Exhibit (d)(17)
INVESTMENT SUBADVISORY AGREEMENT
This Investment Subadvisory Agreement is made as of February 28, 2006,
by and between VANTAGEPOINT INVESTMENT ADVISERS, LLC, a Delaware limited
liability company (hereafter "Client"), and CAPITAL GUARDIAN TRUST COMPANY, a
California corporation (hereafter "Subadviser"), and THE VANTAGEPOINT FUNDS, a
Delaware statutory trust.
WHEREAS, The Vantagepoint Funds is a Delaware Statutory Trust
registered as an open-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act");
WHEREAS, Client is party to a Master Investment Advisory Agreement
with The Vantagepoint Funds for management of the investment operations of The
Vantagepoint Funds including the establishment and operation of investment
portfolios for The Vantagepoint Funds and entering into contracts with
subadvisers to assist in managing the investment of The Vantagepoint Funds'
property;
WHEREAS, Client and Subadviser wish to enter into a subadvisory
agreement pursuant to which Subadviser will provide such assistance to Client.
AGREEMENTS:
In consideration for the performance by Subadviser as Investment
Subadviser of certain assets held by The Vantagepoint Funds, Client authorizes
Subadviser to manage certain of the securities and other assets of The
Vantagepoint Funds as follows:
1. ACCOUNT
The account with respect to which Subadviser shall perform its
services shall consist of those assets of the Vantagepoint Growth and Income
Fund (the "Fund") which Client determines to assign to an account with
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, Client may, upon notice to Subadviser, make additions to the
Account and may, upon notice to Subadviser, make withdrawals from the Account.
To the extent that such withdrawals shall reduce the assets of the Account to
zero, Subadviser shall not be entitled to any fees as set forth hereunder for
the period of time for which no assets are held in the Account, notwithstanding
any termination provisions set forth in this Agreement.
2. APPOINTMENT STATUS, POWERS OF CLIENT AND 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
restrictions set forth in this Agreement, and acting always in conformity with
the Fund's investment guidelines and policies and the written investment
objectives, policies, procedures and restrictions of the Fund described in
Section 4 below, Client hereby grants Subadviser complete, unlimited and
unrestricted discretion and authority to supervise and direct the investment of
the Account and to select portfolio securities with respect to the Account
including the power to acquire (by purchase, exchange, subscription or
otherwise), to hold and to dispose (by sale, exchange or otherwise). Subadviser
will review with Client, upon the request of Client, any transactions it makes
with respect to the investment of the Account. Client agrees to provide
Subadviser with copies of any amendments to the written investment objectives,
policies, procedures and restrictions of the Fund within one business day of the
date on which such amendments or related filings are made with the Securities
and Exchange Commission or other regulatory body.
(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
Client or The Vantagepoint Funds in any way or otherwise to be an agent of
Client or the Fund. The activities of Client and Subadviser in managing the
assets of the Fund shall in all instances be conducted subject to the
supervision and direction of the Board of Directors of The Vantagepoint Funds
and in compliance with applicable laws and rules.
(c) Proxy Voting. Unless otherwise instructed by Client or The
Vantagepoint Funds, 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 in accordance with the Subadviser's written proxy
voting policies and procedures as provided by the Subadviser to Client and the
Board of Directors of The Vantagepoint Funds from time to time. Subadviser will
report quarterly to Client and the Fund regarding such voting in a format
reasonably requested by the Client. Subadviser represents that it has adopted
and implemented written policies and procedures that are reasonably designed to
ensure that the Subadviser votes proxies in the best interest of the Fund in
compliance with the requirements of Rule 206(4)-6 under the Investment Advisers
Act of 1940 ("Advisers Act"). The Subadviser shall promptly provide notice and
copies of any material changes to its policies, procedures or other guidelines
for voting proxies to the Board of Directors of The Vantagepoint Funds or the
Client. Upon request, the Subadviser shall provide The Vantagepoint Funds with a
complete and current copy of its policies, procedures and other guidelines or a
description of such policies, procedures and guidelines for the purpose of
filing such document(s) in The Vantagepoint Funds' prospectus or as otherwise
required by the Securities Act of 1933 or 1940 Act and the rules thereunder.
