<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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[ ] Definitive Additional Materials
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The Vantagepoint Funds
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<PAGE> 2
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 51,680,823 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. The
proxy card and this proxy statement are being mailed to shareholders on or about
June 16, 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.
2
<PAGE> 3
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 29, 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 16, 1999 By Order of The Board of Directors
Paul F. Gallagher
Secretary
<PAGE> 4
Crawford Investment Counsel ("Crawford") and Newell Associates ("Newell")
currently serve as 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 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>
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 approximately $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 Fund, 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 recommended subadvisers may
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.
Although a single investment manager can produce a desirable long-term
performance record, an examination of the short-term typically reveals wide
movements relative to other managers or a market index. The reason is that every
successful manager has an investing approach (typically called a "style") that
swings from being in favor to out of favor in the market. Experienced managers
stick to their styles over the years because they know that doing what they do
best is the only successful method of investing. But doing so creates in-between
performance gyrations.
3
<PAGE> 5
Multi-management seeks to reduce short run performance variation by
combining different managers practicing dissimilar styles. The goal is to have,
in various market environments, at least one style that is in favor to offset
one that is temporarily out of favor. Thus, multi-management offers the
opportunity to not only capture successful manager's desirable long-term
returns, but also to reduce an individual manager's short-term performance
volatility.
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.
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. Such termination of the Current Agreements will only
be effective 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 Management"), Barrow, Hanley, Mewhinney & Strauss, Inc. ("BHM&S"),
and T. Rowe Price Associates, Inc. ("T. Rowe Price"), effective upon Shareholder
approval of the subadvisers and the corresponding subadvisory agreements for
each subadviser. Each of the proposed subadvisers will be responsible for
approximately one-third of the Fund's assets. Further details about each
proposed subadviser and the terms of the Proposed Subadvisory Agreements are set
forth below.
The objective of the Fund is to seek long-term, stable growth of capital
by investing primarily in dividend-paying stocks of well established companies.
The benchmark against which the performance of the Fund is measured is the
S & P/ Barra Value Index. Although the investment style of each of the proposed
subadvisers is different, it is expected that the combination of the three
styles will result in investment characteristics that will be similar to those
of the S & P/ Barra Value Index and therefore, will be consistent with the
Fund's objective.
I. APPROVAL OF A SUBADVISORY AGREEMENT BETWEEN THE INVESTMENT ADVISER AND
WELLINGTON MANAGEMENT.
The Board of Directors is recommending that the Shareholders of the Fund
approve Wellington Management as a subadviser for the Fund and approve the new
subadvisory agreement between the Fund, the Investment Adviser and Wellington
Management relating to the Fund.
DESCRIPTION OF WELLINGTON MANAGEMENT. Wellington Management is a
registered investment adviser and a limited liability partnership with its
principal place of business at 75 State Street, Boston, Massachusetts 02109.
Wellington Management was founded in 1928 and as of March 31, 1999 it had
approximately $215.3 billion under management. Wellington Management will
implement an investment style on behalf of the Fund that is known as a CORE
VALUE style. This means that Wellington Management will select stocks of larger
companies whose stocks sell at attractive valuations relative to what Wellington
Management perceives as their upside potential. Wellington Management provides
investment services to investment companies, employee benefit plans, endowments,
foundations, and other institutional and individual investors. Wellington
Management and its predecessor organizations have provided investment advisory
services for over 70 years.
4
<PAGE> 6
Wellington Management's portion of the Fund's assets will be managed by
Stephen O'Brien, CFA, who has over 27 years of portfolio management experience.
Mr. O'Brien has been with Wellington Management since 1983. 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 Management does not serve as investment adviser or subadviser
to another registered investment company with investment objectives similar to
those of the Fund.
Wellington Management is managed by its active partners. The managing
partners of Wellington Management 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 Management are set
forth in Exhibit D. The principal business address of the principal executive
officer and each of Wellington Management's partners and principals, as it
relates to their duties at Wellington Management, is 75 State Street, Boston,
Massachusetts 02109.
