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EXHIBIT (d)(8)
INVESTMENT ADVISORY AGREEMENT
This Investment Advisory Agreement is made as of the 1st day of March,
1999 by and between VANTAGEPOINT INVESTMENT ADVISERS, LLC, a Delaware limited
liability company (hereafter "Client"), and BARCLAYS GLOBAL FUND ADVISERS, at 00
Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 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 Vantagepoint Growth Fund, 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
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unrestricted discretion and authority to select portfolio securities with
respect to the Account including the power to acquire (by purchase, exchange,
subscription or otherwise), to hold and dispose (by sale, exchange or
otherwise). The Adviser will consult with Client, upon the request of the
Client, concerning any transactions it makes with respect to the investment of
the Account.
(b) Limitation on Authority. Except as expressly authorized herein
or hereafter from time to time, Adviser shall for all purposes be deemed an
independent contractor and shall have no authority to act for or to represent
the Client or the Funds in any way or otherwise to be an agent of the Client or
the Funds.
(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.
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.
(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-lA ("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 use act in
accordance with the specific statement of Investment Adviser Guidelines,
SCHEDULE B, as
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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 make reasonable efforts to 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
(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
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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.
(c) Loss Reimbursement. Adviser shall reimburse the Account for any
loss caused by Adviser's breach of the standard of care set forth in Section 12
that causes delay in the accurate daily pricing of the Fund(s), but Adviser
shall not be responsible for the actions of other service providers, including
broker-dealers, and it is understood that Adviser is not responsible for daily
pricing of the Fund.
(d) Monthly Reports. The Adviser shall also use best efforts to
provide, in writing, preliminary performance numbers and a brief explanation of
these results within a mutually agreeable time period after the end of each
Calendar Month. The requested format will be as mutually agreed by Adviser and
Client.
(f) Reports on Request. Adviser shall make reasonable efforts to
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
(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
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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.
(b) Fee Computation. The Adviser's fee for each calendar quarter
shall be calculated as set forth 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,
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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 who provide services to the Fund shall be
reported to the Client.
11. INSURANCE
At all times during the term of this Agreement, Adviser shall maintain,
through its parent or otherwise, 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 managed by Adviser for
Client and for the Adviser's other clients.
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 gross negligence, bad faith 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 of 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
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the Fund's 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
60 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.
(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 tems.
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:
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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:
Barclays Global Fund Advisers
00 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxxx
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 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 a change in control. Such an change in control will entitle, but not
require, the Client to terminate the Agreement immediately or upon notice.
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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 2000
Adviser represents that it is taking all commercially reasonable steps
to ensure that its ability to provide services under this Agreement will not
be affected by the inability of any information technology product it uses to
process data prior to, during, or after the calendar Year 2000 A.D.
IN WITNESS WHEREOF, THE PARTIES HERETO EXECUTE THIS AGREEMENT ON March 1, 1999
and make it effective on the date set forth.
CLIENT ADVISER
Vantagepoint Barclays Global Fund Advisers
Investment Advisers, LLC
by: by:
/S/ XXXXXX XXXXXX /S/ XXXXXX X. XXXXX
------------------------- -------------------------
(Signature) (Signature)
Xxxxxx X. Xxxxx
Managing Director
------------------------- ------------------------- Xxxxx Xxxxxx
Xxxxxx Xxxxxx, President (name, title) Principal
Date: Date:
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ADDENDUM DATED March 1 1999 TO THE
INVESTMENT ADVISORY AGREEMENT DATED March 1 1999
This addendum modifies and forms a part of the Investment Advisory Agreement
(the "Agreement") dated March 1 1999, between Vantagepoint Investment Advisers,
LLC, a Delaware corporation ("Client"), and Barclays Global Fund 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 Overseas Equity Index 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 Change in Control), and 22 (Year 2000) 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."
11. Section 5(b) is deleted.
12. Section 7(a) is amended by deleting the phrase "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 sees fit),".
13. A new Section 23 is added to read as follows:
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"Section 23. Suspension of Performance. Neither Client nor Adviser shall
bear responsibility for any losses arising out of any delay in or interruptions
of their respective performance of their obligations under this Agreement due to
any act of God, act of governmental authority, act of the public enemy or due to
war, the outbreak or escalation of hostilities, riot, flood, civil commotion,
insurrection, labor difficulty, including without iimitation, any strike, or
other work stoppage or slow down, severe or adverse weather conditions,
communications line failure, or other similar cause beyond the reasonable
control of the party so affected.
14. A new Section 24 is added to read as follows:
"Section 24. Futures and Options. The Adviser's investment authority
shall include the authority to purchase, sell, cover open positions, and
generally to deal in financial futures contracts and options thereon.
The Adviser will: (i) open and maintain brokerage accounts for financial futures
and options (such account hereinafter referred to as "Brokerage Accounts") on
behalf of and in the name of the Fund; and (ii) execute for and on behalf of the
Brokerage Accounts, standard customer agreements with a broker or brokers. The
Adviser may, using such of the securities and other property in the Brokerage
Accounts as the Adviser deems necessary or desirable, direct the custodian to
deposit on behalf of the Fund, original and maintenance brokerage deposits and
otherwise direct payments of cash, cash equivalents and securities and other
property into such brokerage accounts and to such brokers as the Adviser deems
desirable or appropriate.
PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION (THE
"COMMISSION") IN CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE CLIENTS, THIS
BROCHURE OR ACCOUNT DOCUMENT IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED WITH
THE COMMISSION. THE COMMISSION DOES NOT PASS UPON THE MERITS OF PARTICIPATING IN
A TRADING PROGRAM OR UPON THE ADEQUACY OR ACCURACY OF COMMODITY TRADING ADVISOR
DISCLOSURE. CONSEQUENTLY, THE COMMISSION HAS NOT REVIEWED OR APPROVED THIS
TRADING PROGRAM OR THIS BROCHURE OR ACCOUNT DOCUMENT.
The Fund represents and warrants that it is a "qualified eligible client" within
the meaning of CFTC Regulations Section 4.7 and, as such, consents to treat the
Fund in accordance with the exemption in CFTC Regulations Section 4.7(b).
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SCHEDULE A
THE VANTAGEPOINT FUNDS
GROWTH 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 Growth
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 Advisers
to handle the day-to-day investment of assets assigned to them.
I. GENERAL DESCRIPTION AND GOALS
The Growth Fund seeks long-term growth of capital by investing primarily
in common stocks with above average growth potential. Dividend income is
incidental to the overall growth objective.
II. STRUCTURE
The assets of the Growth Fund shall be managed by two or more Advisers.
The Advisers may be retained to manage separate accounts under
discretionary investment advisory contracts. Each Adviser will be
selected for its individual investment management expertise and each
will operate independently of the others. Each Adviser 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 Adviser 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. Advisers 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.
III. INVESTMENT STRATEGY
VIA shall select Advisers 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 Adviser's portfolio.
XXX Xxxx Xxxxxxxxxx - Xxxxx 0, 0000
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Investment strategies employed by the Advisers included in the Growth
Fund may include:
- equity securities of U.S. issuers including small and
micro-capitalization growth stocks,
- securities issued by companies that are "distressed" or "out of
favor",
- securities issued by foreign companies including companies
located in or doing business in emerging markets,
- commodities,
- securities of companies that fluctuate with the value of
commodities such as precious metals,
- short selling,
- purchasing and writing options,
- futures contracts, and
- leverage.
Certain of the above strategies are not permitted or their use is
limited under the Investment Guidelines for the individual Advisers.
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 Adviser 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 - Xxxxx 0, 0000
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INVESTMENT GUIDELINES
I. ELIGIBLE INVESTMENTS
A. EQUITY SECURITIES: U.S. and non-U.S. common stock (including
shares of closed-end funds), 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, short term accounts managed by a custodian
institution, or the Retirement Corporation Sweep Account.
C. FIXED INCOME: Fixed income and convertible fixed income
securities.
D. FINANCIAL FUTURES: Equity index 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
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Equity securities 50% 80-100% 100%
Cash and cash equivalents 0% 0-20% 50%
Fixed income securities 0% 0-5% 10%
II. PROHIBITED PRACTICES AND SECURITIES
A. Securities for which there is no established trading market.
B. Securities issued by the Advisers of the Fund or their
affiliates.
C. General partner interests.
D. Direct investments in oil, gas, or other mineral exploration or
development programs.
E. 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.
XXX Xxxx Xxxxxxxxxx - Xxxxx 0, 0000
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X. Commingled funds; this does not preclude investment in mutual
funds up to 10% of the Fund's market value at the time of
purchase.
G. 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.
H. 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.
I. 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.
J. 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 Growth Fund
pursuant to an established securities lending program conducted by the
Fund's custodian.
XXX Xxxx Xxxxxxxxxx - Xxxxx 0, 0000
17
SCHEDULE B
VANTAGEPOINT INVESTMENT ADVISERS, LLC
GROWTH FUND
INVESTMENT GUIDELINES
FOR
BARCLAYS GLOBAL FUND ADVISORS
MARCH 1, 1999
Barclays Global Fund Advisors invests in a statistically selected sample of
equity securities that are included in the Standard & Poor's/BARRA MidCap Growth
Index. The capitalization-weighted investment characteristics of the Fund will
approximate those of the Index and Fund performance will be highly correlated
with that of the Index. Using cost-effective strategies, the Fund is expected to
provide performance that tracks that of the Index within acceptably small
period-to-period variances, both positive and negative.
I. ELIGIBLE INVESTMENTS
A. EQUITY SECURITIES: Common stock of companies included in the
Standard & Poor's/BARRA MidCap Growth Index.
B. CASH/CASH EQUIVALENTS: U.S. Treasury obligations with maturities
less than one year; short term accounts or securities managed by
the custodian institution.
C. OTHER INVESTMENTS: Securities index futures.
D. ELIGIBLE INVESTMENT LIMITS: The Fund will be fully invested at
all times in a combination of equity securities and equity index
futures contracts except for a cash balance maintained to fund
redemption requests.
