INVESTMENT SUBADVISORY AGREEMENT
INVESTMENT SUBADVISORY AGREEMENT
This Investment Subadvisory Agreement is made as of
May 23, 2005, by
and between Vantagepoint Investment
Advisers, LLC, a Delaware limited liability company (hereafter "Client"),
and Xxxxxxx Xxxxx Asset Management,
L.P., a Delaware partnership (hereafter “Subadviser"), and THE VANTAGEPOINT FUNDS, a Delaware
business 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 a Master Investment Advisory Agreement with The Vantagepoint Funds for management of the investment operations of The Vantagepoint Funds including the establishment and operation of investment portfolios for The Vantagepoint Funds and entering into contracts with subadvisers to assist in managing the investment of The Vantagepoint Funds’ property;
WHEREAS, Client and Subadviser wish to enter into a subadvisory agreement (“Agreement”) pursuant to which Subadviser will provide such assistance to Client.
AGREEMENTS:
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
2. APPOINTMENT STATUS, POWERS OF CLIENT AND 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 Fund’s investment guidelines and policies and the written investment objectives, policies, procedures and restrictions of the Fund described in Section 5 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 securities 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 investment of the Account. Client agrees to provide Subadviser with copies of any amendments to the written investment objectives, policies, procedures and restrictions of the Fund within a reasonable time period from the date on which such amendments or related filings are made with the Securities and Exchange Commission (the “SEC”) or other regulatory body.
(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 Client or The Vantagepoint Funds in any way or otherwise to be an agent of Client or the Fund. The activities of Client and Subadviser in managing the assets of the Fund shall in all instances be conducted subject to the supervision and direction of the Board of Directors of The Vantagepoint Funds and in compliance with applicable laws and rules.
(d) Key Personnel. Subadviser agrees that the following key personnel will have primary responsibility with respect to the investment management of the Account. If the individual isunable to devote sufficient time to maintain primary responsibility for the Account, Subadviser must give Client written advance notice, or, if Subadviser does not have advance knowledge of such inability, prompt written notice after Subadviser first learns of such inability, of the name of the person designated by Subadviser to replace or supplement the individual. 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.
3. Duties of Client. Client has furnished Subadviser with copies of each of the following documents and will promptly furnish to Subadviser at its principal office all future amendments and supplements to such documents, if any:
(a) The Declaration of Trust of the Fund, as filed with the State of Delaware, as in effect on the date hereof and as amended from time to time (“Declaration of Trust);
(b) The by-laws of the Fund as in effect on the date hereof and as amended from time to time (“By-Laws”);
(c) Certified resolutions of the Board of Directors of The Vantagepoint Funds (“Board”) authorizing the appointment of Client and Subadviser and approving the form of the Master Investment Advisory Agreement and this Agreement;
(d) The Fund’s Registration Statement under the 1940 Act and the 1933 Act on Form N-1A, as filed with the SEC relating to the Fund and its shares and all amendments thereto (“Registration Statement”);
(e) The Notification of Registration of the Fund under the 1940 Act on Form N-8A as filed with the SEC and any amendments thereto;
(f) The Fund’s most recent prospectus;
(g) Copies of reports made by the Fund to its shareholders; and
Client shall furnish Subadviser with any further documents, materials or information that Subadviser may reasonably request to enable it to perform its duties pursuant to this Agreement.
<![if !supportLists]>(a) <![endif]>Investment Objectives and Restrictions. Subject to the supervision of The Vantagepoint Funds’ Board of Directors and Client, Subadviser shall manage the assets and direct the investments of the Fund held in the Account in accordance with The Vantagepoint Funds’ prospectus and statement of additional information, with the written investment objectives, policies, procedures, guidelines, restrictions and liquidity requirements of The Vantagepoint Funds and the Fund, with The Vantagepoint Funds’ compliance policies, guidelines and procedures and with any additional investment guidelines and policies that may be communicated, from time to time, by the Client to the Subadviser, all as they may be restated or modified from time to time by Client or The Vantagepoint Funds. Client retains the right, on written notice to Subadviser and without amending this Agreement, to modify any such objectives, policies, procedures, guidelines, restrictions, or requirements in any manner and at any time as may be allowed pursuant to the 1940 Act and consistent with the terms of the Master Investment Advisory Agreement with The Vantagepoint Funds.
