<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
The Vantagepoint Funds
----------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------
same
----
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11(1).
1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was
determined):
-----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
5) Total fee paid:
-----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
-----------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
3) Filing Party:
-----------------------------------------------------------------------
4) Date Filed:
-----------------------------------------------------------------------
<PAGE> 2
THE VANTAGEPOINT FUNDS
EQUITY INCOME FUND
777 North Capital Street, N.E.
Suite 600
Washington, D.C. 20002
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
Notice is hereby given that a special meeting of shareholders (the
"Meeting") of the Equity Income Fund (the "Fund") of The Vantagepoint Funds (the
"Trust") will be held at the headquarters of the ICMA Retirement Corporation,
777 North Capital Street, N.E., Suite 600, Washington, D.C. 20002, on Wednesday,
July 28, 1999, at 9:30 a.m., Eastern Time, for the following purposes:
I. To consider and vote upon a proposal to approve a new subadvisory
agreement between the Fund, Vantagepoint Investment Advisers, LLC
(the "Investment Adviser") and Wellington Management Company, LLP.
II. To consider and vote upon a proposal to approve a new subadvisory
agreement between the Fund, the Investment Adviser and Barrow,
Hanley, Mewwhinney & Strauss, Inc.
III. To consider and vote upon a proposal to approve a new subadvisory
agreement between the Fund, the Investment Adviser and T. Rowe Price
Associates, Inc.
IV. To transact such other business as may properly come before the
Meeting or any adjournments thereof.
Shareholders of record on June 1, 1999, are entitled to receive
notice of and to vote at the Meeting and any adjournment thereof.
While you are, of course, welcome to join us at the meeting, most
shareholders cast their votes by completing and signing the enclosed proxy card.
Whether or not you plan to attend the meeting, we need your vote. Please mark,
sign and date the enclosed proxy card and return it promptly in the enclosed
postage paid envelope.
The persons named as proxies are authorized to vote on such other
business as may properly come before the Meeting in accordance with their own
discretion.
Your vote is important to us. Thank you for taking the time to
consider these important proposals.
June **, 1999 By Order of The Board of Directors
Paul F. Gallagher
Secretary
<PAGE> 3
THE VANTAGEPOINT FUNDS
EQUITY INCOME FUND
777 North Capital Street, N.E.
Suite 600
Washington, D.C. 20002
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
JULY 28, 1999
This proxy statement is furnished in connection with the
solicitation of proxies by the Board of Directors of The Vantagepoint Funds (the
"Trust") on behalf of the Equity Income Fund (the "Fund"), for use at the
Special Meeting of Shareholders to be held at 9:30 a.m. on Wednesday, July 28,
1999 at the offices of ICMA Retirement Corporation, 777 North Capitol St. N.E.,
Suite 600, Washington, D.C. 20002, and at any adjourned session thereof (this
meeting and any adjournment thereof are herinafter referred to as the
"Meeting"). Shareholders of record of the Fund as of the close of business on
June 1, 1999 ("Shareholders") are entitled to vote at the meeting.
As of June 1, 1999 there were ************ shares of beneficial
interest of the Fund issued and outstanding.
Each whole share is entitled to one vote and each fractional share
is entitled to a proportionate fractional vote on the proposal. In addition to
the solicitation of proxies by mail, directors and officers of the Trust and
employees of ICMA Retirement Corporation and officers of Vantagepoint Investment
Advisers, LLC (the "Investment Adviser"), may solicit proxies in person or by
telephone. The proxy card and this proxy statement are being mailed to
shareholders on or about June **, 1999.
Proxies may be revoked at any time before they are exercised by a
written revocation received by the President of the Trust at 777 North Capitol
St., N.E., Washington, D.C. 20002. Proxies also may be revoked by delivering a
duly executed proxy bearing a later date or by attending the Meeting and voting
in person.
INTRODUCTION
The Trust is organized as a Delaware business trust and is not
required to hold annual meetings of Shareholders. The Meeting is being called in
order to permit the Shareholders of the Fund to vote on the selection of three
new subadvisers, and to approve the forms of subadvisory agreement (attached as
Exhibit A, B and C to this Proxy Statement) between the Fund, the Investment
Adviser and each subadviser (the "Proposed Subadvisory Agreements").
