Registration Nos. 333-84639
811-9521
Securities and Exchange Commission
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 X
Pre-Effective Amendment No. ____ __
Post-Effective Amendment No. 1 X
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 3 X
(Check appropriate box or boxes)
MANAGERS AMG FUNDS
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(Exact Name of Registrant as Specified in Charter)
40 Richards Avenue, Norwalk, Connecticut 06854
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(Address of Principal Executive Offices)
John Kingston, III, Secretary
Managers AMG Funds
40 Richards Avenue
Norwalk, CT 06854
Copy To: Philip H. Newman, Esquire
Goodwin, Procter & Hoar, LLP
Exchange Place
Boston, MA 02109-2881
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(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check
appropriate box):
___ Immediately upon filing pursuant to ___On (date) pursuant to
paragraph (b) paragraph (b)
___ 60 days after filing pursuant to ___On (date) pursuant to paragraph
paragraph (a)(1) (a)(1)
X 75 days after filing pursuant to ___On (date) pursuant to paragraph
paragraph (a)(2) of Rule 485 (a)(2) of Rule 485
If appropriate, check the following box:
__ This post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
<PAGE>
The information in this prospectus is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these
securities and is not soliciting an offer to buy these securities
in any state where the offer is not permitted.
MANAGERS AMG FUNDS
FRONTIER GROWTH FUND
_____________________
PROSPECTUS
DATED __________, 2000
The Securities and Exchange Commission has not approved or
disapproved these securities or determined if this Prospectus is
truthful or complete. Any representation to the contrary is a
criminal offense.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
KEY INFORMATION ABOUT THE FRONTIER GROWTH FUND 1
Summary of the Goals, Principal Strategies and Principal Risk
Factors of the Fund 1
FEES AND EXPENSES OF THE FUND 2
Fees and Expenses 3
FRONTIER GROWTH FUND 3
Objective 3
Principal Investment Strategies 3
Should You Invest in this Fund? 4
MANAGERS AMG FUNDS 5
PAST PERFORMANCE OF FRONTIER 5
YOUR ACCOUNT 7
Minimum Investments in the Fund 7
HOW TO PURCHASE SHARES 8
DISTRIBUTION PLANS 8
HOW TO SELL SHARES 9
INVESTOR SERVICES 9
THE FUND AND ITS POLICIES 10
ACCOUNT STATEMENTS 10
DIVIDENDS AND DISTRIBUTIONS 11
TAX INFORMATION 11
</TABLE>
<PAGE>
KEY INFORMATION ABOUT THE FRONTIER GROWTH FUND
This Prospectus contains important information for anyone
interested in investing in the Frontier Growth Fund (the "Fund"),
a series of Managers AMG Funds. Please read this document
carefully before you invest and keep it for future reference.
You should base your purchase of shares of the Fund on your own
goals, risk preferences and investment time horizons.
Summary of the Goals, Principal Strategies and Principal Risk
Factors of the Fund
The following is a summary of the goals, principal strategies
and principal risk factors of the Fund.
<TABLE>
<CAPTION>
Goals Principal Strategies Principal Risk
Factors
<S> <C> <C>
Long-term capital Invests primarily in the Market Risk
appreciation equity securities of Growth Stock Risk
U.S. companies with the Large and Mid-Cap
potential for long-term Stock Risk
growth Sector Risk
Invests primarily in
companies with market
capitalizations greater
than $1 billion, although
it may invest in
companies of any size
Ordinarily invests in 80
to 120 companies from pre-
selected sectors of the
market; investments are
made through a process
that combines a strategic
overview of the
securities markets with
systematic stock
screening using a
disciplined, quantitative
approach and traditional
research techniques;
initially, the focus will
be on the technology,
health care, consumer
growth, producer
durables, financial
services and
utilities/communications
sectors
</TABLE>
All investments involve some type and level of risk. Risk is
the possibility that you will lose money or not make any
additional money by investing in the Fund. Before you invest,
please make sure that you have read, and understand, the risk
factors that apply to the Fund. The following is a discussion of
the principal risk factors of the Fund.
Market Risk
The Fund is subject to the risks generally of investing in
stocks, commonly referred to as "market risk." Market risk
includes the risk of sudden and unpredictable drops in value of
the market as a whole and periods of lackluster performance. The
success of the Fund's investment strategy depends significantly
on the skill of Frontier Capital Management Company, LLC
("Frontier") in assessing the potential of the securities in
which the Fund invests. Despite the unique influences on
individual companies, stock prices in general rise and fall as a
result of investors' perceptions of the market as a whole. The
consequences of market risk are that if the stock market drops in
value, the value of the Fund's portfolio of investments are also
likely to decrease in value. The increase or decrease in the
value of the Fund's investments, in percentage terms, may be more
or less than the increase or decrease in the value of the market.
Growth Stock Risk
Growth stocks may be more sensitive to market movements
because their prices tend to reflect future investor expectations
rather than just current profits. As investors perceive and
forecast good business prospects, they are willing to pay higher
prices for securities. Higher prices therefore reflect higher
expectations. If such expectations are not met, or if
expectations are lowered, the prices of the securities will drop.
In addition, growth stocks tend to be more sensitive than other
stocks to increases in interest rates, which will generally cause
the prices of growth stocks to fall. To the extent that the Fund
invests in those kinds of stocks, it will be exposed to the risks
associated with those kinds of investments. For these and other
reasons, the Fund may underperform other stock funds (such as
value funds) when stocks of growth companies are out of favor.
Large and Mid-Cap Stock Risk
During good market and economic conditions, the prices of
larger company stocks may not rise as quickly or as significantly
as prices of stocks of well-managed smaller companies. For these
and other reasons, the Fund may underperform other stock funds
(such as small-company stock funds) when stocks of large and
medium-sized companies are out of favor.
Sector Risk
Companies that are in similar businesses may be similarly
affected by particular economic or market events, which may in
certain circumstances cause the value of securities in all
companies of a particular sector of the market to decrease. To
the extent the Fund has substantial holdings within a particular
sector, the risks associated with that sector increase.
Diversification among groups of companies in different businesses
may reduce sector risk but may also dilute potential returns.
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you may pay
if you buy and hold shares of the Fund.
Shareholder Fees (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of the offering price) None
Maximum Deferred Sales Charge (Load) None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends
and Other Distributions None
Maximum Account Fee None
Fees and Expenses
<TABLE>
<CAPTION>
Annual Fund Operating Expenses (expenses that are deducted from Fund assets)
<S> <C>
Management Fee _____
Distribution (12b-1) Fees1 _____
Other Expenses2 _____
Total Annual Fund Operating Expenses _____
Fee Waiver and Reimbursement3 _____
Net Annual Fund Operating Expenses _____
</TABLE>
[FN]
1 Although the Fund is subject to a Rule 12b-1 Plan of
Distribution that permits payments of up to 0.25% of the Fund's
average daily net assets, no payments have been authorized under
the plan to date and no payments are expected to be authorized
during the first year of operation.
2 Because the Fund has not commenced operations as of the
date of this prospectus, the "Other Expenses" of the Fund are
based on annualized projected expenses and average net assets for
the fiscal year ending __________, 2001.
3 The Managers Funds LLC and Frontier have contractually
agreed, for a period of not less than _______ (__) months, to
limit Net Annual Fund Operating Expenses to ___% subject to later
reimbursement by the Fund in certain circumstances. See
"Managers AMG Funds."
</FN>
Example
The following Example will help you compare the cost of
investing in the Fund to the cost of investing in other mutual
funds. The Example makes certain assumptions. It assumes that
you invest $10,000 as an initial investment in the Fund for the
time periods indicated and then redeem all of your shares at the
end of those periods. It also assumes that your investment has a
5% total return each year and the Fund's operating expenses
remain the same. Although your actual costs may be higher or
lower, based on the above assumptions, your costs would be+:
1 Year 3 Years
$___ $___
+The Example reflects the impact of the Fund's contractual
expense limitation for the initial _______ (__) month period
covered by the Example.
The Example should not be considered a representation of
past or future expenses, as actual expenses may be greater or
lower than those shown.
FRONTIER GROWTH FUND
Objective
The Fund's objective is to achieve long-term capital
appreciation.
Principal Investment Strategies
The Fund invests primarily in the equity securities of U.S.
companies with the potential for long-term growth. Although the
Fund may invest in companies of any size, the Fund will invest
primarily in companies with market capitalizations greater than
$1 billion. Ordinarily, the Fund invests in 80 to 120 companies
from pre-selected sectors of the market. Investments are made
through a process that combines a strategic overview of the
securities markets with systematic stock screening using a
disciplined, quantitative approach and traditional research
techniques. Initially, the Fund will focus on the technology,
health care, consumer growth, producer durables, financial
services and utilities/communications sectors. Generally, the
Fund limits its investments in any specific company to 5% of its
assets.
Frontier serves as sub-adviser to the Fund. Frontier's
investment process begins with the identification of business
sectors it believes possess above-average growth potential.
Frontier seeks to identify such economic sectors based upon an
analysis of economic, political, and other relevant trends.
Frontier then seeks to identify a limited number of major
industries in such sectors as likely beneficiaries of these
trends. Further industry research is conducted through company
visits, attendance at industry conferences and meetings with Wall
Street analysts. Frontier then looks for individual investments
through a combination of computerized screening and traditional
fundamental investment research. The computerized screening
techniques developed by Frontier focus on companies with dividend
growth, equity growth, earnings growth, earnings momentum, and
earnings surprises. Once the systematic screening of companies
is complete, a focus list of several hundred companies is
developed. This list of companies is then analyzed using
traditional fundamental research methods including an assessment
of management strengths, corporate strategy, product positioning
and financial outlook.
For temporary and defensive purposes, the Fund may invest,
without limit, in cash or quality short-term debt securities
including repurchase agreements. To the extent that the Fund is
invested in these instruments, the Fund will not be pursuing its
investment objective.
Should You Invest in this Fund?
This Fund may be suitable if you:
* Are seeking an opportunity for some equity returns in
your investment portfolio
* Are willing to accept a higher degree of risk for the
opportunity of higher potential returns
* Have an investment time horizon of five years or more
This Fund may not be suitable if you:
* Are seeking stability of principal
* Are investing with a shorter time horizon in mind
* Are uncomfortable with stock market risk
* Are seeking current income
What are you investing in? You are buying shares of a pooled
investment known as a mutual fund. It is professionally
managed and gives you the opportunity to invest in a wide
variety of companies, industries and markets. This Fund is not
a complete investment program and there is no guarantee that
the Fund will reach its stated goals.
MANAGERS AMG FUNDS
Managers AMG Funds is a no-load mutual fund family comprised
of different funds, each having distinct investment management
objectives, strategies, risks and policies. Frontier Growth Fund
is the second fund available in the fund family.
The Managers Funds LLC (the "Investment Manager"), a
subsidiary of Affiliated Managers Group, Inc., serves as
investment manager to the Fund and is responsible for the Fund's
overall administration and distribution. The Investment Manager
also monitors the performance, security holdings and investment
strategies of Frontier, the sub-adviser of the Fund and, when
appropriate, evaluates any potential new asset managers for the
fund family.
Frontier has day-to-day responsibility for managing the
Fund's portfolio. Frontier, located at 99 Summer Street, Boston,
Massachusetts 02110, is the successor firm to Frontier Capital
Management Company, Inc., which was formed in 1980. Affiliated
Managers Group, Inc. indirectly owns a majority interest in
Frontier. As of , 2000, Frontier had assets
under management of $ billion. J. David Wimberly, CFA, and
Stephen M. Knightly, CFA, are the portfolio managers for the
Fund. Mr. Wimberly is the Chairman of Frontier, a position he
has held since 1980. Mr. Knightly is a Vice President of
Frontier, a position he has held since December 1994.
The Fund is obligated by its investment management agreement
to pay an annual management fee to the Investment Manager of
____% of the average daily net assets of the Fund. The
Investment Manager, in turn, pays Frontier ____% of the average
daily net assets of the Fund for its services as sub-adviser.
Under its investment management agreement with the Fund, the
Investment Manager provides a variety of administrative services
to the Fund and, under its distribution agreement with the Fund,
the Investment Manager provides a variety of shareholder and
marketing services to the Fund. The Investment Manager receives
no additional compensation from the Fund for these services.
The Investment Manager has contractually agreed, for a period
of not less than ________ (__) months, to waive fees and pay or
reimburse the Fund to the extent total expenses of the Fund
exceed _____% of the Fund's average daily net assets. The Fund
is obligated to repay the Investment Manager such amounts waived,
paid or reimbursed in future years provided that the repayment
occurs within 3 years after the waiver or reimbursement and that
such repayment would not cause the Fund's expenses in any such
future year to exceed _____% of the Fund's average daily net
assets. In addition to any other waiver or reimbursement agreed
to by the Investment Manager, Frontier from time to time may
waive all or a portion of its fee. In such an event, the
Investment Manager will, subject to certain conditions, waive an
equal amount of the management fee.