6. CUSTODY, DELIVERY, RECEIPT OF SECURITIES
(a) Custody Responsibilities. Client shall designate one or more custodians (the “Custodian”) to hold the Account assets. The Custodian, as designated 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 or securities 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. Client 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.
7. RECORD KEEPING AND REPORTING
(e) Reports. Subadviser shall furnish Client and the Board of Directors of The Vantagepoint Funds such periodic and special reports and non-proprietary or non-confidential information as shall be reasonably necessary to evaluate the terms of any subadvisory agreement between Client and Subadviser with respect to the assets of the Fund including but not limited to: (i) a quarterly report and attestation to the Board of Directors of The Vantagepoint Funds regarding activities and practices relating to transactions entered into in accordance with Rules 10f-3, 17a-7, 17e-1 under the 1940 Act, the purchase or holding of any Rule 144(a) securities or any other technically restricted and/or potentially illiquid securities in the Account, any soft dollar transactions entered into by the Subadviser, and whether the Subadviser violated the restrictions imposed on it by the Fund’s prospectus and statement of additional information; (ii) information relating to the use of brokers; and (iii) information relating to regulatory and/or law enforcement inquiries or actions.
8. PURCHASE AND SALE OF SECURITIES
<![if !supportLists]>(a) <![endif]>Selection of Brokers and Dealers. 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 laws and rules, direct Fund portfolio transactions for which Subadviser is responsible to any broker-dealer that Client may designate), Subadviser shall place all orders for the purchase or sale of securities on behalf of the Account with brokers or dealers selected by Subadviser, but not with a person affiliated with Subadviser, as the term “affiliated person” is defined in the 1940 Act (hereafter an "Affiliate"), unless the transaction is in compliance with Rules 17e-1 or 10f-3 under the 1940 Act or other applicable rules and with The Vantagepoint Funds’ policies and procedures thereunder, copies of which shall be provided to Subadviser. Subadviser will make reasonable efforts to ensure that brokers and/or dealers perform their obligations to the Account, provided, however, that Subadviser will not be responsible or liable for any act or omission of any broker and/or dealer.
(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, the financial stability and reputation of broker-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 such broker-dealers. Subadviser is authorized to pay a broker-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-dealer would have charged for effecting that transaction if Subadviser determines in good faith that such commission is reasonable in relation to the value of the brokerage and research services provided by such broker-dealer in discharging responsibilities with respect to the Account or to other client accounts as to which it exercises investment discretion.
(b) For purposes of this section 9 and Schedule A, all payments due to Subadviser shall be solely made from the assets of the Fund, a portfolio of The Vantagepoint Funds.
10. BEST EFFORTS; NON-EXCLUSIVITY OF SERVICES
11. COMPLIANCE POLICIES AND PROCEDURES
12. XXXXXXX XXXXXXX POLICIES AND CODE OF ETHICS
13. INSURANCE
14. 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.
15. TERM
16. 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 notice of such breach, 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 22, (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.
17. REPRESENTATIONS
Subadviser hereby confirms to Client and The Vantagepoint Funds that Subadviser is registered as an investment adviser under the Advisers Act, 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.
The Fund and the Client each represent, warrant, and agree, with respect to themselves, as follows:
A. Client (i) is registered with the Securities and Exchange Commission under the Advisers Act and will continue to be so registered for so long as this Agreement remains in effect; (ii) is not prohibited by the 1940 Act or the Advisers Act from performing the services contemplated by this Agreement; (iii) has met, and will continue to seek to meet for so long as this Agreement remains in effect, any other applicable federal or state requirements, or the applicable requirements of any regulatory or industry self-regulatory agency, necessary to be met in order to perform the services contemplated by this Agreement, and (iv) will immediately notify Subadviser of the occurrence of any event that would disqualify Client from serving as an investment adviser to an investment company pursuant to Section 9(a) of the 1940 Act or otherwise.
