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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. .... [ ]
Post-Effective Amendment No. ....1 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF
1940 [X]
Amendment No. ....5 [X]
(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. Gallagher, 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.
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THE VANTAGEPOINT FUNDS
PROSPECTUS SUPPLEMENT
JULY **, 1999
THE FOLLOWING INFORMATION REPLACES THE INFORMATION UNDER THE HEADING
"INVESTMENT SUBADVISERS" WITH RESPECT TO THE EQUITY INCOME FUND IN THE FIRST
COLUMN OF PAGE 12 OF THE PROSPECTUS DATED MARCH 1, 1999.
INVESTMENT SUBADVISERS- Barrow, Hanley, Mewhinney & Strauss, Inc. ("BHM&S"),
Dallas, TX serves as a subadviser to the Fund. Richard A. Englander serves as
portfolio manager. Mr. Englander began his career as a portfolio manager in 1963
and joined BHM&S in 1985. BHM&S follows a value-oriented investment approach
which stresses active management through a process of individual stock selection
on a bottom-up basis.
T. Rowe Price Associates, Inc., Baltimore, MD serves as a subadviser to the
Fund. Brian C. Roberts, CFA,CIC serves as portfolio manager. Mr. Roberts has
over 20 years of experience as a portfolio manager and has been with T. Rowe
price since 1981. T. Rowe Price seeks to achieve the Fund's objective by
investing in a broadly diversified basket of securities which display
above-market yield and below-market valuation.
Wellington Management Company, LLP, Boston, MA serves as a subadviser to the
Fund. Stephen O'Brien, CFA serves as portfolio manager. Mr. O'Brien has 30 years
of portfolio management experience. He has been with Wellington Management
Company since 1982. Wellington Management Company seeks to achieve the Fund's
objective by investing in large capitalization companies, which are selling at
attractive prices relative to their upside potential.
As a result of this change in subadvisers total annual Fund expenses are
expected to increase from 0.66% to 0.82% of average daily net assets and the fee
example on page 7 of the prospectus would be $84 for one year and $263 for three
years.
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THE VANTAGEPOINT FUNDS
STATEMENT OF ADDITIONAL INFORMATION
JULY **, 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 March 1, 1999. A
copy of the prospectus may be obtained by writing to the Funds or calling
1-800-669-7400.
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
Description of the Fund and Its Investments and Risks........... 1
Management of The Vantagepoint Funds............................ 5
Control Persons and Principal Holders of Securities............. 6
Investment Advisory and Other Services.......................... 6
Portfolio Transactions.......................................... 10
Capital Stock and Other Securities.............................. 11
Purchase, Redemption, and Pricing of Shares..................... 12
Taxation of the Fund............................................ 12
Calculation of Performance Data................................. 13
Legal Counsel, Independent Auditors, & Custodian................ 13
Financial Statements............................................ 14
</TABLE>
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, LLC ("VIA"), which in turn hires
and manages subadvisers who are responsible for the day-to-day management and
security selections for the Funds. VIA supervises and directs each Fund's
investments. With respect to the Index Funds (other than the Overseas Equity
Index Fund), VIA selects the Master Portfolios in which each Index Fund invests.
The Vantagepoint Funds are as follows:
<TABLE>
<S> <C>
Actively-Managed Funds: Aggressive Opportunities Fund
International Fund
Growth Fund
Growth & Income Fund
Equity Income Fund
Asset Allocation Fund
U.S. Treasury Securities Fund
Money Market Fund
Index Funds: Overseas Equity Index Fund
Mid/Small Company Index Fund
Broad Market Index Fund
500 Stock Index Fund
Core Bond Index Fund
</TABLE>
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.
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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 appointing and monitoring of subadvisers to handle
the day-to-day investment of assets assigned to them.
With the exception of the Money Market Fund the assets of each actively-managed
Fund are managed by one or more subadvisers. Subadvisers are retained to manage
a particular portion of each Fund under the terms of written investment advisory
contracts with VIA.
The Money Market Fund is invested in the Short Term Investment Co. Liquid Assets
Portfolio, a registered money market mutual fund. The mutual fund's investment
adviser is AIM Advisors. Inc.
As explained in the prospectus, and in greater detail on page 5, each Index Fund
(with the exception of the Overseas Equity Index Fund) is structured as a
"feeder" fund investing in a "Master Portfolio" which has substantially similar
investment objectives and strategies as the applicable Index Fund. The
investment adviser for each "Master Portfolio" in which the corresponding Index
Fund invests is Barclays Global Fund Advisors ("Barclays") .
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 the prospectus and 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.
The 500 Stock Index Fund is not sponsored, endorsed, sold or promoted by
Standard & Poor's a division of the McGraw-Hill Companies, Inc. ("S&P"), or by
Wilshire Associates Inc. ("Wilshire Associates"). Neither S&P nor Wilshire
Associates makes any 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, the Wilshire 45000 Index(R) or the Wilshire 5000 Index(R)
to track general stock market performance. S&P's and Wilshire Associates' only
relationship to the licensee is the licensing of certain trademarks and trade
names of S&P and of the S&P 500 Index and Wilshire Associates and the Wilshire
4500 Index and Wilshire 5000 Index, which are determined, composed and
calculated by S&P or Wilshire Associates without regard to the licensee or the
product. S&P and Wilshire Associates have 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, the Wilshire 4500 Index or the
Wilshire 5000 Index. S&P and Wilshire Associates are not responsible for and
have 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 and Wilshire Associates have no obligation or liability
in connection with the administration, marketing or trading of the product.
Neither S&P nor Wilshire Associates guarantees the accuracy and/or the
completeness of the S&P 500 Index, the Wilshire 4500 Index, the Wilshire 5000
Index or any data included therein and neither S&P nor Wilshire Associates shall
have any liability for any errors, omissions, or interruptions therein. S&P and
Wilshire Associates make 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, Wilshire 4500 Index, Wilshire 5000 Index or any
data included therein. S&P and Wilshire Associates make no express or implied
warranties, and expressly
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disclaim all warranties of merchantability or fitness for a particular purpose
or use with respect to the S&P 500 Index, Wilshire 4500 Index, Wilshire 5000
Index or any data included therein. Without limiting any of the foregoing, in no
event shall S&P or Wilshire Associates have any liability for any special,
punitive, indirect, or consequential damages (including lost profits), even if
notified of the possibility of such damages.
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 ("S&P 500 Index") -- consists of 500 companies
representing larger capitalization stocks traded in the U.S.
Standard & Poor's MidCap 400 Index -- consists of 400 medium sized domestic
stocks traded in the U.S.
Standard & Poor's/BARRA MidCap Growth Index -- consists of the stocks of the S&P
MidCap 400 Index having growth characteristics.
Standard & Poor's/BARRA Value Index -- a subset of the S & P that includes
stocks that offer higher than average dividend yields and are considered to be
out of the favor with investors.
Wilshire 5000 Equity Index -- consists of all common equity securities domiciled
in the U.S. for which daily pricing is available.
Wilshire 4500 Equity Index -- consists of all stocks in the Wilshire 5000 except
for those included in the Standard & Poor's 500 Stock Index.
Morgan Stanley Capital International EAFE Free Index -- consists of
approximately 1100 securities listed on the stock exchanges of developed markets
of countries in Europe, Australia and the Far East. The EAFE Free Index excludes
securities that are not available to U.S. investors.
Lehman Brothers Long-Term Treasury Bond Index -- consists of all Treasury
obligations with maturities of 10 years or greater.
Lehman Brothers Government/Corporate Bond Index -- consists of U.S. Treasury,
agency, and corporate securities rated BBB or better.
Merrill Lynch 5-7 Year Treasury Index -- consists of all Treasury obligations
with maturities between 5 and 7 years.
Russell 2000 Index -- consists of the smallest 2,000 of the 3000 largest U.S.
companies based on total market capitalization, representing approximately 7% of
the Russell 3000 Index's total market capitalization.
ELIGIBLE INVESTMENTS
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 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 and
shares of money market mutual funds. All funds may also participate in
repurchase agreements and reverse repurchase agreements.
B. FINANCIAL FUTURES: 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.
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OTHER INVESTMENTS:
The funds may invest in certain other instruments as follows:
i. Rights and 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
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'
Board of 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 the 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.;
(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);
(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 (the
"Commission") thereunder and the aggregate value of all securities loaned does
not exceed 33 1/3% 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 as may be needed to
enter into futures and options transactions as described in the prospectus and
this Statement of Additional Information and for such short-term credits as are
necessary for the clearance of transactions), or engage in short sales (unless
by virtue of a Fund's ownership of other securities that it has a right to
obtain at no added cost and 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;
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(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) 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 or by any rule, regulation, opinion or
interpretation of the Commission. Notwithstanding this restriction, the Index
Funds and the Money Market Fund may enter into 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);
(10) Invest in companies for the purpose of exercising control or management;
and
(11) Invest more than 25% of its assets in any single industry, except for the
Money Market Fund and with respect to the Index Funds, to the extent that such
industry concentration is a component of a Fund's benchmark index.