PAST PERFORMANCE OF FRONTIER
The table below sets forth the investment performance for the
period from ______________, 19__ to ___________, ____ of Frontier
Growth Fund, L.P., a Delaware limited partnership managed by
Frontier with investment objectives, policies and strategies
substantially similar to that of the Frontier Growth Fund (the
"FGF Partnership"). The FGF Partnership's returns have been
attested to by ___________________ for use in connection with
this Prospectus. The FGF Partnership's returns for each period
have been adjusted to give effect on a quarterly basis to fees
and expenses in the amount of ____%, which is the expense ratio
of the Fund, net of contractual waivers and reimbursements.
Investment performance is shown on an annual return basis, with
returns for periods of less than one year not annualized.
Average annual returns and cumulative returns are provided for
the 5-year and 10-year periods ended ______________, 2000.
The investment performance of the FGF Partnership is compared
to the Russell 1000 Growth Index (the "Russell 1000 Growth
Index") and the Standard & Poor's 500 Composite Stock Price Index
(the "S & P 500 Index"), giving effect to the reinvestment of all
dividends. The Russell 1000 Growth Index measures the performance
of those companies in the Russell 1000 Index (representing, among
the 1000 largest U.S. companies based on total market
capitalization, those with higher price-to-book ratios and higher
forecasted growth values). The S & P 500 Index is made up of
larger capitalization companies that represent a broad spectrum
of the U.S. economy and about 70% of the U.S. stock market's
total capitalization. Although used as benchmarks, the
performance of each of the Russell 1000 Growth Index and the S &
P 500 Index may not be comparable to the FGF Partnership because,
unlike the performance of the FGF Partnership, the performance of
each of the Russell 1000 Growth Index and the S & P 500 Index has
not been adjusted for any fees or expenses. The performance of
each of the Russell 1000 Growth Index and the S & P 500 Index has
not been attested to by ___________________. The information
provided does not represent the performance of the Frontier
Growth Fund, which commenced operations on ______________, 2000
and has a limited performance record of its own. The following
information should not be considered a prediction of future
performance of the Frontier Growth Fund. The Frontier Growth
Fund's performance may be higher or lower than that shown below.
<TABLE>
<CAPTION>
FGF Russell 1000 S & P 500
Partnership Return Growth Index Return Index Return
<S> <C> <C> <C>
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
1-year
5-year average annual
10-year average annual
5-year cumulative
10-year cumulative
</TABLE>
The accounts represented by the composite are not subject to
the same types of expenses to which the Fund is subject, nor to
the diversification requirements, specific tax restrictions and
investment limitations imposed on the Fund by the Investment
Company Act of 1940, as amended (the "1940 Act") or the Internal
Revenue Code of 1986, as amended (the "Code"). The performance
of the FGF Partnership might have been less favorable had the
account been subject to these requirements, restrictions and
limitations.
YOUR ACCOUNT
As an investor, you pay no sales charges to invest in the
Fund and you pay no charges to redeem out of the Fund. The price
at which you purchase and redeem your shares is equal to the net
asset value per share (NAV) next determined after your purchase
or redemption order is received on each day the New York Stock
Exchange (NYSE) is open for trading. The NAV is equal to the
Fund's net worth (assets minus liabilities) divided by the number
of shares outstanding. The Fund's NAV is calculated at the close
of regular business of the NYSE, usually 4:00 p.m. New York Time.
The Fund's investments are valued based on market values.
If market quotations are not readily available for any security,
the value of the security will be based on an evaluation of its
fair value, pursuant to procedures established by the Board of
Trustees.
Minimum Investments in the Fund
Cash investments in the Fund must be in U.S. Dollars.
Third-party checks which are payable to an existing shareholder
who is a natural person (as opposed to a corporation or
partnership) and endorsed over to the Fund or State Street Bank
and Trust Company will be accepted.
Subject to approval by the Investment Manager and Frontier,
you may be permitted to purchase shares of the Fund by means of
an in-kind contribution of securities, which will be valued in
accordance with the Fund's pricing procedures. As with a cash
purchase of shares, an in-kind contribution will also be subject
to the Fund's minimum investment requirements.
The following provides the minimum initial and additional
investments in the Fund:
Initial Investment Additional Investment
Regular accounts $25,000 $1,000
Traditional IRA 25,000 1,000
Roth IRA 25,000 1,000
The Fund or the underwriter may, in their discretion, waive
the minimum and initial investment amounts at any time.
A Traditional IRA is an individual retirement account.
Contributions may be deductible at certain income levels and
earnings are tax-deferred while your withdrawals and
distributions are taxable in the year that they are made.
A Roth IRA is an IRA with non-deductible contributions and
tax-free growth of assets and distributions. The account must
be held for five years and certain other conditions must be met
in order to qualify.
You should consult your tax professional for more information on
IRA accounts.
HOW TO PURCHASE SHARES
Initial Purchase Additional Purchases
Through your Contact your Send any additional
Investment Advisor investment advisor monies to your
or other investment investment
professional. professional at the
address appearing on
your account
statement.
Investment Call (800) 358-7668 Call (800) 358-7668
Advisors, Bank for further for further
Trust and 401(k) instructions. instructions.
Agents only
Direct Complete the account Write a letter of
Shareholders: application. instruction and a
check payable to
*By Mail Mail the application Managers AMG Funds
and a check payable to:
to Managers AMG
Funds to: Managers AMG Funds
c/o Boston Financial
Managers AMG Funds Data Services, Inc.
c/o Boston Financial P.O. Box 8517
Data Services, Inc. Boston, MA 02266-
P.O. Box 8517 8517
Boston, MA 02266-
8517 Include your account
*By Telephone # and Fund name on
your check.
If your account has
already been
established, call
the Transfer Agent
at (800) 252-0682.
The minimum
additional
investment is
$1,000.
For Bank Wires: Please call and notify the Fund at (800) 358-
7668. Then instruct your bank to wire the money to State
Street Bank and Trust Company, Boston, MA 02101; ABA
#011000028; BFN Managers AMG Funds A/C 9905-472-8, FBO
Shareholder name, account number and fund name. Please be
aware that your bank may charge you a fee for this service.
It is important to keep in mind that if you invest through a
third party such as a bank, broker-dealer or other fund
distribution organizations rather than directly with us, the
policies and fees may be different than those described in this
material.
DISTRIBUTION PLANS
The Fund has adopted a distribution plan to pay for the
marketing of shares of the Fund. Under the plan, the Board of
Trustees may authorize payments at an annual rate of up to 0.25%
of the Fund's average daily net assets. The Trustees have not
authorized the payment of any fees to date.
HOW TO SELL SHARES
You may sell your shares at any time. Your shares will be
sold at the NAV calculated after the Fund's Transfer Agent
receives your order. Orders received after 4:00 p.m. New York
Time will receive the NAV per share determined at the close of
trading on the next NYSE trading day.
Instructions
Through your Investment Contact your investment
Advisor advisor or other investment
professional.
Investment Advisors, Bank Call (800) 358-7668 for
Trust and 401(k) agents only further instructions.
Direct Shareholders: Write a letter of instruction
containing:
*By Mail
*the name of the Fund
*dollar amount or number of
shares to be sold
*your name
*your account number
*signatures of all owners on account
Mail letter to:
Managers AMG Funds
c/o Boston Financial Data
Services, Inc.
P.O. Box 8517
*By Telephone Boston, MA 02266-8517
If you elected telephone
redemption privileges on your
account application, call us
at (800) 252-0682.
Redemptions of $25,000 and over require a signature
guarantee. A signature guarantee helps to protect against fraud.
You can obtain one from most banks and securities dealers. A
notary public cannot provide a signature guarantee. In joint
accounts, both signatures must be guaranteed.
Telephone redemptions are available only for redemptions
which are below $25,000.
INVESTOR SERVICES
Automatic Reinvestment Plan allows your dividends and capital
gain distributions to be reinvested in additional shares of the
Fund. You can elect to receive cash.
Automatic Investments allows you to make automatic deductions
from a designated bank account.
Systematic Withdrawals allows you to make automatic monthly
withdrawals of $100 or more. Withdrawals are normally completed
on the 25th day of each month. If the 25th day of any month is a
weekend or a holiday, the withdrawal will be completed on the
next business day.
Individual Retirement Accounts are available to you at no
additional cost. Call us at (800) 835-3879 for more information
and an IRA kit.
The Fund has an Exchange Privilege which allows you to
exchange your shares of the Fund for shares of any series of
Managers AMG Funds, The Managers Funds, Managers Trust I and
Managers Trust II. There is no fee associated with the Exchange
Privilege. Be sure to read the Prospectus of any series of
Managers AMG Funds, The Managers Funds, Managers Trust I or
Managers Trust II that you wish to exchange into. You can
request your exchange in writing, by telephone (if elected on the
application) or through your investment advisor, bank or
investment professional.
THE FUND AND ITS POLICIES
The Fund is a series of a "Massachusetts business trust."
The Board of Trustees may, without the approval of the
shareholders, create additional series at any time. Also at any
time, the Board of Trustees may, without shareholder approval,
divide this series or any other series into two or more classes
of shares with different preferences, privileges, and expenses.
The Fund reserves the right to:
* redeem an account if the value of the account falls below
$25,000 due to redemptions;
* suspend redemptions or postpone payments when the NYSE is
closed for any reason other than its usual weekend or
holiday closings or when trading is restricted by the
Securities and Exchange Commission;
* change our minimum investment amounts;
* delay sending out redemption proceeds for up to seven
days (this usually applies to very large redemptions
without notice, excessive trading or during unusual
market conditions);
* make a redemption-in-kind (a payment in portfolio
securities instead of in cash) if we determine that a
redemption is too large and/or may cause harm to the Fund
and its shareholders;
* refuse any purchase or exchange request if we determine
that such request could adversely affect the Fund's NAV,
including if such person or group has engaged in
excessive trading (to be determined in our discretion);
and
* after prior warning and notification, close an account
due to excessive trading.
ACCOUNT STATEMENTS
You will receive quarterly statements detailing your account
activity. All investors (other than IRA accounts) will also
receive a yearly statement, including a Form 1099-DIV, detailing
the tax characteristics of any dividends and distributions that
you have received in your account. You will also receive
confirmations after each trade executed in your account.
DIVIDENDS AND DISTRIBUTIONS
Income dividends and net capital gain distributions, if any,
are normally declared and paid annually in December.
We will automatically reinvest your distributions of
dividends and capital gains unless you tell us otherwise. You
may change your election by writing to us at least 10 days prior
to the scheduled payment date.
TAX INFORMATION
Please be aware that the following tax information is general
and refers to the provisions of the Internal Revenue Code of
1986, as amended, which are in effect as of the date of this
Prospectus. You should consult a tax adviser about the status of
your distributions from the Fund.
All dividends and short-term capital gains distributions are
generally taxable to you as ordinary income, whether you receive
the distribution in cash or reinvest it for additional shares.
An exchange of the Fund's shares for shares of another Fund will
be treated as a sale of the Fund's shares and any gain on the
transaction may be subject to federal income tax.
Keep in mind that distributions may be taxable to you at
different rates depending on the length of time the Fund held the
applicable investment and not the length of time that you held
your Fund shares. When you do sell your Fund shares, a capital
gain may be realized, except for certain tax-deferred accounts,
such as IRA accounts.
Federal law requires the Fund to withhold taxes on
distributions paid to shareholders who;
* fail to provide a social security number or taxpayer
identification number;
* fail to certify that their social security number or
taxpayer identification number is correct; or
* fail to certify that they are exempt from withholding.
The initial investors in the Fund are expected to include
clients of Frontier, some of whom may invest by means of a
contribution of securities in exchange for shares of the Fund in
which no current tax will be incurred. In connection with these
transactions, each investor's tax basis in the contributed
securities will carry over to the Fund, which basis may be lower
than the current market value of the securities. When the Fund
subsequently sells these contributed securities, the Fund may
realize a larger gain (or smaller loss) for tax purposes than
would have been the case if the same securities had been
purchased directly by the Fund with cash. The larger gain (or
smaller loss) may result in shareholders accelerating (or
deferring) the federal income tax liability they otherwise would
have incurred in the absence of the tax-free contribution of
securities.
MANAGERS AMG FUNDS
FRONTIER GROWTH FUND
Investment Manager and Fund Distributor
The Managers Funds LLC
40 Richards Avenue
Norwalk, Connecticut 06854-2325
(203) 857-5321 or (800) 835-3879
Sub-Adviser
Frontier Capital Management Company, LLC
99 Summer Street
Boston, Massachusetts 02110
Custodian
State Street Bank and Trust Company
1776 Heritage Drive
North Quincy, Massachusetts 02171
Legal Counsel
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109
Transfer Agent
Boston Financial Data Services, Inc.
