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(d)(24)
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 SEIX INVESTMENT
ADVISERS at 000 Xxxx Xxxxxxxxx, Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000 (hereafter
"Adviser") and is effective as of March 1,1999 (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;
WHEREAS, Client is party to an Investment Adviser Agreement with the
Funds for management of the investment operations of the Funds including the
establishment and operation of investment portfolios for the Funds and the
entering into of contracts with sub-advisers to assist in managing the
investment of the Funds property;
WHEREAS, Client and Adviser wish to enter into an agreement pursuant to
which Adviser will provide such assistance to Client.
AGREEMENTS:
In consideration of the performance by the Adviser as Investment Adviser
of certain assets held by the Funds, the Client has authorized the Adviser to
manage the securities and other assets as follows:
1. ACCOUNT
The account with respect to which the Adviser shall perform its services
shall consist of those assets of the Funds which the Client determines to assign
to an account with the Adviser, together with all income earned by those assets
and all realized and unrealized capital appreciation related to those assets
(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 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
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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.
(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 prompt 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.
Key Personnel:
Xxxxxxxxx Xxxx
Xxxx Xxxxx
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. The Adviser will adhere to the investment
objectives, guidelines, restrictions, and liquidity requirements of the Funds as
specified by the Client on SCHEDULE A hereto, and as restated or modified from
time to time by the Client in written notice to the Adviser.
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(b) Funds' Agreement and Declaration of Trust. The Adviser will
adhere to all specific provisions established in the Funds' Agreement and
Declaration of Trust and Registration Statement as filed with the Securities and
Exchange Commission on Form N-1A ("Registration Statement), both of which are
hereby incorporated by reference and made a part of this Agreement. 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 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.
(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 are delivered to the Adviser,
it will promptly deliver the same over to the Custodian, in the name of the
Funds.
(b) Securities Transactions. All securities transactions for the
Account will be consummated by payment to or delivery by the Funds of cash or
securities due to or from the Account. The Adviser will notify the Custodian of
all orders to brokers for the Account by 9:00 am EST on the day following the
trade date and will affirm the trade within one (1) business day after the trade
date (T+1).
(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
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(a) Records. Adviser will maintain proper and complete records
relating to the furnishing of services under this Agreement, including records
with respect to the acquisition, holding and disposition of securities for
Client. All records maintained pursuant to this Agreement shall be subject to
examination by Client and by persons authorized by it at all times upon
reasonable notice. Except as expressly authorized in this Agreement or as
required by applicable law, regulation or order of court or as directed by other
party in writing, Adviser and Client shall keep confidential the records and
other information obtained by reason of this Agreement (including, with respect
to Client, the investment information and transactions executed by Adviser).
Upon termination of this Agreement, Adviser shall promptly, upon demand, return
to Client all records Client reasonably believes are necessary in order to
discharge its responsibilities to the Funds. Adviser shall be entitled to retain
originals or copies of records pursuant to the requirements of applicable laws
or regulations.
(b) Quarterly Valuation Reports. Adviser shall use best efforts to
provide to the Client within TEN (10) business days after the end of each
calendar quarter a statement of the fair market value of the Account as of the
close of such quarter together with an itemized list of the assets in the
Account.
(c) Valuation Methodology. For purposes of this Agreement, fair market
value shall mean, as of a particular date, the value of the Account (determined
in accordance with generally accepted accounting principles consistently
applied), plus income accrued thereon less the liabilities related to the assets
in the Account. Adviser shall reconcile security and cash positions , and market
values, and report discrepancies to the Client.
(d) Loss Reimbursement. Adviser shall reimburse the Account for any
loss caused by Adviser's actions that cause delay in the accurate daily pricing
of the Fund(s).
(e) Monthly Reports. Adviser shall provide the Client an itemized
report as to the securities in the account, the fair market value thereof and
the accrued income thereon within FOUR (4) business days after the end of each
Calendar Month. The Adviser shall also use best efforts to provide, in writing,
preliminary performance numbers and a brief explanation of these results within
FIVE (5) business days after the end of each Calendar Month. The requested
format will be as mutually agreed by Adviser and Client. For purposes of this
Agreement, fair market value shall mean, as of a particular date, the value of
the Account plus income accrued thereon less the liabilities related to the
assets in the Account.
(f) Reports on Request. Adviser shall provide to Client promptly upon
request any information available in the records maintained by Adviser relating
to the Account.