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).
THE INDEX FUNDS
Each Index Fund is managed by Barclays using quantitative, structured and
passive management techniques. Each such Fund, except the Overseas Index Fund,
is structured as a "feeder" fund which invests in a Master Portfolio of the
Master Investment Portfolio. The "Master Portfolio" invests in securities in
accordance with investment objectives, policies, and limitations that are
substantially similar to those of the applicable Index Fund.
The Broad Market Index Fund's Master Portfolio invests substantially all of its
assets in two other Master Portfolios of Barclays. One of these Master
Portfolios, in turn, invests substantially all of its assets in a representative
sample of stocks comprising the Wilshire 4500 Index. The other Master Portfolio,
in turn, invests substantially all of its assets in stocks comprising the S&P
500 Index (together, the "Underlying Portfolios"). The Master Portfolio's assets
will be invested in the Underlying Portfolios in proportions adjusted
periodically to maintain the capitalization range of the Wilshire 5000 Index.
The assets of the Vantagepoint Index Funds are invested in these Master
Portfolios in proportions that are designed to meet their respective objectives.
The Vantagepoint 500 Stock Index Fund invests exclusively in the S&P 500 Index
Portfolio. The Vantagepoint Mid/Small Company Index Fund invests exclusively in
the Extended Index Portfolio. The Vantagepoint Broad Market Index Fund invests
the U.S. Equity Index Fund which, in turn, invests in both Underlying Portfolios
in proportions that are designed to approximate the performance of the Wilshire
5000 Index. Finally, the Vantagepoint Core Bond Index Fund invests in a separate
Master Portfolio that is designed to track its benchmark index.
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. Therefore, the performance of the Funds versus their respective
benchmarks can be expected to deviate more than that of funds investing in all
of the securities contained in a benchmark.
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.
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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 an Insider Trading Policy
established pursuant to Rule 17j-1 of the Investment Company Act of 1940. The
policy is designed to prevent unlawful 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 Vantagepoint Funds".
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
VIA is a wholly-owned subsidiary of, and 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.
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 supervises and directs the Funds' investments.
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Additionally, VIA selects the Master Portfolios in which the Index Funds (other
than the Overseas Equity Index Fund) invest. 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
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<S> <C>
All Funds except the Index Funds 0.10%
Index Funds 0.05%
</TABLE>
VIA or its broker-dealer affiliate, ICMA-RC Services LLC, provides all
distribution and marketing services for the Funds. VIA or its transfer agent
affiliate, Vantagepoint Transfer Agents, LLC. ("VTA"), also provides certain
administrative shareholder support services 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 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 0.20% 0.15%
Index Funds
Class I 0.15% 0.15%
-------
Class II 0.05% 0.05%
--------
</TABLE>
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. The fee schedules that have
been negotiated with each subadvisers are set forth below.
<TABLE>
<CAPTION>
AGGRESSIVE OPPORTUNITIES FUND
ASSETS
SUBADVISER MANAGED FEE
- ----------------------------------- ------------------ -------
<S> <C> <C>
First Pacific Advisers First $100 million 0.80%
Over $100 million 0.75%
MFS Institutional Advisers, Inc. Flat fee 0.75%
TCW Funds Management, Inc. First $100 Million 0.73%
Next $100 Million 0.69%
Over $200 Million 0.67%
</TABLE>
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<TABLE>
<CAPTION>
INTERNATIONAL FUND
Subadviser
----------
<S> <C> <C>
Capital Guardian Trust Company First $25 Million 0.75%*
Next $25 Million 0.60%
Next $200 Million 0.43%
Next $250 Million 0.38%
*Mimimum Fee of $337,500
Payable to Capital
Guardian
Lazard Asset Management First $100 million 0.50%
Over $100 million 0.40%
Rowe Price-Fleming, International, Inc. First $20 Million 0.75%
Next $30 Million 0.60%
Over $50 Million* 0.50%
*On all assets managed
by Rowe Price-Fleming
GROWTH FUND
Subadviser
----------
Cadence Capital Management First $100 million 0.45%
Next $400 million 0.20%
Over $500 million 0.15%
William Blair & Company, LLC First $150 million 0.50%
Next $150 million 0.45%
Over $300 million 0.40%
Neuberger Berman, LLC Flat fee 0.45%
Barclays Global Fund Advisors First $500 million 0.04%
Next $500 million 0.02%
Over $1 billion 0.01%
Fidelity Management Trust Company
(Small Company account) First $25 million 0.80%
Over $25 million 0.60%
(Aggressive Equity account) Flat fee** 0.38%
</TABLE>
** From 1/1/2000 to 12/31/2000 the annual fee will be 45 of 1%. Beginning on
1/1/2000 the annual fee will be .80 of 1% on the first $25 milliom and .60% on
assets over $25 million. of 1%
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<TABLE>
<CAPTION>
GROWTH AND INCOME FUND
ASSETS
SUBADVISER MANAGED FEE
- ------------------------------- ----------------- -----
<S> <C> <C>
Capital Guardian Trust Company First $25 million 0.55%*
Next $25 million 0.40%
Over $50 million 0.23%
* Minimum fee of
$167,500 payable to
Capital Guardian
Putnam Investments Management, Inc. First $15 million 0.55%
Next $35 million 0.40%
Next $50 million 0.30%
Over $100 million 0.25%
EQUITY INCOME FUND
Subadviser
- ----------
Wellington Management Company, LLP First $50 million 0.40%
Next $100 million 0.30%
Over $200 million 0.25%
Barrow, Hanley, Mewhinney & Strauss, Inc. First $10 million 0.75%
Next $15 million 0.50%
Next $175 million 0.25%
Next $600 million 0.20%
Next $200 million 0.15%
Over $1 billion 0.13%
T. Rowe Price Associates, Inc. First $500 million 0.40%
Over $500 million 0.35%
ASSET ALLOCATION FUND
Subadviser
- ----------
AVATAR Investors Associates Corp. First $250 million 0.25%
Next $250 million 0.20%
Over $500 million 0.18%
Mellon Capital Management First $200 million 0.38%
Over $200 million 0.20%
Wilshire Asset Management First $100 million 0.04%
Next $400 million 0.02%
Over $500 million 0.01%
Payden & Rygel Investment Counsel First $200 million 0.10%
Next $100 million 0.09%
Over $300 million 0.08%
</TABLE>
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<TABLE>
<CAPTION>
U.S. TREASURY SECURITIES FUND
Subadviser
- ----------
<S> <C> <C>
Seix Investment Advisors, Inc. First $25 million 0.17%
Next $50 million 0.12%
Next $25 million 0.07%
Money Market Fund (Aim Advisors, Inc) 0.08%
OVERSEAS EQUITY INDEX FUND
Barclays Global Fund Advisors N.A.* First $25 million 0.20%
Over $25 million 0.15%
</TABLE>
* Minimum fee of $75,000 payable to Barclays
<TABLE>
<CAPTION>
INDEX FUNDS (BARCLAYS)
ADVISORY AND
ADMINISTRATIVE
FEES
--------------
<S> <C>
Broad Market Index Fund** 0.08%
500 Stock Index Fund 0.05%
Core Bond Index Fund 0.08%
Mid/Small Company Index 0.10%
</TABLE>
**Barclays is entitled to receive monthly fees at the annual rate of 0.01% of
the average daily net assets of the Master Portfolio, 0.08% of the average daily
net assets of the Extended Index Portfolio and 0.05% of the average daily net
assets of the S&P 500 Index Portfolio as compensation for its advisory services.
The Master Portfolio bears its pro rata share of the advisory fees of the
Underlying Portfolios. Based on these fee levels and the expected allocation of
assets between the two Underlying Portfolios, the advisory fees payable to
Barclays by the Master Portfolio on a combined basis will be approximaetly 0.07%
of the average daily net assets of the Master Portfolio. From time to time,
Barclays may waive such fees in whole or in part. Any such waiver will reduce
the expenses of the Master Portfolio and, accordingly, have a favorable impact
on its performance.
Information on the advisory services provided by each subadviser and services
provided by Barclays 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 International Fund, the Growth 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. 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.
10
<PAGE> 13
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.