COMPENSATION. Under the proposed subadvisory agreement, the Fund will pay
Wellington Management a subadvisory fee at the annual rate set forth below. This
fee will be calculated and paid monthly based on the average market value of
that portion of the Fund managed by Wellington Management.
<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 INVESTMENT ADVISER 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 Investment Adviser and BHM&S relating to the Fund.
DESCRIPTION OF BHM&S. BHM&S is a registered investment adviser and a
Nevada 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, CFA, CIC, who has over 30 years of experience as a portfolio manager
in 1963 and joined the firm 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.
5
<PAGE> 7
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. There was no fee waiver associated with these accounts.
<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>
The officers 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 INVESTMENT ADVISER 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 Investment Adviser and T. Rowe Price relating
to the Fund.
DESCRIPTION OF T. ROWE PRICE. T. Rowe Price is a registered investment
adviser and 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.
Rogers. Mr. Rogers has over 20 years experience as a portfolio manager and has
been with T. Rowe Price since 1982. 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 acts as investment adviser and subadviser to several
registered investment companies.
For its services to each such investment company sponsored and managed by
T. Rowe Price ("PRICE FUNDS"), T. Rowe Price is paid a management fee consisting
of two elements: a "group" fee and an "individual" fund fee. The "group" fee
varies based on the combined net assets of certain Price Funds distributed T.
Rowe Price Investment Services, Inc. (excluding T. Rowe Price Index Trust, T.
Rowe Price Spectrum Funds and any institutional and private label mutual funds)
(the "COMBINED PRICE FUNDS"). Each such investment company pays, as a portion of
the "group" fee, an amount equal to the ratio of its daily net assets to the
daily net assets of all the Combined Price Funds. In addition to the group fee,
each investment company pays a flat "individual" fund fee based on its net
assets. The table below sets forth the current "group" fee rate at various asset
levels of the Combined Price Funds.
.480% first $1 billion
.450% next $1 billion
.420% next $1 billion
.390% next $1 billion
.370% next $1 billion
.360% next $2 billion
.350% next $2 billion
.340% next $5 billion
.330% next $10 billion
.320% next $10 billion
.310% next $16 billion
.305% next $30 billion
.300% thereafter
T. Rowe Price also acts as investment subadviser to several registered
investment companies ("SUBADVISED MUTUAL FUNDS") having similar investment
objectives and policies to those of various Price Funds. For this purpose, the
Subadvised Mutual Funds are mutual funds that are not sponsored by T. Rowe
Price.
7
<PAGE> 9
<TABLE>
<CAPTION>
THE VANTAGEPOINT FUNDS - EQUITY INCOME FUND
- -------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
INVESTMENT COMPANY INVESTMENT ANNUAL RATE OF COMPENSATION NET ASSETS
NAME OBJECTIVE AS OF
3/31/99
- ------------------------------------------------------------------------------------------------------------------------------
SUBADVISER:
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
T. Rowe Price N/A N/A $149.2 billion
Associates, Inc under management
- ------------------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE MUTUAL FUNDS:
- ------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Dividend Income .25% (individual fee) $12,742,614,527
Equity Income Fund Capital Growth .32% (group fee)
- ------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Dividend Income .85% (Covers both investment $531,935,132
Equity Income Portfolio Capital Growth management and operating
expenses)
- ------------------------------------------------------------------------------------------------------------------------------
SUBADVISED MUTUAL FUNDS:
- ------------------------------------------------------------------------------------------------------------------------------
Endeavor Series Trust Dividend Income .40% $256,664,187
T. Rowe Price Equity Capital Growth
Income Portfolio
- ------------------------------------------------------------------------------------------------------------------------------
EQ Advisors Trust Dividend Income .40% $243,423,677
T. Rowe Price Equity Capital Growth
Income Portfolio
- ------------------------------------------------------------------------------------------------------------------------------
John Hancock Variable Dividend Income .50% $128,194,199
Series Trust I: Large Cap Capital Growth
Value Portfolio
- ------------------------------------------------------------------------------------------------------------------------------
Maxim Series Trust Dividend Income .50% on first $20 million $195,669,130
Maxim T. Rowe Price Capital Growth .40% on next $30 million
.40% on all assets once assets
exceed $50 million
- ------------------------------------------------------------------------------------------------------------------------------
Manufacturers Investment Dividend Income .400% on first $50 million $1,018,421,294
Trust Capital Growth .300% between $50-$200 million
