Item 5 - Fees and Compensation
Each Fund is indirectly subject to management fee and performance compensation terms (an
“incentive allocation”) in accordance with each Fund’s Offering Documents. Each Fund indirectly bears
a management fee of up to two percent (2%) per year of the market value of the Fund’s net assets,
as measured at the end of each fiscal quarter and payable quarterly in advance. Management fees
are prorated for capital contributions and withdrawals made at times other than the start or end of
a calendar quarter, as applicable.
The Laurion affiliate that also serves as general partner of the Onshore Fund is eligible to receive an
incentive allocation based on the net capital appreciation of a Fund’s market value. The incentive
allocation consists of up to 20% of net capital appreciation for each fiscal year subject to a high water
mark, and is reallocated by the Master Fund to the Laurion affiliate at the end of each fiscal year.
The fees for the Funds are not negotiable. However, Laurion, the affiliated general partner, and the
Board of Directors, in their sole discretion, may waive, reduce or otherwise modify the management
fee and incentive allocation for any Investor, including affiliates and employees of Laurion, members
of their immediate families, and trusts or other entities formed for their benefit. In addition, as
enumerated in each Fund’s Offering Documents, the Funds may issue other classes of shares or enter
into agreements with certain Investors, which may differ from the interests offered to other
shareholders or limited partners in terms of, among other things, the incentive allocation and
management fee.
In addition to our investment management fees and incentive allocation, Investors indirectly bear
the operating expenses of the Funds as set forth in the Offering Documents. These may include,
among others, investment expenses (e.g., expenses related to the research, due diligence and
monitoring of actual and prospective investments (whether or not investments are consummated));
and the consummation of investments, including the following: third-party investment sourcing fees;
consulting and other professional fees (including consulting and licensing fees paid to vendors who
generate or gather trading ideas, trading models or model portfolios); fees and expenses related to
obtaining research and market data (including any information technology hardware, software or
other technology incorporated into the cost of obtaining research and market data, and expenses
related to obtaining, processing and analyzing "big data" or "alternative data"); travel, lodging and
meal expenses; brokerage, including brokerage commissions and other trading expenses, and prime
brokerage and futures commission merchant fees, commissions and expenses; expenses relating to
reorganizations, restructurings and workouts; expenses relating to short sales; clearing and
settlement charges; custodial fees and expenses; bank service fees; interest expenses and fees
related to financings or refinancings; fees and expenses of proxy research and voting services; and
fees and expenses of third-party professionals, including consultants, investment bankers, valuation
service providers, attorneys and accountants; operational expenses, including the following: fees
and expenses relating to information technology hardware, software or other technology (including
costs of software licensing, implementation, data management and recovery services and custom
development, servers and data lines) used to research investments, evaluate and manage risk,
facilitate valuations, facilitate accounting functions, facilitate compliance with the rules of any self-
regulatory organization or applicable law (including reporting obligations), facilitate and manage the
order execution of securities by the Master Fund or any trading vehicle or otherwise manage the
Master Fund or any trading vehicle, such as portfolio management systems, risk management
systems and order management systems; fees and expenses of third-party risk management
products, models and services; third-party administrative fees and expenses (including treasury and
collateral management services); the costs of any litigation or investigation involving activities of the
Master Fund or any trading vehicle; third-party audit and tax preparation expenses; insurance
expenses, including premiums for cybersecurity insurance and liability insurance covering Laurion
and its partners, managers, officers, employees and agents, each member of the Funds’ board of
directors; fees and expenses (including director registration fees) of the Master Fund's and any
trading vehicle's directors and officers (including any third-party AML Officers); costs of preparing
and distributing reports and notices; taxes; expenses relating to the offer and sale of shares;
expenses incurred negotiating and complying with provisions of any side letter agreement; legal
expenses; regulatory, licensing, filing or registration expenses, and/or taxes, including, among
others, expenses in connection with compliance and regulatory filings relating to the Funds and the
investments, fees and expenses of service providers providing services related thereto (including
fees and the expenses associated with preparation and filing of our Form 13F, Form 13H, Form PF,
CPO-PQR, Section 13 filings, Section 16 filings and Form N-PX, if and as applicable, and any other
similar regulatory filings in any other U.S. or non-U.S. jurisdiction); expenses related to the
maintenance of the Funds’ registered office; corporate licensing; extraordinary expenses and other
similar expenses related to the Funds (including, among others, indemnification expenses; fees and
expenses incurred in connection with any tax audit by any taxing authority, including any related
administrative settlement and judicial review; and fees and expenses incurred in connection with the
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