<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. .... [1]
Post-Effective Amendment No. .... [ ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF
1940 [X]
Amendment No. .... [ ]
(Check appropriate box or boxes.)
THE VANTAGEPOINT FUNDS
(Exact Name of Registrant as Specified in Charter)
777 North Capitol Street, NE, Ste. 600
Washington, DC 20002-4240
(Address of Principal Executive Offices)(Zip Code)
Registrant's Telephone Number, including Area Code -(202)962-4621
(Name and Address of Agent for Service)
Paul F. Gallagner, Secretary
777 North Capitol Street, NE, Ste. 600
Washington, DC 20002
Approximate Date of Proposed Public Offering -- as soon as possible after this
registration statement becomes effective.
<PAGE> 2
PRELIMINARY PROSPECTUS
----------------------------------------------------
, 1998
A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
U.S. SECURITIES AND EXCHANGE COMMISSION, BUT HAS NOT YET BECOME EFFECTIVE. THESE
SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME
THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY, NOR SHALL
THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
THE VANTAGEPOINT FUNDS
, 1999
The Vantagepoint Funds is a no-load diversified open-end management investment
company. The Vantagepoint Funds operates as a "series" investment company
offering thirteen distinct investment portfolios (the "Funds"), each Fund having
different investment objectives. The Index Funds offer two classes of shares,
Class I and Class II. The other Funds offer a single class of shares.
This prospectus gives you information about the Vantagepoint Funds that you
should know before investing. You should read this prospectus carefully and
retain it for future reference. It contains important information, including how
each Fund invests and the services available to shareholders.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
[VANTAGEPOINT FUNDS LOGO]
<PAGE> 3
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE> 4
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
SUMMARY 1
The Funds 1
FEE TABLES 3
INVESTMENT POLICIES,
INVESTMENT OBJECTIVES,
PRINCIPAL INVESTMENT
STRATEGIES AND RELATED RISKS 6
Investment Policies 6
Investment Objectives of the Funds 6
RISKS OF INVESTING IN THE FUNDS 11
Investment Limitations 12
MANAGEMENT OF THE FUND 12
Directors and Officers 13
SHAREHOLDER INFORMATION 15
Share Accounting for All Funds 15
Valuation of Funds 15
Reinvestment of Earnings 15
Pricing and Timing of Transactions 15
Reporting to Investors 16
PURCHASES AND REDEMPTIONS 16
Purchases 16
Purchases by Employee Benefit Plans 16
Exchanges and Allocations Among
Funds 17
Exchanges by Telephone 17
VantageLine 17
VantageLink 17
Purchases by IRA Investors 18
TAXATION 18
YEAR 2000 COMPLIANCE 19
</TABLE>
<PAGE> 5
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE> 6
SUMMARY
- --------------------------------------------------------------------------------
A summary of the investment objectives, principal investment strategies
(including the types of securities held in each Fund) and principal risks of
investing in the Funds is set forth below.
Please refer to the discussion under the heading "Shareholder Information" for
an explanation of how shares may be purchased, exchanged, or redeemed. An
investment in mutual funds is subject to fluctuations in market value, and loss
of the principal amount invested is possible.
THE FUNDS
- --------------------------------------------------------------------------------
Aggressive Opportunities Fund
INVESTMENT OBJECTIVE--primary investment objective is to offer high long-term
capital growth.
PRINCIPAL INVESTMENT STRATEGY--The principal strategy of the Fund will be to
invest in small-to-medium capitalization U.S. growth companies that are
considered to be "out of favor" in the market.
PRINCIPAL RISKS--The returns on stocks of small-to mid-capitalization companies
tend to be more volatile than the returns on stocks of larger-capitalization
companies, and you should consider the Fund as a long-term investment vehicle.
International Fund
INVESTMENT OBJECTIVE--primary investment objective is to offer diversification
and long-term capital growth by investing in the stocks of companies doing
business primarily outside the United States. Investment opportunities are
sought in established foreign markets, and to a lesser extent, in less developed
emerging markets.
PRINCIPAL INVESTMENT STRATEGY--The Fund will invest at least 65% of its assets
in foreign equity securities.
PRINCIPAL RISKS--Investment in foreign securities entails exposure to the
volatility of returns associated with common stocks as well as the substantial
risks associated with less-developed markets and foreign currencies. The
International Fund might provide a complementary portion of an overall portfolio
that consists mainly of domestic stocks and bonds. You should not consider the
International Fund as a complete investment program.
Growth Stock Fund
INVESTMENT OBJECTIVE--primary investment objective is to offer long-term capital
growth.
PRINCIPAL STRATEGY--The Fund's principal strategy is to invest in common stocks
that are considered to have above-average potential to growth. Although the Fund
may invest in all capitalization sizes, it is expected that the emphasis will be
on medium- to large-capitalization growth stocks.
PRINCIPAL RISK--The Fund's growth stock investment strategy can be expected to
expose it to a greater degree of price and earnings volatility over shorter time
periods than the stock market as a whole.
Growth & Income Fund
INVESTMENT OBJECTIVE--To attempt to achieve a combination of growth and an
income yield greater than total returns available in the broad stock market.
PRINCIPAL INVESTMENT STRATEGY--The Fund will attempt to achieve its objective by
investment in dividend-paying stocks and sometimes bonds. Investments may
include both foreign and domestic securities, emphasizing those that pay current
1
<PAGE> 7
dividends and offer the potential for earnings growth.
Principal Risks--Investment in the Fund entails the risk of price and earnings
volatility over the short-term.
EQUITY INCOME FUND
Investment Objective--primary investment objective is to offer consistency of
growth, and a comparatively high level of dividend income plus the potential for
moderate share price increases.
Principal Investment Strategy--The Fund will invest in the equity securities of
companies in industries where stocks tend to have higher yields, such as
utilities and energy companies.
Principal Risk--While investment in the Equity Income Fund involves risk, the
Fund's emphasis on income should result in less volatility and risk than is
associated with other types of common stock funds.
ASSET ALLOCATION FUND
Investment Objective--The Fund's primary investment objective is to offer
long-term growth.
Principal Investment Strategy--The Fund will invest in a portfolio actively
allocated among common stocks and index futures contracts, long-term investment
grade corporate bonds, and cash equivalents.
Principal Risk--Because this Fund can and may have a large percentage of its
portfolio invested in an index consisting of common stocks, it should be
considered a long-term investment vehicle with the potential for sudden,
sometimes substantial declines in market value over the shorter term.
U.S. TREASURY SECURITIES FUND
Investment Objective--The Fund's primary investment objective is to offer coupon
income and capital growth.
Principal Investment Strategy--The Fund will invest in intermediate-term U.S.
Treasury Securities and on certain U.S. Government and Agency Securities.
Principal Risks--As with any bond fund, the market prices of the securities held
in the portfolio fluctuate as interest rates change. Generally, the value of a
bond moves in a direction opposite to that of interest rates, and the greater
the duration of the bond, the greater the resulting change in value. The U.S.
Treasury Securities Fund will experience the volatility of an intermediate-
duration fixed income fund.
MONEY MARKET FUND
Investment Objective--The Fund's objective is to seek to obtain the maximum
current income, consistent with maintaining liquidity and a stable share price
of $1.00.
Principal Investment Strategy--The Fund will invest all of its assets in the AIM
Liquid Assets Fund, which invests in high-quality, short-term money market
instruments.
Principal Risk--An investment in the Fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
the Fund seeks to preserve the value of your investment at $1.00 per share, it
is possible to lose money by investing in the Fund.
OVERSEAS EQUITY INDEX FUND
Investment Objective--The Fund seeks to provide a portfolio that will
approximate, before fees, the investment characteristics and performance of the
Morgan Stanley Capital International Europe, Australia, and Far East (EAFE)
Index.
Principal Risks--Please refer to the above discussion of risk in the
International Fund.
Principal Investment Strategy--To invest in a sampling of securities that are
included in the EAFE Index that will be designed to match the performance of the
index.
MID/SMALL COMPANY INDEX FUND
Investment Objective--To seek to provide a portfolio that will approximate,
before fees, the
2
<PAGE> 8
investment characteristics and performance of the Wilshire 4500 Index.
Principal Investment Strategy--To invest in a sampling of securities that are
included in the Wilshire 4500 Index that will be designed to match the
performance of the index.
Principal Risks--The returns on stocks of mid-to small-capitalization companies
tend to be more volatile than the returns on stocks of larger-capitalization
companies, and you should consider the Fund as a long-term investment vehicle.
BROAD MARKET INDEX FUND
Investment Objective--To seek to provide a portfolio that will approximate,
before fees, the investment characteristics and performance of the Wilshire 5000
Index.
Principal Investment Strategy--To invest in a sampling of securities that are
included in the Wilshire 5000 Index that will be designed to match the
performance of the index.
Principal Risks--The Fund is expected to have the same volatility as the U.S.
stock market as a whole.
500 STOCK INDEX FUND
Investment Objective--To seek to provide a portfolio that will approximate,
before fees, the
investment characteristics and performance of the Standard and Poor's (S&P) 500
Index.
Principal Investment Strategy--The Fund will invest in all of the stocks in the
S&P 500 Index in appropriate proportions to match the performance of the index.
Principal Risks--Due to the expected volatility of returns on common stocks over
short time periods, you should consider this Fund to be a long-term investment.
CORE BOND INDEX FUND
Investment Objective--To seek to provide a portfolio that will approximate,
before fees, the investment characteristics and performance of the Lehman
Brothers Aggregate Bond Index.
Principal Investment Strategy--To invest in a sampling of bonds included in the
Lehman Broth ers Aggregate Bond Index that will be designed to match the
performance of the index.
Principal Risks--As with any bond fund, the market prices of the securities held
in the portfolio will fluctuate as interest rates change. Generally, the value
of a bond moves in a direction opposite to that of interest rates, and the
greater the duration of the bond, the greater the resulting change in value. The
Fund should experience the volatility characteristic of an intermediate-duration
fixed income fund.
FEE TABLES
- --------------------------------------------------------------------------------
FEES AND EXPENSES OF THE FUNDS
The purpose of the following tables is to assist you in understanding the
various costs that you, as a shareholder, will bear directly or indirectly in
connection with an investment in one or more of the Vantagepoint Funds.
As you can see in the following table, you do not pay fees of any kind when you
buy, sell, or exchange your shares.
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON
PURCHASES NONE
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON
REINVESTED DIVIDENDS (AND OTHER
DISTRIBUTIONS) NONE
REDEMPTION FEE NONE
EXCHANGE FEE NONE
</TABLE>
The next table shows the annual operating expenses you would pay as a
shareholder in the Funds. These expenses, calculated as a percentage of average
net assets, are deducted from Fund assets, and their effect is factored into any
quoted share price or investment return.
3
<PAGE> 9
ANNUAL FUND OPERATING EXPENSES
<TABLE>
<CAPTION>
Advisory Subadviser Other Total
Funds Fee Expense Expenses+ Expenses
----- -------- ---------- --------- --------
<S> <C> <C> <C> <C>
AGGRESSIVE OPPORTUNITIES 0.10% 0.76% 0.40% 1.26%
INTERNATIONAL 0.10% 0.56% 0.54% 1.20%
GROWTH STOCK 0.10% 0.31% 0.39% 0.80%
GROWTH & INCOME 0.10% 0.49% 0.44% 1.03%
EQUITY INCOME 0.10% 0.18% 0.38% 0.66%
ASSET ALLOCATION 0.10% 0.26% 0.39% 0.75%
U.S. TREASURY SECURITIES 0.10% 0.14% 0.40% 0.64%
MONEY MARKET 0.10% 0.08% 0.41% 0.59%*
Overseas Equity Index
CLASS I 0.05% 0.40%++ 0.36% 0.81%
CLASS II** 0.05% 0.40%++ 0.16% 0.61%
Mid/Small Co. Index
CLASS I 0.05% 0.10%++ 0.36% 0.51%
CLASS II** 0.05% 0.10%++ 0.16% 0.31%
Broad Market Index
CLASS I 0.05% 0.08%++ 0.32% 0.45%
CLASS II** 0.05% 0.08%++ 0.12% 0.25%
500 Stock Index
CLASS I 0.05% 0.05%++ 0.35% 0.45%
CLASS II** 0.05% 0.05%++ 0.15% 0.25%
Core Bond Index
CLASS I 0.05% 0.08%++ 0.32% 0.45%
CLASS II** 0.05% 0.08%++ 0.12% 0.25%
</TABLE>
+ Amounts shown are based on estimated amounts for the Fund's first full fiscal
year, and include the Investor services fee, the Fund services fee, and Fund
operating expenses.
++ Includes subadviser fees and other expenses incurred at the "master" fund
level as a result of the Index Funds being "feeder" funds investing in
"master" funds managed by the subadviser.
* For the Money Market Fund, management has agreed, for a period of two years
from the effective date of registration, to waive any fees that would result
in total Fund expenses in excess of an annual amount of 0.55%.
** Amounts shown are equivalent to the total expenses that will be paid by Class
II shareholders.
4
<PAGE> 10
EXAMPLE
This example is intended to help you compare the cost of investing in the Funds
with the cost of investing in other mutual funds.
This example assumes that you invest $10,000 dollars for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
Funds 1 yr 3 yrs
- ----- ---- -----
<S> <C> <C>
AGGRESSIVE OPPORTUNITIES $129 $402
INTERNATIONAL $123 $383
GROWTH STOCK $ 82 $256
GROWTH & INCOME $106 $329
EQUITY INCOME $ 68 $212
ASSET ALLOCATION $ 77 $241
U.S. TREASURY SECURITIES $ 66 $205
MONEY MARKET $ 60 $190
Overseas Equity Index++
CLASS I $ 83 $260
CLASS II $ 63 $196
Mid/Small Co. Index++
CLASS I $ 52 $164
CLASS II $ 32 $100
Broad Market Index++
CLASS I $ 46 $145
CLASS II $ 26 $ 81
500 Stock Index++
CLASS I $ 46 $145
CLASS II $ 26 $ 81
Core Bond Index++
CLASS I $ 46 $145
CLASS II $ 26 $ 81
</TABLE>
++ Includes subadviser fees and other expenses incurred at the "master" fund
level as a result of the Index Funds being "feeder" funds investing in
"master" funds managed by the subadviser.
If you are investing through another financial institution or a retirement
account, you may be subject to additional fees or expenses, such as plan
administration fees. For more information, please refer to its program materials
for any special provisions, additional service features, or fees and expenses
that may apply to your investment in a Fund.
5
<PAGE> 11
INVESTMENT POLICIES,
INVESTMENT OBJECTIVES,
PRINCIPAL INVESTMENT STRATEGIES,
AND RELATED RISKS
- --------------------------------------------------------------------------------
The Funds are managed by their investment adviser, Vantagepoint Investment
Advisers, LLC ("VIA"), which in turn selects and monitors subadvisers engaged by
VIA. The subadvisers are directly responsible for security selection and day-
to-day management of the assets entrusted to them and the primary factors on
which each subadviser bases its decisions to purchase or sell portfolio
securities is described below under "Investment Objectives of the Fund". The
Funds intend to seek authority from the U.S. Securities and Exchange Commission
(SEC) to allow VIA in its discretion, subject to approval of the Board of
Directors of the Vantagepoint Funds, to add, replace, or remove subadvisers.
INVESTMENT POLICIES
- ----------------------------------------------------
The Funds have adopted certain investment policies and guidelines. Those
designated as "fundamental" in this prospectus or in the Statement of Additional
Information cannot be changed without shareholder approval. Others may be
changed at the discretion of the Board of Directors.
The descriptions that follow are designed to help you choose the Funds that best
fit your investment objectives and tolerance for risk.
INVESTMENT OBJECTIVES
OF THE FUNDS
- ----------------------------------------------------
AGGRESSIVE OPPORTUNITIES FUND--primary investment objective is to offer high
long-term capital growth. It can be expected that the Fund's portfolio will
consist primarily of the stocks of small- to medium-capitalization domestic and
foreign companies. Dividend and interest income, if any, is secondary and
incidental to the Fund's primary objective of long-term growth of capital.
The Aggressive Opportunities Fund is managed on a day-to-day basis by multiple
subadvisers.
First Pacific Advisers, invests the Fund's assets primarily in securities of
companies the subadviser believes to be undervalued. Investments tend to be
concentrated in a limited number of securities and in industries out-of-favor in
the current market.
Massachusetts Financial Services invests the Fund's assets primarily in
securities of emerging growth companies, many of which are at an early stage in
their development, that the subadviser believes have the potential to become
major enterprises. The subadviser selects companies it expects to show earnings
growth over time well above the growth rate of the overall economy and the rate
of inflation.
TCW Funds Management, Inc., invests the Fund's assets primarily in companies
expected to exhibit high earning growth, and employs techniques such as
quantitative screening, research evaluation, and direct company contact.
Due to the nature of the Fund's portfolio securities and the policy of the Fund
to accept opportunistic risk to enhance returns through techniques such as short
sales, investing in options and warrants, investing in bonds that are below
investment grade, and borrowing, the Fund can be expected to exhibit significant
price volatility over the short term.
INTERNATIONAL FUND--primary investment objective is to offer diversification and
long-term capital growth by investing in the stocks of companies doing business
primarily outside the United States. The Fund may invest in securities of
companies doing business in any developed foreign country, including those in
Europe, the Far East, and the Pacific Rim. The Fund may also invest, to a lesser
6
<PAGE> 12
extent, in less developed emerging markets in Asia, Europe, Latin America, and
Africa.
The International Fund is normally invested primarily in a variety of stocks and
secondarily in bonds. Investment may be made in companies of all capitalization
sizes and in a wide variety of industries as well as in stock index contracts.
The Fund is managed by multiple subadvisers. Templeton Global Advisers, Ltd.,
attempts to identify undervalued securities relative to underlying value and
potential earnings, using techniques such as earnings-per-share growth
potential, profit margins, revenues and financing requirements.
Rowe Price-Fleming International, Inc., emphasizes the stocks of companies with
above-average market earnings growth potential at a reasonable price.
The International Fund will also invest approximately 5% of its assets in a
sampling of securities designed to match the performance of the Morgan Stanley
Capital International Europe Australia and Far East Index ("EAFE"). This portion
of the Fund's assets will be managed by Barclay's Global Fund Advisers.
Foreign securities are subject to the same market risks as U.S. securities, such
as general economic conditions and company and industry prospects. Foreign
securities entail additional risk of loss due to political, economic, legal,
regulatory, operational and currency conversion factors. These risks are even
greater in emerging markets than in developed foreign markets.
GROWTH STOCK FUND--primary investment objective is to offer long-term capital
growth by investing in the common stock of a variety of companies with prospects
for above-average growth in earnings, with emphasis on mid- capitalization
growth stocks of seasoned firms. The Fund may also include large-capitalization
stocks. The portfolio is expected to experience higher than average turnover,
which may result in increased brokerage commissions. Dividend income is
incidental to the overall objective of long-term capital growth.
The Growth Stock Fund invests in a variety of common stocks selected for
prospects of above-average growth in corporate earnings per share. The portfolio
is diversified by industry and market capitalization and experiences
higher-than-average portfolio turnover, which may result in increased brokerage
commissions. Investments may include larger, seasoned firms and also small- to
medium-size companies.
The Fund is managed on a day-to-day basis by multiple subadvisers.
Cadence Capital Management invests the Fund's assets in medium- to
large-capitalization stocks and seeks growth at a reasonable price. This
subadviser selects stocks of companies with long-term growth characteristics
selling at reasonable valuations in relation to the fundamental prospects of the
underlying companies.
William Blair & Company, LLC invests the Fund's assets in medium-capitalization
stocks and seeks to invest in durable companies exhibiting strong business
leadership, quality products and services, solid financial prospects, and strong
management.
Neuberger & Berman, LLC invests the Fund's assets in medium-capitalization
stocks of companies that appear to offer high long-term earnings-per-share
growth at a reasonable price relative to their growth rates.
Barclays Global Fund Advisers seeks to replicate the performance and portfolio
characteristics of the S&P BARRA MidCap 400 Growth Index, which consists of 400
domestic stocks traded on certain U.S. stock exchanges. The index is designed to
measure the performance of the middle capitalization sector of the U.S. equities
market.
Fidelity Management Trust Company invests a portion of the Fund's assets that
are assigned to it in the equity securities of smaller companies having
valuations close to or below market and a portion of the Fund's assets assigned
to it in the stocks of well-established, well-managed companies whose earnings
benefit from emerging trends that are identified by Fidelity.
7
<PAGE> 13
The Growth Stock Fund can be expected to have significantly greater volatility
than the stock market (as measured by the S&P 500 Index) over any selected time
period.
GROWTH AND INCOME FUND--attempts to achieve its objective of long-term capital
appreciation and current income by investing primarily in common stocks. The
Fund may also invest in other equity-type securities including, but not limited
to, convertible securities.
The investment approach is to focus on companies whose stocks offer good
potential for price appreciation because of undervaluation, earnings growth or
both, with an emphasis on those which may also provide current dividend income.
The Fund is managed by multiple subadvisers. Capital Guardian attempts to meet
the Fund's objectives using an approach combining both value and growth
orientations.
Putnam Investments seeks the potential returns from growth stocks but with
reduced volatility through the use of risk control techniques, such as avoiding
over-concentration in certain industries and other high risk exposures.
The Fund can be expected to exhibit the risk characteristics of a common stock
portfolio.
EQUITY INCOME FUND--primary investment objective is to offer long term stable
growth of capital through a comparatively high level of dividend income plus the
potential for moderate share price increases.
The investment approach of the Equity Income Fund is to focus on established
companies that pay dividends at higher-than-average relative yields, indicating
attractive valuations and investments which may also be undervalued in relation
to earnings. The Fund may be diversified across all sizes of companies but will
be more concentrated in large-capitalization companies, which tend to have the
most stable long-term earnings and dividend-paying records. As a result of the
income focus, certain industry sectors and/or specific industries tend to be
emphasized.
The Fund is managed by multiple subadvisers. Crawford Investment Counsel, Inc.,
seeks consistent dividend growth by investing in the securities of companies
that consistently raised their dividends every year for the past 10 years.
Newell Associates, seeks to produce high current income from common stocks. It
invests in large, well-established dividend-paying corporations with a current
yield at least 25% higher than the Standard & Poor's Industrials.
Due to the Fund's emphasis on large-capitalization, dividend-paying companies,
the Fund's risk level is expected to be equal to, or lower than, the S&P 500
Index.
ASSET ALLOCATION FUND--primary investment objective is to seek to maximize total
return by investing in a portfolio actively allocated among common stocks and
index futures contracts of a particular index, long-term investment grade bonds,
and money market instruments.
The Fund seeks to maximize total return by varying its overall exposure to
common stocks, bonds, and cash equivalents in accordance with systematic efforts
to assess which of those asset classes are most attractive at a given time. The
investment objective is to seek maximum growth of principal and income with less
investment risk than a portfolio consisting entirely of common stocks.
The Asset Allocation Fund invests as follows: a portfolio of stocks and index
futures contracts selected and passively managed to parallel the investment
performance of the S&P 500 Index; bonds with maturities generally in excess of
20 years; and money market instruments. The Fund may invest in S&P 500 Index
futures and bond futures contracts to alter the percentage exposure to asset
classes. Futures contracts are not used to obtain market leverage, but instead
to reproduce representative returns for S&P 500 Index stocks and long-term
investment grade bonds. Active management of the Fund by its subadvisers
8
<PAGE> 14
consists of rebalancing the percentage mix among stocks, bonds, and cash
equivalents based upon analysis of changes in financial market conditions. The
frequency and magnitude of changes in the proportional mix will vary with each
subadviser's assessment of market conditions.
The Fund is managed by multiple subadvisers who are responsible for portfolio
security selection. AVATAR Associates actively allocates assets between stocks
and cash. At any given time, all or none of the assets may be allocated to
either stocks or cash, though shifts more typically occur in varied increments.
Mellon Capital Management actively allocates assets among common stocks,
long-term, investment grade bonds and money market instruments. Changes to the
asset allocation are normally implemented in small increments on a gradual
basis.
Wilshire Asset Management does not allocate among asset classes but instead
manages the equity portion of the Fund utilized in the other managers'
strategies. The subadviser fully replicates all securities represented in the
S&P 500 Index within acceptably small period-to-period variances, both positive
and negative.
Since one of the subadvisers does not invest in bonds, the Fund's structure is
biased to take advantage of the long-term return potential of stocks. As a
result, the Fund may exhibit a level of price volatility and risk of loss more
consistent with a common stock portfolio than with a balanced portfolio,
especially over the shorter term.
U.S. TREASURY SECURITIES FUND--primary investment objective is to offer coupon
income and capital growth obtainable from active management of intermediate-term
U.S. Treasury securities and certain U.S. Government and Agency securities.
The Fund is designed to offer a rate of return equivalent to intermediate-term
Treasury securities, while minimizing the possibility of default. Returns will
reflect both interest income and market price changes in the bonds held by the
Fund.
The U.S. Treasury Securities Fund invests primarily in intermediate-term U.S.
Treasury securities. In addition, the subadviser is authorized to invest up to
35 percent of the Fund in U.S. Government Agency pass-through mortgage-backed
securities. The Fund may also invest in U.S. Treasury note and bond futures to
adjust duration exposure in response to anticipated interest rate movements. The
combination of fixed-income securities and futures maintains fixed-income
exposure comparable to that of a fully invested portfolio position.
The Fund's subadviser, Seix Investment Advisers, Inc., seeks to offer more
return than is available in a passively managed intermediate-term U.S. Treasury
index by identifying undervalued U.S. Treasury securities, and by allocating
assets to, and selecting securities in, the mortgage-backed sector.
The Fund should experience the volatility characteristics of an
intermediate-duration bond fund.
MONEY MARKET FUND--primary investment objective is to obtain the maximum current
income, consistent with preservation of capital and liquidity, that is available
through investments in specified money market instruments. The Fund seeks to
maintain a constant net asset value per share of $1.00. However there is no
guarantee that it will be able to do so. The Fund will meet the diversification
and quality provisions of Rule 2a-7 under the 1940 Act.
The Fund seeks to obtain its investment objective by investing substantially all
of its assets in a registered money market mutual fund, the AIM Liquid Assets
Fund, whose investment adviser is AIM Advisers, Inc. The underlying portfolio of
the AIM Liquid Assets Fund consists of certificates of deposit of major U.S.
banks, prime commercial paper, high quality short-term corporate obligations,
and short-term U.S. government and agency securities. The Fund has an average
maturity of less than 90 days.
The Index Funds
The five Funds described below follow an indexed or "passively managed" approach
to investing. This means that the Funds' subadviser creates a mix of
9
<PAGE> 15
securities designed to match the performance of a specified benchmark, such as
the S&P 500 Index.
In order to take advantage of the economies of scale offered by a larger fund,
each Index Fund is structured as a "feeder" fund. A "feeder" fund seeks to
achieve its investment objective by investing all its net assets in a single
"master" fund managed by the subadviser. The master fund invests in securities
in accordance with investment objectives, policies, and limitations that are
identical to those of the applicable Index Fund. In other words, each Index Fund
"feeds" shareholder investments into its corresponding portfolio, the "master"
fund.
With the exception of the Overseas Equity Index Fund, the assets of each Index
Fund and invested by Barclay's Global Fund Advisers, which focuses at the
"master" fund level on quantitative, structured and passive management. The
subadviser for the Overseas Equity Index Fund is Bankers Trust.
Unlike an actively managed portfolio, an index fund does not rely on the
portfolio manager's ability to predict the performance of individual securities.
An index fund simply attempts to match the performance of the benchmark.
Index funds offer relative performance predictability in that the investment
performance of the fund parallels that of the index. Additionally, index funds
tend to have lower operating expenses than actively managed funds.
Each Index Fund reserves the right to change the "master" fund in which it
invests, and a Fund may do so when the Board of Directors believes it is in the
best interests of the Fund's shareholders.
The Index Funds offer two classes of shares, Class I and Class II. Information
on your eligibility to invest in a particular class can be found under the
heading "Shareholder Information: Purchases".
The five Index Funds and their respective investment objectives and risks are:
THE OVERSEAS EQUITY INDEX FUND--seeks to provide a portfolio that will
approximate, before fees, the investment characteristics and performance of the
EAFE Index.
The Fund is exposed to the risks of investing in common stocks as well as the
additional risks of investing in foreign securities, which can be affected by
currency, political, legal, regulatory and operational factors.
MID/SMALL COMPANY INDEX FUND--seeks to provide a portfolio that will
approximate, before fees, the investment characteristics and performance of the
Wilshire 4500 Index.
Due to the breadth of the Fund's index, the Fund has a risk factor somewhat
higher than indexes such as the S&P 500. The Wilshire 4500 includes
smaller-capitalization companies whose stocks tend to have more price volatility
than larger companies.
BROAD MARKET INDEX FUND--seeks to provide a portfolio that will approximate,
before fees, the investment characteristics and performance of the Wilshire 5000
Index.
The Fund is exposed to the risks of the overall stock market, and the Index
includes companies of all capitalization sizes.
500 STOCK INDEX FUND--seeks to provide a portfolio that will approximate, before
fees, the investment characteristics and performance of the Standard and Poor's
(S&P) 500 Index.
The Fund has risk characteristics generally associated with large-capitalization
common stocks.
"Standard & Poor's(R)", "S&P(R)", "S&P 500(R)" "Standard & Poor's 500" and "500"
are trademarks of the McGraw-Hill Companies, Inc. and have been licensed for use
by The Vantagepoint Funds. The Fund is not sponsored, endorsed, sold or promoted
by Standard & Poor's and Standard & Poor's makes no representation regarding the
advisability of investing in the Fund.
CORE BOND INDEX FUND--seeks to provide a portfolio that will approximate, before
fees, the investment characteristics and performance of the Lehman Brothers
Aggregate Bond Index.
As with any bond fund, the market price of portfolio securities will generally
move in a direction opposite to interest rates. The Fund should experience the
volatility characteristic of an intermediate-duration fixed income fund.
10
<PAGE> 16
RISKS OF INVESTING IN THE FUNDS
- --------------------------------------------------------------------------------
The following is a description of the risks that you will face as an investor in
the Funds. It is important to keep in mind one of the main axioms of investing:
the higher the potential reward, the higher the risk of losing money. The
reverse is also generally true: the lower the potential reward, the lower the
risk.
Each of the Funds is exposed to one or more of the following types of risk:
I. Stock Market Risk
Market risk is the possibility that stock prices overall will decline over short
or extended periods. Markets tend to move in cycles, with periods of rising
prices and periods of falling prices.
Although the U.S. stock market has risen consistently in recent years, this
trend is not indicative of the market's overall history.
To illustrate the volatility of the U.S. stock market, the following table shows
the best, worst and average total returns for the U.S. stock market over various
time periods as measured by the S&P 500 Index.
AVERAGE ANNUAL U.S. STOCK MARKET RETURNS
(1926-1997)
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS 20 YEARS
------ ------- -------- --------
<S> <C> <C> <C> <C>
BEST 53.9% 23.9% 20.1% 16.9%
WORST -43.3 -12.5 -0.9 3.1
AVERAGE 13.0 10.5 10.9 10.9
</TABLE>
Keep in mind that the S&P 500 Index tracks mainly large-capitalization stocks.
Other groupings of stocks are likely to carry different degrees of volatility.
For example, small-capitalization stocks, as a group, have historically
exhibited greater short-term volatility than that of the S&P 500 Index. All of
the Funds except the Money Market Fund, the U.S. Treasury Securities Fund and
the Core Bond Index Fund are Subject to stock market risk.
Foreign securities are subject to the same market risks as U.S. securities, such
as general economic conditions and company and industry prospects. Foreign
securities involve additional risk of loss due to political, economic, legal,
regulatory, operational and currency conversion factors affecting investment in
the securities of foreign businesses or governments. The International Fund and
the Overseas Equity Index Fund are subject to this risk.
II. Bond market Risk
Bonds also experience market risk, which is primarily attributable to changes in
interest rates. The general rule is that if interest rates rise, bond prices
will fall. The reverse is also true: if interest rates fall, bond prices will
generally rise.