Attn: Managers AMG Funds
P.O. Box 8517
Boston, Massachusetts 02266-8517
(800) 252-0682
Trustees
Jack W. Aber
William E. Chapman, II
Sean M. Healey
Edward J. Kaier
Eric Rakowski
For More Information
Additional information for the Fund, including the Statement
of Additional Information, is available to you without charge and
may be requested as follows:
By Telephone: Call 1-800-835-3879
By Mail: Managers AMG Funds
40 Richards Avenue
Norwalk, CT 06854
On the Internet: Electronic copies are available
on our website at
http://www.managersamg.com
A current Statement of Additional Information is on file with
the Securities and Exchange Commission and is incorporated by
reference (is legally part of this prospectus). Text-only copies
are available on the EDGAR database of the SEC's website at
http://www.sec.gov, and copies of this information may be
obtained, after paying a duplicating fee, by electronic request
at the following E-mail address: [email protected], or by
writing the SEC's Public Reference Section, Washington, D.C.
20549-0102 (202-942-8090).
<PAGE>
The information in this Statement of Additional Information is
not complete and may be changed. We may not sell these
securities until the registration statement filed with the
Securities and Exchange Commission is effective. This Statement
of Additional Information is not an offer to sell these
securities and is not soliciting an offer to buy these securities
in any state where the offer is not permitted.
MANAGERS AMG FUNDS
FRONTIER GROWTH FUND
____________________________
STATEMENT OF ADDITIONAL INFORMATION
DATED __________, 2000
_________________________________________________________________
You can obtain a free copy of the Prospectus of the Frontier
Growth Fund (the "Fund") by calling Managers AMG Funds at (800)
835-3879. The Prospectus provides the basic information about
investing in the Fund.
This Statement of Additional Information is not a Prospectus.
It contains additional information regarding the activities and
operations of the Fund. It should be read in conjunction with
the Fund's Prospectus.
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TABLE OF CONTENTS
Page
<S> <C>
GENERAL INFORMATION 3
INVESTMENT OBJECTIVES AND POLICIES 3
Investment Techniques and Associated Risks 3
Diversification Requirements for the Fund 8
Fundamental Investment Restrictions 8
Temporary Defensive Position 9
Portfolio Turnover 9
BOARD OF TRUSTEES AND OFFICERS OF THE TRUST 10
Trustees' Compensation 11
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES 11
Control Persons 11
Management Ownership 11
MANAGEMENT OF THE FUND 12
Investment Manager 12
Compensation of Investment Manager and Sub-Adviser 12
Fee Waivers and Expense Limitations 12
Investment Management and Sub-Advisory Agreements 13
Custodian 15
Transfer Agent 15
Independent Public Accountants 15
BROKERAGE ALLOCATION AND OTHER PRACTICES 15
PURCHASE, REDEMPTION AND PRICING OF SHARES 16
Purchasing Shares 16
Redeeming Shares 17
Exchange of Shares 17
Net Asset Value 18
Dividends and Distributions 18
Distribution Plan 18
CERTAIN TAX MATTERS 19
Federal Income Taxation of Fund-in General 19
Taxation of the Fund's Investments 19
Federal Income Taxation of Shareholders 20
Foreign Shareholders 20
State and Local Taxes 21
Other Taxation 21
PERFORMANCE DATA 21
Total Return 21
Performance Comparisons 22
Massachusetts Business Trust 22
Description of Shares 23
Additional Information 24
REPORT OF INDEPENDENT ACCOUNTANTS 25
FINANCIAL STATEMENT 26
</TABLE>
<PAGE>
GENERAL INFORMATION
This Statement of Additional Information relates only to the Frontier
Growth Fund (the "Fund"). The Fund is a series of shares of beneficial
interest of Managers AMG Funds, a no-load mutual fund family, formed as a
Massachusetts business trust (the "Trust"). The Trust was organized on
June 18, 1999.
This Statement of Additional Information describes the financial
history, management and operation of the Fund, as well as the Fund's
investment objectives and policies. It should be read in conjunction with
the Fund's current Prospectus. The Trust's executive office is located at
40 Richards Avenue, Norwalk, CT 06854.
The Managers Funds LLC, a subsidiary of Affiliated Managers Group,
Inc., serves as investment manager to the Fund and is responsible for the
Fund's overall administration and distribution. See "Management of the
Fund."
INVESTMENT OBJECTIVES AND POLICIES
The following is additional information regarding the investment
objectives and policies used by the Fund in an attempt to achieve its
objective as stated in its Prospectus. The Fund is a diversified open-end
management investment company.
The Fund invests primarily in equity securities of U.S. companies with
the potential for long-term growth. Although the Fund may invest in
companies of any size, the Fund will invest primarily in companies with
market capitalizations greater than $1 billion. Ordinarily, the Fund
invests in 80 to 120 companies from pre-selected sectors of the market.
Investments are made through a process that combines a strategic overview
of the securities markets with systematic screening using a disciplined,
quantitative approach and traditional research techniques. Initially, the
Fund will focus on the technology, health care, consumer growth, producer
durables, financial services and utilities/communications sectors.
Generally, the Fund limits its investments in any specific company to 5% of
its assets.
Investment Techniques and Associated Risks
The following are descriptions of the types of securities that may be
purchased by the Fund. Also see "Quality and Diversification Requirements
of the Fund."
(1) Cash Equivalents. The Fund may invest in cash equivalents. Cash
equivalents include certificates of deposit, bankers acceptances,
commercial paper, short-term corporate debt securities and repurchase
agreements.
Bankers Acceptances. The Fund may invest in bankers acceptances.
Bankers acceptances are short-term credit instruments used to finance the
import, export, transfer or storage of goods. These instruments become
"accepted" when a bank guarantees their payment upon maturity.
Eurodollar bankers acceptances are bankers acceptances denominated in
U.S. Dollars and are "accepted" by foreign branches of major U.S.
commercial banks.
Certificates of Deposit. The Fund may invest in certificates of
deposit. Certificates of deposit are issues against money deposited into a
bank (including eligible foreign branches of U.S. banks) for a definite
period of time. They earn a specified rate of return and are normally
negotiable.
Commercial Paper. The Fund may invest in commercial paper. Commercial
Paper refers to promissory notes that represent an unsecured debt of a
corporation or finance company. They have a maturity of less than 9
months. Eurodollar commercial paper refers to promissory notes payable in
U.S. Dollars by European issuers.
Repurchase Agreements. The Fund may enter into repurchase agreements
with brokers, dealers or banks that meet the credit guidelines which have
been approved by the Fund's Board of Trustees. In a repurchase agreement,
the Fund buys a security from a bank or a broker-dealer that has agreed to
repurchase the same security at a mutually agreed upon date and price. The
resale price normally is the purchase price plus a mutually agreed upon
interest rate. This interest rate is effective for the period of time the
Fund is invested in the agreement and is not related to the coupon rate on
the underlying security. The period of these repurchase agreements will be
short, and at no time will the Fund enter into repurchase agreements for
more than seven days.
Repurchase agreements could have certain risks that may adversely
affect the Fund. If a seller defaults, the Fund may incur a loss if the
value of the collateral securing the repurchase agreement declines and may
incur disposition costs in connection with liquidating the collateral. In
addition, if bankruptcy proceedings are commenced with respect to a seller
of the security, realization of disposition of the collateral by the Fund
may be delayed or limited.
(2) Reverse Repurchase Agreements. The Fund may enter into reverse
repurchase agreements. In a reverse repurchase agreement, the Fund sells a
security and agrees to repurchase the same security at a mutually agreed
upon date and price. The price reflects the interest rates in effect for
the term of the agreement. For the purposes of the Investment Company Act
of 1940, as amended (the "1940 Act"), a reverse repurchase agreement is
also considered as the borrowing of money by the Fund and, therefore, a
form of leverage which may cause any gains or losses for the Fund to become
magnified.
The Fund will invest the proceeds of borrowings under reverse
repurchase agreements. In addition, the Fund will enter into reverse
repurchase agreements only when the interest income to be earned from the
investment of the proceeds is more than the interest expense of the
transaction. The Fund will not invest the proceeds of a reverse repurchase
agreement for a period that is longer than the reverse repurchase agreement
itself. The Fund will establish and maintain a separate account with the
Custodian that contains a segregated portfolio of securities in an amount
which is at least equal to the amount of its purchase obligations under the
reverse repurchase agreement.
(3) Emerging Market Securities. The Fund may invest some of its assets
in the securities of emerging market countries. Investments in securities
in emerging market countries may be considered to be speculative and may
have additional risks from those associated with investing in the
securities of U.S. issuers. There may be limited information available to
investors which is publicly available, and generally emerging market
issuers are not subject to uniform accounting, auditing and financial
standards and requirements like those required by U.S. issuers.
Investors should be aware that the value of the Fund's investments in
emerging markets securities may be adversely affected by changes in the
political, economic or social conditions, expropriation, nationalization,
limitation on the removal of funds or assets, controls, tax regulations and
other foreign restrictions in emerging market countries. These risks may
be more severe than those experienced in foreign countries. Emerging
market securities trade with less frequency and volume than domestic
securities and therefore may have greater price volatility and lack
liquidity. Furthermore, there is often no legal structure governing
private or foreign investment or private property in some emerging market
countries. This may adversely affect the Fund's operations and the ability
to obtain a judgement against an issuer in an emerging market country.
(4) Foreign Securities. The Fund may invest in foreign securities
either directly or indirectly in the form of American Depositary Receipts
or similar instruments. Investments in securities of foreign issuers and
in obligations of domestic banks involve different and additional risks
from those associated with investing in securities of U.S. issuers. There
may be limited information available to investors which is publicly
available, and generally foreign issuers are not subject to uniform
accounting, auditing and financial standards and requirements like those
applicable to U.S. issuers. Any foreign commercial paper must not be
subject to foreign withholding tax at the time of purchase.
Investors should be aware that the value of the Fund's investments in
foreign securities may be adversely affected by changes in political or
social conditions, confiscatory taxation, diplomatic relations,
expropriation, nationalization, limitation on the removal of funds or
assets, or the establishment of exchange controls or other foreign
restrictions and tax regulations in foreign countries. In addition, due to
the differences in the economy of these foreign countries compared to the
U.S. economy, whether favorably or unfavorably, portfolio securities may
appreciate or depreciate and could therefore adversely affect the Fund's
operations. It may also be difficult to obtain a judgement against a
foreign creditor. Foreign securities trade with less frequency and volume
than domestic securities and therefore may have greater price volatility.
Furthermore, changes in foreign exchange rates will have an affect on those
securities that are denominated in currencies other than the U.S. Dollar.
Forward Foreign Currency Exchange Contracts. The Fund may purchase or
sell equity securities of foreign countries. Therefore, substantially all
of the Fund's income may be derived from foreign currency. A forward
foreign currency exchange contract is an obligation to purchase or sell a
specific currency at a mutually agreed upon date and price. The contract
is usually between a bank and its customers. The contract may be
denominated in U.S. Dollars or may be referred to as a "cross-currency"
contract. A cross-currency contract is a contract which is denominated in
another currency other than in U.S. Dollars.
In such a contract, the Fund's custodian will segregate cash or
marketable securities in an amount not less than the value of the Fund's
total assets committed to these contracts. Generally, the Fund will not
enter into contracts that are greater than 90 days.
Forward foreign currency contracts have additional risks. It may be
difficult to determine the market movements of the currency. The value of
the Fund's assets may be adversely affected by changes in foreign currency
exchange rates and regulations and controls on currency exchange.
Therefore, the Fund may incur costs in converting foreign currency.
If the Fund engages in an offsetting transaction, the Fund will
experience a gain or a loss determined by the movement in the contract
prices. An "offsetting transaction" is one where the Fund enters into a
transaction with the bank upon maturity of the original contract. The Fund
must sell or purchase on the same maturity date as the original contract
the same amount of foreign currency as the original contract.
Foreign Currency Considerations. The Fund may invest some of its
assets in securities denominated in foreign currencies. The Fund will
compute and distribute the income earned by the Fund at the foreign
exchange rate in effect on that date. If the value of the foreign currency
declines in relation to the U.S. Dollar between the time that the Fund
earns the income and the time that the income is converted into U.S.
Dollars, the Fund may be required to sell its securities in order to make
its distributions in U.S. Dollars. As a result, the liquidity of the
Fund's securities may have an adverse affect on the Fund's performance.
(5) Futures Contracts. The Fund may buy and sell futures contracts to
protect the value of the Fund's portfolio against changes in the prices of
the securities in which it invests. When the Fund buys or sells a futures
contracts, the Fund must segregate cash and/or liquid securities equivalent
to the value of the contract.
There are additional risks associated with futures contracts. It may
be impossible to determine the future price of the securities, and
securities may not be marketable enough to close out the contract when the
Fund desires to do so.
Equity Index Futures Contracts. The Fund may enter into equity index
futures contracts. An equity index future contract is an agreement for the
Fund to buy or sell an index relating to equity securities at a mutually
agreed upon date and price. Equity index futures contracts are often used
to hedge against anticipated changes in the level of stock prices. When
the Fund enters into this type of contract, the Fund makes a deposit called
an "initial margin." This initial margin must be equal to a specified
percentage of the value of the contract. The rest of the payment is made
when the contract expires.
