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EXHIBIT (d)(29)
INVESTMENT SUBADVISORY AGREEMENT
This Investment Subadvisory Agreement is made as of the __________ day of
_____, 2000, by and between SOUTHEASTERN ASSET MANAGEMENT, INC, a Delaware
limited liability company (hereafter "Client"), SOUTHEASTERN ASSET MANAGEMENT,
INC, 0000 Xxxxxx Xxx, Xxxxx 000, Xxxxxxx, XX 00000 (hereafter "Subadviser"), and
THE VANTAGEPOINT FUNDS, a Delaware business trust, and is effective as of
_________________,2000 (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
restrictions set forth in this Agreement, and acting always in conformity with
the
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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 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: O. XXXXX XXXXXXX, X. XXXXXX XXXXX
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.
4. INVESTMENT POLICIES
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(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 of 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 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
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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 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
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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 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
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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 sale 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 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
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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. XXXXXXX XXXXXXX 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 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
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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.
(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 requirements.
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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: Xxxx Xxxxxxxxx, Legal Department
c/o ICMA Retirement Corporation
000 Xxxxx Xxxxxxx Xxxxxx, XX, Xxx. 000
Xxxxxxxxxx, X.X. 00000-0000
SUBADVISER:
Southeastern Asset Management, Inc.
Attention: Xxxxxxx Xxxxxx, Legal Department
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
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 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
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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 l940 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
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.
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IN WITNESS WHEREOF, THE PARTIES HERETO EXECUTE THIS AGREEMENT ON ,200_
and make it effective on the date set forth.
CLIENT SUBADVISER
Vantagepoint Southeastern Asset Management, Inc.
Investment Advisers, LLC
by: by:
------------------------ ------------------------
(signature) (signature)
------------------------ ------------------------
Xxxxxx Xxxxxx, President (name, title)
Date: Date:
FUNDS
The Vantagepoint Funds
by:
-------------------------
Xxxxxx Xxxxxx, President
Date:
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SCHEDULE A
THE VANTAGEPOINT FUNDS
EQUITY INCOME 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 Equity
Income 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 Equity Income Fund seeks long-term, stable growth of capital by
investing primarily in dividend-paying, common stocks of
well-established companies. The Fund may also invest in other
equity-type securities (e.g., convertible securities and preferred
stocks) and in bonds.
II. STRUCTURE
The assets of the Equity Income Fund are to be managed by two or more
subadvisers. The subadvisers are retained to manage separate accounts
under discretionary investment advisory contracts. Each subadviser is
selected for its individual investment management expertise, and each
operates independently of the others. Each subadviser must either be
an investment adviser registered with the Securities and Exchange
Commission (SEC) under the Investment Advisers Act of 1940, or be 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 established by VIA
and approved by the Directors. Subadvisers are 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.
XXX Xxxx Xxxxxxxxxx - Xxx 00, 0000
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III. INVESTMENT STRATEGY
VIA selects subadvisers that represent a variety of portfolio management
approaches and investment disciplines. These investment approaches are
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.
While the subadvisers employ different strategies, each has in common
the objective of providing total return from capital appreciation and
current income. The Fund will tend to be concentrated in higher-yielding
industries including, for example, utilities, energy, financial, and
cyclical companies. In addition it is likely, because of the Fund's
income and established company requirements, that larger companies will
dominate.
IV. PERFORMANCE BENCHMARKS
Performance benchmarks are established for the Fund. These benchmarks
are recommended by VIA and adopted by the Directors and will be reviewed
periodically and revised as appropriate. The current performance
benchmarks for the Fund are appended to this document as Exhibit I.
V. DIRECTOR REVIEW
VIA reports periodically to the Directors on performance of the Fund
against the 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.
XXX Xxxx Xxxxxxxxxx - Xxx 00, 0000
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INVESTMENT GUIDELINES
I. ELIGIBLE INVESTMENTS
A. EQUITY SECURITIES: Common stock, preferred stock, common
stock equivalents (units of beneficial interest), American
Depository Receipts, convertible preferred stocks, warrants,
and other rights.
B. CASH/CASH EQUIVALENTS: Fixed-income obligations with
maturity less than one year, registered money market mutual
funds within applicable limits, or short-term accounts or
securities managed by a custodian institution.
C. FIXED INCOME: Fixed income and convertible fixed income
securities with maturities greater than one year.