A bond with a longer maturity (or a bond fund with a longer average maturity)
will be more volatile than shorter term bonds. Because of their extreme
short-term nature, money market instruments carry little market risk. The U.S.
Treasury Securities Fund and the Core Bond Index Fund are
Bonds and bond funds are also exposed to credit risk, which is the possibility
that the issuer of a bond will default on its obligation to pay interest and
principal.
U.S. Treasury securities, which are backed by the full faith and credit of the
U.S. Government, have virtually no credit risk. Therefore, the U.S. Treasury
Securities Fund is not exposed to this risk. Corporate bonds rated BBB or above,
such as those held by the Asset Allocation Fund, are generally considered to
carry minimal credit risk. Corporate bonds rated below BB are considered to have
significant credit risk.
Of course, bonds with lower credit ratings generally pay a higher level of
income to investors.
11
<PAGE> 17
III. Objective Risk
All of the Funds are subject, in varying degrees, to objective risk, which is
the possibility that returns from a specific type of security in which a Fund
invests (for instance, a growth stock) will trail the returns of the overall
market.
In the past, different types of securities have experienced cycles of
outperformance and underperformance in comparison to the market in general.
Therefore, if you invest in a fund with a specific objective, such as the Growth
Stock Fund, you would be exposed to this risk.
IV. Manager Risk
Manager risk is the risk that one of the Funds' subadvisers will do a poor job
of selecting securities and thus fail to meet the Fund's objectives.
As investment adviser to the Funds, VIA continually monitors the performance of
the subadvisers. The Funds intend to apply for an exemptive order from the SEC
that will allow VIA to change subadvisers with the approval of the Fund's Board
of Directors and upon notice to shareholders.
INVESTMENT LIMITATIONS
- ----------------------------------------------------
Each Fund has adopted certain limitations designed to reduce its exposure to
specific situations. Some of these limitations are that a Fund will not:
(a) with respect to 75% of the value of its total assets, purchase the
securities of any issuer (except obligations of the United States
government and its instrumentalities and securities of other investment
companies) if as a result the Fund would hold more than 10% of the
outstanding voting securities of the issuer, or more than 5% of the value
of the Fund's total assets would be invested in the securities of such
issuer;
(b) invest more than 25% of its assets in any one industry (except for the Money
Market Fund or to the extent that the applicable benchmark for an Index Fund
does not meet this standard);
(c) borrow money except from banks for temporary or emergency purposes, and in
no event in excess of 15% of the market value of its total assets.
MANAGEMENT OF THE FUNDS
- --------------------------------------------------------------------------------
The investment adviser to the Vantagepoint Funds is VIA, whose offices are
located at 777 North Capitol Street NE, Suite 600, Washington, DC 20002-4240.
VIA provides its advisory services pursuant to an investment advisory agreement
with the Vantagepoint Funds. VIA is a wholly-owned subsidiary of, and is
controlled by, the ICMA Retirement Corporation (RC), which has been registered
as an investment adviser with the U.S. Securities and Exchange Commission since
1983. RC was established as a not-for-profit organization in 1972 to assist
state and local governments and their agencies and instrumentalities in the
establishment and maintenance of deferred compensation and qualified retirement
plans for the employees of such public sector entities. RC's primary advisory
client is the ICMA Retirement Trust, which was formed to commingle and invest
the assets of the retirement plans administered by RC. VIA is a newly formed
entity.
Compensation for the investment management of the Funds is asset based, i.e, it
consists of an annual percentage fee calculated based on average assets under
management. The fee is paid out of Fund
12
<PAGE> 18
assets. The aggregate annual fees paid to VIA and to subadvisers for advisory
services are as follows:
<TABLE>
<CAPTION>
AGGREGATE ANNUAL
FUNDS ADVISORY FEE
----- ----------------
<S> <C>
Aggressive Opportunities 0.86%
International 0.66%
Growth Stock 0.41%
Growth And Income 0.59%
Equity Income 0.28%
Asset Allocation 0.36%
U.S. Treasury Securities 0.24%
Money Market 0.18%
Overseas Equity Index 0.45%
Mid/Small Company Index 0.15%
Broad Market Index 0.13%
500 Stock Index 0.10%
Core bond Index 0.13%
</TABLE>
The fees charged by each subadviser can be found in the Statement of Additional
Information under the heading "Investment Advisory and Other Services".
The subadvisers are retained on behalf of the Funds by VIA, and day-to-day
discretionary responsibility for security selection and portfolio management
rests with the subadvisers. The responsibility for overseeing subadvisers rests
with VIA's Investment Division, whose division head, Senior Vice President John
Tobey, reports directly to Girard Miller, CFA, President of VIA.
Mr. Miller has over 15 years of experience in investment management, 5 years
with RC. He holds a Political Economy degree from the University of Washington,
a Masters in Economics from Wayne State University in Detroit, Michigan, and a
Masters of Public Administration from Syracuse University, and is a Chartered
Financial Analyst.
Mr. Tobey has over 20 years of experience in investment management, 8 months
with RC. He holds a BS degree in Finance from San Diego State University and an
MBA degree from the Stanford Graduate School of Business.
The investment program and its performance are subject to overall supervision
and regular periodic review by the Funds' Board of Directors.
Further information on Fund subadvisers, including portfolio managers and fees,
can be found in the Statement of Additional Information.
The Directors and Officers of the Vantagepoint Funds, together with information
as to present positions and their principal business occupations during the last
five years, are shown below. Directors who are deemed to be "interested
persons", as defined in the Investment Company Act of 1940, are indicated by an
asterisk. The mailing address for the Directors and Officers of the Funds is 777
North Capitol St., NE, Ste. 600, Washington, D.C. 20002-4240.
DIRECTORS AND OFFICERS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS
NAME, ADDRESS POSITION DURING PAST 5 YEARS
------------- ---------- -----------------------------------------
<S> <C> <C>
George Bissell Director Chairman of Board
Boston, MA Keystone Group Funds
Donna Anderson Director Chief Investment Officer
New York, NY City of New York Pensions
Robert A. Bowman Director President, Chief Operating Officer and
Westport, CT Director (1995-1998)
Chief Financial Officer (1992-1995)
ITT Corporation
N. Anthony Calhoun Director Deputy Executive Director and
Chevy Chase, MD Chief Financial Officer
Pension Benefit Guaranty Assoc.
Arthur Lynch Director Director of Finance
Glendale, AZ City of Glendale, Arizona
Eddie Moore Director President, Virginia State University
Petersburg, VA
Robin L. Wiessmann Director* Principal
Yardley, PA Artemis Capital Group, Inc.
</TABLE>
13
<PAGE> 19
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS
NAME, ADDRESS POSITION DURING PAST 5 YEARS
------------- ---------- -----------------------------------------
<S> <C> <C>
Girard Miller President* President and Chief Executive Officer
Washington, DC ICMA Retirement Corporation
Paul Gallagher Secretary* General Counsel (1998-present)
Washington, DC ICMA Retirement Corporation;
Formerly; Assistant General Counsel,
The Vanguard Group
Paul Breault Treasurer* Chief Financial Officer (1998 to present)
Washington, DC ICMA Retirement Corporation
Formerly; Senior Vice President and
Retail Group Chief Financial Officer
Fidelity Investments
</TABLE>
* Ms. Wiessmann is considered an interested person because she is a member of
the Board of Directors of the ICMA Retirement Corporation. Officers of the
Funds are considered interested persons as defined in the Investment Company
Act of 1940.
14
<PAGE> 20
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
(For purposes of the following discussion, unless noted otherwise, "business
day" means the period(s) of time on any given day during which the New York
Stock Exchange is open for business. Unless noted otherwise, "close of business"
means 4:00 p.m. Eastern time on each business day or the final close of business
on any business day during which trading on the New York Stock Exchange is
suspended.)
SHARE ACCOUNTING FOR ALL FUNDS
- ----------------------------------------------------
The shares represent a dollar-weighted proportional ownership interest in each
of the Funds in which you are invested. The Funds do not issue share
certificates.
The price of a share is known as its net asset value ("NAV"). The daily NAV of a
share is determined at the close of each business day by adding the value of all
of a Fund's investments, plus cash and other assets, deducting liabilities, and
then dividing the result by the number of outstanding shares in the Fund as of
the end of the prior day and rounding the results to the nearest cent. The value
of your investment position equals the number of shares you own multiplied by
the current day's NAV.
Since share values and investment returns will fluctuate, an exchange or
redemption at any given time will normally result in your receiving more or less
than the original cost of your investment. Each Fund's share value can be found
daily in the mutual fund listing of most major newspapers under the heading
"Vantagepoint Funds".
VALUATION OF THE FUNDS
- ----------------------------------------------------
Investment securities held by the Funds are valued daily. Stocks are valued at
the price in effect at the close of business of the exchange on which they are
traded. Bonds are valued using pricing matrices obtained through Merrill Lynch
and other commercial services.
Securities for which market quotations are not readily available are valued
according to methods established by the Board of Directors. If values of foreign
securities have been materially affected by events occurring after the close of
a foreign market, foreign securities may be valued by another method that the
Board of Directors believes reflects fair value.
The underlying "master" fund for each Index Fund is valued daily by the "master"
fund itself, and the "master" fund's NAV is part of the calculation of each
Index Fund's NAV. Once the market value of each Index Fund is determined, it is
then divided by the number of shares outstanding to arrive at that day's NAV for
the Fund.
For the Money Market Fund, net asset value is calculated by valuing portfolio
securities by reference to the Fund's acquisition cost as adjusted for
amortization of premium or accretion of discount, rather than by reference to
their value based on current market factors. This valuation method generally
ignores fluctuations in the market price of the Fund's debt securities and
assumes a steady increase (decrease) in value until maturity.
REINVESTMENT OF EARNINGS
- ----------------------------------------------------
All earnings of the Funds (interest, dividend income, and capital gains are
reinvested in the Funds and used to purchase additional shares. See discussion
under the heading "Taxation".
PRICING AND TIMING OF TRANSACTIONS
- ----------------------------------------------------
Purchases, exchanges and redemptions are executed at the NAV next calculated
after the Fund or its transfer agent receives the transaction request. For
example, under normal circumstances, a transaction request received at 9:30 a.m.
on a business day is executed at the same price as that of a transaction request
received at 3:00 p.m. -- at that day's closing price. If the Funds receive a
transaction request in the morning, you do not insulate yourself from market
gains or losses during the rest
15
<PAGE> 21
of the business day. A transaction request received after the calculation of the
NAV on one day will be executed at the price in effect at the close of the next
business day.
REPORTING TO INVESTORS
- ----------------------------------------------------
With respect to any investment reports you may receive from Vantagepoint Funds,
review these reports carefully, and call the toll-free customer service line at
1-800-#### or contact the Funds on-line at **** immediately if you see any
discrepancies. In order to correct a discrepancy, the Funds must be notified
within 120 days of the close of the calendar quarter in which the discrepancy
occurs.
PURCHASES, EXCHANGES, AND REDEMPTIONS
- --------------------------------------------------------------------------------
PURCHASES
- ----------------------------------------------------
Initially, the Funds will be open for investment exclusively by (i) the ICMA
Retirement Trust; (ii) the employee benefit plans of state and local governments
and their agencies and instrumentalities (including retirement and deferred
compensation plans established under Sections 401 and 457, respectively, of the
Internal Revenue Code of 1986, as amended); and (iii) Individual Retirement
Accounts ("IRAs") of employees of state and local governments and the IRAs of
other persons having a familial or otherwise close relationship to those public
sector employees. The details of such eligibility criteria are set forth in the
account application.
Class I shares of the Index Funds are open to IRA and other individual accounts
and each public sector employee benefit plan that invests indirectly in the
Funds through the ICMA Retirement Trust containing assets of less than $40
million. Class II shares are open to (i) qualifying public sector employee
benefit plans that invest directly in the Funds and have qualifying assets in
excess of $150 million; and (ii) public sector employee benefit plans that
invest indirectly in the Funds through the ICMA Retirement Trust and have
qualifying assets in excess of $40 million so invested. Other plans with average
account balances or other features that are expected to afford the Index Funds
with certain economies of scale in servicing employee benefit plan participant
accounts, may also qualify for Class II shares.
There are no minimum investment amounts, front-end sales charges, deferred sales
charges, back-end sales or redemption charges associated with investment in the
Vantagepoint Funds.
The Vantagepoint Funds reserve the right in their sole discretion to (i) suspend
the offering of their shares or (ii) to reject purchase orders when in the
judgment of management such rejection is in the best interest of a particular
Fund or Funds.
PURCHASES BY EMPLOYEE
BENEFIT PLANS
- ----------------------------------------------------
Employee benefit plans must fill out a retirement plan account form that is to
be signed by the plan's trustee or other authorized official.
Investors may submit purchase orders to the Funds as often as daily. Payments
may be transmitted by check, wire, and Automated Clearing House, although it is
preferred that the Funds receive assets by wire. Investment detail must be
submitted on paper forms, diskette, magnetic tape, or electronically.
Purchase orders received in good order prior to next calculation of the NAV are
posted to Investor accounts at the closing NAV of that day, or if the day the
contributions are received is not a business day, at the closing NAV of the next
business day. Purchase orders received in good order after close
16
<PAGE> 22
of business are posted at the closing NAV of the next business day.
With respect to purchases made through the ICMA Retirement Trust, or by certain
employee benefit plans and other types of omnibus accounts, other arrangements
may be negotiated as to the timing and delivery of purchase instructions.
Posting of contributions to Investor accounts is contingent upon submission of
purchase orders in good order to the Vantagepoint Funds. This means that the
requests must be accompanied by sufficient detail to enable the Vantagepoint
Funds to allocate assets properly. If a purchase request is not received in good
order, the deposit is held in a non-interest bearing account until all necessary
information is received. If the purchase request is still not in good order
after three business days, the assets are returned to the Investor. Purchases
received for unidentified accounts for which no account form has been received
will be returned to the Investor.
EXCHANGES AND ALLOCATIONS
AMONG FUNDS
- ----------------------------------------------------
Investors may submit exchange requests daily in writing or by telephone
exclusively through the VantageLine phone system at 1-800-xxx-xxxx. Remember
that an exchange is a two-part transaction-a redemption of shares in one Fund
and a purchase of shares in another Fund.
Exchange requests received in good order prior to close of business on the New
York Stock Exchange (normally 4:00 p.m. Eastern Time) on a business day are
posted to Investor accounts at that day's closing NAV. Exchange requests
received in good order after close of business will be posted at the closing NAV
of the next business day.
Allocation of new purchase amounts among the Funds may be changed by Investors
without charge or limitation.
Written confirmations are normally sent to Investors on the business day
following the day the transaction occurs. Investors should verify the accuracy
of information in confirmations immediately upon receipt.
EXCHANGES BY TELEPHONE
- ----------------------------------------------------
Investors may make daily exchanges through VantageLine, the Funds' automated
service line or by calling 1-800-xxx-xxxx. Instructions received through
VantageLine must be accompanied by a Personal Identification Number. In
addition, verbal instructions given to a telephone representative will be
accepted upon verification of your identity and will be tape recorded to permit
verification. Written confirmations are normally sent to Investors on the
business day following the day the transactions occur. Investors should verify
the accuracy of information in confirmations immediately upon receipt. See
"VantageLine" and "Internet Capability" for more information.
VANTAGELINE
- ----------------------------------------------------
The Funds maintain VantageLine, an automated service line for the benefit of
Investors who have access to touch-tone telephones. You may use VantageLine to
make exchanges among Funds and change your investment allocation. The phone
number is 1-800-####.
VantageLine is normally available 24 hours a day, seven days a week for your
convenience; however, service availability during these times is not guaranteed.
Neither the Funds, the Funds' investment adviser nor the Funds' transfer agent
will be responsible for any loss (or foregone gain) you may experience as a
result of the service being unavailable or inoperative.
Should the VantageLine service or the "800" number become unavailable,
transactions may be made by VantageLink, as described below, or by express mail
at the shareholders' expense (see back cover for address).
VANTAGELINK
- ----------------------------------------------------
The Funds maintain VantageLink, a home page on the Internet should you have
access to the Internet
17
<PAGE> 23
(the address is http://www.*******). Information available from the Internet
includes account balances, investment allocations, and investment performance.
You may also execute transactions or make changes in your investment allocation
via VantageLink. The transfer agent for the Funds will require that instructions
received over the Internet be accompanied by a Personal Identification Number.
Written confirmations will normally be sent on the business day after the
transaction occurs. You should verify the accuracy of information in
confirmations immediately upon receipt.
VantageLink is normally available 24 hours a day, seven days a week. However,
service availability is not guaranteed. Like other Internet-based services,
VantageLink may be subject to external transmission problems that are beyond the
control of the Funds' management. Accordingly, neither the Funds, the Funds'
investment adviser, nor the Funds' transfer agent will be responsible for any
loss (or foregone gain) you may incur as a result of service being unavailable
or delayed.
PURCHASES BY IRA INVESTORS
- ----------------------------------------------------
PAYROLL Deduction Iras
Purchases made through payroll deduction of IRA contributions will be handled
the same as purchases made by employee benefit plans, but will require a
separate account form. Timing of investment, exchanges, and available services
will be the same as those for employee benefit plans. See "Purchases by Employee
Benefit Plans".
NON-PAYROLL DEDUCTION IRAS
First time IRA investors must fill out an IRA account application and mail it to
the Funds along with a check. Please call the ICMA Retirement Corporation at
1-800-**** for assistance when you are establishing a non-payroll deduction IRA
account. Timing of investment, exchanges, and available services will be the
same as those for employee benefit plans. See "Purchases by Employee Benefit
Plans".
REDEMPTIONS
Shares may be redeemed at any time, subject to certain restrictions imposed by
the Internal Revenue Code on the timing of distributions under tax-favored
employee benefit plans and IRAs. If investment in the Funds has been made
through one or more of these plans, the ICMA Retirement Corporation should be
contacted at 1-800-**** regarding these restrictions. With the exception of
redemptions that are made to effect exchanges among the Vantagepoint Funds,
redemption requests must be in writing.
REDEEMING SHARES IN WRITING
Write a letter of instruction with:
* Name of retirement plan, if applicable
* If a non-payroll IRA, your name and address
* The Fund's name
* Your Fund account number
* The dollar amount or number of shares to be redeemed
* How assets are to be distributed (by mail or by wire)
* If funds are to be distributed by wire, wire instructions.
A signature guarantee may be required, at the Funds' discretion, for certain
redemptions.
TAXATION
- --------------------------------------------------------------------------------
The Vantagepoint Funds intend to elect to be treated and to qualify each year as
a regulated investment company under Subchapter M of the Internal Revenue Code
of 1986, as amended. A regulated investment company generally is not subject to
federal income tax on income and gains distributed in a timely manner to its
shareholders. Normally, distributions to shareholders are taxable as income or
capital gains when such income and gains are distributed to them.
18
<PAGE> 24
However, shareholders who invest in the Funds through section 401 plans, section
457 plans or IRAs, will have earnings reinvested. If that is the case, the
income is not taxable in the year in which it is earned.
YEAR 2000 COMPLIANCE
- --------------------------------------------------------------------------------
Time and space saving programming decisions made by computer programmers in the
1960's have resulted in two-digit computer codes that recognize "00" as "1900",
not "2000". Such computers must be reprogrammed to prevent this error and make
them "Year 2000 compliant". A number of the systems employed by the Vantagepoint
Funds have been developed within the past few years and are already Year 2000
compliant. However, some systems are not yet fully compliant. The Funds and VIA
are working with several vendors to make changes to the systems necessary to
achieve full Year 2000 compliance.
19
<PAGE> 25
Other information, including the Statement of Additional Information can be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. For information on the operation of the
public reference room, call 1-800-SEC-0330. The Securities and Exchange
Commission maintains a Web site (http://www.sec.gov) that contains the
Statement of Additional Information and other related information. Copies of
this information may be obtained, upon payment of a duplicating fee, by
writing the Public Reference Section of the SEC, Washington, D.C. 20549-6009.
The Statement of Additional Information is incorporated in this prospectus by
reference -- it is legally a part of this prospectus. Detailed information on
the investment adviser and each subadviser for the Vantagepoint Funds may be
found in this prospectus and in the Statement of Additional Information.
Mutual fund shares are not guaranteed or insured by the FDIC or any other
agency of the U.S. government.
Investment Company Act file numbers:
811-8941; 333-60789
20
<PAGE> 26
THE VANTAGEPOINT FUNDS
STATEMENT OF ADDITIONAL INFORMATION
______________________, 1999
The Vantagepoint Funds is a no-load, diversified open-end management investment
company. The Vantagepoint Funds operates as a "series" investment company,
offering thirteen distinct investment portfolios (the "Funds"), each Fund having
different investment objectives. This Statement of Additional Information
contains additional information about the Funds.
This Statement of Additional Information is not a prospectus. This Statement of
Additional Information is incorporated by reference into, and should be read in
conjunction with, the Funds' current prospectus, also dated _____________, 1999.
A copy of the prospectus may be obtained by writing to the Funds or calling
1-800-****.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Description of the Fund and Its Investments and Risks ........
Management of the Fund .......................................
Control Persons and Principal Holders of Securities ..........
Investment Advisory and Other Services .......................
Brokerage Allocation and Other Practices .....................
Capital Stock and Other Securities ...........................
Purchase, Redemption, and Pricing of Shares ..................
Taxation of the Fund..........................................
Calculation of Performance Data ..............................
</TABLE>
<PAGE> 27
DESCRIPTION OF THE FUND AND ITS INVESTMENTS AND RISKS
GENERAL INFORMATION
The Vantagepoint Funds is a no-load, diversified open-end management investment
company organized as a Delaware business trust. The Vantagepoint Funds are
managed by Vantagepoint Investment Advisers, Inc. ("VIA"), which in turn hires
and manages subadvisers who are responsible for the day-to-day management and
security selections for the Funds. The Vantagepoint Funds are as follows:
Aggressive Opportunities Fund
International Fund
Growth Stock Fund
Growth and Income Fund
Equity Income Fund
Asset Allocation Fund
U.S. Treasury Securities Fund
Money Market Fund
Overseas Equity Index Fund
Mid/Small Company Index Fund
Broad Market Index Fund
500 Stock Index Fund*
Core Bond Index Fund
The following discussion of investment objectives and policies for the Funds
supplements the discussion of those objectives and policies that is set forth in
the prospectus.
INVESTMENT OBJECTIVES AND POLICIES
The policies and guidelines set forth below for each Fund have been adopted by
the Board of Directors of the Vantagepoint Funds to govern the management and
administration of each Fund by VIA. Those designated as fundamental in this
Statement of Additional Information and in the prospectus cannot be changed
without shareholder approval. Other policies and guidelines described below and
in the prospectus may be reviewed and revised at the discretion of the Board of
Directors. Each Fund's investment administration is under the supervision of
VIA, which is responsible for the appointment and monitoring of subadvisers to
handle the day-to-day investment of assets assigned to them.
The assets of each Fund are managed by one or more subadvisers. With the
exception of the Index Funds and the Money Market Fund, subadvisers are retained
to manage a particular portion of each Fund under the terms of written
investment advisory contracts with VIA.
As explained in the prospectus, each Index Fund is structured as a "feeder"
fund investing in a single "master" registered mutual fund which has identical
investment objectives and strategy as the applicable Index Fund. With the
exception of the Overseas Equity Index Fund, the investment adviser for each
"master" fund in which the corresponding Index Fund invests is Barclay's Global
Investors, N.A. The investment adviser for the "master" fund in which the
Overseas Equity Index Fund invests is Bankers Trust.
The Money Market Fund is invested in the AIM Liquid Assets Fund, a registered
money market mutual fund. The mutual fund's investment adviser is AIM Advisors.
Inc.
The Product is not sponsored, endorsed, sold or promoted by Standard &
Poor's a division of the McGraw-Hill Companies, Inc. ("S&P"). S&P makes no
representation or warranty, express or implied, to the owners of the Product or
any member of the public regarding the advisability of investing in securities
generally or in the Product particularly or the ability of the S&P 500 Index to
track general stock market performance. S&P's only relationship to the Licensee
is the licensing of certain trademarks and trade names of S&P and of the S&P
500 Index which is determined, composed and calculated by S&P without regard to
the Licensee or the Product. S&P has no obligation to take the needs of the
Licensee or the owners of the Product into consideration in determining,
composing or calculating the S&P 500 Index. S&P is not responsible for and has
not participated in the determination of the prices and amount of the Product
or the timing of the issuance or sale of the Product or in the determination or
calculation of the equation by which the Product is to be converted into cash.
S&P has no obligation or liability in connection with the administration,
marketing or trading of the Product.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 500
INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR
IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEES, OWNERS OF THE PRODUCT, OR
ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500 INDEX OR ANY DATA
INCLUDED THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY
DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OR USE WITH RESPECT TO THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY
SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS),
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
<PAGE> 28
Each subadviser is selected for its individual investment management expertise
and each operates independently of the others. Each subadviser is either
registered with the Securities and Exchange Commission (SEC) under the
Investment Advisers Act of 1940 or is a Bank, Insurance Company or Trust Company
exempt as such from registration. Further information on each Fund's
subadviser(s) may be found in this Statement of Additional Information in the
description of each Fund and under the heading "Investment Advisory and Other
Services".
Each subadviser agrees to exercise complete management discretion over assets of
the Fund allocated to its account in a manner consistent with the Fund's
investment policies and guidelines and within such further investment
limitations and conditions as may be established by VIA.
A formal review and appraisal of each Fund's investment objectives and
performance will be conducted periodically by the Board of Directors, and any
material changes in the Fund's fundamental investment objectives will be put to
a vote of its shareholders.
The Funds may engage in one or more securities lending programs conducted by the
Funds' custodian or other appropriate entities.
COMPARATIVE INDEXES
The Funds may, from time to time, use one or more of the unmanaged indexes
listed below for purposes of appraising fund performance. This list of indexes
is not intended to be all inclusive, and other indexes, benchmarks or peer
groups may be used, as deemed appropriate by the Board of Directors.
Standard & Poor's 500 Stock Index -- is a well diversified list of 500
companies representing the U.S. Stock Market.
Standard & Poor's MidCap 400 Index -- is composed of 400 medium sized domestic
stocks.
<PAGE> 29
Standard & Poor's BARRA MidCap 400 Growth Index -- consist of the stocks of the
S&P MidCap 400 Index having comparatively high price-to-book ratios.
Wilshire 5000 Equity Index -- consists of approximately 7,000 common equity
securities, covering all stocks in the U.S. for which daily pricing is
available.
Wilshire 4500 Equity Index -- consists of all stocks in the Wilshire 5000 except
for the 500 stocks in the Standard & Poor's 500 Index.
Morgan Stanley Capital International EAFE Index -- is an arithmetic, market
value-weighted average of the performance of over 1100 securities listed on the
stock exchanges of countries in Europe, Australia and the Far East.
Lehman Brothers Long-Term Treasury Bond Index -- is composed of all bonds
covered by the Shearson Lehman Hutton Treasury Bond Index with maturities of 10
years or greater.
Lehman Brothers Aggregate Bond Index -- is a market weighted index that contains
individually priced U.S. Treasury, agency, corporate, and mortgage pass-through
securities rated BBB or better. The securities included in the Index have a
market value of over $4 trillion.
Lehman Brothers Corporate (BAA) Bond Index -- all publicly offered fixed-rate,
nonconvertible domestic corporate bonds rated Baa by Moody's, with a maturity
longer than 1 year and with more than $25 million outstanding. This Index
includes over 1,000 issues.
Merrill Lynch 5-7 Year Treasury Index -- All U.S. Treasury Notes and Bonds with
maturities greater than or equal to 5 years and less than 7 years.
Merrill Lynch 1-3 Year Treasury Index -- All U.S. Treasury Notes and Bonds with
maturities greater than or equal to 1 year and less than 3 years.
Russell 3000 Index -- consists of approximately the 3,000 largest stocks of U.S.
domiciled companies commonly traded on the New York and American Stock Exchanges
or the NASDAQ over-the-counter market, accounting for over 90% of the market
value of publicly traded stocks in the U.S.
Russell 2000 Index -- composed of the 2,000 smallest securities in the Russell
3000 Index, representing approximately 7% of the Russell 3000 total market
capitalization.
ELIGIBLE INVESTMENTS AND INVESTMENT LIMITATIONS
In addition to the securities and financial instruments described in the
prospectus, the Vantagepoint Funds are authorized to invest in the types of
securities and financial instruments listed below. Not all Funds will invest in
all such securities and/or financial
<PAGE> 30
instruments as indicated below.
A. CASH/CASH EQUIVALENTS: Fixed income obligations with maturity less than one
year, including short term accounts managed by a custodian institution, shares
of money market mutual funds, or repurchase agreements. All funds may invest in
the instruments. All funds may also participate in repurchase agreements and
reverse repurchase agreements.
B. FINANCIAL FUTURES: As appropriate for the Fund. A futures contract is an
agreement to buy or sell a specific amount of a commodity or financial
instrument at a particular price on a stipulated future date. Futures are used
to adjust investment exposure, and may involve a small investment of cash
relative to the magnitude of the risk assumed. Futures will not be used to
obtain market leverage. All funds except the Growth Stock Fund and the Money
Market fund may invest in financial futures.
OTHER INVESTMENTS:
The funds may invest in certain other instruments as follows:
i. Warrants. All funds except the Money Market Fund and the U.S.
Treasury Securities fund
ii. Convertible Securities. All funds except the Money Market Fund and
the U.S. Treasury Securities fund
iii. Forward contracts. The International fund and the Overseas Equity
Fund.
iv. Asset or mortgage backed securities. The U.S. treasury Securities
fund, Asset Allocation Fund and core bond index fund.
ELIGIBLE PRACTICES: There are no restrictions on subadvisers as to the
following:
- - Fund turnover.
- - Realized gains and losses.
These guidelines are not fundamental policies and may be changed by the Funds'
directors without a vote of shareholders.
FUND POLICIES AND INVESTMENT LIMITATIONS
The following policies supplement the Funds' investment limitations set forth in
the prospectus. It is a fundamental policy of each Fund not to engage in any of
the activities or business practices set forth below. Unless it is noted that a
particular restriction is not fundamental, these restrictions may not be
changed with respect to a particular Fund without the approval of a
dollar-weighted majority of the outstanding shares (the term "majority" is used
as defined in the Investment Company Act of 1940) of that Fund. A Fund may not:
1) Issue senior securities, (as defined in the Investment Company Act of 1940)
except as permitted by rule, regulation, or order of the S.E.C.; engage in
short sales except as described in the prospectus;
2) Engage in the business of underwriting securities issued by others, except to
the extent a Fund may technically be deemed to be an underwriter under the
Securities Act of 1933, as amended (this restriction is not fundamental);
3) Purchase or otherwise acquire any security if, as a result, more than 15% of
its net assets would be invested in securities that are illiquid (this
restriction is not fundamental);
<PAGE> 31
4) Make loans, except (i) by purchasing bonds, debentures or similar obligations
(including repurchase agreements, subject to the limitation described in (3)
above) which are either publicly distributed or customarily purchased by
institutional investors, and (ii) by lending its securities to banks, brokers,
dealers and other financial institutions so long as such loans are not
inconsistent with the Investment Company Act of 1940 or the Rules and
Regulations or interpretations of the Securities and Exchange Commission
thereunder and the aggregate value of all securities loaned does not exceed
331/3% of the market value of a Fund's net assets;
(5) Pledge, mortgage, or hypothecate its assets, except to secure authorized
borrowings as provided in the prospectus (this restriction is not fundamental);
(6) Buy any securities or other property on margin (except that the Aggressive
Opportunities Fund may enter into short sales as described in the prospectus, as
may be needed to enter into futures and options transactions as described in the
prospectus, and for such short-term credits as are necessary for the clearance
of transactions), or, with the exception of the Aggressive Opportunities Fund,
engage in short sales (unless by virtue of a Fund's ownership of other
securities its has a right to obtain at no added cost which are equivalent in
kind and amount to the securities sold) except as set forth in the prospectus
(this restriction is not fundamental);
(7) Purchase or sell puts or calls, or combinations thereof except as provided
in the prospectus, provided however, that a Fund may enter into commodities
contracts relating to financial instruments, such as futures contracts, index
contracts and options on such contracts, as well as forward currency exchange
transactions and reverse repurchase agreements as set forth in the prospectus;
(8) Purchase or sell real estate or real estate limited partnerships (although a
Fund may purchase securities secured by real estate interests or interests
therein, or issued by companies or investment trusts which invest in real estate
or interests therein);
(9) A Fund will not invest in the securities of other investment companies,
except as may be acquired as part of a merger, consolidation or acquisition of
assets approved by a Fund's shareholders or otherwise to the extent permitted by
section 12 of the Investment Company Act of 1940 (notwithstanding this
restriction, the Index Funds may enter into Master/Feeder arrangements as
described in the prospectus and in this Statement of Additional Information). A
Fund will invest only in investment companies which have investment objectives
and investment policies consistent with those of the Fund making such
investment except that a fund may invest a portion of its assets in a money
market fund for cash management purposes (this restriction is not fundamental);
and
10) Invest in companies for the purpose of exercising control of management.
