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The following is an excerpt from a DEF 14A SEC Filing, filed by HATTERAS MASTER FUND, L.P. on 5/13/2005.
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HATTERAS MASTER FUND, L.P. - DEF 14A - 20050513 - PROPOSAL_1

PROPOSAL 1

APPROVAL OF A BOARD OF DIRECTORS

The Fund is governed by the Board. The Board is currently comprised of five Directors, each of whom is proposed to continue his service. H. Alexander Holmes, Steven E. Moss, George Y. Ragsdale, II and Gregory S. Sellers are each "Independent Directors," because they are not "interested persons" of the Fund as that term is defined in the 1940 Act. David B. Perkins is an "Interested Director," since he is an "interested person" of the Fund by virtue of his affiliation with Hatteras Investment Partners LLC (the "Adviser"). Mr. Perkins was appointed as the initial director of the Fund by Hatteras Investment Management, LLC, the general partner of the Fund, and his appointment was ratified by the Fund's organizational partner (the "Organizational Limited Partner") on December 16, 2004. On the same date, the Organizational Limited Partner approved resolutions electing Messrs. Holmes, Moss and Sellers as Directors. Mr. Ragsdale is recommended for election by Partners for the first time, although Mr. Ragsdale is currently a Director, having been appointed by the Board on February 22, 2005.

A Director serves on the Board for a term of three years or until he is removed, resigns or is subject to various disabling events such as death or incapacity. A Director may resign upon 90 days' prior written notice to the Board and may be removed either by vote of two-thirds of the Board not subject to the removal vote or of Partners holding not less than two-thirds of the total number of votes eligible to be cast by all of the Partners.

INFORMATION REGARDING DIRECTOR NOMINEES

The name and age of each Director Nominee, his principal occupation during the past five years and certain of his other affiliations are provided below. The Directors also serve as Directors of Hatteras Multi-Strategy Fund I, L.P. and Hatteras Multi-Strategy TEI Fund, L.P., which are "Feeder Funds" of the Fund (collectively, the "Fund Complex"). Mr. Perkins also serves as a Director of Hatteras Diversified Strategies Offshore Fund, Ltd, which is another "Feeder Fund" of the Fund. The Director Nominees have agreed to continue to serve, if elected at the Special Meeting. It is the intention of the persons designated as proxies in the proxy card, unless otherwise directed therein, to vote at the Special Meeting for the election of each of the Director Nominees. If a Director Nominee is unable or unavailable to serve, the persons named as proxies will vote for such other nominee(s) as the Board may recommend.

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                                                                                                            Number of
                             Position(s)                                                                  Portfolios in
                                Held       Term of Office;                                                Fund Complex
                              with the     Length of Time   Principal Occupation(s) During Past 5 Years   Overseen by
     Name, Address & Age        Fund           Served       and Other Directorships Held by Director        Director
-------------------------------------------------------------------------------------------------------------------------
INTERESTED DIRECTORS
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David B. Perkins, 42            Chief       3 year term;   Mr. Perkins has been Chairman and CEO since        3
8816 Six Forks Road           Executive    Since Inception inception of the Fund Complex.  Mr. Perkins
Suite 107                    Officer and                   became the President and Managing Principal
Raleigh, NC 27615            Chairman of                   of the Adviser in September 2003 and became
                            the Board of                   the co-founder and Managing Partner of
                              Directors                    CapFinancial Partners, LLC in April 2003.
                                                           Prior to that, he was Managing Partner at
                                                           Wachovia Securities Financial Network,
                                                           Inc. from June 2002 to September 2003 and
                                                           Managing Principal of CapTrust Financial
                                                           Advisors, LLC from October 1997 to June
                                                           2002.
-------------------------------------------------------------------------------------------------------------------------
INDEPENDENT DIRECTORS
-------------------------------------------------------------------------------------------------------------------------
H. Alexander Holmes, 62       Director:     3 year term;   Mr. Holmes founded Holmes Advisory Services,       3
8816 Six Forks Road             Audit      Since December  LLC, a financial consultation firm, in 1993.
Suite 107                     Committee         2004
Raleigh, NC 27615              Member
-------------------------------------------------------------------------------------------------------------------------
Steven E. Moss, CPA, 51       Director:     3 year term;   Mr. Moss has been a member manager of HMKCT        3
8816 Six Forks Road          Chairman of   Since December  Properties, LLC, an accounting firm, since
Suite 107                     the Audit         2004       January 1996.
Raleigh, NC 27615             Committee
-------------------------------------------------------------------------------------------------------------------------
George Y. Ragsdale, II, 39    Director:     3 year term;   Mr. Ragsdale has been an Investment Research       3
8816 Six Forks Road             Audit      Since February  Director at Kisco Management Co., a family
Suite 107                     Committee         2005       office, since November 1999.
Raleigh, NC 27615              Member
-------------------------------------------------------------------------------------------------------------------------
Gregory S. Sellers, 45        Director:     3 year term;   Mr. Sellers became the Chief Financial             3
8816 Six Forks Road             Audit      Since December  Officer and a director of Kings Plush, Inc.,
Suite 107                     Committee         2004       a fabric manufacturer, in April 2003.  Prior
Raleigh, NC 27615              Member                      to that, he was the Vice President of
                                                           Finance at Parksdale Mills, Inc., a cotton
                                                           and cotton blend yarns producer, from
                                                           January 1991 to April 2003.
-------------------------------------------------------------------------------------------------------------------------

