PERIOD (EACH, A "CALCULATION DATE") CALCULATED AS FOLLOWS:
(A)
FOR EACH ANNUAL PERIOD, 20% OF THE INCREASE (IF ANY) IN THE
ACCOUNT NAV OVER THE HIGHEST ACCOUNT NAV AS OF ANY PREVIOUS CALCULATION DATE, AS
ADJUSTED FOR CONTRIBUTIONS TO OR WITHDRAWALS FROM THE ACCOUNT AS PROVIDED IN
SECTION 2(B) BELOW.
PERFORMANCE FEE ACCRUED, IF ANY, SHALL BE PAYABLE WITHIN 30
DAYS FOLLOWING THE END OF THE ANNUAL PERIOD.
FOR THE PURPOSE OF CALCULATING THE
ASSET BASED FEE UNDER SECTION 1 ABOVE, ANY PERFORMANCE FEE ACCRUED AS OF THE
CALCULATION DATE SHALL BE SUBTRACTED FROM THE ACCOUNT BALANCE AS OF THAT DATE.
B-1
(B)
NO PERFORMANCE FEE SHALL BE PAYABLE TO THE INVESTMENT ADVISER FOR
ANY ANNUAL PERIOD IN RELATION TO WHICH THE ACCOUNT NAV ON THE RELEVANT
CALCULATION DATE IS BELOW THE HIGHEST ACCOUNT NAV ON ANY PREVIOUS CALCULATION
DATE (THE ACCOUNT NAV ON SUCH PREVIOUS CALCULATION DATE (OR ON THE EFFECTIVE
DATE IN THE CASE OF THE FIRST CALCULATION DATE), THE "HIGH WATER MARK"), AND NO
COMPENSATION OTHER THAN THE ASSET BASED FEE SHALL BE PAYABLE TO THE INVESTMENT
ADVISER IN SUBSEQUENT ANNUAL PERIODS UNTIL THE ACCOUNT NAV ON THE RELEVANT
CALCULATION DATE SHALL HAVE EXCEEDED THE HIGH WATER MARK; PROVIDED HOWEVER THAT
IF THE COMPANY WITHDRAWS ANY PART OF THE ASSETS IN THE ACCOUNT IN ANY PERIOD
AFTER THE ACCOUNT NAV ON THE RELEVANT CALCULATION DATE IS BELOW A HIGH WATER
MARK, THEN THE FULL AMOUNT OF THE HIGH WATER MARK SHALL BE REDUCED BY AN AMOUNT
EQUAL TO THE PRODUCT OF (X) HIGH WATER MARK IN EFFECT IMMEDIATELY PRIOR TO SUCH
WITHDRAWAL MULTIPLIED BY (Y) THE QUOTIENT OF (I) THE ACCOUNT NAV IMMEDIATELY
AFTER SUCH WITHDRAWAL DIVIDED BY (II) THE ACCOUNT NAV IMMEDIATELY BEFORE SUCH
WITHDRAWAL.
IF A PERFORMANCE FEE IS PAID WITH RESPECT TO ANY CALCULATION DATE,
THE HIGH WATER MARK IS RESET TO THE ACCOUNT NAV IMMEDIATELY FOLLOWING SUCH
PAYMENT.
(C)
IF THE COMPANY WITHDRAWS ANY PART OF THE ASSETS IN THE ACCOUNT
OTHER THAN AS OF THE END OF AN ANNUAL PERIOD, THEN ANY PERFORMANCE FEE
ATTRIBUTABLE TO THE WITHDRAWN PORTION OF THE ACCOUNT SHALL BE CALCULATED AND
CRYSTALLIZED AS OF THE EFFECTIVE DATE OF THE WITHDRAWAL (A "CRYSTALLIZED
PERFORMANCE FEE"), AND SUCH CRYSTALLIZED PERFORMANCE FEE SHALL BE PAYABLE IN
ARREARS AT THE END OF THAT ANNUAL PERIOD.
(D)
"ANNUAL PERIOD" IS DEFINED AS (I) INITIALLY, THE PERIOD BEGINNING
AS OF THE EFFECTIVE DATE AND ENDING ON DECEMBER 31, 2013, AND (II) THEREAFTER
AND FOR AS LONG AS THE AGREEMENT REMAINS IN EFFECT, EACH TWELVE-MONTH PERIOD
ENDING ON DECEMBER 31; PROVIDED THAT THE LAST ANNUAL PERIOD SHALL COMMENCE ON
THE FIRST DAY OF THE CALENDAR YEAR IMMEDIATELY PRECEDING THE DATE OF TERMINATION
OF THIS AGREEMENT AND SHALL END ON THE DATE OF SUCH TERMINATION.
FOR PURPOSES
OF THIS SECTION 2, REFERENCES TO THE HIGHEST ACCOUNT NAV ON ANY PREVIOUS
CALCULATION DATE SHALL ALSO INCLUDE THE ACCOUNT NAV ON THE EFFECTIVE DATE.
FOR
THE AVOIDANCE OF DOUBT, THIS PERFORMANCE FEE CALCULATION METHOD IS INTENDED