Equity-Income Trust .200% between $200-$500 million
.200% ON ALL ASSETS OVER $500 MILLION
-------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
North American Funds Dividend Income .40% $150,802,542
Equity-Income Fund Capital Growth
- ------------------------------------------------------------------------------------------------------------------------------
SBL Fund Dividend Income .50% on first $20 million $202,931,006
Series O Capital Growth .40% on next $30 million
(Equity Income Series) .40% on all assets above $50 million
- ------------------------------------------------------------------------------------------------------------------------------
Security First Trust Growth and Income .35% $328,258,697
Growth and Income Series
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 10
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 directors and
managing directors of T. Rowe Price are set forth in Exhibit H. 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 registered investment adviser formed by a
joint venture with 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, an affiliate of T. Rowe Price, is entitled to 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.
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. The Board of Directors of the Trust, including
those 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 at a meeting held on May 20-21, 1999. 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
9
<PAGE> 11
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.
Should shareholders approve two of the proposed subadvisers but not the
other, the Board of Directors will meet to consider what steps should be taken
in order to meet the Fund's objective while a new subadviser is selected and
approved by shareholders. For example, that portion of the fund might be
invested in a manner that is designed to match the performance of the S & P
Barra Value Index.
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 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.
The table below compares the current expense ratio of the funds to the
proposed level of fees that would be borne by the Shareholders, assuming the
Shareholders approve the new subadvisers.
<TABLE>
<CAPTION>
Annual Fund Operating Expenses (Deducted from Fund Assets)
- ----------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
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
10
<PAGE> 12
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 Fund 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 Fund 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.
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 Fund 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.
11
<PAGE> 13
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 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 43,812,631 84.7%
- -------------------------------------------------------------------------------------------
</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 with 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.
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 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 Investment Adviser.
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. 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
12
<PAGE> 14
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 does not 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 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.
13
<PAGE> 15
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.
<PAGE> 16
EXHIBIT A
INVESTMENT ADVISORY AGREEMENT
This Investment Advisory Agreement is made as of the __________ day of
_______________, 1999, by and between VANTAGEPOINT INVESTMENT ADVISERS, LLC, a
Delaware limited liability company (hereafter "Client"), and BARROW, HANLEY,
MEWHINNEY & STRAUSS, INC., at 3232 McKinney Avenue, 15th Floor, One McKinney
Plaza, Dallas, Texas 75204 (hereafter "Adviser") and is effective as
of______________ ,19 (the "Effective Date").
WHEREAS, the Vantagepoint Funds (the "Funds") is a Delaware Business
Trust registered as an open-end management investment company under the
Investment Company Act of 1940 (the "1940 Act");
WHEREAS, Client is party to an Investment Adviser Agreement with the
Funds for management of the investment operations of the Funds including the
establishment and operation of investment portfolios for the Funds and the
entering into of contracts with sub-advisers to assist in managing the
investment of the Funds property;
WHEREAS, Client and Adviser wish to enter into a sub-advisory agreement
pursuant to which Adviser will provide such assistance to Client.
AGREEMENTS:
In consideration of the performance by the Adviser as Investment Adviser
of certain assets held by the Funds, the Client has authorized the Adviser to
manage the securities and other assets as follows:
1. ACCOUNT
The account with respect to which the Adviser shall perform its services
shall consist of those assets of the Vantagepoint Equity Income Fund which the
Client determines to assign to an account with the Adviser, together with all
income earned by those assets and all realized and unrealized capital
appreciation related to those assets (hereafter "Account"). From time to time,
the Client may, upon notice to the Adviser, make additions to the Account and
may, upon notice to the Adviser, make withdrawals from the Account.