D. FINANCIAL FUTURES: Equity-index futures, but not to obtain
market leverage.
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
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U.S. Equity securities 65% 80-100% 100%
Non-U.S. equity securities 0% 0-10% 20%
Cash and cash equivalents 0% 0-15% 25%
Fixed income securities 0% 0-15% 25%
Convertible securities 0% 0-20% 35%
II. PROHIBITED PRACTICES AND SECURITIES
A. Short Sales
B. Options
C. Commodities (excluding financial futures).
D. Securities for which there is no established trading market.
VIA Fund Guidelines - May 20, 1999
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E. Margin purchases and other forms of borrowing; granting of
pledges or other security interests in assets of the Fund; use
of futures to obtain market leverage.
F. Securities issued by the subadvisers of the Fund or their
affiliates.
G. General partner interests.
H. Direct investments in oil, gas, or other mineral exploration or
development programs.
I. 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.
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 of
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 of stock of any issuer
M. Commingled funds; this does not preclude investment in
registered mutual funds up to 5% per fund. Investments in
registered mutual funds overall are limited to 10% of the
Fund's market value at the time of purchase.
N. Acquisition of securities that would cause exposure to
non-equity holdings to exceed 35% of the Fund's market value at
the time of purchase.
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 Equity Income
Fund pursuant to an established securities lending program conducted by
the Fund's custodian.
VIA Fund Guidelines - May 20, 1999
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EXHIBIT I
TO THE
STATEMENT OF INVESTMENT POLICIES AND GUIDELINES OF
THE EQUITY INCOME FUND
MARCH 1, 1999
The following standards will be used to measure the performance of the Equity
Income Fund:
A. BENCHMARKS
1. The performance benchmark for the Fund is the S&P/BARRA
VALUE INDEX. This benchmark is used to measure the Fund's
performance net of subadviser fees.
2. The Lipper Equity Income Fund Index, maintained by Lipper
Analytical Services, serves as the performance benchmark for
participant returns, net of all fees and expenses. In
assessing performance against this benchmark, it is taken
into consideration that Lipper Analytical Services may
change the composition of the Index.
3. A peer group benchmark for the Fund consists of mutual funds
with characteristics similar to the Equity Income Fund. The
peer group is used to measure the Fund's performance
relative to other funds with a similar investment approach.
The peer group benchmark measures Fund performance net of
all fees and expenses except for the plan administration
fee.
B. TIME HORIZON
The time horizons for performance measurement are one, three, and
five years.
One Year:
Performance relative to any benchmark established for the Fund can
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 factors that are not related to the
market, action may be appropriate.
XXX Xxxx Xxxxxxxxxx - Xxx 00, 0000
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Three and Five Years:
Performance of the Fund should track market and universe benchmarks more
closely as the evaluation period lenghtens. The ideal performance
objective for the Equity Income Fund is to exceed the returns of all
relevant benchmarks; however, shortfalls over various time periods are
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 Equity Income Fund may have investment characteristics which differ
from the general market, as measured by the Standard & Poor's 500 Index.
For the total Fund, these would include, but are not limited to:
CHARACTERISTIC RELATIVE TO S&P 500 INDEX
Beta Lower
Capitalization Somewhat Lower
Dividend Yield Higher
Hist. 5 year EPS Growth Lower
Price to Earnings Ratio Lower
Standard Deviation Lower
VIA Fund Guidelines - May 20, 1999
18
SCHEDULE B
VANTAGEPOINT INVESTMENT ADVISERS, LLC
EQUITY INCOME FUND
INVESTMENT GUIDELINES
FOR
SOUTHEASTERN ASSET MANAGEMENT INC.
DECEMBER 4, 2000
These Investment Guidelines refer to the portion of the Vantagepoint Equity
Income Fund managed by SOUTHEASTERN ASSET MANAGEMENT INC. Investment
Guidelines for the Fund are an integral part of these guidelines.
Southeastern Asset Management, Inc. follows a "Special Situation Value"
approach to security selection, focusing on undervalued companies whose stocks
are priced at significant discounts to their corporate worth. Screening
criteria and fundamental analysis lead to portfolio holdings that generate
current income, protect capital from significant loss (capital preservation),
and also allow for capital appreciation when value is recognized. The
portfolio is concentrated in 20 to 30 holdings and is normally fully invested
in equities at all times.