With respect to the Index Funds, Barclays assumes general supervision over
placing orders on behalf of the Master Portfolio for the purchase or sale of
portfolio securities. Allocation of brokerage transactions, including their
frequency, is made in the best judgment of Barclays and in a manner deemed fair
and reasonable to interestholders. In executing portfolio transactions and
selecting brokers or dealers, Barclays seeks to obtain the best overall terms
available for the Master Portfolio. In assessing the best overall terms
available for any transaction, Barclays considers factors deemed relevant,
including the breadth of the market in the security, the price of the security,
the financial condition and execution capability of the broker or dealer, and
the reasonableness of the commission, if any, both for the specific transaction
and on a continuing basis. The primary consideration is prompt execution of
orders at the most favorable net price. Certain of the brokers or dealers with
whom the Master Portfolio may transact business offer commission rebates to the
Master Portfolio. Barclays considers such rebates in assessing the best overall
terms available for any transaction. The overall reasonableness of brokerage
commissions paid is evaluated by Barclays based upon its knowledge of available
information as to the general level of commissions paid by other institutional
investors for comparable services. Brokers also are selected because of their
ability to handle special executions such as are involved in large block trades
or broad distributions, provided the primary consideration is met. Portfolio
turnover may vary from year to year, as well as within a year. High turnover
rates over 100% are likely to result in comparatively greater brokerage
expenses.
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
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.
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 $125 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.
11
<PAGE> 14
PURCHASE, REDEMPTION AND PRICING OF SHARES
PURCHASES
Reference is made to the prospectus under the heading "Purchases, Exchanges and
Redemptions".
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 "Purchases, Exchanges and
Redemptions". 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 and may be
required by The Vantagepoint Funds at the discretion of its management. 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;
* 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.
The Funds have made an election with the Commission to pay in cash all
redemptions requested by any shareholder of record limited in an amount during
any 90-day period to the lesser of $250,000 or 1% of the net assets of the Fund
at the beginning of such period. Such commitment is irrevocable without the
prior approval of the Commission. Redemptions in excess of the above limits may
be paid, in whole or in part, in investment securities or in cash, as the
Directors may deem advisable; however, payment will be made wholly in cash
unless the Directors believe that economic or market conditions exist which
would make a practice detrimental to the best interests of the Fund. If
redemptions are paid in investment securities, such securities will be valued as
set forth in the Prospectus under "Pricing and Timing of Transactions" and a
redeeming shareholder would normally incur brokerage expenses if he or she
converted these securities to cash.
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 Fund level, which would reduce Fund returns correspondingly.
12
<PAGE> 15
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
that have been offered through the ICMA Retirement Trust, an unregistered
commingled fund which holds and invests the assets of public sector retirement
plans. The inception dates of these funds are noted below. Substantially all of
the portfolio securities of each Vantagepoint Fund were transferred from the
corresponding fund of the ICMA Retirement Trust. Barclays was not the adviser to
any of the Funds shown during these periods. 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, as set forth in the prospectus.
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 or a core bond index fund, and performance is not shown for those
Vantagepoint Funds. Figures shown are updated to most recent quarter-end.
Please note that the performance depicted is hypothetical. Actual performance of
the Vantagepoint Funds may vary from that shown.
<TABLE>
<CAPTION>
SINCE
FUND 1 YR 3 YR 5 YR 10 YR INCEPTION
- ------------------------------------------ -------- -------- -------- --------- ------------
<S> <C> <C> <C> <C> <C>
Aggressive
Opportunities (inception date: 10/1/94) 12.2% 18.2% n/a n/a 23.1%
International (inception date: 10/1/94) 5.0% 8.5% n/a n/a 7.6%
Growth 19.8% 22.4% 19.3% 18.9% n/a
Equity Income (inception date: 4/1/94) 2.5% n/a n/a 22.0%
Asset Allocation 22.4% 21.1% 17.7% 15.0% n/a
U.S. Treasury
Securities (inception date: 7/1/92) 9.7% 6.6% 6.3% n/a 7.2%
Overseas Equity
Index (inception date: 7/1/97) 19.8% n/a n/a n/a 8.8%
Mid/Small Company (inception date: 7/1/97) 7.3% n/a n/a n/a 16.3%
Broad Market Index 22.7% 24.7% 21.3% 17.1% n/a
500 Stock Index (inception date: 7/1/97) 28.1% n/a n/a n/a 28.1%
</TABLE>
Communications 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.
LEGAL COUNSEL INDEPENDENT AUDITORS & CUSTODIAN.
Morgan, Lewis & Bockius, Washington, D.C. serves as legal counsel to The
Vantagepoint Funds. PricewaterhouseCoopers, LLP, Baltimore, MD, serves as
independent auditors. Investors Bank & Trust, Boston, MA serves as custodian.
13
<PAGE> 16
VANTAGEPOINT FUNDS VANTAGEPOINT MONEY MARKET FUND
STATEMENT OF ASSET AND LIABILITIES
FEBRUARY 19, 1999
<TABLE>
<S> <C>
Cash $ 100,000
Total Assets $ 100,000
Total Liabilities -
Net Assets - Offering and redemption price of $1.00 $ 100,000
Per share with 100,000 shares outstanding
</TABLE>
NOTES TO FINANCIAL STATEMENTS
A. ORGANIZATION
The Vantagepoint Funds (Delaware Business Trust) was organized on July 28, 1999
and was established as a no load open-end diversified "series" investment
company offering thirteen distinct investment portfolios (the "Funds"). The five
Index Funds offer two classes of shares. The other Funds offer a single class of
shares. The Vantagepoint Funds has had no operations other than those matters
related to their organization and registration as an investment company under
the Investment Company Act of 1940. The Statement of Assets and Liabilities
presented is for the Vantagepoint Money Market Fund, one of the portfolios
comprising The Vantagepoint Funds. The ICMA Retirement Corporation (a registered
Investment Adviser) has provided the initial capital for the Fund by purchasing
100,000 shares of the Vantagepoint Money Market Fund at $1.00 per share. Such
shares were acquired for investment and can be disposed of only by redemption.
The Funds are patterned on, have the same investment objectives, and are
operated in substantially 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 the ICMA Retirement Trust will be transferred in-kind to the corresponding
fund of the Vantagepoint Funds upon the commencement of operations. The
underlying portfolio of each fund of the ICMA Retirement Trust will consist
solely of the shares of the corresponding Vantagepoint Fund in which it invests.
B. ORGANIZATION COSTS
The costs incurred in connection with the organization of the Funds has been
borne by ICMA Retirement Corporation. The Funds will not be required to
reimburse ICMA Retirement Corporation for these costs.
C. MANAGEMENT OF THE FUNDS
The Funds are managed by Vantagepoint Investment Advisers, LLC (VIA) a
wholly-owned subsidiary of ICMA Retirement Corporation. VIA employs a
"multi-management" strategy in which it evaluates, selects, and monitors one or
more subadvisors for each Fund. Compensation for the investment management of
the Funds paid to VIA and the subadvisors is asset based, i.e., it consists of
an annual percentage fee calculated based on average assets under management.
The aggregate annual advisory fees paid to VIA and to subadvisors ranges from
.10% to .86% of the average daily net assets of each Fund. VIA or its
broker-dealer affiliate, ICMA-RC Services, LLC, provides all distribution and
marketing services to the Funds. VIA or its transfer agent affiliate,
Vantagepoint Transfer Agents, LLC ("UTA") also provides certain administrative
shareholder support services for the Funds. VIA or VTA receives asset-based
compensation for these additional administrative services ranging from .10% to
.35% of the average daily net assets of the Funds.
14
<PAGE> 17
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of
The Vantagepoint Funds:
In our opinion, the accompanying statement of assets and liabilities presents
fairly, in all material respects, the financial position of the Vantagepoint
Money Market Fund, one portfolio comprising The Vantagepoint Funds (the "Fund")
at February 19, 1999 in conformity with generally accepted accounting
principles. This financial statement is the responsibility of the Fund's
management; our responsibility is to express an opinion on this financial
statement based upon our audit. We conducted our audit of this financial
statement in accordance with generally accepted auditing standards which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statement is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statement, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for the opinion expressed above.
PricewaterhouseCoopers LLP
Baltimore, Maryland
February 22, 1999
15
<PAGE> 18
PART C: OTHER INFORMATION
Financial Statements
Audited Financial statements showing the initial capitalization of the Fund
are included in Part B.
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) Opinion of Independent Accountants**
(k) Not applicable
(l) Purchase Agreement*
(m) Not applicable
(n) Not applicable
(o) Rule 18f-3 plan*
* Previously filed
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> 19
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, LCC, and
Vantagpoint Transfer Agents, LCC, under the heading "Investment Advisory and
Other Services."
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Pre-Effective Amendment No. 4 to the
registration statement on Form N-1A of The Vantagepoint Funds and has duly
caused this registration statement to be signed on its behalf by the
undersigned, and duly authorized, in the City of Washington, DC, on the 28th day
of May, 1999
..............................
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 May 28, 1999
.............................................................................