The above-mentioned Fund policies and investment limitations are considered at
the time investment securities are purchased (with the exception of the
restriction on illiquid securities).
<PAGE> 32
AGGRESSIVE OPPORTUNITIES FUND
STATEMENT OF INVESTMENT POLICIES
I. GENERAL DESCRIPTION AND GOALS
The Aggressive Opportunities Fund seeks high long-term growth by using a
variety of long-term, flexible investment approaches and techniques.
Dividend and interest income, if any, is secondary and incidental to the
Fund's primary objective.
II. INVESTMENT STRATEGY
The Aggressive Opportunities Fund will incorporate complementary
investment disciplines that provide exposure to a variety of portfolio
management approaches, including options, futures, and the use of leverage
and short selling. Each subadviser may employ one or more specific
strategies and will generally concentrate in securities reflecting these
strategies. The Aggressive Opportunities Fund will be more diversified
than each individual subadviser's portfolio.
SUBADVISERS
The Fund has multiple subadvisers:
First Pacific Advisers (Los Angeles, California), for whom Robert
Rodriguez serves as the Fund's portfolio manager. Mr. Rodriguez has 27
years of investment management experience, 15 years with First Pacific
Advisers.
Massachusetts Financial Services (MFS) (Boston, Massachusetts), for whom
Brian Stack serves as the Fund's portfolio manager. Mr. Stack has 15 years
of investment management experience, 5 years with MFS.
TCW Funds Management, Inc. (Los Angeles, California), for whom Douglas
Foreman serves as the Fund's portfolio manager. Mr. Foreman has 9 years
of investment experience, 4 years with TCW.
III. INVESTMENT CHARACTERISTICS
The Aggressive Opportunities Fund may have investment characteristics
which differ from the general U.S. equity market as measured by the
Russell 2000 Index. Because of the broad mandate given subadvisers in
the Aggressive Opportunities
<PAGE> 33
Fund, investment characteristics may be expected to vary widely. However,
the beta of the Fund will frequently be higher than the Russell 2000
Index.
ELIGIBLE INVESTMENT LIMITS
<TABLE>
<CAPTION>
MINIMUM NORMAL RANGE MAXIMUM
------- ------------ -------
<S> <C> <C> <C>
Equity securities 50% 80-100% 100%
Cash and cash
equivalents 0% 0-25% 50%
Fixed income
securities
except derivatives 0% 0-5% 25%
Convertible securities 0% 5-15% 25%
</TABLE>
INTERNATIONAL FUND
STATEMENT OF INVESTMENT POLICIES
I. GENERAL DESCRIPTION AND GOALS
The International Fund seeks long-term growth of capital by investing at
least 65% of its total assets in securities of companies whose principal
place of business is located in countries other than the United States.
The Fund will invest primarily in equity securities, however, debt
securities of foreign governments and private issuers are permitted. The
Fund may invest in securities payable in any currency and may hold foreign
currency.
II. INVESTMENT STRATEGY
The Fund will select subadvisers that represent a variety of investment
approaches investing in countries and companies located primarily outside
the United States. Subadvisers may specialize in a specific, defined
investment style, such as growth or value. Further, a subadviser may have
a particular geographic bias as represented by EAFE (Europe, Australia,
Far East), emerging markets, Pacific Rim or Latin America. The
International Fund will seek diversification by investment approach, type
of security and by the foreign markets in which subadvisers invest. The
majority of the Fund's investments will be in issuers in the EAFE
markets. As global markets evolve, it should be expected that the Fund's
allocations among countries may change. Approximately 5% of the Funds
assets will be invested in a sampling of securities designed to match the
performance of the EAFE Index. This portion of the Fund's assets will be
managed by Barclays Global Fund Advisers.
<PAGE> 34
Investment philosophies incorporated in the International Fund may include
"top-down" approaches which focus on macro-economic and political events.
Judgment, quantitative models and purchasing power parity models are among
the factors that may be used to identify currencies and markets that are
overvalued or undervalued relative to the U.S. dollar. The Fund
subadvisers may also use "bottom-up" strategies which emphasize company
and industry dynamics. The future prospects of growth in earnings per
share, security valuation and dividend considerations of companies will be
among the investment criteria of those subadvisers. Investments may
include companies in larger established countries and companies as well as
companies in smaller emerging markets. The Fund's performance may be
significantly affected by changes in foreign currency exchange rates.
SUBADVISERS
The Fund has multiple subadvisers:
Templeton Global Advisers, LTD. Inc. (Nassau, Bahamas), for whom Howard
Leonard, CFA, serves as the Fund's portfolio manager. Mr. Leonard has
9 years of investment management experience, all of them with Templeton.
Rowe Price-Fleming International, Inc. (Baltimore, Maryland), has an
Investment Advisory Group that has day-to day responsibility for managing
the portfolio and executing the Fund's investment program.
III. INVESTMENT CHARACTERISTICS
The International Fund will have investment characteristics which differ
significantly from investments in the United States equity market. It is
expected that the Fund will exhibit more volatility than a fund invested
primarily in United States issues. Increased volatility will result from
fluctuations in currencies, political and economic events and factors, as
well as, both worldwide and country specific, as well as issue specific,
considerations.
It is expected that the International Fund will exhibit return patterns
and volatility characteristics similar to those of the EAFE Index. To the
extent that emerging markets are included in the Fund, volatility will
increase based on the proportion of the Fund allocation to emerging
markets.
<TABLE>
<CAPTION>
RELATIVE TO EAFE
CHARACTERISTIC INDEX
<S> <C>
Capitalization Lower/Similar
Standard Deviation Lower
</TABLE>
<PAGE> 35
ELIGIBLE INVESTMENT LIMITS
<TABLE>
<CAPTION>
MINIMUM NORMAL RANGE MAXIMUM
------- ------------ -------
<S> <C> <C> <C>
Equity securities 50% 80-100% 100%
Cash and cash
equivalents 0% 0-20% 50%
Fixed income
securities 0% 0-10% 25%
</TABLE>
GROWTH STOCK FUND
STATEMENT OF INVESTMENT POLICIES
I. GENERAL DESCRIPTION AND GOALS
The Growth Stock Fund seeks long-term growth of capital by investing
primarily in common stocks with above-average potential for growth in
corporate earnings. Dividend income is incidental to the Fund's overall
objective.
II. INVESTMENT STRATEGY
Growth Stock Fund is designed to incorporate complementary investment
disciplines that provide exposure to a wide variety of portfolio
management approaches. Each subadviser may employ one or more specific
growth strategies and will generally concentrate in securities reflecting
those strategies. However, the Fund in the aggregate will remain
diversified.
Investment strategies employed by the subadvisers included in the Growth
Stock Fund may focus on past patterns of earnings as well as future
prospects for growth in corporate earnings per share. For example,
earnings growth may result from changes in a company's management, an
industry trend, a cyclical recovery, unit growth, new products and product
expansion. Investments may include securities of large established growth
companies, medium size firms, and smaller emerging growth companies.
SUBADVISERS
The Fund has multiple subadvisers:
Cadence Capital Management (Boston, Massachusetts), for whom William B.
Bannick serves as the Fund's portfolio manager. Mr. Bannick has 14
years of investment management experience, 6 years with Cadence.
<PAGE> 36
William Blair & Company, LLC (Chicago, Illinois), for whom Robert C.
Lanphier, IV serves as the Fund's portfolio manager. Mr. Lanphier has
11 years of investment management experience, all of them with William
Blair.
Neuberger & Berman, LLC (New York, New York), for whom Jennifer K.
Silver, CFA, serves as the Fund's portfolio manager. Ms. Silver has 17
years of investment management experience, 1 year with Neuberger &
Berman.
Barclays Global Fund Advisers (San Francisco, California) uses an
index approach to managing the Fund's assets.
Fidelity Management Trust Company (Boston, Massachusetts), which manages
two separate accounts for the Fund. The portfolio manager for the Small
Company Growth account is Kennedy P. Richardson, who has 20 years of
investment management experience, 13 years with Fidelity. The portfolio
manager for the Aggressive Equity account is Neal Miller, who has 15 years
of investment management experience, 10 years with Fidelity.
III. INVESTMENT CHARACTERISTICS
The Growth Stock Fund may have investment characteristics which differ
from the general market, as measured by the Standard & Poor's 500 Index.
For the total Fund, these would include, but are not limited to:
<TABLE>
<CAPTION>
CHARACTERISTIC PERFORMANCE RELATIVE TO S&P 500 INDEX
<S> <C>
Capitalization Lower
Dividend Yield Lower
Historical 5 year EPS Growth Higher
Price to Earnings Ratio Higher
Standard Deviation Higher
</TABLE>
The Fund shall be managed to limit the concentration in the securities of
any one issuer through guidelines established by VIA.
<TABLE>
<CAPTION>
ELIGIBLE INVESTMENT LIMITS
MINIMUM RANGE MAXIMUM
------- ----- -------
<S> <C> <C> <C>
Equity securities 0% 0-100% 100%
Cash and cash
equivalents 0% 0-25% 100%
Fixed income securities
except derivatives 0% 5-15% 25%
</TABLE>
<PAGE> 37
<TABLE>
<S> <C> <C> <C>
Convertible securities 0% 5-15% 25%
</TABLE>
GROWTH AND INCOME FUND
STATEMENT OF INVESTMENT POLICIES
I. GENERAL DESCRIPTION AND GOALS
The Growth and Income Fund seeks long-term capital appreciation and
current income by investing primarily in common stocks. The Fund may also
invest in other equity securities including, but not limited to,
convertible securities. The goal is to provide a high total return from
underlying security positions that will offer price appreciation because
of undervaluation, earnings growth, or both with a focus on those which
may also provide current dividend income.
II. INVESTMENT STRATEGY
The Fund shall have subadvisers that represent a variety of portfolio
management approaches and investment disciplines. These investment
approaches will be combined in a complementary manner in an attempt to
achieve effectively the investment objective of the Fund.
Investment strategies employed by the subadvisers may involve:
- a focus on past patterns as well as future prospects for growth in
corporate earnings per share;
- an emphasis on securities that pay current dividends and offer
potential earnings growth;
- debt and equity securities which may not currently pay dividends, but
offer prospects for capital appreciation or future income;
- production of long-term capital growth by investing in securities that
the subadviser believes to be undervalued at the time of purchase where
the production of income in a secondary objective;
-the ability to emphasize a growth or income-oriented strategy
opportunistically.
<PAGE> 38
SUBADVISERS
The Fund has multiple subadvisers:
Putnam Investments, for whom Manuel Weiss Herrero serves as the Fund's
portfolio manager. He has 11 years of investment experience, all of them
with Putnam.
Capital Guardian, for whom Bryan Jacoboski serves as the Fund's
portfolio manager. Mr. Jacoboski has 17 years of investment management
experience, 4 years with Capital Guardian.
III. INVESTMENT CHARACTERISTICS
The Growth and Income Fund may have investment characteristics which
differ from the general market as measured by the Standard & Poor's 500
Index. For the total Fund, these would include, but are not limited to:
<TABLE>
<CAPTION>
CHARACTERISTIC RELATIVE TO S&P 500
<S> <C>
Capitalization Somewhat Lower
Dividend Yield Similar
Hist. 5 year EPS Growth Similar
Price to Earnings Ratio Similar
Standard Deviation Similar
</TABLE>
EQUITY INCOME FUND
STATEMENT OF INVESTMENT POLICIES
I. GENERAL DESCRIPTION AND GOALS
The Equity Income Fund seeks long-term growth of capital by investing
primarily in common stocks, and the Fund may also invest in convertible
securities. The goal is to provide a high level of current income from
underlying security positions that will also offer price appreciation
because of undervaluation, earnings growth, or both.
II. INVESTMENT STRATEGY
<PAGE> 39
The Equity Income Fund will incorporate complementary investment
disciplines that provide exposure to a variety of portfolio management
approaches. Each subadviser may employ one or more specific strategies
each of which have in common the objective of obtaining yield. The Fund
will tend to be concentrated in higher yielding industries including, for
example, utilities, energy, financial, and cyclical companies. In addition
it is likely, because of the Fund's income requirement, that large
capitalization companies will dominate. The Equity Income Fund will be
more diversified than each individual subadviser's portfolio.
SUBADVISERS
The Fund has multiple subadvisers:
Crawford Investment Counsel (Atlanta, Georgia), for whom John H.
Crawford III serves as the Fund's portfolio manager. Mr. Crawford has
26 years of experience in investment management, 18 years with Crawford.
Newell & Associates (Palo Alto, California), for whom Roger D. Newell
serves as the Fund's portfolio manager. Mr. Newell has 30 years of
investment management experience, 12 years with Newell.
III. INVESTMENT CHARACTERISTICS
The Equity Income Fund may have investment characteristics which differ
from the general market, as measured by the Standard & Poor's 500 Index.
For the total Fund, these would include, but are not limited to:
<TABLE>
<CAPTION>
CHARACTERISTIC PERFORMANCE RELATIVE TO S&P 500 INDEX
<S> <C>
Beta Lower
Capitalization Somewhat Lower
Dividend Yield Higher
Historical 5 year EPS Growth Lower
Price to Earnings Ratio Lower
Standard Deviation Lower
</TABLE>
ELIGIBLE INVESTMENT LIMITS
<TABLE>
<CAPTION>
MINIMUM NORMAL RANGE MAXIMUM
------- ------------ -------
<S> <C> <C> <C>
Equity securities 50% 60-100% 100%
Cash and cash
equivalents 0% 0-25% 50%
Convertible securities 0% 0-30% 40%
</TABLE>
<PAGE> 40
ASSET ALLOCATION FUND
STATEMENT OF INVESTMENT POLICIES
I. GENERAL DESCRIPTION AND GOALS
The Asset Allocation Fund seeks to maximize total return relative to risk
by varying the asset class exposure to a portfolio invested in common
stocks, bonds and money market instruments.
II. INVESTMENT STRATEGY
The Asset Allocation Fund will integrate the activities of its managers to
create a framework in which overall exposure to stocks, bonds and cash as
separate asset classes will be varied in response to criteria including:
- long term expected returns
- historical valuation levels, earnings per share, and
- monetary, economic and other relationships that can be
quantified and measured over a long period of time.
Subadvisers attempt to add value by taking advantage of the changes in
relative value and risk among asset classes. Allocation among asset
classes may change dramatically over time. Allocation among asset classes
is often implemented by using futures contracts. Management of assets
within asset classes may be active or passive.
SUBADVISERS
The Fund has multiple subadvisers:
AVATAR Associates (New York, New York), for whom Edward S. Babbitt
serves as the Fund's portfolio manager. Mr. Babbitt has 28 years of
investment experience, 18 years with AVATAR.
Mellon Capital Management (San Francisco, California), for whom Thomas
B. Hazuka serves as the Fund's portfolio manager. Mr. Hazuka has 12
years of investment experience, all of them with Mellon.
Wilshire Asset Management (Santa Monica, California), for whom Thomas D.
Stevens serves as the Fund's portfolio manager. Mr. Stevens has 18
years of investment management experience, all of them with Wilshire.
<PAGE> 41
[Subadviser to be determined] will manage the Fund's cash portfolio.
III. INVESTMENT CHARACTERISTICS
The investment characteristics of the Fund will depend on the subadvisers'
asset allocation strategy. Such strategy is intended to maximize
risk-adjusted return.
<TABLE>
<CAPTION>
ELIGIBLE INVESTMENT LIMITS
MINIMUM NORMAL RANGE MAXIMUM
------- ------------ -------
<S> <C> <C> <C>
Equity securities 0% 40%-85% 100%
Cash and cash
equivalents 0% 0%-50% 100%
Fixed income
securities 0% 0%-50% 50%
</TABLE>
U.S. TREASURY SECURITIES FUND
STATEMENT OF INVESTMENT POLICIES
I. GENERAL DESCRIPTION AND GOALS
The U.S. Treasury Securities Fund seeks to provide current income and
capital appreciation consistent with an objective of preservation of
principal by investing primarily in intermediate-term debt securities.
II. INVESTMENT STRATEGY
The U.S. Treasury Securities Fund is invested primarily in
intermediate-term U.S. Treasury Securities. In addition, the Fund may
invest up to 35% in U.S. Government agency pass-through mortgage
securities. The Fund may also invest in Treasury note and bond futures to
adjust duration exposure to take advantage of interest rate movements and
yield curve opportunities. The combination of securities and futures
maintains fixed income exposure comparable to that of a fully invested
portfolio position.
SUBADVISERS
The Fund's subadviser is Seix Investment Advisers, Inc. (Woodcliff Lake,
New Jersey), for whom John Talty serves as the Fund's portfolio
manager. Mr. Talty has 17 years of investment management experience,
over 5 years with Seix.
<PAGE> 42
III. INVESTMENT CHARACTERISTICS
The duration of the U.S. Treasury Securities Fund is managed so that it
will not exceed more than 1.25 times that of the Merrill Lynch 5-7 Year
Treasury Index at any time.
The U.S. Treasury Securities Fund may have some investment characteristics
which differ from the Merrill Lynch 5-7 Year Treasury Index primarily due
to the allowance for mortgage pass-through securities.
<TABLE>
<CAPTION>
SECTOR DIVERSIFICATION LIMITS
MINIMUM NORMAL RANGE MAXIMUM
------- ------------ -------
<S> <C> <C> <C>
Cash and Cash Equivalents 0% 5%- 15% 100%
U.S. Treasury Securities (over
one year) 40% 50%-80% 100%
Mortgage Pass-throughs 0% 10%-35% 35%
</TABLE>
IV. REVERSE REPURCHASE TRANSACTIONS
Assets of the U.S. Treasury Securities Fund may be transferred under
reverse repurchase agreements (including dollar roll transactions
involving mortgage securities) on terms established by VIA. Cash
associated with such transactions may be invested only in short term
liquid investment grade instruments.
MONEY MARKET FUND
STATEMENT OF INVESTMENT POLICIES
I. GENERAL DESCRIPTION AND GOALS
The Money Market Fund seeks to obtain the maximum current income, while
maintaining a constant net asset value of $1.00 per share, consistent with
preservation of capital and liquidity, that is available through
investments in specified money market instruments
II. INVESTMENT STRATEGY
The Fund seeks to obtain its investment objective by investing in a
registered money market mutual fund, the AIM Liquid Assets Fund, which in
turn invests in
<PAGE> 43
specified money market instruments. The Fund's average maturity is less
than 90 days. Eligible money market instruments include:
(1) Negotiable certificates of deposit and bankers' acceptances of U.S.
banks having total assets in excess of $1 billion;
(2) Commercial paper (including variable amount master demand notes) rated
A-1 by Standard & Poor's or Prime-1 by Moody's Investor Service, Inc. or,
if not rated, issued by a corporation having an outstanding unsecured debt
issue rated at Aa or better by Moody's or AA or better by Standard &
Poor's;
(3) Short-term corporate obligations rated Aa or better by Moody's or AA
or better by Standard & Poor's;
(4) U.S. Government obligations including bills, notes, bonds and other
debt securities issued by the U.S. Treasury. These are direct obligations
of the U.S. government and differ mainly in interest rates and dates of
issue;
(5) U.S. Government Agency securities issued or guaranteed by U.S.
Government sponsored instrumentalities and Federal agencies;
(6) Securities listed above which are subject to repurchase agreements.
SUBADVISERS
The Fund invests in the AIM Liquid Assets Fund, a registered money market
mutual fund, whose investment adviser is AIM Advisors, Inc.
III. INVESTMENT CHARACTERISTICS
The Money Market Fund is invested in the AIM Liquid Assets Fund, whose
underlying portfolio is invested in accordance with the requirements of
Rule 2a-7 of the Investment Company Act of 1940 regarding portfolio
maturity, quality and diversification. No portfolio instrument will have a
remaining maturity of greater than 397 days, and the Fund's
dollar-weighted average maturity will be less than 90 days.
IV. REVERSE REPURCHASE TRANSACTIONS
Assets of the Money Market Fund may be transferred under reverse
repurchase agreements (including dollar roll transactions involving
mortgage securities) on terms established by VIA. Cash associated with
such transactions may be invested only in short term liquid investment
grade instruments.
<PAGE> 44
THE INDEX FUNDS
---------------
Each Index Fund is structured as a "feeder" fund which invests in a registered
"master" fund. The "master" fund invests in securities in accordance with
investment objectives, policies, and limitations that are identical to those of
the applicable Index Fund.
With the exception of the Overseas Equity Index Fund, the subadviser for each
Index Fund is Barclay's Global Fund Advisers, which focuses at the "master"
fund level on quantitative, structured and passive management. The subadviser
for the Overseas Equity Index Fund is Bankers Trust.
The Index Funds employ "passive" management techniques, meaning that each Fund
tries to match, as closely as possible, the performance of its benchmark index.
Because it would be very expensive to buy and sell all of the stocks (or bonds,
as the case may be) in the target index, the Mid / Small Company, the Broad
Market, and the Core Bond Index Funds use a "sampling" technique. Using computer
programs, each of these Funds selects securities that will recreate its
benchmark index in terms of factors such as industry, size, and other
characteristics. Although such sampling techniques have been very accurate
historically, there is a risk the subadviser could make an error, causing a Fund
to fail to track the indesx as closely as projected.
OVERSEAS EQUITY INDEX FUND
STATEMENT OF INVESTMENT POLICIES
I. GENERAL DESCRIPTION AND GOALS
The Overseas Equity Index Fund seeks long-term growth of capital by
investing primarily in common stocks of companies domiciled outside
the United States. The goal is to provide a portfolio that will
approximate, before fees, the investment characteristics and
performance of the Morgan Stanley Capital International Europe
Australia and Far East (EAFE) Index.
II. INVESTMENT STRATEGY
The Overseas Equity Index Fund will employ a passive management
strategy to structure a portfolio that will approximate investment
holdings, characteristics, and investment returns of the EAFE Index
of common stocks of companies domiciled outside the United States.
<PAGE> 45
The Fund will maintain equity exposure for cash balances by purchasing
appropriate futures contracts to gain exposure to the components of the
Index. Futures contracts will not be used for the purpose of obtaining
leverage.
III. INVESTMENT CHARACTERISTICS
The Overseas Equity Index Fund should have portfolio characteristics
similar to the EAFE Index.
ELIGIBLE INVESTMENT LIMITS
The Overseas Equity Index Fund will be, through its "master" fund, fully
invested at all times in a combination of equity securities, equity index
futures contracts and small amounts of cash not covered by futures
contracts.
MID / SMALL COMPANY INDEX FUND
STATEMENT OF INVESTMENT POLICIES
I. GENERAL DESCRIPTION AND GOALS
The Mid / Small Company Index Fund seeks long-term growth of capital by
investing primarily in common stocks. The goal is to provide a portfolio
that will approximate the investment characteristics and performance of
the Wilshire 4500 index.
II. INVESTMENT STRATEGY
The Mid / Small Company Index Fund will employ a passive management
strategy to structure a portfolio that will approximate investment
holdings, characteristics, and investment returns (before fees) of the
Wilshire 4500 Index of common stocks.
The Fund will maintain equity exposure for cash balances by purchasing S&P
500 and S&P 400 Index futures contracts. Futures contracts will not be
used for the purpose of obtaining leverage.
III. INVESTMENT CHARACTERISTICS
The Mid / Small Company Index Fund should have portfolio characteristics
similar to the Wilshire 4500 Index.
<PAGE> 46
ELIGIBLE INVESTMENT LIMITS
The Mid / Small Company Index Fund, through its "master" fund, will be
fully invested at all times in a combination of equity securities and
equity index futures contracts and small amounts of cash not covered by
futures contracts.
BROAD MARKET INDEX FUND
STATEMENT OF INVESTMENT POLICIES
I. GENERAL DESCRIPTION AND GOALS
The Broad Market Index Fund seeks long-term growth of capital by investing
primarily in common stocks. The goal is to provide a portfolio that will
approximate the investment characteristics and performance of the Wilshire
5000 Index.
II. INVESTMENT STRATEGY
The Broad Market Index Fund will employ a passive management strategy to
structure a portfolio that will approximate investment holdings,
characteristics, and investment returns of the Wilshire 5000 Index of
common stocks.
The Fund will maintain equity exposure for cash balances by purchasing S&P
500 and S&P 400 Index futures contracts. Futures contracts will not be
used for the purpose of obtaining leverage.
IV. INVESTMENT CHARACTERISTICS
The Broad Market Index Fund should have portfolio characteristics similar
to the Wilshire 5000 Index.
ELIGIBLE INVESTMENT LIMITS
The Broad Market Index Fund, through its "master" fund, will be fully
invested at all times in a combination of equity securities, equity index
futures contracts and small amounts of cash not covered by futures
contracts.
<PAGE> 47
500 STOCK INDEX FUND
STATEMENT OF INVESTMENT POLICIES
I. GENERAL DESCRIPTION AND GOALS
The 500 Stock Index Fund seeks long-term growth of capital by investing
primarily in common stocks. The goal is to provide a portfolio that will
approximate the investment characteristics and performance of the Standard
and Poor's 500 Index.
II. INVESTMENT STRATEGY
The 500 Stock Index Fund employs a passive management strategy to
structure a portfolio that will approximate investment holdings,
characteristics, and investment returns of the Standard & Poor's 500 Index
of common stocks.
The Fund will maintain equity exposure for cash balances by purchasing S&P
500 Index futures contracts. Futures contracts will not be used for the
purpose of obtaining leverage.
III. INVESTMENT CHARACTERISTICS
The 500 Stock Index Fund should have portfolio characteristics similar to
the Standard and Poor's 500 Index.
ELIGIBLE INVESTMENT LIMITS
The 500 Stock Index Fund, through its "master" fund, will be fully
invested at all times in a combination of equity securities and equity
index futures contracts and small amounts of cash not covered by futures
contracts.
CORE BOND INDEX FUND
STATEMENT OF INVESTMENT POLICIES
I. GENERAL DESCRIPTION AND GOALS
The Core Bond Index Fund seeks to provide current income and capital
appreciation consistent with the return of the broadly defined U.S. fixed
income market. The goal is to provide a portfolio that will approximate
the investment characteristics and performance of the Lehman Brothers
Aggregate Bond Index.
<PAGE> 48
II. INVESTMENT STRATEGY
The Core Bond Index Fund will employ a passive management strategy to
structure a portfolio that will approximate investment holdings,
characteristics, and investment returns of the Lehman Brothers Aggregate
Bond Index of fixed income securities.
The Fund may maintain fixed income exposure for cash balances by
purchasing U. S. Treasury Bond and Note financial futures contracts.
Futures contracts will not be used for the purpose of obtaining leverage.
III. INVESTMENT CHARACTERISTICS
The Core Bond Fund should have portfolio characteristics similar to the
Lehman Brothers Aggregate Bond Index.
ELIGIBLE INVESTMENT LIMITS
The Core Bond Index Fund, through its "master" fund, will be fully
invested at all times in a combination of fixed-income securities, bond
index futures contracts and small amounts of cash not covered by futures
contracts.
MANAGEMENT OF THE VANTAGEPOINT FUNDS
The Vantagepoint Funds is organized as a Delaware business trust and is governed
by a 7-member Board of Directors, one of whom is an "interested" director as
that term is defined in the Investment Company Act of 1940. The Directors stand
in the position of fiduciaries to the shareholders and, as such, they have a
duty of due care and loyalty, and are responsible for protecting the interests
of shareholders. The Directors are responsible for the overall supervision of
the operations of the Vantagepoint Funds and evaluation of the performance of
its investment adviser.
Vantagepoint Investment Advisers, LLC ("VIA") serves as investment adviser to
the Funds and employs a supporting staff of management personnel needed to
provide the requisite services to the Funds and also furnishes the Funds with
necessary office space, furnishings, and equipment. Each Fund pays its share of
VIA's net expenses which are allocated among the Funds under procedures
approved by the Funds' Board of Directors. In addition, each Fund bears its own
direct expenses, such as legal, auditing and custodial fees.
The Officers of the Vantagepoint Funds are also officers of VIA. The Officers of
the Funds manage its day-to-day operations and are responsible to the Funds'
Board of Directors.
The Vantagepoint Funds and affiliates adhere to a Code of Ethics established
pursuant to Rule 17j-1 of the Investment Company Act of 1940. The Code is
designed to prevent unlawful
<PAGE> 49
practices in connection with the purchase and sale of securities by persons
associated with the Funds, including officers and employees of VIA.
The names of the Directors and Officers of the Funds and their principal
occupations over the last 5 years may be found in the prospectus under the
heading "Management of the Fund".
COMPENSATION
------------
Directors and Officers of the Funds do not receive salaries, retirement
benefits, deferred compensation or any other form of compensation from the
Vantagepoint Funds. Directors are reimbursed for expenses incurred in the
exercise of their duties. As of the date of this Statement of Additional
Information, Directors and Officers of the Funds as a group beneficially owned
less than 1% of the outstanding shares of the Funds.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
Initially, the principal shareholder in the Vantagepoint Funds will be the ICMA
Retirement Trust (the "RT"), a District of Columbia common law trust. The RT was
established for the purpose of holding and investing the assets of public sector
retirement and deferred compensation plans. The RT will own a majority of the
outstanding shares of the Funds upon registration.
In exercising its rights as a shareholder in the Funds, the RT will seek
instructions from its investors, the plan sponsors of the public sector
retirement plans invested in the RT (the "employers"), in advance of exercising
the RT's voting rights. The RT will vote its shares of the Fund in the same
proportion as the instructions that it receives from the employers.
INVESTMENT ADVISORY AND OTHER SERVICES
The adviser to Vantagepoint Funds, VIA, as a wholly-owned subsidiary, is
controlled by the ICMA Retirement Corporation ("RC"), a retirement plan
administrator and investment adviser whose principal investment advisory client
is the RT. RC was established as a not-for-profit organization in 1972 to assist
state and local governments and their agencies and instrumentalities in the
establishment and maintenance of deferred compensation and qualified retirement
plans for the employees of such public sector entities. These plans are
established and maintained in accordance with Sections 457 and 401,
respectively, of the Internal Revenue Code of 1986, as amended. RC has been
registered as an investment adviser with the U.S. Securities and Exchange
Commission since 1983.
<PAGE> 50
RC is governed by a 10-member Board of Directors approved by the Executive
Committee of the International City/County Management Association, the
organization that founded RC. RC is a non-stock corporation.
VIA is a Delaware limited liability company, and is registered as an investment
adviser with the Securities and Exchange Commission.
VIA provides investment advisory services to each of the Vantagepoint Funds
pursuant to a Master Advisory Agreement (the "Advisory Agreement"). The advisory
services include Fund design, establishment of Fund investment objectives and
strategies, selection and management of subadvisers, and performance monitoring.
VIA furnishes periodic reports to the Funds' Board of Directors regarding the
investment strategy and performance of each Fund.
Pursuant to the Advisory Agreement, the Vantagepoint Funds compensate VIA for
these services by paying VIA an annual advisory fee assessed against daily
average net assets under management in each Fund as follows:
<TABLE>
<CAPTION>
Advisory fee
------------
<S> <C>
All Funds except the Index Funds 0.10%
Index Funds 0.05%
</TABLE>
VIA or its broker-dealer affiliate, ICMA-RC Services, Inc., provides all
distribution and marketing services for the Funds. VIA or its transfer agent
affiliate, Vantagepoint Transfer Agents, Inc. ("VTA"), also provides certain
administrative shareholder support services (such as telephone representatives)
for the Vantagepoint Funds related to the retirement plans investing in the
Funds. VIA or VTA, as the case may be, also provides Fund administration
services, such as preparation of shareholder reports and proxies, shareholder
recordkeeping and processing of orders.
