Money Manager Agreement
This Agreement is between the TIFF Investment Program, Inc. ("TIP"), a
Maryland Corporation, for its TIFF Emerging Markets 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 Emerging Markets Management (hereafter,
the "Manager") and is effective as of January 1, 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 0000 Xxx) 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: X.X. Xxx 0000
Xxxxxxxxxxxxxxx, Xxxxxxxx 00000
Telecopy: 000-000-0000
The Emerging Markets Management
Manager: 0000 Xxxxxxxxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxx
Telecopy: 000-000-0000
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. Emerging Markets Management
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 = 105 + [ 0.394 x (Excess Return - 205)]; subject to Floor of
40 b.p., Cap of 300 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 MSCI Emerging Markets
Free Index 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.