BOARD COMMITTEES

AUDIT COMMITTEE

The Board has established an Audit Committee. The members of the Audit Committee are Messrs. Holmes, Moss, Ragsdale and Sellers, each of whom is an Independent Director. The Audit Committee recommends the selection of the independent registered public accounting firm to the Board. It also (i) reviews the scope and results of audits and the audit fees charged, (ii) reviews reports from the Fund's independent registered public accounting firm regarding the adequacy of the Fund's internal accounting procedures and controls, (iii) oversees the implementation of the Fund's valuation procedures, (iv) makes fair value determinations and establishes methodologies on behalf of the Board as may be specified in the valuation procedures and (v) establishes a separate line of communication between the Fund's independent registered public accounting firm and its Independent Directors. The Audit Committee may have additional functions and responsibilities as deemed appropriate by the Board and the Audit Committee. The Audit Committee operates under a charter (the "Charter") that was adopted by the Board on December 27, 2004. The Charter is attached as APPENDIX A. The Audit Committee is required to meet at least once annually. During the fiscal year ended March 31, 2005, the Audit Committee held one meeting.

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The Board, including a majority of the Independent Directors, selected Deloitte & Touche LLP ("D&T") as the Fund's independent registered public accounting firm. As part of the organizational activities for the Fund, D&T audited the Fund's statement of assets and liabilities as of December 23, 2004 (the "Seed Financials Audit"). D&T advised the Fund that, to the best of its knowledge and belief, as of its Seed Financials Audit report dated January 11, 2005, no D&T professional had any direct or material indirect ownership interest in the Fund inconsistent with independent professional standards pertaining to accountants. It is expected that representatives of D&T will not be present at the Special Meeting, but will be available by telephone to respond to appropriate questions that may arise and to make a statement if the representatives choose to do so.

The Fund recently commenced investment operations and has not yet produced a Semi-Annual or Annual Report. The audited financial statements of the Fund for the fiscal year ended March 31, 2005 will be completed and mailed to Partners in the Fund's Annual Report on or about May 30, 2005. In connection with the audit of the March 31, 2005 financial statements, the Audit Committee met on December 27, 2004 to review and discuss the scope of the audit with D&T.

The members of the Audit Committee are Messrs. Holmes, Moss, Ragsdale and Sellers, each of whom is an Independent Director. The Fund's interests are not listed or traded on any registered national securities exchange and are not listed, traded or quoted on any stock market subject to the rules of any national securities association. Members of the Audit Committee rely without independent verification on the information provided to them and on the representations made by management and the Fund's independent registered public accounting firm. Accordingly, the Audit Committee's oversight does not provide an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the Audit Committee's considerations and discussions referred to above do not assure that any audit of the Fund's financial statements has been carried out in accordance with generally accepted auditing standards, that the financial statements are presented in accordance with generally accepted accounting principles or that the accountants of the Fund's independent registered public accounting firm are in fact "independent."