(d) Key Personnel. Subadviser agrees that the following key personnel
will have primary responsibility with respect to the investment management of
the Account. If these individuals are unable to devote sufficient time to
maintain primary
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responsibility for the Account, Subadviser must give Client written advance
notice, or, if Subadviser does not have advance knowledge of such inability,
prompt written notice within one (1) business day after Subadviser first learns
of such inability, of the name of the person designated by Subadviser to replace
or supplement these individuals. In addition, Subadviser shall give Client
written notice of the replacement of any employee of 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: Xxxxx Xxxxxxxxxx
Xxxxxxx Xxxxxxxx
Xxxxx Xxxxxx
Xxxxx Xxxxxx
Xxxxxxxx Xxxxxxx
Xxxxxx Xxxxx
Xxxx Xxxxxx
3. ACCEPTANCE OF APPOINTMENT
Subadviser accepts the appointment as an investment subadviser of the
Fund and agrees to use its best efforts and professional judgment to make timely
investments for the Account, and to provide the other services required of
Subadviser under the provisions of this Agreement.
4. INVESTMENT POLICIES
(a) Investment Objectives and Restrictions. Subject to the supervision
of The Vantagepoint Funds' Board of Directors and Client, Subadviser shall
manage the assets and direct the investments of the Fund held in the Account in
accordance with The Vantagepoint Funds' prospectus and statement of additional
information, with the written investment objectives, policies, procedures,
guidelines, restrictions and liquidity requirements of The Vantagepoint Funds
and the Fund, with The Vantagepoint Funds' compliance policies, guidelines and
procedures and with any additional investment guidelines and policies that may
be communicated, from time to time, by the Client to the Subadviser, all as they
may be restated or modified from time to time by Client or The Vantagepoint
Funds. Client retains the right, on written notice to Subadviser and without
amending this Agreement, to modify any such objectives, policies, procedures,
guidelines, restrictions, or requirements in any manner and at any time as may
be allowed pursuant to the 1940 Act and consistent with the terms of the Master
Investment Advisory Agreement with The Vantagepoint Funds. Client shall promptly
communicate any such modifications to Subadviser.
(b) Agreement and Registration Statement. Subadviser will adhere to
all specific provisions in this Agreement and in The Vantagepoint Funds' current
Registration Statement on Form N-1A ("Registration Statement") as it may be
amended and updated from time to time and filed with the Securities and Exchange
Commission on Form N-1A ("Registration Statement"). The Registration Statement
is hereby incorporated by
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reference and made a part of this Agreement. Client shall promptly provide
Subadviser with copies or notification of any such amendments or updates to the
extent the same are relevant to Subadviser's duties or responsibilities under
this Agreement.
(c) 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. Client shall designate one or more
custodians (the "Custodian") to hold the Account assets. The Custodian, as
designated by Client will be responsible for the custody, receipt and delivery
of securities and other assets of The Vantagepoint Funds (including the
Account), and Subadviser shall have no authority, responsibility or obligation
with respect to the custody, receipt or delivery of securities or other assets
of The Vantagepoint Funds (including the Account). In the event that any cash or
securities of The Vantagepoint Funds are delivered to Subadviser, it will
promptly deliver the same over to the Custodian, in the name of The Vantagepoint
Funds. Client shall be responsible for all custodial arrangements, including the
payment of all fees and charges to Custodian. Subadviser shall not be
responsible or liable for any act or omission of Custodian.
(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 Vantagepoint Funds of cash or securities due to or
from the Account. Subadviser will make all reasonable efforts to notify the
Custodian of all orders to brokers for the Account by 9:00 a.m. Eastern Time on
the day following the trade date and will affirm the trade before the close of
business one (1) business day after the trade date (T+1).
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 in accordance with applicable laws and rules and 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 may be required by applicable law, rule or as
requested by regulatory authorities having jurisdiction over a party to this
Agreement 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 Vantagepoint Funds. Subadviser
shall be entitled to retain originals or copies of records pursuant to the
requirements of applicable laws or regulations.
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(b) Quarterly Valuation Reports. Subadviser shall use its best efforts
to provide to Client within ten (10) business days after the end of each
calendar quarter a statement of the fair market value of the Account as of the
close of such quarter together with an itemized list of the assets in the
Account, as that information is reported on Subadviser's record keeping system.
