Kellner Management LP

Item 5.        FEES AND COMPENSATION

Kellner Management receives a sub advisory fee from the advisor of the registered
investment company based upon the net management fee received by the advisor. The
sub advisory fee is accrued daily and payable monthly. Sub advisory fees are negotiated
at the time Kellner Management’s sub advisory contract is entered into.

Kellner Management charges its affiliated master/feeder pooled investment vehicle
investment management fees ranging from 1% to 1.25% per annum of net assets.
Investment management fees are deducted from client accounts monthly. Additionally,
an affiliate of Kellner Management receives a performance allocation ranging from 10%
to 15% of the profits allocable to investors in the affiliated master/feeder pooled
investment vehicle (subject to a high-water mark provision). The method of calculating
the performance allocation complies with Rule 205-3 under the Investment Advisors Act
of 1940 (the “Advisers Act”), to the extent possible.

Kellner Management or its affiliate may waive or reduce the investment management fee
or performance allocation with respect to certain investors in its affiliated master/feeder
pooled investment vehicle.

In addition to investment management fees/performance allocation-based compensation,
the registered investment company and affiliated master/feeder pooled investment vehicle
clients also incur brokerage and other transaction costs. Please refer to Item 12 of this
brochure for a discussion of Kellner Management’s brokerage practices. Additionally,

the clients may also be subject to other expenses including, but not limited to,
administrator expenses, custodian fees, filing fees, research expenses, legal fees,
compliance fees, taxes, tax preparation and audit fees. In instances where clients’ assets
are invested in ETFs, other pooled investment vehicles or other registered investment
companies, the clients bear their pro rata share of the investment management fees,
performance fees and other expenses of the underlying investments. The registered
investment company’s daily net asset value reflects the deduction of accrued
management fees and other expenses not otherwise waived.

Kellner Management has an arrangement where it pays fees to a third-party solicitor who
introduces investors to Kellner Management’s registered investment company client and
affiliated master/feeder pooled investment vehicle. Such fees include a percentage of
Kellner Management’s management fee/performance allocation earned from assets raised
by the third-party solicitor. Investors who are introduced by third-party solicitors are not
charged any additional fees.

Kellner Management also has an arrangement where it pays fees to an entity under
common control whose registered representatives introduce investors to Kellner
Management’s registered investment company client and affiliated master/feeder pooled
investment vehicle. Such fees include a percentage of Kellner Management’s
management fee/performance allocation earned from assets raised by such registered
representatives. Investors who are introduced by these registered representatives are not
charged any additional fees.

Receiving compensation for the sale of shares of Kellner Management’s registered
investment company client and interests in the affiliated master/feeder pooled investment
vehicle creates a conflict of interest as it gives the solicitor incentive to recommend
investment products based upon compensation received instead of client needs.
Accordingly, paid solicitations are limited to sophisticated institutional investors and
financial intermediaries.

Item 7.        TYPES OF CLIENTS

Kellner Management’s clients are a registered investment company and an affiliated
master/feeder pooled investment vehicle. Underlying investors in the registered
investment company and in the affiliated master/feeder pooled investment vehicle can be
individuals, tax exempt entities, corporations, partnerships, limited liability companies,
IRA’s and trusts.

Initial and subsequent investment minimums for shareholders of the registered
investment company are disclosed in their prospectuses.

Underlying investors in the affiliated master/feeder pooled investment vehicle are
generally required to be Accredited Investors and Qualified Purchasers. Initial and
additional subscription minimums for investors in the affiliated master/feeder pooled
investment vehicle are disclosed in its offering memorandum.