<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[X] Definitive Proxy Statement RULE 14A-6(E)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
TIFF Investment Program, Inc.
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[X] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
MEMORANDUM
To: Shareholders of the TIFF International Equity Fund
From: Esther Cash
Date: March 9, 1995
Re: New Money Manager Agreements with Delaware International Advisers
Inc., Marathon Asset Management Ltd., Bee & Associates Incorporated
and Lazard Freres Asset Management
-------------------------------------------------------------------
A Special Meeting of the Fund's Members will be held on March 22, 1995 for the
purpose of approving new money manager agreements with two current money
managers of the Fund, Delaware and Marathon, and two proposed new money managers
of the Fund, Bee and Lazard.
New money manager agreements with Delaware and Marathon are necessary because of
a change in ownership of each. The shares of the indirect parent of Delaware are
being sold to a subsidiary of Lincoln National Corporation. Trusts established
by the principals of Marathon that had held 55% of Marathon's parent company's
voting shares recently gained 100% control of such Company. David Salem, the
President of TIP and FAI, has reviewed these situations and has discussed them
with the TIP and FAI Boards. The Boards believe that these transactions will
have no adverse impact on the day-to-day operations of Delaware or Marathon or
their ability to manage Fund assets in the manner described in the TIP
Prospectus. New money manager agreements with Bee and Lazard are proposed to
enable the Fund, with its growing asset base, to benefit from the management
services of additional money managers.
TIP has applied to the SEC for exemption from Member approval of money manager
agreements, but such relief is not expected until later this year. In the
meantime, we must obtain approval of the new Money Manager Agreements with
Delaware, Marathon, Bee and Lazard from all Members of the Fund. For that
purpose, a Special Meeting of Members will be held on March 22, 1995.
The enclosed Proxy Statement provides details of the transactions described
above, as well as information about Delaware, Marathon, Bee and Lazard. We ask
that you review these materials. If you do not plan to attend the Meeting in
person, then please fill in, sign and date the enclosed postcard to appoint
David Salem and me as your proxies to vote your shares at this meeting, and
return it to TIP as soon as possible to ensure that a quorum is present. We
must receive this postcard by March 22 in order for your shares to be
represented by us by proxy at the Special Meeting. Of course, if you have any
questions about how the changes in ownership of Delaware and Marathon, or the
engagement of Bee and Lazard, will affect the management of the Fund's assets,
please give us a call.
Thank you for your cooperation.
<PAGE>
TIFF Investment Program
TIFF International Equity Fund
NOTICE OF SPECIAL MEETING OF MEMBERS
TO BE HELD MARCH 22, 1995
A Special Meeting of the shareholders ("Members") of the TIFF International
Equity Fund (the "Fund") of TIFF Investment Program, Inc. ("TIP") will be held
at TIP's principal offices at 2405 Ivy Road, Charlottesville, Virginia 22903 on
March 22, 1995 at 10:00 a.m. Eastern Time for the following purposes:
(1) To approve or disapprove a new money manager agreement between TIP (for the
account of the Fund) and Delaware International Advisers Ltd. ("Delaware")
in a form identical to the existing money manager agreement with Delaware,
to take effect upon the closing of a proposed change in control of
Delaware;
(2) To approve or disapprove a new money manager agreement between TIP (for the
account of the Fund) and Marathon Asset Management Ltd. ("Marathon") in a
form identical to the money manager agreement with Marathon previously
approved by the Fund's Members (such new Agreement requiring the approval
of the Fund's Members because of a change in control of Marathon);
(3) To approve or disapprove a new money manager agreement between TIP (for the
account of the Fund) and Bee & Associates Incorporated ("Bee") to enable
Bee to act as a money manager with respect to a portion of the Fund's
assets;
(4) To approve or disapprove a new money manager agreement between TIP (for the
account of the Fund) and Lazard Freres Asset Management ("Lazard") to
enable Lazard to act as money manager with respect to a portion of the
Fund's assets; and
(5) To transact such other business as may properly come before the meeting.
The matters referred to above are discussed in detail in the Proxy
Statement attached to this Notice. The Board of Directors has fixed February
28, 1995 (the "Record Date") as the record date for determination of Members
entitled to vote at the meeting.
You are cordially invited to attend the Meeting. All Members are requested
to complete, date and sign the enclosed form of proxy and return it promptly.
This proxy is being solicited on behalf of the Board of Directors.
By Order of the Board of Directors
Esther Cash
Secretary
March 9, 1995
SIGN, DATE AND RETURN THE ENCLOSED PROXY
PROMPTLY TO AVOID ADDITIONAL EXPENSE
YOU CAN HELP THE FUNDS AVOID THE NECESSITY OF SENDING FOLLOW-UP LETTERS TO
ENSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY. IF YOU ARE UNABLE TO
ATTEND THE MEETING, PLEASE MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY SO
THAT THE NECESSARY QUORUMS MAY BE REPRESENTED AT THE SPECIAL MEETING. THE
ENCLOSED POSTCARD REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
TIFF Investment Program
TIFF International Equity Fund
P.O. Box 5165
Charlottesville, Virginia 22905
Proxy Statement
Special Meeting of Members
March 22, 1995
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Fund Information.................................. 1
Proxy Procedures.................................. 3
Proposal 1 (Proposed Delaware Agreement).......... 4
Proposal 2 (Proposed Marathon Agreement).......... 9
Proposal 3 (Proposed Bee Agreement)............... 12
Proposal 4 (Proposed Lazard Agreement)............ 13
Evaluations of Proposals and Recommendations by
TIP Directors................................... 16
Other Business.................................... 17
Appendix A: Form of Proposed Delaware Agreement
Appendix B: Form of Proposed Marathon Agreement
Appendix C: Form of Proposed Bee Agreement
Appendix D: Form of Proposed Lazard Agreement
</TABLE>
* * * * * * * *
The enclosed proxy is solicited on behalf of the Board of Directors of TIFF
Investment Program, Inc. ("TIP"), with respect to a special meeting (the
"Meeting") of shareholders (the "Members") of TIFF International Equity Fund
(the "Fund"). Such proxy is revocable at any time before it is voted by sending
written notice of the revocation to TIP, attention Secretary, or by appearing
personally at the Meeting. The cost of preparing and mailing the notice of
meeting, proxy card, this proxy statement and any additional proxy materials has
been or is to be borne by Delaware International Advisers Ltd. and Marathon
Asset Management Ltd. (both Money Managers, as such term is hereinafter defined,
of a portion of the Fund's assets), and by Foundation Advisers, Inc. ("FAI"),
the Fund's investment adviser. The Board proposes to mail the enclosed notice
of meeting, proxy card and this proxy statement on or about March 9, 1995.
FUND INFORMATION
Member Information. As of February 28, 1995, the Fund had outstanding
9,781,013.786 shares of beneficial interest representing a total net asset value
of $92,211,940.82, each dollar of beneficial interest being entitled to one
vote.
<PAGE>
As of February 28, 1995, the following persons owned of record or
beneficially 5% or more of the shares of common stock of the Fund:
<TABLE>
<CAPTION>
Name and Address Amount and Nature Percent
of Beneficial Owner of Beneficial Ownership of Fund
- ------------------- ----------------------- --------
<S> <C> <C>
Houston Endowment Inc. 2,513,127.965 shares 25.69%
600 Travis, Suite 6400 ($23,698,796.71 net asset value)
Houston, Texas 77002
The Rockefeller Foundation 1,942,514.368 shares 19.86%
420 Fifth Avenue ($18,317,910.49 net asset value)
New York, New York 10018
California Community Foundation 624,487.365 shares 6.38%
606 S. Olive Street, Suite 2400 ($5,888,915.85 net asset value)
Los Angeles, California 90014
Carnegie Corporation of New York 502,625.593 shares 5.14%
437 Madison Avenue ($4,739,759.34 net asset value)
New York, New York 10022
Meadows Foundation, Inc. 502,625.593 shares 5.14%
3003 Swiss Avenue ($4,739,759.34 net asset value)
Dallas, Texas 75204
</TABLE>
The Fund will furnish, without charge, a copy of TIP's annual report for
its fiscal year ended December 31, 1994 to any Member upon request. To request
a copy, please write to AMT Capital Services, Inc. ("AMT Capital"), at 430 Park
Avenue, New York, New York 10022, or call AMT Capital at (212) 308-4848 or (800)
762-4845.
Investment Adviser and Money Managers. TIP's executive offices are located
at 2405 Ivy Road, Charlottesville, Virginia 22903. The Fund's investment
adviser is Foundation Advisers, Inc. ("FAI"), a registered investment adviser
with an address at P.O. Box 5165, Charlottesville, Virginia 22905. Pursuant to
its investment advisory agreement with TIP (the "Advisory Agreement"), FAI: (a)
develops investment programs, selects money managers (the "Money Managers") who
each act as subadvisers with respect to a portion of the Fund's assets; and
monitors Money Manager investment activities and results; (b) provides or
oversees the provision of all general management, investment advisory and
portfolio management services to TIP; and (c) provides TIP with office space,
equipment and personnel.
Except as follows, no money manager agreement between TIP, for the account
of the Fund, and any Money Manager has been terminated. On November 14, 1994,
the money manager agreement between TIP, for the account of the Fund, and
Blairlogie Capital Management Ltd. ("Old Blairlogie") was terminated
automatically pursuant to its terms upon the consummation of the consolidation
of Old Blairlogie and certain other entities with Thomson Advisory Group L.P.,
because such transaction resulted in a transfer of Old Blairlogie's investment
advisory business to a new limited partnership, Blairlogie Capital Management
("New Blairlogie"), and new ownership of such advisory business. New Blairlogie
retained the services of Old Blairlogie's advisory personnel and employees who
had previously provided services to the Fund. Prior to the closing of this
transaction, the Fund's Members had approved a new money manager agreement with
New Blairlogie, which agreement took effect upon such closing.
-2-
<PAGE>
Similarly, on December 21, 1994, the money manager agreement between TIP,
for the account of the Fund, and Marathon Asset Management Ltd. ("Marathon") was
terminated automatically pursuant to its terms upon the completion of a change
in control of Marathon resulting from an increase in the percentage of shares of
Marathon's parent owned by companies affiliated with Marathon's principals from
55% to 100%. The Board of Directors has approved an interim money manager
agreement with Marathon, the terms of which are identical to the terminated
agreement, except for the effective and termination dates, and the fact that
Marathon does not earn any fees pursuant to such interim agreement (which has
not been approved by the Members). The Members are being asked to consider
approval of a new money manager agreement with Marathon at this meeting. See
the information set forth herein under Proposal 2 for details.
Distributor and Administrator. AMT Capital Services, Inc., the address of
which is 430 Park Avenue, New York, New York 10022, serves as the Fund's
distributor and administrator.
PROXY PROCEDURES
Timely, properly executed proxies will be voted as Members instruct.
Unless instructions to the contrary are marked, proxies will be voted FOR the
proposals set forth in the attached Notice.
The presence in person or by proxy of the holders of a majority of the
outstanding shares of the Fund is required to constitute a quorum at the
Meeting. Shares held by Members present in person or represented by proxy at
the Meeting will be counted both for the purpose of determining the presence of
a quorum and for calculating the votes cast on the issues before the Meeting.
Abstentions will also be counted for quorum purposes.
Broker or nominee "non-votes" (that is, proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
owner or other persons entitled to vote shares on a particular matter with
respect to which the brokers or nominees do not have discretionary power) will
have the same effect as abstentions in determining whether a proposal has
received the requisite approval. Where the broker or nominee has no discretion
to vote the shares as to one or more proposals before the Meeting, the non-voted
shares will be excluded from the pool of shares voted on such proposals. Thus,
abstentions and non-votes will have the same effect as a negative vote on
proposals requiring the affirmative vote of a specified portion of the Fund's
outstanding shares, but will not be considered votes cast and thus will have no
effect on matters requiring approval of a specified percentage of votes cast.