2. APPOINTMENT STATUS, POWERS OF ADVISER
(a) Purchase and Sale. Client hereby appoints Adviser to manage the
Account on the terms and conditions set forth in this Agreement. Subject to the
restrictions set forth in this Agreement, and acting always in conformity with
the
<PAGE> 17
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, Jr.
Richard A. Englander
J. Ray Nixon, Jr.
Robert J. Chambers
Timothy J. Culler
2
<PAGE> 18
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.
3
<PAGE> 19
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.
4
<PAGE> 20
(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
5
<PAGE> 21
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.
6
<PAGE> 22
(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.
7
<PAGE> 23
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
8
<PAGE> 24
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.
9
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17. SOLE INSTRUMENT
This instrument constitutes the sole and only agreement of the parties to
it relating to its object and correctly sets forth the rights, duties, and
obligations of each party to the other as of its date. Any prior agreements,
promises, negotiations or representations not expressly set forth in this
Agreement are of no force or effect.
18. WAIVER OR MODIFICATION
No waiver or modification of this Agreement shall be effective unless
reduced to a written document signed by the party to be charged. No failure to
exercise and no delay in exercising, on the part of any party hereto, of any
right, remedy, power or privilege hereunder, shall operate as a waiver thereof.
Only the Chief Executive Officer, has authority on behalf of Client to modify or
waive any of the provisions of the Agreement. It is understood that certain
material amendments may require approval of the Funds shareholders.
19. ASSIGNMENT AND CHANGE IN CONTROL
This Agreement shall automatically terminate in the event of its
assignment. Adviser agrees to provide immediate written notice in the event of a
change in control. Such a change in control will entitle, but not require, the
Client to terminate the Agreement immediately or upon notice.
20. COUNTERPARTS
This Agreement may be executed in counterparts each of which shall be
deemed to be an original and all of which, taken together, shall be deemed to
constitute one and the same instrument.
21. CHOICE OF LAW
This Agreement shall be governed by, and the rights of the parties
arising hereunder construed in accordance with, the laws of the State of
Delaware without reference to principles of conflict of laws and the 1940 Act.
To the extent that the applicable laws of the State of Delaware conflict with
the applicable provisions of the 1940 Act, the latter shall control.
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<PAGE> 26
22. YEAR 2000 STATEMENT
Adviser certifies that it has taken the steps to address the Year 2000
problem that are set forth in Adviser's SEC Form ADV-Y2K, a copy of which has
been filed with the SEC and provided to Client. Any subsequent SEC filings
regarding this issue shall be provided to Client.
23. VANTAGEPOINT FUNDS AS PARTY TO AGREEMENT
For purposes of Sections 8 (Fees), 12 (Liability), 13 (Term), 14
(Termination), 15 (Representations), 16 (Notices), 18 (Waiver or Modification),
19 (Assignment and Change in Control), and 22 (Year 2000 Statement) of the
Agreement, as well as for purposes of Schedule C of the Agreement, the
Vantagepoint Funds is hereby made a party to the Agreement and shall be entitled
to all notices, protections and rights set forth in those Sections and in
Schedule C to which Client is entitled.
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<PAGE> 27
IN WITNESS WHEREOF, THE PARTIES HERETO EXECUTE THIS AGREEMENT ON
, 199 and make it effective on the date set forth.
CLIENT ADVISER
Vantagepoint Barrow, Hanley, Mewhinny & Strauss, Inc.
Investment Advisers, LLC
by: by:
- ------------------------ ------------------------
(signature) (signature)
- ------------------------ ------------------------
Girard Miller, President (name, title)
Date: Date:
FUNDS
The Vantagepoint Funds
by:
- ------------------------
Girard Miller, President
Date:
12
<PAGE> 28
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 T. ROWE PRICE
ASSOCIATES, INC., at 100 East Pratt Street, Baltimore, Maryland 21202 (hereafter
"Adviser") and is effective as of______________ ,1999 (the "Effective Date").