(c) Reconciliations. Subadviser shall review the records of the
Account's portfolio holdings held by the Custodian to provide an account
reconciliation on a monthly basis, and shall report promptly to the Custodian
and to Client any discrepancies regarding the Account's portfolio holdings. On
an ongoing basis, Subadviser shall monitor market developments for significant
events occurring after the close of the primary markets for particular
securities held by the Account that may materially affect their value, and shall
promptly notify Client of any such event that comes to Subadviser's attention.
On a monthly basis, Subadviser shall reconcile security and cash positions, and
market values to the Custodian's records and report discrepancies to Client
within ten (10) business days after the end of the month, or within three (3)
business days of receipt of the custodial statement, whichever comes later.
Subadviser shall assist Client or Fund with the pricing or valuation of
securities and other assets in the Account, as Client or Fund may reasonably
request from time to time.
(d) 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, as set forth in the following sentence that is a direct
cause of a delay in the accurate daily pricing of the Fund. In managing the
Account, Subadviser shall act with the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent person acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims.
(e) Reports. Subadviser shall furnish Client and the Board of
Directors of The Vantagepoint Funds such periodic and special reports and
non-proprietary or non-confidential information as shall be reasonably necessary
to evaluate the terms of any subadvisory agreement between Client and Subadviser
with respect to the assets of the Fund including but not limited to: (i) a
quarterly report and attestation to the Board of Directors of The Vantagepoint
Funds regarding activities and practices relating to transactions entered into
in accordance with Rules 10f-3, 17a-7, 17e-1 under the 1940 Act, the purchase or
holding of any Rule 144A securities or any other technically restricted and/or
potentially illiquid securities in the Account, any soft dollar transactions
entered into by the Subadviser, and whether the Subadviser violated the
restrictions imposed on it by the Fund's prospectus and statement of additional
information; (ii) information relating to the use of brokers; and (iii)
information relating to regulatory and/or law enforcement inquiries or actions.
(f) Other Reports on Request. Subadviser shall provide to Client
promptly upon reasonable request any information available in the records
maintained by Subadviser relating to the Account.
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(g) Review of Materials. During the term of this Agreement, Client
shall ensure that all prospectuses, statements of additional information,
registration statements, proxy statements, reports to shareholders, advertising
and sales literature or other materials prepared for distribution to Fund
shareholders or the public, which refer to the Subadviser in any way, prepared
by employees or agents of Client or its affiliates are consistent with
information previously provided by Subadviser. Subadviser shall promptly notify
the Client of any changes to information pertaining to the Subadviser and stated
in the materials described in this Section 6(g).
7. PURCHASE AND SALE OF SECURITIES
(a) Selection of Brokers and Dealers. Except to the extent otherwise
instructed in writing by Client (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 other applicable laws and rules, direct Fund
portfolio transactions for which Subadviser is responsible to any broker-dealer
that Client may designate, subject to Subadviser's duty to seek "best
execution"), Subadviser shall place all orders for the purchase or sale of
securities on behalf of the Account with brokers or dealers selected by
Subadviser, but not with a person affiliated with Subadviser, as the term
"affiliated person" is defined in the 1940 Act (hereafter an "Affiliate"),
unless the transaction is in compliance with Rules 17e-1 or 10f-3 under the 1940
Act or other applicable rules and with The Vantagepoint Funds' policies and
procedures thereunder, copies of which shall be provided to Subadviser.
Subadviser will make reasonable efforts to ensure that brokers and/or dealers
perform their obligations to the Account, provided, however, that Subadviser
will not be responsible or liable for any act or omission of any broker and/or
dealer. Client shall provide a list of the Fund's "affiliated persons," which
Subadviser may rely upon.
(b) Best Execution. In placing such orders, Subadviser will give
primary consideration to obtaining the most favorable price and efficient
execution reasonably available under the circumstances and in accordance with
applicable law. In evaluating the terms available for executing particular
transactions for the Account and in selecting broker-dealers to execute such
transactions, Subadviser may consider, in addition to commission cost and
execution capabilities, the financial stability and reputation of broker-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 such
broker-dealers. Subadviser is authorized to pay a broker-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-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-dealer in discharging responsibilities
with respect to the Account or to other client accounts as to which it exercises
investment discretion.
