INVESTMENT SUBADVISORY AGREEMENT
This Investment Subadvisory Agreement is made as of October 11, 2013 (the “Effective Date”),
by and between Vantagepoint Investment Advisers LLC, a Delaware limited liability company
(hereafter “Client”), and Xxxxxxxx Investment Management North America Inc., a Delaware corporation
(hereafter “Subadviser”), and THE VANTAGEPOINT FUNDS, a Delaware statutory trust.
WHEREAS, The Vantagepoint Funds is a Delaware statutory trust registered as an open-end
management investment company under the Investment Company Act of 1940, as amended (the “1940
Act”);
WHEREAS, Client is party to certain Master Investment Advisory Agreements with The
Vantagepoint Funds (the “Master Agreements”) for management of the investment operations of The
Vantagepoint Funds including the establishment and operation of investment portfolios for The
Vantagepoint Funds (each a “Series”);
WHEREAS, subject to the receipt of such approvals by the Board of Directors of The
Vantagepoint Funds and its shareholders as may be required by law, the Master Agreements authorize
Client to enter into agreements on behalf of The Vantagepoint Funds with subadvisers under which
the subadvisers agree to perform all or any portion of the management and advisory duties with
respect to all or any portion of the Series of The Vantagepoint Funds;
WHEREAS, Client and Subadviser wish to enter into a subadvisory agreement pursuant to which
Subadviser will perform certain duties with respect to a portion of the assets of a Series of The
Vantagepoint Funds (the “Agreement”).
In consideration for the performance by Subadviser as investment subadviser of certain assets
held by The Vantagepoint Funds, Client authorizes Subadviser to manage certain of the securities
and other assets of The Vantagepoint Funds as follows:
1. ACCOUNT
The account with respect to which Subadviser shall perform its services shall consist of those
assets of the Vantagepoint Low Duration Bond Fund (the “Fund”), a separate Series of The
Vantagepoint Funds, which Client determines to assign to an account with Subadviser, together with
all income earned by those assets and all realized and unrealized capital appreciation related to
those assets (hereafter “Account”). From time to time, Client may, upon notice to Subadviser, make
additions to the Account and may, upon notice to Subadviser, make withdrawals from the Account. To
the extent that such withdrawals shall reduce the assets of the Account to zero, Subadviser shall
not be
entitled to any fees as set forth hereunder for the period of time for which no assets are held in
the Account, notwithstanding any termination provisions set forth in this Agreement.
(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 investment guidelines provided by Client, and the
policies and written investment objectives, policies, procedures and restrictions of the Fund
described in Section 4 below, Client hereby grants Subadviser complete, unlimited and unrestricted
discretion and authority to supervise and direct the investment of the Account and to select
portfolio investments with respect to the Account including the power to acquire (by purchase,
exchange, subscription or otherwise), to hold and to dispose (by sale, exchange or otherwise).
Subadviser will review with Client, upon the request of Client, any transactions it makes with
respect to the management of the Account.
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(d) Key Personnel. Subadviser agrees that the following key personnel will have primary
responsibility with respect to the investment management of the Account.
If these individuals are unable to devote sufficient time to maintain primary responsibility for
the Account or for whatever reason no longer have such responsibility, Subadviser must give Client
written advance notice, or, if Subadviser does not have advance knowledge of such inability, prompt
written notice within one (1) business day after Subadviser first learns of such inability, of the
name of the person designated by Subadviser to replace or supplement these individuals. In
addition, Subadviser shall give Client written notice of the replacement of any employee of
Subadviser who has direct supervisory responsibility for the key personnel or who has
responsibility for setting investment policy as soon as reasonably practicable.
| Key Personnel: | Xxxxxxx X. Xxxxxxxx | ||
| Xxxxxx X. Xxxxxx | |||
| Xxxxxxx X. Xxxxx | |||
| Xxxxxx X.X. Xxxxxxxx | |||
| Xxxx X. Xxxxxxxxxx | |||
| Xxxxx X. Xxxxxxx |
Subadviser accepts the appointment as an investment subadviser of the Fund and agrees to use
its best efforts and professional judgment to make investment decisions for the Account, and to
provide the other services required or requested of Subadviser under the provisions of this
Agreement.