VIA, ICMA-RC Services Inc. or VTA receives asset-based compensation for these
administrative services on an annual basis as follows:
<TABLE>
<CAPTION>
Fee for Fee for
Investor Services Fund Services
----------------- -------------
<S> <C> <C>
All Funds except
the Index Funds 0.25% 0.10%
Index Funds
Class I 0.20% 0.10%
- -------
Class II 0.05% 0.05%
- --------
</TABLE>
<PAGE> 51
The advisory fee, the fee for Investor services, and the fee for Fund services
are deducted from the applicable Fund's assets, and their effect is factored
into any quoted share price or investment return for that Fund.
The day-to-day management of each Fund rests with one or more subadvisers hired
by the Funds with the assistance of VIA. The responsibility for overseeing
subadvisers rests with VIA's Investment Division, headed by Senior Vice
President John Tobey, reporting directly to Girard Miller, CFA , President of
VIA. The following tables identify each subadviser and indicate the annual
subadvisory fee that is paid out of the assets of each Fund. The fee is assessed
against average daily net assets under management.
<TABLE>
<CAPTION>
Aggressive Opportunities Fund
Annual
Subadviser Subadvisory Fee
- ---------- ---------------
<S> <C>
First Pacific Advisers 0.80%
Massachusetts Financial Services 0.75%
TCW Funds Management Inc. 0.73%
International Fund
Annual
Subadviser Subadvisory Fee
- ---------- ---------------
Templeton Global Advisers, Ltd 0.55%
Rowe Price-Fleming, International, Inc. 0.57%
Growth Stock Fund
Annual
Subadviser Subadvisory Fee
- ---------- ---------------
Cadence Capital Management 0. 24%
William Blair & Company, LLC 0. 49%
Neuberger & Berman, LLC 0. 45%
Barclays Global Investors, N.A. 0. 03%
Fidelity Management Trust Company
(Small Company Growth account) 0. 49%
(Aggressive Equity account) 0. 45%
</TABLE>
<PAGE> 52
<TABLE>
<CAPTION>
Growth and Income Fund
Annual
Subadviser Subadvisory Fee
- ---------- ---------------
<S> <C>
Capital Guardian 0.50%
Putnam Investments 0.47%
Equity Income Fund
Annual
Subadviser Subadvisory Fee
- ---------- ---------------
Crawford Investment Counsel 0.16%
Newell Associates 0.20%
Asset Allocation Fund
Annual
Subadviser Subadvisory Fee
- ---------- ---------------
AVATAR Associates 0.23 %
Mellon Capital Management 0.27 %
Wilshire Asset Management 0.02%
U.S. Treasury Securities Fund
Annual
Subadviser Subadvisory Fee
- ---------- ---------------
Seix Investment Advisers, Inc. 0.14%
Money Market Fund
Annual
Subadviser Subadvisory Fee
- ---------- ---------------
AIM Advisors, Inc. 0. 08%
Overseas Equity Index Fund
Annual
Subadviser Subadvisory Fee
- ---------- ---------------
Bankers Trust 0. 40%
</TABLE>
<PAGE> 53
<TABLE>
<CAPTION>
Mid/Small Company Index Fund
Annual
Subadviser Subadvisory Fee
- ---------- ---------------
<S> <C>
Barclays Global Investors, N.A. 0.10%
Broad Market Index Fund
Annual
Subadviser Subadvisory Fee
- ---------- ---------------
Barclays Global Investors, N.A. 0. 08%
500 Stock Index Fund
Annual
Subadviser Subadvisory Fee
- ---------- ---------------
Barclays Global Investors, N.A. 0.05 %
Core Bond Index Fund
Annual
Subadviser Subadvisory Fee
- ---------- ---------------
Barclays Global Investors, N.A. 0.08 %
</TABLE>
Information on the advisory services provided by each subadviser for each Fund
can be found in the prospectus, under the heading "Investment Policies,
Investment Objectives, Principal Investment Strategies, and Related Risks".
PORTFOLIO TRANSACTIONS OF THE FUNDS
VIA maintains a commission recapture program with certain brokers for the
Aggressive Opportunities Fund, the Growth Stock Fund, the Growth and Income
Fund, and the Equity Income Fund. Under that program, a percentage of
commissions generated by the portfolio transactions for those Funds is rebated
to the Funds by the brokers and used to reduce the operating expenses of those
Funds.
The advisory agreements with each subadviser authorize the subadviser to select
the brokers or dealers who will execute the purchases or sales of securities for
each Fund.
<PAGE> 54
The agreements direct the subadvisers to use best efforts to obtain the best
available price and most favorable execution with respect to all transactions
for the Funds.
In placing Fund transactions, each subadviser will use its best judgment to
choose the broker most capable of providing the brokerage services necessary to
obtain most favorable execution.
In choosing brokers, the subadvisers may take into account, in addition to
commission cost and execution capabilities, the financial stability and
reputation of the brokers and the brokerage and research services (as those
terms are defined in Section 28(e) of the Securities Exchange Act of 1934)
provided by such brokers. The subadviser is authorized to pay brokers who
provide such brokerage or research services a commission for executing a
transaction which is in excess of the commission another broker would have
charged for that transaction if the subadviser determines that such commission
is reasonable in relation to the value of the brokerage and research services
provided to the subadviser by the broker.
One or more of the subadvisers may aggregate sale and purchase orders from the
Funds with similar orders made simultaneously for other clients of the
subadviser. The subadviser will do so when, in its judgment, such aggregation
will result in overall economic benefit to the Fund, taking into consideration
the advantageous selling or purchase price, brokerage commission, and other
expenses.
If an aggregate order is executed in parts at different prices, or two or more
separate orders for two or more of a subadviser's clients are entered at
approximately the same time on any day are executed at different prices, the
subadviser has discretion, subject to its fiduciary duty to all its clients, to
use an average price at which such securities were purchased or sold for each of
the clients for whom such orders were executed.
The Vantagepoint Funds participate in a securities lending program under which
one or more of the Funds' custodians is authorized to lend Fund securities to
qualified institutional investors under contracts calling for collateral in U.S.
Government securities or cash in excess of the market value of the securities
loaned. The Vantagepoint Funds receive dividends and interest on the loaned
securities. Lending fees received in the Vantagepoint Funds account are used to
reduce overall custodial expenses in the Funds from which the loaned securities
originated.
CAPITAL STOCK AND OTHER SECURITIES
The Vantagepoint Funds is an open-end diversified management investment company
organized as a Delaware business trust. As an open-end company, the Vantagepoint
Funds continually offers shares to the public. With the exception of the Index
Funds, each Fund offers a single class of shares.
<PAGE> 55
The Index Funds offer two classes of shares, Class I and Class II. Class I
shares are open to IRA and other individual accounts and each public sector
employee benefit plan that invests indirectly in the Funds through the ICMA
Retirement Trust containing assets of less than $40 million. Class II shares are
open (i) to qualifying public sector employee benefit plans that invest directly
in the Funds and have qualifying assets in excess of $150 million and (ii)
public sector employee benefit plans that invest indirectly in the Funds through
the ICMA Retirement Trust and have qualifying assets in excess of $40 million so
invested. Other plans with average account balances or other features that are
expected to afford the Index Funds with certain economies of scale in servicing
employee benefit plan participant accounts, may also qualify for Class II
shares.
PURCHASES AND REDEMPTIONS
Purchases
- ---------
Reference is made to the prospectus under the heading "Shareholder Information".
The Funds reserve the right in their sole discretion (i) to suspend the offering
of their shares or (ii) to reject purchase orders when in the judgment of
management such rejection is in the best interest of a particular Fund or Funds.
Redemptions
- -----------
Reference is made to the prospectus under the heading "Shareholder Information".
The Funds may suspend redemption privileges or postpone the date of payment (i)
during any period that the New York Stock Exchange is closed or trading on the
exchange is restricted as determined by the Securities and Exchange Commission
(the "Commission"), (ii) during any period when an emergency exists as defined
by the rules of the Commission as a result of which it is not reasonably
practicable for the Funds to dispose of securities owned by it, or fairly to
determine the value of its assets, and (iii) for such other periods as the
Commission may permit.
Certain redemption requests must include a signature guarantee
- --------------------------------------------------------------
A signature guarantee is designed to protect you against fraud. A redemption
request must be made in writing and must include a signature guarantee if any of
the following situations would apply:
* The account registration has changed within the past 30 days;
* The check is being mailed to an address other than the one listed on the
account (record address);
* The check is being made payable to someone other than the account owner;
* The redemption proceeds are being transferred to an account with a
different registration;
* Proceeds are to be wired to a bank account that was not pre-designated;
<PAGE> 56
* Any other transaction reasonably determined by the Funds to require a
signature guarantee.
A signature guarantee may be obtained from a bank, broker, dealer, credit union
(if authorized under state law), securities exchange or association, clearing
agency or savings association. Please note: a notary public cannot provide a
signature guarantee, and a notarized redemption request is not sufficient.
TAXATION OF THE FUND
The Vantagepoint Funds intends to qualify as a regulated investment company
under Subchapter M of the Internal Revenue Code, which would cause the income
and capital gains of the Trust to "pass through" to the shareholders for federal
income and capital gains tax purposes. Failure to qualify for Subchapter M
status could result in federal income and capital gains taxes being assessed at
the Funds level, which would reduce Fund returns correspondingly.
CALCULATION OF PERFORMANCE DATA
As newly registered funds, the Vantagepoint Funds have no performance history.
However, the Vantagepoint Funds are patterned on, have the same investment
objectives, and are operated in subtantially the same fashion, as certain funds
offered through the ICMA Retirement Trust, an unregistered commingled fund which
holds and invests the assets of public sector retirement plans. Most of the
portfolio securities of each Vantagepoint Fund were transferred in-kind from the
corresponding fund of the ICMA Retirement Trust. The underlying portfolio of
each fund of the ICMA Retirement Trust currently consists solely of the shares
of the corresponding Vantagepoint Fund in which it invests.
The performance shown below is the performance an investor would have received
had the funds of the ICMA Retirement Trust charged the same asset-based fees and
expenses as the Vantagepoint Funds. Those fees and expenses are set forth below
under the heading "Vantagepoint Funds Fee Table".
The ICMA Retirement Trust's index funds offered a single class of shares. The
ICMA Retirement Trust did not offer a money market fund or a growth and income
fund, and performance is not shown. Prior to June 1, 1997, the the ICMA
Retirement Trust's Core Bond Index fund was not indexed. Figures shown will be
updated to most recent quarter-end prior to effectiveness.
Please note that the performance depicted is hypothetical. Actual performance of
the Vantagepoint Funds may vary from that shown.
<PAGE> 57
<TABLE>
<CAPTION>
Since
Fund 1 yr 5 yr 10 yr Inception
- ---- ---- ---- --- ---------
<S> <C> <C> <C> <C>
Aggressive
Opportunities *%
International *%
Growth Stock *% *% *% *%
Equity Income *%
Asset Allocation *% *% *%
U.S. Treasury
Securities *% *%
Overseas Equity Index *%
Mid/Small Company *%
Broad Market Index *% *%
500 Stock Index *%
Core Bond Index *% *% *%
</TABLE>
Advertisements which refer to the use of a Fund as a potential investment for
employee benefit plans or Individual Retirement Accounts may quote a total
return based upon compounding of dividends on which it is presumed no Federal
tax applies.
In assessing such comparison of yields, an investor should keep in mind that the
composition of the investments in the reported averages may not be identical to
the formula used by the Fund to calculate its yield. In addition, there can be
no assurance that any Fund will continue its performance as compared to such
other averages.
<PAGE> 58
VANTAGEPOINT FUNDS FEE TABLE
Annual Fund Operating Expenses
<TABLE>
<CAPTION>
Advisory Subadviser Other Total
Funds Fee Expense Expenses+ Expenses
- ----- --- ------- --------- --------
<S> <C> <C> <C> <C>
Aggressive
Opportunities 0.10% 0.76% 0.40% 1.26%
International 0.10% 0.56% 0.54% 1.20%
Growth Stock 0.10% 0.31% 0.39% 0.80%
Equity Income 0.10% 0.18% 0.38% 0.66%
Asset Allocation 0.10% 0.26% 0.39% 0.75%
U.S. Treasury
Securities 0.10% 0.14% 0.40% 0.64%
Overseas Equity
Index
Class I 0.05% 0.40%/\ 0.36% 0.81%
- -------
Class II 0.05% 0.40%/\ 0.16% 0.61%
- --------
Mid/Small Co.
Index
Class I 0.05% 0.10%/\ 0.36% 0.51%
- -------
Class II 0.05% 0.10%/\ 0.16% 0.31%
- --------
Broad Market
Index
Class I 0.05% 0.08%/\ 0.32% 0.45%
- -------
Class II 0.05% 0.08%/\ 0.12% 0.25%
- --------
500 Stock Index
Class I 0.05% 0.05%/\ 0.35% 0.45%
- -------
Class II 0.05% 0.05%/\ 0.15% 0.25%
- --------
Core Bond Index
Class I 0.05% 0.08%/\ 0.32% 0.45%
- -------
Class II 0.05% 0.08%/\ 0.12% 0.25%
- --------
</TABLE>
+ Amounts shown are based on estimated amounts for the current fiscal year, and
include the Investor services fee, the Fund services fee, and Fund operating
expenses.
/\ Includes subadviser fees and other expenses incurred at the "master" fund
level as a result of the Index Funds being "feeder" funds investing in "master"
funds managed by the subadviser.
LEGAL COUNSEL & INDEPENDENT AUDITORS.
Morgan, Lewis & Bockius, Washington, D.C. serves as legal counsel to The
Vantagepoint Funds. PricewaterhouseCoopers, LLP, Baltimore, MD, serves as
independent auditors.
<PAGE> 59
PART C: OTHER INFORMATION
EXHIBITS
(a) Agreement and Declaration of Trust *
(b) By-laws*
(c) Not applicable
(d) Advisory Contract with VIA.*
Form of Advisory Contract with Subadvisers*
(e) Distribution Agreement
(f) Not applicable
(g) Custodial Contracts**
(h) Not applicable
(i) Legal opinion**
(j) Not applicable
(k) Not applicable
(l) Not applicable
(m) Not applicable
(n) Not applicable
(o) Rule 18f-3 plan*
* Filed herewith
** To be filed by amendment
PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND
Reference is made to the discussion regarding the ICMA Retirement Trust under
the heading "Control Persons and Principal Holders of Securities".
INDEMNIFICATION
Reference is made to Article VII, sections 3 and 4 of Registrant's Agreement and
Declaration of Trust.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to Directors, Officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than payment by the Registrant of expenses incurred or
paid by a Director, Officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
Director, Officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE> 60
BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER
VIA, the investment adviser for the Funds, is wholly owned by the ICMA
Retirement Corporation, which is itself a registered investment adviser. The
ICMA Retirement Corporation also provides plan administration services to public
sector Section 401 qualified retirement plans and public sector Section 457
deferred compensation plans. Girard Miller is President, Chief Executive Officer
and an ex-officio member of the Board of Directors of the ICMA Retirement
Corporation. Mr. Miller is president of the Fund's principal investment adviser,
VIA. Mr. Miller also serves as President of the ICMA Retirement Trust, a
principal shareholder in the Vantagepoint Funds. Mr. Miller serves as President,
Chief Executive Officer, and Supervisory Principal of ICMA-RC Services, Inc., a
wholly-owned broker-dealer subsidiary of the ICMA Retirement Corporation.
Robin L. Wiessmann is a member of the Board of Directors of the ICMA Retirement
Corporation.
LOCATION OF ACCOUNTS AND RECORDS
The books, accounts and other documentation required by section 31(a) of the
Investment Company Act of 1940 and the rules under that section will be
maintained in the physical possession of Registrant, the Registrant's transfer
agent, VTA, which has a place of business at 777 North Capitol Street, NE, Ste.
600, Washington, DC 20002, and the Registrant's custodian(s).
MANAGEMENT SERVICES
Reference is made to the discussion in this Statement of Additional Information
regarding the ICMA Retirement Corporation, ICMA-RC Services, Inc., and
Vantagpoint Transfer Agents, Inc., under the heading "Investment Advisory and
Other Services."
<PAGE> 61
SIGNATURES
Pursuant to the requirements of the Securities Act and the Investment
Company Act, the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, duly authorized, in the City of
Washington, DC, on the 22 day of December 1998
..............................
The Vantagepoint Funds
By: (PAUL F. GALLAGHER)*
George Bissell, Director
and Chair
...........................
(Signature and Title)
Pursuant to the requirements of the Securities Act, this registration
statement has been signed below by the following persons in the capacities and
on the date(s) indicated.
By: (Paul F. Gallagher)*
George Bissell Director December 22, 1998
.............................................................................
(Signature) (Title) (Date)
By: (Paul F. Gallagher)*
Robert A. Bowman Director December 22, 1998
By: (Paul F. Gallagher)*
N. Anthony Calhoun Director December 22, 1998
By: (Paul F. Gallagher)*
Arthur Lynch Director December 22, 1998
By: (Paul F. Gallagher)*
Eddie Moore Director December 22, 1998
.............................................................................
(Signature) (Title) (Date)
By: (Paul F. Gallagher)*
Robin L. Wiessman Director December 22, 1998
* As Attorney-in-Fact, pursuant to Power-of-Attorney dated November 12, 1998.
<PAGE> 1
EXHIBIT 99.a
Effective as of _________________________
AGREEMENT AND DECLARATION OF TRUST
OF
THE VANTAGEPOINT FUNDS
a Delaware Business Trust
Principal Place of Business:
777 NORTH CAPITOL STREET, NE, STE. 600
WASHINGTON, D.C. 20002
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I Page 4
Name and Definitions Page 4
Section 1. Name Page 4
Section 2. Definitions Page 4
ARTICLE II Page 5
Purpose Page 5
ARTICLE III Page 6
Shares Page 6
Section 1. Division of Beneficial Interest Page 6
Section 2. Ownership of Shares Page 7
Section 3. Transfer of Shares Page 7
Section 4. Investments in the Trust Page 7
Section 5. Status of Shares and Limitation of
Personal Liability Page 7
Section 6. Power of Board of Directors to Change
Provisions Relating to Shares Page 8
Section 7. Establishment and Designation of
Shares Page 8
Section 8. Indemnification of Shareholders Page 10
ARTICLE IV Page 10
The Board of Directors Page 10
Section 1. Number, Classes and Tenure Page 10
Section 2. Election of Directors by Shareholders Page 11
Section 3. Nomination of Directors Page 11
Section 4. Removal and Resignation of Directors Page 11
Section 5. Mandatory Interim Shareholder Election Page 11
Section 6. Effect of Death, Resignation, etc., of
a Director Page 12
Section 7. Powers Page 12
Section 8. Payment of Expenses by the Trust Page 15
Section 9. Payment of Expenses by Shareholders Page 15
Section 10. Ownership of Assets of the Trust Page 16
Section 11. Service Contracts Page 16
ARTICLE V Page 17
Shareholders' Voting Powers and Meetings Page 17
Section 1. Voting Powers Page 17
</TABLE>
2
<PAGE> 3
<TABLE>
<S> <C> <C>
Section 2. Notice and Meetings Page 17
Section 3. Quorum and Required Vote Page 18
Section 4. Action by Written Consent Page 18
Section 5. Record Dates Page 18
Section 6. Additional Provisions Page 19
ARTICLE VI Page 19
Net Asset Value, Distributions, and Redemptions Page 19
Section 1. Determination of Net Asset Value, Net
Income, and Distributions Page 19
Section 2. Redemptions and Repurchases Page 19
Section 3. Redemptions at the Option of the
Trust Page 20
Section 4. Disclosure of Ownership Page 20
ARTICLE VII Page 20
Compensation and Limitation of Liability of Directors Page 20
Section 1. Compensation Page 20
Section 2. Standard of Care Page 20
Section 3. Indemnification and Limitation of
Liability Page 20
Section 4. Director's Good Faith Action, Expert
Advice, No Bond or Surety Page 21
Section 5. Insurance Page 21
ARTICLE VIII Page 22
Miscellaneous Page 22
Section 1. Liability of Third Persons Dealing
with Directors Page 22
Section 2. Termination of Trust or Series Page 22
Section 3. Reorganization and Master/Feeder Page 22
Section 4. Amendments Page 23
Section 5. Filing of Copies, References,
Headings Page 24
Section 6. Applicable Law Page 24
Section 7. Provisions in Conflict with Law or
Regulations Page 25
Section 8. Business Trust Only Page 25
Section 9. Derivative Actions Page 26
Section 10. Use of the name "The Vantagepoint Funds"
or "Vantagepoint" Page 26
</TABLE>
3
<PAGE> 4
AGREEMENT AND DECLARATION OF TRUST
OF
THE VANTAGEPOINT FUNDS
WHEREAS, THIS AGREEMENT AND DECLARATION OF TRUST is made and entered
into as of the date set forth below by the Directors named hereunder for the
purpose of forming a Delaware business trust in accordance with the provisions
hereinafter set forth,
NOW, THEREFORE, the Directors hereby direct that a Certificate of
Trust be filed with the Office of the Secretary of State of the State of
Delaware and do hereby declare that the Directors will hold IN TRUST all cash,
securities and other assets which the Trust now possesses or may hereafter
acquire from time to time in any manner and manage and dispose of the same upon
the following terms and conditions for the pro rata benefit of the holders of
Shares in this Trust.
ARTICLE I.
Name and Definitions
Section 1. Name. This trust shall be known as "The Vantagepoint Funds" and the
Directors shall conduct the business of the Trust under that name or any other
name as they may from time to time determine.
Section 2. Definitions. Whenever used herein, unless otherwise
required by the context or specifically provided:
(a) The "1940 Act" refers to the Investment Company Act of 1940 and
the Rules and Regulations thereunder, all as amended from time to time;
(b) "By-Laws" shall mean the By-Laws of the Trust as amended from
time to time which By-Laws are expressly herein incorporated by reference as
part of the "governing instrument" with the meaning of the Delaware Act;
(c) "Class" means a class of Shares in a Series of the Trust
established in accordance with the provisions of Article III hereof.
(d) The terms "Commission" and "Principal Underwriter" shall have
the respective meanings given them in Section 2(a)(7) and Section (2)(a)(29) of
the 1940 Act;
(e) "Declaration of Trust" shall mean this Agreement and
Declaration of Trust, as amended or restated from time to time;
4
<PAGE> 5
(f) "Delaware Act" means the Delaware Business Trust Act, 12 Del.
Code, Sections 3801 et seq., as amended from time to time;
(g) "Directors" refers to the persons who have signed this
Agreement and Declaration of Trust, so long as they continue in office in
accordance with the terms hereof, and all other persons who may from time to
time be duly elected or appointed to serve on the Board of Directors in
accordance with the provisions hereof, and reference herein to a Director or the
Directors shall refer to such person or persons in their capacity as trustees
hereunder;
(h) The term "Interested Person" has the meaning given it in
Section 2(a)(19) of the 1940 Act
(i) "Investment Manager" or "Manager" means a party furnishing
services to the Trust pursuant to any contract described in Article IV, Section
7(a) hereof;
(j) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures, estates and other entities,
whether or not legal entities, and governments and agencies and political
subdivisions thereof, whether domestic or foreign;
(k) "Series" refers to each Series of Shares established and
designated under or in accordance with the provisions of Article III and shall
mean an entity such as that described in Section 18(f)(2) of the 1940 Act, and
subject to Rule 18f-2 thereunder;
(l) "Shareholder" means a record owner of outstanding Shares;
(m) "Shares" means the shares of beneficial interest into which the
beneficial interest in the Trust shall be divided from time to time and includes
fractions of Shares as well as whole Shares;
(n) The "Trust" refers to the Delaware business trust established
under the Delaware Act by this Agreement and Declaration of Trust and the filing
of the Certificate of Trust in the Office of the Secretary of State of the State
of Delaware, as it may be amended from time to time;
(o) The "Trust Property" means any and all property, real or
personal, tangible or intangible, which is owned or held by or for the account
of the Trust, including without limitation the rights referenced in Article
VIII, Section 10 hereof.
ARTICLE II.
Purpose of Trust
The purpose of the Trust is to conduct, operate and carry on the
business of a management investment company registered under the 1940 Act
through one or more Series investing primarily in securities.
5
<PAGE> 6
ARTICLE III.
Shares
Section 1. Division of Beneficial Interest. The beneficial interest
in the Trust shall be divided into one or more Series. Each Series may be
divided into two or more Classes. Subject to the further provisions of this
Article III and any applicable requirements of the 1940 Act, the Directors shall
have full power and authority, in their sole discretion, and without obtaining
any authorization or vote of the Shareholders of any Series or Class thereof,
(i) to divide the beneficial interest in each Series or Class thereof into
Shares, with or without par value as the Directors shall determine, (ii) to
issue Shares without limitation as to number (including fractional Shares), to
such Persons and for such amount and type of consideration, subject to any
restriction set forth in the By-Laws, including cash or securities, at such time
or times and on such terms as the Directors may deem appropriate, (iii) to
establish and designate and to change in any manner any Series or Class thereof
and to fix such preferences, voting powers, rights, duties and privileges and
business purpose of each Series or Class thereof as the Directors may from time
to time determine, which preferences, voting powers, rights, duties and
privileges may be senior or subordinate to (or in the case of business purpose,
different from) any existing Series or Class thereof and may be limited to
specified property or obligations of the Trust or profits and losses associated
with specified property or obligations of the Trust, (iv) to divide or combine
the Shares of any Series or Class thereof into a greater or lesser number
without thereby materially changing the proportionate beneficial interest of the
Shares of such Series or Class in the assets held with respect to that Series,
(v) to Classify or reclassify any issued Shares of any Series or Class thereof
into shares of one or more Series or Classes thereof and (vi) to take such other
action with respect to the Shares as the Directors may deem desirable.
Subject to the distinctions permitted among Classes of the same
Series as established by the Directors consistent with the requirements of the
1940 Act, each Share of a Series of the Trust shall represent an equal
beneficial interest in the net assets of such Series, and each holder of Shares
of a Series shall be entitled to receive such holder's pro rata share of
distributions of income and capital gains, if any, made with respect to such
Series. Upon redemption of the Shares of any Series, the applicable Shareholder
shall be paid solely out of the funds and property of such Series of the Trust.
All references to Shares in this Declaration of Trust shall be deemed
to be Shares of any or all Series or Classes thereof, as the context may
require. All provisions herein relating to the Trust shall apply equally to each
Series of the Trust and each Class thereof, except as the context otherwise
requires.
All Shares issued hereunder, including, without limitation, Shares
issued in connection with a dividend in Shares or a split or reverse split of
Shares, shall be fully paid and non-assessable. Except as otherwise provided by
the Directors, Shareholders shall have no preemptive or other right to subscribe
to any additional Shares or other securities issued by the Trust.
6
<PAGE> 7
Section 2. Ownership of Shares. The ownership of Shares shall be
recorded on the books of the Trust or a transfer or similar agent for the Trust,
which books shall be maintained separately for the Shares of each Series (or
Class). No certificates certifying the ownership of Shares shall be issued
except as the Board of Directors may otherwise determine from time to time. The
Directors may make such rules as they consider appropriate for the issuance of
Share certificates, transfer of Shares of each Series (or Class) and similar
matters. The record books of the Trust as kept by the Trust, or any transfer or
similar agent, as the case may be, shall be conclusive as to the identity of the
Shareholders of each Series (or Class) and as to the number of Shares of each
Series (or Class) held from time to time by each.
Section 3. Transfer of Shares. Except as otherwise provided by the
Directors, Shares shall be transferable on the books of the Trust only by the
record holder thereof or by his duly authorized agent upon delivery to the
Directors or the Trust's transfer agent of a duly executed instrument of
transfer, together with a Share certificate if one is outstanding, and such
evidence of the genuineness of each such execution and authorization and of such
other matters as may be required by the Directors. Upon such delivery, and
subject to any further requirements specified by the Directors or contained in
the By-Laws, the transfer shall be recorded on the books of the Trust. Until a
transfer is so recorded, the Shareholder of record of Shares shall be deemed to
be the holder of such Shares for all purposes hereunder and neither the
Directors nor the Trust, nor any transfer agent or registrar or any officer,
employee or agent of the Trust, shall be affected by any notice of a proposed
transfer.
Section 4. Investments in the Trust. Investments may be accepted by
the Trust from such Persons, at such times, on such terms, and for such
consideration as the Directors from time to time may authorize. Each investment
shall be credited to the individual Shareholder's account in the form of full
and fractional Shares of the Trust, in such Series (or Class) as the purchaser
shall select, at the net asset value per Share next determined for such Series
(or Class) after receipt of the investment; provided, however, that the
Directors may, in their sole discretion, impose a sales charge or transaction
fee upon investments in the Trust.
Section 5. Status of Shares and Limitation of Personal Liability.
Shares shall be deemed to be personal property giving only the rights provided
in this instrument. Every Shareholder by virtue of having become a Shareholder
shall be held to have expressly assented and agreed to the terms hereof and to
have become a party hereto. The death, incapacity, dissolution, termination or
bankruptcy of a Shareholder during the existence of the Trust shall not operate
to terminate the Trust, nor entitle the representative of any deceased
Shareholder to an accounting or to take any action in court or elsewhere against
the Trust or the Directors, but entitles such representative only to the rights
of such Shareholder under this Trust. Ownership of Shares shall not entitle the
Shareholder to any title in or to the whole or any part of the Trust Property or
right to call for a partition or division of the same or for an accounting, nor
shall the ownership of Shares constitute the Shareholders as partners. Neither
the Trust nor the Directors, nor any officer, employee or agent of the Trust
shall have any power to bind personally any Shareholders, nor, except as
specifically provided herein, to call upon any Shareholder for the payment of
any sum of money or assessment whatsoever other than such as the Shareholder may
at any time personally agree to pay.
7
<PAGE> 8
Section 6. Power of Board of Directors to Change Provisions Relating
to Shares. Notwithstanding any other provisions of this Declaration of Trust and
without limiting the power of the Board of Directors to amend the Declaration of
Trust as provided elsewhere herein, the Board of Directors shall have the power
to amend this Declaration of Trust, at any time and from time to time, in such
manner as the Board of Directors may determine in their sole discretion, without
the need for Shareholder action, so as to add to, delete, replace or otherwise
modify any provisions relating to the Shares contained in this Declaration of
Trust, provided that before adopting any such amendment without Shareholder
approval the Board of Directors shall determine that it is consistent with the
fair and equitable treatment of all Shareholders or that Shareholder approval is
not otherwise required by the 1940 Act or other applicable federal or state law.
Subject to the foregoing Paragraph, the Board of Directors may amend
the Declaration of Trust to amend any of the provisions set forth in paragraphs
(a) through (i) of Section 7 of this Article III.
Section 7. Establishment and Designation of Shares. The establishment
and designation of any Series (or Class) of Shares shall be effective upon the
resolution by a majority of the then Directors, adopting a resolution which sets
forth such establishment and designation and the relative rights and preferences
of such Series (or Class) whether directly in such resolution or by reference to
another document including, without limitation, any registration statement of
the Trust, or as otherwise provided in such resolution. Each such resolution
shall be incorporated herein by reference upon adoption.