In the event that a quorum is present at the Meeting but sufficient votes
to approve any proposal are not received, the persons named as proxies may
propose one or more adjournments of the Meeting to permit further solicitation
of proxies. Any such adjournment will require the affirmative vote of a
majority of those shares represented at the Meeting in person or by proxy. If a
quorum is present, the persons named as proxies will vote those proxies which
they are entitled to vote FOR the proposal in favor of such an adjournment and
will vote those proxies required to be voted AGAINST the proposal against any
such adjournment. A vote of the Members may be taken on one or more of the
proposals in this Proxy Statement prior to any adjournment if sufficient votes
have been received for approval.
Approval of Proposals 1, 2, 3 and 4 each requires the vote of a "majority
of the outstanding voting securities" of the Fund as defined in the Investment
Company Act of 1940, as amended (the "1940 Act"), which means the vote of 67% or
more of the shares of the Fund present at the Meeting (if the holders of more
than 50% of the outstanding shares are present or represented by proxy), or the
vote of more than 50% of the outstanding shares of the Fund, whichever is less.
-3-
<PAGE>
PROPOSAL 1:
APPROVAL OR DISAPPROVAL OF A NEW MONEY MANAGER AGREEMENT BETWEEN TIP, FOR THE
ACCOUNT OF THE FUND, AND DELAWARE INTERNATIONAL ADVISERS LTD., TO TAKE EFFECT
UPON THE CLOSING OF A PROPOSED CHANGE IN CONTROL OF DELAWARE.
Delaware International Advisers Ltd. ("Delaware") currently acts as a Money
Manager with respect to a portion of the Fund's assets pursuant to a money
manager agreement (the "Current Delaware Agreement") with TIP, for the account
of the Fund.
At the Meeting, Members of the Fund will be asked to approve a new money
manager agreement (the "Proposed Delaware Agreement") to replace the Current
Delaware Agreement because consummation of the Merger (as described below) would
cause the Current Delaware Agreement automatically to terminate in accordance
with its terms. In the event that the Merger does not take place, the Current
Delaware Agreement will continue. The Proposed Delaware Agreement contains the
same terms and conditions as the Current Delaware Agreement, except for their
effective and termination dates.
The following summary provides information about the Merger, the terms and
conditions of the Current Delaware Agreement, and Delaware. Please see the
section of this Proxy Statement entitled "Evaluation of Proposals and
Recommendations by TIP Directors" for information regarding the deliberations of
the Boards of Directors concerning approval of the Proposed Delaware Agreement.
The Merger Agreement
Terms of the Merger. On December 12, 1994, Lincoln National Corporation
("LNC"), George Sub, Inc., a newly-formed, wholly-owned subsidiary of LNC (the
"Merger Subsidiary") and Delaware Management Holdings, Inc. ("DMH"), the
indirect parent of Delaware, entered into a merger agreement (the "Merger
Agreement"). The Merger Agreement provides that the Merger Subsidiary will be
merged with and into DMH, causing DMH to become a wholly-owned subsidiary of
LNC. This transaction is referred to herein as the "Merger."
Under the Merger Agreement, cash consideration of $301 million will be paid
to the holders of DMH common stock, options, warrants, phantom stock and phantom
stock equivalents ("DMH Equity"). The cash consideration will be allocated to
holders of DMH Equity so that each such holder receives the same amount per
share (on a fully diluted basis) after deducting from the amounts payable to the
holders of DMH options and warrants the exercise price of the options or
warrants.
Most of the cash consideration will be paid to the holders of DMH Equity at
the closing of the Merger; however, a portion of the cash consideration will be
paid after closing to holders of options that have not vested as of the closing
date and holders of phantom stock that could not have been "put" to DMH under
the terms of the relevant phantom stock agreement, as a result of the Merger.
In addition to the $301 million of cash consideration, the holders of DMH
Equity are entitled to receive, subject to the satisfaction of certain
conditions, a contingent payment of up to a maximum $22.5 million on June 1,
1997. The amount of this contingent payment will depend upon the cumulative
management revenues (i.e., investment management and advisory or sub-advisory
fees) of DMH during the period April 1, 1995 through March 31, 1997 (the
"Measurement Period"). If the cumulative management revenues during the
Measurement Period do not exceed $245.6 million, no contingent payments will be
made. If cumulative management revenues exceed that amount, then a contingent
payment will be made by LNC in an amount determined by multiplying $22.5 million
by a fraction, the numerator of which will be the amount
-4-
<PAGE>
by which cumulative management revenues during the Measurement Period exceed
$245.6 million and the denominator of which is $26.9 million.
Conditions to Closing of the Merger. The closing of the Merger is subject
to a number of conditions, including a condition that Delaware Group Funds (as
defined in the Merger Agreement) which collectively included at least 90% of all
the assets of the Delaware Group Funds as of November 30, 1994, shall, by
shareholder vote, have approved new investment advisory agreements with DMH's
investment advisory affiliates and that the aggregate amount of net assets under
management by DMH, through its investment advisory affiliates, on the last day
of the calendar month ending prior to the closing of the Merger, after certain
adjustments and excluding market value fluctuations, shall equal or exceed 90%
of the net assets under management on November 30, 1994.
In addition, the Merger must have been approved by the holders of a
majority of the outstanding common stock of DMH; however, the holders of a
majority of the outstanding common stock of DMH have already agreed to vote in
favor of the Merger, so the approval of the DMH stockholders is virtually
assured. A further condition under the Merger Agreement is that holders of no
more than 15% of the outstanding common stock of DMH shall have perfected
appraisal rights under applicable provisions of the Delaware law with respect to
the Merger.
The closing of the Merger and, consequently, the assignment of the Current
Delaware Agreement, is currently scheduled to occur on or about March 31, 1995.
The Merger Agreement may be terminated upon the occurrence of certain events,
and may be terminated by either party if the Merger has not been consummated on
or before June 30, 1995.
Effect of the Merger on Key Personnel of Delaware. In connection with the
Merger, Wayne A. Stork (Chairman, Chief Executive Officer and Director of DMH,
and Chairman, Chief Executive Officer and Director of Delaware), and Brian F.
Wruble (President, Chief Operating Officer and Director of DMH, and Director of
Delaware), have executed employment agreements with DMH and LNC providing that
they will continue in the employ of DMH for a period of approximately four years
if the Merger is consummated. In addition to Mr. Stork and Mr. Wruble, David K.
Downes (Senior Vice President, Chief Financial Officer and Chief Administrative
Officer of DMH, Treasurer of DMH and Director of Delaware) has also executed an
employment agreement which provides that he will remain in the employ of DMH for
a period of approximately three years if the Merger is consummated.
Terms and Conditions of the Current and Proposed Delaware Agreements
Delaware serves as Money Manager to the Fund pursuant to the Current
Delaware Agreement. The Current Delaware Agreement, dated April 18, 1994, was
approved by the Board of Directors on March 21, 1994 and by Members of the Fund
on May 27, 1994. The Proposed Delaware Agreement was approved by the Board of
Directors on February 16, 1995.
Members are not being asked to approve the continuation of the Current
Delaware Agreement. It will continue in the event that the Merger does not take
place. Only the Proposed Delaware Agreement is being submitted for Member
approval.
Members should refer to Appendix A for the complete terms of the Proposed
Delaware Agreement.
The Current Delaware Agreement is identical to the Proposed Delaware
Agreement except for its effective and termination dates.
-5-
<PAGE>
Basic Terms. Each of the Current and Proposed Delaware Agreements has an
initial term of two years and provides that it will thereafter continue in
effect from year to year only if such continuation is specifically approved at
least annually by (a) either (i) a vote of a majority of the Board of Directors
of TIP, or (ii) a vote of a majority of the outstanding voting securities of the
Fund, and (b) a vote of a majority of the Fund's directors who are not
"interested persons" (as defined in the 1940 Act). Each of the Current and
Proposed Delaware Agreements provides that it may be terminated by the Fund, by
its Board of Directors or by a vote of a majority of its outstanding voting
securities, or by Delaware, in each case at any time upon 30 days' written
notice to the other party. In addition, each Agreement provides for its
automatic termination in the event of assignment. Under the 1940 Act, the
completion of the Merger will constitute such an assignment and will trigger the
termination of the Current Delaware Agreement.
The Proposed Delaware Agreement, like the Current Delaware Agreement,
provides that Delaware is required to manage the securities held by the Fund,
subject to the supervision and stated direction of FAI, the Fund's investment
adviser, and ultimately TIP's Board of Directors, in accordance with the Fund's
investment objective and policies, make investment decisions for the Fund, and
place orders to purchase and sell securities on behalf of the Fund.
The Proposed Delaware Agreement and the Current Delaware Agreement each
provide that Delaware is not liable to the Fund for any error of judgment but
shall be liable to the Fund for any loss resulting from willful misfeasance, bad
faith or gross negligence by Delaware in providing services under the Agreement
or from reckless disregard by Delaware of its obligations and duties under the
Agreement.
Money Management Fees. The fees under the Proposed Delaware Agreement are
the same as the fees under the Current Delaware Agreement. The Proposed
Delaware Agreement provides that the Fund will pay Delaware a monthly fee at an
annual rate based on average daily net assets of the Fund (which is the same fee
rate as originally contracted with Delaware) as follows:
TIFF
Portion of Average International
Daily Net Assets Equity Fund
------------------ ------------
first $50 million 0.50%
next $50 million 0.35%
over $100 million 0.30%
During the Fund's fiscal year ended December 31, 1994, the Fund paid
Delaware a total of $22,025.48 in payment for its services pursuant to the
Current Delaware Agreement.
Consequences of Approval and of Disapproval. If the Proposed Delaware
Agreement is approved by the Members, it will become effective upon consummation
of the Merger, and will remain in effect, unless earlier terminated, for an
initial two-year term, subject to annual review and continuation thereafter.
Delaware and the other parties to the Merger may proceed with the
Merger without regard to whether the Proposed Delaware Agreement is not approved
by the Members. In the event that the Members do not approve the Proposed
Delaware Agreement and the Merger is consummated, subject to the approval of the
Securities and Exchange Commission if necessary, the Board of Directors of TIP
would seek to obtain for the Fund interim advisory services either from Delaware
or from another advisory organization. Thereafter, the Board of Directors would
either negotiate a new money manager agreement with an advisory organization
selected by the Board or make other appropriate arrangements, in either event
subject to approval by the Members.
-6-
<PAGE>
Background Information Regarding Delaware and LNC
Delaware. Delaware, a United Kingdom company, the address of which is
Veritas House, 3rd Floor, 125 Finsbury Pavement, London, England EC2A INQ, is an
investment adviser registered in the United States under the Investment Advisers
Act of 1940 (the "Advisers Act"), and is also a member of Investment Management
Regulatory Organization ("IMRO") in the United Kingdom. Delaware commenced
operations in December 1990. On November 30, 1994, Delaware was managing
approximately $2.2 billion, of which approximately $261 million were registered
investment company assets.
Wayne A. Stork is the Chairman and Chief Executive Officer and a
Director of Delaware, and David G. Tilles is the Managing Director, Chief
Investment Officer and a Director of Delaware. The other current Directors of
Delaware and their principal occupations are as follows: Brian F. Wruble,
President and Chief Operating Officer of Delaware Management Company, Inc.
("DMC"), a registered investment adviser that is, like Delaware, an indirect
subsidiary of DMH; Winthrop S. Jessup, Executive Vice President of DMC; George
M. Chamberlain, Jr., Senior Vice President and Secretary of DMC; Richard G.
Unruh, Jr., Executive Vice President of DMC; David K. Downes, Senior Vice
President, Chief Financial Officer and Chief Administrative Officer of DMC; John
C. E. Campbell, Senior Vice President/Client Services of Delaware Investment
Advisers, a division of DMC; Richard J. Flannery, Managing Director-Corporate &
Tax Affairs of DMC; G. Roger H. Kitson, Vice Chairman of Delaware; John
Emberson, Compliance Officer and Secretary of Delaware; and Clive A. Gillmore,
Hamish O. Parker, Timothy W. Sanderson, and Ian G. Sims, who are Senior
Portfolio Managers of Delaware. All of the above officers and directors of
Delaware may be contacted at Veritas House, 3rd Floor, 125 Finsbury Pavement,
London, England EC2A 1NQ.