WHEREAS, the Vantagepoint Funds (the "Funds") is a Delaware Business
Trust registered as an open-end management investment company under the
Investment Company Act of 1940 (the "1940 Act");
WHEREAS, Client is party to an Investment Adviser Agreement with the
Funds for management of the investment operations of the Funds including the
establishment and operation of investment portfolios for the Funds and the
entering into of contracts with sub-advisers to assist in managing the
investment of the Funds property;
WHEREAS, Client and Adviser wish to enter into a sub-advisory agreement
pursuant to which Adviser will provide such assistance to Client.
AGREEMENTS:
In consideration of the performance by the Adviser as Investment Adviser
of certain assets held by the Funds, the Client has authorized the Adviser to
manage the securities and other assets as follows:
1. ACCOUNT
The account with respect to which the Adviser shall perform its services
shall consist of those assets of the Vantagepoint Equity Income Fund which the
Client determines to assign to an account with the Adviser, together with all
income earned by those assets and all realized and unrealized capital
appreciation related to those assets (hereafter "Account"). From time to time,
the Client may, upon notice to the Adviser, make additions to the Account and
may, upon providing as much notice to the Adviser as reasonably practical, make
withdrawals from the Account.
2. APPOINTMENT STATUS, POWERS OF ADVISER
(a) Purchase and Sale. Client hereby appoints Adviser to manage the
Account on the terms and conditions set forth in this Agreement. Subject to the
restrictions set forth in this Agreement, and acting always in conformity with
the Investment Policies provided in Paragraph 4, Adviser shall supervise and
direct
<PAGE> 29
investment of the Account. Client hereby grants the Adviser complete, unlimited
and unrestricted discretion and authority to select portfolio securities with
respect to the Account including the power to acquire (by purchase, exchange,
subscription or otherwise), to hold and dispose (by sale, exchange or
otherwise). The Adviser will consult with Client, upon the request of the
Client, concerning any transactions it makes with respect to the investment of
the Account.
(b) Limitation on Authority. Except as expressly authorized herein or
hereafter from time to time, Adviser shall for all purposes be deemed an
independent contractor and shall have no authority to act for or to represent
the Client or the Funds in any way or otherwise to be an agent of the Client or
the Funds. The activities of Client and Adviser in managing the assets of the
Fund Vantagepoint Equity Income Fund shall in all instances be conducted subject
to the supervision and direction of the Board of Directors of the Vantagepoint
Funds.
(c) Voting. Unless otherwise instructed by Client, Adviser shall have
discretion to take any action or render any advice with respect to the voting of
shares or the execution of proxies solicited from time to time by, or with
respect to, the issuers of securities held in the Account. Adviser will report
annually to Client regarding such voting.
(d) Key Personnel. Adviser agrees that the following key personnel have
primary responsibility with respect to the investment management of the Account.
If the(se) individual(s) is unable to devote sufficient time to maintain primary
responsibility of the Account, the Adviser must give Client written advance
notice (if possible), or prompt notice within three (3) business days, of the
name of the person designated by the Adviser to replace or supplement the
individual(s). In addition, the Adviser will give Client written notice of the
replacement of any employee of the Adviser who has direct supervisory
responsibility for the key personnel or who has responsibility for setting
investment policy as soon as reasonably practicable.
Key Personnel: Brian C. Rogers
3. ACCEPTANCE OF APPOINTMENT
Adviser accepts the appointment as an investment adviser and agrees to
use its best efforts and professional judgment to make timely investment
transactions for the Client with respect to the investments of the Account, and
to provide the other services required of the Adviser under the provisions of
this Agreement.
