Kensico Capital Management Corp

ITEM 5. FEES AND COMPENSATION

The fees for each Fund are set forth in their respective confidential offering memorandum. Below is a brief
summary.

Management Fee

Kensico is generally paid a management fee (the “Management Fee”) calculated based on a percentage of
the value of the interests or shares, as applicable, of each investor in each of the Onshore Fund and the
Offshore Feeder Fund (each, a “Fund Investor”). The percentage varies depending on the date of

investment, as well as which of two applicable capital holding periods that a Fund Investor chooses, which
is illustrated as follows:

                  Holding Period                            Annual Management Fee
                  One Year                                          1.5%
                  Three Year                                        1.0%

Investments deemed by Kensico to be special situation investments (e.g., certain illiquid investments or
investments lacking a readily ascertainable market value) are valued at cost (or, in the case of a pre-existing
Fund investment that is designated as a special situation investment after it is acquired, at estimated fair
market value as of the date of such designation) for purposes of calculating the Management Fee until any
such investment is realized or becomes freely tradable (as determined by Kensico).

Management Fees are deducted monthly in advance for the Onshore Fund and deducted quarterly in
advance for the Offshore Fund. With respect to any period that is less than a full calendar month or quarter,
as applicable, the prepaid Management Fees, prorated accordingly, are refunded to the Fund Investor’s
account. In other words, the Management Fee is adjusted for any subscriptions and withdrawals or
redemptions during the relevant calendar month or quarter.

Kensico can, in its sole discretion, waive, reduce or modify the Management Fee for any and all Funds with
regard to certain Fund Investors. Kensico has waived the Management Fee with respect to members,
officers, affiliates and employees of Kensico and their related interests (collectively, the “Adviser
Affiliates”) and their families.

Incentive Reallocation

Kensico’s affiliated entity, Kensico Capital, L.L.C., generally receives an annual incentive reallocation
from the Funds, equal to a percentage of the annual increase in value (incorporating realized and unrealized
gains and losses), if any, of each Fund Investor’s capital. The percentage reallocated to Kensico Capital,
L.L.C. varies depending on the date of the investment, as well as which of two applicable capital holding
periods that a Fund Investor chooses, which is illustrated as follows:

                  Holding Period                          Annual Incentive Reallocation
                  One Year                                           17.0%
                  Three Year                                         15.0%

The incentive reallocation is also reduced by any amounts in the relevant loss recovery account, which
reflects losses from prior periods. Special situation investments are not subject to any incentive reallocation
until that investment is realized or becomes freely tradable (as determined by Kensico).

In the event that a Fund Investor withdraws or exits a Fund at any time other than at the end of a fiscal year,
the incentive reallocation will be determined with respect to such interest of the Fund Investor as of the date
of the withdrawal or exit.

Kensico can, in its sole discretion, waive, reduce or modify the provisions relating to the incentive
reallocations with regard to certain Fund Investors. Kensico has waived the incentive reallocation with
respect to Adviser Affiliates and their families.

Additional Fees and Expenses

In addition to the Management Fee and the incentive reallocation, the Funds bear their own expenses as
described more fully in each Fund’s confidential offering memorandum. These expenses include, for
example, charges imposed by custodians, brokers, or other counterparties, as well as interest and
commitment fees on loans and debit balances, research and data service costs, transfer taxes, wire transfer
and electronic fund fees, and other fees and taxes on brokerage accounts and securities transactions. The
Funds also incur certain operating and related expenses, such as administration, accounting, tax, audit,
insurance, legal and directors’ fees and expenses. For more information about the brokerage commissions
that are incurred by the Funds, please see Item 12 (Brokerage Practices). Expenses are typically allocated
among the Funds in proportion to their respective net asset values, or in such other manner as Kensico
determines to be equitable.

ITEM 7. TYPES OF CLIENTS

As noted above in Item 4, Kensico currently provides investment advisory services to the Funds. Investors
in the Funds include institutions, endowments, foundations and charities, funds of funds, family offices,
high-net worth individuals and other privately placed pooled investment vehicles. The Funds are offered
exclusively to accredited investors as defined in Regulation D under the Securities Act. The confidential
offering memorandum for each Fund sets forth the required minimum amounts for investment by investors.
The minimum investment amounts generally do not apply to Adviser Affiliates and have been reduced for
other investors.