DMH, indirectly, through its wholly-owned subsidiary, DMH Corp., owns
100% of the voting securities of DMC and Delaware. Legend Capital Group, L.P.
("Legend") owns approximately 41.8% of the outstanding shares of common stock of
DMH. By reason of its percentage ownership of DMH common stock and through
Voting Trust Agreements with certain other DMH shareholders, Legend may be
deemed to control DMH. Leonard M. Harlan and John K. Castle are the sole general
partners and are limited partners of Legend. As general partners of Legend,
Messrs. Harlan and Castle have the ability to direct the voting of more than a
majority of the shares of DMH common stock and thereby may be deemed to control
DMH, DMC, Delaware and other direct and indirect wholly-owned subsidiaries of
DMH. However, the Voting Trust Agreements do not operate in the case of certain
fundamental transactions such as the Merger. The address of Legend Capital
Group, L.P. is 150 East 58th Street, New York, NY 10155. The address of DMH is
One Commerce Square, Philadelphia, PA 19103. The address of DMH Corp. is
Foulkstone Plaza, 1403 Foulk Road, Suite 102, Wilmington, DE 19803.
Delaware acts as investment adviser to certain registered investment
companies that have investment objectives similar to that of the Fund. The
names of such investment companies, their approximate net assets as of December
31, 1994 and the fees charged to such investment companies by Delaware are set
forth below.
-7-
<PAGE>
<TABLE>
<CAPTION>
Name of Investment Approximate Net Assets Annual Advisory Fee (as %
Company at December 31, 1994 of average daily net assets)
- ------------------ ---------------------- ----------------------------
<S> <C> <C>
Delaware Group Global &
International Funds, Inc.:
-Global Asset Series $ 1,405,389 .75%/1/
-Global Bond Series $ 850,001 .75%/1/
-International Equity
Series $61,955,525 .75%/1/
Delaware Group Global
Dividend and Income Fund,
Inc. $86,861,436 see footnote 2
Delaware Group Premium
Fund, Inc.:
-International Equity
Series $57,649,236 .75%/3/
Delaware Pooled Trust,
Inc.:
-The Global Fixed
Income Portfolio $57,477,672 .50%/4/
-The International
Equity Portfolio $69,971,160 .75%/4/
-The International
Fixed Income
Portfolio --- .50%/5/
</TABLE>
- ----------------------
/1/ Delaware has elected voluntarily to waive that portion, if any, of the
annual management fees payable separately by the Global Assets Series and
the Global Bond Series and to reimburse these series to the extent
necessary to ensure that the Total Operating Expenses of these series do
not exceed .95% (exclusive of taxes, interest, brokerage commissions,
extraordinary expenses and 12b-1 expenses) through May 31, 1995. Delaware
has elected voluntarily to waive that portion, if any, of the annual
management fees payable by the International Equity Series and to reimburse
that series to the extent necessary to ensure that the Total Operating
Expenses of that series did not exceed 1.50% (exclusive of taxes, interest,
brokerage commissions, extraordinary expenses and 12b-1 expenses) for the
period from June 1, 1994 through November 30, 1994. Prior to June 1, 1994,
a waiver and reimbursement commitment was in place to ensure expenses of
this series did not exceed .95% (exclusive of taxes, interest, brokerage
commissions, extraordinary expenses and 12b-1 expenses).
/2/ As subadviser to this fund, Delaware is paid 40% of the fees paid to DMC,
which earns fees at the rate of .70% per annum of average weekly net
assets.
/3/ Delaware has elected voluntarily to waive that portion, if any, of the
annual management fees payable separately by this series of Delaware Group
Premium Fund, Inc. and to reimburse such series to limit certain expenses
of such series to .80% (exclusive of taxes, interest, brokerage commissions
and extraordinary expenses) through June 30, 1995.
/4/ Delaware has elected voluntarily to waive that portion, if any, of the
annual management fees payable separately by certain portfolios of Delaware
Pooled Trust, Inc. and to reimburse the portfolios to the extent necessary
to ensure that expenses of such portfolios do not exceed, on an annualized
basis, .60% with respect to The Global Fixed Income Portfolio and .96% with
respect to The International Equity Portfolio through April 30, 1995.
/5/ Delaware has elected voluntarily to waive that portion, if any, of the
annual management fees payable by The International Fixed Income Portfolio
of Delaware Pooled Trust, Inc., and to reimburse such portfolio to the
extent necessary to ensure that expenses of such portfolio do not exceed,
on an annualized basis, .60% through April 30, 1995. This portfolio is not
yet operational.
-8-
<PAGE>
LNC. LNC is one of the nation's largest financial services businesses.
Through its subsidiaries, it provides life insurance, annuities and pensions,
property-casualty insurance, life-health reinsurance, mutual funds and other
investment services. LNC, through its subsidiaries, is a leading writer of
individual variable annuities in the United States, and the reinsurance
organization is the nation's leading life-health reinsurer.
While LNC is engaged in marketing insurance and investment-related products
to individuals and corporations primarily in the United States, the company also
has an international presence. LNC does business in more than 30 countries, with
a strong life insurance presence in the United Kingdom. The mission of LNC is to
satisfy the financial security needs of individuals and businesses. In so doing,
LNC seeks to create superior value for shareholders, offer quality products and
services to customers, provide satisfying jobs for employees and be a
responsible citizen in the communities in which it operates. LNC, with
headquarters in Fort Wayne, Indiana, is a publicly-traded company on the New
York, London, Tokyo, Pacific and Chicago stock exchanges. LNC has assets of
nearly $49 billion and annual revenues of approximately $7 billion.
PROPOSAL 2:
APPROVAL OR DISAPPROVAL OF A NEW MONEY MANAGER AGREEMENT BETWEEN
TIP, FOR THE ACCOUNT OF THE FUND, AND MARATHON ASSET MANAGEMENT LTD.
Marathon Asset Management Ltd. ("Marathon") has acted as a Money Manager with
respect to a portion of the Fund's assets pursuant to money manager agreements
with TIP for the account of the Fund since the Fund's inception. The initial
money manager agreement (the "Initial Marathon Agreement") between Marathon and
TIP was approved by the Fund's Board of Directors on March 21, 1994 and by the
Fund's Members on May 27, 1994. This agreement was terminated automatically in
accordance with its terms on December 21, 1994 upon the consummation of a
transaction (resulting in a change of control of Marathon) in which trusts
established by the principals of Marathon gained 100% control of Marathon's
parent. Since such termination, Marathon has been acting as Money Manager for
the Fund pursuant to an interim money manager agreement (the "Interim Marathon
Agreement"), dated as of December 21, 1994, that has been approved by the Fund's
Board of Directors. The Interim Marathon Agreement is identical to the Initial
Marathon Agreement except that Marathon does not earn any fees pursuant to such
agreement.
At the Meeting, Members of the Fund will be asked to approve a new money
manager agreement (the "Proposed Marathon Agreement") to replace the Interim
Marathon Agreement. The Proposed Marathon Agreement contains the same terms and
conditions as the Initial Marathon Agreement and the Interim Marathon Agreement,
except for (i) their effective and termination dates and (ii) the fact that the
Interim Marathon Agreement does not provide for payment of any fees to Marathon,
whereas the Proposed Marathon Agreement provides for payment of fees identical
to those payable pursuant to the Initial Marathon Agreement.
The following summary provides information about Marathon, the change in
control of Marathon and the terms and conditions of the Initial, Interim and
Proposed Marathon Agreements. Please see the section of this Proxy Statement
entitled "Evaluation of Proposals and Recommendations by TIP Directors" for
information regarding the deliberations of the Boards of Directors concerning
approval of the Proposed Marathon Agreement.
-9-
<PAGE>
Change In Control
Marathon is a wholly-owned subsidiary of M.A.M. Investments Limited (the
"Marathon Parent"). Prior to December 21, 1994, 45% of the Marathon Parent's
ordinary voting shares were owned by Sphere Investment Trust PLC ("Sphere"), a
publicly-traded United Kingdom company. The remaining 55% of the Marathon
Parent's ordinary voting shares were held by trusts established by the three
principals of Marathon, William J. Arah, Jeremy J. Hosking and Neil M. Ostrer.
(See "Background Information Regarding Marathon," below.)
Effective on December 21, 1994, Sphere's entire interest in the Marathon
Parent was converted into non-voting redeemable preference shares, and trusts
established by the principals of Marathon became the beneficial owners of 100%
of the Marathon Parent's ordinary voting shares. Under the 1940 Act, the
conversion of Sphere's interest constituted the assignment of a "controlling
block" of the Marathon Parent's outstanding voting securities, and therefore
(also pursuant to the 1940 Act) is deemed to be an assignment of the Initial
Marathon Agreement. Pursuant to such Agreement's terms, this assignment of such
Agreement resulted in its termination.
The advisory personnel and employees who had been providing services to the
Fund prior to the change of control described above continue to provide services
to the Fund and are expected to continue to do so. In the opinion of FAI and
the Fund's Board of Directors, the transaction described above has not
materially affected the level or quality of advisory services provided to the
Fund.
Terms and Conditions of the Initial, Interim and Proposed Marathon Agreements
Marathon serves as Money Manager to the Fund pursuant to the Interim Marathon
Agreement, and previously served as Money Manager pursuant to the Initial
Marathon Agreement. The Proposed Marathon Agreement was approved by the Board
of Directors on February 16, 1995.
Members are not being asked to approve the continuation of the Interim
Marathon Agreement. It will continue in the event that the Merger does not take
place. Only the Proposed Marathon Agreement is being submitted for Member
approval.
Members should refer to Appendix B for the complete terms of the Proposed
Marathon Agreement.
Basic Terms. Each of the Initial, Interim and Proposed Marathon Agreements
has an initial term of two years and provides that it will thereafter continue
in effect from year to year only if such continuation is specifically approved
at least annually by (a) either (i) a vote of a majority of the Board of
Directors of TIP, or (ii) a vote of a majority of the outstanding voting
securities of the Fund, and (b) a vote of a majority of the Fund's directors who
are not "interested persons" (as defined in the 1940 Act). Each of the Initial,
Interim and Proposed Agreements provides that it may be terminated by the Fund,
by its Board of Directors or by a vote of a majority of its outstanding voting
securities, or by Marathon, in each case at any time upon 30 days' written
notice to the other party. Each Agreement provides that it will terminate
automatically upon its assignment.
The Proposed Marathon Agreement, like the Initial and Interim Marathon
Agreements, provides that Marathon is required to manage the securities held by
the Fund, subject to the supervision and stated direction of FAI, the Fund's
Adviser, and ultimately TIP's Board of Directors, in accordance with the Fund's
investment objective and policies, make investment decisions for the Fund, and
place orders to purchase and sell securities on behalf of the Fund.
-10-
<PAGE>
The Proposed Marathon Agreement and the Initial and Interim Marathon
Agreement each provide that Marathon is not liable to the Fund for any error of
judgment but shall be liable to the Fund for any loss resulting from willful
misfeasance, bad faith or gross negligence by Marathon in providing services
under the Agreement or from reckless disregard by Marathon of its obligations
and duties under the Agreement.
Money Management Fees. The fees under the Proposed Marathon Agreement are
the same as the fees under the Initial Agreement. The Proposed Marathon
Agreement provides that the Fund will pay Marathon a monthly fee at an annual
rate based on average daily net assets of the Fund (which is the same fee rate
as originally contracted with Marathon) as follows:
Fee = 40 + [.167 x (Excess Return - 140)] subject to
Floor of 15 bp; Cap of 160 bp
Measurement Period = Trailing 12 Months
Excess Return = Manager's Return - Benchmark Return
Benchmark = Morgan Stanley Capital International's All Country World ex USA
Index
During the Fund's fiscal year ended December 31, 1994, the Fund paid Marathon
a total of $46,848.98 in payment for its services pursuant to the Initial
Marathon Agreement.