(6) Illiquid Securities, Private Placements and Certain Unregistered
Securities. The Fund may invest in privately placed, restricted, Rule 144A
or other unregistered securities. The Fund may not acquire illiquid
holdings if, as a result, more than 15% of the Fund's total assets would be
in illiquid investments. Subject to this Fundamental policy limitation,
the Fund may acquire investments that are illiquid or have limited
liquidity, such as private placements or investments that are not
registered under the Securities Act of 1933, as amended (the "1933 Act")
and cannot be offered for public sale in the United States without first
being registered under the 1933 Act. An investment is considered
"illiquid" if it cannot be disposed of within seven (7) days in the normal
course of business at approximately the same amount at which it was valued
in the Fund's portfolio. The price the Fund's portfolio may pay for
illiquid securities or receives upon resale may be lower than the price
paid or received for similar securities with a more liquid market.
Accordingly, the valuations of these securities will reflect any
limitations on their liquidity.
The Fund may purchase Rule 144A securities eligible for sale without
registration under the 1933 Act. These securities may be determined to be
illiquid in accordance with the guidelines established by The Managers
Funds LLC and approved by the Trustees. The Trustees will monitor these
guidelines on a periodic basis.
Investors should be aware that the Fund may be subject to a risk if the
Fund should decide to sell these securities when a buyer is not readily
available and at a price which the Fund believes represents the security's
value. In the case where an illiquid security must be registered under the
1933 Act before it may be sold, the Fund may be obligated to pay all or
part of the registration expenses. Therefore, a considerable time may
elapse between the time of the decision to sell and the time the Fund may
be permitted to sell a security under an effective registration statement.
If, during such a period, adverse market conditions develop, the Fund may
obtain a less favorable price than was available when it had first decided
to sell the security.
(7) Obligations of Domestic and Foreign Banks. Banks are subject to
extensive governmental regulations. These regulations place limitations on
the amounts and types of loans and other financial commitments which may be
made by the bank and the interest rates and fees which may be charged on
these loans and commitments. The profitability of the banking industry
depends on the availability and costs of capital funds for the purpose of
financing loans under prevailing money market conditions. General economic
conditions also play a key role in the operations of the banking industry.
Exposure to credit losses arising from potential financial difficulties of
borrowers may affect the ability of the bank to meet its obligations under
a letter of credit.
(8) Option Contracts.
Covered Call Options. The Fund may write ("sell") covered call options
on individual stocks, equity indices and futures contracts, including
equity index futures contracts. Written call options must be listed on a
national securities exchange or a futures exchange.
A call option is a short-term contract that is generally for no more
than nine months. This contract gives a buyer of the option, in return for
a paid premium, the right to buy the underlying security or contract at an
agreed upon price prior to the expiration of the option. The buyer can
purchase the underlying security or contract regardless of its market
price. A call option is considered "covered" if the Fund that is writing
the option owns or has a right to immediately acquire the underlying
security or contract.
The Fund may terminate an obligation to sell an outstanding option by
making a "closing purchase transaction." The Fund makes a closing purchase
transaction when it buys a call option on the same security or contract
with has the same price and expiration date. As a result, the Fund will
realize a loss if the amount paid is less than the amount received from the
sale. A closing purchase transaction may only be made on an exchange that
has a secondary market for the option with the same price and expiration
date. There is no guarantee that the secondary market will have liquidity
for the option.
There are risks associated with writing covered call options. The Fund
is required to pay brokerage fees in order to write covered call options as
well as fees for the purchases and sales of the underlying securities or
contracts. The portfolio turnover rate of the Fund may increase due to the
Fund writing a covered call option.
Covered Put Options. The Fund may write ("sell") covered put options
on individual stocks, equity indices and futures contracts, including
equity index futures contracts.
A put option is a short-term contract that is generally for no more
than nine months. This contract gives a buyer of the option, in return for
a paid premium, the right to sell the underlying security or contract at an
agreed upon price prior to the expiration of the option. The buyer can
sell the underlying security or contract at the option price regardless of
its market price. A put option is considered "covered" if the Fund which
is writing the option owns or has a right to immediately acquire the
underlying security or contract. The seller of a put option assumes the
risk of the decrease of the value of the underlying security. If the
underlying security decreases, the buyer could exercise the option and the
underlying security or contract could be sold to the seller at a price that
is higher than its current market value.
The Fund may terminate an obligation to sell an outstanding option by
making a "closing purchase transaction." The Fund makes a closing purchase
transaction when it buys a put option on the same security or contract with
the same price and expiration date. As a result, the Fund will realize a
loss if the amount paid is less than the amount received from the sale. A
closing purchase transaction may only be made on an exchange that has a
secondary market for the option with the same price and expiration date.
There is no guarantee that the secondary market will have liquidity for the
option.
There are risks associated with writing covered put options. The Fund
is required to pay brokerage fees in order to write covered put options as
well as fees for the purchases and sales of the underlying securities or
contracts. The portfolio turnover rate of the Fund may increase due to the
Fund writing a covered put option.
Dealer Options. Dealer Options are also known as Over-the-Counter
options ("OTC"). Dealer options are puts and calls where the strike price,
the expiration date and the premium payment are privately negotiated. The
bank's creditworthiness and financial strength are judged by the Sub-
Adviser and must be determined to be as good as the creditworthiness and
strength of the banks to whom the Fund lends its portfolio securities.
Puts and Calls. The Fund may buy options on individual stocks, equity
indices and equity futures contracts. The Fund's purpose in buying these
puts and calls is to protect itself against an adverse affect in changes of
the general level of market prices in which the Fund operates. A put
option gives the buyer the right upon payment to deliver a security or
contract at an agreed upon date and price. A call option gives the buyer
the right upon payment to ask the seller of the option to deliver the
security or contract at an agreed upon date and price.
(9) Rights and Warrants. The Fund may purchase rights and warrants.
Rights are short-term obligations issued in conjunction with new stock
issues. Warrants give the holder the right to buy an issuer's securities
at a stated price for a stated time.
(10) Securities Lending. The Fund may lend its portfolio securities
in order to realize additional income. This lending is subject to the
Fund's investment policies and restrictions. Any loan of portfolio
securities must be secured at all times by collateral that is equal to or
greater than the value of the loan. If a seller defaults, the Fund may use
the collateral to satisfy the loan. However, if the buyer defaults, the
buyer may lose some rights to the collateral securing the loans of
portfolio securities.
(11) Segregated Accounts. The Fund will establish a segregated
account with its Custodian after it has entered into either a repurchase
agreement or certain options, futures and forward contracts. The
segregated account will maintain cash and/or liquid securities that are
equal in value to the obligations in the agreement.
(12) Short Sales. The Fund may enter into short sales. The Fund
enters into a short sale when it sells a security that it does not own. A
broker retains the proceeds of the sales until the Fund replaces the sold
security. The Fund arranges with the broker to borrow the security. The
Fund must replace the security at its market price at the time of the
replacement. As a result, the Fund may have to pay a premium to borrow the
security and the Fund may, but will not necessarily, receive any interest
on the proceeds of the sale. The Fund must pay to the broker any dividends
or interest payable on the security until the security is replaced.
Collateral, consisting of cash, or marketable securities, is used to secure
the Fund's obligation to replace the security. The collateral is deposited
with the broker. If the price of the security sold increases between the
time of the sale and the time the Fund replaces the security, the Fund will
incur a loss. If the price declines during that period, the Fund will
realize a capital gain. The capital gain will be decreased by the amount
of transaction costs and any premiums, dividends or interest the Fund will
have to pay in connection with the short sale. The loss will be increased
by the amount of transaction costs and any premiums, dividends or interest
the Fund will have to pay in connection with the short sale. For tax
planning reasons, the Fund may also engage in short sales with respect to a
security that the Fund currently holds or has a right to acquire, commonly
referred to as a "short against the box."
(13) When-Issued Securities. The Fund may purchase securities on a
when-issued basis. The purchase price and the interest rate payable, if
any, on the securities are fixed on the purchase commitment date or at the
time the settlement date is fixed. The value of these securities is
subject to market fluctuation. For fixed-income securities, no interest
accrues to the Fund until a settlement takes place. At the time the Fund
makes a commitment to purchase securities on a when-issued basis, the Fund
will record the transaction, reflect the daily value of the securities when
determining the net asset value of the Fund, and if applicable, calculate
the maturity for the purposes of determining the average maturity from the
date of the Transaction. At the time of settlement, a when-issued security
may be valued below the amount of the purchase price.
To facilitate these transactions, the Fund will maintain a segregated
account with the Custodian that will include cash, or marketable
securities, in an amount which is at least equal to the commitments. On
the delivery dates of the transactions, the Fund will meet its obligations
from maturities or sales of the securities held in the segregated account
and/or from cash flow. If the Fund chooses to dispose of the right to
acquire a when-issued security prior to its acquisition, it could incur a
loss or a gain due to market fluctuation. Furthermore, the Fund may be at
a disadvantage if the other party to the transaction defaults. When-issued
transactions may allow the Fund to hedge against unanticipated changes in
interest rates.
Diversification Requirements for the Fund
The Fund intends to meet the diversification requirements of the 1940
Act as currently in effect. Investments not subject to the diversification
requirements could involve an increased risk to an investor should an
issuer, or a state or its related entities, be unable to make interest or
principal payments or should the market value of such securities decline.
Fundamental Investment Restrictions
The following investment restrictions have been adopted by the Trust
with respect to the Fund. Except as otherwise stated, these investment
restrictions are "fundamental" policies. A "fundamental" policy is defined
in the 1940 Act to mean that the restriction cannot be changed without the
vote of a "majority of the outstanding voting securities" of the Fund. A
majority of the outstanding voting securities is defined in the 1940 Act as
the lesser of (a) 67% or more of the voting securities present at a meeting
if the holders of more than 50% of the outstanding voting securities are
present or represented by proxy, or (b) more than 50% of the outstanding
voting securities.
The Fund may not:
(1) Issue senior securities. For purposes of this restriction,
borrowing money, making loans, the issuance of shares of beneficial
interest in multiple classes or series, the deferral of Trustees' fees, the
purchase or sale of options, futures contracts, forward commitments and
repurchase agreements entered into in accordance with the Fund's investment
policies, are not deemed to be senior securities.
(2) Borrow money, except (i) in amounts not to exceed 33 1/3% of the
value of the Fund's total assets (including the amount borrowed) taken at
market value from banks or through reverse repurchase agreements or forward
roll transactions, (ii) up to an additional 5% of its total assets for
temporary purposes, (iii) in connection with short-term credits as may be
necessary for the clearance of purchases and sales of portfolio securities
and (iv) the Fund may purchase securities on margin to the extent permitted
by applicable law. For purposes of this investment restriction,
investments in short sales, roll transactions, futures contracts, options
on futures contracts, securities or indices and forward commitments,
entered into in accordance with the Fund's investment policies, shall not
constitute borrowing.
(3) Underwrite the securities of other issuers, except to the extent
that, in connection with the disposition of portfolio securities, the Fund
may be deemed to be an underwriter under the Securities Act of 1933.
(4) Purchase or sell real estate, except that the Fund may (i) acquire
or lease office space for its own use, (ii) invest in securities of issuers
that invest in real estate or interests therein, (iii) invest in securities
that are secured by real estate or interests therein, (iv) purchase and
sell mortgage-related securities and (v) hold and sell real estate acquired
by the Fund as a result of the ownership of securities.
(5) Purchase or sell commodities or commodity contracts, except the
Fund may purchase and sell options on securities, securities indices and
currency, futures contracts on securities, securities indices and currency
and options on such futures, forward foreign currency exchange contracts,
forward commitments, securities index put or call warrants and repurchase
agreements entered into in accordance with the Fund's investment policies.
(6) Make loans, except that the Fund may (i) lend portfolio securities
in accordance with the Fund's investment policies up to 33 1/3% of the
Fund's total assets taken at market value, (ii) enter into repurchase
agreements, (iii) purchase all or a portion of an issue of debt securities,
bank loan participation interests, bank certificates of deposit, bankers'
acceptances, debentures or other securities, whether or not the purchase is
made upon the original issuance of the securities and (iv) lend portfolio
securities and participate in an interfund lending program with other
series of the Trust provided that no such loan may be made if, as a result,
the aggregate of such loans would exceed 33 1/3% of the value of the Fund's
total assets.
(7) With respect to 75% of its total assets, purchase securities of an
issuer (other than the U.S. Government, its agencies, instrumentalities or
authorities or repurchase agreements collateralized by U.S. Government
securities and other investment companies), if: (a) such purchase would
cause more than 5% of the Fund's total assets taken at market value to be
invested in the securities of such issuer; or (b) such purchase would at
the time result in more than 10% of the outstanding voting securities of
such issuer being held by the Fund.
(8) Invest more than 25% of its total assets in the securities of one
or more issuers conducting their principal business activities in the same
industry (excluding the U.S. Government or its agencies or
instrumentalities).