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Statement” and together with the documents and items described in paragraph (a) of this Section 4,
“Fund Policies”)). The Registration Statement is hereby incorporated by reference and made a part
of this Agreement. Client agrees to provide Subadviser with copies of any amendments to the
Registration Statement that are applicable to the Account within five (5) business days after the
date on which such amendments or related filings are made with the SEC or other regulatory body.
Subadviser shall comply with any changes to the Fund’s investment objectives, guidelines,
restrictions or other matters due to such amendments provided that Subadviser has received actual
notice of such amendment.
(a) Custody Responsibilities. Client shall identify to Subadviser one or more custodians (the
“Custodian”) to hold the Account assets. The Custodian, as identified by Client, will be
responsible for the custody, receipt and delivery of securities and other assets of The
Vantagepoint Funds (including the Account), and Subadviser shall have no authority, responsibility
or obligation with respect to the custody, receipt or delivery of securities or other assets of The
Vantagepoint Funds (including the Account). In the event that any cash, securities or other assets
of The Vantagepoint Funds are delivered to Subadviser, it will promptly deliver the same over to
the Custodian, in the name of The Vantagepoint Funds, as permitted by applicable law. Client or
the Fund shall be responsible for all custodial arrangements, including the payment of all fees and
charges to Custodian. Subadviser shall not be responsible or liable for any act or omission of
Custodian.
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notice. Upon termination of this Agreement, Subadviser, at its expense, shall promptly, upon
demand, return to Client and the Fund all records that Client or the Fund reasonably requests.
Subadviser shall be entitled to retain originals or copies of records pursuant to the requirements
of applicable law.
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(f) Other Reports and Information on Request. Subadviser shall provide to Client promptly upon
reasonable request other reports or information relating to the Account or Subadviser.
(a) Selection of Broker-Dealers and other Market Intermediaries. Except to the extent
otherwise instructed in writing by Client (it being understood that Client, acting on behalf of the
Fund, may, in its absolute discretion and consistent with the requirements of the 1940 Act and
other applicable law, direct Fund portfolio transactions for which Subadviser is responsible to any
broker-dealer or market intermediary that Client may designate), Subadviser shall place all orders
for the purchase or sale of investments on behalf of the Account with broker-dealers or other
market intermediaries (i.e., foreign currency dealers and futures commission merchants) selected by
Subadviser, but not with a person affiliated with Subadviser, as the term “affiliated person” is
defined in the 1940 Act (an “Affiliate”), unless the transaction is in compliance with applicable
law and with the Fund Policies, copies of which shall be provided to Subadviser.
(b) Best Execution. In placing such orders, Subadviser will give primary consideration to
obtaining the most favorable price and efficient execution reasonably available under the
circumstances and in accordance with applicable law. In evaluating the terms available for
executing particular transactions for the Account and in selecting broker-dealers to execute such
transactions, Subadviser may consider, in addition to commission cost and execution capabilities,
relevant factors, such as the financial stability and reputation of broker-dealers and the
brokerage and research services (as those terms
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are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended (the “1934
Act”)) provided by such broker-dealers. Subadviser is authorized to pay a broker-dealer who
provides such brokerage and research services a commission for executing a transaction for the
Account which is in excess of the amount of commission another broker-dealer would have charged for
effecting that transaction (“Soft Dollars”) if Subadviser determines in good faith that such
commission is reasonable in relation to the value of the brokerage and research services provided
by such broker-dealer in discharging responsibilities with respect to the Account or to other
client accounts as to which it exercises investment discretion. Subadviser agrees that any and all
Soft Dollar arrangements or usage relevant to the Account will comply with applicable law.
