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EXHIBIT (d) (24)
INVESTMENT SUBADVISORY AGREEMENT
This Investment Subadvisory Agreement is made as of the 1st day of
December, 2000, by and between VANTAGEPOINT INVESTMENT ADVISERS, LLC, a
Delaware limited liability company (hereafter "Client"), XXXXXX & RYGEL
INVESTMENT COUNSEL (hereafter "Subadviser"), and THE VANTAGEPOINT FUNDS, a
Delaware business trust, and is effective as of December 1, 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 Income Preservation
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 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
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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 Income Preservation 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: XXXXX XXXXXXXX; XXXX 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.
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4. INVESTMENT POLICIES
(a) Investment Objectives. Subject to the supervision of the
Fund's Board of Directors and the Client, the Subadviser shall direct the
investments of the Account in accordance with the Fund's investment objectives,
policies, and restrictions as provided in the Fund's Prospectus and Statement
of Additional Information as filed with the Securities and Exchange Commission
on Form N-1A ("Registration Statement"), as currently in effect and as amended
or supplemented from time to time, and such other limitations as the Fund or
Client may reasonably impose by written notice to the Subadviser or as set
forth in SCHEDULE A. Client shall give Subadviser copies of the Fund's
Prospectus and Statement of Additional Information, and any amendments or
supplements thereto, as soon a practicable after such documents become
available.
(b) Funds' Agreement and Declaration of Trust. The Subadviser
will adhere to all specific provisions relating to the investment of the
Account established in the Funds' Agreement and Declaration of Trust and
Registration Statement, both of which are hereby incorporated by reference and
made a part of this Agreement. The Client shall give written notice to the
Subadviser of any amendments to the Agreement and Declaration of Trust or
Registration Statement, which amendments, upon their receipt by the Subadviser,
shall be binding on the Subadviser.
(c) Investment Subadviser Guidelines. The Subadviser shall act in
accordance with the Fund's Prospectus and Statement 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.
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(b) Securities Transactions. Unless otherwise required by local
custom, all securities transactions for the Account will be consummated by
payment to or delivery by the Funds of cash or securities due to or from the
Account. The Subadviser will make all reasonable efforts to notify the
Custodian of all orders to brokers for the Account by 9:00 am EST on the day
following the trade date and will affirm the trade within the close of business
one (1) business day after the trade date (T+1).
(c) Tri-Party Agreement. The Subadviser is authorized to enter
into Tri-Party Repurchase Agreements and sign the standard PSA tri-party
agreement (the "Tri-Party Agreement") on behalf of the Client and the
subcustodian thereunder is authorized to act as a subcustodian for the
Account's assets involved in any tri-party repurchase agreement pursuant to
such Tri-Party Agreement.
6. RECORD KEEPING AND REPORTING
(a) Records. Subadviser will maintain proper and complete records
relating to the furnishing of services under this Agreement, including records
with respect to the acquisition, holding and disposition of securities for
Client that are required of an investment adviser to a registered investment
company pursuant to the 1940 Act and the Investment Advisers Act of 1940, and
the rules thereunder, and in accordance with such reasonable instructions as
shall be provided to Subadviser by Client from time to time. All records
maintained pursuant to this Agreement shall be subject to examination by Client
and by persons authorized by it during normal business hours upon reasonable
notice. Except as expressly authorized in this Agreement or as required by
applicable law, regulation or order of court or as directed by other party in
writing, Subadviser and Client shall keep confidential the records and other
information obtained by reason of this Agreement. Upon termination of this
Agreement, Subadviser shall promptly, upon demand, return to Client all records
Client reasonably believes are necessary in order to discharge its
responsibilities to the Funds. Subadviser shall be entitled to retain originals
or copies of records pursuant to the requirements of applicable laws or
regulations.
(b) Reconciliations. Subadviser shall reconcile security and cash
positions, and market values on a monthly basis to the Custodian's records and
report discrepancies to the Client by ten (10) business days after the end of
the month.
(c) Loss Reimbursement. Subadviser shall reimburse the Account
for any material error to the Fund's net asset value caused by Subadviser's
breach of its standard of care set forth in Section 12 that is a direct cause
of a delay in the accurate 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 Income Preservation 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 amount of commission another broker or dealer would have charged for
effecting that
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transaction if Subadviser determines in good faith that such commission is
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer in discharging responsibilities with respect
to the Account or to other client accounts as to which it exercises investment
discretion.
(c) Bunching Orders. Client agrees that Subadviser may aggregate
sales and purchase orders of Account with similar orders being made
simultaneously for other accounts managed by Subadviser, if in Subadviser's
reasonable judgment such aggregation shall result in an overall economic
benefit or more efficient execution to the Account taking into consideration
the advantageous selling or purchase price, brokerage commission and other
expenses. Client acknowledges that the determination of such economic benefit
to the Fund by Subadviser represents Subadviser's evaluation that the Account
is benefited by relatively better purchase or sales prices, lower commission
expenses and beneficial timing of transactions or a combination of these and
other factors. In such event, allocation of the securities so purchased or
sold, as well as expenses incurred in the transaction, will be made by the
Subadviser in a manner the Subadviser considers to be most equitable and
consistent with its fiduciary obligations to the Fund and to its other clients.
8. INVESTMENT FEES
(a) Fee Schedule. The compensation of the Subadviser for its
services under this Agreement shall be calculated and paid by the Client from
the assets of the Account in accordance with SCHEDULE C hereto.
(b) For purposes of this section 8 and Schedule C, all payments
due to Subadviser shall be solely made from the assets of the Vantagepoint
Income Preservation 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 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
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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 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 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.
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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.
16. NOTICES
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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:
Xxxxxx and Rygel Investment Counsel
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 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 Agreement. It is understood that certain
material amendments may require approval of the Funds shareholders.
19. ASSIGNMENT AND CHANGE IN CONTROL
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This Agreement shall automatically terminate in the event of its
assignment. Subadviser agrees to provide immediate written notice in the event
of a change in control. Such a change in control will entitle, but not require,
the Client to terminate the Agreement immediately or upon notice.
20. COUNTERPARTS
This Agreement may be executed in counterparts each of which shall be
deemed to be an original and all of which, taken together, shall be deemed to
constitute one and the same instrument.
21. CHOICE OF LAW
This Agreement shall be governed by, and the rights of the parties
arising hereunder construed in accordance with, the laws of the State of
Delaware without reference to principles of conflict of laws and the 1940 Act.
To the extent that the applicable laws of the State of Delaware conflict with
the applicable provisions of the 1940 Act, the latter shall control.
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IN WITNESS WHEREOF, THE PARTIES HERETO EXECUTE THIS AGREEMENT ON DECEMBER 1,
2000, and make it effective on the date set forth.
CLIENT SUBADVISER
Vantagepoint Xxxxxx & Rygel Investment Counsel
Investment Advisers, LLC
by: by:
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(signature) (signature)
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Xxxxxx Xxxxxx, President (name, title)
Date: Date:
FUNDS
The Vantagepoint Funds
by:
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Xxxxxx Xxxxxx, President
Date:
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