(Signature) (Title) (Date)
By: (Paul F. Gallagher)*
Robert A. Bowman Director May 28, 1999
By: (Paul F. Gallagher)*
N. Anthony Calhoun Director May 28, 1999
By: (Paul F. Gallagher)*
Arthur Lynch Director May 28, 1999
By: (Paul F. Gallagher)*
Eddie Moore Director May 28, 1999
.............................................................................
(Signature) (Title) (Date)
By: (Paul F. Gallagher)*
Robin L. Wiessman Director May 28, 1999
* As Attorney-in-Fact, pursuant to Power-of-Attorney dated November 12, 1998.
<PAGE> 21
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Pre-Effective Amendment No. 5 to the
Registration Statement on Form N-1A of The Vantagepoint Funds and has duly
caused this Pre-Effective Amendment No. 5 to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of Little Rock, State of
Arkansas on the 28th day of May, 1999.
MASTER INVESTMENT PORTFOLIO
EXTENDED INDEX MASTER PORTFOLIO
U.S. EQUITY INDEX MASTER PORTFOLIO
S&P 500 INDEX MASTER PORTFOLIO
BOND INDEX MASTER PORTFOLIO
By /s/ RICHARD H. BLANK, JR.
--------------------------------
Richard H. Blank, Jr.
Secretary and Treasurer
(Principal Financial Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment No. 5 to the Registration Statement on Form N-1A has
been signed below by the following persons in the capacities and on the date
indicated:
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ Richard H. Blank, Jr. Secretary and Treasurer
- ------------------------------ (Principal Financial Officer) May 28, 1999
Richard H. Blank, Jr.
* Trustee May 28, 1999
- ------------------------------
Jack S. Euphrat*
* Chairman, President
- ------------------------------ (Principal Executive Officer), May 28, 1999
R. Greg Feltus* and Trustee
* Trustee May 28, 1999
- ------------------------------
W. Rodney Hughes*
</TABLE>
* Richard H. Blank, Jr. signs this document pursuant to powers of attorney
as previously filed.
*By /s/ RICHARD H. BLANK, JR.
-------------------------------
Richard H. Blank, Jr.
Attorney in Fact
<PAGE> 22
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Marco E. Adelfio, Richard H. Blank, Jr., R. Greg Feltus and Robert M.
Kurucza, and each of them, his true and lawful attorney-in-fact and agent (each,
an "Attorney-in Fact") with full power of substitution and resubstitution, for
him and in his name, place and stead, in any and all capacities, (i) to execute
the Registration Statement of each of MasterWorks Funds Inc. and Master
Investment Portfolio and any investment company whose fund(s) invest in a Master
Portfolio of Master Investment Portfolio (each, a "Company"), and any or all
amendments (including post-effective amendments) thereto and to file the same,
with any and all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission and any state securities commissions
or authorities, and (ii) to execute any and all federal or state regulatory
filings, including all applications with regulatory authorities, state charter
or organizational documents and any amendments or supplements thereto, to be
executed by, on behalf of, or for the benefit of, a Company. The undersigned
hereby grants to each Attorney-in-Fact full power and authority to do and
perform each and every act and thing contemplated above, as fully and to all
intents and purposes as he might or could do in person, and hereby ratifies and
confirms all that said Attorney-in-Fact may lawfully do or cause to be done by
virtue hereof.
Dated: August 11, 1998 /s/ JACK S. EUPHRAT
-----------------------
Jack S. Euphrat
<PAGE> 23
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Marco E. Adelfio, Richard H. Blank, Jr., R. Greg Feltus and Robert M.
Kurucza, and each of them, his true and lawful attorney-in-fact and agent (each,
an "Attorney-in Fact") with full power of substitution and resubstitution, for
him and in his name, place and stead, in any and all capacities, (i) to execute
the Registration Statement of each of MasterWorks Funds Inc. and Master
Investment Portfolio and any investment company whose fund(s) invest in a Master
Portfolio of Master Investment Portfolio (each, a "Company"), and any or all
amendments (including post-effective amendments) thereto and to file the same,
with any and all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission and any state securities commissions
or authorities, and (ii) to execute any and all federal or state regulatory
filings, including all applications with regulatory authorities, state charter
or organizational documents and any amendments or supplements thereto, to be
executed by, on behalf of, or for the benefit of, a Company. The undersigned
hereby grants to each Attorney-in-Fact full power and authority to do and
perform each and every act and thing contemplated above, as fully and to all
intents and purposes as he might or could do in person, and hereby ratifies and
confirms all that said Attorney-in-Fact may lawfully do or cause to be done by
virtue hereof.
Dated: August 11, 1998 /s/ R. GREG FELTUS
-----------------------
R. Greg Feltus
<PAGE> 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Marco E. Adelfio, Richard H. Blank, Jr., R. Greg Feltus and Robert M.
Kurucza, and each of them, his true and lawful attorney-in-fact and agent (each,
an "Attorney-in Fact") with full power of substitution and resubstitution, for
him and in his name, place and stead, in any and all capacities, (i) to execute
the Registration Statement of each of MasterWorks Funds Inc. and Master
Investment Portfolio and any investment company whose fund(s) invest in a Master
Portfolio of Master Investment Portfolio (each, a "Company"), and any or all
amendments (including post-effective amendments) thereto and to file the same,
with any and all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission and any state securities commissions
or authorities, and (ii) to execute any and all federal or state regulatory
filings, including all applications with regulatory authorities, state charter
or organizational documents and any amendments or supplements thereto, to be
executed by, on behalf of, or for the benefit of, a Company. The undersigned
hereby grants to each Attorney-in-Fact full power and authority to do and
perform each and every act and thing contemplated above, as fully and to all
intents and purposes as he might or could do in person, and hereby ratifies and
confirms all that said Attorney-in-Fact may lawfully do or cause to be done by
virtue hereof.
Dated: August 11, 1998 /s/ W. RODNEY HUGHES
-----------------------
W. Rodney Hughes
<PAGE> 1
EXHIBIT D-1
INVESTMENT ADVISORY AGREEMENT
This Investment Advisory Agreement is made as of the __________ day
of _______________, 1999, by and between VANTAGEPOINT INVESTMENT ADVISERS, LLC,
a Delaware limited liability company (hereafter "Client"), and BARROW, HANLEY,
MEWHINNEY & STRAUSS, INC., at 3232 McKinney Avenue, 15th Floor, One McKinney
Plaza, Dallas, Texas 75204 (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 (the "1940 Act");
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 a sub-advisory
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 those assets of the Vantagepoint Equity Income Fund
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 (hereafter "Account"). 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> 2
Investment Policies provided in Paragraph 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 be deemed 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. The activities of Client and Adviser in managing the assets of the
Fund Vantagepoint Equity Income Fund shall in all instances be conducted subject
to the supervision and direction of the Board of Directors of the Vantagepoint
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. Adviser will
report annually to Client regarding such voting.
(d) Key Personnel. Adviser agrees that the following key personnel
have primary responsibility with respect to the investment management of the
Account. If the(se) individual(s) is unable to devote sufficient time to
maintain primary responsibility of the Account, the Adviser must give Client
written advance notice, or prompt notice within three (3) business days, of the
name of the person designated by the Adviser to replace or supplement the
individual(s). In addition, the Adviser will give Client written notice of the
replacement of any employee of the Adviser who has direct supervisory
responsibility for the key personnel or who has responsibility for setting
investment policy as soon as reasonably practicable.
Key Personnel: James P. Barrow
Bryant M. Hanley
Richard A. Englander
J. Ray Nixon, Jr.
Robert J. Chambers
Timothy J. Culler
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<PAGE> 3
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
(a) Investment Objectives. Subject to the supervision of the Fund's
Board of Directors and the Client, the Adviser shall direct the investments of
the Account in accordance with the Fund's investment objectives, policies, and
restrictions as provided in the Fund's Prospectus and Statement of Additional
Information as filed with the Securities and Exchange Commission on Form N-1A
("Registration Statement"), as currently in effect and as amended or
supplemented from time to time, and such other limitations as the Fund or Client
may reasonably impose by written notice to the Adviser or as set forth in
SCHEDULE A. Client shall give Adviser copies of the Fund's Prospectus and
Statement of Additional Information, and any amendments or supplements thereto,
as soon a practicable after such documents become available.
(b) Funds' Agreement and Declaration of Trust. The Adviser will
adhere to all specific provisions relating to the investment of the Account
established in the Funds' Agreement and Declaration of Trust and Registration
Statement, both of which are hereby incorporated by reference and made a part of
this Agreement. 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.
(c) Investment Adviser Guidelines. The Adviser shall act in
accordance with the Fund's Prospectus and Statement or Additional Information,
and in accordance with the limitations set forth in the specific statement of
Investment Adviser Guidelines, SCHEDULE B, as restated or modified from time to
time by the Client in written notice to the Adviser. 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
as may be allowed pursuant to the 1940 Act.