(a) Fee Schedule. The compensation of Subadviser for its services under this Agreement shall
be calculated by Client and paid from the assets of the Fund in accordance with Schedule A hereto.
(b) For purposes of this section 8 and Schedule A, all payments due to Subadviser shall be
solely made from the assets of the Fund.
The Subadviser shall devote its best efforts and such time as it deems necessary to provide
prompt and expert service to Client and the Fund. The services of Subadviser to be provided
hereunder are not to be deemed exclusive and Subadviser
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shall be free to provide similar services for its own account or the accounts of other persons and
to receive compensation for such services. Client acknowledges that Subadviser or its Affiliates
or 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. Except as may otherwise be required under Subadviser’s
policies and procedures described in Section 11 below, Subadviser shall have no obligation to
acquire or dispose of a position in any investment pursuant to this Agreement solely 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.
The Subadviser shall promptly provide The Vantagepoint Funds’ Chief Compliance Officer
(“CCO”), upon request, copies of its policies and procedures for compliance by the Subadviser and
the Fund with the Federal Securities Laws as defined in Rule 38a-1 under the 1940 Act and promptly
provide the CCO with copies of any material changes to those policies and procedures. The
Subadviser shall fully cooperate with the CCO as to facilitate the CCO’s performance of his/her
responsibilities under Rule 38a-1 to review, evaluate and report to The Vantagepoint Funds’ Board
of Directors on the operation of the Subadviser’s compliance policies and procedures and shall
promptly report to the CCO any “Material Compliance Matter” as defined by Rule 38a-1(e)(2). At
least annually, the Subadviser shall provide a certification to the CCO to the effect that the
Subadviser has in place and has implemented policies and procedures that are reasonably designed to
ensure compliance by the Fund and the Subadviser with the Federal Securities Laws.
Subadviser hereby represents that it has adopted policies and procedures and a code of ethics
that meet the requirements of Rule 17j-1 under the 1940 Act, Section 204A of the Advisers Act and
Rule 204A-1 under the Advisers Act. Copies of such policies and procedures and code of ethics and
any changes or supplements thereto shall be delivered to Client and The Vantagepoint Funds, and any
material violation of such policies by personnel of Subadviser and the sanctions imposed in
response thereto and any issues arising under such policies shall be reported to Client and The
Vantagepoint Funds.
12. INSURANCE
At all times during the term of this Agreement, Client and Subadviser shall each
maintain, at its own cost and expense, professional liability insurance for errors, omissions and
negligent acts, in an amount and with such terms as are standard in the financial services industry
for an investment adviser of an investment company registered as such under the 1940 Act managing
the amount of aggregate assets managed by Client and Subadviser, respectively.
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13. LIABILITY
(a) In the absence of any willful misfeasance, bad faith, or gross negligence in the
performance of its duties or by reason of reckless disregard of its obligations and duties under
this Agreement, Subadviser shall not be liable to Client or The Vantagepoint Funds for honest
mistakes of judgment or for action or inaction taken in good faith for a purpose that Subadviser
reasonably believes to be in the best interests of the Fund. However, neither this provision nor
any other provision of this Agreement shall constitute a waiver or limitation of any rights which
Client or The Vantagepoint Funds may have under federal or state securities laws.
(b) Client shall indemnify and hold harmless Subadviser against any loss, liability, damages,
costs or expenses caused by: (i) the gross negligence, willful misfeasance, bad faith or fraud of
Client in the performance of its duties hereunder; (ii) Client’s violation of applicable law; or
(iii) Client’s breach of any term or provision in this Agreement.
(c) Subadviser shall indemnify and hold harmless Client against any loss, liability, damages,
costs or expenses caused by: (i) the gross negligence, willful misfeasance, bad faith or fraud of
Subadviser in the performance of its duties hereunder; (ii) Subadviser’s violation of applicable
law; or (iii) Subadviser’s breach of any term or provision in this Agreement.