If any percentage restriction described above for the Fund is adhered
to at the time of investment, a subsequent increase or decrease in the
percentage resulting from a change in the value of the Fund's assets will
not constitute a violation of the restriction.
Unless otherwise provided, for purposes of investment restriction (8)
above, the term "industry" shall be defined by reference to the SEC
Industry Codes set forth in the Directory of Companies Required to File
Annual Reports with the Securities and Exchange Commission.
Temporary Defensive Position
The Fund may invest up to 100% of its assets in cash for temporary
defensive purposes. This strategy may be inconsistent with the Fund's
principal investment strategies and may be used in an attempt to respond to
adverse market, economic, political or other conditions. During such a
period, the Fund may not achieve its investment objective.
Portfolio Turnover
Generally, the Fund purchases securities for investment purposes and
not for short-term trading profits. However, the Fund may sell securities
without regard to the length of time that the security is held in the
portfolio if such sale is consistent with the Fund's investment objectives.
A higher degree of portfolio activity may increase brokerage costs to the
Fund.
The portfolio turnover rate is computed by dividing the dollar amount
of the securities which are purchased or sold (whichever amount is smaller)
by the average value of the securities owned during the year. Short-term
investments such as commercial paper, short-term U.S. Government securities
and variable rate securities (those securities with intervals of less than
one-year) are not considered when computing the portfolio turnover rate.
BOARD OF TRUSTEES AND OFFICERS OF THE TRUST
The Board of Trustees and Officers of the Trust, their business
addresses, principal occupations and dates of birth are listed below. The
Board of Trustees provides broad supervision over the affairs of the Trust
and the Fund. Unless otherwise noted, the address of the Trustees and
Officers is the address of the Trust: 40 Richards Avenue, Norwalk,
CT 06854.
JACK W. ABER - Trustee; Professor of Finance, Boston University School of
Management since 1972. He has served as a Trustee of the Trust since June
1999. He also serves as a Trustee of The Managers Funds, The Managers
Trust I and The Managers Trust II. His address is 595 Commonwealth Avenue,
Boston, Massachusetts 02215. His date of birth is September 9, 1937.
WILLIAM E. CHAPMAN, II - Trustee; President and Owner, Longboat Retirement
Planning Solutions. From 1990 to 1998, he served in a variety of roles
with Kemper Funds, the last of which was President of the Retirement Plans
Group. Prior to joining Kemper, he spent 24 years with CIGNA in investment
sales, marketing and general management roles. He has served as a Trustee
of the Trust since June 1999. He also serves as a Trustee of The Managers
Funds, The Managers Trust I and The Managers Trust II. His address is 380
Gulf of Mexico Drive, Longboat Key, Florida 34228. His date of birth is
September 23, 1941.
SEAN M. HEALEY1 - Trustee; President and Chief Operating Officer of
Affiliated Managers Group, Inc. since October 1999. From April 1995 to
October 1999, he was Executive Vice President of Affiliated Managers Group,
Inc. From August 1987 through March 1995, he served in a variety of roles
in the Mergers and Acquisitions Department of Goldman, Sachs & Co., the
last of which was as Vice President. His address is Two International
Place, 23rd Floor, Boston, Massachusetts 02110. He has served as a
Trustee of the Trust since June 1999. He also serves as a Trustee of The
Managers Funds, The Managers Trust I and The Managers Trust II. His date
of birth is May 9, 1961.
EDWARD J. KAIER - Trustee; Partner, Hepburn Willcox Hamilton & Putnam since
1977. He has served as a Trustee of the Trust since June 1999. He also
serves as a Trustee of The Managers Funds, The Managers Trust I and The
Managers Trust II. His address is 1100 One Penn Center, Philadelphia,
Pennsylvania 19103. His date of birth is September 23, 1945.
ERIC RAKOWSKI - Trustee; Professor, University of California at Berkeley
School of Law since 1990. Visiting Professor, Harvard Law School
1998-1999. He has served as a Trustee of the Trust since June 1999. He
also serves as a Trustee of The Managers Funds, The Managers Trust I and
The Managers Trust II. His address is 1535 Delaware Street, Berkeley,
California 94703-1281. His date of birth is June 5, 1958.
PETER M. LEBOVITZ - President; President of The Managers Funds LLC. From
September 1994 to April 1999, he was Managing Director of The Managers
Funds, L.P. (the predecessor to The Managers Funds LLC). From June 1993 to
June 1994, he was the Director of Marketing for Hyperion Capital
Management, Inc. From April 1989 to June 1993, he was Senior Vice
President for Greenwich Asset Management, Inc. His date of birth is
January 18, 1955.
DONALD S. RUMERY - Treasurer and Principal Accounting Officer; Chief
Financial Officer of The Managers Funds LLC (formerly The Managers Funds,
L.P.) since December 1994. From March 1990 to December 1994, he was a Vice
President of Signature Financial Group. From August 1980 to March 1990, he
held various positions with The Putnam Companies, the last of which was
Vice President. His date of birth is May 29, 1958.
JOHN KINGSTON, III - Secretary; Vice President of Affiliated Managers
Group, Inc. since March 1999. From June 1998 to February 1999, he served
in a general counseling capacity with Morgan Stanley Dean Witter Investment
Management Inc. From September 1994 to May 1998 he was an Associate with
Ropes and Gray. His date of birth is October 23, 1965.
PETER M. MCCABE - Assistant Treasurer; Portfolio Administrator of The
Managers Funds LLC (formerly The Managers Funds, L.P.) since August 1995.
From July 1994 to August 1995, he was a Portfolio Administrator at
Oppenheimer Capital, L.P. His date of birth is September 8, 1972.
LAURA A. DESALVO - Assistant Secretary; Legal/Compliance Officer of The
Managers Funds LLC (formerly The Managers Funds, L.P.) since September
1997. From August 1994 to June 1997, she was a law student. Her date of
birth is November 10, 1970.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------
Trustees' Compensation
Compensation Table:
Total Compensation
from the
Aggregate Aggregate Fund and the
Name of Compensation Compensation Fund Complex
Trustee from the Fund from the Trust (a) Paid to Trustees(b)
<S> <C> <C> <C>
Jack W. Aber $4,000 $26,000
William E. Chapman, II $4,000 $26,000
Sean M. Healey none none none
Edward K. Kaier $4,000 $26,000
Eric Rakowski $4,000 $26,000
</TABLE>
____________________
[FN]
(a) Compensation is estimated for the Fund's fiscal year ending
__________, 2001. The Fund does not provide any pension or retirement
benefits for the Trustees.
(b) Total compensation includes estimated compensation to be paid during
the 12-month period ending December 31, 2000 for services as Trustees
of The Managers Funds, The Managers Trust I and The Managers Trust II.
</FN>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
Control Persons
[As of __________, 2000, through its ownership of 100% of the shares
of the Fund, Affiliated Managers Group, Inc. ("AMG") "controlled" (within
the meaning of the 1940 Act) the Fund. An entity or person which
"controls" a particular Fund could have effective voting control over that
Fund.]
No other person or entity owned shares of the Fund.
Management Ownership
As of __________, 2000, all management personnel (i.e., Trustees and
Officers) as a group owned beneficially less than 1% of the outstanding
shares of the Fund.
MANAGEMENT OF THE FUND
Investment Manager and Sub-Adviser
The Trustees provide broad supervision over the operations and affairs
of the Trust and the Fund. The Managers Funds LLC (the "Investment
Manager") serves as investment manager to and distributor of the Fund. The
Managers Funds LLC is a subsidiary of AMG, and AMG serves as the Managing
Member of the LLC. AMG is located at Two International Place, 23rd Floor,
Boston, Massachusetts 02110.
The Investment Manager and its corporate predecessors have had over 20
years of experience in evaluating sub-advisers for individuals and
institutional investors. As part of its services to the Fund under an
investment management agreement with the Trust dated ________, 2000 (the
"Investment Management Agreement"), the Investment Manager also carries out
the daily administration of the Trust and Fund. For its investment
management services, the Investment Manager receives an investment
management fee from the Fund. All or a portion of the investment
management fee paid by the Fund to the Investment Manager is used to pay
the advisory fees of Frontier Capital Management Company, LLC, the sub-
adviser which manages the assets of the Fund (the "Sub-Adviser" or
"Frontier"). The Investment Manager receives no additional compensation
from the Fund for its administration services. Frontier was selected by
the Investment Manager, subject to the review and approval of the Trustees.
Frontier is the successor firm to Frontier Capital Management Company, Inc.
which was formed in 1980. AMG indirectly owns a majority interest in
Frontier. As of , 2000, Frontier's assets under
management totaled approximately $ billion. Frontier's address is 99
Summer Street, Boston, MA 02110. J. David Wimberly, CFA and Stephen M.
Knightly, CFA are the portfolio managers for the Fund.
The Sub-Adviser has discretion, subject to oversight by the Trustees
and the Investment Manager, to purchase and sell portfolio assets,
consistent with the Fund's investment objectives, policies and
restrictions. Generally, the services which the Sub-Adviser provides to
the Fund are limited to asset management and related recordkeeping
services. The Sub-Adviser may also serve as a discretionary or
non-discretionary investment adviser to management or advisory accounts
which are unrelated in any manner to the Investment Manager or its
affiliates.
Compensation of Investment Manager and Sub-Adviser by the Fund
As compensation for the investment management services rendered and
related expenses under the Investment Management Agreement, the Fund has
agreed to pay the Investment Manager an investment management fee, which is
computed daily as percentages of the average of the value of the net assets
of the Fund and may be paid monthly. As compensation for the investment
management services rendered and related expenses under the Sub-Advisory
Agreement, the Investment Manager has agreed to pay the Sub-Adviser a fee
(net of all mutually agreed upon fee waivers and reimbursements required by
applicable law) for managing the portfolio, which is also computed daily
and paid monthly. The fee paid to the Sub-Adviser is paid out of the fee
the Investment Manager receives from the Fund and does not increase the
expenses of the Fund.
Fee Waivers and Expense Limitations
The Investment Manager has contractually agreed, for a period of no
less than ______ (__) months, to limit total annual fund operating
expenses to _____%, subject to later reimbursement by the Fund in certain
circumstances. The waiver may, at the discretion of the Investment Manager,
be continued beyond such point. See "Managers AMG Funds" in the Prospectus
for further information.
The Investment Manager has decided to waive all or a portion of its
fees from the Fund or reimburse expenses to the Fund for a variety of
reasons, including attempting to make the Fund's performance more
competitive as compared to similar funds. The effect of the expense
limitation in effect at the date of this Statement of Additional
Information on the management fees which are expected to be payable by the
Fund is reflected in the Expense Information located at the front of the
Fund's Prospectus. In addition to any other waiver and/or reimbursement
agreed to by the Investment Manager, Frontier from time to time may waive
all or a portion of its fee. In such an event, the Investment Manager
will, subject to certain conditions, waive an equal amount of the
management fee. Shareholders will be notified of any change in the
management fees of the Fund on or about the time that such fees or expenses
become effective.
Investment Management and Sub-Advisory Agreements
The Managers Funds LLC serves as investment manager to the Fund under
the Investment Management Agreement. The Investment Management Agreement
permits the Investment Manager to from time to time engage one or more sub-
advisers to assist in the performance of its services. Pursuant to the
Investment Management Agreement, the Investment Manager has entered into a
sub-advisory agreement with Frontier Capital Management Company, LLC, dated
__________, 2000 (the "Sub-Advisory Agreement").
The Investment Management Agreement and the Sub-Advisory Agreement
provide for an initial term of two years and thereafter shall continue in
effect from year to year so long as such continuation is specifically
approved at least annually (i) by either the Trustees of the Trust or by
vote of a majority of the outstanding voting securities (as defined in the
1940 Act) of the Fund, and (ii) in either event by the vote of a majority
of the Trustees of the Trust who are not parties to the agreements or
"interested persons" (as defined in the 1940 Act) of any such party, cast
in person at a meeting called for the purpose of voting on such
continuance. The Investment Management Agreement and the Sub-Advisory
Agreement may be terminated, without penalty, by the Board of Trustees, by
vote of a majority of the outstanding voting securities (as defined in the
1940 Act) by the Investment Manager or (in the case of the Sub-Advisory
Agreement) by the Sub-Adviser on not more than 60 days' written notice to
the other party and to the Fund. The Investment Management Agreement and
the Sub-Advisory Agreement terminate automatically in the event of
assignment, as defined under the 1940 Act and regulations thereunder.
The Investment Management Agreement provides that the Investment
Manager is specifically responsible for:
* developing and furnishing continuously an investment program and
strategy for the Fund in compliance with the Fund's investment objective
and policies as set forth in the Trust's current Registration Statement;
* providing research and analysis relative to the investment program and
investments of the Fund;
* determining (subject to the overall supervision and review of the
Board of Trustees of the Trust) what investments shall be purchased,
held,
sold or exchanged by the Fund and what portion, if any, of the assets of
the Fund shall be held in cash or cash equivalents; and
* making changes on behalf of the Trust in the investments of the Fund.