Shares of each Series (or Class) established pursuant to this Section
6, unless otherwise provided in the resolution establishing such Series, shall
have the following relative rights and preferences:
(a) Assets Held with Respect to a Particular Series. All
consideration received by the Trust for the issue or sale of Shares of a
particular Series, together with all assets in which such consideration is
invested or reinvested, all income, earnings, profits, and proceeds thereof from
whatever source derived, including, without limitation, any proceeds derived
from the sale, exchange or liquidation of such assets, and any funds or payments
derived from any reinvestment of such proceeds in whatever form the same may be,
shall irrevocably be held with respect to that Series for all purposes, subject
only to the rights of creditors, and shall be so recorded upon the books of
account of the Trust. Such consideration, assets, income, earnings, profits and
proceeds thereof, from whatever source derived, including, without limitation,
any proceeds derived from the sale, exchange or liquidation of such assets, and
any funds or payments derived from any reinvestment of such proceeds, in
whatever form the same may be, are herein referred to as "assets held with
respect to" that Series. In the event that there are any assets, income,
earnings, profits and proceeds thereof, funds or payments which are not readily
identifiable as assets held with respect to any particular Series (collectively
"General Assets"), the Directors shall allocate such General Assets to, between
or among any one or more of the Series in such manner and on such basis as the
Directors, in their sole discretion, deem fair and
8
<PAGE> 9
equitable, and any General Asset so allocated to a particular Series shall be
held with respect to that Series. Each such allocation by the Directors shall be
conclusive and binding upon the Shareholders of all Series for all purposes.
Separate and distinct records shall be maintained for each Series and the assets
held with respect to each Series shall be held and accounted for separately from
the assets held with respect to all other Series and the General Assets of the
Trust not allocated to such Series.
(b) Liabilities Held with Respect to a Particular Series. The
assets of the Trust held with respect to each particular Series shall be
charged against the liabilities of the Trust held with respect to that Series
and all expenses, costs, charges and reserves attributable to that Series, and
any general liabilities of the Trust which are not readily identifiable as
being held with respect to any particular Series shall be allocated and charged
by the Directors to and among any one or more of the Series in such manner and
on such basis as the Directors in their sole discretion deem fair and
equitable. The liabilities, expenses, costs, charges, and reserves so charged
to a Series are herein referred to as "liabilities held with respect to" that
Series. Each allocation of liabilities, expenses, costs, charges and reserves
by the Directors shall be conclusive and binding upon the holders of all Series
for all purposes. All Persons who have extended credit which has been allocated
to a particular Series, or who have a claim or contract which has been
allocated to any particular Series, shall look, and shall be required by
contract to look exclusively, to the assets of that particular Series for
payment of such credit, claim, or contract. In the absence of an express
contractual agreement so limiting the claims of such creditors, claimants and
contract providers, each creditor, claimant and contract provider will be
deemed nevertheless to have impliedly agreed to such limitation unless an
express provision to the contrary has been incorporated in the written contract
or other document establishing the claimant relationship.
(c) Dividends, Distributions, Redemptions, and Repurchases.
Notwithstanding any other provisions of this Declaration of Trust, including,
without limitation, Article VI, no dividend or distribution including, without
limitation, any distribution paid upon termination of the Trust or paid on or in
respect of any Series (or Class), nor any redemption or repurchase of, the
Shares of any Series (or Class) shall be effected by the Trust other than from
the assets held with respect to such Series, nor, except as specifically
provided in Section 8 of this Article III, shall any Shareholder of any
particular Series, otherwise have any right or claim against the assets held
with respect to any other Series except to the extent that such Shareholder has
such a right or claim hereunder as a Shareholder of such other Series. The
Directors shall have full discretion, to the extent not inconsistent with the
1940 Act, to determine which items shall be treated as income and which items as
capital; and each such determination and allocation shall be conclusive and
binding upon the Shareholders.
(d) Voting. All Shares of the Trust entitled to vote on a matter
shall vote separately by Series (and, if applicable, by Class): that is, the
Shareholders of each Series (or Class) shall have the right to approve or
disapprove matters affecting the Trust and each respective Series (or Class) as
if the Series (or Classes) were separate companies. There are, however, two
exceptions to voting by separate Series (or Classes). First, if the 1940 Act
requires all shares of the Trust to be voted in the aggregate without
differentiation between the separate Series (or Classes), then all the Trust's
Shares shall be entitled to vote on a dollar-
9
<PAGE> 10
weighted basis, i.e., voting shall be based on the relative net asset value of
each Series (or each Class within a Series). Second, if any matter affects only
the interests of some but not all Series (or Classes), then only the
Shareholders of such affected Series (or Classes) shall be entitled to vote on
the matter on the same dollar-weighted basis.
(e) Equality. All the Shares of each particular Series shall
represent an equal proportionate undivided interest in the assets held with
respect to that Series (subject to the liabilities held with respect to that
Series and such rights and preferences as may have been established and
designated with respect to Classes of Shares within such Series), and each Share
of any particular Series shall be equal to each other Share of that Series.
(f) Fractions. Any fractional Share of a Series shall carry
proportionately all the rights and obligations of a whole share of that Series,
including rights with respect to voting, receipt of dividends and distributions,
redemption of Shares and termination of the Trust.
(g) Exchange Privilege. The Directors shall have the authority to
provide that the holders of Shares of any Series shall have the right to
exchange said Shares for Shares of one or more other Series of Shares in
accordance with such requirements and procedures as may be established by the
Directors.
(h) Combination of Series. The Directors shall have the authority,
without the approval of the Shareholders of any Series unless otherwise required
by applicable law, to combine the assets and liabilities held with respect to
any two or more Series into assets and liabilities held with respect to a single
Series.
(i) Elimination of Series. At any time that there are no Shares
outstanding of any particular Series (or Class) previously established and
designated, the Directors may by resolution of a majority of the then Directors
abolish that Series (or Class) and rescind the establishment and designation
thereof.
Section 8. Indemnification of Shareholders. If any Shareholder or
former Shareholder shall be exposed to liability by reason of a claim or demand
relating to his or her being or having been a Shareholder, and not because of
his or her acts or omissions, the Shareholder or former Shareholder (or his or
her heirs, executors, administrators, or other legal representatives or in the
case of a corporation or other entity, its corporate or other general successor)
shall be entitled to be held harmless from and indemnified out of the assets of
the Trust against all loss and expense arising from such claim or demand, but
only out of the assets held with respect to the particular Series of Shares of
which such Person is or was a Shareholder and from or in relation to which such
liability arose.
10
<PAGE> 11
ARTICLE IV.
The Board of Directors
Section 1. Number, Classes and Tenure. The Directors constituting the
organizing Board of Directors shall be Joan McCallen, Paul Gallagher, and
Michael Schaefer. Thereafter, the number of Directors shall in no event be less
than one nor more than seven unless otherwise specified by resolution approved
at a duly constituted meeting of the Board of Directors or by a written
instrument signed by a majority of the Directors. The members of the organizing
Board of Directors shall, concurrently with their resignation, appoint an
initial Board of Directors to serve for a term ending at a meeting of the Board
of Directors to be held in October, 2001. Thereafter, the Directors shall be
divided into three classes. There shall be three Class 1 Directors and the terms
of Class 1 Directors shall end at a meeting of the Board of Directors to be held
in October 2004. There shall be three Class 2 directors and the terms of the
Class 2 Directors shall end at a meeting of the Board of Directors to be held in
October 2007. Thereafter, terms of Class 1 and Class 2 directors shall end at a
meeting of the Board of Directors to be held on or around the sixth anniversary
of their commencement. There shall be one Class 3 Director. The Class 3 Director
shall be a Director of the ICMA Retirement Corporation and shall stand for
election at each meeting of Directors at which Class 1 or Class 2 Directors
stand for election. Except in cases in which shareholder election is required,
as provided in Article IV, Section 2, immediately below, the Board of Directors
may, by action of a majority of the then Directors at a duly constituted
meeting, elect Directors and fill vacancies in the Board of Directors. Each
Class 1 and Class 2 Director shall serve throughout his or her term or until he
or she dies, resigns, is declared bankrupt or incompetent by a court of
appropriate jurisdiction, or is removed. The Class 3 Director shall serve only
so long as he or she is a Director of the ICMA Retirement Corporation or until
he or she dies, resigns, is declared bankrupt or incompetent by a court of
appropriate jurisdiction, or is removed. No Director shall serve as such for
more than twelve consecutive years nor shall a Director serve a term beginning
after he or she has attained the age of 72.
Section 2. Election of Directors by the Shareholders. Directors shall
be elected by shareholders when such election is required to effect their
appointment under the provisions of the 1940 Act as interpreted or modified by
the Commission exercising its statutory powers. In the case in which any
Director must stand for election under the foregoing provision, all Directors
whose terms would commence concurrently with that of such Director shall
concurrently stand for election or re-election. A meeting of shareholders for
election of one or more Directors shall be held at a place specified by the
Board of Directors immediately in advance of the meeting of the Board of
Directors in which such election would occur were shareholder election not
required.
Section 3. Nomination of Directors. Directors subject to election by
the shareholders shall be nominated by the Board of Directors for election. The
Board of Directors shall consider the recommendations of a Nominating Committee
constituted as provided in the By-laws.
Section 4. Removal and Resignation of Directors. The Board of
Directors may, by action of a majority of the then Directors at a duly
constituted meeting, remove Directors with or without cause. A meeting of
Shareholders for the purpose of electing or removing one or more Directors may
be called (i) by the Directors upon their own vote, or (ii) upon the demand of
Shareholders owning 10% or more of the Shares of the Trust in the aggregate. Any
Director may resign at any time by written instrument signed by him or her and
delivered to any officer of the Trust or to a meeting of the Directors. Such
resignation shall be effective upon receipt
11
<PAGE> 12
unless specified to be effective at some other time. Except to the extent
expressly provided in a written agreement with the Trust, no Director resigning
and no Director removed shall have any right to any compensation or expense
reimbursement for any period following his or her resignation or removal, or any
right to damages on account of such removal.
Section 5. Mandatory Interim Shareholder Election. In the event that
less than a majority of the Directors holding office have been elected by the
Shareholders, the Directors then in office shall call a Shareholders' meeting
for the election of Directors. The Shareholders may elect Directors at any
meeting of Shareholders called by the Directors for that purpose. A meeting of
Shareholders for the purpose of electing one or more Directors may be called (i)
by the Directors upon their own vote, or (ii) upon the demand of Shareholders
owning 10% or more of the Shares of the Trust in the aggregate.
Section 6. Effect of Death, Resignation, etc. of a Director. The
death, declination, resignation, retirement, removal, or incapacity of one or
more Directors, or all of them, shall not operate to annul the Trust or to
revoke any existing agency created pursuant to the terms of this Declaration of
Trust. Whenever a vacancy in the Board of Directors shall occur, until such
vacancy is filled as provided in Article IV, Section 1 or Section 2, the
Directors in office, regardless of their number, shall have all the powers
granted to the Directors and shall discharge all the duties imposed upon the
Directors by this Declaration of Trust. As conclusive evidence of such vacancy,
a written instrument certifying the existence of such vacancy may be executed by
an officer of the Trust or by a majority of the Board of Directors. In the event
of the death, declination, resignation, retirement, removal, or incapacity of
all the then Directors within a short period of time and without the opportunity
for at least one Director being able to appoint additional Directors to fill
vacancies, the Trust's principal Investment Manager is (or if there is not such
principal Investment Manager, a majority of the Trust's Investment Managers are)
empowered to appoint new Trustees subject to the provisions of Section 16(a) of
the 1940 Act.
Section 7. Powers. Subject to the provisions of this Declaration of
Trust, the business of the Trust shall be managed by the Board of Directors, and
such Board shall have all powers necessary or convenient to carry out that
responsibility including the power to engage in securities transactions of all
kinds on behalf of the Trust. The Directors shall have full power and authority
to do any and all acts and to make and execute any and all contracts and
instruments that they may consider necessary or appropriate in connection with
the administration of the Trust. Without limiting the foregoing, the Directors
may: adopt By-Laws not inconsistent with this Declaration of Trust providing for
the regulation and management of the affairs of the Trust and may amend and
repeal them to the extent that such By-Laws do not reserve that right to the
Shareholders; elect and remove, with or without cause, such officers and appoint
and terminate such agents as they consider appropriate; appoint from their own
number and establish and terminate one or more committees consisting of two or
more Directors which may exercise the powers and authority of the Board of
Directors to the extent that the Directors determine; employ one or more
custodians of the assets of the Trust and may authorize such custodians to
employ subcustodians and to deposit all or any part of such assets in a system
or systems for the central handling of securities or with a Federal Reserve
Bank, retain a transfer agent or a shareholder servicing agent, or both; provide
for the issuance and distribution of Shares by the Trust directly or through one
or more Principal Underwriters or
12
<PAGE> 13
otherwise; redeem, repurchase and transfer Shares pursuant to applicable law;
set record dates for the determination of Shareholders with respect to various
matters; declare and pay dividends and distributions to Shareholders of each
Series from the assets of such Series; establish from time to time, in
accordance with the provisions of Article III, Section 6 hereof, any Series (or
Class) of Shares, each such Series (or Class) to operate as a separate and
distinct investment medium and with separately defined investment objectives and
policies and distinct investment purpose; and in general delegate such authority
as they consider desirable to any officer of the Trust, to any committee of the
Directors and to any agent or employee of the Trust or to any such custodian,
transfer or shareholder servicing agent, or Principal Underwriter. Any
determination as to what is in the interests of the Trust made by the Directors
in good faith shall be conclusive. In construing the provisions of this
Declaration of Trust, the presumption shall be in favor of a grant of power to
the Directors. Unless otherwise specified herein or in the By-Laws or required
by law, any action by the Board of Directors shall be deemed effective if
approved or taken by a majority of the Directors present at a meeting of
Directors at which a quorum of Directors is present, within or without the State
of Delaware. Any action required or permitted to be taken at any meeting of the
Board of Directors, or any committee thereof, may be taken without a meeting if
all members of the Board of Directors or committee (as the case may be) consent
thereto in writing, and the writing or writings are filed with the minutes of
the proceedings of the Board of Directors, or committee.
Without limiting the foregoing, the Directors shall have the power
and authority to cause the Trust (or to act on behalf of the Trust):
(a) To invest and reinvest cash, to hold cash uninvested, and to
subscribe for, invest in, reinvest in, purchase or otherwise acquire, own, hold,
pledge, sell, assign, transfer, exchange, distribute, write options on, lend or
otherwise deal in or dispose of contracts for the future acquisition or delivery
of fixed income or other securities, and securities, and securities of every
nature and kind, including, without limitation, all types of bonds, debentures,
stocks, preferred stocks, negotiable or non-negotiable instruments, obligations,
evidences of indebtedness, certificates of deposit or indebtedness, commercial
paper, repurchase agreements, bankers, acceptances, and other securities of any
kind, issued, created, guaranteed, or sponsored by any and all Persons,
including, without limitation, states, territories, and possessions of the
United States and the District of Columbia and any political subdivision,
agency, or instrumentality thereof, any foreign government or any political
subdivision of the U.S. Government or any foreign government, or any
international instrumentality, or by any bank or savings institution, or by any
corporation or organization organized under the laws of the United States or of
any state, territory, or possession thereof, or by any corporation or
organization organized under any foreign law, or in "when issued" contracts for
any such securities, to change the investments of the assets of the Trust; and
to exercise any and all rights, powers, and privileges of ownership or interest
in respect of any and all such investments of every kind and description,
including, without limitation, the right to consent and otherwise act with
respect thereto, with power to designate one or more Persons, to exercise any of
said rights, powers, and privileges in respect of any of said instruments;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, lease,
or write options with respect to or otherwise deal in any property rights
relating to any or all of the
13
<PAGE> 14
assets of the Trust or any Series, subject to any requirements of the 1940 Act;
(c) To vote or give assent, or exercise any rights of ownership,
with respect to stock or other securities or property; and to execute and
deliver proxies or powers of attorney to such person or persons as the Directors
shall deem proper, granting to such person or persons such power and discretion
with relation to securities or property as the Directors shall deem proper;
(d) To exercise powers and right of subscription or otherwise which
in any manner arise out of ownership of securities;
(e) To hold any security or property in a form not indicating that
it is trust property, whether in bearer, unregistered or other negotiable form,
or in its own name or in the name of a custodian or subcustodian or a nominee or
nominees or otherwise or to authorize the custodian or a subcustodian or a
nominee or nominees to deposit the same in a securities depository;
(f) To consent to, or participate in, any plan for the
reorganization, consolidation or merger of any corporation or issuer of any
security which is held in the Trust; to consent to any contract, lease,
mortgage, purchase or sale of property by such corporation or issuer; and to pay
calls or subscriptions with respect to any security held in the Trust;
(g) To join with other security holders in acting through a
committee, depositary, voting Director or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such committee,
depositary or Director, and to delegate to them such power and authority with
relation to any security (whether or not so deposited or transferred) as the
Directors shall deem proper, and to agree to pay, and to pay, such portion of
the expenses and compensation of such committee, depositary or Director as the
Directors shall deem proper;
(h) To compromise, arbitrate or otherwise adjust claims in favor of
or against the Trust or any matter in controversy, including but not limited to
claims for taxes;
(i) To enter into joint ventures, general or limited partnerships
and any other combinations or associations;
(j) To borrow funds or other property in the name of the Trust
exclusively for Trust purposes;
(k) To endorse or guarantee the payment of any notes or other
obligations of any Person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof;
(l) To purchase and pay for entirely out of Trust Property such
insurance as the Directors may deem necessary or appropriate for the conduct of
the business, including, without limitation, insurance policies insuring the
assets of the Trust or payment of distributions and
14
<PAGE> 15
principal on its portfolio investments, and insurance policies insuring the
Shareholders, Directors, officers, employees, agents, investment advisers,
principal underwriters, or independent contractors of the Trust, individually
against all claims and liabilities of every nature arising by reason of holding
Shares, holding, being or having held any such office or position, or by reason
of any action alleged to have been taken or omitted by any such Person as
Director, officer, employee, agent, investment adviser, principal underwriter,
or independent contractor, including any action taken or omitted that may be
determined to constitute negligence, whether or not the Trust would have the
power to indemnify such Person against liability;
(m) To adopt, establish and carry out pension, profit-sharing,
share bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans, trusts and provisions, including the purchasing of life insurance
and annuity contracts as a means of providing such retirement and other
benefits, for any or all of the Directors, officers, employees and agents of the
Trust;
(n) To employ one or more banks, trust companies or companies that
are members of a national securities exchange or such other entities as the
Commission may permit as custodians of any assets of the Trust subject to any
conditions set forth in this Declaration or Trust or in the By-Laws;
(o) To interpret the investment policies, practices or limitations
of any Series or Class; and
(p) To invest part or all of the Trust Property (or part or all of
the assets of any Series), or to dispose of part or all of the Trust Property
(or part or all of the assets of any Series) and invest the proceeds of such
disposition, in securities issued by one or more other investment companies
registered under the 1940 Act (including investment by means of transfer of part
or all of the Trust Property in exchange for an interest or interests in such
one or more investment companies) all without any requirement of approval by
Shareholders unless required by the 1940 Act. Any such other investment company
may (but need not) be a trust (formed under the laws of the State of Delaware or
of any other state) which is classified as a partnership for federal income tax
purposes.
The Trust shall not be limited to investing in obligations maturing
before the possible termination of the Trust or one or more of its Series. The
Trust shall not in any way be bound or limited by any present or future law or
custom in regard to investment by fiduciaries. The Trust shall not be required
to obtain any court order to deal with any assets of the Trust or take any other
action hereunder.
Section 8. Payment of Expenses by the Trust. The Directors are
authorized to pay or cause to be paid out of the principal or income of the
Trust or any Series (or Class), or partly out of the principal and partly out of
income, and to charge or allocate the same to, between or among such one or more
of the Series (or Class) that may be established or designated pursuant to
Article III, Section 6, as they deem fair, all expenses, fees, charges, taxes
and liabilities incurred or arising in connection with the Trust or Series (or
Class), or in connection with the management thereof, including, but not limited
to, the Directors' compensation and such
15
<PAGE> 16
expenses and charges for the services of the Trust's officers, employees,
investment adviser or manager, principal underwriter, auditors, counsel,
custodian, transfer agent, Shareholder servicing agent, and such other agents or
independent contractors and such other expenses and charges as the Directors may
deem necessary or proper to incur.
Section 9. Payment of Expenses by Shareholders. The Directors shall
have the power, as frequently as they may determine, to cause each Shareholder,
or each Shareholder of any particular series, to pay directly, in advance or
arrears, for charges of the Trust's custodian or transfer, Shareholder servicing
or similar agent, an amount fixed from time to time by the Directors, by setting
off such charges due from such Shareholder from declared but unpaid dividends
owed such Shareholder and/or by reducing the number of shares in the account of
such Shareholder by that number of full and/or fractional Shares which
represents the outstanding amount of such charges due from such Shareholder.
Section 10. Ownership of Assets of the Trust. Title to all of the
assets of the Trust shall at all times be considered as vested in the Trust,
except that the Directors shall have power to cause legal title to any Trust
Property to be held by or in the name of one or more of the Directors, or in the
name of the Trust, or in the name of any other Person as nominee, on such terms
as the Directors may determine. The right, title and interest of the Directors
in the Trust Property shall vest automatically in each Person who may hereafter
become a Director. Upon the resignation, removal or death of a Director he or
she shall automatically cease to have any right, title or interest in any of the
Trust Property, and the right, title and interest of such Director in the Trust
Property shall vest automatically in the remaining Directors. Such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered.
Section 11. Service Contracts.
(a) Subject to such requirements and restrictions as may be set
forth in the By-Laws, the Directors may, at any time and from time to time,
contract for exclusive or nonexclusive advisory, management and/or
administrative services for the Trust or for any Series with any corporation,
trust, association or other organization; and any such contract may contain such
other terms as the Directors may determine, including without limitation,
authority for the Investment Manager, Adviser or administrator to determine from
time to time without prior consultation with the Directors what investments
shall be purchased, held, sold or exchanged and what portion, if any, of the
assets of the Trust shall be held uninvested and to make changes in the Trust's
investments, or such other activities as may specifically be delegated to such
party.
(b) The Directors may also, at any time and from time to time,
contract with any corporation, trust, association or other organization,
appointing it exclusive or nonexclusive distributor or Principal Underwriter for
the Shares of one or more of the Series (or Classes) or other securities to be
issued by the Trust. Every such contract shall comply with such requirements and
restrictions as may be set forth in the By-Laws; and any such contract may
contain such other terms as the Directors may determine.
16
<PAGE> 17
(c) The Directors are also empowered, at any time and from time to
time, to contract with any corporations, trusts, associations or other
organizations, appointing it or them the custodian, transfer agent and/or
shareholder servicing agent for the Trust or one or more of its Series. Every
such contract shall comply with such requirements and restrictions as may be set
forth in the By-Laws or stipulated by resolution of the Directors.
(d) The Directors are further empowered, at any time and from time
to time, to contract with any entity to provide such other services to the Trust
or one or more of the Series, as the Directors determine to be in the best
interests of the Trust and the applicable Series.
(e) The fact that:
(i) any of the Shareholders, Directors, or officers of the
Trust is a shareholder, director, officer, partner, Director,
employee, Manager, adviser, Principal Underwriter, distributor, or
affiliate or agent of or for any corporation, trust, association, or
other organization, or for any parent or affiliate of any
organization with which an advisory, management or administration
contract, or principal underwriter's or distributor's contract, or
transfer, shareholder servicing or other type of service contract may
have been or may hereafter be made, or that any such organization, or
any parent or affiliate thereof, is a Shareholder or has an interest
in the Trust, or that
(ii) any corporation, trust, association or other
organization with which an advisory, management or administration
contract or principal underwriter's or distributor's contract, or
transfer, shareholder servicing or other type of service contract may
have been or may hereafter be made also has an advisory, management
or administration contract, or principal underwriter's or
distributor's contract, or transfer, shareholder servicing or other
service contract with one or more other corporations, trust,
associations, or other organizations, or has other business or
interests,
shall not affect the validity of any such contract or disqualify any
Shareholder, Director or officer of the Trust from voting upon or executing the
same, or create any liability or accountability to the Trust or its
Shareholders, provided approval of each such contract is made pursuant to the
requirements of the 1940 Act.
ARTICLE V.
Shareholders' Voting Powers and Meetings
Section 1. Voting Powers. Subject to the provisions of Article III,
Section 7(d), the Shareholders shall have power to vote only (i) for the
election or removal of Directors as provided in Article IV and (ii) with respect
to such additional matters relating to the Trust as may be required by this
Declaration of Trust, the By-Laws or any registration of the Trust with the
Commission (or any
17
<PAGE> 18
successor agency) or any state, or as the Directors may consider necessary or
desirable. Each whole Share shall be entitled to one vote as to any matter on
which it is entitled to vote and each fractional Share shall be entitled to a
proportionate fractional vote. There shall be no cumulative voting in the
election of Directors. Shares may be voted in person or by proxy. A proxy with
respect to Shares held in the name of two or more persons shall be valid if
executed by any one of them unless at or prior to exercise of the proxy the
Trust receives a specific written notice to the contrary from any one of them. A
proxy purporting to be executed by or on behalf of a Shareholder shall be deemed
valid unless challenged at or prior to its exercise and the burden of proving
invalidity shall rest on the challenger. The By-Laws may provide that proxies
may also, or may instead, be given by any electronic or telecommunications
device or in any other manner. Notwithstanding anything else contained herein or
in the By-Laws, in the event a proposal by anyone other than the officers or
Directors of the Trust is submitted to a vote of the shareholders of one or more
Series or Classes thereof or of the Trust, or in the event of any proxy contest
or proxy solicitation or proposal in opposition to any proposal by the officers
or Directors of the Trust, Shares may be voted only in person or by written
proxy at a meeting. Until Shares are issued, the Directors may exercise all
rights of Shareholders and may take any action required by law, this Declaration
of Trust or the By-Laws to be taken by the Shareholders.
Section 2. Notice and Meetings. Meetings of the Shareholders may be
called by the Directors for the purpose of electing or removing Directors as
provided in Article IV and for such other purposes as may be prescribed by law,
by this Declaration of Trust or by the By-Laws. Meetings of the Shareholders may
also be called by the Directors from time to time for the purpose of taking
action upon any other matter deemed by the Directors to be necessary or
desirable. A meeting of Shareholders may be held at any place designated by the
Directors. Written notice of any meeting of Shareholders shall be given or
caused to be given by the Directors by mailing such notice at least seven (7)
days before such meeting, postage prepaid, stating the time and place of the
meeting, to each Shareholder at the Shareholder's address as it appears on the
records of the Trust. Whenever notice of a meeting is required to be given to a
Shareholder under this Declaration of Trust or the By-Laws, a written waiver
thereof, executed before or after the meeting by such Shareholder or his or her
attorney thereunto authorized and filed with the records of the meeting, shall
be deemed equivalent to such notice.
Section 3. Quorum and Required Vote. Except when a larger quorum is
required by applicable law, by the By-Laws or by this Declaration of Trust,
forty percent (40%) of the Shares entitled to vote shall constitute a quorum at
a Shareholders meeting. When any one or more Series (or Classes) is to vote as a
single Class separate from any other Shares, fifty percent (50%) of the Shares
of each such Series (or Classes) entitled to vote shall constitute a quorum at a
Shareholder's meeting of that Series (or Class). Any meeting of Shareholders may
be adjourned from time to time by a majority of the votes properly cast upon the
question of adjourning a meeting to another date and time, whether or not a
quorum is present, and the meeting may be held as adjourned within a reasonable
time after the date set for the original meeting without further notice. Subject
to the provisions of Article III, Section 6(d), when a quorum is present at any
meeting, a majority of the Shares voted shall decide any questions and a
plurality shall elect a Director, except when a larger vote is required by any
provision of this Declaration of Trust or the By-Laws or by applicable law.
Where any provision of law or of this Declaration of Trust requires that the
holders of any Series shall vote as a Series (or that holders of a Class shall
vote as a Class), then a majority of the Shares of that Series (or Class) voted
on the
18
<PAGE> 19
matter (or a plurality with respect to the election of a Director) shall decide
that matter insofar as that Series (or Class) is concerned.
Section 4. Action by Written Consent. Any action taken by
Shareholders may be taken without a meeting if Shareholders holding a majority
of the Shares entitled to vote on the matter (or such larger proportion thereof
as shall be required by any express provision of this Declaration of Trust or by
the By-Laws) and holding a majority (or such larger proportion as aforesaid) of
the Shares of any Series (or Class) entitled to vote separately on the matter
consent to the action in writing and such written consents are filed with the
records of the meetings of Shareholders. Such consent shall be treated for all
purposes as a vote taken at a meeting of Shareholders.
Section 5. Record Dates. For the purpose of determining the
Shareholders of any Series (or Class) who are entitled to vote or act at any
meeting or any adjournment thereof, the Directors may from time to time fix a
time, which shall be not more than ninety (90) days before the date of any
meeting of Shareholders, as the record date for determining the Shareholders of
such Series (or Class) having the right to notice of and to vote at such meeting
and any adjournment thereof, and in such case only Shareholders of record on
such record date shall have such right, notwithstanding any transfer of shares
on the books of the Trust after the record date. For the purpose of determining
the Shareholders of any Series (or Class) who are entitled to receive payment of
any dividend or of any other distribution, the Directors may from time to time
fix a date, which shall be before the date for the payment of such dividend or
such other payment, as the record date for determining the Shareholders of such
Series (or Class) having the right to receive such dividend or distribution.
Without fixing a record date the Directors may for voting and/or distribution
purposes close the register or transfer books for one or more Series for all or
any part of the period between a record date and a meeting of Shareholders or
the payment of a distribution. Nothing in this Section shall be construed as
precluding the Directors from setting different record dates for different
Series (or Classes).
Section 6. Additional Provisions. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters.
ARTICLE VI.
Net Asset Value, Distributions, and Redemptions
Section 1. Determination of Net Asset Value, Net Income, and
Distributions. Subject to Article III, Section 7 hereof, the Directors, in their
absolute discretion, may prescribe and shall set forth in the By-laws or in a
duly adopted vote of the Directors such bases and time for determining the per
Share or net asset value of the Shares of any Series or net income attributable
to the Shares of any Series, or the declaration and payment of dividends and
distributions on the Shares of any Series, as they may deem necessary or
desirable.
19
<PAGE> 20
Section 2. Redemptions and Repurchases. The Trust shall purchase such
Shares as are offered by any Shareholder for redemption, upon the presentation
of a proper instrument of transfer together with a request directed to the Trust
or a Person designated by the Trust that the Trust purchase such Shares or in
accordance with such other procedures for redemption as the Directors may from
time to time authorize; and the Trust will pay therefor the net asset value
thereof, in accordance with the By-Laws and applicable law. Payment for said
Shares shall be made by the Trust to the Shareholder within seven days after the
date on which the request is made in proper form. The obligation set forth in
this Section 2 is subject to the provision that in the event that any time the
New York Stock Exchange (the "Exchange") is closed for other than weekends or
holidays, or if permitted by the Commission during periods when trading on the
Exchange is restricted or during any emergency which makes it impracticable for
the Trust to dispose of the investments of the applicable Series or to determine
fairly the value of the net assets held with respect to such Series or during
any other period permitted by order of the Commission for the protection of
investors, such obligations may be suspended or postponed by the Directors. In
the case of a suspension of the right of redemption as provided herein, a
Shareholder may either withdraw the request for redemption or receive payment
based on the net asset value per share next determined after the termination of
such suspension.
The redemption price may in any case or cases be paid wholly or
partly in kind if the Directors determine that such payment is advisable in the
interest of the remaining Shareholders of the Series for which the Shares are
being redeemed. Subject to the foregoing, the fair value, selection and quantity
of securities or other property so paid or delivered as all or part of the
redemption price may be determined by or under authority of the Directors. In no
case shall the Trust be liable for any delay of any corporation or other Person
in transferring securities selected for delivery as all or part of any payment
in kind.
Section 3. Redemptions at the Option of the Trust. The Directors may require
Shareholders to redeem Shares for any reason under terms set by the Directors,
including, but not limited to, (i) the determination of the Directors that
direct or indirect ownership of Shares of any Series has or may become
concentrated in such Shareholder to an extent that would disqualify any Series
as a regulated investment company under the Internal Revenue Code of 1986, as
amended (or any successor statute thereto), (ii) the failure of a Shareholder to
supply a tax identification number if required to do so, or to have the minimum
investment required (which may vary by Series), or (iii) the failure of a
Shareholder to pay when due for the purchase of Shares issued to him. Any such
redemption shall be effected at the redemption price and in the manner provided
in this Article VI.
