Exhibit 3 to PEA #12 (filed September 2, 1999)
AMENDMENT
AMENDMENT effective as of ____________, to that certain Portfolio Management
Agreement dated September 18, 1997, ("Agreement"), which agreement first became
effective accordingly to its terms on October 1, 1999, between Xxxxxxx Xxxxx
Asset Management, a separate operating division of Xxxxxxx, Sachs & Co., a New
York limited partnership ("Portfolio Manager") and The Xxxxxx Xxxxxxxxx Trust, a
Delaware business trust ("Trust").
WHEREAS, the Trust has retained the Portfolio Manager to provide to a continuous
program of investment management for a portion of the assets of The Growth
Equity Portfolio of the Trust ("Account") pursuant to the Agreement; the Trust
desires to compensate the Portfolio Manager for its services based, in part, on
the performance achieved by the Portfolio Manager for the Account;
NOW THEREFORE, in consideration of the promises and covenants set forth herein
and intending to be legally bound hereby, it is agreed between the parties to
amend the Agreement by deleting Schedule A in its entirety and replacing it with
the following new Schedule A:
SCHEDULE A: PERFORMANCE COMPENSATION FORMULA
Initial Period. Under the Performance Fee Amendment, GSAM's fee would be
adjusted to reflect the performance of the Account only after the Performance
Fee Amendment has been in effect for 12 months ("Initial Period") following the
date ("Effective Date") on which the Performance Fee Amendment becomes
effective.
For the first three quarters of the Initial Period, , GSAM shall receive a Base
Fee of .075% of the average net assets of the GSAM Account (or 7.5 basis
points). For the fourth quarter of the Initial Period, GSAM shall receive a fee
equal to .075% of the average net assets of the GSAM Account plus or minus a
Performance Component multiplied by the average net assets of the GSAM Account
for the Initial Period. The Performance Component shall be calculated by (a)
computing the difference between (i) the total return of the GSAM Account
without regard to expenses incurred in the operation of the GSAM Account ("Gross
Total Return") during the Initial Period, and (ii) the return of the Xxxxxxx
1000 Growth Index ("Index Return") during the Initial Period plus 30 basis
points; and (b) multiplying the resulting factor by 25%.
Subsequent Quarterly Periods. For each quarter following the fourth quarter of
the Initial Period, GSAM would receive a quarterly fee of 7.5 basis points plus
or minus 1/4 of the Performance Component (calculated in the same manner as set
forth with respect to the Initial Period and set forth above) multiplied by the
average net assets of the GSAM Account for the immediately preceding 12 month
period,on a "rolling basis." This means that, at each quarterly fee calculation,
the Gross Total Return of the GSAM Account, the Index Return and the average net
assets of the GSAM Account for the most recent quarter will be substituted for
the corresponding values of the earliest quarter included in the prior fee
calculation.
Maximum Performance Adjusted Fee. Notwithstanding the formula set forth above,
the maximum fee to which GSAM shall be entitled with respect to any 12 month
period shall be .50% of the average net assets of the GSAM Account (or 50 basis
points). The maximum fee to which GSAM shall be entitled with respect to any
quarter (other than the fourth quarter of the Initial Period) shall be .125% of
the average net assets of the GSAM Account (or 12.5 basis points). Due to the
performance hurdle noted above, this maximum fee level would be attained only to
the extent that the GSAM Account outperforms the Xxxxxxx 1000 Growth Index by a
factor of at least 110 basis points.
Minimum Contractual Fee. The minimum fee payable to GSAM with respect to any
annual period (including the Initial Period) shall be .10% of the average net
assets of the GSAM Account (or 10 basis points); the minimum fee payable with
respect to any single quarter shall be .025% of the average net assets of the
GSAM Accounts (or 2.5 basis points). Due to the performance hurdle noted above,
this minimum fee level would be reached only in the event that the GSAM Account
underperforms the Xxxxxxx 1000 Growth Index by a factor of at least 50 basis
points.
Recoupment Feature. If the aggregate of the payments to GSAM made with respect
to the first four quarters following the Effective Date exceed the Performance
Adjusted Fee to which GSAM would be entitled with respect to the Initial Period,
advisory fees payable to GSAM with respect to each succeeding quarter will be
reduced until the
difference between the aggregate quarterly fees received by GSAM with respect to
the Initial Period and such Performance Adjusted Fee is fully recouped by the
GSAM Account. In accord with the Minimum Contractual Fee provision noted above,
however, no quarterly payment to GSAM will be less than 2.5 basis points.
Expenses; Effectiveness. Portfolio Manager shall pay all expenses incurred by it
in the performance of its duties under the Agreement and shall not be required
to pay any other expenses of the Trust, including but not limited to brokerage
and transactions costs incurred by the Trust. In the event of termination of
this Agreement, all compensation due to the Portfolio Manager through the date
of termination will be calculated on a pro-rated basis through the date of
termination and paid within fifteen business days of the date of termination.
This Amendment shall become effective as of the first date written above.
XXXXXXX, XXXXX & CO., ON BEHALF OF THE XXXXXX XXXXXXXXX TRUST
XXXXXXX XXXXX ASSET MANAGEMENT ON BEHALF OF THE GROWTH EQUITY PORTFOLIO
BY: ____________________DATE:_______ BY: ____________________DATE:_______