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<PAGE> 30
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
3
<PAGE> 31
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
4
<PAGE> 32
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
5
<PAGE> 33
available under the circumstances. In evaluating the terms available for
executing particular transactions for Client and in selecting brokers and
dealers to execute such transactions, the Adviser may consider, in addition to
commission cost and execution capabilities, the financial stability and
reputation of brokers and dealers and the brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act of 1934,
as amended) provided by brokers and dealers. Adviser is authorized to pay a
broker or dealer who provides such brokerage and research services a commission
for executing a transaction which is in excess of the amount of commission
another broker or dealer would have charged for effecting that transaction if
Adviser determines in good faith that such commission is reasonable in relation
to the value of the brokerage and research services provided by such broker or
dealer in discharging responsibilities with respect to the Account or to other
client accounts as to which it exercises investment discretion.
(c) Bunching Orders. Client agrees that Adviser may aggregate sales and
purchase orders of Account with similar orders being made simultaneously for
other accounts managed by Adviser, if in Adviser's reasonable judgment such
aggregation shall result in an overall economic benefit or more efficient
execution to the Account taking into consideration the advantageous selling or
purchase price, brokerage commission and other expenses. Client acknowledges
that the determination of such economic benefit to the Fund by Adviser
represents Adviser's evaluation that the Account is benefited by relatively
better purchase or sales prices, lower commission expenses and beneficial timing
of transactions or a combination of these and other factors. In such event,
allocation of the securities so purchased or sold, as well as expenses incurred
in the transaction, will be made by the Adviser in a manner the Adviser
considers to be most equitable and consistent with its fiduciary obligations to
the Fund and to its other clients.
8. INVESTMENT FEES
(a) Fee Schedule. The compensation of the Adviser for its services under
this Agreement shall be calculated and paid by the Client from the assets of the
Account in accordance with SCHEDULE C hereto.
(b) For purposes of this section 8 and Schedule C, all payments due to
Adviser shall be solely made from the assets of the Vantagepoint Equity Income
Fund.
(c) Pro Rata Fee. If the Adviser should serve for less than the whole of
any calendar quarter, its compensation shall be determined as provided above on
the basis of the ending market value of the Account in the month in which the
termination occurs and shall be payable on a pro rata basis for the period of
the calendar quarter for which it has served as Adviser hereunder.
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<PAGE> 34
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 other provision of this Agreement
shall constitute a waiver or limitation of any rights which Client may have
under federal or state securities laws.
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<PAGE> 35
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 of Client has been fully authorized and, upon execution and
delivery, this Agreement will be binding upon Client in accordance with its
terms.
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<PAGE> 36
(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.
100 E. Pratt Street
Baltimore, MD 21202
Each party may change its address by giving notice as herein required.
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
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<PAGE> 37
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.
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
10
<PAGE> 38
filed with the SEC and provided to Client. Any subsequent SEC filings
regarding this issue shall be provided to Client.
23. VANTAGEPOINT FUNDS AS PARTY TO AGREEMENT
For purposes of Sections 8 (Fees), 12 (Liability), 13 (Term), 14
(Termination), 15 Representations), 16 (Notices), 18 (Waiver or Modification),
19 (Assignment and Change in Control), and 22 (Year 2000 Statement) of the
Agreement, as well as for purposes of Schedule C of the Agreement, the
Vantagepoint Funds is hereby made a party to the Agreement and shall be entitled
to all notices, protections and rights set forth in those Sections and in
Schedule C to which Client is entitled.
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<PAGE> 39
IN WITNESS WHEREOF, THE PARTIES HERETO EXECUTE THIS AGREEMENT ON
, 199 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 Darrell N. Braman, Vice President
Date: Date:
FUNDS
The Vantagepoint Funds
by:
- ------------------------
Girard Miller, President
Date:
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<PAGE> 40
EXHIBIT C
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
<PAGE> 41
restrictions set forth in this Agreement, and acting always in conformity with
the Investment Policies provided in Paragraph 4, Subadviser shall supervise and
direct investment of the Account. Client hereby grants the Subadviser complete,
unlimited and unrestricted discretion and authority to select portfolio
securities with respect to the Account including the power to acquire (by
purchase, exchange, subscription or otherwise), to hold and dispose (by sale,
exchange or otherwise). The Subadviser will consult with Client, upon the
request of the Client, concerning any transactions it makes with respect to the
investment of the Account.