The Adviser must comply with the Fund Investment Guidelines (see Schedule A)
except where noted in the sections that follow: I. ELIGIBLE INVESTMENTS and
II. PROHIBITED PRACTICES AND SECURITIES.
I. ELIGIBLE INVESTMENTS
A. EQUITY SECURITIES: Common stock, preferred stock, common
stock equivalents (units of beneficial interest), American
Depository Receipts, convertible preferred stocks, warrants,
and other rights.
B. CASH/CASH EQUIVALENTS: Fixed income obligations with
maturities less than one year, or short-term accounts or
securities managed by the custodian institution.*
C. FIXED INCOME: Fixed income and convertible fixed income
securities with maturities greater than one year.
D. FINANCIAL FUTURES: Futures are not permitted.
XXX Xxxx Xxxxxxxxxx - Xxx 00, 0000
00
[*NOTE; THESE INSTRUCTIONS DIFFER FROM SCHEDULE A, INVESTMENT
GUIDELINES, SECTION I.D.]
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
------- ------------ -------
U. S. equity securities 65% 80%-100% 100%
Non-U.S. equity securities 0% 0-10% 20%**
(Defined as the security of a company headquartered outside the U.S.)
Cash and cash equivalents* 0% 0%-10% 20%
U.S. Fixed income securities* 0% 0%-10% 20%
[*NOTE: THESE INSTRUCTIONS DIFFER FROM SCHEDULE A, INVESTMENT GUIDELINES,
SECTION I.F.]
[** NON-U.S. SECURITIES THAT ARE NEITHER LISTED NOR TRADED IN THE U.S. CANNOT
EXCEED 5%]
II. PROHIBITED PRACTICES AND SECURITIES
A. Short sales.
B. Options.
C. Commodities.
D. Securities for which there is no established trading market.
E. Margin purchases and other forms of borrowing; granting of
pledges or other security interests in assets of the portfolio;
use of futures to obtain market leverage.
F. Securities offered by the Adviser or its affiliates.
G. General partner interests.
H. Direct investments in oil, gas, or other mineral exploration or
development programs.
XXX Xxxxxxx Xxxxxxxxxx - Xxx 00, 0000
00
X. 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.
J. Acquisition of securities that would cause exposure to a
single industry to exceed 25% of the portfolio at the time
of purchase.
K. In the absence of prior consent of VIA, acquisition of
securities of an issuer that would cause more than 10% of
the portfolio to be invested in such securities.
L. In the absence of prior consent of VIA, acquisition of more
than 5% of the outstanding stock of any issuer.
M. Commingled and registered mutual funds.
[*NOTE: THESE INSTRUCTIONS DIFFER FROM SCHEDULE A,
INVESTMENT GUIDELINES, SECTION II.J.]
Exceptions to the above listed eligible investments and prohibited
securities or practices may be permitted with prior consent from VIA.
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.
VIA Fund Guidelines - May 20, 1999
21
IV. PERFORMANCE BENCHMARK AND MONITORING CRITERIA
[Note: The standards outlined in this section are subject to review by
VIA as and when appropriate.]
A. PERFORMANCE BENCHMARKS
Two benchmarks are used to track the advisors relative
performance:
1. The LIPPER EQUITY INCOME INDEX is used to evaluate
performance relative to the average of similar mutual
funds.
2. The S&P/BARRA VALUE INDEX is used to measure performance
relative to a market benchmark of "value" stocks.
The Adviser is tracked over one-, three- and five-year periods
with the expectation that the Adviser will outperform the
benchmark (net of Adviser fees).
B. PEER GROUP
VIA will also compare investment performance to a peer group of
other managers with similar investment approaches.
VIA tracks the Adviser's net performance over one-, three- and
five-year periods with the expectation that the Adviser will
outperform the median return of the peer group for all periods.
VIA Adviser Guidelines - May 20, 1999
22
SCHEDULE C
VANTAGEPOINT INVESTMENT ADVISERS, LLC
VANTAGEPOINT EQUITY INCOME FUND
FEE SCHEDULE
FOR
SOUTHEASTERN ASSET MANAGEMENT, INC.
The Advisor's quarterly fee shall be calculated based on the average daily net
assets value of the assets under management as provided by the Custodian,
based on the following annual rate.
First $ 50 million 0.75 percent
Over $ 50 million 0.50 percent