The Investment Adviser employs a "multi-management" strategy under
which it has general oversight responsibility for the investment advisory
services provided to the Fund, including formulating investment policies,
managing the allocation of the assets of the Fund among multiple subadvisers,
and directing and evaluating the investment services provided by the
subadvisers, including their adherence to the Fund's investment objectives and
policies and the overall investment performance of the Fund. Crawford Investment
Counsel ("Crawford") and Newell Associates ("Newell") currently serve as
2
<PAGE> 4
subadvisers to the Fund pursuant to subadvisory agreements each, of which is
dated March 1, 1999 (the "Current Agreements"). The Current Agreements were
approved by the sole initial shareholder of the Fund on February 2, 1999. The
terms of the Current Agreements are substantially similar to the terms of the
Proposed Subadvisory Agreements, discussed below, except for the dates of
execution and the fee arrangements. According to the terms of the Current
Agreements, Crawford and Newell are entitled to subadvisory fees at the annual
rates set forth below. Such fees are based on the average daily net assets of
that portion of the Fund under management.
<TABLE>
<CAPTION>
Subadviser Assets Managed Fee
---------- -------------- ---
<S> <C> <C> <C>
Crawford Investment First $100 million 0.20%
Counsel, Inc. Next $100 million 0.15%
Over $200 million 0.10%
Newell Associates First $250 million 0.20%
Next $500 million 0.15%
Next $250 million 0.10%
Over $1 billion 0.08%
</TABLE>
The Fund commenced operations on March 1, 1999, and will not have
its first fiscal year end until December 31, 1999. However, for the period from
March 1, 1999 through March 31, 1999, investment subadvisory fees for Crawford
and Newell amounted to $35,616 and $46,317 respectively. Prior to that time,
Crawford and Newell served as advisers to the Fund's predecessor -- the Equity
Income Portfolio Fund of the ICMA Retirement Trust, an unregistered
commingled fund which holds and invests the assets of public sector retirement
plans. For the 1998 fiscal year, Crawford and Newell received advisory fees of
$413,590 and $521,709, respectively, for services provided to the ICMA
Retirement Trust.
On May 20-21, 1999, the Board of Directors of the Trust, including a
majority of the non-interested Directors, voted to terminate the current
subadvisory agreements for the Fund based on the Board's determination that the
selection of the subadvisers listed below to provide investment subadvisory
services is in the best interests of the Fund.
While the Fund's current subadvisers have provided sound management
and returns since the Fund's predecessor was created in 1994, the Board of
Directors and the Fund's management believe that the three replacement
subadvisers will provide a better opportunity for future returns. In addition,
given the Fund's growth, it is felt that employing three subadvisers rather than
two is prudent in terms of improving the Fund's defensive posture. The proposed
change will enhance the Fund's style diversification, thereby offering the
opportunity for reduced volatility, a key attribute of the Fund's
multi-management structure.
Thus, the Board and management feel that this change will provide
the Fund's shareholders with an improved opportunity for sound and consistent
investment performance over time.
3
<PAGE> 5
Each of the proposed subadvisers is a large and well-known
institutional investment manager. The firms possess extensive resources
(portfolio managers, research analysts, traders, etc.) and manage sizeable
assets in a style appropriate for the Fund. The termination of the Current
Agreements will only take effect upon shareholder approval of the Proposed
Agreements.
PROPOSALS FOR APPROVAL OF SUBADVISERS FOR THE FUND
At the May 20 - 21, 1999 meeting, the Board of Directors approved
the replacement of the current subadvisers with Wellington Management Company,
LLP ("Wellington"), Barrow, Hanley, Mewhinney & Strauss, Inc. ("BHM&S"), and T.
Rowe Price Associates, Inc. ("T. Rowe Price"), effective upon Shareholder
approval. Further details about each proposed subadviser and the terms of the
Proposed Subadvisory Agreements are set forth below.
I. APPROVAL OF A SUBADVISORY AGREEMENT BETWEEN THE FUND, VANTAGEPOINT
INVESTMENT ADVISERS, LLP, AND WELLINGTON.
The Board of Directors is recommending that the Shareholders of the
Fund approve Wellington as a subadviser for the Fund and approve the new
subadvisory agreement between the Fund, Vantagepoint Investment Advisers LLP,
and Wellington.
DESCRIPTION OF WELLINGTON. Wellington is a registered investment
adviser and a limited liability partnership with its principal place of
business at 75 State Street, Boston, Massachusetts 02109. Wellington was
founded in 1928 and as of March 31, 1999 it had approximately $215.3 billion
under management. Wellington will implement an investment style on behalf of
the Fund that is known as a CORE VALUE style. This means that Wellington will
select stocks of larger companies that sell at attractive prices relative to
what Wellington perceives as their capital appreciation potential. Wellington
provides investment services to investment companies, employee benefit plans,
endowments, foundations, and other institutional and individual investors.
Wellington and its predecessor organizations have provided investment advisory
services for over 70 years.
Wellington's portion of the Fund's assets will be managed by Stephen
O'Brien, CFA, who has 30 years of portfolio management experience. Mr. O'Brien
has been with Wellington since 1982. Mr. O'Brien is a Chartered Financial
Analyst. He is a graduate of Assumption College and holds an MBA from the
University of Pittsburgh.
