Money Manager Agreement
This Agreement is between the TIFF Investment Program, Inc. ("TIP"), a
Maryland Corporation, for its TIFF U.S. Equity Fund and such other of its Funds
as TIP may from time to time allot assets for management under this agreement
(hereafter, the "Fund"), and ▇▇▇▇▇▇▇ Capital Management Co., Inc. (hereafter,
the "Manager") and is effective as of _________, 1997 (the "Effective Date").
Recitals
TIP is a non-diversified open-end management investment company
registered under the Investment Company Act of 1940 (the "1940 Act"); and
The Fund wishes to retain the Manager to render advisory services to
the Fund, and the Manager is willing to render those services.
Now, therefore, the parties agree as follows:
1. Managed Assets
The Manager will provide investment management services with respect to
assets placed with the Manager on behalf of the Fund from time to time. Such
assets, as changed by investment, reinvestment, additions, disbursements of
expenses, and withdrawals, are referred to in this Agreement as the "Managed
Assets." The Fund may make additions to or withdraw all or any portion of the
Managed Assets from this management arrangement at any time.
2. Appointment and Powers of Manager; Investment Approach
(a) Appointment. TIP, acting on behalf of the Fund, hereby appoints the
Manager to manage the Managed Assets for the period and on the terms set forth
in this Agreement. The Manager hereby accepts this appointment and agrees to
render the services herein described in accordance with the Manager Profile
(appended to this Agreement as Schedule II) and Investment Guidelines (appended
to this Agreement as Schedule III, (together, the "Investment Approach") as such
approach may be elaborated, amended, and refined with the mutual consent of
Foundation Advisers, Inc. ("FAI"), acting on behalf of the Fund, and the
Manager.
(b) Powers. Subject to the supervision of the Board of Directors of TIP
and subject to the supervision of FAI, the Manager shall direct investment of
the Managed Assets in accordance with the Manager's Investment Approach. The
Fund grants the Manager authority to:
(i) Acquire (by purchase, exchange,
subscription, or otherwise), hold and
dispose (by sale, exchange or otherwise)
investments and other securities;
(ii) Determine what portion of the Managed
Assets will be held uninvested; and
(iii) Enter into such agreements and make such
representations (including representations regarding
the purchase of securities for investment) as may be
necessary or proper in connection with the
performance by the Manager of its duties hereunder.
(c) Power of Attorney. To enable the Manager to exercise fully
discretion granted hereunder, TIP appoints the Manager as its attorney-in-fact
to invest, sell, and reinvest the Managed Assets as fully as TIP itself could
do. The Manager hereby accepts this appointment.
(d) Voting. The Manager shall be authorized to vote on behalf of the
Fund any proxies relating to the Managed Assets, provided, however, that the
Manager shall comply with any instructions received from the Fund as to the
voting of securities and handling of proxies.
(e) Independent Contractor. Except as expressly authorized herein, the
Manager shall for all purposes be deemed to be an independent contractor and
shall have no authority to act for or to represent TIP, the Fund or FAI in any
way or otherwise to be an agent of any of them.
(f) Reporting. The Manager shall furnish to TIP such information as TIP
reasonably may require to complete and submit any filing required by any
applicable state or federal securities law or regulation.
3. Requirements; Duties
(a) Requirements. In performing services for the Fund and otherwise
discharging its obligations under this Agreement, the Manager shall conform its
actions to the provisions in the following documents (referred to collectively
in this Agreement as the "Requirements"):
(i) The Articles of Incorporation and By-Laws
of TIP;
(ii) TIP's Registration Statement, on Form N-1A, as
amended from time to time ("the "Registration
Statement"), including the Investment Approach set
forth therein;
(iii) The 1940 Act, the Internal Revenue Code of 1986, as
amended, and all other applicable federal and state
laws and regulations which apply to the Manager in
conjunction with performing services for the Fund, if
any;
(iv) Written instructions and directions of the
Board of Directors of TIP;
(v) Written instructions and directions of
FAI; and
(vi) The Manager's Investment Guidelines, which shall be
amended from time to time through mutual agreement by
the Manager and FAI.
The Manager only shall be responsible for complying with those
requirements specified in this Paragraph 3 to the extent it has received from
TIP or FAI written instructions or directions or the document that contains or
states such requirements, other than the 1940 Act or the Internal Revenue Code
of 1986.
