Mackay Shields LLC

ITEM 5:         FEES AND COMPENSATION
We typically receive fees for our services based on a percentage of the value of the assets in the client’s
account. These are referred to as “asset-based fees.” Certain clients also have performance-based fees, as
more fully described under “Performance-Based Fees and Side-by-Side Management,” below. Advisory fees,
including any performance fees, are set forth in the investment management agreement, offering document,
or similar agreement between each client and Mackay Shields.

Asset-Based Fees
MacKay Shields generally charges asset-based fees based on the value of the client’s assets under
management and/or the value of the client’s and its affiliates’ or related person’s assets under management.
Asset-based fees are generally negotiated and tailored with clients on a case-by-case basis and are described
in the separately managed account client’s investment advisory agreement or the fund’s offering document.
Asset-based fees generally range from 0.030% to 1.500% annually of assets under management, depending
on the strategy(ies) involved and vehicle(s) in which the assets are held (e.g., a separately managed account,

collective investment vehicle, or registered investment company). In our sole discretion, we have, and
anticipate that in the future we will, negotiate a performance-based fee, agree to a fee schedule other than
within the range described above, and/or waive, rebate, or reduce fees for clients. Factors taken into
consideration when tailoring fees may include, but are not limited to, the investment strategy, portfolio
composition, and structure of the account (e.g., lock up or liquidity terms, incentive allocation); existing
contractual commitments with other clients; whether the client is an affiliate, the client’s other relationships
to MacKay Shields and its affiliates; related accounts under management; servicing requirements; and
investment strategy capacity.

ITEM 7:         TYPES OF CLIENTS
We provide discretionary investment management services primarily to institutions, such as SEC-registered
investment companies and other collective investment vehicles, insurance companies, corporate pension
funds, endowments and foundations, Taft-Hartley plans, wrap fee programs, non-U.S. collective investment
vehicles, non-U.S. clients and high net worth clients. We manage collective investment funds and separate
accounts for our affiliates. See “Item 5 - Fees and Compensation,” above, and “Item 10 - Other Financial
Industry Activities and Affiliations,” below.