(d) Conflict in Policies. If a conflict in policies or guidelines
referenced herein occurs, the Registration Statement shall govern for purposes
of this Agreement.
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<PAGE> 4
5. CUSTODY, DELIVERY, RECEIPT OF SECURITIES
(a) Custody Responsibilities. 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.
(b) Securities Transactions. Unless otherwise required by local
custom, 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 make all reasonable efforts to 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 the close of business one (1)
business day after the trade date (T+1).
(c) Tri-Party Agreement. 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 that are required of an investment adviser to a registered investment
company pursuant to the 1940 Act and the Investment Advisers Act of 1940, and
the rules thereunder, and in accordance with such reasonable instructions as
shall be provided to Adviser by Client from time to time. All records maintained
pursuant to this Agreement shall be subject to examination by Client and by
persons authorized by it during normal business hours 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. 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.
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<PAGE> 5
(b) Reconciliations. Adviser shall reconcile security and cash
positions, and market values on a monthly basis to the Custodian's records and
report discrepancies to the Client by ten (10) business days after the end of
the month.
(c) Loss Reimbursement. Adviser shall reimburse the Account for any
material error to the Fund's net asset value caused by Adviser's breach of its
standard of care set forth in Section 12 that is a direct cause of a delay in
the accurate daily pricing of the Fund(s), provided such loss was not the result
of action or inaction of other service providers to the Client or the Fund in
failing to observe the instructions of the Adviser.
(d) Reports. Adviser shall furnish Client and the Board of Directors
of the Vantagepoint Funds such periodic and special reports and information as
either of them may request, including such information as shall be reasonably
necessary to evaluate the terms of any advisory agreement between Client and
Adviser with respect to the assets of the Vantagepoint Equity Income Fund.
(e) Other Reports on Request. Adviser shall provide to Client
promptly upon request any information available in the records maintained by
Adviser relating to the Account.
(f) Review of Materials. During the term of this Agreement, the
Client shall furnish to the Adviser at its principal office all prospectuses,
statements of additional information, proxy statements, reports to shareholders,
advertising and sales literature or other material prepared for distribution to
Fund shareholders or the public, which refer to the Adviser or its clients in
any way, prior to the use thereof, and the Client shall not use any such
materials if the Adviser reasonably objects in writing within ten (10) business
days (or such other time as may be mutually agreed) after receipt thereof. The
Client shall ensure that materials prepared by employees or agents of the Client
or its affiliates that refer to the Adviser or its clients in any way are
consistent with those materials previously approved by the Adviser as referenced
in the preceding sentence.
7. PURCHASE AND SALE OF SECURITIES
(a) Selection of Brokers. Except to the extent otherwise
instructed in writing by Client in acting on behalf of the Fund, (it being
understood that Client, acting on behalf of the Fund, may, in its absolute
discretion and consistent with the requirements of the 1940 Act and applicable
federal securities laws, 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
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<PAGE> 6
person" is defined in the Investment Company Act of 1940 (hereafter an
"Affiliate"), unless the transaction is in compliance with Rules 17e-1 or 10f-3
under the 1940 Act, as applicable, and the Fund's policies and procedures
thereunder, copies of which shall be provided to Adviser.
(b) Best Execution. In placing such orders, the Adviser will give
primary consideration to obtaining the most favorable price and efficient
execution reasonably available under the circumstances. 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 in good faith 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 or to other client accounts as to which it exercises investment
discretion.
(c) 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 or more efficient
execution 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 the Fund by Adviser
represents Adviser's evaluation that the Account 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. In such event,
allocation of the securities so purchased or sold, as well as expenses incurred
in the transaction, will be made by the Adviser in a manner the Adviser
considers to be most equitable and consistent with its fiduciary obligations to
the Fund and to its other clients.
8. INVESTMENT FEES
(a) Fee Schedule. 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.
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<PAGE> 7
(b) For purposes of this section 8 and Schedule C, all payments due
to Adviser shall be solely made from the assets of the Vantagepoint Equity
Income Fund.
(c) Pro Rata Fee. 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 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 Fund. 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 upon request, and any material
violation of such policies by personnel of the Adviser who are "access persons"
with respect to the Account shall be reported to the Client.
11. INSURANCE
At all times during the term of this Agreement, Adviser shall
maintain, at its own cost and expense, professional liability insurance for
errors, omissions, and negligent acts, in an amount and with such terms as
are standard in the financial services industry for an investment adviser
managing the amount of aggregate assets managed by Adviser for Client and for
the Adviser's other clients.
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<PAGE> 8
12. LIABILITY
In the absence of any gross negligence, malfeasance, or willful
violation of this Agreement, 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
or the Fund. 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.
13. 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 the Fund's Board of Directors, provided that in such event, continuance shall
also be approved by a vote 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.
14. 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
material breach of any provision thereof by the party so notified if such breach
shall not have been cured within a twenty (20) day period after notice of such
breach, or otherwise by Adviser upon sixty (60) days' written notice to the
Client or by Client upon 30 days' written notice to Adviser, except that this
Agreement shall automatically terminate in the event of its assignment, as
provided in Paragraph 19, at the discretion of the Client in the event of
Adviser's change in control as provided in Paragraph 19, upon the termination of
the Funds, or upon termination of Client's advisory agreement with 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.
15. 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
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<PAGE> 9
execution and delivery, this Agreement will be binding upon Adviser in
accordance with its terms.
(b) Client hereby confirms to Adviser that it is registered as an
investment adviser under the Investment Advisers Act of 1940, 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.
(c) Adviser hereby acknowledges that the Vantagepoint Funds is
registered as an open-end investment company under the 1940 Act and is subject
to taxation as a regulated investment company under Subchapter M and the
regulations promulgated thereunder of the Internal Revenue Code. Adviser hereby
represents that it is familiar with the requirements of such laws and the rules
and regulations thereunder as they apply to the Vantagepoint Funds and has
systems and procedures in place reasonably designed to permit Adviser, Client,
and the Vantagepoint Funds to comply with such requirement.
16. 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
Attention: Legal Department
c/o ICMA Retirement Corporation
777 North Capitol Street, NE, Ste. 600
Washington, D.C. 20002-4240
ADVISER:
Barrow, Hanley, Mewhinney & Strauss, Inc.
Attention: Rich Englander
3232 McKinney Avenue, 15th Floor
McKinney Plaza
Dallas, Texas 75204
Each party may change its address by giving notice as herein
required.
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<PAGE> 10
17. 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.
18. 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. It is understood that
certain material amendments may require approval of the Funds shareholders.
19. ASSIGNMENT AND CHANGE IN CONTROL
This Agreement shall automatically terminate in the event of its
assignment. Adviser agrees to provide immediate written notice in the event of a
change in control. Such a change in control will entitle, but not require, the
Client to terminate the Agreement immediately or upon notice.
20. 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.
21. 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 and the 1940 Act.
To the extent that the applicable laws of the State of Delaware conflict with
the applicable provisions of the 1940 Act, the latter shall control.
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<PAGE> 11
22. YEAR 2000 STATEMENT
Adviser certifies that it has taken the steps to address the Year
2000 problem that are set forth in Adviser's SEC Form ADV-Y2K, a copy of which
has been filed with the SEC and provided to Client. Any subsequent SEC filings
regarding this issue shall be provided to Client.
23. VANTAGEPOINT FUNDS AS PARTY TO AGREEMENT
For purposes of Sections 8 (Fees), 12 (Liability), 13 (Term), 14
(Termination), 15 (Representations), 16 (Notices), 18 (Waiver or Modification),
19 (Assignment and Change in Control), and 22 (Year 2000 Statement) of the
Agreement, as well as for purposes of Schedule C of the Agreement, the
Vantagepoint Funds is hereby made a party to the Agreement and shall be entitled
to all notices, protections and rights set forth in those Sections and in
Schedule C to which Client is entitled.
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<PAGE> 12
IN WITNESS WHEREOF, THE PARTIES HERETO EXECUTE THIS AGREEMENT ON , 199 and
make it effective on the date set forth.
CLIENT ADVISER
Vantagepoint Barrow, Hanley, Mewhinny & Strauss, Inc.
