Water Island Capital LLC

Item 5 – Fees and Compensation

Water Island is the investment adviser to The Arbitrage Funds pursuant to an investment advisory
agreement. Under the terms of the agreement, the Adviser may be reimbursed for certain
expenses and receives advisory fees for managing The Arbitrage Funds, payable monthly, at an
annual rate on the average daily net assets in accordance with the following schedules:

Water Island Capital, LLC
Form ADV Part 2A Brochure                       4                                        March 2026

                            FUND                                 ADVISORY FEE
 Arbitrage Fund                                     •   1.25% on the first $250 million,
                                                    •   1.20% on the next $50 million,
                                                    •   1.15% on the next $50 million,
                                                    •   1.10% on the next $75 million,
                                                    •   1.05% on the next $75 million, and
                                                    •   1.00% on average daily net assets
                                                        in excess of $500 million
 Water Island Event-Driven Fund                         1.10% of average daily net assets
 Water Island Credit Opportunities Fund             •   0.95% on the first $250 million,
                                                    •   0.90% on the next $500 million, and
                                                    •   0.85% on average daily net assets
                                                        in excess of $750 million

Water Island also is the investment adviser to AltShares Trust pursuant to an investment advisory
agreement. Under the terms of this agreement, the Adviser may be reimbursed for certain
expenses and receives advisory fees for managing its ETFs, payable monthly, at an annual rate on
the average daily net assets in accordance with the following schedule:

                   FUND                                          ADVISORY FEE
 AltShares Merger Arbitrage ETF                         0.75% of average daily net assets
 AltShares Event-Driven ETF                             1.25% of average daily net assets

Water Island is the sub-adviser to an unaffiliated registered investment company pursuant to a
separate sub-advisory agreement. Pursuant to this sub-advisory agreement, Water Island may
be reimbursed for certain expenses, and receives advisory fees calculated at the rates negotiated
with the adviser to the sub-advised fund based on the average daily net assets of such investment
company.

Fees charged with respect to registered investment companies are subject to annual review and
approval by such registered investment companies’ boards of directors. These fees and expenses
are described in each registered investment company’s prospectus. Existing or prospective
shareholders in a registered investment company advised by Water Island should review the
prospectus to fully understand the total amount and types of fees and expenses to be paid by
such investor.

Water Island is also the sub-adviser and special limited partner to a privately offered pooled
investment vehicle. As special limited partner, Water Island is entitled to receive a performance
allocation as described fully in the fund’s offering document.

Water Island Capital, LLC
Form ADV Part 2A Brochure                      5                                        March 2026

Water Island also offers its services to Clients through separately managed accounts. Actual fees,
minimum fees, minimum account sizes, and how fees will be charged may be negotiated and may
vary depending on the Client, nature, and/or amount of services provided or as otherwise agreed
upon with each Client. Fees may be higher or lower than the fees reflected above.

Clients will incur brokerage and other transaction costs in connection with securities transactions
that Water Island engages for their accounts. Such costs may include brokerage commissions,
commission equivalents, mark-ups and mark-downs, odd-lot differentials, exchange fees, SEC
fees, transfer taxes, and other transaction costs. Please refer to Item 12 of this Brochure
regarding Water Island’s brokerage practices. In addition, other types of fees and expenses that
Clients may incur include custody fees, borrowing costs, including on securities sold short,
interest and dividend expenses on securities sold short, acquired fund fees and expenses,
administration fees, fees for professional services, such as accounting, audit, tax, and legal
services, taxes or fees mandated by federal, state, or other applicable laws, and other
miscellaneous costs. The brokerage and other transaction costs and other fees and expenses will
vary based on the type of account, instruments traded, trading frequency, and other factors that
may be unique to a strategy or account. These fees and expenses are the sole responsibility of
each Client. Water Island does not receive any portion of these other fees and expenses.

Subject to Client-imposed restrictions, if any, Water Island may invest or recommend investment
in open-end registered investment companies (such as ETFs). When Water Island invests Client
assets in open-end registered investment companies, unless otherwise agreed and where
permitted by applicable law, a Client will bear its proportionate share of fees and expenses of the
acquired fund as an investor in addition to Water Island’s advisory or sub-advisory fees. The
acquired fund’s prospectus contains a description of its fees and expenses.

From time to time, funds advised by Water Island may invest a portion of their assets in one or
more affiliated funds to gain exposure to its investments. Investors in such funds will not be
charged duplicative advisory fees. Fund assets invested in an affiliated fund are not subject to an
...

Item 7 – Types of Clients

Water Island is an independent, employee-owned registered investment adviser that specializes
in event-driven investing. Water Island manages accounts for both institutional and retail Clients.
Water Island’s investment advisory services are available to investors through registered
investment companies (including mutual funds and ETFs) and separately managed accounts.

Clients advised or sub-advised by Water Island include registered investment companies and an
unaffiliated private fund, but may include separately managed accounts of corporations,
foundations, endowments, and pension and profit-sharing plans, among others. Minimum
account sizes vary by Client and strategy.

The requirements for and risks relating to investing in the series of mutual funds of The Arbitrage
Funds are set forth in The Arbitrage Funds’ Prospectus and Statement of Additional Information,

Water Island Capital, LLC
Form ADV Part 2A Brochure                         9                                           March 2026

which can be accessed by visiting www.arbitragefunds.com/resources or by calling
(800) 295-4485.

The requirements for and risks relating to investing in the series of ETFs of AltShares Trust are set
forth in AltShares Trust’s Prospectus and Statement of Additional Information, which can be
accessed by visiting www.altsharesetfs.com/resources or by calling (855) 955-1607.

The requirements for and risks relating to investing in the sub-advised funds are set forth in their
respective offering documents.