Item 5 – Fees and Compensation
A brief summary of Sentinel Dome’s fees is provided below. Managed Account clients, Investors, and
prospective Investors should refer to the applicable Fund Operative Documents and Sub-advisory
Agreement for a detailed description of the fees.
A. Management Fees and Incentive-Allocation
Sentinel Dome, or the board of directors in the case of the Flagship Offshore Fund, may waive or reduce
the management fee or incentive allocation paid as to particular Investors at any time. Employees,
members, and other related persons of Sentinel Dome typically do not pay a management fee or incentive
allocation.
1. Funds
The Flagship Master Fund pays Sentinel Dome a management fee of 1.5% per annum, quarterly in advance,
based on the net asset value of the respective Fund (the “Management Fee”). Generally, each Series of the
Special Situations Fund pays a Management Fee of 1% per annum, quarterly in advance, based on the net
asset value of the Series, but not all Series pay a Management Fee. SDCO and SDCO II pay a management
fee of 1.25% per annum of the equity contribution of the Funds respective investments, payable semi-annual
in arrears.
Sentinel Dome or an affiliate also receives an incentive allocation of 20% of the net profits of the respective
Master Fund, on a high-watermark basis (the “Incentive Allocation”). Similarly, Sentinel Dome receives
an Incentive Allocation of 15% of the net profits of the respective Series. In the case of SDCO, SDCO II,
SDCO GP and SDCO II GP may receive performance-based profit distributions (commonly referred to as
“Carried Interest”) once all capital contributions have been returned to the Investors in SDCO (pursuant to
the terms in the Fund Operative Documents). In general, SDCO and SDCO II distributes up to 20% of its
net profits to SDCO GP and SDCO II GP, depending on performance. A hurdle rate and/or other factors
apply to the calculation of the Carried Interest (as detailed in the Fund Operative Documents).
Management Fees and Incentive Allocations may be reduced or waived at the discretion of Sentinel Dome
or an affiliate as to a particular Investor. Generally, Sentinel Dome deducts the Management Fee and
Incentive Allocation directly from the respective Series of the Special Situations Fund, respective Master
Fund,SDCO and SDCO II. Clients are not billed by Sentinel Dome for such fees. Please refer to the Item
5.C. below for information on the allocation of the Management Fee between the respective Feeder Funds,
when applicable.
2. Managed Account
The Investment Manager receives a monthly management fee payable in advance and an annual
performance fee (the “Performance Fee”), which will be payable solely from the assets of the existing
discretionary Managed Account, as outlined in the applicable Sub-advisory Agreement.
In the future, managed accounts will generally be subject to Management Fees and an Incentive Allocation
and/or Performance Fee, however fee arrangements and terms for each managed account will be
individually negotiated. Accordingly, each managed account may be subject to different terms and fees
than those of the Funds and the Managed Account.
Generally, the Investment Manager bills the Management Fee and Incentive Allocation and/or Performance
Fee to the Managed Account.
B. Fees Payable in Advance
As noted above, Management Fees are payable in advance.
C. Expenses
1. Funds
Expenses and fees will generally be paid through each Master Fund and allocated to the Feeder Funds as
detailed in the Fund Operative Documents. Each of the Feeder Funds will generally bear its ongoing
operating costs, as well as its share of the Master Fund’s operating costs, either directly or by reimbursing
Sentinel Dome. The Special Situations Fund, SDCO and SDCO II will be allocated expenses as incurred.
The Funds’ operating costs include, but are not limited to:
• brokerage commissions;
• interest and borrowing charges on securities sold short and margin and other borrowings;
• custodial and bank service fees;
• auditing, accounting, third-party-administration; bookkeeping, tax preparation and reporting, legal,
and other professional fees and costs;
• fees and costs in connection with any lawsuits, arbitrations, or other controversies;
• costs of the Funds’ registration and filings with and licensing by governmental and self-regulatory
organizations and costs associated with regulatory, tax, and other filing and reporting requirements
by or related to the Funds, including filings required of Sentinel Dome and/or its affiliates as a
result of their involvement in the management of or provision of services to the Funds (including
Form PF);
• transfer, income, stamp, and other taxes and duties;
• costs of reporting to Investors and of Fund meetings;
• costs directly related to research about investments and potential investments and costs incurred in
connection with the oversight or management of existing investments; and
• all other costs related to the Funds’ operation or to the purchase, sale or transmittal of the Funds’
assets.
The Funds will also bear all offering and organizational expenses.
The SDCO, SDCO II and certain Series of the Special Situations Fund expenses are capped. Expenses
above the applicable cap may be paid upon realization in the Special Situations Fund.
2. Managed Account
All fees and expenses are separately negotiated for the Managed Account, and any future managed
accounts, and therefore may vary from client to client. Generally, the Managed Account (and future
managed accounts) will also bear all fees and expenses incurred in relation to the maintenance and operation
of the Managed Account (and future managed accounts), and the purchase and sale of assets in the Managed
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