
Please see Item 12 of this Brochure regarding brokerage.

D.     Prepayment of Fees
JCSD will pro rate the management fee for Interests held for less than a full quarter. Clients whom
JCSD permits to withdraw capital on a date other than the last day of a fiscal quarter do not receive a
refund of the management fee paid in advance for that fiscal quarter.
E.     Outside Compensation for the Sale of Securities
Neither JCSD nor any of its supervised persons accepts compensation for the sale of securities or
other investment products outside of its association with JCSD.

The foregoing discussion in Items 5 represents JCSD’s basic compensation arrangements. The
management fees and incentive allocations described above are structured to comply with
Rule 205-3 under the Advisers Act and applicable state laws. Fees and other compensation are
negotiable in certain circumstances and arrangements with any particular Investor may vary.
Although JCSD believes its fees are competitive, lower fees for comparable services may be
available from other investment advisers.

Item 7 – Types of Clients

JCSD provides investment advice and management to three private investment funds, referred to as
the Clients and one separately managed account referred to as the Account. JCSD may in the future
provide the same or similar services to other privately placed investment funds and separately
managed accounts.

JCSD intends to restrict the number of Investors and will offer Interests only through non-public
transactions in order to maintain the Clients’ exclusion from “investment company” status under the
Investment Company Act of 1940, as amended (the “Investment Company Act”).

Prospective Investors in the Clients and Accounts must meet eligibility criteria and are subject to
certain withdrawal requirements and limitations. Prospective Investors are encouraged to thoroughly
review the Clients’ Constituent Documents, which set forth all of the terms in detail. Each Investor in
the Clients generally must be an “accredited investor” (as defined in Regulation D under the Securities
Act of 1933), an Investor who is eligible to enter into a performance fee arrangement under state and/or
federal law, as applicable, and must meet other criteria as specified in the Constituent Documents. The
minimum initial investment is $500,000, subject to waiver at the discretion of JCSD.