Consequences of Approval or Disapproval. If the Proposed Marathon Agreement
is approved by the Members, it will become effective immediately, and will
remain in effect, unless earlier terminated, for an initial two-year term,
subject to annual review and continuation thereafter.
In the event that the Members do not approve the Proposed Marathon Agreement,
subject to the approval of the Securities and Exchange Commission if necessary,
the Board of Directors of TIP would seek to obtain for the Fund advisory
services from another advisory organization. The Board of Directors would
either negotiate a new money manager agreement with an advisory organization
selected by the Board or make other appropriate arrangements, in either event
subject to approval by the Members.
Background Information Regarding Marathon
Marathon, a United Kingdom company, with an address of 115 Shaflesbury
Avenue, London, England WC2H 8AD, is an investment adviser registered in the
United States under the Advisers Act, and is also a member of Investment
Management Regulatory Organization ("IMRO") in the United Kingdom. Marathon
commenced operations in 1986. On December 31, 1994, Marathon was managing
approximately $2.2 billion, of which approximately $103 million were registered
investment company assets.
The following persons serve in the capacities indicated with respect to
Marathon. Serving in the capacity or capacities indicated is the principal
occupation of each such person, and each has a business address of 115
Shaflesbury Avenue, London, England WC2H 8AD. William J. Arah, Jeremy J. Hosking
and Neil M. Ostrer are each Directors. David L. Donne is a Non-Executive
Director. David C. Brown is the Financial Controller and Compliance
Officer.
Marathon is the wholly-owned subsidiary of M.A.M. Investments Limited, which
is the Marathon Parent and a Jersey company. Omnium Investments Ltd. ("Omnium"),
a Hong Kong company, holds all of the Marathon Parent's outstanding shares in
its capacity as trustee for each of three trusts: the W.J. Arah Overseas Trust,
the J.J. Hosking Overseas Trust and the Ostrer 1986 Settlement. The address of
Omnium is 1802 Edinburgh Tower, The Landmark, 15 Queen's Road Central, Hong
Kong. See "Change in Control," above.)
-11-
<PAGE>
PROPOSAL 3:
TO APPROVE OR DISAPPROVE A NEW MONEY MANAGER AGREEMENT BETWEEN
TIP, FOR THE ACCOUNT OF THE FUND, AND BEE & ASSOCIATES INCORPORATED
It is proposed that the Fund engage the services of Bee & Associates
Incorporated ("Bee") as a Money Manager with respect to a portion of the Fund's
assets pursuant to a money manager agreement (the "Proposed Bee Agreement") with
TIP, for the account of the Fund. At the Meeting, Members of the Fund will be
asked to approve the Proposed Bee Agreement.
The following summary provides information about Bee and the terms of the
Proposed Bee Agreement. Please see the section of this Proxy Statement entitled
"Evaluation of Proposals and Recommendations by TIP Directors" for information
regarding the deliberations of the Boards of Directors concerning approval of
the Proposed Bee Agreement.
Terms of the Proposed Bee Agreement
The Proposed Bee Agreement was approved by the Board of Directors on February
16, 1995. A summary of the terms of such Agreement is set forth below. Members
should refer to Appendix C for the complete terms of the Proposed Bee Agreement.
Basic Terms. The Proposed Bee Agreement has an initial term of two years and
provides that it will thereafter continue in effect from year to year only if
such continuation is specifically approved at least annually by (a) either (i) a
vote of a majority of the Board of Directors of TIP, or (ii) a vote of a
majority of the outstanding voting securities of the Fund, and (b) a vote of a
majority of the Fund's directors who are not "interested persons" (as defined in
the 1940 Act). The Agreement further provides that it may be terminated by the
Fund, by its Board of Directors or by a vote of a majority of its outstanding
voting securities, or by Bee, in each case, at any time upon at least 30 days'
written notice to the other party. In addition, the Agreement provides for its
automatic termination in the event of assignment.
The Proposed Bee Agreement provides that Bee is required to manage the
securities held by the Fund, subject to the supervision and stated direction of
FAI, the Fund's Adviser, and ultimately TIP's Board of Directors, in accordance
with the Fund's investment objective and policies, make investment decisions for
the Fund, and place orders to purchase and sell securities on behalf of the
Fund.
The Proposed Bee Agreement provides that Bee is not liable to the Fund for
any error of judgment but shall be liable to the Fund for any loss resulting
from willful misfeasance, bad faith or gross negligence by Bee in providing
services under the Agreement or from reckless disregard by Bee of its
obligations and duties under the Agreement.
Money Management Fees. The Proposed Bee Agreement provides that the Fund
will pay Bee a monthly fee at an annual rate based on average daily net assets
of the Fund as follows:
Fee = 15 + [0.270 x (Excess Return - 115)] subject to
Floor of 15 bp; Cap of 200 bp
Measurement Period = Trailing 12 Months
Excess Return = Manager's Return - Benchmark Return
Benchmark Return = Morgan Stanley Capital International's All Country World
Index or All Country World ex USA Index
-12-
<PAGE>
Consequences of Approval and of Disapproval. If the Proposed Bee Agreement
is approved by the Members, it will become effective immediately, and will
remain in effect, unless earlier terminated, for an initial two-year term,
subject to annual review and continuation thereafter.
In the event that the Members do not approve the Proposed Bee Agreement, the
Board of Directors of TIP may seek to obtain for the Fund advisory services from
another advisory organization. Thereafter, the Board of Directors would either
negotiate a new money manager agreement with an advisory organization selected
by the Board or make other appropriate arrangements, in either event subject to
approval by the Members.
Background Information Regarding Bee
Bee, a Colorado company, is an investment adviser registered under the
Advisers Act. Bee commenced operations in 1989. On December 31, 1994, Bee was
managing approximately $52 million in assets. Bee's address is 370 Seventeenth
Street, Suite 5150, Denver, Colorado 80202.
The directors of Bee are Bruce Bee, Edward M. McMillan and Marshall F.
Wallach. Mr. Bee serves as President of Bee (which is his principal occupation),
and is the owner of 90% of Bee's outstanding shares. Mr. Bee's business address
is the same as that of Bee. Mr. McMillan serves as a Principal of Bee (his
principal occupation), where he leads marketing for Bee. His business address is
the same as that of Bee. Mr. Wallach's principal occupation is serving as
President of The Wallach Company, an investment bank, and his address is 1401
Seventeenth Street, Suite 750, Denver, Colorado 80202.
PROPOSAL 4:
TO APPROVE OR DISAPPROVE A NEW MONEY MANAGER AGREEMENT BETWEEN TIP,
FOR THE ACCOUNT OF THE FUND, AND LAZARD FRERES ASSET MANAGEMENT
It is proposed that the Fund engage the services of Lazard Freres Asset
Management ("Lazard") as a Money Manager with respect to a portion of the Fund's
assets pursuant to a money manager agreement (the "Proposed Lazard Agreement")
with TIP, for the account of the Fund. At the Meeting, Members of the Fund will
be asked to approve the Proposed Lazard Agreement.
The following summary provides information about Lazard and the terms of the
Proposed Lazard Agreement. Please see the section of this Proxy Statement
entitled "Evaluation of Proposals and Recommendations by TIP Directors" for
information regarding the deliberations of the Boards of Directors concerning
approval of the Proposed Lazard Agreement.
Terms of the Proposed Lazard Agreement
The Proposed Lazard Agreement was approved by the Board of Directors on
February 16, 1995. A summary of the terms of such Agreement is set forth below.
Members should refer to Appendix D for the complete terms of the Proposed Lazard
Agreement.
Basic Terms. The Proposed Lazard Agreement has an initial term of two years
and provides that it will thereafter continue in effect from year to year only
if such continuation is specifically approved at least annually by (a) either
(i) a vote of a majority of the Board of Directors of TIP, or (ii) a vote of a
majority of the outstanding voting securities of the Fund, and (b) a vote of a
majority of the Fund's directors who are not "interested persons" (as defined in
the 1940 Act). The Proposed Lazard Agreement provides that it may be terminated
by the Fund, by its Board of Directors or by a vote of a majority of its
outstanding voting securities, or by Lazard, in either case, at any time upon 30
days' written notice to the other party. In addition, the Agreement provides
for its automatic termination in the event of assignment.
-13-
<PAGE>
The Proposed Lazard Agreement provides that Lazard is required to manage the
securities held by the Fund, subject to the supervision and stated direction of
FAI, the Fund's Adviser, and ultimately TIP's Board of Directors in accordance
with the Fund's investment objective and policies, make investment decisions for
the Fund, and place orders to purchase and sell securities on behalf of the
Fund.
The Proposed Lazard Agreement provides that Lazard is not liable to the Fund
for any error of judgment but shall be liable to the Fund for any loss resulting
from willful misfeasance, bad faith or gross negligence by Lazard in providing
services under the Agreement or from reckless disregard by Lazard of its
obligations and duties under the Agreement.
Money Management Fees. The Proposed Lazard Agreement provides that the Fund
will pay Lazard a monthly fee at the rate of 0.50% of average daily net assets
of the Fund managed by Lazard.
Consequences of Approval or Disapproval. If the Proposed Lazard Agreement is
approved by the Members, it will become effective immediately, and will remain
in effect, unless earlier terminated, for an initial two-year term, subject to
annual review and continuation thereafter.
In the event that the Members do not approve the Proposed Lazard Agreement,
subject to the approval of the Securities and Exchange Commission if necessary,
the Board of Directors of TIP would seek to obtain for the Fund advisory
services from another advisory organization. Thereafter, the Board of Directors
would either negotiate a new money manager agreement with an advisory
organization selected by the Board or make other appropriate arrangements, in
either event subject to approval by the Members.
Background Information Regarding Lazard
Lazard is a division of Lazard Freres & Co. (the "Lazard Parent"), a New York
limited partnership. The Lazard Parent is registered as an investment adviser
under the Advisers Act. As of December 31, 1994, Lazard had approximately $22
billion in assets under management, of which approximately $2 billion were
registered investment company assets. The address of Lazard and the Lazard
Parent is One Rockefeller Plaza, New York, New York 10020.
The general partners of the Lazard Parent who will have significant
management responsibilities relating to assets of the Fund are as follows:
Norman Eig, Herbert W. Gullquist, Thomas F. Dunn, Eduardo Haim, Alexander E.
Zagoreos, Michael S. Rome, Robert P. Morganthau, John R. Reese and John R.
Reinsberg. The principal occupation of each of such persons is acting as general
partner of the Lazard Parent. All such persons have a business address of One
Rockefeller Plaza, New York, New York 10020.
The general partners of the Lazard Parent with the five largest economic
interests in the Lazard Parent are the following: Michel David-Weill, Lazard
Partners, L.P., Damon Mezzacappa, Steven Rattner and Felix Rohatyn. The
principal occupation or business of each of such persons is acting as general
partner of the Lazard Parent. All such persons have a business address of One
Rockefeller Plaza, New York, New York 10020.
Lazard acts as investment adviser to The Lazard Funds, Inc., of which two
portfolios have investment objectives similar to that of the Fund. The names of
such portfolios, their approximate net assets as of December 31, 1994 and the
fees charged to such portfolios by Lazard are set forth below.
