Item 5. Fees and Compensation
The Adviser or the General Partner is paid an asset-based fee in an amount ranging from 0% to 1.75% per
annum of the net assets of the respective client account (calculated in accordance with the governing
documents of the relevant account).
The Master Fund pays the Adviser or the General Partner a quarterly asset-based charge and payment
(the “Asset-Based Charge and Payment”) in advance based on the net asset value of the respective Fund
as of the beginning of each calendar quarter. The Asset-Based Charge and Payment is prorated for any
period that is less than a full quarter.
The Adviser or the General Partner (or an affiliate of the Adviser) is entitled to be paid annual performance-
based compensation, which is compensation that is based on a share of net capital appreciation of the
assets of a client. This performance-based compensation ranges from 0% to 25% and is subject to a loss
carryforward and/or a hurdle amount.
A Fund may waive, reduce or enter into alternative fee arrangements with investors in a Fund who are
principals, employees or affiliates of the Adviser or General Partner, relatives of such persons and for
certain large or strategic investors.
If applicable, any fees or compensation received by the Adviser from the Accounts will be separately
negotiated and includes an asset-based fee (which may be a fixed amount agreed upon with the Account)
and performance-based compensation.
With respect to the Funds, the Asset-Based Charge and Payment is paid pursuant to instructions made by
the Master Fund’s administrator to deduct it from the Master Fund’s bank account. The performance-based
compensation paid to the General Partners is either structured as a re-allocation of profits or paid pursuant
to instructions made by the Feeder Funds’ administrator to deduct it from the Feeder Funds’ bank accounts.
If applicable, the Adviser sends an invoice for the asset-based fee and performance-based compensation
with respect to the Accounts, based on information provided by the Accounts’ third-party administrators.
In addition to paying the asset-based fee and performance-based compensation, certain client accounts
are also subject to other expenses such as legal, accounting (including third-party accounting services),
audit, third-party valuation specialists fees and expenses, other professional fees and expenses, including
expenses relating to consultants (including tax consultants), attorneys, brokers and other agents and
advisors who provide research, advice or due diligence services with regard to investments, and/or fees
and expenses to or for one or more portfolio companies, including fees for directors of portfolio companies
unaffiliated with the Investment Manager and support services to portfolio companies or prospective
portfolio companies, organizational expenses, all other research expenses, fees and expenses related to
activist and event-driven investment activities, including shareholder and management communications,
soliciting proxies, tender offer expenses, proxy advisory consultants, hosting shareholder forums, fees and
expenses of public relations consultants, participation in restructurings and activist-related litigation (either
as plaintiff or defendant), all investment-related costs and expenses (i.e., expenses that, in the Adviser’s
sole discretion, are related to the investment of the client assets, whether or not such investments are
consummated), such as commissions, custodial fees, costs and expenses of any FX hedging services or
sales or placement agents acting on behalf of the client to assist with the purchase or sale of any client
assets, bank service fees, insurance costs (including D&O and E&O insurance for the Adviser), fees and
expenses of a third-party administrator, fees and expenses of the Board of Directors of the Funds,
compliance expenses of the clients, including expenses associated with any regulatory filings attributable
to the assets of the clients (e.g., Form PF) and fees and expenses of AML/sanctions compliance officers,
and other expenses related to the purchase, sale, preservation or transmittal of client assets.
If applicable, the Accounts will be subject to different fees and expenses, which will be set forth in the
investment management agreements entered into between the Accounts and the Adviser.
The allocation of expenses by the Adviser between it and any client and among clients represents a conflict
of interest for the Adviser. The Adviser has adopted an expense allocation policy that is designed to
address this conflict. The Adviser allocates expenses to each client in accordance with the client’s
arrangements with the Adviser (including applicable client disclosures). The Adviser seeks to allocate
shared expenses for products and services benefitting the Adviser and the client and not covered in the
client’s arrangements in a fair and reasonable manner. The Adviser may allocate common client expenses
among multiple clients pro rata based on net assets under management as of the beginning of the month
in which the expenses are incurred. The Adviser may deviate from this standard allocation method if it
determines that an expense disproportionately benefits a particular client or group of clients.
Pre-paid fees charged to the Adviser’s clients will be refunded based on the number of days remaining in
the quarter if a withdrawal or redemption (as applicable) is made before the end of a quarter.
More detailed information about the fees and expenses paid by client accounts may be found in the
governing documents of each client account.
As noted in Item 8, in connection with the Adviser’s strategy with respect to a particular target company,
certain personnel of the Adviser may from time to time take a seat on the company’s board of directors. In
the event that the Adviser or its affiliates (or their respective principals, members or employees) receive
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