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(c) Bunching Orders. Client agrees that Subadviser may aggregate sales
or purchase orders for the 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 Account 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 Subadviser in a manner 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 Subadviser for its services
under this Agreement shall be calculated by Client and paid from the assets of
the Account in accordance with SCHEDULE A hereto.
(b) For purposes of this section 8 and Schedule A, all payments due to
Subadviser shall be solely made from the assets of the Fund, a portfolio of The
Vantagepoint Funds.
(c) Pro Rata Fee. If 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 average daily net asset value of the Account for the period
of that calendar quarter and shall be payable on a pro rata basis for the period
of the calendar quarter for which it has served as Subadviser hereunder. In no
event shall the Subadviser receive payment for any period of time during which
there were no assets in the Account.
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 Client and the Fund. The
services of Subadviser to be provided 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 Affiliates 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.
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10. COMPLIANCE POLICIES AND PROCEDURES
The Subadviser shall promptly provide The Vantagepoint Funds' Chief
Compliance Officer (CCO), upon request, copies of its policies and procedures
for compliance by the Subadviser and the Fund with the Federal Securities Laws
as defined in Rule 38a-1 under the 1940 Act and promptly provide the CCO with
copies of any material changes to those policies and procedures. The Subadviser
shall fully cooperate with the CCO as to facilitate the CCO's performance of
his/her responsibilities under Rule 38a-1 to review, evaluate and report to The
Vantagepoint Funds' Board of Directors on the operation of the Subadviser's
compliance policies and procedures and shall promptly report to the CCO any
"Material Compliance Matter" as defined by Rule 38a-1(2). At least annually, the
Subadviser shall provide a certification to the CCO to the effect that the
Subadviser has in place and has implemented policies and procedures that are
reasonably designed to ensure compliance by the Fund and the Subadviser with the
Federal Securities Laws.
11. XXXXXXX XXXXXXX POLICIES AND CODE OF ETHICS
Subadviser hereby represents that it has adopted policies and
procedures and a code of ethics that meet the requirements of Rule 17j-1 under
the 1940 Act and of Rule 204A-1 under the Advisers Act. Copies of such policies
and procedures and code of ethics and any material changes or supplements
thereto shall be delivered to Client and The Vantagepoint Funds. Subadviser
shall furnish to the Board of Directors of The Vantagepoint Funds with the
written reports that Subadviser is required to furnish to the Board of Directors
pursuant to Rule 17j-1 under the 1940 Act.
12. INSURANCE
At all times during the term of this Agreement, Client and Subadviser
shall each 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 Client and
Subadviser, respectively.
13. LIABILITY
(a) In the absence of any willful misfeasance, bad faith, or gross
negligence in the performance of its duties or by reason of reckless disregard
of its obligations and duties under this Agreement, Subadviser shall not be
liable to Client or The Vantagepoint Funds for honest mistakes of judgment or
for action or inaction taken in good faith for a purpose that Subadviser
reasonably believes to be in the best interests of the Fund. However, neither
this provision nor any other provision of this Agreement shall constitute a
waiver or limitation of any rights which Client or The Vantagepoint Funds may
have under federal or state securities laws.
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(b) Client shall indemnify Subadviser against any loss, liability,
damages, costs or expenses caused by the negligence or malfeasance of Client or
violation of any applicable law, rule or internal policy for which Client has
the primary responsibility of compliance and the responsibility for which has
not been specifically delegated to Subadviser.
14. TERM
This Agreement shall be in effect from March 1, 2006 to February 28,
2007. This Agreement may be renewed thereafter for successive periods, the
length of which shall be determined by the Board of Directors of The
Vantagepoint Funds, provided that such renewal is specifically approved at least
annually by the Board of Directors of The Vantagepoint Funds, including a
majority of those Directors of the Board of the Vantagepoint Funds who are not
parties to this Agreement or "interested persons" of any party to this Agreement
(as that term is defined in the Investment Company Act of 1940).
15. TERMINATION
This Agreement may be terminated by Subadviser, without the payment of
any penalty, immediately upon notice to The Vantagepoint Funds and to Client in
the event of a material breach of any provision thereof by The Vantagepoint
Funds or Client 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 Client and The Vantagepoint Funds, or by Client or
The Vantagepoint Funds for any reason or no reason immediately upon written
notice to Subadviser. This Agreement shall automatically terminate (a) in the
event of its assignment, as provided in Section 20, (b) upon the termination of
The Vantagepoint Funds, or (c) upon termination of Client's Master Investment
Advisory Agreement with The Vantagepoint 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 party or parties. To the extent that the assets of the
Account are zero, Subadviser shall not be entitled to any fees as set forth
hereunder for the period of time for which no assets are held in the Account.