(b) Responsibility with Respect to Actions of Others. TIP places the
investment portfolio of each of its Funds, including the Fund, with one or more
investment managers. To the extent the applicability of, or conformity with,
Requirements depends upon investments made by, or activity of, managers other
than the Manager, the Manager agrees to comply with such Requirements: (i) to
the extent that such compliance is within the Manager's Investment Guidelines
and (ii) to the extent that the Manager is provided with information sufficient
to ascertain the applicability of such Requirements. If it appears to the Fund
at any time that the Fund may not be in compliance with any Requirement and the
Fund so notifies the Manager, the Manager shall promptly take such actions not
inconsistent with applicable law as the Fund may reasonably specify to effect
compliance.
(c) Responsibility with Respect to Performance of Duties. Except as
permitted by Paragraph 7 of this Agreement, in performing its duties under this
Agreement, the Manager will act solely in the interests of the Fund and shall
use reasonable care and its best judgment in matters relating to the Fund. The
Manager will not deal with the Managed Assets in its own interest or for its own
account.
4. Recordkeeping and Reporting
(a) Records. The Manager shall maintain proper and complete records
relating to the furnishing of investment management services under this
Agreement, including records with respect to the securities transactions for the
Managed Assets required by Rule 31a-1 under the 1940 Act. All records maintained
pursuant to this Agreement shall be subject to examination by the Fund and by
persons authorized by it during reasonable business hours upon reasonable
notice. Records required by Rule 31a-1 maintained as specified above shall be
the property of the Fund; the Manager will preserve such records for the periods
prescribed by Rule 31a-2 under the 1940 Act and shall surrender such records
promptly at the Fund's request. Upon termination of this Agreement, the Manager
shall promptly return records that are the Fund's property and, upon demand,
shall make and deliver to the Fund true and complete and legible copies of such
other records maintained as required by this Section 4(a) as the Fund may
request. The Manager may retain copies of records furnished to the Fund.
(b) Reports to Custodian. The Manager shall provide to the Fund's
custodian and to the Fund on each business day information relating to all
transactions concerning the Managed Assets.
(c) Other Reports. The Manager shall render to the Board of Directors
of TIP and to FAI such periodic and special reports as the Board or FAI may
reasonably request.
5. Purchase and Sale of Securities
(a) Selection of Brokers. The Manager shall place all orders for the
purchase and sale of securities on behalf of the Fund with brokers or dealers
selected by the Manager in conformity with the policy respecting brokerage set
forth in the Registration Statement. Neither the Manager nor any of its
officers, employees, or any of its "affiliated persons", as defined in the 1940
Act, will act as principal or receive any compensation in connection with the
purchase or sale of investments by the Fund other than the management fees
provided for in Section 6 hereof. The Manager will not be liable to Client for
any acts or omissions made by the Administrator, Custodian or other service
provider to the Fund, unless such liability resulted from acts or omissions of
the Manager or from information from the Manager.
(b) Aggregating Orders. On occasions when the Manager deems the
purchase or sale of a security to be in the best interest of the Fund as well as
other advisory clients of the Manager, the Manager, to the extent permitted by
applicable laws and regulations, may, but shall be under no obligation to,
aggregate the securities to be so sold or purchased in order to obtain the most
favorable price or lower brokerage commissions and efficient execution. In such
event, allocation of securities so purchased or sold, as well as the expense
incurred in the transaction, will be made by the Manager in the manner it
considers to be most equitable and consistent with its fiduciary obligations to
the Fund and its other advisory clients.
6. Management Fees; Expenses
(a) Management Fees. Schedule I attached hereto sets out the fees to be
paid by the Fund to the Manager by the tenth business day of the following month
in connection with this Agreement. The applicable fee rate will be applied to
the average daily net assets (gross of expenses except custodian transaction
charges) of the Managed Assets, computed as described in the Registration
Statement, pursuant to this Agreement.