7. PURCHASE AND SALE OF SECURITIES
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(a) Selection of Brokers. Except to the extent otherwise instructed
by Client, (it being understood that Client may, in its absolute discretion,
direct portfolio transactions for which Adviser is responsible to any broker
that Client may see fit), Adviser shall place all orders for the purchase and
sale of securities on behalf of the Client with brokers or dealers selected by
Adviser, but not with a person affiliated with Adviser, as the term "affiliated
person" is defined in the Investment Company Act of 1940 (hereafter an
"Affiliate").
(b) Best Execution. In placing such orders, the Adviser will give
primary consideration to obtaining the most favorable price and efficient
execution. In evaluating the terms available for executing particular
transactions for Client and in selecting brokers and dealers to execute such
transactions, the Adviser may consider, in addition to commission cost and
execution capabilities, the financial stability and reputation of brokers and
dealers and the brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934, as amended) provided by
brokers and dealers. Adviser is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for executing a
transaction which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if Adviser determines
that such commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer in discharging
responsibilities with respect to the Account.
(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 to the Account taking
into consideration the advantageous selling or purchase price, brokerage
commission and other expenses. Client acknowledges that the determination of
such economic benefit to Client by Adviser represents Adviser's evaluation that
client is benefited by relatively better purchase or sales prices, lower
commission expenses and beneficial timing of transactions or a combination of
these and other factors.
8. INVESTMENT FEES
(a) 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. The Adviser shall send a
written invoice to the Client within 30 days of the quarter end and shall be
duly compensated from the assets of the Account.
(b) Fee Computation. The Adviser's fee for each calendar quarter
shall be calculated based on the market value of the average net assets under
management each month for the past four months as provided by the Custodian. The
market value of the net assets will be determined by the Custodian on the last
business day of each
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calendar month-end. (See example on Schedule C.) The fee will be calculated at a
rate equal to one-fourth of the annual rates specified in Schedule C.
(c) Fee Amendment. Fee rates may be changed from time to time by
agreement between the Client and the Adviser; provided, however, that no
increase in such rates shall be made during the first calendar year of this
Agreement.
(d) 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 Client. Adviser
shall have no obligation to acquire or dispose of a position in any investment
pursuant to this Agreement simply because Adviser, its directors, members,
Affiliates or employees invest in such a position for its or their own accounts
or for the account of another client.
10. XXXXXXX XXXXXXX POLICIES AND CODE OF ETHICS
Adviser hereby represents that it has adopted policies that meet the
requirements of Rule 17j-1 under the Investment Company Act of 1940. Copies of
such policies shall be delivered to the Client, and any violation of such
policies by personnel of the Adviser shall be reported to the Client.
11. INSURANCE
At all times during the term of this Agreement, Adviser shall maintain,
at its own cost and expense, professional liability insurance for errors,
omissions, and negligent acts, in an amount and with such terms as are standard
in the financial services industry for an investment adviser managing the amount
of aggregate assets managed by Adviser for Client and for the Adviser's other
clients.
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12. LIABILITY
Adviser shall not be liable to Client for honest mistakes of judgment or
for action or inaction taken in good faith for a purpose that the Adviser
reasonably believes to be in the best interests of the Client. Adviser shall be
liable to Client for any liability, damages or expenses of Client arising out of
the negligence, malfeasance or violation of applicable law by Adviser or any of
its officers, employees or Affiliates in providing management under this
Agreement. However, neither this provision nor any other provision of this
Agreement shall constitute a waiver or limitation of any rights which Client may
have under federal or state securities laws.
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 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
breach of any provision thereof by the party so notified, 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 ownership change as provided
in Paragraph 19, or upon the termination of the Funds. Any termination in
accordance with the terms of this Agreement shall not cause the payment of any
penalty. Any such termination shall not affect the status, obligations or
liabilities of any party hereto to the other.
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.
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(b) Client hereby confirms to Adviser that it has full power and
authority to enter into this Agreement and that the execution of this Agreement
on behalf of Client has been fully authorized and, upon execution and delivery,
this Agreement will be binding upon Client in accordance with its terms.
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
000 Xxxxx Xxxxxxx Xxxxxx, XX, Xxx. 000
Xxxxxxxxxx, X.X. 00000-0000
ADVISER:
Seix Investment Advisors
000 Xxxx Xxxxxxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Attn: Xxxx Xxxxx
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 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
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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.
19. ASSIGNMENT AND OWNERSHIP CHANGE
This Agreement shall automatically terminate in the event of its
assignment. Adviser agrees to provide immediate written notice in the event of
an ownership change. Such an ownership change 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.