(b) Limitation on Authority. Except as expressly authorized herein or
hereafter from time to time, Subadviser shall for all purposes be deemed an
independent contractor and shall have no authority to act for or to represent
the Client or the Funds in any way or otherwise to be an agent of the Client or
the Funds. The activities of Client and Subadviser in managing the assets of the
Fund Vantagepoint Equity Income Fund shall in all instances be conducted subject
to the supervision and direction of the Board of Directors of the Vantagepoint
Funds.
(c) Voting. Unless otherwise instructed by Client, Subadviser shall have
discretion to take any action or render any advice with respect to the voting of
shares or the execution of proxies solicited from time to time by, or with
respect to, the issuers of securities held in the Account. Subadviser will
report annually to Client regarding such voting.
(d) Key Personnel. Subadviser agrees that the following key personnel
have primary responsibility with respect to the investment management of the
Account. If the(se) individual(s) is unable to devote sufficient time to
maintain primary responsibility of the Account, the Subadviser must give Client
written advance notice, or prompt notice within three (3) business days, of the
name of the person designated by the Subadviser to replace or supplement the
individual(s). In addition, the Subadviser will give Client written notice of
the replacement of any employee of the Subadviser who has direct supervisory
responsibility for the key personnel or who has responsibility for setting
investment policy as soon as reasonably practicable.
Key Personnel: Stephen T. O'Brien
3. ACCEPTANCE OF APPOINTMENT
Subadviser accepts the appointment as an investment Subadviser and agrees
to use its best efforts and professional judgment to make timely investment
transactions for the Client with respect to the investments of the Account, and
to provide the other services required of the Subadviser under the provisions of
this Agreement.
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<PAGE> 42
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
3
<PAGE> 43
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
4
<PAGE> 44
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
5
<PAGE> 45
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
6
<PAGE> 46
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
7
<PAGE> 47
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.
8
<PAGE> 48
(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.
9
<PAGE> 49
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.
10
<PAGE> 50
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.
11
<PAGE> 51
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:
12
<PAGE> 52
EXHIBIT D
WELLINGTON MANAGEMENT COMPANY, LLP
Schedule of Partners
Partners: 61
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<S> <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
</TABLE>
17
<PAGE> 53
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<S> <C>
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
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>
18
<PAGE> 54
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
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<PAGE> 55
EXHIBIT F
PRINCIPAL EXECUTIVE OFFICERS AND DIRECTORS OF T. ROWE PRICE ASSOCIATES, INC.
The Directors of T. Rowe Price Associates, Inc., their Principal
Occupation, and the Principal Executive Officers are shown below. Each person's
principal occupation during the last five years has been as an employee of T.
Rowe Price Associates, Inc., unless otherwise noted. The business address of
each such person, unless otherwise indicated, is 100 East Pratt Street,
Baltimore, Maryland 21202.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Name Position with T. Rowe Price Principal Occupation
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
James E. Halbkat, Jr. Director President of U.S. Monitor Corporation, a provider of
P.O. Box 23109 public response systems.
Hilton Head Island, SC 29925
- -----------------------------------------------------------------------------------------------------------------------------------
Donald B. Hebb, Jr. Director Managing General Partner of ABS Capital Partners,
One South Street, 25th Floor private equity funds.
Baltimore, MD 21202
- -----------------------------------------------------------------------------------------------------------------------------------
Richard L. Menschel Director Limited Partner of The Goldman Sachs Group L.P.,
85 Broad St., 2nd Floor an investment banking firm.
New York, NY 10004
- -----------------------------------------------------------------------------------------------------------------------------------
Robert L. Strickland Director Retired Chairman of Lowe's Companies, Inc.; Director of
2000 W. First Street Lowe's Companies, Inc., a retailer of specialty home
Suite 604 supplies; Director of Hannaford Bros., Co., a food
Winston-Salem, NC 27104 retailer.