<TABLE>
<CAPTION>
Approximate Net Assets Annual Advisory Fee (as%
Name of Portfolio at December 31, 1994 of average daily net assets)
- ------------------ ---------------------- ----------------------------
<S> <C> <C>
Lazard International
Equity Portfolio $831,876,982 .75%
Target International
Equity Portfolio $188,278,127 .40%
</TABLE>
-14-
<PAGE>
EVALUATIONS OF PROPOSALS AND RECOMMENDATIONS BY TIP DIRECTORS
The Board of Directors has determined, in approving the Proposed Delaware
Agreement and the Proposed Marathon Agreement on behalf of the Fund, that the
Fund can best assure itself that services currently provided by Delaware and
Marathon, and their respective officers and employees, will continue to be
provided without interruption. The Board believes that, like the Current
Delaware Agreement and the Initial and Interim Marathon Agreements, the Proposed
Delaware Agreement and the Proposed Marathon Agreement will enable the Fund to
obtain services of high quality at costs deemed appropriate, reasonable, and in
the best interests of the Fund and its Members. The Board of Directors has also
determined that the Proposed Bee and Lazard Agreements will enable the Fund,
with its growing asset base, to obtain services of high quality at costs deemed
appropriate, reasonable, and in the best interests of the Fund and its Members,
and to diversify further the pool of Money Managers acting with respect to the
Fund's assets.
At a meeting on February 16, 1995, the Directors of TIP considered
information with respect to whether the Proposed Delaware, Marathon, Bee and
Lazard Agreements are in the best interests of the Fund and its Members. The
Directors considered, with respect to Delaware, among other factors,
representations by Delaware that the Merger will not materially affect the
investment advisory operations of Delaware or the level or quality of advisory
services provided to the Fund; that, subject to Board and Member approval, the
same personnel at Delaware who currently provide services to the Fund are
expected to continue to do so after the Merger; that the advisory fee will not
change as a result of the Merger; and that the Fund will be unaffected in any
other way by the Merger, including that the Fund will not be subjected to any
unfair burden as a result of the transaction. With respect to the Proposed
Marathon Agreement, the Board considered, among other factors, representations
by Marathon that the change of control had not materially affected the
investment advisory operations of Marathon or the level or quality of advisory
services provided to the Fund; and that subject to Board and Member approval,
the same personnel at Marathon who currently provide services to the Fund will
continue to do so. With respect to the Proposed Bee and Lazard Agreements, the
Board considered, among other factors, the quality of advisory services that
each of Bee and Lazard could provide to the Fund; the education and experience
of the personnel at each of Bee and Lazard who would be providing services to
the Fund; the amounts of the advisory fees to be paid to each of Bee and Lazard
pursuant to each Agreement; and the benefit to Members of the Fund arising out
of each Agreement.
Based upon its review, the Board of Directors concluded that the Proposed
Delaware, Marathon, Bee and Lazard Agreements are reasonable, fair, and in the
best interests of the Fund and its Members, and that the fees provided in such
Agreements are fair and reasonable. In the Board's view, retaining each of
Delaware, Marathon, Bee and Lazard to serve as Money Managers of the Fund, under
the terms of the Proposed Delaware, Marathon, Bee and Lazard Agreements, are
desirable and in the best interests of the Fund and its Members. Accordingly,
after consideration of the above factors, and such other factors and information
as it deemed relevant, the Board of Directors, including all of the Independent
Directors in attendance at the meeting, unanimously approved the Proposed
Delaware, Marathon, Bee and Lazard Agreements and voted to recommend their
approval to the Fund's Members.
THE DIRECTORS, INCLUDING THE INDEPENDENT DIRECTORS, RECOMMEND THAT MEMBERS VOTE
"FOR" PROPOSAL 1, "FOR" PROPOSAL 2, "FOR" PROPOSAL 3 AND "FOR" PROPOSAL 4, AND
ANY UNMARKED PROXIES WILL BE SO VOTED.
-15-
<PAGE>
OTHER BUSINESS
The Directors know of no other business to be brought before the
Meeting. However, if any other matters properly come before the Meeting,
proxies will be voted in accordance with the judgment of the Board of Directors.
Proposals for Future Member Meetings
TIP does not intend to hold Member meetings each year, but meetings
may be called by the Directors from time to time. Proposals of Members which
are intended to be presented at a future Member meeting must be received by TIP
by a reasonable time prior to TIP's mailing of information statements relating
to such meeting.
By Order of the Board of Directors
Esther Cash
Secretary
-16-
<PAGE>
Appendix A
Money Manager Agreement
This Agreement is between the TIFF Investment Program, Inc.("TIP"), a
Maryland Corporation, for its TIFF International Equity Fund and such other of
its Funds as may from time to time allot assets for management under this
agreement (hereafter "Fund"), and Delaware International Advisers Ltd.
(hereafter "Manager") and is effective as of ____________________, 1995 (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
Fund wishes to retain Manager to render advisory services to Fund and
Manager is willing to render those services.
Now, therefore, the parties agree as follows:
1. Managed Assets
Manager will provide investment management services with respect to assets
placed with Manager on behalf of 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." 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 Fund, hereby appoints Manager to
manage the Managed Assets for the period and on the terms set forth in this
Agreement. Manager hereby accepts this appointment and agrees to render the
services herein described in accordance with the Manager's Investment Approach
set forth in the Manager Profile and Investment Guidelines ("Investment
Guidelines," and together with the Manager Profile, Manager's "Investment
Approach") as such approach may be elaborated, amended, and refined with the
mutual consent of Foundation Advisers, Inc. ("FAI"), acting on behalf of Fund,
and Manager. The Manager Profile pertaining to Manager is included in the
prospectus (the "Prospectus") which is part of the Registration Statement under
the 1940 Act
<PAGE>
and the Securities Act of 1933, as amended on Form N1-A as filed with the
Securities and Exchange Commission relating to Fund and the shares of common
stock in Fund. The Registration Statement, with all amendments thereto, is
referred herein as the "Registration Statement".
(b) Powers. Subject to the supervision of the Board of Directors of TIP
and subject to the supervision of FAI as Investment Adviser to Fund, Manager
shall direct investment of the Managed Assets in accordance with Manager's
Investment Approach. Fund grants the Manager authority to:
(i) acquire (by purchase, exchange, subscription, or otherwise), to
hold, and to 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 Manager of its duties hereunder.
(c) Power of Attorney. To enable Manager to exercise fully discretion
granted hereunder, TIP appoints Manager as its attorney in fact to invest, sell,
and reinvest the Managed Assets as fully as TIP itself could do. Manager hereby
accepts this appointment.
(d) Voting. Manager shall be authorized to vote on behalf of Fund any
proxies relating to the Managed Assets, provided, however, that Manager shall
comply with any instructions received from Fund as to the voting of securities
and handling of proxies.
(e) Independent Contractor. Except as expressly authorized herein, Manager
shall for all purposes be deemed to be an independent contractor and shall have
no authority to act for or to represent TIP, Fund, or FAI in any way, or
otherwise to be an agent of any of them.
3. Requirements; Duties
2
<PAGE>
(a) Requirements. In performing services for the Fund and otherwise
discharging its obligations under this Agreement, Manager shall act in
conformity with the following requirements (referred to collectively in this
Agreement as the "Requirements"):
(i) requirements in the Articles of Incorporation and By-Laws of TIP,
a copy of which has been provided to Manager, which apply to the
Manager, if any;
(ii) requirements in the Registration Statement, including the
Manager's Investment Approach set forth therein, which apply to
the Manager;
(iii) requirements of the 1940 Act, the Internal Revenue Code, 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) instructions and directions of the Board of Directors of TIP, the
likely scope of which are outlined in TIP's Prospectus;
(v) instructions and directions of FAI, the likely scope of which are
outlined in TIP's Prospectus; and
(vi) the Manager's Investment Guidelines, which shall be amended from
time to time through mutual agreement by the Investment Adviser
and Manager.
(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 Manager, Manager agrees to comply with such Requirements: (i) to the
extent that such compliance is within Manager's Investment Guidelines; and (ii)
to the extent that Manager is provided with information sufficient to ascertain
the applicability of such Requirements. If it appears to Fund at any time that
Fund may not be in compliance with any Requirement and Fund so notifies Manager,
Manager shall promptly take such actions not inconsistent with applicable law as
Fund may reasonably specify to effect compliance.
3
<PAGE>
(c) Responsibility with Respect to Performance of Duties. In performing
its duties under this Agreement, Manager will act solely in the interests of
Fund and shall use reasonable care and its best judgment in matters relating to
the Fund. Manager will not deal with the Managed Assets in its own interest or
for its own account.
4. Recordkeeping and Reporting
(a) Records. 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 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 Fund; 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, Manager
shall promptly return records that are Fund's property and, upon demand, shall
make and deliver to Fund true and complete and legible copies of such other
records maintained as required by this Section 4(a) as Fund may request.
Manager may retain copies of records furnished to Fund.
(b) Reports to Custodian. Manager shall provide to Fund's custodian and to
the Fund on each business day information relating to all transactions
concerning the Managed Assets.
(c) Other Reports. 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. Manager shall place all orders for the purchase
and sale of securities on behalf of Fund with brokers or dealers selected by
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
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compensation in connection with the purchase or sale of investments by Fund
other than the management fees provided for in Section 6 hereof.
(b) Aggregating Orders. On occasions when Manager deems the purchase or
sale of a security to be in the best interest of Fund as well as other Funds of
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 Manager in the manner it considers to be most
equitable and consistent with its fiduciary obligations to Fund and its other
Funds.
6. Management Fees; Expenses
(a) Management Fees. Schedule I attached hereto sets out the fees to be
paid by Fund to 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 Fund's Registration
Statement, pursuant to this Agreement.
(b) Expenses. 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. Manager shall not have
responsibility for calculating the Net Asset Value of the Fund's portfolio, but
must daily review the pricing of the Managed Assets. Fund shall pay directly,
or, if Manager makes payment, reimburse Manager for, (i) custodial fees for the
Managed Assets, (ii) brokerage commissions, issue and transfer taxes and other
costs of securities transactions to which Fund is a party, including any portion
of such commissions attributable to research and brokerage services; and (iii)
taxes, if any, payable by Fund. In addition, Fund shall pay directly, or, if
Manager makes payment, reimburse Manager for, such non-recurring special out-of-
pocket costs and expenses as may be authorized in advance by Fund.
7. Non-Exclusivity of Services
5
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Manager is free to act for its own account and to provide investment
management services to others. Fund acknowledges that Manager and its officers
and employees, and Manager's other Funds 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
Fund. Neither 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
Fund. 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 Fund for any error of judgment but Manager
shall be liable to Fund for any loss resulting from willful misfeasance, bad
faith, or gross negligence by Manager in providing services under this Agreement
or from reckless disregard by Manager of its obligations and duties under this
Agreement.
9. Representations
(a) Manager hereby confirms to Fund that 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 Manager has been duly
authorized and, upon execution and delivery, this Agreement will be binding upon
Manager in accordance with its terms.
(b) TIP hereby confirms to Manager that it has full power and authority to
enter into this Agreement and that the execution of this Agreement on behalf of
Fund has been duly authorized and, upon execution and delivery, this Agreement
will be binding upon TIP in accordance with its terms.
6
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(c) TIP acknowledges receipt of Manager's Form ADV and CTA Disclosure
Document.
(d) TIP and Fund are in full compliance with the regulations of the
CFTC and SEC.
10. Term
This Agreement shall continue in effect for a period of two years from the
date hereof and shall thereafter be automatically renewed for successive periods
of one 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 the
Fund, if a decision to terminate is made by the Board of Directors of Fund or by
a vote of a majority of the outstanding voting securities (as defined in the
1940 Act) of the Fund, or by the Manager, in each case with at least 30 days'
written notice from the terminating party and on the date specified in the
notice of termination.
This Agreement shall terminate automatically in the event of its
assignment (as defined in the 1940 Act).
11. Amendment
This Agreement may be amended by mutual consent, but the consent of 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 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:
Fund: TIFF Investment Program
c/o Foundation Advisers, Inc.
P.O. Box 5165
Charlottesville, Virginia 22905
Telecopy: 804-977-4479
7
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Manager: Delaware International Advisers Ltd.