II. PROHIBITED PRACTICES AND SECURITIES
A. Short sales.
B. Options.
C. Commodities except for security index futures contracts.
D. Securities for which there is no established trading market.
VIA Adviser Guidelines - March 1, 1999
18
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.
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 of an issuer that would cause more
than 5% of the portfolio at the time of purchase to be invested
in such securities.
K. Acquisition of more than 5% of the outstanding stock of an
issuer.
L. Acquisition of securities that would cause exposure to a single
industry to exceed 25% of the portfolio at the time of purchase.
M. Commingled and registered mutual funds.
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.
IV. PERFORMANCE BENCHMARK AND MONITORING CRITERIA
The standards outlined in this section are subject to review by VIA as
and when appropriate.
A. PERFORMANCE BENCHMARK
The performance of the Fund will be measured gross of fees
against the STANDARD & POOR'S/BARRA MIDCAP GROWTH INDEX.
Performance should track that of the Index within acceptably
small period-to-period variances, both positive and negative.
VIA Adviser Guidelines - March 1, 1999
19
SCHEDULE C
VANTAGEPOINT INVESTMENT ADVISERS, LLC
FEE SCHEDULE
FOR
BARCLAYS GLOBAL FUND 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.
Growth Fund
$500 million 0.04 percent
Next $500 million 0.02 percent
Over $1,000 million 0.01 percent
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
VIA Fee Schedule - March 1, 1999
20
EXHIBIT I
TO THE
STATEMENT OF INVESTMENT POLICIES AND GUIDELINES OF
THE GROWTH FUND
MARCH 1, 1999
The following standards will be used to measure the performance of the Growth
Fund:
A. BENCHMARKS
1. The performance benchmarks for the Growth Fund are the STANDARD
& POOR's MIDCAP 400 INDEX and STANDARD & POOR's/BARRA MIDCAP
GROWTH INDEX. These benchmarks will be used to measure the
Fund's performance net of Adviser fees.
2. A peer group benchmark for the Growth Fund will consist of
mutual funds with characteristics similar to the Growth 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 the Retirement Corporation plan
administration fee.
3. The Lipper Growth 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 Growth Fund
will vary over one year periods and rather wide performance 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.
Three and Five Years:
Performance of the Growth Fund should track market and universe
benchmarks more closely as the evaluation period lengthens. The ideal
performance objective for the Growth 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
XXX Xxxx Xxxxxxxxxx - Xxxxx 0, 0000
00
single benchmark over an extended period may be acceptable, particularly
if other benchmarks have been exceeded.
C. INVESTMENT CHARACTERISTICS
The Growth 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 Higher
Capitalization Lower
Dividend Yield Lower
Hist. 5 year EPS Growth Higher
Price to Earnings Ratio Higher
Standard Deviation Higher
VIA Fund Guidelines - March 1, 1999
22
SCHEDULE C
VANTAGEPOINT INVESTMENT ADVISERS, LLC
FEE SCHEDULE
FOR
BARCLAYS GLOBAL FUND ADVISOR
The Advisor's quarterly fee shall be calculated based on the average daily net
assets of the assets under management as provided by the Custodian, based on the
following annual rate.
First $1 billion 0.015 percent
Over $1 billion 0.010 percent
Effective October 1, 2000
23
---------------------------------
XXXXXX XXXXXX
Telephone 000 000 0000
Facsimile 000 000 0000
Group Facsimile 000 000 0000
xxxxxx.xxxxxx@xxxxxxxxxxxxxx.xxx
-------------------------
BARCLAYS GLOBAL INVESTORS
24
AMENDMENT TO SUBADVISORY AGREEMENT
The subadvisory agreement between The Vantagepoint Funds, Vantagepoint
Investment Advisers and Barclays Global Fund Advisors dated March 1, 1999 is
hereby amended by replacing Schedule C to the agreement with the attached
Schedule C.
CLIENT SUBADVISER
Vantagepoint Investment Advisers, LLC Barclays Global Fund Advisors
by: by:
/s/ XXXXXX XXXXXX /s/ XXXXXX X. XXXX
------------------------------ ---------------------------------
(Signature) (Signature)
Xxxxxx X. Xxxx, Principal
------------------------------ ---------------------------------
Xxxxxx Xxxxxx, President (Name, Title)
Date: 10-1-2000 Date: 11/9/00
by:
/s/ XXXXXXX XXXXXX
---------------------------------
(Signature)
Xxxxxxx Xxxxxx, Managing Director
---------------------------------
(Name, Title)
Date: 11/13/00
25
SCHEDULE C
VANTAGEPOINT INVESTMENT ADVISERS, LLC
FEE SCHEDULE
FOR
BARCLAYS GLOBAL FUND ADVISORS
The Advisor's quarterly fee shall be calculated based on the average daily net
assets of the assets under management as provided by the Custodian, based on the
following annual rate.
First $1 billion 0.015 percent
over $1 billion 0.010 percent
Effective October 1, 2000