16. REPRESENTATIONS
(a) Subadviser hereby confirms to Client and The Vantagepoint Funds
that Subadviser is registered as an investment adviser under the Advisers Act,
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.
(b) Client hereby confirms to Subadviser that it is registered as an
investment adviser under the Advisers Act, 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
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fully authorized and, upon execution and delivery, this Agreement will be
binding upon Client in accordance with its terms.
(c) The Vantagepoint Funds hereby confirm to Subadviser, and
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 thereunder
of the Internal Revenue Code.
17. 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 a 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 AND FUNDS:
The Vantagepoint Funds
Vantagepoint Investment Advisers, LLC
Attention: Xxxx Xxxxxxxxx, Legal Department
c/o ICMA Retirement Corporation
000 Xxxxx Xxxxxxx Xxxxxx, XX, Xxx. 000
Xxxxxxxxxx, X.X. 00000-0000
Fax: 000-000-0000
SUBADVISER:
Capital Guardian Trust Company
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Treasurer
Fax: 000-000-0000
Each party may change its address by giving notice as herein required.
18. 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.
19. 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
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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 Fund's shareholders.
20. ASSIGNMENT OR CHANGE OF CONTROL
This Agreement shall automatically terminate in the event of its
assignment as defined under the 1940 Act. In addition, Subadviser agrees to
provide Client immediate written notice in the event of any actual or planned
change in control, within the meaning of the Advisers Act, of Subadviser.
21. 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.
22. 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. 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.
23. CONFIDENTIAL INFORMATION
Any information or recommendations supplied by any party to this
Agreement, which are not otherwise in the public domain or previously known to
another party in connection with the performance of obligations hereunder,
including securities or other assets held or to be acquired by the Fund,
transactions in securities or other assets effected or to be effected on behalf
of the Fund, or financial information or any other information relating to a
party to this Agreement, are to be regarded as confidential ("Confidential
Information") and held in the strictest confidence. No party may use or disclose
to others Confidential Information about another party, except solely for the
legitimate business purposes of the Fund for which the Confidential Information
was provided; as may be required by applicable law or rule or compelled by
judicial or regulatory authority having competent jurisdiction over the party;
or as specifically agreed to in writing by the other party to which the
Confidential Information pertains. Further, no party may trade in any securities
issued by another party while in possession of material non-public information
about that party. Lastly, the Subadviser may not consult with any other
sub-advisers of the Fund about transactions in securities or other assets of the
Fund, except for purposes of complying with the 1940 Act or SEC rules or
regulations applicable to the Fund. Nothing in this Agreement shall be
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construed to prevent the Subadviser from lawfully giving other entities
investment advice about, or trading on their behalf in, the shares issued by the
Fund or securities or other assets held or to be acquired by the Fund.
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IN WITNESS WHEREOF, THE PARTIES HERETO EXECUTE THIS AGREEMENT ON
FEBRUARY 28, 2006.
CLIENT SUBADVISER
Vantagepoint Investment Advisers, LLC Capital Guardian Trust Company
by: by:
----------------------------------- ----------------------------------
(signature) (signature)
----------------------------------- ----------------------------------
Xxxx X. Xxxxxxxxx, Secretary Xxxxxxxx X. Xxxxxxx, Assistant VP
Approved by: -----------------------------
Xxxxx Xxxxxxx, Vice President
FUND
The Vantagepoint Fund, on behalf of the Growth and Income Fund
by:
----------------------------------
Xxxx X. Xxxxxxxxx, Secretary
Approved by: -----------------------------
Xxxxx Xxxxxxx, Vice President
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SCHEDULE A
VANTAGEPOINT INVESTMENT ADVISERS, LLC
THE VANTAGEPOINT FUNDS
FEE SCHEDULE
FOR
CAPITAL GUARDIAN TRUST COMPANY
The Subadviser's quarterly fee shall be calculated based on the average daily
net asset value of the assets under the Subadviser's management as provided by
the Client or Custodian, at Client's discretion, based on the following annual
rate.