Wellington does not serve as investment adviser or subadviser to
another registered investment company with investment objectives similar to
those of the Fund. However, Wellington does manage other institutional accounts
in this style.
Wellington is managed by its active partners. The managing partners
of Wellington as of March 31, 1999 were Robert W. Doran, Duncan M. McFarland and
John R. Ryan. The names and titles of each of the general partners and Senior
Vice Presidents of Wellington are set forth in Exhibit D. The principal business
address of the principal executive officer and each of Wellington's partners and
principals, as it relates to their duties at Wellington, is 75 State Street,
Boston, Massachusetts 02109.
4
<PAGE> 6
COMPENSATION. Under the proposed subadvisory agreement, the Fund
will pay Wellington a subadvisory fee at the annual rate set forth below. This
fee will be calculated and paid monthly based on the average daily market value
of that portion of the Fund managed by Wellington.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
ASSETS FEE RATE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C>
First $50 million 0.40%
- -------------------------------------------------------------------------------------------------------------------------
Next $50 million 0.30%
- -------------------------------------------------------------------------------------------------------------------------
Over $100 million 0.25%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR PROPOSAL I.
II. APPROVAL OF A SUBADVISORY AGREEMENT BETWEEN THE FUND, VANTAGEPOINT
INVESTMENT ADVISERS, LLC, AND BHM&S.
The Board of Directors is recommending that the Shareholders of the
Fund approve BHM&S as a subadviser for the Fund and approve the new subadvisory
agreement between the Fund, Vantagepoint Investment Advisers, LLC, and BHM&S.
DESCRIPTION OF BHM&S. BHM&S is a registered investment adviser and a
Texas corporation with its principal place of business at 3232 McKinney Ave.,
15th Floor, Dallas, Texas 75204. BHM&S is a wholly-owned subsidiary of United
Asset Management Corporation. BHM&S was founded in 1979, and as of March 31,
1999 it had approximately $36 billion of assets under management. BHM&S will
employ a CONTRARIAN investment style, meaning that it will select a concentrated
portfolio of larger companies whose stocks it believes to be undervalued
relative to their prospects, primarily due to investor neglect or anxiety.
BHM&S' portion of the Fund's assets will be managed by Richard A.
Englander, who began his career as a portfolio manager in 1963 and joined
BHM&S in 1985. Mr. Englander has an MBA from the Wharton School of Business of
the University of Pennsylvania, and a BS from the Pennsylvania State University.
BHM&S also serves as investment adviser or subadviser to several
other registered investment companies with investment objectives similar to
those of the Fund, as well as to pension and profit sharing plans and other
institutional investors. The approximate net assets of these funds are set
forth below. The fee schedule for each fund is the same as that set forth below
for the Fund. BHM&S's fees on assets of over $1 billion are negotiable.
5
<PAGE> 7
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
ASSET SIZE
FUND (AS OF 3/31/99)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C>
Vanguard Windsor II $23.3 billion
- -------------------------------------------------------------------------------------------------------------------------
Vanguard Variable Investment Fund - Diversified Value $25 million
- -------------------------------------------------------------------------------------------------------------------------
American Airlines Aadvantage -
Balance Fund $159 million
- -------------------------------------------------------------------------------------------------------------------------
American Airlines Aadvantage -
Growth & Income Fund $371 million
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
There were no fee waivers associated with these accounts.
The names and titles of each of the directors and the principal
executive officer of BHM&S are listed in Exhibit E. The principal business
address of each director and the principal executive officer, as it relates to
their duties at BHM&S, is 3232 McKinney Ave., 15th Floor, Dallas, Texas 75204.
Bryant M. Hanley, Jr. serves as President, Treasurer and Secretary of the firm.
COMPENSATION. Under the proposed subadvisory agreement, the Fund
will pay BHM&S a subadvisory fee at the annual rate set forth below. This fee
will be calculated and paid monthly based on the average daily market value of
that portion of the Fund managed by BHM&S.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
ASSETS FEE RATE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C>
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%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR PROPOSAL II.
III. APPROVAL OF A SUBADVISORY AGREEMENT BETWEEN THE FUND, VANTAGEPOINT
INVESTMENT ADVISERS, LLP AND T. ROWE PRICE.
The Board of Directors is recommending that the Shareholders of the
Fund approve T. Rowe Price as a subadviser for the Fund and approve the new
subadvisory agreement between the Fund, Vantagepoint Investment Advisers, LLC,
and T. Rowe Price relating to the Fund.