Veritas House
125 Finsbury Pavement, 3rd Floor
London, England EC2A 1NQ
Telecopy: 011-44-71-638-2099
Attn.: Managing Director
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.
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.
On behalf of Fund by the
TIFF Investment Program, Inc.: On behalf of Manager by:
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- -------------------------- -------------------------------
Esther Cash/Vice President Signature
-------------------------------
Name / Title
9
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Schedule I
Fee Calculation
Compensation
As compensation for the services performed and the facilities and personnel
provided by the Manager pursuant to this Agreement, the Fund will pay to the
Manager a fee according to the following formula:
0.50% of average daily assets on first $50 million
0.35% of average daily assets on next $50 million
0.30% per annum on remainder
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Appendix B
Money Manager Agreement
This Agreement is between the TIFF Investment Program, Inc.("TIP"), a
Maryland Corporation, for its TIFF International Equity Fund and such other of
its Funds as may from time to time allot assets for management under this
agreement (hereafter "Fund"), and Marathon Asset Management Ltd. (hereafter
"Manager") and is effective as of ___________________, 1995 (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
Fund wishes to retain Manager to render advisory services to Fund and
Manager is willing to render those services.
Now, therefore, the parties agree as follows:
1. Managed Assets
Manager will provide investment management services with respect to assets
placed with Manager on behalf of 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." 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 Fund, hereby appoints Manager to
manage the Managed Assets for the period and on the terms set forth in this
Agreement. Manager hereby accepts this appointment and agrees to render the
services herein described in accordance with the Manager's Investment Approach
set forth in the Manager Profile and Investment Guidelines ("Investment
Guidelines," and together with the Manager Profile, Manager's "Investment
Approach") as such approach may be elaborated, amended, and refined with the
mutual consent of Foundation Advisers, Inc. ("FAI"), acting on behalf of Fund,
and Manager. The Manager Profile pertaining to Manager is included in the
prospectus (the "Prospectus") which is part of the Registration Statement under
the 1940 Act
<PAGE>
and the Securities Act of 1933, as amended on Form N1-A as filed with the
Securities and Exchange Commission relating to Fund and the shares of common
stock in Fund. The Registration Statement, with all amendments thereto, is
referred herein as the "Registration Statement".
(b) Powers. Subject to the supervision of the Board of Directors of TIP
and subject to the supervision of FAI as Investment Adviser to Fund, Manager
shall direct investment of the Managed Assets in accordance with Manager's
Investment Approach. Fund grants the Manager authority to:
(i) acquire (by purchase, exchange, subscription, or otherwise), to
hold, and to 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 Manager of its duties hereunder.
(c) Power of Attorney. To enable Manager to exercise fully discretion
granted hereunder, TIP appoints Manager as its attorney in fact to invest, sell,
and reinvest the Managed Assets as fully as TIP itself could do. Manager hereby
accepts this appointment.
(d) Voting. Manager shall be authorized to vote on behalf of Fund any
proxies relating to the Managed Assets, provided, however, that Manager shall
comply with any instructions received from Fund as to the voting of securities
and handling of proxies.
(e) Independent Contractor. Except as expressly authorized herein, Manager
shall for all purposes be deemed to be an independent contractor and shall have
no authority to act for or to represent TIP, Fund, or FAI in any way, or
otherwise to be an agent of any of them.
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<PAGE>
3. Requirements; Duties
(a) Requirements. In performing services for the Fund and otherwise
discharging its obligations under this Agreement, Manager shall act in
conformity with the following requirements (referred to collectively in this
Agreement as the "Requirements"):
(i) requirements in the Articles of Incorporation and By-Laws of TIP,
a copy of which has been provided to Manager, which apply to the
Manager, if any;
(ii) requirements in the Registration Statement, including the
Manager's Investment Approach set forth therein, which apply to
the Manager;
(iii) requirements of the 1940 Act, the Internal Revenue Code, 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) instructions and directions of the Board of Directors of TIP, the
likely scope of which are outlined in TIP's Prospectus;
(v) instructions and directions of FAI, the likely scope of which are
outlined in TIP's Prospectus; and
(vi) the Manager's Investment Guidelines, which shall be amended from
time to time through mutual agreement by the Investment Adviser
and Manager.
(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 Manager, Manager agrees to comply with such Requirements: (i) to the
extent that such compliance is within Manager's Investment Guidelines; and (ii)
to the extent that Manager is provided with information sufficient to ascertain
the applicability of such Requirements. If it appears to Fund at any time that
Fund may
3
<PAGE>
not be in compliance with any Requirement and Fund so notifies Manager, Manager
shall promptly take such actions not inconsistent with applicable law as Fund
may reasonably specify to effect compliance.
(c) Responsibility with Respect to Performance of Duties. In performing
its duties under this Agreement, Manager will act solely in the interests of
Fund and shall use reasonable care and its best judgment in matters relating to
the Fund. Manager will not deal with the Managed Assets in its own interest or
for its own account.
4. Recordkeeping and Reporting
(a) Records. 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 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 Fund; 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, Manager
shall promptly return records that are Fund's property and, upon demand, shall
make and deliver to Fund true and complete and legible copies of such other
records maintained as required by this Section 4(a) as Fund may request.
Manager may retain copies of records furnished to Fund.
(b) Reports to Custodian. Manager shall provide to Fund's custodian and to
the Fund on each business day information relating to all transactions
concerning the Managed Assets.
(c) Other Reports. 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. Manager shall place all orders for the purchase
and sale of securities on behalf of Fund with brokers or dealers selected by
Manager in conformity with the policy respecting brokerage set forth in the
Registration
4
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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 Fund other than the management fees provided for in Section 6 hereof.
(b) Aggregating Orders. On occasions when Manager deems the purchase or
sale of a security to be in the best interest of Fund as well as other Funds of
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 Manager in the manner it considers to be most
equitable and consistent with its fiduciary obligations to Fund and its other
Funds.
6. Management Fees; Expenses
(a) Management Fees. Schedule I attached hereto sets out the fees to be
paid by Fund to 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 Fund's Registration
Statement, pursuant to this Agreement.
(b) Expenses. 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. Manager shall not have
responsibility for calculating the Net Asset Value of the Fund's portfolio, but
must daily review the pricing of the Managed Assets. Fund shall pay directly,
or, if Manager makes payment, reimburse Manager for, (i) custodial fees for the
Managed Assets, (ii) brokerage commissions, issue and transfer taxes and other
costs of securities transactions to which Fund is a party, including any portion
of such commissions attributable to research and brokerage services; and (iii)
taxes, if any, payable by Fund. In addition, Fund shall pay directly, or, if
Manager makes payment, reimburse Manager for, such non-recurring special out-of-
pocket costs and expenses as may be authorized in advance by Fund.
5
<PAGE>
7. Non-Exclusivity of Services
Manager is free to act for its own account and to provide investment
management services to others. Fund acknowledges that Manager and its officers
and employees, and Manager's other Funds 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
Fund. Neither 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
Fund. 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 Fund for any error of judgment but Manager
shall be liable to Fund for any loss resulting from willful misfeasance, bad
faith, or gross negligence by Manager in providing services under this Agreement
or from reckless disregard by Manager of its obligations and duties under this
Agreement.
9. Representations
(a) Manager hereby confirms to Fund that 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 Manager has been duly
authorized and, upon execution and delivery, this Agreement will be binding upon
Manager in accordance with its terms.
(b) TIP hereby confirms to Manager that it has full power and authority to
enter into this Agreement and that the execution of this Agreement on behalf of
Fund has been duly authorized and, upon execution and delivery, this Agreement
will be binding upon TIP in accordance with its terms.
6
<PAGE>
(c) TIP acknowledges receipt of Manager's Form ADV and CTA Disclosure
Document.
(d) TIP and Fund are in full compliance with the regulations of the
CFTC and SEC.
10. Term
This Agreement shall continue in effect for a period of two years from the
date hereof and shall thereafter be automatically renewed for successive periods
of one 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 the
Fund, if a decision to terminate is made by the Board of Directors of Fund or by
a vote of a majority of the outstanding voting securities (as defined in the
1940 Act) of the Fund, or by the Manager, in each case with at least 30 days'
written notice from the terminating party and on the date specified in the
notice of termination.
This Agreement shall terminate automatically in the event of its assignment
(as defined in the 1940 Act).
11. Amendment
This Agreement may be amended by mutual consent, but the consent of 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 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:
7
<PAGE>
Fund: TIFF Investment Program
c/o Foundation Advisers, Inc.
P.O. Box 5165
Charlottesville, Virginia 22905
Telecopy: 804-977-4479
Manager: Marathon Asset Management Ltd.
115 Shaftesbury Avenue
London, England WC2H 8AD
Attention: David Brown
Telecopy: 071-497-2399
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.
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.
8
<PAGE>
On behalf of Fund by the
TIFF Investment Program, Inc.: On behalf of Manager by:
- ---------------------------- -----------------------------
Esther Cash/Vice President Signature
-----------------------------
Name / Title
9
<PAGE>
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 Fund will pay to the
Manager a fee according to the following formula:
Fee = 40 + [.167 x (Excess Return - 140)], subject to Floor of 15 b.p., Cap
of 160 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.
"Managed Assets" is hereby defined as that portion of Fund'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 except custodian transaction charges) of Managed Assets during such
month by 1/12th of the "floor rate" set forth in this Agreement.
"Performance Adjusted Fee," with respect to a calendar month subsequent to
the Transitional Period, shall mean the result obtained by multiplying the
average daily value of the net assets of the Managed Assets during the
performance measurement period by 1/12th of the Performance Fee Rate determined
in accordance with the formula above, where the performance measurement period
is the one-year period beginning on the first day of the thirteenth month prior
to such month and ending on the last day of the second month prior to such
month.
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<PAGE>
"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 Fund 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.
"Start-Up Period" shall mean the period beginning on the Beginning Date and
ending on either (i) the last day of the first full calendar month following the
month in which the Beginning Date falls, where the Beginning Date is the first
day of a calendar month, or (ii) the last day of the second full calendar month
following the month in which the Beginning Date falls, where the Beginning Date
is a day other than the first day of a calendar month.
"Transitional Performance Fee" shall mean the result obtained by
multiplying the average daily net assets (gross of expenses except custodian
transaction charges) of the Managed Assets during the performance measurement
period by the Performance Fee Rate determined in accordance with the formula
above, where the performance measurement period is the period beginning on the
Beginning Date and ending on the last day of the tenth month of the Transitional
Period (annualized, should the Beginning Date not be the first day of a calendar
month).
"Transitional Period" shall mean the period of twelve consecutive calendar
months beginning on the day following the last day of the Start-Up Period.
Fee For Services During Start-Up Period
11
<PAGE>
For services rendered by the Manager hereunder during each calendar month,
or portion of a calendar month, during the Start-Up Period, the Manager shall be
entitled to a fee equal to 150% of the Minimum Fee (prorated, with respect to
any period of less than a full calendar month, based on the number of days
during such calendar month that the Manager provided services hereunder),
payable by the Fund on or about the tenth day of the month following the month
in which such fees are earned.
Fee For Services During Transitional Period
(a) Amount of Fee. For services rendered by the Manager hereunder during
the Transitional Period, the Manager shall be entitled to a fee equal to the
Transitional Performance Fee.
(b) Payment of Fee. On or about the tenth day of each month of the
Transitional Period, other than the first such month, the Fund shall pay to the
Manager an amount equal to the Minimum Fee applicable to the immediately
preceding month. On or about the tenth day of the month following the end of
the Transitional Period, the Fund shall pay the Manager the difference between
(i) the Transitional Performance Fee and (ii) the sum of Minimum Fee payments
made during the Transitional Period.
(c) Early Termination. If the Manager ceases to render services hereunder
at any time during, and before the end of, the Transitional Period, the Manager
shall be entitled to a fee for services rendered hereunder during the
Transitional Period equal to 150% of the Minimum Fee payments referred to in the
immediately preceding paragraph (prorated for any period of less than a full
calendar month that the Manager provided services hereunder based on the number
of days during such month that the Manager provided services hereunder), with
any amounts not previously paid being payable on or about the tenth day of the
month following the month in which the Manager ceased to render services
hereunder.
