Common use of Base Fee Adjustment Clause in Contracts

Base Fee Adjustment. Beginning in the 13th month of operations, the Base Fee of 2.50% will be adjusted upward or downward on a monthly basis based upon the performance of the Subadviser Assets relative to the performance of the S&P 500 Index (the "Index"). The maximum or minimum adjustment is 1.50% annually. Therefore, the maximum annual fee payable to the Subadviser shall be 4.00% of Subadviser Assets, and the minimum annual fee shall be 1.00% of Subadviser Assets. The pro rata adjustment upward or downward will be determined based upon the performance of the Subadviser Assets in excess of, or below, that of the Index. The amount of any upward adjustment in the Base Fee shall be equal to 1.50% multiplied by the ratio of the number of percentage points by which the performance of the Subadviser Assets exceeds the performance of the Index as compared to 30 percentage points. For example, if the performance of the Subadviser Assets was 6.6% above that of the S&P 500 Index, the ratio would be 6.6 to 30, or 22%, times 1.50%, for an upward adjustment of 0.33%. The amount of any downward adjustment in the Base Fee will be equal to 1.50% multiplied by the ratio of the number of percentage points by which the performance of the Subadviser Assets is less than the performance of the Index as compared to 30 percentage points. For example, if the performance of the Subadviser Assets was 10.0% below that of the S&P 500 Index, the ratio would be 10 to 30, or 33.33%, times 1.50%, for a downward adjustment of 0.50%. In determining the Base Fee adjustment, if any, applicable during any month, the Adviser will compare the investment performance of the Subadviser Assets for the twelve-month period ending on the last day of the prior month (the "Performance Period") to the investment record of the Index during the Performance Period. The investment performance of the Subadviser Assets will be determined for each month in the Performance Period by subtracting (i) the value of the Subadviser Assets as of the first business day of the calendar month (including any amounts allocated to the Subadviser Assets as of that date) from (ii) the value of the Subadviser Assets as of the last business day of the calendar month, expressed as a percentage of (iii) the value of the Subadviser Assets as of the first business day of the calendar month (including any amounts allocated to the Subadviser Assets as of that date). The investment performance for the Performance Period shall be the annualized product of the investment performance for each month in the Performance Period. The investment performance of the Index will be determined by adding together (i) the change in the level of the Index during the Performance Period, and (ii) the value, computed consistently with the Index, of cash distributions made by companies whose securities comprise the Index accumulated to the end of the Performance Period, and will be expressed as a percentage of the Index at the beginning of the Performance Period. After it determines any Base Fee adjustment, the Adviser will determine the dollar amount of additional fees or fee reductions to be accrued each month by multiplying the Base Fee adjustment by the average Subadviser Assets during the Performance Period and dividing that number by the number of months in the Performance Period. The average Subadviser Assets will be the average of (i) the value of the Subadviser Assets as of the first business day of each calendar month (including any amounts allocated to the Subadviser Assets as of that date), and (ii) the value of the Subadviser Assets as of the last business day of each calendar month (not including any rebalancing), in the Performance Period. The Base Fee, as adjusted, is accrued and paid monthly and shall be prorated in any month for which this Agreement is not in effect for the entire month.