DESCRIPTION OF T. ROWE PRICE. T. Rowe Price is a Maryland
corporation with its principal offices at 100 East Pratt Street, Baltimore,
Maryland 21202. The outstanding shares of T. Rowe Price are owned by members of
the public, employees and management. As of March 1, 1999, T. Rowe Price
Associates is not aware of any individual or entity owning, beneficially or
otherwise, 5% or more of its outstanding common stock.
6
<PAGE> 8
T. Rowe Price will employ a HIGH DIVIDEND YIELD investment style
with respect to its portion of the Fund's assets, meaning that it will select
the stocks of larger companies which offer high dividend yields due primarily to
short-term conditions that are expected to return to normal. T. Rowe Price was
founded in 1937, and as of March 31, 1999 had approximately $149 billion under
management. T. Rowe Price's clients include other investment companies, employee
benefit plans and other institutional investors. No Director of the Trust
purchased or sold shares of T. Rowe Price or its parent(s) or subsidiaries from
the inception of the Fund through the most recent quarter-end.
T. Rowe Price's portion of the Fund's assets will be managed by
Brian C. Roberts. Mr. Roberts has over 20 years experience as a portfolio
manager and has been with T. Rowe Price since 1981. Mr. Rogers is a Chartered
Financial Analyst and a Chartered Investment Counselor. He has an MBA from
Harvard Business School and an AB from Harvard College.
T. Rowe Price also serves as investment adviser or subadviser to
several other registered investment companies with investment objectives similar
to those of the Fund. The approximate net assets of these funds and the fee
payable from each are set forth below:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
ASSET SIZE
FUND (AS OF 3/31/99) FEE PAYABLE
- -----------------------------------------------------------------------------------
<S> <C> <C>
Endeavor Series Trust $256 million 0.40%
- -----------------------------------------------------------------------------------
EQ Advisors Trust $243 million 0.40%
- -----------------------------------------------------------------------------------
John Hancock
Variable Series Trust I $128 million 0.50%
- -----------------------------------------------------------------------------------
Securities First Trust $328 million 0.35%
- -----------------------------------------------------------------------------------
</TABLE>
There were no fee waivers associated with these accounts.
George A. Roche is President, Chairman of the Board and Managing
Director of T. Rowe Price. James S. Riepe is Vice Chairman of the Board and
Managing Director. M. David Testa is Vice Chairman of the Board, Chief
Investment Officer and Managing Director. The names and titles of each of the
managing directors of T. Rowe Price are set forth in Exhibit F. The principal
business address of each director and the principal executive officer, as it
relates to their duties at T. Rowe Price, is 100 East Pratt Street, Baltimore,
Maryland 21202.
COMPENSATION. Under the proposed subadvisory agreement, the Fund
will pay T. Rowe Price a subadvisory fee at the annual rate set forth below.
This fee will be calculated and paid monthly based on the average daily market
value of that portion of the Fund managed by T. Rowe Price.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
ASSETS FEE RATE
- ------------------------------------------------------------------------------------------------------
<S> <C>
First $500 million 0.40%
- ------------------------------------------------------------------------------------------------------
Over $500 million 0.375%
- ------------------------------------------------------------------------------------------------------
</TABLE>
In addition to the subadvisory fee described above, Rowe Price
Fleming, International, Inc. ("Rowe Price"), a joint venture between Jardine
Fleming and T. Rowe Price Associates, serves as subadviser to the Trust's
International Fund. Under the subadvisory agreement between Rowe Price and the
Investment Adviser, Rowe Price, is entitled to fees of 0.75% on the first $20
million of assets, 0.60% on the next $30 million of assets, and 0.50% on all
assets over $50 million. The fee paid to Rowe Price is calculated and paid
monthly based on the average daily net assets of that portion of the
International Fund managed by Rowe Price. For the period from March 1, 1999
through March 31, 1999, this amounted to payments of approximately $34,000.
7
<PAGE> 9
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR PROPOSAL III.
CONTRACTUAL AND FEE CONSIDERATIONS
The Board of Directors is recommending that the Shareholders approve
each subadviser recommended in Proposals I through III as subadvisers to the
Fund and approve the Proposed Subadvisory Agreements between the Investment
Adviser and each subadviser.