(b) Expenses. The Manager shall furnish at its own expense all office
facilities, equipment and supplies, and shall perform at its own expense all
routine and recurring functions necessary to render the services required under
this Agreement, including administrative, bookkeeping and accounting, clerical,
statistical and correspondence functions. The Manager shall not have
responsibility for calculating the net asset value of the Fund's portfolio or
for conducting a daily reconciliation of the Fund's portfolio; however, the
Manager will daily review the pricing of the Managed Assets with such
information as is available to the Manager. The Fund shall pay directly, or, if
the Manager makes payment, reimburse the Manager for, (i) custodial fees for the
Managed Assets, (ii) brokerage commissions, issue and transfer taxes and other
costs of securities transactions to which the Fund is a party, including any
portion of such commissions attributable to research and brokerage services, and
(iii) taxes, if any, payable by the Fund. In addition, the Fund shall pay
directly, or, if the Manager makes payment, reimburse the Manager for, such
non-recurring special out-of-pocket costs and expenses as may be authorized in
advance by the Fund.
7. Non-Exclusivity of Services
The Manager is free to act for its own account and to provide
investment management services to others. The Fund acknowledges that the Manager
and its officers and employees, and the Manager's other advisory 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. Neither the Manager nor any of its officers
or employees shall have any obligation to effect a transaction under this
Agreement simply because such a transaction is effected for his or its own
account or for the account of another advisory client. The Fund agrees that the
Manager may refrain from providing any advice or services concerning securities
of companies for which any officers, directors, partners or employees of the
Manager or any of the Manager's affiliates act as financial adviser, investment
manager or in any capacity that the Manager deems confidential, unless the
Manager determines in its sole discretion that it may appropriately do so. The
Fund appreciates that, for good commercial and legal reasons, material nonpublic
information which becomes available to affiliates of the Manager through these
relationships cannot be passed on to the Fund.
8. Liability
Manager shall not be liable to Client for any error of judgment, acts,
omission, or mistake of law or any loss arising out of its obligations and
duties in providing services under this Agreement, except that Manager shall be
liable to the Client for any loss resulting from Manager's willful misfeasance,
bad faith, gross negligence or reckless disregard by Manager of its obligations
and duties in providing services under this Agreement. Manager shall not be held
liable for any acts or omission of the Client's Custodian or Administrator or
any other third party, unless such liability resulted from acts or omissions of
the Manager or information from the Manager. Nothing in this Agreement shall
constitute a waiver or limitation of any rights which the Fund, TIP, or FAI may
have under applicable state or federal laws, including the Investment Advisers
Act of 1940.
Client understands that the Manager, in the performance of its obligations and
duties under this Agreement, is entitled to rely in good faith upon the accuracy
of the information furnished by, or on behalf of, Client, without further
investigation.
9. Representations
(a) The Manager represents to the Fund that the Manager 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 the Manager has
been duly authorized and, upon execution and delivery, this Agreement will be
binding upon the Manager in accordance with its terms.
(b) TIP represents to the Manager that it has full power and authority
to enter into this Agreement, its execution and delivery of this Agreement on
behalf of the Fund have been duly authorized and this Agreement represents the
legal, valid and binding obligation of TIP, enforceable in accordance with its
terms.
(c) TIP acknowledges receipt of copies of the Manager's Form ADV and
CTA Disclosure Document (if applicable).
(d) TIP hereby represents that TIP and the Fund are in full compliance
with all applicable state and federal securities laws and regulations.
10. Term
This Agreement shall continue in effect for a period of two (2) years
from the date hereof and shall thereafter be automatically renewed for
successive periods of one (1) year each, provided such renewals are specifically
approved at least annually in conformity with the requirements of the 1940 Act;
provided however, that this Agreement may be terminated without the payment of
any penalty by (a) the Fund, if a decision to terminate is made by the Board of
Directors of the Fund or by a vote of a majority of the outstanding voting
securities (as defined in the ▇▇▇▇ ▇▇▇) of the Fund, or (b) the Manager, and in
either case with at least 30 days' written notice from the terminating party and
on the date specified in the notice of termination.
The rights and obligations that are provided in section (f) of
Paragraph 2 shall survive the cancellation, expiration or termination of this
Agreement.
This Agreement shall terminate automatically in the event of its
assignment (as defined in the 1940 Act).
11. Amendment
Except as otherwise provided in this Agreement, this Agreement may be
amended by mutual consent, but the consent of the Fund must be approved in
conformity with the requirements of the 1940 Act and any order of the Securities
and Exchange Commission that may address the applicability of such requirements
in the case of the Fund.