(d) Subadviser shall indemnify and hold harmless The Vantagepoint Funds against any loss,
liability, damages, costs or expenses caused by: (i) the gross negligence, willful misfeasance, bad
faith or fraud of Subadviser in the performance of its duties hereunder; (ii) Subadviser’s
violation of applicable law; or (iii) Subadviser’s breach of any term or provision in this
Agreement.
14. TERM
This Agreement shall be in effect for an initial term beginning on the Effective Date and
ending on February 28, 2015. This Agreement may be renewed thereafter for successive periods, the
length of which shall be determined by the Board of Directors of The Vantagepoint Funds, provided
that such renewal is specifically approved at least annually by the Board of Directors of The
Vantagepoint Funds, including a majority of those members of the Board of The Vantagepoint Funds
who are not parties to the Agreement or “interested persons” of any party to the Agreement (as that
term is defined in the 1940 Act).
15. TERMINATION
This Agreement may be terminated by Subadviser, without the payment of any penalty,
immediately upon notice to The Vantagepoint Funds and to Client in the event of a material breach
of any provision thereof by The Vantagepoint Funds or Client if such breach shall not have been
cured within a twenty (20) day period after the Fund or
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Client (as applicable) receives written notice of such breach from Subadviser, or otherwise by
Subadviser upon sixty (60) days written notice to Client and The Vantagepoint Funds, or by Client
or The Vantagepoint Funds for any reason or no reason immediately upon written notice to
Subadviser. This Agreement shall automatically terminate (a) in the event of its assignment, as
provided in Section 20, (b) upon the termination of The Vantagepoint Funds, or (c) upon termination
of Client’s Master Investment Advisory Agreement with The Vantagepoint Funds. Any termination in
accordance with the terms of this Agreement shall not cause the payment of any penalty. Any such
termination shall not affect the status, obligations or liabilities of any party hereto to the
other party or parties. To the extent that the assets of the Account are zero, Subadviser shall
not be entitled to any fees as set forth hereunder for the period of time for which no assets are
held in the Account.
16. REPRESENTATIONS
(a)(i) Subadviser hereby represents to Client and The Vantagepoint Funds that Subadviser is
registered as an investment adviser under the Advisers Act and will continue to be registered for
so long as this Agreement remains in effect, 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.
(ii) Subadviser further represents that: (a) it is not prohibited by the 1940 Act or the
Advisers Act from performing the services contemplated by this Agreement; (b) in all material
respects, it is in compliance with and will continue to be in compliance with all applicable law
pertaining to the subject matter of this Agreement; (c) it will promptly notify Client and The
Vantagepoint Funds of the actual or pending occurrence of any event that would disqualify the
Subadviser from serving as an investment adviser of an investment company pursuant to Section 9(a)
of the 1940 Act or otherwise; (d) it will notify Client and The Vantagepoint Funds promptly of any
material fact respecting or relating to Subadviser that is necessary to be contained in the
Registration Statement to make it not misleading or of any statement contained therein respecting
or relating to Subadviser that becomes untrue or inaccurate in any material respect; and (e) there
is no pending, or to the best of its knowledge, threatened or contemplated action, suit or
proceeding before or by any court, governmental, administrative or self-regulatory body or
arbitration panel to which the Subadviser or any of its officers, directors, employees or
Affiliates is a party, or to which any of the assets of the Subadviser is subject, which reasonably
might be expected to (i) result in any material adverse change in the Subadviser’s condition
(financial or otherwise), business or prospects; (ii) affect adversely in any material respect any
of the Account’s assets; (iii) materially impair the Subadviser’s ability to discharge its
obligations under this Agreement, and the Subadviser has not received notice of an enforcement
investigation by the SEC or any state regarding U.S. federal or state securities laws, regulations
or rules.