DIRECTOR'S CONSIDERATIONS. At a meeting held on May 20-21, 1999,
the Board of Directors of the Fund, including the six Directors who are not
"interested persons" within the meaning of Section 2(a)(19) of the Investment
Company Act of 1940, as amended (the "1940 Act"), unanimously approved, subject
to shareholder approval, the Proposed Subadvisory Agreements with respect to
the Fund. The Directors received written and oral information from both the
Investment Adviser and the proposed subadvisers. The Investment Adviser
recommended the selection of the proposed subadvisers and reviewed the
considerations and the search process that had led to the recommendation. The
Directors also met with representatives of the proposed subadvisers and
considered information about key personnel, investment philosophy and process
and performance track record, among other factors. In recommending that the
Shareholders approve the Proposed Subadvisory Agreements, the Directors
carefully evaluated the investing experience of each proposed subadviser's key
personnel and the quality and quantity of services each proposed subadviser can
be expected to provide to the Fund, including, but not limited to: (1) the fee
and expense ratios of comparable mutual funds; (2) the performance of the Fund
since commencement of operations; (3) the nature and quality of the services
expected to be rendered to the Fund by each proposed subadviser; (4) the
distinct and complementary nature of the investment styles of the proposed
subadvisers; (5) the amount of compensation payable to each proposed subadviser
by the Fund under the Proposed Subadvisory Agreements, and the impact of such
compensation on the overall fees and expenses of the Fund; (6) the history,
reputation, operational and administrative expertise (including mutual fund
investment management expertise), qualification and background of each proposed
subadviser as well as the qualifications of their personnel and their
respective financial conditions; (7) their performance records; (8) the
benefits expected to be realized as a result of the multi-management strategy
employed by the Investment Adviser; and (9) other factors deemed relevant. The
Directors also reviewed the fees to be paid to each subadviser in comparison to
those currently being charged by the Fund and its existing subadvisers in the
relevant segment of the mutual fund business, including any benefits received
by any subadviser or its affiliates in connection with soft dollar payments.
IMPACT OF SUBADVISER COMPENSATION ON TOTAL EXPENSES OF THE FUND. As
discussed above, the terms of the Current Agreements are substantially similar
to the terms of the Proposed Subadvisory Agreements, except for the dates of
execution and the fee arrangements. The subadvisers are entitled to their
respective fees based on the portion of the assets of the Fund that are
allocated to them. These
8
<PAGE> 10
subadvisory fees are borne directly by the Shareholders. Because the fee of each
proposed subadviser is higher than the current subadvisers, the total expenses
of the Fund are expected to increase from 0.66% to 0.82% if the Shareholders
approve the proposed subadvisers. For the reasons described on page 3 (increased
style diversification, opportunity for reduced volatility, experience and
management depth of each firm, etc). the Fund's Board of Directors and
management believe that the proposed change will be beneficial to the Fund's
shareholders despite the proposed fee increase.
The table below compares the current expense ratio of the funds to
the proposed level of fees that would be borne by the Shareholders (based on
current asset levels), assuming the Shareholders approve the new subadvisers.
Annual Fund Operating Expenses (Deducted from Fund Assets)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
FUND ADVISORY FEE SUBADVISER EXPENSE OTHER EXPENSES* TOTAL EXPENSES
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Equity Income Fund
(current subadvisory structure) 0.10% 0.17% 0.39% 0.66%
- ---------------------------------------------------------------------------------------------------------------------------
Equity Income Fund
(proposed subadvisory structure) 0.10% 0.33% 0.39% 0.82%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Amounts shown are based on estimated amounts for the Fund's first full fiscal
year.
Example
This example is intended to help Shareholders compare the cost of investing in
the Fund with the cost of investing in other mutual funds. This example assumes
that a Shareholder invests $10,000 dollars for the time periods indicated and
then redeems all of its shares at the end of those periods. The example also
assumes that a Shareholder's investment has a 5% return each year and that the
Fund's operating expenses remain the same. Although actual costs may be higher
or lower, based on these assumptions, a Shareholder's costs would be:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
FUND 1 YEAR 3 YEARS
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Equity Income Fund
(current subadvisory structure) $68 $212
- --------------------------------------------------------------------------------------------------------------
Equity Income Fund
(proposed subadvisory structure) $84 $263
- --------------------------------------------------------------------------------------------------------------
</TABLE>
DUTIES UNDER THE PROPOSED SUBADVISORY AGREEMENTS. Under each
Proposed Subadvisory Agreement, the subadviser makes the investment decisions
for the assets of the Fund allocated to it by the Investment Adviser, and
continuously reviews, supervises, and administers the Fund's investment program
with respect to these assets. Each subadviser is independent of the Investment
Adviser and discharges its responsibilities subject to the supervision of the
Investment Adviser and the Board of Directors of the Trust and in a manner
consistent with the Fund's investment objectives, policies and restrictions. The
Proposed Subadvisory Agreements provide that the subadviser shall not be
protected against any liability, damages or expenses to the Trust arising out of
the subadviser's gross negligence or malfeasance or willful violation of the
Subadvisory Agreement or a violation of applicable law by the subadviser or any
of its officers, employees, or affiliates in providing management under the
subadvisory agreement.