Investment Advisers, LLC
by: by:
- -------------------------- ---------------------------
(signature) (signature)
- -------------------------- ---------------------------
Girard Miller, President (name, title)
Date: Date:
FUNDS
The Vantagepoint Funds
by:
- ---------------------------
Girard Miller, President
Date:
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<PAGE> 1
EXHIBIT D-2
INVESTMENT ADVISORY AGREEMENT
This Investment Advisory Agreement is made as of the __________ day
of _______________, 1999, by and between VANTAGEPOINT INVESTMENT ADVISERS, LLC,
a Delaware limited liability company (hereafter "Client"), and T. ROWEPRICE
ASSOCIATES, INC., at 100 East Pratt Street, Baltimore, Maryland 21202 (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 (the "1940 Act");
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 a sub-advisory
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 those assets of the Vantagepoint Equity Income Fund
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 (hereafter "Account"). From time to time,
the Client may, upon notice to the Adviser, make additions to the Account and
may, upon providing as much notice to the Adviser as reasonably practical, 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 Investment Policies provided in Paragraph 4, Adviser shall supervise and
direct
<PAGE> 2
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 be deemed 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. The activities of Client and Adviser in managing the assets of the
Fund Vantagepoint Equity Income Fund shall in all instances be conducted subject
to the supervision and direction of the Board of Directors of the Vantagepoint
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. Adviser will
report annually to Client regarding such voting.
(d) Key Personnel. Adviser agrees that the following key personnel
have primary responsibility with respect to the investment management of the
Account. If the(se) individual(s) is unable to devote sufficient time to
maintain primary responsibility of the Account, the Adviser must give Client
written advance notice (if possible), or prompt notice within three (3) business
days, of the name of the person designated by the Adviser to replace or
supplement the individual(s). In addition, the Adviser will give Client written
notice of the replacement of any employee of the Adviser who has direct
supervisory responsibility for the key personnel or who has responsibility for
setting investment policy as soon as reasonably practicable.
Key Personnel: Brian C. Rogers
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.
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<PAGE> 3
4. INVESTMENT POLICIES
(a) Investment Objectives. Subject to the supervision of the Fund's
Board of Directors and the Client, the Adviser shall direct the investments of
the Account in accordance with the Fund's investment objectives, policies, and
restrictions as provided in the Fund's Prospectus and Statement of Additional
Information as filed with the Securities and Exchange Commission on Form N-1A
("Registration Statement"), as currently in effect and as amended or
supplemented from time to time, and such other limitations as the Fund or Client
may reasonably impose by written notice to the Adviser or as set forth in
SCHEDULE A. Client shall give Adviser as many copies as Adviser may reasonably
request of the Fund's Prospectus and Statement of Additional Information, and
any amendments or supplements thereto, as soon a practicable after such
documents become available.
(b) Funds' Agreement and Declaration of Trust. The Adviser will
adhere to all specific provisions relating to the investment of the Account
established in the Funds' Agreement and Declaration of Trust and Registration
Statement, both of which are hereby incorporated by reference and made a part of
this Agreement. 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.
(c) Investment Adviser Guidelines. The Adviser shall act in
accordance with the Fund's Prospectus and Statement or Additional Information,
and in accordance with the limitations set forth in the specific statement of
Investment Adviser Guidelines, SCHEDULE B, as restated or modified from time to
time by the Client in written notice to the Adviser. 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
as may be allowed pursuant to the 1940 Act.
(d) Conflict in Policies. If a conflict in policies or guidelines
referenced herein occurs, the Registration Statement shall govern for purposes
of this Agreement.
5. CUSTODY, DELIVERY, RECEIPT OF SECURITIES
(a) Custody Responsibilities. 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
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<PAGE> 4
are delivered to the Adviser, it will promptly deliver the same over to the
Custodian, in the name of the Funds.
(b) Securities Transactions. Unless otherwise required by local
custom, 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 make all reasonable efforts to notify the Custodian of
all orders to brokers for the Account by 11:00 a.m. EST on the day following the
trade date and will affirm the trade within the close of business one (1)
business day after the trade date (T+1) provided the broker has also affirmed
the trade.
(c) Tri-Party Agreement. 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 that are required of an investment adviser to a registered investment
company pursuant to the 1940 Act and the Investment Advisers Act of 1940, and
the rules thereunder, and in accordance with such reasonable instructions as
shall be provided to Adviser by Client from time to time. All records maintained
pursuant to this Agreement shall be subject to examination by Client and by
persons authorized by it during normal business hours 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. 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) Reconciliations. Adviser shall reconcile security and cash
positions, and market values on a monthly basis to the Custodian's records and
report discrepancies to the Client by ten (10) business days after the end of
the month.
(c) Loss Reimbursement. Adviser shall reimburse the Account for any
material error to the Fund's net asset value caused by Adviser's breach of its
standard of
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care set forth in Section 12 that is a direct cause of a delay in the accurate
daily pricing of the Fund(s), provided such loss was not the result of action or
inaction of other service providers to the Client or the Fund in failing to
observe the instructions of the Adviser.
(d) Reports. Adviser shall furnish Client and the Board of Directors
of the Vantagepoint Funds such periodic and special reports and information as
either of them may reasonably request, including such information as shall be
reasonably necessary to evaluate the terms of any advisory agreement between
Client and Adviser with respect to the assets of the Vantagepoint Equity Income
Fund.
(e) Other Reports on Request. Adviser shall provide to Client
promptly upon request any information available in the records maintained by
Adviser relating to the Account.
(f) Review of Materials. During the term of this Agreement, the
Client shall furnish to the Adviser at its principal office all prospectuses,
statements of additional information, proxy statements, reports to shareholders,
advertising and sales literature or other material prepared for distribution to
Fund shareholders or the public, which refer to the Adviser or its clients in
any way, prior to the use thereof, and the Client shall not use any such
materials if the Adviser reasonably objects in writing within ten (10) business
days (or such other time as may be mutually agreed) after receipt thereof. The
Client shall ensure that materials prepared by employees or agents of the Client
or its affiliates that refer to the Adviser or its clients in any way are
consistent with those materials previously approved by the Adviser as referenced
in the preceding sentence.
7. PURCHASE AND SALE OF SECURITIES
(a) Selection of Brokers. Except to the extent otherwise instructed
in writing by Client in acting on behalf of the Fund, (it being understood that
Client, acting on behalf of the Fund, may, in its absolute discretion and
consistent with the requirements of the 1940 Act and applicable federal
securities laws, 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"), unless the transaction is in compliance with Rules 17e-1 or
10f-3 under the 1940 Act, as applicable, and the Fund's policies and procedures
thereunder, copies of which shall be provided to Adviser.
(b) Best Execution. In placing such orders, the Adviser will give
primary consideration to obtaining the most favorable price and efficient
execution reasonably
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available under the circumstances. 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 in good faith 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 or to other
client accounts as to which it exercises investment discretion.
(c) 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 or more efficient
execution 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 the Fund by Adviser
represents Adviser's evaluation that the Account 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. In such event,
allocation of the securities so purchased or sold, as well as expenses incurred
in the transaction, will be made by the Adviser in a manner the Adviser
considers to be most equitable and consistent with its fiduciary obligations to
the Fund and to its other clients.
8. INVESTMENT FEES
(a) Fee Schedule. 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.
(b) For purposes of this section 8 and Schedule C, all payments due
to Adviser shall be solely made from the assets of the Vantagepoint Equity
Income Fund.
(c) Pro Rata Fee. 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.
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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 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 Fund. 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 upon request, and any material
violation of such policies by personnel of the Adviser who are "access persons"
with respect to the Account shall be reported to the Client.
11. INSURANCE
At all times during the term of this Agreement, Adviser shall
maintain, at its own cost and expense, professional liability insurance for
errors, omissions, and negligent acts, in an amount and with such terms as are
standard in the financial services industry for an investment adviser managing
the amount of aggregate assets managed by Adviser for Client and for the
Adviser's other clients.
12. LIABILITY
In the absence of any gross negligence, malfeasance, or willful
violation of this Agreement, 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
or the Fund. However, neither this provision nor any
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other provision of this Agreement shall constitute a waiver or limitation of any
rights which Client may have under federal or state securities laws.
13. 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 the Fund's Board of Directors, provided that in such event, continuance shall
also be approved by a vote 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.
14. 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
material breach of any provision thereof by the party so notified if such breach
shall not have been cured within a twenty (20) day period after notice of such
breach, or otherwise by Adviser upon sixty (60) days' written notice to the
Client or by Client upon 30 days' written notice to Adviser, except that this
Agreement shall automatically terminate in the event of its assignment, as
provided in Paragraph 19, upon the termination of the Funds, or upon termination
of Client's advisory agreement with the Funds, and at the discretion of the
Client in the event of Adviser's change in control as provided in Paragraph 19.
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.
15. 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 is registered as an
investment adviser under the Investment Advisers Act of 1940, that it has full
power and authority to enter into this Agreement and that the execution of this
Agreement on behalf
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of Client has been fully authorized and, upon execution and delivery, this
Agreement will be binding upon Client in accordance with its terms.
(c) Adviser hereby acknowledges that the Vantagepoint Funds is
registered as an open-end investment company under the 1940 Act and is subject
to taxation as a regulated investment company under Subchapter M and the
regulations promulgated thereunder of the Internal Revenue Code. Adviser hereby
represents that it is familiar with the requirements of such laws and the rules
and regulations thereunder as they apply to the Vantagepoint Funds and has
systems and procedures in place reasonably designed to permit Adviser, Client,
and the Vantagepoint Funds to comply with such requirement.
