Item 5 - Fees and Compensation
The extent to and specific manner in which we charge management fees, performance-
based compensation and expenses are set forth in each client’s written agreement with us
(and, with respect to each Fund, in the Memorandum).
Generally, we are paid management fees quarterly in advance. We typically receive
performance-based fees or allocations on an annual basis in arrears and upon redemptions
by investors in the Funds. Management fees are generally pro-rated for partial periods.
We normally have authority to deduct our management from client accounts.
Generally, the Feeder Funds are currently obligated to pay, or reimburse Trinnacle or its
affiliates for advancing, the Feeder Funds’ operating expenses, including, but not limited
to, expenses related to investment transactions and positions for the Funds’ account,
including brokerage commissions and custody charges, clearing and settlement charges,
interest and commitment fees on loans and debit balances, and costs of borrowing
securities to be sold short (see Item 12 “Brokerage Practices” below); third-party
operations, accounting and portfolio and trading-related software and system costs;
research and market data fees, expenses and materials (including subscriptions to online
news and quotation services and print publications, computer hardware, data feed for
portfolio securities, data and software used for research (and any exchange fees related
thereto), Bloomberg services and terminal, and travel expenses (including transportation,
lodging and meals) relating to investment research, due diligence and execution); fees
and expenses incurred in connection with the Funds’ risk management systems and
processes (including software); costs of any outside appraisers, accountants, auditors,
attorneys, independent pricing services or other experts or consultants engaged by
Trinnacle, the General Partner and/or the Master Fund to serve the needs of the Funds;
fees of the Offshore Fund’s independent directors; fees and expenses of the Funds’
administrator (such as portfolio and investor accounting, middle office, tax and financial
reporting and investor servicing costs); costs and expenses in connection with
communications to investors, including preparation and distribution to investors of
marketing and reporting materials; bank charges; costs of insuring against risks to the
Funds’ assets; all legal fees and costs, including legal expenses arising in connection with
the Funds’ investing activities; legal expenses relating to the formation and organization
of the Funds and legal expenses and costs (including settlement costs) arising in
connection with any litigation or regulatory investigation instituted against the Funds,
Trinnacle and/or the General Partner regarding the affairs of the Funds; the Funds’, the
General Partner’s and Trinnacle’s costs and expenses relating to regulatory and statutory
filings and reporting (such as any filings or reporting with respect to the Foreign Account
Tax Compliance Act (“FATCA”) provisions of the United States Hiring Incentives to
Restore Employment Act of 2010, Cayman Islands regulations to give effect to the
automatic exchange of financial account information standard (i.e., the Common
Reporting Standard) published by the Organisation for Economic Co-operation and
Development together with certain regulations related to FATCA as more fully set forth
in the Memorandum, Form D, Form PF and blue sky); fees and expenses incurred in
connection with the compliance by the Funds (or by Trinnacle and/or the General Partner
in relation to advising the Funds) with applicable laws, rules, regulations and procedures
(including the cost of any outside compliance consultants, but excluding the preparation
Trinnacle Capital Management LLC Form ADV: Part 2A Page 5
of Trinnacle’s Form ADV); any taxes applicable to the Feeder Funds on account of their
operations and/or investments (including the cost of professional advice relating thereto),
including any withholding or transfer taxes; administrative costs, including portfolio and
investor accounting, tax and investor servicing costs; valuation costs and the costs of the
audit of the Funds’ annual financial statements; expenses related to the offering of the
shares and interests in the Funds; and other similar fees and expenses. In addition, the
Feeder Funds will bear their pro rata shares of the Master Fund’s operating expenses.
Trinnacle and/or the General Partner may, in their discretion, waive their right to be
reimbursed for any of the foregoing expenses for any period of time.
The Feeder Funds will also be responsible for their (and their pro rata share of the Master
Fund’s) organizational fees and expenses (including the costs of preparing the
Memorandum, and the articles of association and limited partnership agreement of the
Master Fund).
The Feeder Funds and/or the Master Fund may purchase and maintain (or reimburse
Trinnacle and/or the General Partner for purchasing or maintaining) directors’ and
officers’ and errors and omissions insurance on behalf of the Feeder Funds, the Master
Fund, the General Partner, Trinnacle, their principals, officers, employees, partners,
directors, members, affiliates or agents of any of the foregoing.
Trinnacle and/or the General Partner may, in their discretion, waive their right to be
reimbursed for any of the foregoing expenses for any period of time.
Except as provided above, Trinnacle and the General Partner will bear their own
operating, rent and similar overhead expenses, in addition to the salaries and benefits of
their employees.
The General Partner or Trinnacle, in their discretion, may allocate Fund expenses
between or among the Funds’ general accounts and any special memorandum accounts or
between or among different classes and/or series of interests or shares based on the
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