9
<PAGE> 11
DURATION AND TERMINATION. Unless terminated earlier, each Proposed
Subadvisory Agreement shall continue in effect for two years from its execution,
and thereafter, for periods of one year for so long as such continuance is
specifically approved at least annually by the vote of the holders of a majority
of the outstanding shares of the Fund or by a majority of the members of the
Board of Directors of the Trust who are not parties to the investment advisory
agreement or the investment subadvisory agreement or who are not "interested
persons" (as that term is defined in the 1940 Act) of any party thereto, cast in
person at a meeting called for the purpose of voting on such approval.
Each Proposed Subadvisory Agreement will terminate automatically in
the event of its assignment. Each Proposed Subadvisory Agreement is terminable
by either party without the payment of any penalty, immediately upon notice to
the other in the event of a breach of any provision of the subadvisory
agreement, or otherwise by the subadviser upon sixty (60) days' written notice
to the Investment Adviser, or by the Investment Adviser upon thirty days written
notice to the subadviser.
The Vantagepoint Funds Board of Directors has authorized its
Officers to file an application for exemptive relief with the U.S. Securities
and Exchange Commission which, if granted, would permit the Board to replace
subadvisers without shareholder approval.
In the event Shareholders of the Fund do not approve the adoption of
a Proposed Subadvisory Agreement at the Meeting to which this Proxy Statement
relates, or any adjournment thereof, the Directors will consider the appropriate
course of action.
GENERAL INFORMATION ABOUT THE FUND AND OTHER MATTERS
DISTRIBUTION. RC Services, LLC, a wholly-owned subsidiary of ICMA
Retirement Corporation, acts as the Distributor of the Trust's shares pursuant
to a Distribution Agreement dated March 1, 1999. Girard Miller serves as
President and Chief and Chief Executive officer of ICMA Retirement Corporation
and president of RC Services, LLC.
PORTFOLIO TRANSACTIONS. The Fund commenced operations as a
registered investment company on March 1, 1999, and has not completed its
first fiscal year. Therefore, no information on brokerage commissions paid by
the Fund is available.
5% SHAREHOLDERS. As of June 1, 1999, the following persons were the
only persons who were, to the knowledge of the Fund's management, beneficial
owners of 5% or more of the shares of the Fund.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Name and Address of Beneficial Owner Number of Shares Percentage of Fund's shares
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ICMA Retirement Trust ***** **%
777 N. Capitol St., NE
Washington, DC 20002
- -------------------------------------------------------------------------------------------------------------
</TABLE>
Girard Miller, President of The Vantagepoint Funds, holds as part of
his portfolio approximately $22,000 worth of units in the VantageTrust
International Fund through an ICMA Retirement Trust 457 plan established
through a former public sector employer, which is thus invested in the
Vantagepoint International Fund. The Fund's other Directors and Officers do not
beneficially own any shares of the Fund and do not receive any compensation
from the Fund for their services.
10
<PAGE> 12
ADJOURNMENT. In the event that sufficient votes in favor of the
proposal set forth in the Notice of Special Meeting are not received by the time
scheduled for the Meeting, the persons named as proxies may propose one or more
adjournments of the meeting for a reasonable period of time to permit further
solicitation of proxies with respect to the proposals. Any such adjournment will
require the affirmative vote of a majority of the votes cast on the question in
person or by proxy at the session of the Meeting to be adjourned, whether or not
a quorum is present. The persons named as proxies will vote in favor of such
adjournment those proxies which are entitled to vote in favor of the proposals.
They will vote against any such adjournment those proxies required to be voted
against any such proposals. The costs of any additional solicitation will be
borne by the Fund.
REQUIRED VOTE. Although 50% of the outstanding shares entitled to
vote on a proposal must be present in person or by proxy to have a quorum to
conduct business at the Meeting, approval of each proposal requires the
affirmative vote of a majority of the outstanding shares of the Fund. As defined
in the 1940 Act, "majority of the outstanding shares" means the vote of (i) 67%
or more of the Fund's outstanding shares present at a meeting, if the holders of
more than 50% of the outstanding shares of the Fund are present or represented
by proxy, or (ii) more than 50% of the Fund's outstanding shares, whichever is
less.
Shares represented by duly executed proxies will be voted in
accordance with the instructions given. Signed proxies received before the
Meeting on which no vote is indicated will be voted "FOR" the proposal as to
which it is entitled to vote. Abstentions and proxies signed and returned by
brokers without voting on a proposal ("broker non-votes") will not be counted
for or against the proposals, but will be counted for purposes of determining
whether a quorum is present. Abstentions will be counted as votes present for
purposes of determining a "majority of the outstanding voting securities"
present at the Meeting, and will therefore have the effect of counting against
the proposals.
SHAREHOLDER PROPOSALS. The Fund is not required to hold regular
shareholder meetings. Shareholders wishing to submit proposals for inclusion in
a proxy statement for a subsequent meeting should send their written proposals
to the Secretary of the Fund, 777 North Capitol Street, N.E., Suite 600,
Washington, D.C. 20002.