Under the Sub-Advisory Agreement, Frontier is responsible for
performing substantially these same advisory services for the Investment
Manager and the Fund.
The Investment Management Agreement also provides that the Investment
Manager shall furnish the Fund with office space and facilities, services
of executives and administrative personnel and certain other administrative
services. The Investment Manager compensates all executive and clerical
personnel and Trustees of the Trust if such persons are employees of the
Investment Manager or its affiliates.
The Fund pays all expenses not borne by its Investment Manager or Sub-
Adviser including, but not limited to, the charges and expenses of the
Fund's custodian and transfer agent, independent auditors and legal counsel
for the Fund and the Trust's independent Trustees, 12b-1 fees, if any, all
brokerage commissions and transfer taxes in connection with portfolio
transactions, all taxes and filing fees, the fees and expenses for
registration or qualification of its shares under federal and state
securities laws, all expenses of shareholders' and Trustees' meetings and
of preparing, printing and mailing reports to shareholders and the
compensation of Trustees who are not directors, officers or employees of
the Investment Manager, Sub-Adviser or their affiliates, other than
affiliated registered investment companies.
The Sub-Advisory Agreement requires the Sub-Adviser to provide fair
and equitable treatment to the Fund in the selection of portfolio
investments and the allocation of investment opportunities. However, it
does not obligate the Sub-Adviser to acquire for the Fund a position in any
investment which any of the Sub-Adviser's other clients may acquire. The
Fund shall have no first refusal, co-investment or other rights in respect
of any such investment, either for the Fund or otherwise.
Although the Sub-Adviser makes investment decisions for the Fund
independent of those for its other clients, it is likely that similar
investment decisions will be made from time to time. When the Fund and
another client of a Sub-Adviser are simultaneously engaged in the purchase
or sale of the same security, the transactions are, to the extent feasible
and practicable, averaged as to price and the amount is allocated between
the Fund and the other client(s) pursuant to a formula considered equitable
by the Sub-Adviser. In specific cases, this system could have an adverse
affect on the price or volume of the security to be purchased or sold by
the Fund. However, the Trustees believe, over time, that coordination and
the ability to participate in volume transactions should benefit the Fund.
Reimbursement Agreement
Under the Investment Management Agreement, the Investment Manager
provides a variety of administrative services to the Fund and, under its
distribution agreement with the Fund, the Investment Manager provides a
variety of shareholder and marketing services to the Fund. The Investment
Manager receives no additional compensation from the Fund for these
services. Pursuant to a Reimbursement Agreement between the Investment
Manager and Frontier, Frontier reimburses the Investment Manager for the
costs the Investment Manager bears in providing such services to the Fund.
Code of Ethics
The Trustees have adopted a Code of Ethics under Rule 17j-1 of the
1940 Act on behalf of the Trust. The Code of Ethics of the Trust
incorporates the code of ethics of the Investment Manager (applicable to
"access persons" of the Trust that are also employees of the Investment
Manager) and the code of ethics of the Sub-Adviser (applicable to "access
persons" of the Trust that are also employees of the Sub-Adviser). In
combination, these codes of ethics generally require access persons to
preclear any personal securities investment (with limited exceptions such
as government securities). The preclearance requirement and associated
procedures are designed to identify any substantive prohibition or
limitation applicable to the proposed investment. The restrictions also
include a ban on trading securities based on information about the trading
within a Fund.
Distribution Arrangements
Under a distribution agreement between the Fund and The Managers Funds
LLC dated ________, 2000 (the "Distribution Agreement"), The Managers Funds
LLC serves as distributor (the "Distributor") in connection with the
offering of the Fund's shares on a no-load basis. The Distributor bears
certain expenses associated with the distribution and sale of shares of the
Fund. The Distributor acts as agent in arranging for the sale of the
Fund's shares without sales commission or other compensation.
The Distribution Agreement between the Trust and the Distributor may
be terminated by either party under certain specified circumstances and
will automatically terminate on assignment in the same manner as the
Investment Management Agreement. The Distribution Agreement may be
continued annually so long as such continuation is specifically approved at
least annually (i) by either the Trustees of the Trust or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Fund, and (ii) in either event by the vote of a majority of the
Trustees of the Trust who are not parties to the agreement or "interested
persons" (as defined in the 1940 Act) of any such party, cast in person at
a meeting called for the purpose of voting on such continuance.
Custodian
State Street Bank and Trust Company ("State Street" or the
"Custodian"), 1776 Heritage Drive, North Quincy, Massachusetts, is the
Custodian for the Fund. It is responsible for holding all cash assets and
all portfolio securities of the Fund, releasing and delivering such
securities as directed by the Fund, maintaining bank accounts in the names
of the Fund, receiving for deposit into such accounts payments for shares
of the Fund, collecting income and other payments due the Fund with respect
to portfolio securities and paying out monies of the Fund. In addition,
when the Fund trades in futures contracts and those trades would require
the deposit of initial margin with a futures commission merchant ("FCM"),
the Fund will enter into a separate special custodian agreement with a
custodian in the name of the FCM which agreement will provide that the FCM
will be permitted access to the account only upon the Fund's default under
the contract.
The Custodian is authorized to deposit securities in securities
depositories or to use the services of sub- custodians, including foreign
sub-custodians, to the extent permitted by and subject to the regulations
of the Securities and Exchange Commission.
Transfer Agent
Boston Financial Data Services, Inc., P.O. Box 8517, Boston,
Massachusetts 02266-8517, is the transfer agent (the "Transfer Agent") for
the Fund.
Independent Public Accountants
PricewaterhouseCoopers LLP, 160 Federal Street, Boston, Massachusetts
02110, is the independent public accountant for the Fund.
PricewaterhouseCoopers LLP conducts an annual audit of the financial
statements of the Fund, assists in the preparation and/or review of each of
the Fund's federal and state income tax returns and consults with the Fund
as to matters of accounting and federal and state income taxation.
BROKERAGE ALLOCATION AND OTHER PRACTICES
The Sub-Advisory Agreement provides that the Sub-Adviser place all
orders for the purchase and sale of securities which are held in the Fund's
portfolio. In executing portfolio transactions and selecting brokers or
dealers, it is the policy and principal objective of the Sub-Adviser to
seek best price and execution. It is expected that securities will
ordinarily be purchased in the primary markets. The Sub-Adviser shall
consider all factors that it deems relevant when assessing best price and
execution for the Fund, including the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer and the reasonableness of the
commission, if any (for the specific transaction and on a continuing
basis).
In addition, when selecting brokers to execute transactions and in
evaluating the best available net price and execution, the Sub-Adviser is
authorized by the Trustees to consider the "brokerage and research
services" (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934, as amended), provided by the broker. The Sub-Adviser
is also authorized to cause the Fund to pay a commission to a broker who
provides such brokerage and research services for executing a portfolio
transaction which is in excess of the amount of commission another broker
would have charged for effecting that transaction. The Sub-Adviser must
determine in good faith, however, that such commission was reasonable in
relation to the value of the brokerage and research services provided
viewed in terms of that particular transaction or in terms of all the
accounts over which the Sub-Adviser exercises investment discretion.
Brokerage and research services received from such brokers will be in
addition to, and not in lieu of, the services required to be performed by
each Sub-Adviser. The Fund may purchase and sell portfolio securities
through brokers who provide the Fund with research services.
The Trustees will periodically review the total amount of commissions
paid by the Fund to determine if the commissions paid over representative
periods of time were reasonable in relation to commissions being charged by
other brokers and the benefits to the Fund of using particular brokers or
dealers. It is possible that certain of the services received by the
Sub-Adviser attributable to a particular transaction will primarily benefit
one or more other accounts for which investment discretion is exercised by
the Sub-Adviser.
The fees of the Sub-Adviser are not reduced by reason of their receipt
of such brokerage and research services. Generally, the Sub-Adviser does
not provide any services to the Fund except portfolio investment management
and related record- keeping services.
PURCHASE, REDEMPTION AND PRICING OF SHARES
Purchasing Shares
Investors may open accounts with the Fund through their financial
planners or investment professionals, or by the Trust in limited
circumstances as described in the Prospectus. Shares may also be purchased
through bank trust departments on behalf of their clients, other investors
such as corporations, endowment funds and charitable foundations, and
tax-exempt employee welfare, pension and profit-sharing plans. There are
no charges by the Trust for being a customer for this purpose. The Trust
reserves the right to determine which customers and which purchase orders
the Trust will accept.
Certain investors may purchase or sell Fund shares through
broker-dealers or through other processing organizations who may impose
transaction fees or other charges in connection with this service. Shares
purchased in this way may be treated as a single account for purposes of
the minimum initial investment. The Fund may from time to time make
payments to such broker-dealers or processing organizations for certain
recordkeeping services. Investors who do not wish to receive the services
of a broker-dealer or processing organization may consider investing
directly with the Trust. Shares held through a broker-dealer or processing
organization may be transferred into the investor's name by contacting the
broker-dealer or processing organization or the Transfer Agent. Certain
processing organizations may receive compensation from the Trust's
Investment Manager and/or the Sub-Adviser.
Purchase orders received by the Fund before 4:00 p.m. New York Time,
c/o Boston Financial Data Services, Inc. at the address listed in the
Prospectus on any Business Day will receive the net asset value computed
that day. Orders received after 4:00 p.m. by certain processing
organizations which have entered into special arrangements with the
Investment Manager will also receive that day's offering price. The
broker-dealer, omnibus processor or investment professional is responsible
for promptly transmitting orders to the Trust. Orders transmitted to the
Trust at the address indicated in the Prospectus will be promptly forwarded
to the Transfer Agent.
Federal Funds or Bank Wires used to pay for purchase orders must be in
U.S. dollars and received in advance, except for certain processing
organizations which have entered into special arrangements with the Trust.
Purchases made by check are effected when the check is received, but are
accepted subject to collection at full face value in U.S. funds and must be
drawn in U.S. Dollars on a U.S. bank.
To ensure that checks are collected by the Trust, redemptions of
shares which were purchased by check are not effected until the clearance
of the check, which may take up to 15 days after the date of purchase
unless arrangements are made with the Investment Manager. However, during
this 15 day period, such shareholder may exchange such shares into any
series of Managers AMG Funds, The Managers Funds, The Managers Trust I or
The Managers Trust II. The 15 day holding period for redemptions would
still apply to such exchanges.
If the check accompanying any purchase order does not clear, or if
there are insufficient funds in your bank account, the transaction will be
canceled and you will be responsible for any loss the Trust incurs. For
current shareholders, the Fund can redeem shares from any identically
registered account in the Fund as reimbursement for any loss incurred. The
Trust has the right to prohibit or restrict all future purchases in the
Trust in the event of any nonpayment for shares. Third party checks which
are payable to an existing shareholder who is a natural person (as opposed
to a corporation or partnership) and endorsed over to the Fund or State
Street Bank and Trust Company will be accepted.
In the interest of economy and convenience, share certificates will
not be issued. All share purchases are confirmed to the record holder and
credited to such holder's account on the Trust's books maintained by the
Transfer Agent.
Redeeming Shares
Any redemption orders received by the Trust before 4:00 p.m. New York
Time on any Business Day will receive the net asset value determined at the
close of trading on the New York Stock Exchange (the "NYSE") on that day.
Redemption orders received after 4:00 p.m. will be redeemed at the
net asset value determined at the close of trading on the next Business
Day. Redemption orders transmitted to the Trust at the address indicated
in the Prospectus will be promptly forwarded to the Transfer Agent. If you
are trading through a broker-dealer or investment adviser, such investment
professional is responsible for promptly transmitting orders. There is no
redemption charge. The Fund reserves the right to redeem shareholder
accounts (after 60 days notice) when the value of the Fund shares in the
account falls below $500 due to redemptions. Whether the Fund will
exercise its right to redeem shareholder accounts will be determined by the
Investment Manager on a case-by-case basis.
If the Fund determines that it would be detrimental to the best
interest of the remaining shareholders of the Fund to make payment wholly
or partly in cash, payment of the redemption price may be made in whole or
in part by a distribution in kind of securities from the Fund, in lieu of
cash, in conformity with the applicable rule of the SEC. If shares are
redeemed in kind, the redeeming shareholder might incur transaction costs
in converting the assets to cash. The method of valuing portfolio
securities is described under the "Net Asset Value," and such valuation
will be made as of the same time the redemption price is determined.
Investors should be aware that redemptions from the Fund may not be
processed if a redemption request is not submitted in proper form. To be
in proper form, the request must include the shareholder's taxpayer
identification number, account number, Fund number and signatures of all
account holders. All redemptions will be mailed to the address of record
on the shareholder's account. In addition, if a shareholder sends a check
for the purchase of shares of the Fund and shares are purchased before the
check has cleared, the transmittal of redemption proceeds from the shares
will occur upon clearance of the check which may take up to 15 days. The
Fund reserves the right to suspend the right of redemption and to postpone
the date of payment upon redemption beyond seven days as follows: (i)
during periods when the NYSE is closed for other than weekends and holidays
or when trading on the NYSE is restricted as determined by the SEC by rule
or regulation, (ii) during periods in which an emergency, as determined by
the SEC, exists that causes disposal by the Fund of, or evaluation of the
net asset value of, portfolio securities to be unreasonable or
impracticable, or (iii) for such other periods as the SEC may permit.