16. 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. Notice to the Client shall constitute notice to the
Vantagepoint Funds as required under Section 23 hereof. The addresses of the
parties are:
CLIENT:
Vantagepoint Investment Advisers, LLC
Attention: Legal Department
c/o ICMA Retirement Corporation
777 North Capitol Street, NE, Ste. 600
Washington, D.C. 20002-4240
ADVISER:
T. RowePrice Associates, Inc.
Attention: Henry H. Hopkins, Esq.
c/o T. Rowe Price Associates, Inc.
100 E. Pratt Street
Baltimore, MD 21202
Each party may change its address by giving notice as herein
required.
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17. 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.
18. 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. It is understood that
certain material amendments may require approval of the Funds shareholders.
19. ASSIGNMENT AND CHANGE IN CONTROL
This Agreement shall automatically terminate in the event of its
assignment. Adviser agrees to provide immediate written notice in the event of a
change in control. Such a change in control will entitle, but not require, the
Client to terminate the Agreement immediately or upon notice.
20. 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.
21. 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 and the 1940 Act.
To the extent that the applicable laws of the State of Delaware conflict with
the applicable provisions of the 1940 Act, the latter shall control.
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22. YEAR 2000 STATEMENT
Adviser certifies that it has taken the steps to address the Year
2000 problem that are set forth in Adviser's SEC Form ADV-Y2K, a copy of which
has been filed with the SEC and provided to Client. Any subsequent SEC filings
regarding this issue shall be provided to Client.
23. VANTAGEPOINT FUNDS AS PARTY TO AGREEMENT
For purposes of Sections 8 (Fees), 12 (Liability), 13 (Term), 14
(Termination), 15 Representations), 16 (Notices), 18 (Waiver or Modification),
19 (Assignment and Change in Control), and 22 (Year 2000 Statement) of the
Agreement, as well as for purposes of Schedule C of the Agreement, the
Vantagepoint Funds is hereby made a party to the Agreement and shall be entitled
to all notices, protections and rights set forth in those Sections and in
Schedule C to which Client is entitled.
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IN WITNESS WHEREOF, THE PARTIES HERETO EXECUTE THIS AGREEMENT ON , 199 and
make it effective on the date set forth.
CLIENT ADVISER
Vantagepoint T. RowePrice Associates, Inc.
Investment Advisers, LLC
by: by:
- ----------------------------- ----------------------------------
Girard Miller, President Darell N. Braman, Vice President
Date: Date:
FUNDS
The Vantagepoint Funds
by:
- --------------------------
Girard Miller, President
Date:
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EXHIBIT D-3
INVESTMENT SUBADVISORY AGREEMENT
This Investment Subadvisory Agreement is made as of the __________
day of _______________, 1999, by and between VANTAGEPOINT INVESTMENT ADVISERS,
LLC, a Delaware limited liability company (hereafter "Client"), WELLINGTON
MANAGEMENT COMPANY, LLP, 75 State Street, Boston, Massachusetts 02109 (hereafter
"Subadviser"), and, as set forth in Section 23, THE VANTAGEPOINT FUNDS, a
Delaware business trust, 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 (the "1940 Act");
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 Subadviser wish to enter into a sub-advisory
agreement pursuant to which Subadviser will provide such assistance to Client.
AGREEMENTS:
In consideration of the performance by the Subadviser as Investment
Subadviser of certain assets held by the Funds, the Client has authorized the
Subadviser to manage the securities and other assets as follows:
1. ACCOUNT
The account with respect to which the Subadviser shall perform its
services shall consist of those assets of the Vantagepoint Equity Income Fund
which the Client determines to assign to an account with the Subadviser,
together with all income earned by those assets and all realized and unrealized
capital appreciation related to those assets (hereafter "Account"). From time to
time, the Client may, upon notice to the Subadviser, make additions to the
Account and may, upon notice to the Subadviser, make withdrawals from the
Account.
2. APPOINTMENT STATUS, POWERS OF SUBADVISER
(a) Purchase and Sale. Client hereby appoints Subadviser to manage
the Account on the terms and conditions set forth in this Agreement. Subject to
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restrictions set forth in this Agreement, and acting always in conformity with
the Investment Policies provided in Paragraph 4, Subadviser shall supervise and
direct investment of the Account. Client hereby grants the Subadviser 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 Subadviser 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, Subadviser shall for all purposes be deemed 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. The activities of Client and Subadviser in managing the assets of the
Fund Vantagepoint Equity Income Fund shall in all instances be conducted subject
to the supervision and direction of the Board of Directors of the Vantagepoint
Funds.
(c) Voting. Unless otherwise instructed by Client, Subadviser 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. Subadviser will
report annually to Client regarding such voting.
(d) Key Personnel. Subadviser agrees that the following key
personnel have primary responsibility with respect to the investment management
of the Account. If the(se) individual(s) is unable to devote sufficient time to
maintain primary responsibility of the Account, the Subadviser must give Client
written advance notice, or prompt notice within three (3) business days, of the
name of the person designated by the Subadviser to replace or supplement the
individual(s). In addition, the Subadviser will give Client written notice of
the replacement of any employee of the Subadviser who has direct supervisory
responsibility for the key personnel or who has responsibility for setting
investment policy as soon as reasonably practicable.
Key Personnel: Stephen T. O'Brien
3. ACCEPTANCE OF APPOINTMENT
Subadviser accepts the appointment as an investment Subadviser 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 Subadviser under the
provisions of this Agreement.
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4. INVESTMENT POLICIES
(a) Investment Objectives. Subject to the supervision of the Fund's
Board of Directors and the Client, the Subadviser shall direct the investments
of the Account in accordance with the Fund's investment objectives, policies,
and restrictions as provided in the Fund's Prospectus and Statement of
Additional Information as filed with the Securities and Exchange Commission on
Form N-1A ("Registration Statement"), as currently in effect and as amended or
supplemented from time to time, and such other limitations as the Fund or Client
may reasonably impose by written notice to the Subadviser or as set forth in
SCHEDULE A. Client shall give Subadviser copies of the Fund's Prospectus and
Statement of Additional Information, and any amendments or supplements thereto,
as soon a practicable after such documents become available.
(b) Funds' Agreement and Declaration of Trust. The Subadviser will
adhere to all specific provisions relating to the investment of the Account
established in the Funds' Agreement and Declaration of Trust and Registration
Statement, both of which are hereby incorporated by reference and made a part of
this Agreement. The Client shall give written notice to the Subadviser of any
amendments to the Agreement and Declaration of Trust or Registration Statement,
which amendments, upon their receipt by the Subadviser, shall be binding on the
Subadviser.
(c) Investment Subadviser Guidelines. The Subadviser shall act in
accordance with the Fund's Prospectus and Statement or Additional Information,
and in accordance with the limitations set forth in the specific statement of
Investment Adviser Guidelines, SCHEDULE B, as restated or modified from time to
time by the Client in written notice to the Subadviser. The Client retains the
right, on written notice to the Subadviser, to modify any such objectives,
guidelines, restrictions, and liquidity requirements in any manner at any time
as may be allowed pursuant to the 1940 Act.
(d) Conflict in Policies. If a conflict in policies or guidelines
referenced herein occurs, the Registration Statement shall govern for purposes
of this Agreement.
5. CUSTODY, DELIVERY, RECEIPT OF SECURITIES
(a) Custody Responsibilities. 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 Subadviser 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
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are delivered to the Subadviser, it will promptly deliver the same over to the
Custodian, in the name of the Funds.
(b) Securities Transactions. Unless otherwise required by local
custom, 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 Subadviser will make all reasonable efforts to 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 the close of business one (1)
business day after the trade date (T+1).
(c) Tri-Party Agreement. The Subadviser 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. Subadviser 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 that are required of an investment adviser to a registered investment
company pursuant to the 1940 Act and the Investment Advisers Act of 1940, and
the rules thereunder, and in accordance with such reasonable instructions as
shall be provided to Subadviser by Client from time to time. All records
maintained pursuant to this Agreement shall be subject to examination by Client
and by persons authorized by it during normal business hours 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, Subadviser and Client shall keep confidential the records and other
information obtained by reason of this Agreement. Upon termination of this
Agreement, Subadviser shall promptly, upon demand, return to Client all records
Client reasonably believes are necessary in order to discharge its
responsibilities to the Funds. Subadviser shall be entitled to retain originals
or copies of records pursuant to the requirements of applicable laws or
regulations.
(b) Reconciliations. Subadviser shall reconcile security and cash
positions, and market values on a monthly basis to the Custodian's records and
report discrepancies to the Client by ten (10) business days after the end of
the month.