Section 4. Disclosure of Ownership. The holders of Shares shall upon
demand disclose to the Trustees in writing such information with respect to
direct and indirect ownership of Shares as the Trustees deem necessary to comply
with the provisions of the Internal Revenue Code of 1986, as amended (or any
successor statute thereto), or to comply with the requirements of any other
taxing authority or other applicable law.
20
<PAGE> 21
ARTICLE VII.
Compensation and Limitation of Liability of Directors
Section 1. Compensation. Directors shall not receive any stated
salaries, retirement benefits, deferred compensation or any other form of
compensation, provided that nothing herein shall be construed to preclude any
Director from serving the Trust in any other capacity and receiving compensation
therefor. The Trust is authorized to pay the necessary expenses of members of
the Board of Directors incurred in connection with the performance of the
official duties of the office. Any proposal to amend this provision to provide
for compensation to the Directors, or to provide for an increase in compensation
to Directors in excess of adjustments required to reflect the rate of inflation,
must be approved by (i) a majority of the Trust's shareholders or (ii) the
Trustees of the ICMA Retirement Trust.
Section 2. Standard of Care. The fiduciary duties of Directors to the
Trust and its Shareholders are the same as those of the directors of a Delaware
corporation to the corporation and its shareholders.
Section 3. Indemnification and Limitation of Liability. A Director,
when acting in such capacity, shall not be personally liable to any Person,
other than the Trust or a Shareholder to the extent provided in this Article
VII, for any act, omission or obligation of the Trust, of such Director, or of
any other Director. A Director shall not be personally liable for monetary
damages for breach of fiduciary duty as a trustee except in cases in which (i)
the Director breaches the duty of loyalty to the Trust or its Shareholders, (ii)
an act or omission not in good faith or that involves intentional misconduct or
a knowing violation of law, (iii) the Director derived an improper personal
benefit. The Directors shall not be responsible or liable in any event for any
neglect or wrong-doing of any officer, agent, employee, Manager or Principal
Underwriter of the Trust, nor shall any Director be responsible for the act or
omission of any other Director. The Trust shall indemnify each Person who is, or
has been, a Trustee, officer, employee or agent of the Trust any Person who is
serving or has served at the Trust's request as a director, officer, trustee,
employee or agent of another organization in which the Trust has any interest as
a shareholder, creditor or otherwise to the extent and in the manner provided in
the By-Laws.
All persons extending credit to, contracting with or having any claim
against the Trust or the Trustees shall look only to the assets of the
appropriate Series, or, if the Trustees have yet to establish Series, of the
Trust for payment under such credit, contract or claim; and neither the Trustees
nor the Shareholders, nor any of the Trust's officers, employees or agents,
whether past, present or future, shall be personally liable therefor.
Every note, bond, contract, instrument, certificate or undertaking and
every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees by any of them in connection with the Trust shall
conclusively be deemed to have been executed or done only in or with respect to
his or their capacity as Trustee or Trustees, and such Trustee or Trustees shall
not be personally liable thereon. At the Trustees' discretion, any note, bond,
contract, instrument, certificate or undertaking made or issued by the Trustees
or by any officer or officers may give notice that the Certificate of Trust is
on file in the Office of the Secretary of State of the State of Delaware
21
<PAGE> 22
and that a limitation on liability of Series exists and such note, bond,
contract, instrument, certificate or undertaking may, if the Trustees so
determine, recite that the same was executed or made on behalf of the Trust by a
Trustee or Trustees in such capacity and not individually or by an officer or
officers in such capacity and not individually and that the obligations of such
instrument are not binding upon any of them or the Shareholders individually but
are binding only on the assets and property of the Trust or a Series thereof,
and may contain such further recital as such Person or Persons may deem
appropriate. The omission of any such notice or recital shall in no way operate
to bind any Trustees, officers or Shareholders individually.
Section 4. Director's Good Faith Action, Expert Advice, No Bond or
Surety. The exercise by the Directors of their powers and discretions hereunder
shall be binding upon everyone interested. A Director shall be liable to the
Trust and to any Shareholder solely for his or her own willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Director, and shall not be liable for errors of
judgment or mistakes of fact or law. The Directors may take advice of counsel or
other experts with respect to the meaning and operation of this Declaration of
Trust, and shall be under no liability for any act or omission in accordance
with such advice nor for failing to follow such advice. The Directors shall not
be required to give any bond as such, nor any surety if a bond is required.
Section 5. Insurance. The Directors shall be entitled and empowered
to the fullest extent permitted by law to purchase with Trust assets insurance
for liability and for all expenses reasonably incurred or paid or expected to be
paid by a Director or officer in connection with any claim, action, suit or
proceeding in which he or she becomes involved by virtue of his or her capacity
or former capacity with the Trust, whether or not the Trust would have the power
to indemnify him or her against such liability under the provisions of this
Article.
ARTICLE VIII.
Miscellaneous
Section 1. Liability of Third Persons Dealing with Directors. No
Person dealing with the Directors shall be bound to make any inquiry concerning
the validity of any transaction made or to be made by the Directors or to see to
the application of any payments made or property transferred to the Trust or
upon its order.
Section 2. Termination of Trust or Series.
(a) Unless terminated as provided herein, the Trust shall continue
without limitation of time. The Trust may be terminated at any time by vote of a
majority of the Shares of each Series entitled to vote, voting separately by
Series, or by the Directors by written notice to the Shareholders. Any Series or
Class may be terminated at any time by vote of a majority of the Shares of that
Series or Class entitled to vote, or by the Directors by written notice to the
Shareholders of that Series or Class.
(b) Upon the requisite Shareholder vote or action by the Directors
to terminate the Trust or any one or more Series of Shares or any Class thereof,
after paying or otherwise providing
22
<PAGE> 23
for all charges, taxes, expenses and liabilities, whether due or accrued or
anticipated, of the Trust or of the particular Series or any Class thereof as
may be determined by the Directors, the Trust shall in accordance with such
procedures as the Directors consider appropriate reduce the remaining assets of
the Trust or of the affected Series or Class to distributable form in cash or
Shares (if any Series remain) or other securities, or any combination thereof,
and distribute the proceeds to the Shareholders of the Series or Classes
involved, ratably according to the number of Shares of such Series or Class held
by the several Shareholders of such Series or Class on the date of distribution.
Thereupon, the Trust or any affected Series or Class shall terminate and the
Directors and the Trust shall be discharged of any and all further liabilities
and duties relating thereto or arising therefrom, and the right, title and
interest of all parties with respect to the Trust or such Series or Class shall
be canceled and discharged.
(c) Upon termination of the Trust, following completion of winding
up of its business, the Directors shall cause a certificate of cancellation of
the Trust's Certificate of Trust to be filed in accordance with the Delaware
Act, which certificate of cancellation may be signed by any one Director.
Section 3. Reorganization and Master/Feeder
(a) Notwithstanding anything else herein, the Directors may,
without Shareholder approval unless such approval is required by applicable law:
(i) cause the Trust to merge or consolidate with or into one or
more trusts (or series thereof to the extent permitted by law), partnerships,
associations, corporations or other business entities (including trusts,
partnerships, associations, corporations or other business entities created by
the Directors to accomplish such merger or consolidation) so long as the
surviving or resulting entity is an open-end management investment company under
the 1940 Act, or is a series thereof, that will succeed to or assume the Trust's
registration under the 1940 Act and that is formed, organized or existing under
the laws of the United States or of a state, commonwealth, possession or colony
of the United States;
(ii) cause the Shares to be exchanged under or pursuant to any
state or federal statute to the extent permitted by law; or
(iii) cause the Trust to incorporate under the laws of
Delaware. Any agreement of merger or consolidation or exchange or certificate of
merger may be signed by a majority of the Directors and facsimile signatures
conveyed by electronic or telecommunication means shall be valid.
(b) Pursuant to and in accordance with the provisions of Section
3815(f) of the Delaware Act, and notwithstanding anything to the contrary
contained in this Declaration of Trust, an agreement of merger or consolidation
approved by the Directors in accordance with this Section 3 may effect any
amendment to the governing instrument of the Trust or effect the adoption of a
new trust instrument of the Trust if the Trust is the surviving or resulting
trust in the merger or consolidation.
(c) The Directors may create one or more business trusts to which
all or any
23
<PAGE> 24
part of the assets, liabilities, profits or losses of the Trust or any Series or
Class thereof may be transferred and may provide for the conversion of Shares in
the Trust or any Series or Class thereof into beneficial interests in any such
newly created trust or trusts or any series or classes thereof.
(d) Notwithstanding anything else herein, the Directors may,
without Shareholder approval, invest all or a portion of the Trust Property of
any Series, or dispose of all or a portion of the Trust Property of any Series,
and invest the proceeds of such disposition in interests issued by one or more
other investment companies registered under the 1940 Act. Any such other
investment company may (but need not) be a trust (formed under the laws of the
State of Delaware or any other state or jurisdiction) (or subtrust thereof)
which is classified as a partnership for federal income tax purposes.
Notwithstanding anything else herein, the Directors may, without Shareholder
approval unless such approval is required by applicable law, cause a Series that
is organized in the master/feeder fund structure to withdraw or redeem its Trust
Property from the master fund and cause such series to invest its Trust Property
directly in securities and other financial instruments or in another master
fund.
Section 4. Amendments. Except as specifically provided in this
Section, the Directors may, without Shareholder vote, restate, amend or
otherwise supplement this Declaration of Trust. Shareholders shall have the
right to vote:
(i) on any amendment that would affect their right to vote granted
in Article V, Section 1 hereof;
(ii) on any amendment to this Section 4 of Article VIII;
(iii) on any amendment as may be required by applicable law or by
the Trust's registration statement filed with the Commission; and
(iv) on any amendment submitted to them by the Directors. Any
amendment required or permitted to be submitted to the Shareholders that, as the
Directors determine, shall affect the Shareholders of one or more Series shall
be authorized by a vote of the Shareholders of each Series affected and no vote
of Shareholders of a Series not affected shall be required. Notwithstanding
anything else herein, no amendment hereof shall limit the rights to insurance
provided by Article VII, Section 5 with respect to any acts or omissions of
Persons covered thereby prior to such amendment nor shall any such amendment
limit the rights to indemnification referenced in Article VII, Section 3 hereof
as provided in the By-Laws with respect to any actions or omissions of Persons
covered thereby prior to such amendment. The Directors may, without Shareholder
vote, restate, amend, or otherwise supplement the Certificate of Trust as they
deem necessary or desirable.
Section 5. Filing of Copies, References, Headings. The original or a
copy of this instrument and of each restatement and/or amendment hereto shall be
kept at the office of the Trust where it may be inspected by any Shareholder.
Anyone dealing with the Trust may rely on a certificate by an officer of the
Trust as to whether or not any such restatements and/or amendments have been
made and as to any matters in connection with the Trust hereunder; and, with the
same effect as if it were the original, may rely on a copy certified by an
officer of
24
<PAGE> 25
the Trust to be a copy of this instrument or of any such restatements and/or
amendments. In this instrument and in any such restatements and/or amendment,
references to this instrument, and all expressions like "herein," "hereof" and
"hereunder," shall be deemed to refer to this instrument as amended or affected
by any such restatements and/or! amendments. Headings are placed herein for
convenience of reference only and shall not be taken as a part hereof or control
or affect the meaning, construction or effect of this instrument. Whenever the
singular number is used herein, the same shall include the plural; and the
neuter, masculine and feminine genders shall include each other, as applicable.
This instrument may be executed in any number of counterparts each of which
shall be deemed an original.
Section 6. Applicable Law.
(a) The Trust is created under, and this Declaration of Trust is to
be governed by, and construed and enforced in accordance with, the laws of the
State of Delaware. The Trust shall be of the type commonly called a business
trust, and without limiting the provisions hereof, the Trust specifically
reserves the right to exercise any of the powers or privileges afforded to
business trusts or actions that may be engaged in by business trusts under the
Delaware Act, and the absence of a specific reference herein to any such power,
privilege or action shall not imply that the Trust may not exercise such power
or privilege or take such actions.
(b) Notwithstanding the first sentence of Section 6(a) of this
Article VIII, there shall not be applicable to the Trust, the Trustees or this
Declaration of Trust (x) the provisions of Section 3540 of Title 12 of the
Delaware Code or (y) any provisions of the laws (statutory or common) of the
State of Delaware (other than the Delaware Act) pertaining to trusts that relate
to or regulate:
(i) the filing with any court or governmental body or agency of
trustee accounts or schedules of trustee fees and charges;
(ii) affirmative requirements to post bonds for trustees,
officers, agents or employees of a trust;
(iii) the necessity for obtaining a court or other governmental
approval concerning the acquisition, holding or disposition of real or personal
property;
(iv) fees or other sums applicable to trustees, officers,
agents or employees of a trust;
(v) the allocation of receipts and expenditures to income or
principal;
(vi) restrictions or limitations on the permissible nature,
amount or concentration of trust investments or requirements relating to the
titling, storage or other manner of holding of trust assets; or
(vii) the establishment of fiduciary or other standards or
responsibilities or limitations on the acts or powers of trustees that are
inconsistent with the limitations or liabilities or
25
<PAGE> 26
authorities and powers of the Directors set forth or referenced in this
Declaration of Trust.
Section 7. Provisions in Conflict with Law or Regulations.
(a) The provisions of the Declaration of Trust are severable, and
if the Directors shall determine, with the advice of counsel, that any of such
provisions is in conflict with the 1940 Act, the regulated investment company
provisions of the Internal Revenue Code or with other applicable laws and
regulations, the conflicting provision shall be deemed never to have constituted
a part of the Declaration of Trust; provided, however, that such determination
shall not affect any of the remaining provisions of the Declaration of Trust or
render invalid or improper any action taken or omitted prior to such
determination.
(b) If any provision of the Declaration of Trust shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such jurisdiction and
shall not in any manner affect such provision in any other jurisdiction or any
other provision of the Declaration of Trust in any jurisdiction.
Section 8. Business Trust Only. It is the intention of the Directors
to create a business trust pursuant to the Delaware Business Trust Act, as
amended from time to time (the "Act"), and thereby to create only the
relationship of Director and beneficial owners within the meaning of such Act
between the Directors and each Shareholder. It is not the intention of the
Directors to create a general partnership, limited partnership, joint stock
association, corporation, bailment, or any form of legal relationship other than
a business trust pursuant to such Act. Nothing in this Declaration of Trust
shall be construed to make the Shareholders, either by themselves or with the
Directors, partners or members of a joint stock association.
Section 9. Derivative Actions. In addition to the requirements set
forth in Section 3816 of the Delaware Act, a Shareholder may bring a derivative
action on behalf of the Trust only if the following conditions are met:
(a) The Shareholder or Shareholders must make a pre-suit demand
upon the Directors to bring the subject action unless an effort to cause the
Directors to bring such an action is not likely to succeed. For purposes of this
Section 9(a), a demand on the Directors shall only be deemed not likely to
succeed and therefore excused if a majority of the Board of Directors, or a
majority of any committee established to consider the merits of such action, has
a personal financial interest in the transaction at issue, and a Director shall
not be deemed interested in a transaction or otherwise disqualified from ruling
on the merits of a Shareholder demand by virtue of the fact that such Director
receives remuneration for his service on the Board of Directors of the Trust or
on the boards of one or more Trusts that are under common management with or
otherwise affiliated with the Trust.
(b) Unless a demand is not required under paragraph (a) of this
Section 9, Shareholders eligible to bring such derivative action under the
Delaware Act who hold at least 10% of the Outstanding Shares of the Trust, or
10% of the Outstanding Shares of the Series or Class to which such action
relates, shall join in the request for the Directors to commence such action;
and
26
<PAGE> 27
(c) Unless a demand is not required under paragraph (a) of this
Section 9, the Directors must be afforded a reasonable amount of time to
consider such shareholder request and to investigate the basis of such claim.
The Directors shall be entitled to retain counsel or other advisors in
considering the merits of the request and shall require an undertaking by the
Shareholders making such request to reimburse the Trust for the expense of any
such advisors in the event that the Directors determine not to bring such
action.
For purposes of this Section 9, the Board of Directors may designate
a committee of one Director to consider a Shareholder demand if necessary to
create a committee with a majority of Directors who do not have a personal
financial interest in the transaction at issue. The Directors shall be entitled
to retain counsel or other advisors in considering the merits of the request and
shall require an undertaking by the Shareholders making such request to
reimburse the Trust for the expense of any such advisors in the event that the
Directors determine not to bring such action.
Section 10. Use of the name "Vantagepoint Funds" or "Vantagepoint".
The name "Vantagepoint Funds" or "Vantagepoint" and all rights to the use of the
name "The Vantagepoint Funds" or "Vantagepoint" belong to The ICMA Retirement
Corporation ("RC"), the sponsor of the Trust. RC has consented to the use by the
Trust of the identifying word "Vantagepoint" and has granted to the Trust a
non-exclusive license to use the name "Vantagepoint" as part of the name of the
Trust and the name of any Series of Shares. In the event RC or an affiliate of
RC is not appointed as Manager and/or Principal Underwriter or ceases to be the
Manager and/or Principal Underwriter of the Trust or of any series using such
names, the non-exclusive license granted herein may be revoked by RC and the
Trust shall cease using the name "Vantagepoint" as part of its name or the name
of any Series of Shares, unless otherwise consented to by or any successor to
its interests in such names.
[the remainder of this page left intentionally blank]
27
<PAGE> 28
IN WITNESS WHEREOF, the Directors named below do hereby make and
enter into this Declaration of Trust as of the day of , 1998.
- ----------------------------
Joan McCallen
- ----------------------------
Paul Gallagher
- ----------------------------
Michael Schaefer
THE PRINCIPAL PLACE OF BUSINESS OF THE TRUST IS:
777 North Capitol St., NE, Ste. 600
WASHINGTON, D.C. 20002
28
<PAGE> 1
EXHIBIT-99.b
BY-LAWS
OF
THE VANTAGEPOINT FUNDS
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I - AGREEMENT AND DECLARATION OF TRUST Page 4
Section 1. Agreement and Declaration of Trust Page 4
Section 2. Definitions Page 4
ARTICLE II - OFFICES Page 4
Section 1. Principal Office Page 4
Section 2. Registered Office and Other Offices Page 4
ARTICLE III - SHAREHOLDERS Page 4
Section 1. Meetings Page 4
Section 2. Notice of Meetings Page 5
Section 3. Record Date of Meetings Page 5
Section 4. Proxies Page 5
Section 5. Inspection of Books Page 6
Section 6. Action without Meeting Page 6
Section 7. Application of this Article Page 6
ARTICLE IV - DIRECTORS Page 6
Section 1. Meetings of the Directors Page 6
Section 2. Quorum and Manner of Acting Page 7
ARTICLE V - COMMITTEES Page 7
Section 1. Executive Nominating, Audit,
and Other Committees Page 7
Section 2. Meetings, Quorum and Manner of Acting Page 8
ARTICLE VI - OFFICERS Page 8
Section 1. General Provisions Page 8
Section 2. Term of Office and Qualifications Page 8
Section 3. Removal Page 8
Section 4. Powers and Duties of Chairman Page 9
Section 5. Powers and Duties of the President Page 9
Section 6. Powers and Duties of the Vice President Page 9
Section 7. Powers and Duties of the Treasurer Page 9
Section 8. Powers and Duties of the Secretary Page 10
Section 9. Powers and Duties of Assistant Treasurers Page 10
Section 10. Powers and Duties of Assistant Secretaries Page 10
Section 11. Compensation of Officers and Directors Page 10
</TABLE>
2
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE VII - FISCAL YEAR Page 11
ARTICLE VIII - SEAL Page 11
ARTICLE IX - WAIVERS OF NOTICE Page 11
ARTICLE X - CUSTODY OF SECURITIES Page 11
Section 1. Employment of a Custodian Page 11
Section 2. Action Upon Termination of Custodian Agreement Page 12
Section 3. Provisions of Custodian Contract Page 12
Section 4. Central Certificate System Page 12
ARTICLE XI - INDEMNIFICATION OF DIRECTORS, OFFICERS,
EMPLOYEES AND OTHER AGENTS Page 12
Section 1. Agents, Proceedings, Expenses Page 12
Section 2. Indemnification Page 12
Section 3. Limitations, Settlements Page 13
Section 4. Insurance, Rights Not Exclusive Page 13
Section 5. Advance of Expenses Page 13
Section 6. Fiduciaries of Employee Benefit Plan Page 14
ARTICLE XII - AMENDMENTS Page 14
</TABLE>
3
<PAGE> 4
BY-LAWS
OF
THE VANTAGEPOINT FUNDS
ARTICLE I
Agreement and Declaration of Trust
SECTION 1. AGREEMENT AND DECLARATION OF TRUST. These By-Laws shall be
subject to the Agreement and Declaration of Trust, as from time to time amended,
supplemented or restated (the "Declaration of Trust") of The Vantagepoint Funds
(the "Trust").
SECTION 2. DEFINITIONS. Unless otherwise defined herein, the terms used
herein have the respective meanings given them in the Declaration of Trust.
ARTICLE II
Offices
SECTION 1. PRINCIPAL OFFICE. The principal office of the Trust shall be
located in the District of Columbia or such other location as the Directors may
from time to time determine.
SECTION 2. REGISTERED OFFICE AND OTHER OFFICES. The registered office of
the Trust shall be located in the City of Wilmington, State of Delaware or such
other location within the State of Delaware as the Directors may from time to
time determine. The Trust may establish and maintain such other offices and
places of business as the Directors may from time to time determine.
ARTICLE III
Shareholders
SECTION 1. MEETINGS. Meetings of the Shareholders shall be held at the
principal executive offices of the Trust or at such other place within the
United States of America as the Directors shall designate. Meetings of the
Shareholders shall be called by the
4
<PAGE> 5
Secretary whenever (i) ordered by the Directors or (ii) for the purpose of
voting on the removal of any Director, requested in writing by Shareholders
holding at least ten percent (10%) of the outstanding Shares entitled to vote.
If the Secretary, when so ordered or requested, refuses or neglects for more
than 10 days to call such meetings, the Directors or the Shareholders so
requesting, may, in the name of the Secretary, call the meeting by giving notice
thereof in the manner required when notice is given by the Secretary.
SECTION 2. NOTICE OF MEETINGS. Notice of all meetings of the
Shareholders, stating the time, place and purposes of the meeting, shall be
given by the Secretary by delivering or mailing, postage prepaid, to each
Shareholder at his or her address as recorded on the register of the Trust at
least (10) days and not more than ninety (90) days before the meeting. Only the
business stated in the notice of the meeting shall be considered at such
meeting. Any adjourned meeting may be held as adjourned without further notice.
No notice need be given to any Shareholder who shall have failed to inform the
Trust of his or her current address or if a written waiver of notice, executed
before or after the meeting by the Shareholder or his or her attorney thereunto
authorized, is filed with the records of the meeting.
SECTION 3. RECORD DATE FOR MEETINGS. For the purpose of determining the
Shareholders who are entitled to notice of and to vote at any meeting, the
Directors may from time to time close the transfer books for such period, not
exceeding thirty (30) days, as the Directors may determine; or without closing
the transfer books the Directors may fix a date not more than ninety (90) days
prior to the date of any meeting of Shareholders as a record date for the
determination of the persons to be treated as Shareholders of record for such
purpose.
SECTION 4. PROXIES. At any meeting of Shareholders, any holder of Shares
entitled to vote thereat may vote by proxy, provided that no proxy shall be
voted at any meeting unless it shall have been placed on file with the
Secretary, or with such other officer or agent of the Trust as the Secretary may
direct, for verification prior to the time at which such vote shall be taken;
provided, however, that notwithstanding any other provision of this Section 4 to
the contrary, the Directors may at any time adopt one or more electronic,
telecommunication or other alternatives to execution of a written instrument
that will enable holders of Shares entitled to vote at any meeting to appoint a
proxy to vote such holders' Shares at such meeting. Proxies may be solicited in
the name of one or more Directors or one or more of the officers of the Trust.
Only Shareholders of record shall be entitled to vote. Each whole Share shall be
entitled to one vote as to any matter on which it is entitled by the Declaration
of Trust to vote, and each fractional Share shall be entitled to a proportionate
fractional vote. When any Share is held jointly by several persons, any one of
them may vote at any meeting in person or by proxy in respect of such Share, but
if more than one of them shall be present at such meeting in person or by proxy,
and such joint owners or their proxies so present disagree as to any vote to be
cast, such vote shall not be received in respect of such Share. A proxy
purporting to be executed by or on behalf of a Shareholder shall be deemed valid
unless challenged at or prior to its exercise,
5
<PAGE> 6
and the burden of proving invalidity shall rest on the challenger. If the holder
of any such Share is a minor or a person of unsound mind, and subject to
guardianship or the legal control of any other person as regards the charge or
management of such Share, he or she may vote by his or her guardian or such
other person appointed or having such control, and such vote may be given in
person or by proxy. At all meetings of the Shareholders, unless the voting is
conducted by inspectors, all questions relating to the qualifications of voters,
the validity of proxies, and the acceptance or rejection of votes shall be
decided by the chairman of the meeting. Except as otherwise provided herein or
in the Declaration of Trust, all matters relating to the giving, voting or
validity of proxies shall be governed by the General Corporation Law of the
State of Delaware relating to proxies, and judicial interpretations thereunder,
as if the Trust were a Delaware corporation and the Shareholders were
shareholders of a Delaware corporation.
SECTION 5. INSPECTION OF BOOKS. The Directors shall from time to time
determine whether and to what extent, and at what times and places, and under
what conditions and regulations the accounts and books of the Trust or any of
them shall be open to the inspection of the Shareholders; and no Shareholder
shall have any right to inspect any account or book or document of the Trust
except as conferred by law or otherwise by the Directors or by resolution of the
Shareholders.
SECTION 6. ACTION WITHOUT MEETING. Any action that may be taken at any
meeting of Shareholders may be taken without a meeting and without prior notice
if a consent in writing setting forth the action so taken is signed by the
holders of outstanding Shares having not less than the minimum number of votes
that would be necessary to authorize or take that action at a meeting at which
all Shares entitled to vote on that action were present and voted. All such
consents shall be filed with the records of Shareholder meetings. Such consents
shall be treated for all purposes as a vote taken at a meeting of Shareholders.
SECTION 7. APPLICATION OF THIS ARTICLE. Meetings of Shareholders shall
consist of Shareholders of any Series (or Class thereof) or of all Shareholders,
as determined pursuant to the Declaration of Trust, and this Article shall be
construed accordingly.
ARTICLE IV
Directors
SECTION 1. MEETINGS OF THE DIRECTORS. The Directors may in their
discretion provide for regular or stated meetings of the Directors. Notice of
regular or stated meetings need not be given. Meetings of the Directors other
than regular or stated meetings shall be held whenever called by the Chairman,
the President, or by any two of the Directors, at the time being in office.
Notice of the time and place of each meeting other than regular or stated
meetings shall be given by the Secretary or an Assistant
6
<PAGE> 7
Secretary or by the officer or Directors calling the meeting and shall be
delivered or mailed, postage prepaid, to each Director at least two days before
the meeting, or shall be telegraphed, cabled, wired, or delivered by equivalent
electronic means, to each Director at his or her business address, or personally
delivered to him or her, at least one day before the meeting. Such notice may,
however, be waived by any Directors. Notice of a meeting need not be given to
any Director if a written waiver of notice, executed by him or her before the
meeting, is filed with the records of the meeting, or to any Director who
attends the meeting without protesting prior thereto or at its commencement the
lack of notice to him or her. A notice or waiver of notice need not specify the
purpose of any meeting. The Directors may meet by means of a telephone
conference circuit or similar communications equipment by means of which all
persons participating in the meeting are connected, which meeting shall be
deemed to have been held at a place designated by the Directors at the meeting.
Participation in a telephone conference meeting shall constitute presence in
person at such meeting. Any action required or permitted to be taken at any
meeting of the Directors may be taken by the Directors without a meeting if a
majority of the Directors then in office (or such higher number of Directors as
would be required to act on the matter under the Declaration of Trust, these
By-Laws or applicable law if a meeting were held) consent to the action in
writing and the written consents are filed with the records of the Directors'
meetings. Such consents shall be treated for all purposes as a vote taken at a
meeting of the Directors. Notwithstanding the foregoing, all actions of the
Directors shall betaken in compliance with the provisions of the Investment
Company Act of 1940, as amended.
SECTION 2. QUORUM AND MANNER OF ACTING. A majority of the Directors then
in office shall constitute a quorum for the transaction of business. If at any
meeting of the Directors there shall be less than a quorum present, a majority
of those present may adjourn the meeting from time to time until a quorum shall
be obtained. Notice of an adjourned meeting need not be given. The act of the
majority of the Directors present of any meeting at which there is a quorum
shall be the act of the Directors, except as may be otherwise specifically
provided bylaw or by the Declaration of Trust or by these By-Laws.
ARTICLE V
Committees
SECTION 1. EXECUTIVE, NOMINATING, AUDIT AND OTHER COMMITTEES. The
Directors by vote of a majority of all the Directors may elect from their own
number an Executive Committee to consist of not less than three (3) Directors to
hold office at the pleasure of the Directors, which shall have the power to
conduct the current and ordinary business of the Trust while the Directors are
not in session, including the purchase and sale of securities and the
designation of securities to be delivered upon redemption of Shares of the
Trust, and such other powers of the Directors as the Directors may, from time to
time,
7
<PAGE> 8
delegate to them except those powers by law, the Declaration of Trust or these
By-Laws they are prohibited from delegating. The Directors may also elect from
their own number or otherwise other Committees from time to time, the number
composing such Committees, the powers conferred upon the same (subject to the
same limitations as with respect to the Executive Committee) and the terms of
membership on such Committees to be determined by the Directors. Such committees
shall include a Nominating Committee and an Audit Committee. The Nominating
Committee shall include two persons, one designated by the Chair of the ICMA
Retirement Trust and one designated by the Chair of the ICMA Retirement
Corporation, in addition to such other persons as may be elected by the
Directors. The Directors may designate a chairman of any Committee. In the
absence of such designation the Committee may elect its own chairman.
SECTION 2. MEETINGS, QUORUM AND MANNER OF ACTING. The Directors may (1)
provide for stated meetings of any Committees, (2) specify the manner of calling
and notice required for a special meeting of any Committee, (3) specify the
number of members of a Committee required to constitute a quorum and the taken
without a meeting and cause them to be recorded in a book designated for that
purpose and kept at the principal executive offices of the Trust.
ARTICLE VI
Officers
SECTION 1. GENERAL PROVISIONS. The officers of the Trust shall be a
President, a Treasurer and a Secretary, who shall be elected by the Directors.
The Directors may elect or appoint such other officers or agents as the business
of the Trust may require, including a Chairman of the Board ("Chairman"), Vice
Chairman, one or more Vice Presidents, one or more Assistant Secretaries, and
one or more Assistant Treasurers. The Directors may delegate to any officer or
Committee the power to appoint any subordinate officers or agents.
SECTION 2. TERM OF OFFICE AND QUALIFICATIONS. Except as otherwise
provided by law, the Declaration of Trust or these By-Laws, the President, the
Treasurer and the Secretary, and all other officers shall hold office at the
pleasure of the Directors. The Secretary and Treasurer may be the same person. A
Vice President and the Treasurer or a Vice President and the Secretary may be
the same person, but the offices of Vice President, Secretary and Treasurer
shall not be held by the same person. The President shall hold no other office,
but may be a Director of the Trust. Except as above provided, any two offices
may be held by the same person. The Chairman, if such an officer is elected,
shall be a Director and may, but need not be, a Shareholder. Any other officer
may be, but none need be, a Director or Shareholder.
SECTION 3. REMOVAL. The Directors, at any regular or special meeting of
the
8
<PAGE> 9
Directors, may remove any officer with or without cause, by a vote of a
majority of the Directors then in office. Any officer or agent appointed by an
officer or committee may be removed with or without cause by such appointing
officer or committee.
SECTION 4. POWERS AND DUTIES OF THE CHAIRMAN. The Chairman, if such an
officer is elected, shall if present preside at meetings of the Shareholders and
the Directors, and shall, subject to the control of the Directors, have general
supervision, direction and control of the business and the officers of the Trust
and exercise and perform such other powers and duties as may be from time to
time assigned to him by the Directors or prescribed by the Declaration of Trust
or these By-Laws. In the absence of the Chairman, the Vice Chairman, if such an
officer is elected, shall assume all powers and duties assigned to the Chairman
hereunder.