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(iii) Subadviser acknowledges that the foregoing representations in Sections 16(a)(i) and (ii)
above shall be continuing and be deemed repeated at and as of
all times during the term of this Agreement. Further, if at any time during the term of this
Agreement, Subadviser discovers any fact or omission, or any event or change of circumstances
occurs or is pending, which would make the Subadviser’s representations in this Agreement
inaccurate or incomplete in any material respect, or which might render the Registration Statement
untrue or misleading in any material respect, the Subadviser will provide prompt written
notification within 5 business days (or sooner if practicable) to The Vantagepoint Funds and Client
of any such fact, omission, event or change of circumstances, and the facts related thereto.
(b) Client hereby confirms to Subadviser that it is registered as an investment adviser under
the Advisers Act, that it has full power and authority to enter into this Agreement and that the
execution of this Agreement on behalf of Client has been fully authorized and, upon execution and
delivery, this Agreement will be binding upon Client in accordance with its terms.
(c) The Vantagepoint Funds hereby confirms to Subadviser, and Subadviser hereby acknowledges,
that The Vantagepoint Funds is registered as an open-end investment company under the 1940 Act and
intends to be subject to taxation as a regulated investment company under Subchapter M and the
regulations thereunder of the Internal Revenue Code.
17. NOTICES
Notices or other notifications given or sent under or pursuant to this Agreement shall be in
writing and be deemed to have been given or sent if delivered to a party at its address listed
below in person, by registered mail with return receipt requested, or by electronic means the
receipt of which is confirmed by registered mail with return receipt requested. The addresses of
the parties are:
Client:
Vantagepoint Investment Advisers, LLC
Attention: Legal Department
c/o ICMA Retirement Corporation
000 Xxxxx Xxxxxxx Xxxxxx, XX, Xxxxx 000
Xxxxxxxxxx, X.X. 00000-0000
Fax: 000-000-0000
Attention: Legal Department
c/o ICMA Retirement Corporation
000 Xxxxx Xxxxxxx Xxxxxx, XX, Xxxxx 000
Xxxxxxxxxx, X.X. 00000-0000
Fax: 000-000-0000
The Vantagepoint Funds
Attention: Xxxxxx Xxxxxx, Fund Secretary
c/o ICMA Retirement Corporation
000 Xxxxx Xxxxxxx Xxxxxx, XX, Xxxxx 000
Xxxxxxxxxx, X.X. 00000-0000
Fax: 000-000-0000
Attention: Xxxxxx Xxxxxx, Fund Secretary
c/o ICMA Retirement Corporation
000 Xxxxx Xxxxxxx Xxxxxx, XX, Xxxxx 000
Xxxxxxxxxx, X.X. 00000-0000
Fax: 000-000-0000
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Subadviser:
Xxxxxxxx Investment Management North America Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxx
Fax: (000) 000-0000
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxx
Fax: (000) 000-0000
Each party may change its address by giving notice as herein required.
18. SOLE INSTRUMENT
This Agreement, along with any and all attachments hereto, 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.
No waiver of or amendment to 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. It is understood that certain material amendments of this Agreement may require
approval of the Fund’s Board of Directors or shareholders.
This Agreement shall automatically terminate in the event of its “assignment” as defined under
the 1940 Act or the Advisers Act and the rules thereunder as interpreted from time to time by the
SEC or its staff (an “Assignment”). In addition, Subadviser agrees to provide Client prompt
written advance notice of any event(s), transaction(s) or circumstance(s), whether actual, proposed
or expected, that is or are expected to result in an “Assignment” of the Agreement. The Subadviser
shall promptly reimburse the Fund for any and all costs and expenses incurred by the Fund, or its
officers, directors or employees, in connection with any actual, proposed or expected “Assignment”
of the Agreement (even if a proposed or expected “Assignment” ultimately does not take place).
21. COUNTERPARTS
This Agreement may be executed in counterparts each of which shall be deemed to be an original
and all of which, taken together, shall be deemed to constitute one and the same instrument.
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22. CHOICE OF LAW
This Agreement shall be governed by, and the rights of the parties arising hereunder construed
in accordance with, the laws of the State of Delaware without reference to principles of conflict
of laws. To the extent that the applicable laws of the State of Delaware conflict with the
applicable provisions of the 1940 Act, the latter shall control.