(c) Loss Reimbursement. Subadviser shall reimburse the Account for
any material error to the Fund's net asset value caused by Subadviser's breach
of its standard of care set forth in Section 12 that is a direct cause of a
delay in the accurate
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daily pricing of the Fund(s), provided such loss was not the result of action or
inaction of other service providers to the Client or the Fund.
(d) Reports. Subadviser shall furnish Client and the Board of
Directors of the Vantagepoint Funds such periodic and special reports and
information as either of them may request, including such information as shall
be reasonably necessary to evaluate the terms of any advisory agreement between
Client and Subadviser with respect to the assets of the Vantagepoint Equity
Income Fund.
(e) Other Reports on Request. Subadviser shall provide to Client
promptly upon request any information available in the records maintained by
Subadviser relating to the Account.
(f) Review of Materials. During the term of this Agreement, the
Client shall furnish to the Subadviser at its principal office all prospectuses,
statements of additional information, proxy statements, reports to shareholders,
advertising and sales literature or other material prepared for distribution to
Fund shareholders or the public, which refer to the Subadviser or its clients in
any way, prior to the use thereof, and the Client shall not use any such
materials if the Subadviser reasonably objects in writing within ten (10)
business days (or such other time as may be mutually agreed) after receipt
thereof. The Client shall ensure that materials prepared by employees or agents
of the Client or its affiliates that refer to the Subadviser or its clients in
any way are consistent with those materials previously approved by the
Subadviser as referenced in the preceding sentence.
7. PURCHASE AND SALE OF SECURITIES
(a) Selection of Brokers. Except to the extent otherwise instructed
in writing by Client in acting on behalf of the Fund, (it being understood that
Client, acting on behalf of the Fund, may, in its absolute discretion and
consistent with the requirements of the 1940 Act and applicable federal
securities laws, direct portfolio transactions for which Subadviser is
responsible to any broker that Client may see fit), Subadviser shall place all
orders for the purchase and sale of securities on behalf of the Client with
brokers or dealers selected by Subadviser, but not with a person affiliated with
Subadviser, as the term "affiliated person" is defined in the Investment Company
Act of 1940 (hereafter an "Affiliate"), unless the transaction is in compliance
with Rules 17e-1 or 10f-3 under the 1940 Act, as applicable, and the Fund's
policies and procedures thereunder, copies of which shall be provided to
Subadviser.
(b) Best Execution. In placing such orders, the Subadviser will give
primary consideration to obtaining the most favorable price and efficient
execution
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reasonably available under the circumstances. In evaluating the terms available
for executing particular transactions for Client and in selecting brokers and
dealers to execute such transactions, the Subadviser 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. Subadviser 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
Subadviser determines in good faith 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 or
to other client accounts as to which it exercises investment discretion.
(c) Bunching Orders. Client agrees that Subadviser may aggregate
sales and purchase orders of Account with similar orders being made
simultaneously for other accounts managed by Subadviser, if in Subadviser's
reasonable judgment such aggregation shall result in an overall economic benefit
or more efficient execution 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 the Fund
by Subadviser represents Subadviser's evaluation that the Account 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.
In such event, allocation of the securities so purchased or sold, as well as
expenses incurred in the transaction, will be made by the Subadviser in a manner
the Subadviser considers to be most equitable and consistent with its fiduciary
obligations to the Fund and to its other clients.
8. INVESTMENT FEES
(a) Fee Schedule. The compensation of the Subadviser 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.
(b) For purposes of this section 8 and Schedule C, all payments due
to Subadviser shall be solely made from the assets of the Vantagepoint Equity
Income Fund, a portfolio of the Vantagepoint Funds.
(c) Pro Rata Fee. If the Subadviser 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
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occurs and shall be payable on a pro rata basis for the period of the calendar
quarter for which it has served as Subadviser hereunder.
9. BEST EFFORTS; NON-EXCLUSIVITY OF SERVICES
The Subadviser shall devote its best efforts and such time as it
deems necessary to provide prompt and expert service to the Client. The services
of Subadviser to be provided to Client hereunder are not to be deemed exclusive
and Subadviser 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 Subadviser and its members, Affiliates and employees,
and Subadviser'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 Fund.
Subadviser shall have no obligation to acquire or dispose of a position in any
investment pursuant to this Agreement simply because Subadviser, 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
Subadviser 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 upon request, and any material
violation of such policies by personnel of the Subadviser who are "access
persons" with respect to the Account shall be reported to the Client.
11. INSURANCE
At all times during the term of this Agreement, Subadviser shall
maintain, at its own cost and expense, professional liability insurance for
errors, omissions, and negligent acts, in an amount and with such terms as are
standard in the financial services industry for an investment adviser managing
the amount of aggregate assets managed by Subadviser for Client and for the
Subadviser's other clients.
12. LIABILITY
In the absence of any gross negligence, malfeasance, or willful
violation of this Agreement, Subadviser shall not be liable to Client for honest
mistakes of judgment
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or for action or inaction taken in good faith for a purpose that the Subadviser
reasonably believes to be in the best interests of the Client or the Fund.
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.
13. 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 the Fund's Board of Directors, provided that in such event, continuance shall
also be approved by a vote 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.
14. 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
material breach of any provision thereof by the party so notified if such breach
shall not have been cured within a twenty (20) day period after notice of such
breach, or otherwise by Subadviser upon sixty (60) days' written notice to the
Client or by Client upon 30 days' written notice to Subadviser, except that this
Agreement shall automatically terminate in the event of its assignment, as
provided in Paragraph 19, at the discretion of the Client in the event of
Subadviser's change in control as provided in Paragraph 19, upon the termination
of the Funds, or upon termination of Client's advisory agreement with 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.
15. REPRESENTATIONS
(a) Subadviser hereby confirms to Client that Subadviser 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
Subadviser has been duly authorized and, upon execution and delivery, this
Agreement will be binding upon Subadviser in accordance with its terms.
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(b) Client hereby confirms to Subadviser that it is registered as an
investment adviser under the Investment Advisers Act of 1940, 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.
(c) Subadviser hereby acknowledges that the Vantagepoint Funds is
registered as an open-end investment company under the 1940 Act and is subject
to taxation as a regulated investment company under Subchapter M and the
regulations promulgated thereunder of the Internal Revenue Code. Subadviser
hereby represents that it is familiar with the requirements of such laws and the
rules and regulations thereunder as they apply to the Vantagepoint Funds and has
systems and procedures in place reasonably designed to permit Subadviser,
Client, and the Vantagepoint Funds to comply with such requirement.
16. 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
Attention: Legal Department
c/o ICMA Retirement Corporation
777 North Capitol Street, NE, Ste. 600
Washington, D.C. 20002-4240
SUBADVISER:
Wellington Management Company, LLP
Attention: Regulatory Affairs Department
75 State Street
Boston, MA 02109
Each party may change its address by giving notice as herein
required.
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17. 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.
18. 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. It is understood that
certain material amendments may require approval of the Funds shareholders.
19. ASSIGNMENT AND CHANGE IN CONTROL
This Agreement shall automatically terminate in the event of its
assignment. Subadviser agrees to provide immediate written notice in the event
of a change in control. Such a change in control will entitle, but not require,
the Client to terminate the Agreement immediately or upon notice.
20. 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.
21. 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 and the 1940 Act.
To the extent that the applicable laws of the State of Delaware conflict with
the applicable provisions of the 1940 Act, the latter shall control.
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22. YEAR 2000 STATEMENT
Subadviser certifies that it has taken the steps to address the Year
2000 problem that are set forth in Subadviser's SEC Form ADV-Y2K, a copy of
which has been filed with the SEC and provided to Client. Any subsequent SEC
filings regarding this issue shall be provided to Client.
23. VANTAGEPOINT FUNDS AS PARTY TO AGREEMENT
For purposes of Sections 8 (Fees), 12 (Liability), 13 (Term), 14
(Termination), 15 Representations), 16 (Notices), 18 (Waiver or Modification),
19 (Assignment and Change in Control), and 22 (Year 2000 Statement) of the
Agreement, as well as for purposes of Schedule C of the Agreement, the
Vantagepoint Funds is hereby made a party to the Agreement and shall be entitled
to all notices, protections and rights set forth in those Sections and in
Schedule C to which Client is entitled.
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IN WITNESS WHEREOF, THE PARTIES HERETO EXECUTE THIS AGREEMENT ON , 199
and make it effective on the date set forth.
CLIENT SUBADVISER
Vantagepoint Wellington Management Company, LLP
Investment Advisers, LLC
by: by:
- --------------------------- -------------------------
(signature) (signature)
- --------------------------- -------------------------
Girard Miller, President (name, title)
Date: Date:
FUNDS
The Vantagepoint Funds
by:
- -------------------
Girard Miller, President
Date:
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