22. YEAR 0000 XXXXXXXX
(a) Adviser warrants that all software or other information
technology product used by Adviser or by Adviser's vendors, subcontractors, or
agents, that is to be used in the performance of Adviser's obligations under
this Agreement, is designed to be used prior to, during, and after the calendar
year 2000 A.D. Adviser further warrants that said software or other information
technology product will operate during such time period without error relating
to date data, specifically including any error relating to, or the product of,
date data which represents or references different centuries or more than one
century.
(b) Adviser shall indemnify and hold Client harmless from and against
any cost, loss, damage or expense (including reasonable attorney fees) incurred
by Client as a result of a breach of subsection (a) of this section 22.
IN WITNESS WHEREOF, THE PARTIES HERETO EXECUTE THIS AGREEMENT ON
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March 1, 1999 and make it effective on the date set forth.
CLIENT ADVISER
Vantagepoint Seix Investment Advisers
Investment Advisers, LLC
by: by:
/s/ XXXXXX XXXXXX /s/ XXXXXXXXX XXXX
------------------------- ------------------------
(signature) (signature)
President Chairman
------------------------- ------------------------
(name, title) (name, title)
Date: Date:
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ADDENDUM DATED March 1, 1999 TO THE
INVESTMENT ADVISORY AGREEMENT DATED _____________
This addendum modifies and forms a part of the Investment Advisory Agreement
(the "Agreement") dated _______________ 1999, between Vantagepoint Investment
Advisers, LLC, a Delaware corporation ("Client"), and Seix Investment Advisers
("Adviser"), relating to the Vantagepoint Funds ("VF").
All terms used in this Addendum have the same meaning given to them in the
Agreement unless specifically noted otherwise.
1. The assets of the Account to be managed by the Adviser under the Agreement
and this Addendum are assets of the U.S. Treasury Securities Fund (the "Fund"),
a portfolio of VF. For purposes of Section 8 (Fees) and Schedule C, all payments
due to Adviser shall be solely made from the assets of the Fund.
2. All references in the Agreement and this Addendum to the Investment Policies
to be followed by Adviser in managing the assets of the Fund are hereby deemed
to include the Investment Policies set forth in the Agreement and any Schedules
to the Agreement, as well as the Fund's current prospectus and statement of
additional information as on file with the Securities and Exchange Commission.
3. The activities of the Client and the Adviser in managing the assets of the
Fund pursuant to the Agreement and this Addendum shall in all instances be
conducted subject to the supervision and direction of the Board of Directors of
VF.
4. For purposes of Sections 8 (Fees), 12 (Liability), 13 (Term), 14
(Termination), 15 (Representation), 16 (Notices), 18 (Waiver or Modification),
19 (Assignment and Ownership Change), and 22 (Year 2000 Warranty) of the
Agreement, as well as for purposes of Schedule C of the Agreement, VF 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.
5. For purposes of the Agreement and this Addendum, Client and Adviser hereby
agree to maintain all books and records relating to VF that are required to be
maintained in accordance with good practice, applicable federal and state
securities laws, including the Investment Company Act of 1940 and or the
Investment Advisers Act of 1940, and such reasonable instructions as shall be
provided to Adviser by Client from time to time.
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6. Adviser shall furnish Client and the Board of Directors of VF 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 assets of VF.
7. For purposes of the Agreement and this Addendum, the value of the assets of
the Fund managed by Adviser shall be calculated in accordance with the
procedures for determining net asset value per share ("NAV") set forth in the
Fund's prospectus and statement of additional information.
8. Section 6 is hereby amended as follows:
a. 6(a) is amended beginning on line 8 and ending on line 9 by deleting the
parentheses and all language with in the parentheses;
b. 6(b) is deleted in its entirety;
c. 6(c) is redesignated 6(b) Reconciliations, the first sentence is deleted;
d. 6(d) is changed to 6(c); and
e. 6(e) is deleted and 6(f) is changed to 6(d).
9. Section 8, Investment Fees, is amended by deleting 8(b) and 8(c) in their
entirety and by redesignating 8(d) as 8(b).
10. Section 15, Representations, is amended by the insertion of 15(c) below:
"(c) Adviser hereby acknowledges that VF is registered as an open end
investment company under the Investment Company Act of 1940 and is subject
to taxation as a regulated investment company under 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 VF
and has systems and procedures in place reasonably designed to permit
Adviser, Client, and VF to comply with such requirement."