NOMINATING COMMITTEE

The Board has not established a nominating committee or a nominating committee charter. The Board as a whole performs the functions typically delegated to a nominating committee. While the Board has not elected to have a nominating committee at this time, the Board intends to continually evaluate the need for a nominating committee.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES

The following paragraphs include information about the aggregate fees paid to D&T for the last fiscal year. Because the Fund's most recent fiscal year ended on March 31, 2005, shortly before this Proxy Statement was printed, the figures for amounts billed for the past fiscal year are good faith estimates and the actual figures may vary.

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AUDIT FEES

Audit Fees are fees related to the audit of and review of the Fund's financial statements included in annual reports and registration statements and other services that are normally provided by an independent registered public accounting firm in connection with statutory and regulatory filings or engagements. Aggregate Audit Fees billed to the Fund by D&T for the fiscal year ended March 31, 2005 were $35,000 (estimate).

AUDIT-RELATED FEES

Audit-Related Fees are fees for assurance and related services provided by an independent registered public accounting firm that are reasonably related to the performance of the audit of the Fund's financial statements and are not reported as Audit Fees. For the Fund's fiscal year ended March 31, 2005, Audit-Related Fees included certain agreed-upon procedures including technical research on accounting and disclosure matters. Aggregate Audit-Related Fees billed to the Fund by D&T for the fiscal year ended March 31, 2005 were $0 (estimate).

TAX FEES

Tax Fees are fees associated with tax compliance, tax advice and tax planning. Tax Fees for the Fund's fiscal year ended March 31, 2005 were primarily for research and advice on tax matters. Aggregate Tax Fees billed to the Fund by D&T for the fiscal year ended March 31, 2005 were $0 (estimate). Please note that the Fund's tax year-end is December 31.

ALL OTHER FEES

All Other Fees are fees for products and services provided by an independent registered public accounting firm, other than the services reported above under "Audit Fees," "Audit-Related Fees" and "Tax Fees." Aggregate All Other Fees billed to the Fund by D&T for the fiscal year ended March 31, 2005 were $0 (estimate).

PRE-APPROVAL POLICIES AND PROCEDURES; ADVISER AFFILIATES

Before an independent registered public accounting firm is engaged to render (i) audit and non-audit services (including audit-related, tax and all other) to the Fund, and (ii) non-audit services to the Adviser or any control affiliate of the Adviser that relate directly to the Fund's operations and financial reporting, the engagement is required to be approved by the Audit Committee. A "control affiliate" of the Adviser is an entity controlling, controlled by, or under common control with the Adviser that provides ongoing services to the Fund. The Adviser and control affiliates are collectively referred to as "Adviser Entities."

The Audit Committee uses a combination of specific (on a case-by-case basis as potential services are contemplated) and general (pre-determined list of permitted services) pre-approvals. Unless a type of service has received general pre-approval, it requires specific pre-approval by the Audit Committee if it is to be provided by an independent registered public accounting firm. This pre-approval policy does not delegate the Audit Committee's responsibilities to pre-approve services performed by the Fund's independent registered public accounting firm to Fund management.

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During the fiscal year ended March 31, 2005, there were no Audit-Related Fees, Tax Fees or All Other Fees billed to Adviser Entities that were required to be approved pursuant to these pre-approval requirements. None of the Audit-Related Fees, Tax Fees and All Other Fees required to be approved during the fiscal year ended March 31, 2005 were approved under the "de minimis" exception provided by applicable regulation.

AGGREGATE NON-AUDIT FEES

The aggregate non-audit fees billed by D&T for services rendered to the Fund and to the Adviser Entities for the fiscal year ended March 31, 2005 are set forth in the table below:

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Fiscal Year Ending    Non-Audit Fees Billed to  Non-Audit Fees Billed by  Aggregate Non-Audit Fees
                      the Fund                  D&T to Adviser Entities   Billed by D&T to the Fund
                                                that provide on-going     and Adviser Entities
                                                services to the Fund
------------------------------------------------------------------------------------------------------
March 31, 2005        $0                        $0                        $0
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BROKERAGE PARTNERS