ITEM 5. FEES AND COMPENSATION
DESCRIPTION OF COMPENSATION AND FEE SCHEDULE
In consideration of our advisory services, we and/or one of our affiliates generally receive
management fees and incentive allocations or fees with respect to the Fund. While our fees are
described in detail in the applicable governing and offering documents, a brief summary of our
advisory fees is set forth below.
Management Fees
With respect to the Fund, we generally receive a management fee at an annual rate of 1.0% of the
balance of each limited partner’s capital account. The management fee is calculated and paid each
calendar month in advance.
Incentive Allocations and Fees
Slotnik SLP, LP, a Delaware limited partnership and an affiliate of the Firm and the General
Partner (the “Special Limited Partner”), is entitled to a performance-based profit allocation (the
“Performance Allocation”) at the end of each calendar year (and/or at certain other times
discussed below) equal, generally, to 16% of the amount by which, generally, the Fund’s net profits
allocated to a limited partner’s capital account for the current calendar year exceeds the balance in
such limited partner’s Carryforward Account (as defined in the Fund’s offering and governing
documents). Net profit includes unrealized appreciation or depreciation of both marketable and
non-marketable investments.
Each investor in the Fund generally is required to represent that it is a “qualified purchaser,” as
such term is defined in Section 2(a)(51)(A) of the Company Act.
Our advisory fees generally are not negotiable. However, we may enter into side letters or similar
arrangements with certain investors that grant different terms (including the reduction or
elimination of certain fees) to such investors than the terms generally applicable to other investors.
PAYMENT OF FEES
Management fees generally are payable by investors monthly, in advance, as of the first day of
each calendar month. Management fees are deducted directly from the capital account or
participating shares, as applicable, of an investor, and are typically deducted directly from the
Fund’s custodian(s) account(s), in accordance with the Fund’s authorization provided in the
custodial agreement.
Performance allocations or fees are calculated and allocated or paid as of the end of each fiscal
year (and at such other times as set forth in the governing documents of the Funds). With respect
to the Fund, performance allocations are allocated directly from each capital account of a limited
partner to the Special Limited Partner.
Slotnik Capital, LLC 7
OTHER FEES AND EXPENSES
In addition to management fees and performance allocations, the Fund generally bears its own
expenses, including, but not limited to, investment expenses (i.e., expenses related to the
investment of the Fund’s assets, including, without limitation, data, clearance, exchange,
structuring, administrative, legal, tax, audit and technology fees, brokerage commissions, custody
fees, interest and other borrowing charges, professional and legal expenses relating to particular
investments and other expenses reasonably related to the investment decision and monitoring
process), expenses from derivatives transactions, taxes, insurance premiums, legal expenses,
regulatory expenses, the costs of brokerage services and research (including, without limitation,
news, quotation, statistics and pricing services; software, databases and other technical and
telecommunications services and equipment used in the investment management process; and
other consulting fees in connection with investigating and monitoring potential and existing
investments), accounting, audit and tax preparation expenses, the administrator’s fees, other
expenses associated with the operation of the Fund, organizational expenses and expenses incurred
in connection with the offering and sale of interests or shares and all extraordinary expenses.
The Funds generally are responsible for and pay all brokerage and custodial fees. A portion of the
commissions generated on the Fund’s brokerage transactions may generate “soft dollar” credits
that the General Partner and the Firm are authorized to use to pay brokers and other providers for
research and other research related services and products used by the General Partner and the Firm.
See “Item 12: Brokerage Practices” below for more information on how we select or recommend
brokerage firms for securities transactions and information related to that process.
Fund expenses generally are borne pro rata by the limited partners in the Fund in accordance with
their respective capital account balances.
Each of the General Partner and the Firm, as applicable, shall be entitled to reimbursement from
the Fund for any of the fund expenses paid by it on behalf of the Fund. The Fund does not have its
own separate employees or office, and it does not reimburse the General Partner or the Firm for
salaries, office rent, and other general overhead costs of the General Partner or the Firm.
WITHDRAWALS AND REDEMPTIONS
Subject to the terms and conditions set forth in the applicable governing documents, an investor
generally may make a complete or partial withdrawal or redemption, as applicable, as of the last
day of each calendar month; provided that partial withdrawals or redemptions must be at least
$1,000,000, unless such requirement is waived. Notice of any withdrawal or redemption generally
must be given in writing at least thirty (30) calendar days prior to the proposed withdrawal or
redemption date. Partial withdrawal or redemption proceeds generally will be distributed to a
withdrawing or redeeming investor within fifteen (15) business days after the applicable
withdrawal date. In the case of an investor’s complete withdrawal of the balance of its capital
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