Taconic Capital Advisors LP

Item 5 - Fees and Compensation
With respect to each Fund, Taconic receives management fee and performance compensation, as
described below. Taconic complies with Rule 205-3 of the Advisers Act, to the extent required by
applicable law. Information regarding the management fees and carried interest distributions
applicable to each Fund is set forth in the applicable offering and governing documents of such

Funds. Investors should review carefully the specific terms set forth in the relevant Fund’s
government documents.

Management Fees

With respect to the Hedge Funds, Taconic is generally paid a management fee that ranges from
0.50% to 1.5% per annum of the aggregate net asset value of each investor’s capital account or
series of shares, as applicable, and the management fee is generally adjusted pro rata for any
subscriptions, transfers, redemptions or withdrawals for each month. With respect to the Closed-
End Funds, Taconic is generally paid a management fee of 0.75% to 1.5% per annum of called
capital invested (at cost), net invested capital (i.e., called capital in respect of investments that have
not been disposed of, adjusted for distributions of principal relating to distributions of investments
and permanent write-downs or write offs), total assets under management or net asset value.
Management fees are generally paid monthly and semi-annually in arrears for the Hedge Funds
and Closed-End Funds, respectively.

All management fees for managed accounts are established pursuant to each account’s governing
documents.

Performance Fees

With respect to the Hedge Funds, Taconic is generally allocated or paid an annual performance-
based allocation or fee of 15 to 20% of the net gain earned by each investor subject to a high water
mark and, in certain cases, a hurdle rate. With respect to the Closed-End Funds, Taconic is
generally allocated or paid a performance-based carried interest allocation or fee of 15% to 20%
of the net profits of the applicable Fund subject to a preferred return, catch-up distributions, and/or
other performance hurdles as more fully described in the governing documents of each Fund.

The Funds generally invest on a long-term basis. Accordingly, investment advisory and other fees
are expected to be paid, except as otherwise described in the Funds’ governing document, over the
term of the relevant Fund and, except with respect to the Hedge Funds, investors generally are not
permitted to withdraw or redeem interest in the Funds.

The base currency of all the Funds is U.S. Dollars, and all Funds offer share classes denominated
in U.S. Dollars. In addition to the U.S. dollar-denominated share classes, the Opportunity offshore
funds have certain classes denominated in British Pounds Sterling and the Euro.

All management fees for managed accounts are established pursuant to each account’s
governing documents.

Other Fees and Fee Reductions

With respect to the Hedge Funds, if Taconic earns a performance allocation in a given year,
Taconic deducts that fee from a fee-paying investor’s account as of the last day of the year, or
earlier with respect to a portion of an investment that has been withdrawn. Taconic’s Closed-End
Funds typically charge a carried interest (rather than an annual performance allocation) that is only
paid to Taconic upon distribution of realized investment proceeds, typically subject to a giveback
at the end of the applicable Fund’s harvest period. Taconic may waive fees in its discretion, and
does so for affiliates, principals and employees. In addition, Taconic has entered into side letters
with certain investors in its Funds whereby it has reduced the management fee and/or allocation
rate so long as the investor (individually or together with certain related investors) maintains
managed assets invested in the applicable Funds at or above certain agreed-upon thresholds (and
is willing to grant similar terms to any other investor at that asset level). Certain investors in the
Closed-End Funds have negotiated, and may continue to negotiate, management fee and carried
interest discounts based on size or other factors. The investment management agreements between
the Funds and Taconic have not been negotiated at arms’ length.

For more information about Taconic’s fees with respect to a particular Fund, please see that Fund’s
Confidential Private Offering Memorandum, which describes the fee arrangements in greater
detail.

Taconic has entered and may continue to enter into side letters with investors (without the approval
of other investors) that provide such investors with additional or different rights than are generally
available to investors in the applicable Fund. Taconic generally only agrees to a side letter term
where no other investors will be harmed by such term and where no investor who holds
investments in the Taconic Funds (via one or more accounts) will be given preferential treatment
over any other investor whose investment is equal to or greater than the investor given such
treatment and reserves the right to reject any requested term.

Taconic also receives consulting fees in respect to certain funds for which Taconic provides non-
advisory services.

Additional Expenses Borne by the Funds

In addition to the fees described above, each Fund bears all of its own expenses (and each investor
in a Fund bears its share), including, but not limited to:

   •   Transaction cost-related expenses incurred with its investment and trading activities
       (including in respect of unconsummated investments), including brokerage, mark ups and
       mark downs, clearing expenses, margin interest expenses, expenses related to the formation
       and maintenance of investment subsidiaries (including without limitation salary, office
       space, utilities, telephone, computer equipment and service expenses to the extent required

       or advisable under the laws of the jurisdiction in which such subsidiary is established),
...

Item 7 - Types of Clients
Taconic provides investment advice on a discretionary basis to onshore and offshore Funds that
are offered to high net worth, financially sophisticated, individual and institutional investors that
may include banks or thrift institutions, investment companies, pension and profit sharing plans,
governmental plans, trusts, estates or other business entities. Taconic manages separate accounts.
Minimum investment amounts for managed accounts will be determined on a case-by-case basis.

The minimum capital contribution or subscription amount in a Fund is typically $1 million,
although Taconic has the discretion to accept smaller investments or to set higher investment
minimums. The Funds must offer their interests or shares only to persons who meet certain
qualifications. Each U.S. Investor (taxable or tax-exempt) in a Fund (onshore or offshore) must
be an “Accredited Investor” within the meaning of the Securities Act of 1933 and a “Qualified
Purchaser” within the meaning of the Investment Company Act of 1940, and may also be required
to be a “Qualified Eligible Person” within the meaning of the Commodity Exchange Act in the
case of certain Funds. Non-U.S. investors in any U.S.-organized (onshore) Fund must also be
“Qualified Purchasers” and “Accredited Investors.” Non-U.S. investors may be subject to
additional suitability requirements imposed by such investors’ home jurisdictions. The fact that an
Investor may meet the regulatory requirements to be eligible to invest in a Fund, however, does
not necessarily mean that such Fund is a suitable investment for such investor. Taconic has adopted
subscription procedures that are intended to ensure that Taconic has a reasonable belief that
investors who are accepted into a particular Fund are both eligible and suitable to invest in such
Fund. The Funds are privately offered in reliance upon exemptions from the registration
requirements of the Securities Act of 1933; accordingly, investment in the Funds is not open to the
general public.