SECTION 5. POWERS AND DUTIES OF THE PRESIDENT. Subject to the powers of
the Chairman, if there be such an officer, the President shall be the principal
executive officer of the Trust. He or she may call meetings of the Directors and
of any Committee thereof when he or she deems it necessary and, in the absence
of the Chairman, shall preside at all meetings of the Shareholders. Subject to
the control of the Directors, the Chairman and any Committees of the Directors,
within their respective spheres, as provided by the Directors, the President
shall at all times exercise a general supervision and direction over the affairs
of the Trust. The President shall have the power to employ attorneys and counsel
for the Trust and to employ such subordinate officers, agents, clerks and
employees as he or she may find necessary to transact the business of the Trust.
He or she shall also have the power to grant, issue, execute or sign such powers
of attorney, proxies or other documents as may be deemed advisable or necessary
in furtherance of the interests of the Trust. The President shall have such
powers and duties as from time to time may be conferred upon or assigned to him
or her by the Directors.
SECTION 6. POWERS AND DUTIES OF THE VICE PRESIDENT. In the absence or
disability of the President, the Vice President or, if there be more than one
Vice President, any Vice President designated by the Directors shall perform all
the duties and may exercise any of the powers of the President, subject to the
control of the Directors. Each Vice President shall perform such other duties as
may be assigned to him or her from time to time by the Directors or the
President.
SECTION 7. POWERS AND DUTIES OF THE TREASURER. The Treasurer shall be the
principal financial and accounting officer of the Trust. The Treasurer shall
deliver all funds of the Trust which may come into his or her hands to such
Custodian as the Directors may employ pursuant to Article X of these By-Laws. He
or she shall render a statement of condition of the finances of the Trust to the
Directors as often as they shall require the same and he or she shall in general
perform all the duties incident to the office of Treasurer and such other duties
as from time to time may be assigned to him or her by the Directors. The
Treasurer shall give a bond for the faithful discharge of his or her duties, if
required so to do by the Directors, in such sum and with such surety or sureties
9
<PAGE> 10
as the Directors shall require.
SECTION 8. POWERS AND DUTIES OF THE SECRETARY. The Secretary shall keep
the minutes of all meetings of the Directors and of the Shareholders in proper
books provided for that purpose; he or she shall have custody of the seal of the
Trust; he or she shall have charge of the Share transfer books, lists and
records unless the same are in the charge of the Transfer Agent. The Secretary
shall attend to the giving and serving of all notices by the Trust in accordance
with the provisions of these By-Laws and as required by law; and subject to
these By-Laws, he or she shall in general perform all duties incident to the
office of the Secretary and such other duties as from time to time may be
assigned to him or her by the Directors.
SECTION 9. POWERS AND DUTIES OF ASSISTANT TREASURERS. In the absence or
disability of the Treasurer, any Assistant Treasurer designated by the Directors
shall perform all the duties, and may exercise any of the powers, of the
Treasurer. Each Assistant Treasurer shall give a bond for the faithful discharge
of his or her duties, if required so to do by the Directors, in such sum and
with such surety or sureties as the Directors shall require.
SECTION 10. POWERS AND DUTIES OF ASSISTANT SECRETARIES. In the absence or
disability of the Secretary, any Assistant Secretary designated by the Directors
shall perform all the duties, and may exercise any of the powers, of the
Secretary. Each Assistant Secretary shall perform such other duties as from time
to time may be assigned to him or her by the Directors.
SECTION 11. COMPENSATION OF DIRECTORS. Directors shall not receive any
stated salaries, retirement benefits, deferred compensation or any other form of
compensation, provided that nothing herein shall be construed to preclude any
Director from serving the Trust in any other capacity and receiving compensation
therefor. The Trust is authorized to pay the necessary expenses of members of
the Board of Directors incurred in connection with the performance of the
official duties of their office. Any proposal to amend this provision to provide
for compensation to the Directors, or to provide for an increase in compensation
to Directors in excess of adjustments required to reflect the rate of inflation,
must be approved by (i) a majority of the Trust's shareholders or (ii) the
Trustees of the ICMA Retirement Trust.
SECTION 12. COMPENSATION OF OFFICERS. Subject to any applicable
provisions of the Declaration of Trust, the compensation of the officers shall
be fixed from time to time by the Directors or by any Committee or officer upon
whom such power may be conferred by the Directors. No officer shall be prevented
from receiving such compensation as such officer by reason of the fact that he
or she is also a Director.
10
<PAGE> 11
ARTICLE VII
Fiscal Year
The fiscal year of the Trust shall end on such date as the Directors shall from
time to time determine.
ARTICLE VIII
Seal
The Directors may adopt a seal which shall be in such form and shall have
such inscription thereon as the Directors may from time to time prescribe.
ARTICLE IX
Waivers of Notice
Whenever any notice whatever is required to be given by law, the Declaration of
Trust or these By-Laws, a waiver thereof in writing, signed by the person or
persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent thereto. A notice shall be deemed to have
been telegraphed, cabled or wired for the purposes of these By-Laws when it has
been delivered to a representative of any telegraph, cable or wire company with
instructions that it be telegraphed, cabled or wired.
ARTICLE X
Custody of Securities
SECTION 1. EMPLOYMENT OF A CUSTODIAN. The Trust shall place and at all
times maintain in the custody of a Custodian (including any sub-custodian for
the Custodian) all funds, securities and similar investments included in the
Trust Property. The Custodian (and any sub-custodian) shall be a bank or other
depository meeting such requirements as may be set forth in the Investment
Company Act of 1940 and other applicable law and regulations for institutions
serving as custodians of funds held by registered investment companies. The
Custodian shall be appointed from time to time by the Directors, who shall fix
its remuneration.
11
<PAGE> 12
SECTION 2. ACTION UPON TERMINATION OF CUSTODIAN AGREEMENT. Upon
termination of a Custodian Agreement or inability of the Custodian to continue
to serve, the Directors shall promptly appoint a successor custodian, but in the
event that no successor custodian can be found who has the required
qualifications and is willing to serve, the Directors shall call as promptly as
possible a special meeting of the Shareholders to determine whether the Trust
shall function without a custodian or shall be liquidated. If so directed by a
vote of holders of the majority of the outstanding Shares entitled to vote, the
Custodian shall deliver and pay over all Trust Property held by it as specified
in such vote.
SECTION 3. PROVISIONS OF CUSTODIAN CONTRACT. The Custodian contract shall
contain such provisions as may be required in the case of such arrangements by
the Investment Company Act of 1940 and rules and regulations adopted thereunder.
SECTION 4. CENTRAL CERTIFICATE SYSTEM. Subject to applicable rules,
regulations and orders adopted by the Commission, the Directors may direct the
Custodian to deposit all or any part of the securities owned by the Trust in a
system for the central handling of securities established by a national
securities exchange or a national securities association registered with the
Commission under the Securities Exchange Act of 1934, or such other person as
may be permitted by the Commission, or otherwise in accordance with the 1940
Act, pursuant to which system all securities of any particular class or series
of any issuer deposited within the system are treated as fungible and may be
transferred or pledged by bookkeeping entry without physical delivery of such
securities, provided that all such deposits shall be subject to withdrawal only
upon the order of the Trust.
ARTICLE XI
Indemnification of Directors, Officers, Employees and Other Agents
SECTION 1. AGENTS, PROCEEDINGS, EXPENSES. For the purpose of this
Article, "agent" means any Person who is or was a Director, officer, employee or
other agent of the Trust or is or was serving at the request of the Trust as a
Director, director, officer, employee or agent of another organization in which
the Trust has any interest as a shareholder, creditor or otherwise; "proceeding"
means any threatened, pending or completed claim, action, suit or proceeding,
whether civil, criminal, administrative or investigative (including appeals);and
"expenses" includes, without limitation, attorneys' fees, costs, judgments,
amounts paid in settlement, fines, penalties and all other liabilities
whatsoever.
SECTION 2. INDEMNIFICATION. Subject to the exceptions and limitation
contained in Section 3 below, every agent shall be indemnified by the Trust to
the fullest extent permitted by law against all liabilities and against all
expenses reasonably incurred or paid
12
<PAGE> 13
by him or her in connection with any proceeding in which he or she becomes
involved as a party or otherwise by virtue of his or her being or having been an
agent.
SECTION 3. LIMITATIONS, SETTLEMENTS. No indemnification shall be provided
hereunder to an agent:
(a) who shall have been adjudicated by the court or other body before
which the proceeding was brought to be liable to the Trust or its Shareholders
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his or her office
(collectively, "disabling conduct"); or
(b) with respect to any proceeding disposed of (whether by settlement,
pursuant to a consent decree or otherwise) without an adjudication by the court
or other body before which the proceeding was brought that such agent was liable
to the Trust or its Shareholders by reason of disabling conduct, unless there
has been a determination that such agent did not engage in disabling conduct:
(i) by the court or other body before which the proceeding was
brought;
(ii) by at least a majority of those Directors who are neither
Interested Persons of the Trust nor are parties to the proceeding based upon a
review of readily available facts (as opposed to a full trial-type inquiry); or
(iii) by written opinion of independent legal counsel based upon a
review of readily available facts (as opposed to a full trial-type inquiry);
provided, however, that indemnification shall be provided hereunder to an agent
with respect to any proceeding in the event of (1) a final decision on the
merits by the court or other body before which the proceeding was brought that
the agent was not liable by reason of disabling conduct, or (2) the dismissal of
the proceeding by the court or other body before which it was brought for
insufficiency of evidence of any disabling conduct with which such agent has
been charged.
SECTION 4. INSURANCE, RIGHTS NOT EXCLUSIVE. The rights of indemnification
herein provided may be insured against by policies maintained by the Trust on
behalf of any agent, shall be severable, shall not be exclusive of or affect any
other rights to which any agent may now or hereafter be entitled and shall inure
to the benefit of the heirs, executors and administrators of any agent.
SECTION 5. ADVANCE OF EXPENSES. Expenses incurred by an agent in
connection with the preparation and presentation of a defense to any proceeding
may be paid by the Trust from time to time prior to final disposition thereof
upon receipt of an undertaking by or on behalf of such agent that such amount
will be paid over by him or her to the Trust if
13
<PAGE> 14
it is ultimately determined that he or she is not entitled to indemnification
under this Article XI; provided, however, that (a) such agent shall have
provided appropriate security for such undertaking, (b) the Trust is insured
against losses arising out of any such advance payments or (c) either a majority
of the Directors who are neither Interested Persons of the Trust nor parties to
the proceedings, or independent legal counsel in a written opinion, shall have
determined, based upon a review of readily available facts (as opposed to a
trial-type inquiry or full investigation), that there is reason to believe that
such agent will be found entitled to indemnification under this Article XI.
SECTION 6. FIDUCIARIES OF EMPLOYEE BENEFIT PLAN. The Article does not
apply to any proceeding against any Director, investment manager or other
fiduciary of an employee benefit plan in that person's capacity as such, even
though that person may also be an agent of this Trust as defined in Section 1 of
this Article. Nothing contained in this Article shall limit any right to
indemnification to which such Director, investment manager, or other fiduciary
may be entitled by contract or otherwise which shall be enforceable to the
extent permitted by applicable law other than this Article.
ARTICLE XII
Amendments
These By-Laws, or any of them, may be altered, amended or repealed, or
new By-laws may be adopted by (a) a vote of holders of the majority of the
outstanding Shares entitled to vote or (b) by the Directors, provided, however,
that no By-law may be amended, adopted or repealed by the Directors if such
amendment, adoption or repeal is required by applicable law, the Declaration of
Trust or these By-Laws, to be submitted to a vote of the Shareholders.
14
<PAGE> 1
EXHIBIT-99.d(i)
MASTER INVESTMENT ADVISORY AGREEMENT
BETWEEN
THE VANTAGEPOINT FUNDS
AND
VANTAGEPOINT INVESTMENT ADVISERS, LLC
AGREEMENT, made the [ ] day of [ ] 1998, between the Vantagepoint
Funds ("VF") and Vantagepoint Investment Advisers, LLC. ("VIA").
RECITALS
(1) VF is an open-end, diversified management investment company organized as
a Delaware business trust and registered under the Investment Company Act of
1940. The VF is organized as a "series" investment company, and offers 13
distinct investment portfolios (the "Funds").
(2) VIA has been established to provide investment advisory services to VF.
(3) VF and VIA wish to enter into this Master Investment Advisory Agreement
(the "Agreement"), under which VIA will render investment advisory services to
the VF and also will furnish operational support to the VF. This Agreement
includes payment provisions under which amounts are disbursed from VF to pay VIA
for services and support rendered under this Agreement.
<PAGE> 2
AGREEMENT
Article I
GENERAL
SECTION 1.01 Definitions. Unless otherwise specifically provided
herein, capitalized terms have the meanings ascribed in the Agreement and
Declaration of Trust of the Vantagepoint Funds dated [DATE], as now or
hereinafter amended.
Article II
INVESTMENT ADVISORY AND MANAGEMENT SERVICES
SECTION 2.01 Appointment of Adviser. VF hereby appoints VIA to act as
the investment adviser to VF under the terms and conditions set forth in this
Agreement. VIA accepts such appointment and agrees to render the services herein
described, for the compensation herein provided.
SECTION 2.02 Duties Relating to the Funds. Subject to the supervision
of the Board of Directors of VF, VIA shall manage the investment operations of
the VF and the composition of VF's portfolios in accordance with the investment
objectives, policies and restrictions set forth in the prospectus for VF and
such additional guidelines as may be established from time to time by VF. In
performing such services, VIA shall use its best judgment, and shall have the
following responsibilities:
(a) VIA shall supervise and direct VF's investments and shall have the
discretion to determine from time to time what investments, securities,
commodities or financial futures contracts or options thereon ("futures") will
be purchased, retained, sold or lent by the VF and what portion of the assets
will be invested or held uninvested as cash;
(b) For purposes of managing the Funds, VIA may discharge its
responsibilities to VF through the appointment of one or more subadvisers
("Subadvisers") as provided in Section 2.03 below to which it may delegate the
responsibilities granted to it herein;
(c) VIA may place orders, pursuant to its determinations as to what
securities or other instruments should be purchased or sold on behalf of VF,
with or through such persons, brokers, dealers or futures commissions merchants
as it may select; VIA may delegate this authority to Subadvisers duly appointed
by it;
2
<PAGE> 3
(d) VIA may cause VF to keep such portion of VF assets in cash or cash
balances as VIA, from time to time, may deem to be in the best interest of VF
without liability for interest thereon;
(e) VIA shall maintain, or cause custodians and Subadvisers to maintain,
books and records with respect to securities transactions executed for each
portfolio of VF in accordance with good practice, applicable federal and state
securities laws, and such instructions as may be provided to it by VF from time
to time;
(g) VIA shall provide, or cause the Subadvisers to provide, to each
custodian of the assets of VF in a timely fashion all requisite information
relating to transactions concerning the assets of VF.
(h) VIA may, and may authorize Subadvisers to, vote upon all general or
specific proxies relative to stocks, bonds, or other securities held in VF, give
general or specific powers of attorney with or without power of substitution;
exercise any conversion privileges, subscription rights, or other options, and
make any payments incidental thereto; oppose, or consent to, or participate in,
any corporate reorganization or other changes affecting corporate securities,
participate in any class action lawsuit the subject of which is a security (or
issuer of a security) held by VF, and delegate discretionary powers, and pay any
assessments or charges in connection therewith; and generally exercise any of
the powers of an owner with respect to stocks, bonds, securities or other
property held as part of VF property;
SECTION 2.03 Subadvisers. VIA is authorized to enter into agreements
on behalf of VF with Subadvisers under which the Subadvisers agree to perform
all or any portion of the management and advisory duties with respect to all or
any portion of the Funds of VF. In the event VIA enters into one or more such
agreements, the Subadviser shall be responsible directly to the VF for the
performance of such duties as may be imposed upon it by the Subadviser
Agreement. VIA will, however, retain the authority and responsibility to monitor
and review the performance of each Subadviser. VIA may negotiate contracts that
specify investment subadvisory fees and provide for payment of such fees
directly by VF, and delegate to the Subadvisers responsibility for the
day-to-day operations of the Funds with respect to which the Subadvisers are
hired, including any or all of the responsibilities set forth in Section 2.02
hereof, except the power to enter into contracts with Subadvisers. Each such
contract with a Subadviser shall provide that it is terminable by VIA, without
penalty, upon no more than 60 days notice to the Subadviser.
3
<PAGE> 4
SECTION 2.04 Fund Design. VIA shall develop new Funds for VF
responsive to the evolving needs of existing and potential Shareholders and
shall periodically evaluate the objectives and performance of each existing
Fund, and shall provide a recommendation to the Board of Directors of VF as to
whether such Fund should continue to be offered.
SECTION 2.05 Fees for Services. For the services to be provided under
this Article II, the VF shall pay to VIA an advisory fee based upon net assets
in the VF computed at the annual rates specified in the following table:
<TABLE>
<CAPTION>
Fund Annual Rate
---- -----------
(as a % of Net Assets)
<S> <C>
Aggressive Opportunities Fund 0.10%
International Fund 0.10%
Growth Stock Fund 0.10%
Growth and Income Fund 0.10%
Equity Income Fund 0.10%
Asset Allocation Fund 0.10%
U.S. Treasury Securities Fund 0.10%
Money Market Fund 0.10%
Overseas Equity Index Fund 0.05%
Small/Mid Company Index Fund 0.05%
Broad Market Index Fund 0.05%
500 Stock Index Fund 0.05%
Core Bond Index Fund 0.05%
</TABLE>
Fees shall be calculated and accrued daily.
There are additional fees charged by Subadvisers, and the amount of those fees
will be as negotiated by VIA and each Subadviser in accordance with the terms of
Section 2.03.
Article III
OPERATIONAL SUPPORT
SECTION 3.01 Office Space and General Services.
(a) VIA shall provide VF with such office space as shall be required for
the operation of the VF.
4
<PAGE> 5
(b) VIA shall furnish to VF such additional services and professional
support to accomplish the work to be performed by VF as the Board of Directors
or the officers of VF shall from time to time specify.
SECTION 3.02 Reimbursement to VIA. VF shall reimburse VIA on a
monthly basis for the expenses, including costs of insurance, professional
services, printing and mailing, office space and facilities and transportation,
and other costs and expenses, incurred by VIA in providing operational support
to VF pursuant to this Article III.
Article IV
OTHER MATTERS
SECTION 4.01 Billing Procedures. VIA will submit monthly an itemized
statement of fees and expenses for services rendered under this Agreement to the
President of VF or his/her designee.
SECTION 4.02 Liability. VIA shall not be liable to VF for any error
of judgment or mistake of law or for any loss suffered by VF in connection with
the matters to which this Agreement relates, except a loss resulting from
misfeasance, bad faith or negligence on the part of VIA in the performance of
its duties or from reckless disregard by it of its duties under this Agreement.
Nothing in this Section 4.02 shall constitute a waiver by VF of any rights VF
may have under applicable federal or state securities laws.
SECTION 4.03 Delivery of Documents by VF and VIA.
(a) VF has delivered to VIA copies of each of the following documents and
will deliver to it all future amendments and supplements thereto if any:
(i) The Agreement and Declaration of Trust of the Vantagepoint
Funds dated [DATE];
(ii) The By-laws of the Vantagepoint Funds; and
(iii) A certified resolution of the Board of Directors of the
Vantagepoint Funds authorizing the appointment of VIA and approving the form of
this Master Agreement.
(b) (i) VIA shall submit its audited financial statements to VF within
120 days of the close of each calendar year.
5
<PAGE> 6
(ii) VIA shall submit to VF Part II of VIA's current SEC Form ADV,
and shall submit to VF updated copies of Form ADV from time to time as updates
occur.
SECTION 4.04 Effective Date, Duration and Termination. (a) This
Agreement shall be effective on the date specified in the first sentence hereof
and shall have an initial term of two (2) years. This Agreement shall continue
automatically for successive periods of one calendar year upon the annual
approval of a majority of those Directors of the Board of VF who are not
"interested persons" as that term is defined in the Investment Company Act of
1940.
(b) This Agreement may be terminated by VF or VIA at any time, without
the payment of any penalty, on sixty (60) days' written notice to the other
party.
(c) In the event this Agreement is terminated, VF shall pay to VIA any
outstanding amounts payable under the terms of this Agreement that have accrued
as of the effective date of termination.
SECTION 4.05 Assignment. This Agreement shall automatically
terminate in the event of its assignment.
SECTION 4.06 Amendment. This Agreement may be amended only by an
instrument in writing executed by both parties.
SECTION 4.07 Miscellaneous.
(a) The captions in this Agreement are included for convenience only and
in no way define or delimit any of the provisions hereof or otherwise affect
their construction or effect. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
(b) This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(c) This Agreement supersedes any other agreement between the parties
concerning the matters covered herein.
SECTION 4.08 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the District of Columbia.
6
<PAGE> 7
AGREED:
THE VANTAGEPOINT FUNDS:
by:
----------------------------------
Title:
----------------------------------
Date:
----------------------------------
VANTAGEPOINT INVESTMENT ADVISERS, INC.
by:
----------------------------------
Title:
--------------------------------
Date:
---------------------------------
7
<PAGE> 8
EXHIBIT-99.d(ii)
INVESTMENT ADVISORY AGREEMENT
This Investment Advisory Agreement is made as of the __________ day of
_______________, 1997, by and between VANTAGEPOINT INVESTMENT ADVISERS, LLC, a
Delaware limited liability company (hereafter "Client"), and [SUBADVISER] at
[ADDRESS] (hereafter "Adviser") and is effective as of______________ ,19 (the
"Effective Date").
WHEREAS, the Vantagepoint Funds (the "Funds") is a Delaware Business
Trust registered as an open-end management investment company
under the Investment Company Act of 1940;.
WHEREAS, Client is party to an Investment Adviser Agreement with the
Funds for management of the investment operations of the Funds including the
establishment and operation of investment portfolios for the Funds and the
entering into of contracts with sub-advisers to assist in managing the
investment of the Funds property;
WHEREAS, Client and Adviser wish to enter into an agreement pursuant to
which Adviser will provide such assistance to Client.
AGREEMENTS:
In consideration of the performance by the Adviser as Investment Adviser
of certain assets held by the Funds, the Client has authorized the Adviser to
manage the securities and other assets as follows:
1. ACCOUNT
The account with respect to which the Adviser shall perform its services
shall consist of, and as used herein "Account" refers to, those assets of the
Funds which the Client determines to assign to an account with the Adviser,
together with all income earned by those assets and all realized and unrealized
capital appreciation related to those assets. From time to time, the Client may,
upon notice to the Adviser, make additions to the Account and may, upon notice
to the Adviser, make withdrawals from the Account.
2. APPOINTMENT STATUS POWERS OF ADVISER
(a) Purchase and Sale. Client hereby appoints Adviser to manage the
Account on the terms and conditions set forth in this Agreement. Subject to the
restrictions set forth in this Agreement, and acting always in conformity with
the
<PAGE> 9
Investment Program provided in Section 4, Adviser shall supervise and direct
investment of the Account. Client hereby grants the Adviser complete, unlimited
and unrestricted discretion and authority to select portfolio securities with
respect to the Account including the power to acquire (by purchase, exchange,
subscription or otherwise), to hold and dispose (by sale, exchange or
otherwise). The Adviser will consult with Client, upon the request of the
Client, concerning any transactions it makes with respect to the Investment of
the Account.
(b) Limitation on Authority. Except as expressly authorized herein or
hereafter from time to time, Adviser shall for all purposes deemed to be an
independent contractor and shall have no authority to act for or to represent
the Client or the Funds in any way or otherwise to be an agent of the Client or
the Funds.
(c) Voting. Unless otherwise instructed by Client, Adviser shall have
discretion to take any action or render any advice with respect to the voting of
shares or the execution of proxies solicited from time to time by, or with
respect to, the issuers of securities held in the Account.
3. ACCEPTANCE OF APPOINTMENT
Adviser accepts the appointment as an investment adviser and agrees to
use its best efforts and professional judgment to make timely investment
transactions for the Client with respect to the investments of the Account, and
to provide the other services required of the Adviser under the provisions of
this Agreement.
4. INVESTMENT POLICIES
The Adviser will adhere to the investment objectives, guidelines,
restrictions, and liquidity requirements of the Funds as specified by the Client
on SCHEDULE A hereto, and as restated or modified from time to time by the
Client in written notice to the Adviser, and all specific provisions established
in the Funds' Agreement and Declaration of Trust and Registration Statement as
filed with the Securities and Exchange Commission on Form N-1A ("Registration
Statement), both of which are hereby incorporated by reference and made a part
of this Agreement. In addition, the Adviser shall use reasonable efforts to act
in accordance with the specific statement of Investment Adviser Guidelines,
SCHEDULE B. The Client retains the right, on written notice to the Adviser, to
modify any such objectives, guidelines, restrictions, and liquidity requirements
in any manner at any time. The Client shall give written notice to the Adviser
of any amendments to the Agreement and Declaration of Trust or Registration
Statement, which amendments, upon their receipt by the Adviser, shall be binding
on the Adviser.
2
<PAGE> 10
5. CUSTODY, DELIVERY, RECEIPT OF SECURITIES
The Client shall designate one or more custodians to hold the Account.
The Custodian, as designated by the Client will be responsible for the custody,
receipt and delivery of securities and other assets of the Funds (including the
Account), and the Adviser shall have no authority, responsibility or obligation
with respect to the custody, receipt or delivery of securities or other assets
of the Funds (including the Account). In the event that any cash or securities
of the Funds are delivered to the Adviser, it will promptly deliver the same
over to the Custodian, in the name of the Funds. All securities transactions for
the Account will be consummated by payment to or delivery by the Funds of cash
or securities due to or from the Account. The Adviser will notify the Custodian
of all orders to brokers for the Account by 9:00 am EST on the day following the
trade date and will affirm the trade within one (1) business day after the trade
date (T+1).
The Adviser is authorized to enter into Tri-Party Repurchase Agreements and sign
the standard PSA tri-party agreement (the "Tri-Party Agreement") on behalf of
the Client and the subcustodian thereunder is authorized to act as a
subcustodian for the Account's assets involved in any tri-party repurchase
agreement pursuant to such Tri-Party Agreement.
6. RECORD KEEPING AND REPORTING
(a) Records. Adviser will maintain proper and complete records relating
to the furnishing of services under this Agreement, including records with
respect to the acquisition, holding and disposition of securities for Client.
All records maintained pursuant to this Agreement shall be subject to
examination by Client and by persons authorized by it at all times upon
reasonable notice. Except as expressly authorized in this Agreement or as
required by applicable law, regulation or order of court or as directed by other
party in writing, Adviser and Client shall keep confidential the records and
other information obtained by reason of this Agreement (including, with respect
to Client, the investment information and transactions executed by Adviser).
Upon termination of this Agreement, Adviser shall promptly, upon demand, return
to Client all records Client reasonably believes are necessary in order to
discharge its responsibilities to the Funds. Adviser shall be entitled to retain
originals or copies of records pursuant to the requirements of applicable laws
or regulations.
(b) Quarterly Valuation Reports. Adviser shall use best efforts to
provide to the Client within TEN (10) business days after the end of each
Calendar Quarter a statement of the fair market value of the Account as of the
close of such quarter together with an itemized list of the assets in the
Account. For purposes of this Agreement, fair
3
<PAGE> 11
market value shall mean, as of a particular date, the value of the Account
(determined in accordance with generally accepted accounting principles
consistently applied), plus income accrued thereon less the liabilities related
to the assets in the Account.
(c) Monthly Reports. Adviser shall provide the Client an itemized report
as to the securities in the account, the fair market value thereof and the
accrued income thereon within FOUR (4) business days after the end of each
Calendar Month. The Adviser shall also use best efforts to provide, in writing,
preliminary performance numbers and a brief explanation of these results within
FIVE (5) business days after the end of each Calendar Month. The requested
format will be as mutually agreed by Adviser and Client. For purposes of this
Agreement, fair market value shall mean, as of a particular date, the value of
the Account plus income accrued thereon less the liabilities related to the
assets in the Account.
(d) Reports on Request. Adviser shall provide to Client promptly upon
request any information available in the records maintained by Adviser relating
to the Account.
7. PURCHASE AND SALE OF SECURITIES
(a) Selection of Brokers. Except to the extent otherwise instructed by
Client, (it being understood that Client may, in its absolute discretion, direct
portfolio transactions for which Adviser is responsible to any broker that
Client may see fit), Adviser shall place all orders for the purchase and sale of
securities on behalf of the Client with brokers or dealers selected by Adviser,
but not with a person affiliated with Adviser, as the term "affiliated person"
is defined in the Investment Company Act of 1940 (hereafter an "Affiliate"). In
placing such orders, the Adviser will give primary consideration to obtaining
the most favorable price and efficient execution. In evaluating the terms
available for executing particular transactions for Client and in selecting
brokers and dealers to execute such transactions, the Adviser may consider, in
addition to commission cost and execution capabilities, the financial stability
and reputation of brokers and dealers and the brokerage and research services
(as those terms are defined in Section 28(e) of the Securities Exchange Act of
1934, as amended) provided by brokers and dealers. Adviser is authorized to pay
a broker or dealer who provides such brokerage and research services a
commission for executing a transaction which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if Adviser determines that such commission is reasonable in relation
to the value of the brokerage and research services provided by such broker or
dealer in discharging responsibilities with respect to the Account.
4
<PAGE> 12
(b) Bunching Orders. Client agrees that Adviser may aggregate sales and
purchase orders of Account with similar orders being made simultaneously for
other accounts managed by Adviser, if in Adviser's reasonable judgment such
aggregation shall result in an overall economic benefit to the Account taking
into consideration the advantageous selling or purchase price, brokerage
commission and other expenses. Client acknowledges that the determination of
such economic benefit to Client by Adviser represents Adviser's evaluation that
client is benefited by relatively better purchase or sales prices, lower
commission expenses and beneficial timing of transactions or a combination of
these and other factors.
8. INVESTMENT FEES
(a) The compensation of the Adviser for its services under this Agreement
shall be calculated and paid by the Client from the assets of the Account in
accordance with SCHEDULE C hereto. The Adviser shall send a written invoice to
the Client within 30 days of the quarter end and shall be duly compensated from
the assets of the Account.
(b) The Adviser's fee for each calendar quarter shall be calculated based
on the market value of the average net assets under management each month for
the past four months as provided by the Custodian. The market value of the net
assets will be determined by the Custodian on the last business day of each
calendar month-end. (See example on Schedule C.) The fee will be calculated at a
rate equal to one-fourth of the annual rates specified in Schedule C. Such rates
may be changed from time to time by agreement between the Client and the
Adviser; provided, however, that no increase in such rates shall be made during
the first calendar year of this Agreement.
(c) If the Adviser should serve for less than the whole of any
calendar quarter, its compensation shall be determined as provided above on the
basis of the ending market value of the Account in the month in which the
termination occurs and shall be payable on a pro rata basis for the period of
the calendar quarter for which it has served as Adviser hereunder.
9. BEST EFFORTS; NON-EXCLUSIVITY OF SERVICES
The Adviser shall devote its best efforts and such time as it deems
necessary to provide prompt and expert service to the Client. The services of
Adviser to be provided to Client hereunder are not to be deemed exclusive and
Adviser shall be free to provide similar services for its own account and the
accounts of other persons and to receive compensation for such services. Client
acknowledges that Adviser and its
5
<PAGE> 13
members, Affiliates and employees, and Adviser's other clients may at any time,
have, acquire, increase, decrease, or dispose of positions in the same
investments which are at the same time being held, acquired for or disposed of
under this Agreement for the Client. Adviser shall have no obligation to acquire
or dispose of a position in any investment pursuant to this Agreement simply
because Adviser, its directors, members, Affiliates or employees invest in such
a position for its or their own accounts or for the account of another client.