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SCHEDULE A
THE VANTAGEPOINT FUNDS
INTERNATIONAL FUND
STATEMENT OF INVESTMENT POLICIES
These Investment Policies and Guidelines have been adopted by the Vantagepoint
Funds (the "Funds") to govern the management and administration of the
International Fund by Vantagepoint Investment Advisers, LLC ("VIA"). They may be
reviewed and revised at the discretion of the Directors of the Vantagepoint
Funds (the "Directors"). VIA is responsible for the monitoring and appointment
of subadvisers to handle the day-to-day investment of assets assigned to them.
I. GENERAL DESCRIPTION AND GOALS
The International Fund seeks long-term growth of capital by
investing at least 65% of its total assets in securities of
companies whose principal place of business is located in countries
other than in the United States. The Fund will invest primarily in
equity securities, however, debt securities of foreign governments
and private issuers are permitted. The Fund may invest in securities
payable in any currency and may hold foreign currency.
II. STRUCTURE
The assets of the International Fund shall be managed by two or more
subadvisers. The subadvisers may be retained to manage separate
accounts under discretionary investment advisory contracts. Each
subadviser will be selected for its individual investment management
expertise and each will operate independently of the others. Each
subadviser must either be registered with the Securities and
Exchange Commission (SEC) under the Investment Advisers Act of 1940
or a Bank, Insurance Company or Trust Company exempt as such from
registration.
Each subadviser shall exercise complete management discretion over
assets of the Fund allocated to its account in a manner consistent
with these Investment Policies and Guidelines and with such further
investment limitations and conditions as may be recommended by VIA
and approved by the Directors. Subadvisers will be obligated to
manage Fund assets as if they were subject to the fiduciary duty of
care that applies under the Employee Retirement Income Security Act
of 1974 (ERISA) governing pension and profit sharing assets.
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III. INVESTMENT STRATEGY
VIA shall select subadvisers that represent a variety of portfolio
management approaches and investment disciplines. These investment
approaches will be combined in a complementary manner to effectively
achieve the investment objective of the Fund. The Fund as a whole
will be more diversified than each individual subadviser's
portfolio.
Investment philosophies incorporated in the International Fund may
include "top-down" approaches which focus on macro-economic and
political events. Judgment, quantitative models and purchasing power
parity models are among the factors used to identify currencies and
markets that are overvalued or undervalued relative to the U.S.
dollar. The Fund subadvisers may also use "bottom-up" strategies
which emphasize company and industry dynamics. The future prospects
of growth in earnings per share, security valuation and dividend
considerations of companies will be among the investment criteria of
those subadvisers. Investments may include:
- non-U.S. and U.S. equity securities of large-, mid- and
small-cap companies,
- equity securities in emerging markets,
- securities issued by companies that are "distressed" or
"out of favor",
- futures contracts.
The Fund's performance may be significantly affected by changes in
foreign currency exchange rates.
Certain of the above strategies are not permitted or their use is
limited under the Investment Guidelines for the individual
subadvisers.
IV. PERFORMANCE BENCHMARKS
Performance benchmarks will be established for the Fund. These
benchmarks will be recommended by VIA and adopted by the Directors
and will be reviewed and revised as appropriate from time to time.
The current performance benchmarks for the Fund are appended to this
document as Exhibit I.
V. DIRECTOR REVIEW
VIA will report periodically to the Directors on performance of the
Fund against benchmarks and on subadviser results and will evaluate
for the Directors the overall performance of the Fund relative to
its objectives. The Directors will consider such reports and other
relevant factors in appraising the investment objectives and
performance of the Fund.
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INVESTMENT GUIDELINES
I. ELIGIBLE INVESTMENTS
A. EQUITY SECURITIES: Foreign and domestic common stock
(including shares of closed-end funds) or ordinary
shares, preferred stock, common stock equivalents (units
of beneficial interest), American Depository Receipts,
convertible preferred stocks, warrants, and other
rights.
B. CASH/CASH EQUIVALENTS: Foreign and domestic fixed
income obligations with maturity less than one year, or
short term accounts managed by a custodian institution.
C. FIXED INCOME: Foreign and domestic fixed income and
convertible fixed income securities with maturities
greater than one year.
D. FINANCIAL FUTURES: Equity index and currency futures.
E. ELIGIBLE PRACTICES: There are no restrictions on
subadvisers as to the following:
- Portfolio turnover.
- Realized gains and losses.
F. ELIGIBLE INVESTMENT LIMITS
MINIMUM NORMAL RANGE MAXIMUM
------- ------------ -------
Non-U.S. equity securities 65% 85-100% 100%
U.S. equity securities 0% 0-15% 35%
Cash and cash equivalents 0% 0-15% 35%
Fixed income securities 0% 0-10% 25%
Convertible securities 0% 0-15% 25%
II. PROHIBITED PRACTICES AND SECURITIES
A. Short sales
B. Options
C. Commodities (excluding financial and currency futures)
D. Securities for which there is no established trading market.
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E. Securities issued by the subadviser of the Fund or its
affiliates.