Growth and Income Fund (U.S. Equity Separate Account) *
Minimum Annual Fee $167,500
First $25 million 0.550 percent
Next $25 million 0.400 percent
Over $50 million 0.225 percent
* For purposes of calculating the fee, all accounts under management will be
aggregated and a fee discount shall be applied. Please refer to Exhibit I
for details on the fee aggregation policies and fee discounts and
elimination of fee breakpoint policies applicable to the account.
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EXHIBIT I
TO
SCHEDULE A - FEE SCHEDULE FOR CAPITAL GUARDIAN TRUST COMPANY
1. FEE AGGREGATION POLICIES
Fee aggregation will apply to all accounts managed by Capital Group companies,
except for emerging markets equity investments and investments in funds with
internally charged fees ("Eligible Accounts"). In order to achieve the benefit
of fee aggregation, the combined actual fees must exceed the combined total of
the minimum fee applicable to each of the client's Eligible Accounts.
For additional Eligible Accounts with the same investment objectives and
guidelines, all assets for these Eligible Accounts will be aggregated for fee
calculation purposes.
For additional Eligible Accounts with different investment objectives and
guidelines:
Each account will be charged on the first $10 million at the initial
breakpoint rate for the appropriate mandate. Any incremental assets
over $10 million will be aggregated and charged at the incremental
rate for the appropriate mandate.
Assets invested in commingled funds will be aggregated and charged at
the incremental rate for the appropriate mandate.
The first additional account within a new country will be charged on
the first 15 million at the initial breakpoint rate for the
appropriate mandate. Any incremental assets over $15 million will be
aggregated and charged at the incremental rate for the appropriate
mandate.
For fee aggregation purposes, Eligible Accounts will be aggregated in the
following order: balanced, equity-developed markets, convertible,
fixed-income-high yield, fixed-income emerging markets, and
fixed-income-developed markets.
Unless otherwise requested, the benefit from fee aggregation for clients with
multiple accounts will be calculated by comparing total aggregated fees to total
unaggregated fees for all Eligible Accounts. The resulting percentage discount
will be applied to each Eligible Account's unaggregated fees.
If all Eligible Accounts are not denominated in the same currency, the local
currency assets of each Eligible Account and the related fees calculated on an
unaggregated basis will be converted to a designated base currency using the
applicable foreign exchange rate. The total of such fees will be compared to the
Eligible Accounts' total aggregated fees. The resulting percentage discount will
then be applied to each Eligible Account's unaggregated fee as determined in the
applicable currency.
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2. FEE DISCOUNTS AND ELIMINATION OF FEE BREAKPOINTS
The following fee discount will be applied based upon the total aggregated fees:
Clients between $1.25 million to $4 million ................... 5% discount
Clients between $4 million to $8 million ...................... 7.5% discount
Clients between $8 million to 512 million ..................... 10% discount
Clients over $12 million ...................................... 12.5% discount
For this purpose, aggregated fees will include all fees from separate accounts,
commingled funds, and Funds with internally charged fees managed by Capital
Group companies, except for investments in American Funds' mutual funds. The
resulting fee discount percentage will be applied to each account's fees
(excluding fees related to investments in funds with internally charged fees).
For clients whose total aggregated fees (before discounts) exceed $3 million,
fee breakpoints will be eliminated and each account will be charged at the
lowest marginal fee rate applicable to the account's fee schedule.
To determine the applicable fee discount level and breakpoint elimination
threshold, the total aggregated fees for the quarter will be annualized. For
this purpose, all local currency fees will be convened to a designated base
currency.
Fees related to investments in funds with internally charged fees will be
estimated by multiplying the quarter end value of the investment (adjusted on a
prorated basis for any contributions or withdrawals during the quarter) by the
fund's effective fee. For this purpose, the effective fee will he based on the
value of the fund's quarter end assets and the Fund's current fee schedule.
Applicable discount levels and the elimination of fee breakpoints will be
effective beginning with the first quarter a discount threshold is exceed and
will remain in effect unless the total fees fall below the discount threshold
due to a significant withdrawal of assets. A decline in the market alone will
not cause the reinstatement of a lower discount level or fee breakpoints.
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