FEES AND COMPENSATION
A. Fees and Other Charges
Separately Managed Accounts
Fees for Separately Managed Accounts (“Investment Advisory Fees”) are priced as follows:
Account Size Fee (Annual percentage)
0 - $5,000,000 1.50%
$5,000,001 and above Negotiable
All Midway Partners’ Investment Advisory Fees are negotiable. The annual Investment Advisory
Fee charged shall not exceed a maximum of 1.50% of the assets held in the Client’s account. Midway
Partners may charge a lesser Investment Advisory Fee based upon certain criteria. (e.g., length of
relationship, types of assets, anticipated future assets, dollar amounts of assets to be managed etc.).
The Investment Advisory Fee charged is at the sole discretion of Midway Partners. Investment
Advisory Fees are based on a blended tier schedule. The blended fee is calculated by applying the
percentage rates from each tier to the account values as shown in the above chart. This results in a
combined weighted average fee. For example, an account valued at $6,000,000 that negotiates a
0.75% fee on all account values above $5,000,000, would pay an annual effective fee equal to 1.50%
on the first $5,000,000 of assets managed, plus 0.75% on all additional assets managed, in this
example $1,000,000. Therefore, the total annual effective fee would be calculated as ($5,000,000 x
1.50%) + ($1,000,000 x 0.75%) = 1.375%.
Lower fees for comparable services may be available from other sources.
All Investment Advisory Fees are deducted by the qualified custodian of record on a quarterly basis
in arrears, or as otherwise indicated in the IAA. Client statements for prior deductions will be
provided on a quarterly basis.
Midway Partners will provide investment advisory services and portfolio management services but
will not provide custodial or other administrative services. At no time will Midway Partners accept
or maintain custody of a Clients’ funds or securities except for authorized fee deduction. The Client
may contact the custodian directly for disbursements, or account record changes, and may also do so
in writing to the custodian. Midway Partners may act at the Client’s convenience to facilitate such
written communications to the custodian, provided that such action is not construed to be custody of
Client assets.
Client is responsible for all custodial and securities execution fees charged by the custodian and
executing broker-dealer. Fees paid to Midway Partners are separate and distinct from the custodian
and execution fees.
Either party may request to terminate the advisory contract by giving to the other party thirty (30)
days written notice as outlined in the IAA. Upon termination, any fees paid in advance will be
prorated to the date of termination and any excess will be refunded to Client through the custodian.
Client’s IAA with the Midway Partners is non-transferable without Client’s written approval.
MIDWAY PARTNERS CAPITAL MANAGEMENT, LLC
While Midway Partners does not recommend or select third-party investment managers or mutual
funds, it may, from time to time, recommend or invest in low-cost ETFs or index funds to efficiently
gain a desired exposure to certain sectors or industries. All fees paid to Midway Partners for
investment advisory services are separate and distinct from the expenses charged by these third-party
ETFs or index fund managers. These fees and expenses are described to the Client in separate
disclosures. These fees will generally include third-party management fees, an investment company
management fee, and other various expenses. Any ETF or index fund recommended or selected by
Midway Partners will be a low-cost vehicle designed to provide a desired sector or industry exposure
within its investment programs, not an allocation to a third-party active manager.
Alternative Investment Fund
The Alternative Investment Fund provides two subscription classes. Subscription Class 1 is a
monthly management fee (the “Management Fee”) equal to 1/12 of 1.5% per calendar year of each
investor’s share of the Fund’s net asset value paid in arrears. Subscription Class 2 is a monthly
Management Fee equal to 1/12 of 1.0% per calendar year of each investor’s share of the Fund’s net
asset value. Both Management Fees are payable monthly in arrears and calculated as of the last
business day of the preceding calendar month, after considering any investor withdrawals and
redemptions. Lower fees for comparable services may be available from other sources.
Midway Partners, in its sole discretion, may waive or reduce the Management Fee with respect to
one or more investors for any period, or agree to apply a lesser Management Fee for that investor.
Certain investors may pay less than the Management Fee described above because of separately
negotiated side letters or similar agreements. Midway Partners may, in its sole discretion, use a
portion of its Management Fee to pay third parties for services.
For Subscription Class 2 investors only, the General Partner is entitled to receive a performance
allocation (the “Performance Allocation”), which will accrue and be paid annually at the close of
business on December 31 of each calendar year. The Performance Allocation will be equal to 10%
of that portion of the Fund’s net income (including realized and unrealized gains and net of the
Management Fee) attributable to each investor that exceeds a hurdle rate of 5.0%. The Performance
Allocation and hurdle rate are subject to a high-water mark. The high-water mark prevents the
General Partner from receiving a Performance Allocation on profits that simply restore previous
losses and is intended to ensure that each Performance Allocation is based on the long-term
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