Exchange of Shares
An investor may exchange shares from the Fund into shares of any
series of Managers AMG Funds, The Managers Funds, The Managers Trust I or
The Managers Trust II without any charge. An investor may make such an
exchange if following such exchange the investor would continue to meet the
Fund's minimum investment amount. Shareholders should read the Prospectus
of the series of Managers AMG Funds, The Managers Funds, The Managers
Trust I or The Managers Trust II they are exchanging into. Investors may
exchange only into accounts that are registered in the same name with the
same address and taxpayer identification number. Shares are exchanged on
the basis of the relative net asset value per share. Since exchanges are
purchases of a series of Managers AMG Funds, The Managers Funds, The
Managers Trust I or The Managers Trust II and redemptions of the Fund, the
usual purchase and redemption procedures and requirements apply to each
exchange. Shareholders are subject to federal income tax and may recognize
capital gains or losses on the exchange for federal income tax purposes.
Settlement on the shares of any series of Managers AMG Funds, The Managers
Funds, The Managers Trust I or The Managers Trust II will occur when the
proceeds from redemption become available. The Trust reserves the right to
discontinue, alter or limit the exchange privilege at any time.
Net Asset Value
The Fund computes its Net Asset value once daily on Monday through
Friday on each day on which the NYSE is open for trading, at the close of
business of the NYSE, usually 4:00 p.m. New York Time. The net asset value
will not be computed on the day the following legal holidays are observed:
New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas
Day. The Fund may close for purchases and redemptions at such other times
as may be determined by the Board of Trustees to the extent permitted by
applicable law. The time at which orders are accepted and shares are
redeemed may be changed in case of an emergency or if the NYSE closes at a
time other than 4:00 p.m. New York Time.
The net asset value of the Fund is equal to the value of the Fund
(assets minus liabilities) divided by the number of shares outstanding.
Fund securities listed on an exchange are valued at the last quoted sale
price on the exchange where such securities are principally traded on the
valuation date, prior to the close of trading on the NYSE, or, lacking any
sales, at the last quoted bid price on such principal exchange prior to the
close of trading on the NYSE. Over-the-counter securities for which market
quotations are readily available are valued at the last sale price or,
lacking any sales, at the last quoted bid price on that date prior to the
close of trading on the NYSE. Securities and other instruments for which
market quotations are not readily available are valued at fair value, as
determined in good faith and pursuant to procedures established by the
Trustees.
Dividends and Distributions
The Fund declares and pays dividends and distributions as described in
the Prospectus.
If a shareholder has elected to receive dividends and/or their
distributions in cash and the postal or other delivery service is unable to
deliver the checks to the shareholder's address of record, the dividends
and/or distribution will automatically be converted to having the dividends
and/or distributions reinvested in additional shares. No interest will
accrue on amounts represented by uncashed dividend or redemption checks.
Distribution Plan
The Trust has adopted a "Plan of Distribution Pursuant to Rule 12b-1"
(the "Distribution Plan") under which the Trust may engage, directly or
indirectly, in financing any activities primarily intended to result in the
sale of shares, including, but not limited to, (1) making payments to
underwriters, securities dealers and others engaged in the sale of shares,
including payments to the Distributor to compensate or reimburse other
persons for engaging in such activities and (2) paying expenses or
providing reimbursement of expenditures incurred by the Distributor or
other persons in connection with the offer or sale of shares, including
expenses relating to the formulation and implementation of marketing
strategies and promotional activities such as direct mail promotions and
television, radio, newspaper, magazine and other mass media advertising,
the preparation, printing and distribution of sales literature and reports
for recipients other than existing shareholders of the Trust, and obtaining
such information, analyses and reports with respect to marketing and
promotional activities and investor accounts as the Trust may, from time to
time, deem advisable. The Trust and the Fund are authorized to engage in
the activities listed above, and in other activities primarily intended to
result in the sale of shares, either directly or through other persons with
which the Trust has entered into agreements pursuant to the Distribution
Plan. Under the Distribution Plan, the Board of Trustees may authorize
payments which may not exceed on an annual basis 0.25% of the average
annual net assets of the Fund. The Trustees have not authorized the
payment of any fees to date.
CERTAIN TAX MATTERS
Federal Income Taxation of Fund-in General
The Fund intends to qualify and elect to be treated each taxable year
as a "regulated investment company" under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), although it cannot give
complete assurance that it will qualify to do so. Accordingly, the Fund
must, among other things, (a) derive at least 90% of its gross income in
each taxable year from dividends, interest, payments with respect to
securities loans, gains from the sale or other disposition of stock,
securities or foreign currencies, or other income (including, but not
limited to, gains from options, futures or forward contracts) derived with
respect to its business of investing in such stock, securities or
currencies (the "90% test"); and (b) satisfy certain diversification
requirements on a quarterly basis.
If the Fund should fail to qualify as a regulated investment company
in any year, it would lose the beneficial tax treatment accorded regulated
investment companies under Subchapter M of the Code and all of its taxable
income would be subject to tax at regular corporate rates without any
deduction for distributions to shareholders, and such distributions will be
taxable to shareholders as ordinary income to the extent of the Fund's
current or accumulated earnings and profits. Also, the shareholders, if
they received a distribution in excess of current or accumulated earnings
and profits, would receive a return of capital that would reduce the basis
of their shares of the Fund to the extent thereof. Any distribution in
excess of a shareholder's basis in the shareholder's shares would be
taxable as gain realized from the sale of such shares.
The Fund will be liable for a nondeductible 4% excise tax on amounts
not distributed on a timely basis in accordance with a calendar year
distribution requirement. To avoid the tax, during each calendar year the
Fund must distribute an amount equal to at least 98% of the sum of its
ordinary income (not taking into account any capital gains or losses) for
the calendar year, and its net capital gain income for the 12-month period
ending on October 31, in addition to any undistributed portion of the
respective balances from the prior year. For that purpose, any income or
gain retained by the Fund that is subject to corporate tax will be
considered to have been distributed by year end. The Fund intends to make
sufficient distributions to avoid this 4% excise tax.
Taxation of the Fund's Investments
Original Issue Discount; Market Discount. For federal income tax
purposes, debt securities purchased by the Fund may be treated as having
original issue discount. Original issue discount represents interest for
federal income tax purposes and can generally be defined as the excess of
the stated redemption price at maturity of a debt obligation over the issue
price. Original issue discount is treated for federal income tax purposes
as income earned by the Fund, whether or not any income is actually
received, and therefore is subject to the distribution requirements of the
Code. Generally, the amount of original issue discount is determined on
the basis of a constant yield to maturity which takes into account the
compounding of accrued interest. Under Section 1286 of the Code, an
investment in a stripped bond or stripped coupon may result in original
issue discount.
Debt securities may be purchased by the Fund at a discount that
exceeds the original issue discount plus previously accrued original issue
discount remaining on the securities, if any, at the time the Fund
purchases the securities. This additional discount represents market
discount for federal income tax purposes. In the case of any debt security
issued after July 18, 1984, having a fixed maturity date of more than one
year from the date of issue and having market discount, the gain realized
on disposition will be treated as interest to the extent it does not exceed
the accrued market discount on the security (unless the Fund elects to
include such accrued market discount in income in the tax year to which it
is attributable). Generally, market discount is accrued on a daily basis.
The Fund may be required to capitalize, rather than deduct currently, part
or all of any direct interest expense incurred or continued to purchase or
carry any debt security having market discount, unless the Fund makes the
election to include market discount currently. Because the Fund must
include original issue discount in income, it will be more difficult for
the Fund to make the distributions required for the Fund to maintain its
status as a regulated investment company under Subchapter M of the Code or
to avoid the 4% excise tax described above.
Options and Futures Transactions. Certain of the Fund's investments
may be subject to provisions of the Code that (i) require inclusion of
unrealized gains or losses in the Fund's income for purposes of the 90%
test, and require inclusion of unrealized gains in the Fund's income for
purposes of the excise tax and the distribution requirements applicable to
regulated investment companies; (ii) defer recognition of realized losses;
and (iii) characterize both realized and unrealized gain or loss as
short-term and long-term gain, irrespective of the holding period of the
investment. Such provisions generally apply to, among other investments,
options on debt securities, indices on securities and futures contracts.
The Fund will monitor its transactions and may make certain tax elections
available to it in order to mitigate the impact of these rules and prevent
disqualification of the Fund as a regulated investment company.
Federal Income Taxation of Shareholders
General. Dividends paid by the Fund may be eligible for the 70%
dividends-received deduction for corporations. The percentage of the
Fund's dividends eligible for such tax treatment may be less than 100% to
the extent that less than 100% of the Fund's gross income may be from
qualifying dividends of domestic corporations. Any dividend declared in
October, November or December and made payable to shareholders of record in
any such month is treated as received by such shareholder on December 31,
provided that the Fund pays the dividend during January of the following
calendar year.
Distributions by the Fund can result in a reduction in the fair market
value of the Fund's shares. Should a distribution reduce the fair market
value below a shareholder's cost basis, such distribution nevertheless may
be taxable to the shareholder as ordinary income or capital gain, even
though, from an investment standpoint, it may constitute a partial return
of capital. In particular, investors should be careful to consider the tax
implications of buying shares just prior to a taxable distribution. The
price of shares purchased at that time includes the amount of any
forthcoming distribution. Those investors purchasing shares just prior to
a taxable distribution will then receive a return of investment upon
distribution which will nevertheless be taxable to them.
Foreign Shareholders
Dividends of net investment income and distribution of realized net
short-term gain in excess of net long-term loss to a shareholder who is a
nonresident alien individual, fiduciary of a foreign trust or estate,
foreign corporation or foreign partnership (a "foreign shareholder") will
be subject to U.S. withholding tax at the rate of 30% (or lower treaty
rate) unless the dividends are effectively connected with a U.S. trade or
business of the shareholder, in which case the dividends will be subject to
tax on a net income basis at the graduated rates applicable to U.S.
individuals or domestic corporations. Distributions treated as long-term
capital gains to foreign shareholders will not be subject to U.S. tax
unless the distributions are effectively connected with the shareholder's
trade or business in the United States or, in the case of a shareholder who
is a nonresident alien individual, the shareholder was present in the
United States for more than 182 days during the taxable year and certain
other conditions are met.
In the case of a foreign shareholder who is a nonresident alien
individual or foreign entity, the Fund may be required to withhold U.S.
federal income tax as "backup withholding" at the rate of 31% from
distributions treated as long-term capital gains and from the proceeds of
redemptions, exchanges or other dispositions of the Fund's shares unless
IRS Form W-8 is provided. Transfers by gift of shares of the Fund by a
foreign shareholder who is a non-resident alien individual will not be
subject to U.S. federal gift tax, but the value of shares of the Fund held
by such shareholder at his or her death will be includible in his or her
gross estate for U.S. federal estate tax purposes.
State and Local Taxes
The Fund may also be subject to state and/or local taxes in
jurisdictions in which the Fund is deemed to be doing business. In
addition, the treatment of the Fund and its shareholders in those states
which have income tax laws might differ from treatment under the federal
income tax laws. Shareholders should consult with their own tax advisers
concerning the foregoing state and local tax consequences of investing in
the Fund.
Other Taxation
The Fund is a series of a Massachusetts business trust. Under current
law, neither the Trust nor the Fund is liable for any income or franchise
tax in The Commonwealth of Massachusetts, provided that the Fund continues
to qualify as a regulated investment company under Subchapter M of the
Code.
Shareholders should consult their tax advisers about the application
of the provisions of tax law described in this Statement of Additional
Information in light of their particular tax situations.
PERFORMANCE DATA
From time to time, the Fund may quote performance in terms of yield,
actual distributions, total return or capital appreciation in reports,
sales literature, and advertisements published by the Fund. Since the Fund
commenced operations on [_________, 2000], there is no current performance
information for the Fund.
Total Return
The Fund may advertise performance in terms of average annual total
return for 1-, 5- and 10-year periods, or for such lesser periods that the
Fund has been in existence. Average annual total return is computed by
finding the average annual compounded rates of return over the periods that
would equate the initial amount invested to the ending redeemable value,
according to the following formula:
P (1 + T) N = ERV
In the above formula, P = a hypothetical initial payment of $1,000
T = average annual total return
N = number of years
ERV = ending redeemable value of the hypothetical $1,000 payment made at
the beginning of the 1-, 5- or 10-year periods at the end of the year or
period
The figure is then annualized. The formula assumes that any charges
are deducted from the initial $1,000 payment and assumes that all dividends
and distributions by the Fund are reinvested at the price stated in the
Prospectus on the reinvestment dates during the period
Performance Comparisons
The Fund may compare its performance to the performance of other
mutual funds having similar objectives. This comparison must be expressed
as a ranking prepared by independent services or publications that monitor
the performance of various mutual funds such as Lipper, Inc. ("Lipper") and
Morningstar, Inc., ("Morningstar"). Lipper prepares the "Lipper Composite
Index," a performance benchmark based upon the average performance of
publicly offered stock funds, bond funds, and money market funds as
reported by Lipper. Morningstar, a widely used independent research firm,
also ranks mutual funds by overall performance, investment objectives and
assets. The Fund's performance may also be compared to the performance of
various unmanaged indices such as the Russell 3000 Growth Index, Russell
1000 Growth Index, Standard & Poor's 500 Composite Stock Price Index, the
Standard & Poor's 400 Composite Stock Price Index or the Dow Jones
Industrial Average.