Any information about a party hereto that such party supplies to another party to
this Agreement, which is not otherwise in the public domain or previously known to the receiving
party, shall be regarded as confidential and held in the strictest confidence. Similarly, any
information about a party hereto that is generated or recorded by another party hereto pursuant to
this Agreement, which is not otherwise in the public domain, also shall be regarded as confidential
and held in the strictest confidence (such information, together with the information referenced in
the previous sentence, collectively, “Confidential Information”).
Confidential Information includes, but is not limited to: the records referenced in Section
6(a) hereof, and any other data, records or other information in any form regarding the securities
or other assets held or to be acquired by the Fund, the transactions in securities or other assets
effected or to be effected on behalf of the Fund, or financial information or any other information
relating to a party to this Agreement.
No party may use Confidential Information about another party, except solely: (i) for the
legitimate business purposes of the Fund for which the Confidential Information was provided,
generated or recorded; or (ii) as specifically agreed to in writing by the other party to which the
Confidential Information pertains.
No party may disclose to others Confidential Information about another party, except solely:
(i) as may be required by applicable law or compelled by judicial or regulatory authority having
competent jurisdiction over the party; or (ii) as specifically agreed to in writing by the other
party to which the Confidential Information pertains. Notwithstanding the foregoing, Client, The
Vantagepoint Funds and the Fund may disclose Confidential Information regarding the Subadviser to
each other or to a third party for the legitimate business purposes of the Fund for which the
Confidential Information was provided, generated or recorded.
Further, no party may trade in any securities issued by another party while in possession of
material non-public information about that party or such securities.
Lastly, the Subadviser may not consult with any other subadvisers of The Vantagepoint Funds
about transactions in securities or other assets of the Fund, except for purposes of complying with
the 1940 Act or SEC rules or regulations applicable to the Fund.
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Nothing in this Agreement shall be construed to prevent the Subadviser from lawfully giving
other persons investment advice about, or lawfully trading on their behalf in, the shares issued by
the Fund or securities or other assets held or to be acquired by the Fund.
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| Client | ||||
| Subadviser | ||||
| Vantagepoint Investment Advisers, LLC | Xxxxxxxx Investment Management North America Inc. | |||
by:
|
by: | |||
| /s/ Xxxxxx Xxxxxx | /s/ Xxxx X. Xxxxxxxx | |||
| Xxxxxx Xxxxxx, Assistant Secretary | Xxxx X. Xxxxxxxx | |||
| Chief Operating Officer | ||||
Approved by:
|
/s/ Xxxxx Xxxxxx | /s/ Xxxxxxx X. Xxxxx | ||
| Xxxxx Xxxxxx | Xxxxxxx X. Xxxxx | |||
| Chief Investment Officer | Authorized Signatory | |||
Fund
The Vantagepoint Funds, on behalf of the Vantagepoint Low Duration Bond Fund
by: |
||
/s/ Xxxxxx Xxxxxx |
||
Approved by:
|
/s/ Xxxxx Xxxxxx
|
|||
| Chief Investment Officer, Vantagepoint Investment Advisers, LLC |
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Schedule A
VANTAGEPOINT INVESTMENT ADVISERS, LLC
VANTAGEPOINT INVESTMENT ADVISERS, LLC
THE VANTAGEPOINT FUNDS
Fee Schedule
For
For
Xxxxxxxx Investment Management North America Inc.
The Subadviser’s quarterly fee shall be calculated based on the average daily net asset value of
the assets under the Subadviser’s management as provided by the Client or Custodian, at Client’s
discretion, based on the following annual rate.
0.250% for the first $130 million;
0.125% for the next $370 million;
0.100% for the next $500 million; and
0.080% for the balance.
0.125% for the next $370 million;
0.100% for the next $500 million; and
0.080% for the balance.
Fees are billed and paid quarterly in arrears.
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