B. The Fund and the Client each agree that the Subadviser shall have no responsibility or liability arising out of any non-compliance by the Fund or the Adviser with anti-money laundering regulations. The Fund represents and warrants that it has implemented an anti-money laundering program and a customer identification program (“CIP”) that each comply with the requirements of applicable law, including the Bank Secrecy Act and U.S.A. PATRIOT Act of 2001 and the regulations promulgated thereunder.
C. The Vantagepoint Funds hereby confirm to Subadviser, and 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 thereunder of the Internal Revenue Code.
D. The Fund has policies and procedures designed to detect and deter disruptive trading practices, including “market timing".
18. Use of Marks
It is understood that the name “Xxxxxxx, Xxxxx & Co.” or “Xxxxxxx Sachs” or any derivative thereof, and any trade name, trademark, trade device, service xxxx, symbol or logo associated with those names, are the valuable property of the Subadviser or its affiliates and that the Client has the right to use to such name (or derivative or logo), in offering materials or promotional or sales-related materials of the Fund, only with the prior written approval of the Subadviser, such approval not to be unreasonably withheld, and only during the term of this Agreement. Notwithstanding the foregoing, the Subadviser’s approval is not required when (i) previously approved materials are re-issued with minor modifications, (ii) the Client and Subadviser identify materials which they jointly determine do not require the Subadviser’s approval and (iii) used as required to be disclosed in the registration statement of the Fund. Upon termination of this Agreement, the Fund and the Client shall forthwith cease to use such name (or derivative or logo). This section will survive any termination of this Agreement.
19. 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 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 and Funds:
The Vantagepoint Funds
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
Fax: 000-000-0000
Subadviser:
Xxxxxxx Xxxxx Asset Management, L.P.
00 Xxx Xxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx
Each party may change its address by giving notice as herein required.
20. 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.
21. 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 Fund’s shareholders.
22. ASSIGNMENT OR CHANGE OF CONTROL
This Agreement shall automatically terminate in the event of its assignment as defined under the 1940 Act. In addition, Subadviser agrees to provide Client immediate written notice in the event of any actual or planned change in control, within the meaning of the Advisers Act, of Subadviser.
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.
24. 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.
25. CONFIDENTIAL INFORMATION
Any information or recommendations supplied by any party to this Agreement, which are not otherwise in the public domain or previously known to another party in connection with the performance of obligations hereunder, including Fund portfolio holdings, Fund portfolio securities transactions, financial information or any other information relating to a party to this Agreement, are to be regarded as confidential (“Confidential Information”) and held in the strictest confidence. No party may use or disclose to others Confidential Information about another party, except solely for the legitimate business purposes of the Fund for which the Confidential Information was provided; as may be required by applicable law or rule or compelled by judicial or regulatory authority of competent jurisdiction over the party; or as specifically agreed to in writing by the other party. Further, no party may trade in any securities issued by a party while in possession of non-public information about that party. Lastly, Subadviser may not consult with any other Fund subadvisers about Fund portfolio securities transactions, except for purposes of complying with the 1940 Act or SEC rules or regulations applicable to the Fund. Nothing in this Agreement shall be construed to prevent Subadviser from lawfully giving other entities investment advice about, or trading on their behalf in, the securities of the Fund.
IN
WITNESS WHEREOF, THE PARTIES HERETO EXECUTE THIS AGREEMENT ON
May 23, 2005
and make it effective on the date first set forth at the beginning of this
Agreement.
Client Subadviser
Vantagepoint Investment Advisers, LLC Xxxxxxx Xxxxx Asset Management, L.P.
by: _____________________________ by: _____________________________
Xxxx X. Xxxxxxxxx, Secretary Name:
Title:
The
Vantagepoint Funds, on behalf of
the Growth Fund
by: _____________________________
Xxxx X. Xxxxxxxxx, Secretary
VANTAGEPOINT INVESTMENT ADVISERS, LLC
THE VANTAGEPOINT FUNDS
Fee Schedule
For
XXXXXXX SACHS ASSET MANAGEMENT, L.P.
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.
0.30% for the first $50 million in assets
0.23% for the next $100 million in assets
0.20% for assets over $150 million