12. Notices
Notices or other communications required to be given pursuant to this
Agreement shall be deemed duly given when delivered in writing or sent by
telecopy or three days after mailing registered mail postage prepaid as follows:
To TIP, TIFF Investment Program, Inc.
the Fund, c/o Foundation Advisers, Inc.
or both: ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
The ▇▇▇▇▇▇▇ Capital Management Co., Inc.
Manager:
Attention:
Telecopy:
Each party may change its address by giving notice as herein required.
13. 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.
14. 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.
15. Applicable Law
This Agreement shall be governed by, and the rights of the parties
arising hereunder construed in accordance with, the laws of the Commonwealth of
Virginia without reference to principles of conflict of laws. Nothing herein
shall be construed to require either party to do anything in violation of any
applicable law or regulation.
16. Change in Management or Control of Manager
The Manager agrees to notify TIP and the Fund in writing of any changes
in the membership of the Manager within a reasonable time period after such
change.
IN WITNESS WHEREOF, the parties hereto execute this Agreement on and make it
effective on the effective date specified in the first paragraph of this
Agreement.
TIFF Investment Program, Inc. ▇▇▇▇▇▇▇ Capital Management Co., Inc.
By: By:
Title: Treasurer Title:
Schedule I
Performance Fee Calculation
Compensation
As compensation for the services performed and the facilities and
personnel provided by the Manager pursuant to this Agreement, the Client will
pay to the Manager a fee according to the following formula:
Fee = 46 + [.130 * {Excess Return - 121}; subject to Floor
of 50 b.p., Cap of 95 b.p.
and computed in accordance with the following provisions.
Certain Defined Terms
"Beginning Date" shall mean the date that the Manager begins (or
resumes after a hiatus) to render services under this Agreement.
"Excess Return" shall mean the amount by which the performance of the
Managed Assets exceeds the performance of the Wilshire 5000 during the
performance measurement period.
"Managed Assets" is hereby defined as that portion of Client's assets
allocated to Manager.
"Minimum Fee" shall mean, with respect to any full calendar month, the
result obtained by multiplying the average daily value of the net assets (gross
of expenses) of Managed Assets during such month by 1/12th of the "floor rate"
set forth in this Agreement.
"Performance Adjusted Fee," shall mean the result obtained by
multiplying the average daily value of the net assets of the Managed Assets
during the performance measurement period (trailing 12 months performance) by
1/12th of the Performance Fee Rate determined in accordance with the formula
above.
"Performance Fee Rate" shall mean the rate of fee produced by
application of the formula set forth above. Under such formula, the rate of fee
varies directly with the time-weighted rate of return achieved for the Client by
the Manager over the applicable performance measurement period, but is never
greater than the "cap" rate nor less than the "floor" rate specified in the
formula. The rate of fee varies above and below the "fulcrum" fee rate, i.e.,
the rate that is midway between the cap rate and the floor rate, depending on
the amount by which the Manager's return exceeds, or is less than, the return of
the "benchmark" specified in the formula. (The rate of return at which the
Performance Fee Rate will equal the fulcrum fee rate is equal to the benchmark
return plus the "hurdle" rate incorporated in the formula.) The rate at which
the Performance Fee Rate changes in response to a specified increment of change
in the Manager's performance relative to the performance of the benchmark is
constant. The Performance Fee Rate will change as the Manager's performance
varies from the performance of the benchmark in increments of one basis point.
Fee For Services
(a) Fee. For services rendered by the Manager hereunder during
consecutive full calendar months subsequent, the Manager shall be entitled to a
fee equal to the Performance Adjusted Fee, payable by the Client on or about the
tenth day of the month following the month in which such fees are earned.
(b) Early Termination. If the Manager ceases to render services
hereunder at any time during, and before the end of, any such subsequent month,
the Manager shall be entitled to a fee for services rendered hereunder during
such month equal to 150% of the Minimum Fee (prorated based on the number of
days during such calendar month that the Manager provided services hereunder)
payable by the Client on or about the tenth day of the month following the month
in which the Manager ceased to render services hereunder.
Miscellaneous
(a) Valuation. For purposes of calculating the Manager's fee hereunder,
the securities in the Fund's portfolio shall be valued in the manner described
in the Fund's prospectus.