REPORTS TO SHAREHOLDERS. As a newly registered Fund, there have been
no Annual or Semi-Annual reports issued to date.
LITIGATION. The Fund is not involved in any litigation.
OTHER MATTERS. The Directors know of no other matters to be brought
before the Meeting. However, if any other matters properly come before the
Meeting, it is their intention that proxies which do not contain specific
restrictions to the contrary will be voted on such matters in accordance with
the judgment of the persons named in the enclosed form of proxy.
SHAREHOLDERS ARE URGED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY
AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
11
<PAGE> 13
EXHIBIT A
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
the
12
<PAGE> 14
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.
13
<PAGE> 15
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
14
<PAGE> 16
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
15
<PAGE> 17
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
16
<PAGE> 18
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
17
<PAGE> 19
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
18
<PAGE> 20
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.
19
<PAGE> 21
(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.
20
<PAGE> 22
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.
21
<PAGE> 23
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.
22
<PAGE> 24
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:
23
<PAGE> 25
EXHIBIT B
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
24
<PAGE> 26
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
25
<PAGE> 27
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.
26
<PAGE> 28
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.
27
<PAGE> 29
(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
28
<PAGE> 30
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.
29
<PAGE> 31
(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.
30
<PAGE> 32
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
31
<PAGE> 33
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.
32
<PAGE> 34
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.
33
<PAGE> 35
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.
34
<PAGE> 36
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, Mewhinney & 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:
35
<PAGE> 37
EXHIBIT C
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
36
<PAGE> 38
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.
37
<PAGE> 39
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
38
<PAGE> 40
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
39
<PAGE> 41
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
40
<PAGE> 42
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.
41
<PAGE> 43
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
42
<PAGE> 44
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
43
<PAGE> 45
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.
44
<PAGE> 46
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.
45
<PAGE> 47
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.
46
<PAGE> 48
IN WITNESS WHEREOF, THE PARTIES HERETO EXECUTE THIS AGREEMENT ON , 1999 and
make it effective on the date set forth.
CLIENT ADVISER
Vantagepoint T. Rowe Price 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:
47
<PAGE> 49
EXHIBIT D
WELLINGTON MANAGEMENT COMPANY, LLP
Schedule of Partners
Partners: 61
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<S> <C> <C>
Kenneth L. Abrams Senior Vice President
Nicholas C. Adams Senior Vice President
Rand L. Alexander Senior Vice President
Deborah L. Allinson Senior Vice President
James H. Averill Senior Vice President
Karl E. Bandtel Senior Vice President
Marie-Claude Bernal Senior Vice President
William N. Booth Senior Vice President
Paul Braverman Senior Vice President & Chief Financial Officer
Robert A. Bruno Senior Vice President
Maryann E. Carroll Senior Vice President
Pamela Dippel Senior Vice President
Robert W. Doran Chairman
Charles T. Freeman Senior Vice President
Laurie A. Gabriel Senior Vice President
Frank J. Gilday Senior Vice President
John H. Gooch Senior Vice President
Nicholas P. Greville Senior Vice President
Paul Hamel Senior Vice President
William C.S. Hicks Senior Vice President
Lucius T. Hill, III Senior Vice President
Paul D. Kaplan Senior Vice President
John C. Keogh Senior Vice President
George C. Lodge, Jr. Senior Vice President
Nancy T. Lukitsh Senior Vice President
Mark T. Lynch Senior Vice President
Christine S. Manfredi Senior Vice President
Patrick J. McCloskey Senior Vice President
Earl E. McEvoy Senior Vice President
Duncan M. McFarland President and Chief Executive Officer
Paul M. Mecray III Senior Vice President
Matthew E. Megargel Senior Vice President
James N. Mordy Senior Vice President
Diane C. Nordin Senior Vice President
Stephen T. O'Brien Senior Vice President
Edward P. Owens Senior Vice President
Saul J. Pannell Senior Vice President
</TABLE>
48
<PAGE> 50
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<S> <C> <C>
Thomas L. Pappas Senior Vice President
Jonathan M. Payson Senior Vice President
Stephen M. Pazuk Senior Vice President/Finance & Treasurer
Robert D. Rands Senior Vice President
Eugene E. Record, Jr. Senior Vice President
James A. Rullo Senior Vice President
John R. Ryan Senior Vice President
Joseph H. Schwartz Senior Vice President
Theodore Shasta Senior Vice President
Binkley C. Shorts Senior Vice President
Trond Skramstad Senior Vice President
Catherine A. Smith Senior Vice President
Stephen A. Soderberg Senior Vice President
Brendan J. Swords Senior Vice President
Harriett Tee Taggart Senior Vice President
Perry M. Traquina Senior Vice President
Gene R. Tremblay Senior Vice President
Michael A. Tyler Senior Vice President
Mary Ann Tynan Senior Vice President/Secretary
Clare Villari Senior Vice President
Ernst H. von Metzsch Senior Vice President
James L. Walters Senior Vice President/Special Counsel
Kim Williams Senior Vice President
Francis V. Wisneski Senior Vice President
</TABLE>
49
<PAGE> 51
EXHIBIT E
BARROW, HANLEY, MEWHINNEY & STRAUSS, INC.
