THE BENCHMARK FUNDS
ADDENDUM NO. 3 TO THE INVESTMENT ADVISORY AGREEMENT
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This Addendum, dated as of the 31st day of March, 1998, is entered
into between THE BENCHMARK FUNDS (the "Trust"), a Delaware business trust, and
THE NORTHERN TRUST COMPANY (the "Investment Adviser"), an Illinois state bank.
WHEREAS, the Trust and the Investment Adviser have entered into an
Investment Advisory Agreement as amended by Addenda No. 1 and No. 2, each of
even date herewith (the "Advisory Agreement"), pursuant to which the Trust
appointed the Investment Adviser to act as investment adviser to the Trust for
the Diversified Assets Portfolio, Government Portfolio, Government Select
Portfolio, Tax-Exempt Portfolio, U.S. Treasury Index Portfolio, U.S. Government
Securities Portfolio, Short-Intermediate Bond Portfolio, Bond Portfolio, Equity
Index Portfolio, Small Company Index Portfolio, Diversified Growth Portfolio,
Focused Growth Portfolio and Balanced Portfolio;
WHEREAS, Section 1(b) of the Advisory Agreement provides that in the
event the Trust establishes one or more additional investment portfolios with
respect to which it desires to retain the Investment Adviser to act as
investment adviser under the Advisory Agreement, the Trust shall so notify the
Investment Adviser in writing and if the Investment Adviser is willing to render
such services it shall notify the Trust in writing, and the compensation to be
paid to the Investment Adviser shall be that which is agreed to in writing by
the Trust and the Investment Adviser; and
WHEREAS, pursuant to Section 1(b) of the Advisory Agreement, the Trust
has notified the Investment Adviser that it had established the International
Growth Portfolio and International Bond Portfolio (the "Portfolios"), and that
it desires to retain the Investment Adviser to act as the investment adviser
therefor, and the Investment Adviser has notified the Trust that it is willing
to serve as investment adviser for the Portfolios;
NOW THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Appointment. The Trust hereby appoints the Investment Adviser to
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act as investment adviser to the Trust for the Portfolios for the
period and on the terms set forth in the Advisory Agreement. The
Investment Adviser hereby accepts such appointment and agrees to
render the services set forth in the Advisory Agreement for the
compensation herein provided.
2. Duties. The Investment Adviser shall perform the following
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duties with respect to common and preferred stocks of the
Portfolios in lieu of clauses (ii) and (iii) of paragraph 3(a) of
the Advisory Agreement:
(a) The Investment Adviser shall place orders pursuant
to its determination either directly with the issuer or with any
broker and/or dealer or other persons who deal in the securities
in which the Portfolio in question is trading. In executing
portfolio transactions and selecting brokers or dealers, the
Investment Adviser shall use its best judgment to obtain the best
overall terms available. In assessing the best overall terms
available for any transaction, the Adviser shall consider all
factors it deems relevant, including the breadth of the market in
the security, the price of the security, the financial condition
and execution capability of the broker or dealer, and the
reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. In evaluating the best
overall terms available and in selecting the broker or dealer to
execute a particular transaction, the Adviser may also consider
the brokerage and research services (as those terms are defined
in Section 28(e) of the Securities Exchange Act of 1934) provided
to any Portfolio and/or other accounts over which the Adviser
and/or an affiliate of the Adviser exercises investment
discretion;
(b) The Investment Adviser may, on occasions when it
deems the purchase or sale of a security to be in the best
interests of a Portfolio as well as other fiduciary or agency
accounts managed by the Investment Adviser, aggregate, to the
extent permitted by applicable laws and regulations, the
securities to be sold or purchased in order to obtain best
overall terms available execution. In such event, allocation of
the securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by the Investment
Adviser in the manner it considers to be most equitable and
consistent with its fiduciary obligations to such Portfolio and
to such other accounts.
3. Compensation. For the services provided and the
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expenses assumed pursuant to the Advisory Agreement, the Trust
will pay the Investment Adviser, and the Investment Adviser will
accept as full compensation therefor from the Trust, a fee at an
annual rate of .90 of 1% of average net assets for International
Bond Portfolio and 1% of average net assets for International
Growth Portfolio. The fee will be computed based on net assets on
each day and will be paid to the Investment Adviser monthly. Such
fee as is attributable to each Portfolio shall be a separate
charge to such Portfolio and shall be the several (and not joint
or joint and several) obligation of each such Portfolio.
4. Capitalized Terms. From and after the date hereof, the term
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"Portfolios" as used in the Advisory Agreement shall be deemed to
include the International Growth Portfolio and International Bond
Portfolio. Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Advisory
Agreement.
5. Miscellaneous. Except to the extent supplemented hereby, the
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Advisory Agreement shall remain unchanged and in full force and
effect, and is hereby ratified and confirmed in all respects as
supplemented hereby.
IN WITNESS WHEREOF, the undersigned have executed this Addendum as of
the date and year first above written.
ATTEST: THE BENCHMARK FUNDS
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By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
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Title: Vice President
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ATTEST: ---------------- THE NORTHERN TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: Sr. Vice President
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