F. General partner interests.
G. Direct investments in oil, gas, or other mineral exploration or
development programs.
H. Direct investments in real estate or interests in real estate;
this does not preclude investment in purchases of securities of
real estate investment trusts and other companies holding real
estate or interests in real estate.
I. Commingled funds; this does not preclude investment in mutual
funds up to 10% of the Fund's market value at the time of
purchase.
J. Acquisition of securities that would cause exposure to a single
industry to exceed 25% of the Fund's market value at the time of
purchase.
K. In the absence of prior consent of VIA, acquisition securities of
an issuer that would cause more than 5% of the Fund to be
invested in such securities.
L. In the absence of prior consent of VIA, acquisition of more than
5% of the outstanding shares of any class of equity securities.
III. SECURITIES AND PRACTICES NOT OTHERWISE MENTIONED
Any securities or practices not enumerated in Section I or Section
II of these Investment Guidelines may be acquired or employed, as
the case may be, but only if explicitly approved in advance by VIA.
IV. SECURITIES LENDING
Nothing herein shall prevent loans of securities in the
International Fund pursuant to an established securities lending
program conducted by the Fund's custodian.
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17
EXHIBIT I
TO THE
STATEMENT OF INVESTMENT POLICIES AND GUIDELINES OF
THE INTERNATIONAL FUND
MARCH 1, 1999
The following standards will be used to measure the performance of the
International Fund:
A. BENCHMARKS
1. The performance benchmark for the Fund is the MSCI EUROPE,
AUSTRALIA, AND FAR EAST (EAFE) INDEX. This benchmark will be
used to measure the Fund's performance net of subadviser fees.
2. A peer group benchmark for the Fund will consist of mutual funds
with characteristics similar to the Fund. The peer group will be
used to measure the Fund's performance relative to other funds
with a similar investment approach. The peer group benchmark will
measure Fund performance net of all fees and expenses except for
plan administration fee.
3. The Lipper International Index, selected by Lipper Analytical
Services, will serve as the performance benchmark for participant
returns, net of all fees and expenses. In assessing performance
against this benchmark, it will be taken into consideration that
Lipper Analytical Services may change the composition of the
Index.
B. TIME HORIZON
The time horizon for performance measurement will be one, three, and
five years.
One Year:
Performance relative to any benchmark established for the International
Fund will vary widely over one-year periods; such variance over short
time periods is expected and acceptable. However, if such variance is
determined to be caused by systemic issues, action may be appropriate.
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Three and Five Years:
Performance of the International Fund should track market and universe
benchmarks more closely as the evaluation period lengthens. The ideal
performance objective for the International Fund is to exceed the
returns of all relevant benchmarks; however, shortfalls over various
time periods should be expected in some cases. Underperformance against
a single benchmark over an extended period may be acceptable,
particularly if other benchmarks have been exceeded.
C. INVESTMENT CHARACTERISTICS
The Fund may have investment characteristics which differ from the
general international equity market as measured by the MSCI EAFE index.
Because of the broad mandate given subadvisers in the International
Fund, investment characteristics may be expected to vary widely.
However, the beta of the Fund may be higher than the MSCI EAFE Index.
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FEE SCHEDULE
FOR
SEIX INVESTMENT ADVISORS
The Adviser's quarterly fee shall be calculated based on the average daily
market value of the assets under management as provided by the Custodian, based
on the following annual rate.
$25 million 0.17 percent
Next $50 million 0.12 percent
Next $25 million 0.07 percent
Over $100 million Negotiable
EXAMPLE OF FEE CALCULATION (HYPOTHETICAL AMOUNTS)
January 1, 1999 $190,000,000 End-of-Day Market Value
January 2, 1999 $190,678,462 End-of-Day Market Value
January 3, 1999 $190,796,123 End-of-Day Market Value
. . .
March 29, 1999 $194,512,214 End-of-Day Market Value
March 30, 1999 $194,720,978 End-of-Day Market Value
March 31, 1999 $194,901,556 End-of-Day Market Value
Quarterly Daily Average $192,601,555
$100 million 0.50 percent $500,000
Next $100 million 0.45 percent $416,707
Over $200 million 0.40 percent ---------
Annual Fee $916,707
One-Fourth Annual Fee $229,177
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