- -----------------------------------------------------------------------------------------------------------------------------------
Phillip C. Walsh Director Retired mining industry executive
Pleasant Valley
Peapack, NJ 07977
- -----------------------------------------------------------------------------------------------------------------------------------
Anne Marie Whittemore Director Partner of the law firm of McGuire, Woods, Battle & Booth L.L.P.;
One James Center Director of Owens and Minor, Inc., a distributor of medical and
Richmond, VA 23219 surgical supplies; USF&G Corporation, an insurance company; Fort
James Corporation, a manufacturer of paper products; and
Albemarle Corporation, a manufacturer of specialty chemicals.
- -----------------------------------------------------------------------------------------------------------------------------------
James S. Riepe Vice-Chairman of the Board, Mr. Riepe also serves as a Director of General Re Corporation,
Managing Director, and a holding company for global reinsurance and related risk
Member of Management Committee management.
- -----------------------------------------------------------------------------------------------------------------------------------
George A. Roche Chairman of the Board, President,
Managing Director, and Chairman
of Management Committee
- -----------------------------------------------------------------------------------------------------------------------------------
M. David Testa Vice-Chairman of the Board,
Chief Investment Officer,
Managing Director, and
Member of Management Committee
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE> 56
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Name Position with T. Rowe Price Principal Occupation
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Henry H. Hopkins Director and Managing Director; Legal Counsel
- ----------------------------------------------------------------------------------------------------------------------------------
James A.C. Kennedy Director and Managing Director; Director Equity
Division
- ----------------------------------------------------------------------------------------------------------------------------------
John H. Laporte, Jr. Director and Managing Director
- ----------------------------------------------------------------------------------------------------------------------------------
William T. Reynolds Director and Managing Director; Director Fixed
Income Division
- ----------------------------------------------------------------------------------------------------------------------------------
Brian C. Rogers Director and Managing Director
- ----------------------------------------------------------------------------------------------------------------------------------
Preston G. Athey Managing Director
- ----------------------------------------------------------------------------------------------------------------------------------
Brian W.H. Berghuis Managing Director
- ----------------------------------------------------------------------------------------------------------------------------------
Stephen W. Boesel Managing Director
- ----------------------------------------------------------------------------------------------------------------------------------
Edward C. Bernard Managing Director; Director of Retail Marketing
- ----------------------------------------------------------------------------------------------------------------------------------
Michael A. Goff Managing Director; Chief Technology Officer
- ----------------------------------------------------------------------------------------------------------------------------------
Gregory A. McCrickard Managing Director
- ----------------------------------------------------------------------------------------------------------------------------------
Mary J. Miller Managing Director
- ----------------------------------------------------------------------------------------------------------------------------------
Charles A. Morris Managing Director
- ----------------------------------------------------------------------------------------------------------------------------------
George A. Murnaghan Managing Director
- ----------------------------------------------------------------------------------------------------------------------------------
Edmund M. Notzon III Managing Director
- ----------------------------------------------------------------------------------------------------------------------------------
Wayne D. O'Melia Managing Director
- ----------------------------------------------------------------------------------------------------------------------------------
Larry J. Puglia Managing Director
- ----------------------------------------------------------------------------------------------------------------------------------
John R. Rockwell Managing Director
- ----------------------------------------------------------------------------------------------------------------------------------
R. Todd Ruppert Managing Director; Director, Institutional Separate
Account Sales
- ----------------------------------------------------------------------------------------------------------------------------------
Robert W. Smith Managing Director
- ----------------------------------------------------------------------------------------------------------------------------------
William J. Stromberg Managing Director; Director of Equity Research
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
21
<PAGE> 57
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Name Position with T. Rowe Price Principal Occupation
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Charles E. Vieth Managing Director
- ----------------------------------------------------------------------------------------------------------------------------------
Richard T. Whitney Managing Director
- ----------------------------------------------------------------------------------------------------------------------------------
Alvin M. Younger, Jr. Chief Financial Officer, Managing Director,
Secretary and Treasurer
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
22