10. INSIDER TRADING POLICIES AND CODE OF ETHICS
Adviser hereby represents that it has adopted policies that meet the
requirements of Rule 17j-1 under the Investment Company Act of 1940. Copies of
such policies shall be delivered to the Client, and any violation of such
policies by personnel of the Adviser shall be reported to the Client.
11. LIABILITY
Adviser shall not be liable to Client for honest mistakes of judgment or
for action or inaction taken in good faith for a purpose that the Adviser
reasonably believes to be in the best interests of the Client but Adviser shall
be liable to Client for any liability, damages or expenses of Client arising out
of the negligence, malfeasance or violation of applicable law by Adviser or any
of its officers, employees or Affiliates in providing management under this
Agreement. However, neither this provision nor any other provision of this
Agreement shall constitute a waiver or limitation of any rights which Client may
have under federal or state securities laws.
12. TERM
This Agreement shall be in effect for an initial term of two years
beginning on the Effective Date. This Agreement may be renewed thereafter for
successive one-year periods if such renewal is approved annually by the majority
of those members of the Funds' Board of Directors who are not "interested
persons" as that term is defined in the Investment Company Act of 1940.
13. TERMINATION
This Agreement may be terminated by either party hereto, without the
payment of any penalty, immediately upon notice to the other in the event of a
breach of
6
<PAGE> 14
any provision thereof by the party so notified, or otherwise upon sixty (60)
days' notice to the other, except that this Agreement shall automatically
terminate in the event of its assignment, as provided in Paragraph 18, or upon
the termination of the Funds. Any termination in accordance with the terms of
this Agreement shall not cause the payment of any penalty. Any such termination
shall not affect the status, obligations or liabilities of any party hereto to
the other.
14. REPRESENTATIONS
(a) Adviser hereby confirms to Client that Adviser is registered as an
investment adviser under the Investment Advisers Act of 1940, that it has full
power and authority to enter into and perform fully the terms of this Agreement
and that the execution of this Agreement on behalf of Adviser has been duly
authorized and, upon execution and delivery, this Agreement will be binding upon
Adviser in accordance with its terms.
(b) Client hereby confirms to Adviser that it has full power and
authority to enter into this Agreement and that the execution of this Agreement
on behalf of Client has been fully authorized and, upon execution and delivery,
this Agreement will be binding upon Client in accordance with its terms.
15. NOTICES
Notices or other notifications given or sent under or pursuant to this
Agreement shall be in writing and be deemed to have been given or sent if
delivered to the party at its address listed below in person or by telex or
telecopy receipt of which is confirmed or by mail or by registered mail, return
receipt requested. The addresses of the parties are:
CLIENT:
-------
Vantagepoint Investment Advisers, LLC
777 North Capitol Street, NE, Ste. 600
Washington, D.C. 20002-4240
ADVISER:
--------
[name, address]
Each party may change its address by giving notice as herein required.
7
<PAGE> 15
16. SOLE INSTRUMENT
This instrument constitutes the sole and only agreement of the parties to
it relating to its object and correctly sets forth the rights, duties, and
obligations of each party to the other as of its date. Any prior agreements,
promises, negotiations or representations not expressly set forth in this
Agreement are of no force or effect.
17. WAIVER OR MODIFICATION
No waiver or modification of this Agreement shall be effective unless
reduced to a written document signed by the party to be charged. No failure to
exercise and no delay in exercising, on the part of any party hereto, of any
right, remedy, power or privilege hereunder, shall operate as a waiver thereof.
Only the Chief Executive Officer, has authority on behalf of Client to modify or
waive any of the provisions of the Agreement.
18. ASSIGNMENT
This Agreement shall automatically terminate in the event of its
assignment.
19. COUNTERPARTS
This Agreement may be executed in counterparts each of which shall be
deemed to be an original and all of which, taken together, shall be deemed to
constitute one and the same instrument.
20. CHOICE OF LAW
This Agreement shall be governed by, and the rights of the parties
arising hereunder construed in accordance with, the laws of the State of
Delaware without reference to principles of conflict of laws.
8
<PAGE> 16
21. YEAR 2000 WARRANTY
(a) Adviser warrants that all software or other information technology
product used by Adviser or by Adviser's vendors, subcontractors, or agents, that
is to be used in the performance of Adviser's obligations under this Agreement,
is designed to be used prior to, during, and after the calendar year 2000 A.D.
Adviser further warrants that said software or other information technology
product will operate during such time period without error relating to date
data, specifically including any error relating to, or the product of, date data
which represents or references different centuries or more than one century.
(b) Adviser shall indemnify and hold Client harmless
from and against any cost, loss, damage or expense (including reasonable
attorney fees) incurred by Client as a result of a breach of subsection (a) of
this section 21.
IN WITNESS WHEREOF, THE PARTIES HERETO EXECUTE THIS AGREEMENT ON , 1997
and make it effective on the date set forth.
CLIENT ADVISER
Vantagepoint [name]
Investment Advisers, Inc.
by: by:
- ------------------------- -------------------------
(signature) (signature)
- ------------------------- -------------------------
(name, title) (name, title)
Date: Date:
9
<PAGE> 17
SCHEDULE A
THE VANTAGEPOINT FUNDS
[NAME OF FUND]
STATEMENT OF INVESTMENT POLICIES
These Investment Policies and Guidelines have been adopted by the Vantagepoint
Funds (the "Funds") to govern the management and administration of the [NAME OF
VP FUND] of the Funds by Vantagepoint Investment Advisers, Inc. ("VIA"). They
may be reviewed and revised at the discretion of the Directors of the
Vantagepoint Funds. The [NAME OF VP FUND]'s investment administration is under
the supervision of the Retirement Corporation, which is responsible for the
monitoring and appointment of subadvisers to handle the day-to-day investment of
assets assigned to them.
I. GENERAL DESCRIPTION AND GOALS
II. STRUCTURE
III. INVESTMENT STRATEGY
IV. PERFORMANCE BENCHMARKS
V. DIRECTOR REVIEW
10
<PAGE> 18
INVESTMENT GUIDELINES
I. ELIGIBLE INVESTMENTS
III. SECURITIES AND PRACTICES NOT OTHERWISE MENTIONED
IV. INVESTMENT IN MUTUAL FUNDS AND COMMINGLED FUNDS
V. SECURITIES LENDING
VI. INVESTMENT GUIDELINES
VII. ADMINISTRATION
VIII. OTHER CONSIDERATIONS
11
<PAGE> 19
EXHIBIT I
TO THE
STATEMENT OF INVESTMENT POLICIES AND GUIDELINES OF
[NAME OF FUND]
The following standards will be used to measure the performance of the [NAME OF
FUND]:
A. BENCHMARKS
B. TIME HORIZON
C. INVESTMENT CHARACTERISTICS
12
<PAGE> 20
SCHEDULE B
VANTAGEPOINT INVESTMENT ADVISERS, LLC
[NAME OF FUND]
INVESTMENT ADVISER GUIDELINES
FOR
[NAME OF SUBADVISER]
[DESCRIPTION OF ADVISER'S INVESTMENT STYLE]
I. ELIGIBLE INVESTMENTS
III. SECURITIES AND PRACTICES NOT OTHERWISE MENTIONED
IV. PERFORMANCE BENCHMARK AND MONITORING CRITERIA
13
<PAGE> 21
SCHEDULE C
FEE SCHEDULE
The Adviser's fee for each calendar quarter shall be calculated based on the
market value of the average net assets under management each month as provided
by the Custodian. The market value of the net assets will be determined by the
Custodian on the last business day of each calendar month-end. The fee will be
calculated at a rate equal to one-fourth of the following annual rates:
<TABLE>
<S> <C>
$XX million 0.xx percent
Next $XX million 0.xx percent
Over $XXX million 0.xx percent
</TABLE>
EXAMPLE OF FEE CALCULATION
Market Value of Net Assets
<TABLE>
<S> <C>
December 31, 199x $ xxxx
January 30, 199x $ xxxx
February 28, 199x $ xxxx
March 31, 199x $ xxxx
------------
QUARTERLY AVERAGE $ xxxx
Fee Calculation:
.50% on first $150 million $ xxxx
.45% over $150 million $ xxxx
Annual Fee $ xxxx
One-Fourth of Annual Fee $ xxxx
</TABLE>
Date:
---------
14
<PAGE> 1
EXHIBIT 99.E
DISTRIBUTION AGREEMENT
This Agreement, made as of the _________________________ day of
________ between The Vantagepoint Funds, a Delaware business trust (the
"Fund"), and RC Services, LLC,. (the "Distributor"), a Delaware limited
liability Company.
WITNESSETH:
WHEREAS, the Fund proposes to engage in business as an open-end
management investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "1940 Act") and its shares are registered
under the Securities Act of 1933, as amended (the "1933 Act"); and
WHEREAS, the Distributor is registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and is a member
in good standing of the National Association of Securities Dealers, Inc. (the
"NASD"); and
WHEREAS, the Fund and the Distributor wish to enter into an agreement
with each other with respect to the continuous offering of the Fund's shares of
beneficial interest (the "Shares") to commence on __________________,
NOW, THEREFORE, in consideration of the mutual covenants set forth in
this Agreement, the Fund and the Distributor hereby agree as follows:
1. Appointment of Distributor. The Fund hereby appoints the
Distributor as its exclusive agent to sell and to arrange for the sale of the
Fund's shares of beneficial interest ("Shares") at the net asset value per
share plus any applicable sales charges in accordance with the Fund's current
prospectus(es), on the terms and for the period set forth in this Agreement,
and the Distributor hereby accepts such appointment and agrees to act hereunder
directly and/or through the Fund's transfer agent using all reasonable efforts
in connection with the distribution of Shares of the Fund.
2. Services and Duties of the Distributor.
(a) The Distributor agrees to sell the Shares, as agent
for the Fund, from time to time during the term of this Agreement upon the
terms described in the Fund's current Prospectus(es). As used in this
Agreement, the term "Prospectus" shall mean the prospectus and statement of
additional information included as part of the Fund's Registration Statement,
as such prospectus and statement of additional information may be amended or
supplemented from time to time, and the term "Registration Statement" shall
mean the registration statement most
<PAGE> 2
recently filed from time to time by the Fund with the Securities and Exchange
Commission and any amendments thereto at the time in effect.
(b) The Distributor will hold itself available to receive
orders, that the Distributor reasonably believes to be in good order, for the
purchase of the Shares and will accept such orders and will transmit such
orders as are so accepted and funds received by it in payment for such Shares
to the Fund's transfer agent or custodian, as appropriate, as promptly as
practicable. Purchase orders shall be deemed effective at the time and in the
manner set forth in the Prospectus.
(c) The offering price of the Shares shall be the net
asset value per share of the Shares plus any applicable sales charges,
determined as set forth in the Prospectus. The Fund shall furnish the
Distributor, with all possible promptness, each computation of net asset value
and offering price.
3. Duties of the Fund.
(a) Maintenance of Federal Registration. The Fund shall,
at its expense, take, from time to time, all necessary action and such steps,
including payment of the related filing fees, as may be necessary to register
and maintain registration of a sufficient number of Shares under the 1933 Act.
The Fund agrees to file from time to time such amendments, reports and other
documents as may be necessary in order that there may be no untrue statement of
a material fact in a Registration Statement or Prospectus, or necessary in
order that there may be no omission to state a material fact in the
Registration Statement or Prospectus which omission would make the statements
therein misleading.
(b) Maintenance of "Blue Sky" Qualifications. The Fund
shall, at its expense, use its best efforts to qualify and maintain the
qualification of an appropriate number of Shares for and to the extent that may
be required under any state law, sale under the securities laws of such states
as the Distributor and the Fund may approve, and, if necessary or appropriate
in connection therewith, to qualify and maintain the qualification of the Fund
in such states; provided that the Fund shall not be required to amend its
Articles of Incorporation or By-Laws to comply with the laws of any state, to
maintain an office in any state, to change the terms of the offering of the
Shares in any state, to change the terms of the offering of the Shares in any
state from the terms set forth in its Registration Statement and Prospectus, to
qualify as a foreign corporation in any state or to consent to service of
process in any state other than with respect to claims arising out of the
offering and sale of the Shares. The Distributor shall furnish such
information and other material relating to its affairs and activities as may be
required by the Fund in connection with such qualifications.
2
<PAGE> 3
(c) Copies of Reports and Prospectus. The Fund shall, at
its expense, keep the Distributor fully informed with regard to its affairs
that reasonably relate to the distribution of the Fund's Shares and in
connection therewith shall furnish to the Distributor copies of all
information, financial statements and other papers which the Distributor may
reasonably request for use in connection with the distribution of Shares,
including such reasonable number of copies of its Prospectus and annual and
interim reports as the Distributor may request and shall cooperate fully in the
efforts of the Distributor to sell and arrange for the sale of the Shares and
in the performance of the Distributor under this Agreement.
4. Conformity with Applicable Law and Rules. The Distributor
agrees that in selling Shares hereunder it shall conform in all respects with
the laws of the United States and of any state in which Shares may be offered,
and with applicable rules and regulations of the NASD.
5. Independent Contractor. In performing its duties hereunder,
the Distributor shall be an independent contractor and neither the Distributor,
nor any of its officers, directors, employees, or representatives is or shall
be an employee of the Fund in the performance of the Distributor's duties
hereunder. The Distributor shall be responsible for its own conduct and the
employment, control, and conduct of its agents and employees and for injury to
such agents or employees or to others through its agents or employees. The
Distributor assumes full responsibility for its agents and employees under
applicable statutes.
6. Indemnification.
(a) Indemnification of Fund. The Distributor agrees to
indemnify and hold harmless the Fund and each of its present or former
directors, officers, employees, representatives an each person, if any, who
controls or previously controlled the Fund within the meaning of Section 15 of
the 1933 Act against any and all losses, liabilities, damages, claims or
expenses (including the reasonable costs or investigating or defending any
alleged loss, liability, damage, claims or expense and reasonable legal counsel
fees incurred in connection therewith) to which the Fund or any such person may
become subject under the 1933 Act, under any other statute, at common law, or
otherwise, arising out of the acquisition of any Shares by any person which (i)
may be based upon any wrongful act by the Distributor or any of the
Distributor's directors, officers, employees or representatives, or (ii) may be
based upon any untrue statement or alleged untrue statement of a material fact
contained in a registration statement, prospectus, shareholder report or other
information covering Shares filed or made public by the Fund or any amendment
thereof or supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading if such statement or omission was made in
reliance upon information furnished to the Fund by the Distributor, it being
understood that the Fund will rely upon the information provided by the
Distributor for use in the preparation of the Registration Statement and
Prospectus. In no case (i) is the Distributor's indemnity in favor of the
Fund, or any other person
3
<PAGE> 4
indemnified, to be deemed to protect the Fund or such indemnified person
against any liability to which the Fund or such person would otherwise be
subject by reason of willful misfeasance, bad faith, or gross negligence in the
performance of his duties or by reason of his reckless disregard of his
obligations and duties under this Agreement, or (ii) is the Distributor to be
liable under its indemnity agreement contained in this Paragraph with respect
to any claim made against the Fund or any person indemnified unless the Fund or
such person, as the case may be, shall have notified the Distributor in writing
of the claim within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall have been
served upon the Fund or upon such person (or after the Fund or such person
shall have received notice to such service on any designated agent). However,
failure to notify the Distributor of any such claim shall not relieve the
Distributor from any liability which the Distributor may have to the Fund or
any person against whom such action is brought otherwise than on account of the
Distributor's indemnity agreement contained in this Paragraph.
The Distributor shall be entitled to participate, at its own expense,
in the defense, or, if the Distributor so elects, to assume the defense of any
suit brought to enforce any claim as to which it provides this indemnification,
but, if the Distributor elects to assume the defense, such defense shall be
conducted by legal counsel chosen by the Distributor and satisfactory to the
Fund, whose approval shall not be unreasonably withheld, and any other
indemnified defendant or defendants in the suit. In the event that the
Distributor elects to assume the defense of any such suit and retain such legal
counsel, the Fund and any other indemnified defendant or defendants in the suit
shall bear the fees and expenses of any additional legal counsel retained by
them. If the Distributor does not elect to assume the defense of any such
suit, the Distributor will reimburse the Fund and any other indemnified
defendant or defendants in such suit for the reasonable fees and expenses of
any legal counsel retained by them. The Distributor agrees to promptly notify
the Fund of the commencement of any litigation of proceedings against it or any
of its officers, employees, representatives or control persons in connection
with the issue or sale of any Shares.
(b) Indemnification of the Distributor. The Fund agrees
to indemnify and hold harmless the Distributor and each of its present or
former officers, employees, representatives and each person, if any, who
controls or previously controlled the Distributor within the meaning of Section
15 of the 1933 Act against any and all losses, liabilities, damages, claims or
expenses (including the reasonable costs of investigating or defending any
alleged loss, liability, damage, claim or expense and reasonable legal counsel
fees incurred in connection therewith) to which the Distributor or other
indemnified person may become subject under the 1933 Act, under any other
statute, at common law, or otherwise, arising out of the acquisition of any
Shares by any person which (i) may be based upon any wrongful act by the Fund
or any of the Fund's directors, officers, employees or representatives, or (ii)
may be based upon any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, shareholder
report or other information covering Shares filed or made public by the
4
<PAGE> 5
Fund or any amendment thereof or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading unless such statement
or omission was made in reliance upon information furnished to the Fund by the
Distributor, it being understood that the Fund will rely upon the information
provided by the Distributor for use in the preparation of the Registration
Statement and Prospectus. In no case (i) is the Fund's indemnity in favor of
the Distributor, or any person indemnified to be deemed to protect the
Distributor or such indemnified person against any liability to which the
Distributor or such person would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of his duties or
by reason of his reckless disregard of his obligations and duties under this
Agreement, or (ii) is the Fund to be liable under its indemnity agreement
contained in this Paragraph with respect to any claim made against Distributor,
or person indemnified unless the Distributor, or such indemnified person, as
the case may be, shall have notified the Fund in writing of the claim within a
reasonable time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon the
Distributor or upon such person (or after the Distributor or such person shall
have received notice of such service on any designated agent). However,
failure to notify the Fund of any such claim shall not relieve the Fund from
any liability which the Fund may have to the Distributor or any person against
whom such action is brought otherwise than on account of the Fund's indemnity
agreement contained in this Paragraph.
The Fund shall be entitled to participate, at its own expense,
in the defense, or, if the Fund so elects, to assume the defense of any suit
brought to enforce any claim as to which it provides this indemnification, but
if the Fund elects to assume the defense, such defense shall be conducted by
legal counsel chosen by the Fund and satisfactory to the Distributor whose
approval shall not be unreasonably withheld, and any other indemnified
defendant or defendants in the suit. In the event that the Fund elects to
assume the defense of any such suit and retain such legal counsel, the
Distributor, and any other indemnified defendant or defendants in the suit,
shall bear the fees and expenses of any additional legal counsel retained by
them. If the Fund does not elect to assume the defense of any such suit, the
Fund will reimburse the Distributor and any other indemnified defendant or
defendants in such suit for the reasonable fees and expenses of any legal
counsel retained by them. The Fund agrees to promptly notify the Distributor
of the commencement of any litigation or proceedings against it or any of its
directors, officers, employees or representatives in connection with the issue
or sale of any Shares.
7. Authorized Representation. The Distributor is not authorized
by the Fund to give on behalf of the Fund any information or to make any
representations in connection with the sale of Shares other than the
information and representations contained in a registration statement filed
with the Securities and Exchange Commission ("SEC") under the 1933 Act and the
1940 Act, as such registration statement may be amended from time to time, or
contained in shareholder reports or other material that may be prepared by or
on behalf of the Fund for the
5
<PAGE> 6
Distributor's use. The Distributor may prepare and distribute sales literature
and other material as it may deem appropriate, provided that such literature
and materials have been prepared in accordance with applicable laws, rules and
regulations and further provided that the Fund be given notice of such
literature and materials prior to their first distribution. No person other
than the Distributor is authorized to act as principal underwriter (as such
term is defined in the 1940 Act) for the Fund.
8. Term of Agreement. This Agreement shall be effective upon its
execution, and unless terminated as provided, shall continue in force through
______________________, 2000 and thereafter from year to year, provided that
such annual continuance is approved by (i) either the vote of a majority of the
Directors of the Fund, or the vote of a majority of the outstanding voting
securities of the Fund, and (ii) the vote of a majority of those Directors of
the Fund who are not parties to this Agreement or interested persons of any
such party ("Qualified Directors") cast in person at a meeting called for the
purpose of voting on the approval. The Distributor shall furnish to the Fund,
promptly upon its request, such information as may reasonably be necessary to
evaluate the terms of this Agreement or any extension, renewal or amendment
hereof.
9. Amendment and Assignment of Agreement. This Agreement may not
be amended without the affirmative vote of a majority of the outstanding voting
securities of the Fund. This Agreement shall automatically and immediately
terminate in the event of its assignment.
10. Termination of Agreement. This Agreement may be terminated by
either party hereto, without the payment of any penalty, on not more than upon
60 days' nor less than 30 days' prior notice in writing to the other party;
provided, that in the case of termination by the Fund such action shall have
been authorized by resolution of a majority of the Qualified Directors of the
Fund, or by vote of a majority of the outstanding voting securities of the
Fund.
11. Miscellaneous. The captions of this Agreement are included
for convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Nothing herein contained shall be deemed to require the Fund to take
any action contrary to its Articles of Incorporation or By-Laws, or any
applicable statutory or regulatory requirement to which it is subject or by
which it is bound, or to relieve or deprive the Board of Directors of the Fund
of its responsibility for and control of the conduct of the affairs of the
Fund.
6
<PAGE> 7
12. Compliance with Securities Laws. The Fund represents that it
is registered as an open-end management investment company under the 1940 Act,
and agrees that it will comply with all applicable provisions of the 1940 Act,
the 1933 Act and state securities laws and the rules and regulations
thereunder. The Distributor represents that it is a broker-dealer registered
under the Securities Exchange Act of 1934, is a member in good standing of the
National Association of Securities Dealers, Inc., and agrees to comply with all
of the applicable terms and provisions of the Securities Exchange Act of 1934,
the 1940 Act, the 1933 Act, and state securities laws and the rules and
regulations thereunder and with applicable rules and regulations of the NASD.
13. Notices. Any notice required to be given pursuant to this
Agreement shall be deemed duly given if delivered or mailed by registered mail,
postage prepaid to the Distributor at 777 North Capitol St., NE, Suite 600,
Washington, DC 20002 .
14. Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of Delaware. Any question of
interpretation of any term or provision of this Agreement having a counterpart
in or otherwise derived from a term or provision of the 1940 Act, however,
shall be resolved by reference to such term or provision of the 1940 Act and to
interpretation thereof, if any, by the United States courts or, in the absence
of any controlling decision of any such court, by rules, regulations or orders
of the Securities and Exchange Commission validly issued pursuant to the 1940
Act. Specifically, the terms "vote of a majority of the outstanding voting
securities", "interested persons", "assignment", and "affiliated person", as
used in this Agreement, shall have the meanings assigned to them by Section
2(a) of the 1940 Act. Where the effect of a requirement of the 1940 Act
reflected in any provision of this Agreement is relaxed by a rule, regulation
or order of the Securities and Exchange Commission, whether of special or of
general applications, such provision shall be deemed to incorporate the effect
of such rule, regulation or order. To the extent that the applicable laws of
the State of Delaware, or any of the provisions herein, conflict with the
applicable provisions of the 1940 Act, the latter shall control.
15. Limitation of Liability. Notice is hereby given that this
Agreement is executed on behalf of the Directors of the Fund as Directors and
not individually and that the obligations of this instrument are not binding
upon any of the Directors, officers or Shareholders of the Fund individually
but binding only upon the assets and property of the Fund. Further,
obligations of the Fund with respect to any one Portfolio shall not be binding
upon any other Portfolio.
7
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed by their fully authorized representatives and their respective
corporate seals to be hereunto affixed, as of the day and year first above
written.
<TABLE>
<S> <C>
THE VANTAGEPOINT FUNDS
By:
----------------------------
Attest:
- -----------------------
Secretary
RC SERVICES, LLC
By:
----------------------------
Attest:
- -----------------------
Secretary
</TABLE>
8
<PAGE> 1
EXHIBIT -99.O
THE VANTAGEPOINT FUNDS
MULTIPLE CLASS PLAN PURSUANT TO
RULE 18F-3 UNDER THE INVESTMENT COMPANY ACT OF 1940
This Multiple Class Plan has been adopted by a majority of the Board of
Directors of the Vantagepoint Funds ("VPF"), including a majority of the
Directors who are not interested persons of VPF, on behalf of the Vantagepoint
Index Funds (the "Index Funds"). The Index Funds are a separate series of shares
offered by VPF.
I. BACKGROUND
The VPF is an open-end, diversified, no-load management investment
company registered under the Investment Company Act of 1940, as amended (the
"Act). The VPF is a "series" investment company offering a number of portfolios,
including the Index Funds1. The ICMA Retirement Corporation ("RC") acts as
investment adviser to the ICMA Retirement Trust, a group trust established for
the commingled investment of certain public sector retirement plans administered
by RC in its capacity as a plan administrator. Vantagepoint Investment Advisers,
LLC, a wholly-owned subsidiary of RC, acts as investment adviser to VPF pursuant
to a Master Investment Advisory Agreement (the "Agreement") with VPF.
II. SHARE CLASSES
Each Index Fund will offer two classes of shares: Class I and Class II.
III. DISTRIBUTION ARRANGEMENTS
The distribution arrangements will differ between Class I shares and
Class II shares of each of the Index Funds as follows:
- ------------------------------
(1) There are 5 Index Funds: The Overseas Equity Index Fund, the Mid/Small
Company Index Fund, the Broad Market Index Fund, the 500 Stock Index Fund, and
the Core Bond Index Fund.
<PAGE> 2
A. CLASS I SHARES
Class I shares will be available to certain public sector employee
benefit plans containing total plan assets under $40 million dollars that invest
indirectly in the Index Funds through the ICMA Retirement Trust. Class I shares
will also be available to individual retirement account ("IRA") investors as
described in the VPF prospectus.
B. CLASS II SHARES
Class II shares will be available to qualifying public sector
employee benefit plans that (i) invest directly in the Index Funds and have
qualifying total plan assets in excess of $150 million; and (ii) public sector
employee benefit plans that invest indirectly in the Index Funds through the
ICMA Retirement Trust and have qualifying total plan assets equal to or in
excess of $40 million.
Other public sector employee benefit plans with average account
balances or other features that are expected to afford the Index Funds with
certain economies of scale with respect to the servicing of their accounts, may
also qualify for Class II shares.
IT IS EXPECTED THAT THE INVESTORS TO WHOM CLASS II SHARES ARE
AVAILABLE WILL AFFORD THE INDEX FUNDS WITH SUBSTANTIAL ECONOMIES OF SCALE WITH
REGARD TO THE SERVICING OF THEIR ACCOUNTS.
IV. SERVICE ARRANGEMENTS
Service arrangements will differ between Class I Shares and Class II
Shares of the Index Funds as follows:
A. CLASS I SHARES
It is expected that Class I Shares will be held by more investors
than Class II Shares. It is anticipated that the aggregate amount of
account-based services(2) that are provided to Class I Shares will materially
exceed the amount of such services for Class II Shares.
- -------------------------
(2) "Account-based services" for purposes of the Multiple Class Plan
relating to the Funds are defined as services provided on a per account basis to
the Funds. Such services include transaction processing, shareholder
recordkeeping and the mailing of shareholder reports, proxy materials and other
items.
2
<PAGE> 3
B. CLASS II SHARES
Due to the higher asset size investment requirement and
anticipated higher average account balances of Class II investors, it is
expected that Class II Shares will be held by fewer investors than Class I
Shares. It is anticipated that the aggregate amount of account-based services
that are provided to Class II Shares will be materially less than the amount of
such services provided to Class I Shares.
V. EXCHANGES AND CONVERSIONS
A. EXCHANGES
1. CLASS I SHARES
Class I Shares of each Index Fund may be exchanged for
Class II Shares of that Index Fund provided that all
purchase eligibility requirements for Class II Shares are
satisfied by the holder of Class I Shares. Class I Shares
of a particular Index Fund may be exchanged into Class I
Shares of the other Index Funds. In addition, Class I
Shares of the Index Funds may be exchanged into the other
series funds offered by VPF, provided such exchanges are
permitted by the Act.
2. CLASS II SHARES
Class II Shares of each Index Fund may not be exchanged for
Class I Shares of that or any other Index Fund. Class II
Shares of a particular Index Fund may be exchanged into
Class II Shares of the other Index Funds. In addition,
Class II Shares of the Index Funds may be exchanged into
the other series funds offered by VPF, provided such
exchanges are permitted by the Act.
Class II Shares of each Index Fund that are held by
employee benefit plans invested directly in that Index Fund
(i.e., not invested indirectly through the ICMA Retirement
Trust) may be exchanged for shares in the Model Portfolio
Funds and the PLUS Funds available from the ICMA Retirement
Trust.
3
<PAGE> 4
B. CONVERSIONS
Each Index Fund may convert Class II shares into Class I shares if
an investor no longer meets the criteria established in Paragraph III.B. of this
Multiple Class Plan. Any such conversion will be preceded by written notice to
the investor and will be effected on the basis of the relative net asset values
of Class I shares and Class II shares of the applicable Index Fund without the
imposition of any sales load, fee or other charge.
V. EXPENSE ALLOCATION BETWEEN CLASSES
A. CLASS SPECIFIC EXPENSES
1. MARKETING AND DISTRIBUTION EXPENSES
Expenses associated with marketing and distribution
activities will be allocated to the share class of each
Index Fund on behalf of which the expenses were incurred by
making such allocations to Class I Shares and Class II
Shares as if each such share class were a separate fund
under the Agreement.
2. EXPENSES FOR ACCOUNT-BASED SERVICES
Expenses associated with the provision of account-based
services to each Index Fund will be allocated between
Class I Shares and Class II Shares of that Index Fund on
the basis of the amount incurred by each share class as
follows:
(A) ACCOUNT MAINTENANCE EXPENSES
Expenses associated with the maintenance of investor
accounts for each Index Fund will be allocated to
the class generating the expenses.
(B) LITERATURE PRODUCTION AND MAILING EXPENSES
Expenses associated with shareholder reports, proxy
materials and other literature will be allocated
between Class I Shares and Class II Shares based
upon the number of such items produced and mailed
for each class of shares.
4
<PAGE> 5
3. OTHER CLASS SPECIFIC EXPENSES
Expenses for the primary benefit of a particular share
class will be allocated to that share class. Such expenses
include the following: each class' share of operating
expenses (not including expenses related to management
of each Index Fund's assets allocated under subparagraph
below), Blue Sky fees, and legal fees attributable to a
particular class.
C. FUND EXPENSES
1. ASSET MANAGEMENT EXPENSES
Expenses associated with management of each Index Fund's
assets (including all advisory, tax preparation, and
custody fees) will be allocated between Class I Shares and
Class II Shares of that Index Fund on the basis of their
relative net assets.
2. OTHER FUND EXPENSES
Any other expenses not described above will be allocated
between Class I Shares and Class II Shares of each Index
Fund on the basis of their relative
net assets.
VI. ALLOCATION OF INCOME, GAINS AND LOSSES
Income, gains and losses of each Index Fund will be allocated between
Class I Shares and Class II Shares on the basis of the relative net assets of
each class of shares. As a result of differences in allocated expenses, it is
expected that the net income of, and dividends payable to, each class of shares
will vary. Dividends and distributions paid to each class of shares of each
Index Fund will be calculated in the same manner, on the same day, and at the
same time.
VII. VOTING AND OTHER RIGHTS
Class I Shares and Class II Shares of each Index Fund will have: (i)
exclusive voting rights on any matter submitted to shareholders that relates
solely to its service or distribution arrangements; (ii) separate voting rights
on any matter submitted to shareholders in which the interests of one class
differ from the interests of the other class; and (iii) in all other respects
the same rights, obligations and privileges as each other, except as described
in this Multiple Class Plan.
5
<PAGE> 6
VIII. AMENDMENTS
All material amendments to this Multiple Class Plan must be approved by a
majority of the Board of Directors of the VPF, including a majority of the
Directors who are not interested persons of VPF.
6