Fee For Services During Subsequent Months
(a) Fee. For services rendered by the Manager hereunder during
consecutive full calendar months subsequent to the end of the Transitional
Period, the Manager shall be entitled to a fee equal to the Performance
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<PAGE>
Adjusted Fee, payable by the Fund 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 Fund on or about the tenth day of the month following the month in which
the Manager ceased to render services hereunder.
13
<PAGE>
Appendix C
Money Manager Agreement
This Agreement is between the TIFF Investment Program, Inc.("TIP"), a
Maryland Corporation, for the account of its TIFF International Equity Fund and
such other of its Funds as may from time to time allot assets for management
under this agreement (hereafter "Client"), and Bee & Associates, Inc. (hereafter
"Manager") and is effective as of ______________________, 1995 (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
Client wishes to retain Manager to render advisory services to Client and
Manager is willing to render those services.
Now, therefore, the parties agree as follows:
1. Managed Assets
Manager will provide investment management services with respect to assets
placed with Manager on behalf of Client 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." Client
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 Client, hereby appoints Manager
to manage the Managed Assets for the period and on the terms set forth in this
Agreement. Manager hereby accepts this appointment and agrees to render the
services herein described in accordance with the Manager's Investment Approach
set forth in the Manager Profile (Manager's "Investment Approach") as such
approach may be elaborated and refined with the consent of Foundation Advisers,
Inc. ("FAI"), acting on behalf of Client. The Manager Profile pertaining to
Manager is included in the prospectus (the "Prospectus") which is part of the
Registration
<PAGE>
Statement under the 1940 Act and the Securities Act of 1933, as amended on Form
N1-A as filed with the Securities and Exchange Commission relating to Client and
the shares of common stock in Client. The Registration Statement, with all
amendments thereto, is referred herein as the "Registration Statement".
(b) Powers. Subject to the supervision of the Board of Directors of TIP
and subject to the supervision of FAI, which is Investment Adviser to Client,
Manager shall direct investment of the Managed Assets in accordance with
Manager's Investment Approach. Client grants the Manager authority to:
(i) acquire (by purchase, exchange, subscription, or otherwise), to
hold, and to 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 Manager of its duties hereunder.
(c) Power of Attorney. To enable Manager to exercise fully discretion
granted hereunder, TIP appoints Manager as its attorney in fact to invest, sell,
and reinvest the Managed Assets as fully as TIP itself could do. Manager hereby
accepts this appointment.
(d) Voting. Manager shall be authorized to vote on behalf of Client any
proxies relating to the Managed Assets, provided, however, that Manager shall
comply with instructions received from Client as to the voting of securities and
handling of proxies.
(e) Independent Contractor. Except as expressly authorized herein, Manager
shall for all purposes be deemed to be an independent contractor and shall have
no authority to act for or to represent TIP, Client, or FAI in any way, or
otherwise to be an agent of any of them.
3. Requirements; Duties
2
<PAGE>
(a) Requirements. In performing services and otherwise discharging its
obligations under this Agreement, Manager shall act in conformity with the
following requirements (referred to collectively in this Agreement as the
"Requirements"):
(i) the Articles of Incorporation and By-Laws of TIP;
(ii) the Registration Statement, including the Manager's Investment
Approach set forth therein;
(iii) the 1940 Act, the Internal Revenue Code, and all other applicable
federal and state laws and regulations;
(iv) instructions and directions of the Board of Directors of TIP;
(v) instructions and directions of FAI; and
(vi) the Manager's Investment Guidelines, which shall be amended from
time to time by the Investment Adviser.
(b) Responsibility with Respect to Actions of Others. TIP places the
investment portfolio of each of its Funds, including Client, 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 Manager, Manager agrees to comply with such Requirements to the extent
Manager is provided with information sufficient to ascertain the applicability
of such Requirements. If it appears to Client at any time that Client may not
be in compliance with any Requirement and Client so notifies Manager, Manager
shall promptly take such actions not inconsistent with applicable law as Client
may specify to effect compliance.
(c) Responsibility with Respect to Performance of Duties. In performing
its duties under this Agreement, Manager will act solely in the interests of
Client and shall use reasonable care and its best judgment. Manager will not
deal with the Managed Assets in its own interest or for its own account.
4. Recordkeeping and Reporting
3
<PAGE>
(a) Records. Manager shall maintain proper and complete records relating
to the furnishing of investment management services under this Agreement,
including records with respect to the Client's securities transactions required
by Rule 31a-1 under the 1940 Act. All records maintained pursuant to this
Agreement shall be subject to examination by Client 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 Client;
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 Client's
request. Upon termination of this Agreement, Manager shall promptly return
records that are Client's property and, upon demand, shall make and deliver to
Client true and complete and legible copies of such other records maintained as
required by this Section 4(a) as Client may request. Manager may retain copies
of records furnished to Client.
(b) Reports to Custodian. Manager shall provide to Client's custodian and
to the Client on each business day information relating to all transactions
concerning the Managed Assets.
(c) Other Reports. 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. Manager shall place all orders for the purchase
and sale of securities on behalf of Client with brokers or dealers selected by
Manager in conformity with the policy respecting brokerage set forth in the
Registration Statement. Neither the Manager nor any of its officers, employees,
or affiliates will act as principal or receive any compensation in connection
with the purchase or sale of investments by Client other than the management
fees provided for in Section 6 hereof.
(b) Aggregating Orders. On occasions when Manager deems the purchase or
sale of a security to be in the best interest of Client as well as other clients
of 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, the broker shall
confirm the transactions on an average price basis and allocation of securities
so purchased or
4
<PAGE>
sold, as well as the expense incurred in the transaction, will be made by
Manager in the manner it considers to be most equitable and consistent with its
fiduciary obligations to Client and its other clients.
6. Management Fees; Expenses
(a) Management Fees. Schedule 1 attached hereto sets out the fees to be
paid by Client to Manager by the tenth business day of the following month in
connection with this Agreement. The applicable fee rate will be applied to the
Manager's average daily net assets (gross of expenses except custodian
transaction charges), which is defined as that portion of the average daily net
assets (gross of expenses except custodian transaction charges) of the Fund,
computed as described in the Fund's Registration Statement, that is managed
pursuant to this Agreement by the Money Manager.
(b) Expenses. 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. Client shall pay directly, or, if
Manager makes payment, reimburse Manager for, (i) custodial fees for the
Managed Assets, (ii) brokerage commissions, issue and transfer taxes and other
costs of securities transactions to which Client is a party, including any
portion of such commissions attributable to research and brokerage services; and
(iii) taxes, if any, payable by Client. In addition, Client shall pay directly,
or, if Manager makes payment, reimburse Manager for, such non-recurring special
out-of-pocket costs and expenses as may be authorized in advance by Client.
7. Non-Exclusivity of Services
Manager is free to act for its own account to provide services to others
similar to those to be provided to Client hereunder. Client acknowledges that
Manager and its officers and employees, and Manager'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 Client. Neither 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 client.
5
<PAGE>
8. Liability
Manager shall not be liable to Client for any error of judgment but Manager
shall be liable to Client for any loss resulting from willful misfeasance, bad
faith, or gross negligence by Manager in providing services under this Agreement
or from reckless disregard by Manager of its obligations and duties under this
Agreement.
9. Representations
(a) Manager hereby confirms to Client that 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 Manager has been duly
authorized and, upon execution and delivery, this Agreement will be binding upon
Manager in accordance with its terms.
(b) TIP hereby confirms to Manager 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 duly authorized and, upon execution and delivery, this Agreement
will be binding upon Client in accordance with its terms.
10. Term
This Agreement shall continue in effect for a period of more than two years
from the date hereof only so long as such continuance is 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 the Client, if a decision to terminate is made by the Board of
Directors of Client or by a vote of a majority of the outstanding voting
securities (as defined in the 1940 Act) of the Client, or by the Manager, in
each case with at least 30 days' written notice from the terminating party and
on the date specified in the notice of termination.
This Agreement shall terminate automatically in the event of its assignment
(as defined in the 1940 Act).
11. Amendment
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This Agreement may be amended by mutual consent, but the consent of Client
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 Client.
12. Notices
Notices or other communications required to be given pursuant to this
Agreement shall be deemed duly given when delivered in person, or sent by
telecopy, or three days after mailing registered mail postage prepaid as
follows:
Client: TIFF Investment Program
c/o Foundation Advisers, Inc.
P.O. Box 5165
Charlottesville, Virginia 22905
Telecopy: 804-977-4479
Manager: Bee & Associates, Inc.
370 Seventeenth St., Suite 5150
Denver, CO 80202
Attention: Edward McMillan
Telecopy: 303-592-5120
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.
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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.
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.
On behalf of Client by the On behalf of Bee & Associates
TIFF Investment Program by:
/s/ Ester Cash /s/ Bruce B. Bee
- ---------------------------- -----------------------------
Signature Signature
ESTER CASH, VP BRUCE B. BEE, PRESIDENT
- ---------------------------- -----------------------------
Name / Title Name / Title
8
<PAGE>
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 = 15 + [ 0.270 x (Excess Return - 115)]; subject to Floor of 15 b.p.,
Cap of 200 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.
"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," with respect to a calendar month subsequent to
the Transitional Period, shall mean the result obtained by multiplying the
average daily value of the net assets of the Managed Assets during the
performance measurement period by 1/12th of the Performance Fee Rate determined
in accordance with the formula above, where the performance measurement period
is the one-year period beginning on the first day of the thirteenth month prior
to such month and ending on the last day of the second month prior to such
month.
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"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 (i.e.,
the slope of the line graph appearing in Schedule 1) is constant (i.e., the
graph's slope is a straight line). The Performance Fee Rate will change as the
Manager's performance varies from the performance of the benchmark in increments
of one basis point.
"Start-Up Period" shall mean the period beginning on the Beginning Date and
ending on either (i) the last day of the first full calendar month following the
month in which the Beginning Date falls, where the Beginning Date is the first
day of a calendar month, or (ii) the last day of the second full calendar month
following the month in which the Beginning Date falls, where the Beginning Date
is a day other than the first day of a calendar month.
"Transitional Performance Fee" shall mean the result obtained by
multiplying the average daily net assets (gross of expenses) of the Managed
Assets during the performance measurement period by the Performance Fee Rate
determined in accordance with the formula above, where the performance
measurement period is the period beginning on the Beginning Date and ending on
the last day of the tenth month of the Transitional Period (annualized, should
the Beginning Date not be the first day of a calendar month).
"Transitional Period" shall mean the period of twelve consecutive calendar
months beginning on the day following the last day of the Start-Up Period.
Fee For Services During Start-Up Period
10
<PAGE>
For services rendered by the Manager hereunder during each calendar month,
or portion of a calendar month, during the Start-Up Period, the Manager shall be
entitled to a fee equal to 150% of the Minimum Fee (prorated, with respect to
any period of less than a full calendar month, 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 such fees are earned.
Fee For Services During Transitional Period
(a) Amount of Fee. For services rendered by the Manager hereunder during
the Transitional Period, the Manager shall be entitled to a fee equal to the
Transitional Performance Fee.
(b) Payment of Fee. On or about the tenth day of each month of the
Transitional Period, other than the first such month, the Client shall pay to
the Manager an amount equal to the Minimum Fee applicable to the immediately
preceding month. On or about the tenth day of the month following the end of
the Transitional Period, the Client shall pay the Manager the difference between
(i) the Transitional Performance Fee and (ii) the sum of Minimum Fee payments
made during the Transitional Period.