Officers:
James P. Barrow
Bryant Miller Hanley, Jr.
Michael C. Mewhinney
Richard A. Englander
Joseph R. Nixon, Jr.
Robert J. Chambers
H. Monroe Helm, III
Mary Jane Gilday
James S. McClure
John P. Harloe, Jr.
Carrie Carmelita Canter
John S. Willaims
David R. Hurdin
John S. MacDonald
Mark C. Luchsinger
50
<PAGE> 52
EXHIBIT F
T. ROWE PRICE
Managing Directors:
<TABLE>
<CAPTION>
<S> <C>
George A. Roche Chairman and President
James S. Riepe Vice Chairman
M. David Testa Vice Chairman and Chief Investment Officer
Henry H. Hopkins Managing Director
James A.C. Kennedy Managing Director
John H. Laporte Managing Director
William T. Reynolds Managing Director
Brian C. Rogers Managing Director
</TABLE>
51
<PAGE> 53
THE VANTAGEPOINT FUNDS
EQUITY INCOME FUND
SPECIAL MEETING OF THE SHAREHOLDERS
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR
THE SPECIAL MEETING OF SHAREHOLDERS, JULY 28, 1999
The undersigned, revoking previous proxies with respect to the Shares
(defined below), hereby appoints Girard Miller and Paul Breault as proxies and
each of them, each with full power of substitution, to vote at the Special
Meeting of Shareholders of the Equity Income Fund (the "Fund") of the The
Vantagepoint Funds (the "Trust") to be held in the headquarters of the ICMA
Retirement Corporation, 777 North Capital Street, N.E., Suite 600, Washington,
D.C. 20002, on Wednesday, July 28, 1999, at 9:30 a.m. (Eastern Time), and any
adjournments or postponements thereof (the "Meeting") all shares of beneficial
interest of the Fund that the undersigned would be entitled to vote if
personally present at the Meeting ("Shares") on the proposals set forth below
respecting the proposed subadvisory agreements (the "Sub-Advisory Agreements")
between Vantagepoint Investment Advisers, LLC, ("VIA"), the Fund, and
Wellington Management Company LLP ("Wellington"), Barrow, Hanley, Mewwhinney &
Strauss, Inc. ("BHM&S"), and T. Rowe Price Associates, Inc. ("T. Rowe Price"),
respectively, and in accordance with their own judgement, any other matters
properly brought before the Meeting.
THE BOARD OF DIRECTORS OF THE TRUST RECOMMENDS A VOTE "FOR" THE PROPOSALS TO:
Proposal 1: Approve the Sub-Advisory Agreement between the Fund,
VIA and Wellington:
For Against Abstain
Proposal 2: Approve the Sub-Advisory Agreement between the Fund,
VIA and BHM&S:
For Against Abstain
Proposal 3: Approve the Sub-Advisory Agreement between the Fund,
VIA and T. Rowe Price:
For Against Abstain
THIS PROXY WILL, WHEN PROPERLY EXECUTED, BE VOTED AS DIRECTED HEREIN BY
THE SIGNING SHAREHOLDER(s). IF NO CONTRARY DIRECTION IS GIVEN WHEN THE DULY
EXECUTED PROXY IS RETURNED, THIS PROXY WILL BE VOTED FOR THE FOREGOING PROPOSAL
AND WILL BE VOTED IN THE APPOINTED PROXIES' DISCRETION UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING.
The undersigned acknowledges receipt with this Proxy of a copy of the
Notice of Special Meeting and the Proxy Statement of the Board of Directors.
Your signature(s) on this Proxy should be exactly as your name(s) appear on
this Proxy. If the shares are held jointly, each holder should sign this Proxy.
Attorneys-in-fact, executors, administrators, trustees or guardians should
indicate the full title and capacity in which they are signing.
Dated: , 1999
-------------------
--------------------------------
Signature of Shareholder
--------------------------------
Signature (Joint owners)
PLEASE DATE, SIGN AND RETURN PROMPTLY USING THE ENCLOSED, POSTAGE-PAID ENVELOPE
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING; YOU MAY, NEVERTHELESS, VOTE IN
PERSON IF YOU DO ATTEND.
