Needham Investment Management LLC

Item 5. Fees and Compensation

NIM receives an investment management fee based on the value of Client assets under
management. Clients are billed as described below.

For Clients that are registered investment companies, NIM charges an annual fee of 1.25% of the
average daily net asset value of each portfolio, paid monthly, in arrears as of the last day of each
calendar month. Such fee is subject to reduction in accordance with the terms of various expense
limitation agreements between NIM and its registered investment company Clients that may be in
effect from time to time.

For Clients that are pooled investment vehicles, such as hedge funds, NIM charges an annual fee
of 1.00% of assets under management. This fee is paid in advance on either a quarterly or monthly
basis as of the first day of each calendar quarter or month, as applicable.

In addition to the management fee, Clients that are pooled investment vehicles are also subject to
a performance-based fee, which is compensation based on a share of capital gains or capital
appreciation of the assets of a Client. These fees vary for each Client and range from 15% to 20%
of returns. Additionally, certain Clients may not become subject to performance-based fees unless
NIM achieves returns in excess of a predetermined threshold.

The performance-based fees NIM receives from certain Clients may create a conflict of interest,
which is described more fully under Item 6 of this Brochure. These fees are negotiable.

Clients will be billed for fees incurred; however, NIM does not deduct fees directly from Client
accounts.

Clients may also be required to pay for expenses incurred by NIM, including, but not limited to,
expenses incurred in connection with membership in investment company organizations,
transaction costs, legal, auditing or accounting expenses, fees to certain service providers, such as
the fund administrator, clerical expenses, and other expenses as noted in each Client’s advisory
agreement.

Generally, certain investors must make any contributions or withdrawals on the first day of the
month or quarter, in accordance with the respective partnership agreement. For Clients with a
quarterly billing cycle, NIM may occasionally accept contributions or withdrawals on the first day
of a month other than the first month of the billing cycle. In that case, (i) for contributions, the
Client would be billed during the following quarter for a pro-rated portion of that quarter’s fee in
addition to the fee for the following quarter and (ii) for withdrawals, the Client would be credited
during the following quarter for a pro-rated portion of that quarter’s fee.

In the event a Client chooses to terminate its advisory contract with NIM, NIM would bill the
Client through the date the contract was terminated, if paid in arrears, and NIM would credit the
client for a pro-rated portion of the fee through the date the contract was terminated, if paid in
advance.

Neither NIM nor any of its personnel accept compensation directly for the sale of securities or
other investment products. NIM’s affiliated broker-dealer, Needham & Company, LLC
(“Needham”), serves as the distributor of the registered investment company Clients to which NIM
provides advice. Certain of Needham’s registered representatives act in an advisory capacity for
NIM. Compensation for these representatives is typically composed of base salaries and
discretionary bonuses. Certain of NIM personnel are compensated based on client referrals for
NIM’s registered investment companies. Needham and its registered representatives do not
receive transaction/commission-based payments related to placement of interests in pooled
investment vehicles managed by NIM.

Item 6. Performance Fees and Side-by-Side Management

As described in Item 5 above, NIM may be entitled to be paid performance-based compensation
in the form of performance fees if the Adviser generates net capital appreciation for investors.
NIM provides investment management services to multiple portfolios for multiple Clients, some
of whom are subject to performance-based fees while others are charged other types of fees.
NIM’s investment personnel are also typically compensated on a basis that includes a
performance-based component. Additionally, certain Clients may be subject to higher fees or more
favorable performance-based compensation arrangements than other Clients. This creates a
potential conflict of interest in that there is some incentive for NIM and its management personnel
to favor the Clients that pay NIM a performance-based fee or higher fees.

When making investment decisions for a portfolio, NIM considers the investment objectives and
guidelines of the portfolio, irrespective of the fees NIM may receive. Because NIM manages
several portfolios, each with its own investment objectives and guidelines, there may be times
when NIM gives advice to one portfolio that differs from the advice given to another portfolio. To
the extent NIM may make the same investment decision for multiple portfolios, NIM has adopted
policies and procedures, including the review of investment decisions, that are designed to ensure
that trades are allocated among the various portfolios in an equitable manner and to prevent
performance-based conflicts from influencing the allocation of investment opportunities among
its Clients. For example, the performance of similarly managed accounts is regularly compared to
determine whether there are any unexplained significant discrepancies. Please refer to Item 16 of
this Brochure for further details about NIM’s allocation and aggregation procedures.

Item 7. Types of Clients

NIM provides investment management services on a discretionary basis to registered investment
companies and pooled investment vehicles.

Clients that are pooled investment vehicles require investment minimums for initial and additional
subscriptions, as described in their respective offering memoranda. The investors within each
pooled investment vehicle are generally institutional investors and other financially sophisticated
investors. NIM may accept lower subscription amounts under the circumstances described in the
offering memoranda.