(c) Early Termination. If the Manager ceases to render services hereunder
at any time during, and before the end of, the Transitional Period, the Manager
shall be entitled to a fee for services rendered hereunder during the
Transitional Period equal to 150% of the Minimum Fee payments referred to in the
immediately preceding paragraph (prorated for any period of less than a full
calendar month that the Manager provided services hereunder based on the number
of days during such month that the Manager provided services hereunder), with
any amounts not previously paid being payable on or about the tenth day of the
month following the month in which the Manager ceased to render services
hereunder.
Fee For Services During Subsequent Months
(a) Fee. For services rendered by the Manager hereunder during
consecutive full calendar months subsequent to the end of the Transitional
Period, the Manager shall be entitled to a fee equal to the Performance
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<PAGE>
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.
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<PAGE>
Appendix D
Money Manager Agreement
This Agreement is between the TIFF Investment Program, Inc.("TIP"), a
Maryland Corporation, for the account of its TIFF International Equity Fund and
such other of its Funds as may from time to time allot assets for management
under this agreement (hereafter "Client"), and Lazard Freres Asset Management, a
division of Lazard Freres & Co. (hereafter "Manager") and is effective as of
______________________, 1994 (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
Client wishes to retain Manager to render advisory services to Client and
Manager is willing to render those services.
Now, therefore, the parties agree as follows:
1. Managed Assets
Manager will provide investment management services with respect to assets
placed with Manager on behalf of Client 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." Client
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 Client, hereby appoints Manager
to manage the Managed Assets for the period and on the terms set forth in this
Agreement. Manager hereby accepts this appointment and agrees to render the
services herein described in accordance with the Manager's Investment Approach
set forth in the Manager Profile (Manager's "Investment Approach") as such
approach may be elaborated and refined with the consent of Foundation Advisers,
Inc. ("FAI"), acting on behalf of Client. The Manager Profile pertaining to
Manager is included the prospectus (the "Prospectus") which is part of the
Registration
<PAGE>
Statement under the 1940 Act and the Securities Act of 1933, as
amended on Form N1-A as filed with the Securities and Exchange Commission
relating to Client and the shares of common stock in Client. The Registration
Statement, with all amendments thereto, is referred herein as the "Registration
Statement".
(b) Powers. Subject to the supervision of the Board of Directors of TIP
and subject to the supervision of FAI, which is Investment Adviser to Client,
Manager shall direct investment of the Managed Assets in accordance with
Manager's Investment Approach. Client grants the Manager authority to:
(i) acquire (by purchase, exchange, subscription, or otherwise), to
hold, and to 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 Manager of its duties hereunder.
(c) Power of Attorney. To enable Manager to exercise fully discretion
granted hereunder, TIP appoints Manager as its attorney in fact to invest, sell,
and reinvest the Managed Assets as fully as TIP itself could do. Manager hereby
accepts this appointment.
(d) Voting. Manager shall be authorized to vote on behalf of Client any
proxies relating to the Managed Assets, provided, however, that Manager shall
comply with instructions received from Client as to the voting of securities and
handling of proxies. All proxies shall be voted in accordance with Section
12(d)(1)(F) of the 1940 Act.
(e) Independent Contractor. Except as expressly authorized herein, Manager
shall for all purposes be deemed to be an independent contractor and shall have
no authority to act for or to represent TIP, Client, or FAI in any way, or
otherwise to be an agent of any of them.
<PAGE>
3. Requirements; Duties
(a) Requirements. In performing services and otherwise discharging its
obligations under this Agreement, Manager shall act in conformity with the
following requirements (referred to collectively in this Agreement as the
"Requirements"):
(i) the Articles of Incorporation and By-Laws of TIP, a copy of
which has been provided to Manager;
(ii) the Registration Statement, including the Manager's Investment
Approach set forth therein;
(iii) the 1940 Act, the Internal Revenue Code, and all other
applicable federal and state laws and regulations;
(iv) instructions and directions of the Board of Directors of TIP;
(v) instructions and directions of FAI; and
(vi) the Manager's Investment Guidelines, which have been agreed to
by Client and Manager, and which shall be amended from time to
time by the Investment Adviser.
(b) Responsibility with Respect to Actions of Others. TIP places the
investment portfolio of each of its Funds, including Client, 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 Manager, Manager agrees to comply with such Requirements to the extent
Manager is provided with information sufficient to ascertain the applicability
of such Requirements. If it appears to Client at any time that Client may not
be in compliance with any Requirement and Client so notifies Manager, Manager
shall promptly take such actions not inconsistent with applicable law as Client
may reasonably specify to effect compliance.
(c) Responsibility with Respect to Performance of Duties. In performing
its duties under this Agreement, Manager will act solely in the interests of
Client
<PAGE>
and shall use reasonable care and its best judgment. Manager will not deal with
the Managed Assets in its own interest or for its own account.
4. Recordkeeping and Reporting
(a) Records. 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 Client 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 Client; 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 Client's request. Upon termination of this Agreement, Manager
shall promptly return records that are Client's property and, upon demand, shall
make and deliver to Client true and complete and legible copies of such other
records maintained as required by this Section 4(a) as Client may reasonably
request. Manager may retain copies of records furnished to Client.
(b) Reports to Custodian. Manager shall provide to Client's custodian and
to the Client on each business day information relating to all transactions
concerning the Managed Assets.
(c) Other Reports. 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. Manager shall place all orders for the purchase
and sale of securities on behalf of Client with brokers or dealers selected by
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 Client other than the management fees provided for in Section 6
hereof.
(b) Aggregating Orders. On occasions when Manager deems the purchase or
sale of a security to be in the best interest of Client as well as other
<PAGE>
clients of 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, the broker shall
confirm the transactions on an average price basis and allocation of securities
so purchased or sold, as well as the expense incurred in the transaction, will
be made by Manager in the manner it considers to be most equitable and
consistent with its fiduciary obligations to Client and its other clients.
6. Management Fees; Expenses
(a) Management Fees. Schedule I attached hereto sets out the fees to be
paid by Client to Manager by the tenth business day of the following month in
connection with this Agreement. The applicable fee rate will be applied to the
Manager's average daily net assets (gross of expenses), which is defined as that
portion of the average daily net assets (gross of expenses) of the Fund,
computed as described in the Fund's Registration Statement, that is managed
pursuant to this Agreement by the Money Manager.
(b) Expenses. 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. Manager shall not have
responsibility for calculating the Net Asset Value of the Client's portfolio,
but must daily review the pricing of the Managed Assets. Client shall pay
directly, or, if Manager makes payment, reimburse Manager for, (i) custodial,
transfer agent, accounting and other professional fees for the Managed Assets,
(ii) brokerage commissions, issue and transfer taxes and other costs of
securities transactions to which Client is a party, including any portion of
such commissions attributable to research and brokerage services; and (iii)
taxes, if any, payable by Client. In addition, Client shall pay directly, or,
if Manager makes payment, reimburse Manager for, such non-recurring special out-
of-pocket costs and expenses as may be authorized in advance by Client.
7. Non-Exclusivity of Services
Manager is free to act for its own account to provide services to others
similar to those to be provided to Client hereunder. Client acknowledges that
Manager and its officers and employees, and Manager's other clients may at any
<PAGE>
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 Client. Neither 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 client. Client agrees that the Manager may refrain from
providing any advice or services concerning securities of companies in 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 Client 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 Client.
8. Liability
Manager shall not be liable to Client for any error of judgment but Manager
shall be liable to Client for any loss resulting from willful misfeasance, bad
faith, or gross negligence by Manager in providing services under this Agreement
or from reckless disregard by Manager of its obligations and duties under this
Agreement.
9. Representations
(a) Manager hereby confirms to Client that 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 Manager has been duly
authorized and, upon execution and delivery, this Agreement will be binding upon
Manager in accordance with its terms.
(b) TIP hereby confirms to Manager that: (i) it has full power and
authority to enter into this Agreement; (ii) the execution of this Agreement on
behalf of Client has been duly authorized and, upon execution and delivery, this
Agreement will be binding upon Client in accordance with its terms; (iii) the
Registration Statement has been duly filed with the SEC and contains no material
misstatement or omission; and (iv) TIP has informed the Manager of all legal
limitations on the Manager's investment authority.
<PAGE>
10. Term
This Agreement shall continue in effect for a period of more than two years
from the date hereof only so long as such continuance is 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 the Client, if a decision to terminate is made by the Board of
Directors of Client or by a vote of a majority of the outstanding voting
securities (as defined in the 1940 Act) of the Client, or by the Manager, in
each case with at least 30 days' written notice from the terminating party and
on the date specified in the notice of termination.
This Agreement shall terminate automatically in the event of its assignment
(as defined in the 1940 Act).
11. Change in Membership
The Manager shall notify Client of any change in its membership within a
reasonable period of time following such change. In addition, Manager will give
TIP notice as soon as reasonably practicable (and prior notice when possible) of
a change in the trader(s) and/or portfolio manager(s) providing services to TIP.
12. Amendment
This Agreement may be amended by mutual consent, but the consent of Client
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 Client.
13. Notices
Notices or other communications required to be given pursuant to this
Agreement shall be deemed duly given when delivered in person, or sent by
telecopy, or three days after mailing registered mail postage prepaid as
follows:
Client: TIFF Investment Program
c/o Foundation Advisers, Inc.
P.O. Box 5165
Charlottesville, Virginia 22905
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Telecopy: 804-977-4479
Manager: Lazard Freres Asset Management
One Rockefeller Plaza
New York, NY 10020
Telecopy: 212-698-1184
Each party may change its address by giving notice as herein required.
14. 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.
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15. 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.
16. 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.
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.
On behalf of Client by the
TIFF Investment Program On behalf of Manager by:
/s/ Esther Cash /s/ Herbert W. Gullquist
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Signature Signature
Esther Cash, VP Herbert W. Gullquist
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Name / Title Name / Title -- General Partner
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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 pay to the
Manager a fee according to the following formula:
0.50% of average daily assets
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TIFF INVESTMENT PROGRAM
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SPECIAL MEETING OF MEMBERS OF THE TIFF INTERNATIONAL
EQUITY FUND -- MARCH 22, 1995
Revoking any such prior appointments, the undersigned hereby appoints David A.
Salem and Esther L. Cash, and each of them, the proxies of the undersigned, with
power of substitution to each of them, to vote all shares of the common stock of
TIFF International Equity Fund, a series of common stock issued by TIFF
Investment Program, Inc. which the undersigned is entitled to vote at the
Special Meeting of Members of the TIFF International Equity Fund, to be held at
2405 Ivy Road, Charlottesville, Virginia on March 22, 1995 at 10:00 a.m. Eastern
time, and any adjournment thereof.
Unless otherwise specified in the squares provided, the undersigned's vote will
be cast FOR items (1) through (4).
(1) To approve a new money manager agreement between TIFF Investment Program,
Inc. for the account of its TIFF International Equity Fund, and Delaware
International Advisors Ltd., in a form identical to the existing money
manager agreement with Delaware International Advisors Ltd.
[_] For [_] Against [_] Abstain
(2) To approve a new money manager agreement between TIFF Investment Program,
Inc., for the account of its TIFF International Equity Fund, and Marathon
Asset Management Ltd., in a form identical to the initial money manager
agreement with Marathon Asset Management Ltd.
[_] For [_] Against [_] Abstain
(3) To approve a new money manager agreement between TIFF Investment Program,
Inc., for the account of its TIFF International Equity Fund, and Bee &
Associates Incorporated.
[_] For [_] Against [_] Abstain
(4) To approve a new money manager agreement between TIFF Investment Program,
Inc., for the account of its TIFF International Equity Fund, and Lazard
Freres Asset Management.
[_] For [_] Against [_] Abstain
(5) To transact such other business as may properly come before the meeting.
Please sign on behalf of the foundation indicated hereon and indicate your
position with the foundation.
Foundation:________________________________________
Signature of Authorized Person:____________________
Title of Authorized Person:________________________
IEF Mkt Value at 2/28/95:__________________________
Date:______________________________________________
PLEASE SIGN AND RETURN PROMPTLY -- NO POSTAGE REQUIRED