Massachusetts Business Trust
The Fund is a series of a "Massachusetts business trust." A copy of
the Declaration of Trust for the Trust is on file in the office of the
Secretary of The Commonwealth of Massachusetts. The Declaration of Trust
and the By-Laws of the Trust are designed to make the Trust similar in most
respects to a Massachusetts business corporation. The principal
distinction between the two forms concerns shareholder liability and are
described below.
Under Massachusetts law, shareholders of such a trust may, under
certain circumstances, be held personally liable as partners for the
obligations of the trust. This is not the case for a Massachusetts
business corporation. However, the Declaration of Trust of the Trust
provides that the shareholders shall not be subject to any personal
liability for the acts or obligations of the Fund and that every written
agreement, obligation, instrument or undertaking made on behalf of the Fund
shall contain a provision to the effect that the shareholders are not
personally liable thereunder.
No personal liability will attach to the shareholders under any
undertaking containing such provision when adequate notice of such
provision is given, except possibly in a few jurisdictions. With respect
to all types of claims in the latter jurisdictions, (i) tort claims, (ii)
contract claims where the provision referred to is omitted from the
undertaking, (iii) claims for taxes, and (iv) certain statutory liabilities
in other jurisdictions, a shareholder may be held personally liable to the
extent that claims are not satisfied by the Fund. However, upon payment of
such liability, the shareholder will be entitled to reimbursement from the
general assets of the Fund. The Trustees of the Trust intend to conduct
the operations of the Trust in a way as to avoid, as far as possible,
ultimate liability of the shareholders of the Fund.
The Declaration of Trust further provides that the name of the Trust
refers to the Trustees collectively as Trustees, not as individuals or
personally, that no Trustee, officer, employee or agent of the Fund or to a
shareholder, and that no Trustee, officer, employee or agent is liable to
any third persons in connection with the affairs of the Fund, except if the
liability arises from his or its own bad faith, willful misfeasance, gross
negligence or reckless disregard of his or its duties to such third
persons. It also provides that all third persons shall look solely to the
property of the Fund for any satisfaction of claims arising in connection
with the affairs of the Fund. With the exceptions stated, the Trust's
Declaration of Trust provides that a Trustee, officer, employee or agent is
entitled to be indemnified against all liability in connection with the
affairs of the Fund.
The Trust shall continue without limitation of time subject to the
provisions in the Declaration of Trust concerning termination by action of
the shareholders or by action of the Trustees upon notice to the
shareholders.
Description of Shares
The Trust is an open-end management investment company organized as a
Massachusetts business trust in which the Fund represents a separate series
of shares of beneficial interest. See "Massachusetts Business Trust"
above.
The Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares ($0.001 par value) of one or more
series and to divide or combine the shares of any series, if applicable,
without changing the proportionate beneficial interest of each shareholder
in the Fund or assets of another series, if applicable. Each share of the
Fund represents an equal proportional interest in the Fund with each other
share. Upon liquidation of the Fund, shareholders are entitled to share
pro rata in the net assets of the Fund available for distribution to such
shareholders. See "Massachusetts Business Trust" above. Shares of the
Fund have no preemptive or conversion rights and are fully paid and
nonassessable. The rights of redemption and exchange are described in the
Prospectus and in this Statement of Additional Information.
The shareholders of the Trust are entitled to one vote for each dollar
of net asset value (or a proportionate fractional vote in respect of a
fractional dollar amount), on matters on which shares of the Fund shall be
entitled to vote. Subject to the 1940 Act, the Trustees themselves have
the power to alter the number and the terms of office of the Trustees, to
lengthen their own terms, or to make their terms of unlimited duration
subject to certain removal procedures, and appoint their own successors,
provided however, that immediately after such appointment the requisite
majority of the Trustees have been elected by the shareholders of the
Trust. The voting rights of shareholders are not cumulative so that
holders of more than 50% of the shares voting can, if they choose, elect
all Trustees being selected while the shareholders of the remaining shares
would be unable to elect any Trustees. It is the intention of the Trust
not to hold meetings of shareholders annually. The Trustees may call
meetings of shareholders for action by shareholder vote as may be required
by either the 1940 Act or by the Declaration of Trust of the Trust.
Shareholders of the Trust have the right, upon the declaration in
writing or vote of more than two-thirds of its outstanding shares, to
remove a Trustee from office. The Trustees will call a meeting of
shareholders to vote on removal of a Trustee upon the written request of
the record holders of 10% of the shares of the Trust. In addition,
whenever ten or more shareholders of record who have been shareholders of
record for at least six months prior to the date of the application, and
who hold in the aggregate either shares of the Fund having a net asset
value of at least $25,000 or at least 1% of the Trust's outstanding shares,
whichever is less, shall apply to the Trustees in writing, stating that
they wish to communicate with other shareholders with a view to obtaining
signatures to request a meeting for the purpose of voting upon the question
of removal of any of the Trustees and accompanies by a form of
communication and request which they wish to transmit, the Trustees shall
within five business days after receipt of such application either: (1)
afford to such applicants access to a list of the names and addresses of
all shareholders as recorded on the books of the Trust; or (2) inform such
applicants as to the approximate number of shareholders of record, and the
approximate cost of mailing to them the proposed shareholder communication
and form of request. If the Trustees elect to follow the latter, the
Trustees, upon the written request of such applicants accompanied by a
tender of the material to be mailed and the reasonable expenses of mailing,
shall, with reasonable promptness, mail such material to all shareholders
of record at their addresses as recorded on the books, unless within five
business days after such tender the Trustees shall mail to such applicants
and file with the SEC, together with a copy of the material to be mailed, a
written statement signed by at least a majority of the Trustees to the
effect that in their opinion either such material contains untrue
statements of fact or omits to state facts necessary to make the statements
contained therein not misleading, or would be in violation of applicable
law, and specifying the basis of such opinion. After opportunity for
hearing upon the objections specified in the written statements filed, the
SEC may, and if demanded by the Trustees or by such applicants shall, enter
an order either sustaining one or more objections or refusing to sustain
any of such objections, or if, after the entry of an order sustaining one
or more objections, the SEC shall find, after notice and opportunity for a
hearing, that all objections so sustained have been met, and shall enter an
order so declaring, the Trustees shall mail copies of such material to all
shareholders with reasonable promptness after the entry of such order and
the renewal of such tender.
The Trustees have authorized the issuance and sale to the public of
shares of one series of the Trust. The Trustees may authorize the issuance
of additional series of the Trust. The proceeds from the issuance of any
additional series would be invested in separate, independently managed
portfolios with distinct investment objectives, policies and restrictions,
and share purchase, redemption and net asset value procedures. All
consideration received by the Trust for shares of any additional series,
and all assets in which such consideration is invested, would belong to
that series, subject only to the rights of creditors of the Trust and would
be subject to the liabilities related thereto. Shareholders of the
additional series will approve the adoption of any management contract,
distribution agreement and any changes in the investment policies of the
Fund, to the extent required by the 1940 Act.
Additional Information
This Statement of Additional Information and the Prospectus do not
contain all of the information included in the Trust's Registration
Statement filed with the SEC under the 1933 Act. Pursuant to the rules and
regulations of the SEC, certain portions have been omitted. The
Registration Statements, including the Exhibits filed therewith, may be
examined at the office of the SEC in Washington DC.
Statements contained in the Statement of Additional Information and
the Prospectus concerning the contents or any contract or other document
are not necessarily complete, and in each instance, reference is made to
the copy of such contract or other document filed as an Exhibit to the
applicable Registration Statement. Each such statement is qualified in all
respects by such reference.
No dealer, salesman or any other person has been authorized to give any
information or to make any representations, other than those contained in
the Prospectus or this Statement of Additional Information, in connection
with the offer of shares of the Fund and, if given or made, such other
representations or information must not be relied upon as having been
authorized by the Trust, the Fund or the Distributor. The Prospectus and
this Statement of Additional Information do not constitute an offer to sell
or solicit an offer to buy any of the securities offered thereby in any
jurisdiction to any person to whom it is unlawful for the Fund or the
Distributor to make such offer in such jurisdictions.
<PAGE>
PART C
To the Registration Statement of
Managers AMG Funds (the "Trust")
Item 23. Exhibits.
Exhibit No. Description
a.1 Master Trust Agreement dated June 18, 1999.(i)
a.2 Amendment No. 1 to Master Trust Agreement changing the name of
the "Essex Growth Fund" to "Essex Aggressive Growth Fund."(iii)
a.3 Amendment No. 2 to Master Trust Agreement changing the name of
the Trust to "Managers AMG Funds."(iii)
b. By-Laws of the Trust dated June 18, 1999.(i)
c. Sections 4.2(d), 4.2(e), 4.2(f), 4.2(i), 4.2(j), 4.2(k), 4.2(m),
4.6, 6.3, 6.5, 6.6, 7.1, 7.2 and 7.3 and Article V of the Master
Trust Agreement are included in Exhibit a.(i)
d.1 Investment Management Agreement between the Registrant and The
Managers Funds LLC with respect to the Essex Aggressive Growth
Fund, dated as of October 19, 1999.(iii)
d.2 Form of Investment Management Agreement between the Registrant
and The Managers Funds LLC with respect to the Frontier Growth
Fund, dated as of ____________, filed herewith.
d.3 Sub-Advisory Agreement between The Managers Funds LLC and Essex
Investment Management Company, LLC with respect to the Essex
Aggressive Growth Fund, dated as of October 19, 1999. (iii)
d.4 Form of Sub-Advisory Agreement between The Managers Funds LLC and
Frontier Capital Management Company, LLC with respect to the
Frontier Growth Fund, dated as of _____________, filed herewith.
e. Distribution Agreement between the Registrant and The Managers
Funds LLC, dated as of October 19, 1999. (iii)
f. Not applicable.
g. Form of Custodian Agreement between the Registrant and State Street
Bank and Trust Company.
h. Form of Transfer Agency Agreement between the Registrant and Boston
Financial Data Services, Inc.
i.1 Opinion and Consent of Goodwin, Procter & Hoar LLP with respect
to the Essex Aggressive Growth Fund.(iii)
i.2 Opinion and Consent of Goodwin, Procter & Hoar LLP with respect
to the Frontier Growth Fund, to be filed by Post-Effective Amendment.
j.1 Consent of PricewaterhouseCoopers LLP with respect to the Frontier
Growth Fund.(iii)
j.2 Opinion and Consent of Deloitte & Touche LLP with respect to the
Frontier Growth Fund(iii)
k. Not Applicable.
l. Power of Attorney dated September 9, 1999. (ii)
m. Plan of Distribution Pursuant to Rule 12b-1, dated as of
October 15, 1999.(iii)
n. Not applicable.
o. Not applicable.
p.1 Code of Ethics of the Trust, to be filed by Post-Effective Amenmdment.
p.2 Code of Ethics of The Managers Funds LLC, to be filed by Post-
Effective Amendment.
p.3 Code of Ethics for Essex Investment Management Company, LLC, to be
filed by Post-Effective Amendment.
p.4 Code of Ethics of Frontier Capital Management Company, LLC, to be
filed by Post-Effective Amendment.
_____________________________________________________________________________
(i) Filed as an exhibit to the Registrant's Registration Statement on Form
N-1A, Registration No. 333-84639 (filed August 6, 1999), under the
same exhibit number.
(ii) Filed as an exhibit to Pre-Effective Amendment No. 1 to the
Registrant's Registration Statement on Form N-1A, Registration No.
333-84639 (filed September 23, 1999), under the same exhibit number.
(iii)Filed as an exhibit to Pre-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form N-1A, Registration No.
333-84639 (filed November 1, 1999), under the same exhibit number.
Item 24. Persons Controlled by or Under Common Control with Registrant.
None.
Item 25. Indemnification.
Under Article VI of the Registrant's Master Trust Agreement, any
present or former Trustee, Officer, agent or employee or person serving in
such capacity with another entity at the request of the Registrant
("Covered Person") shall be indemnified against all liabilities, including
but not limited to amounts paid in satisfaction of judgments, in
compromises or as fines or penalties and expenses, including reasonable
legal and accounting fees, in connection with the defense or disposition of
any proceeding by or in the name of the Registrant or any shareholder in
his capacity as such if: (i) a favorable final decision on the merits is
made by a court or administrative body; or (ii) a reasonable determination
is made by a vote of the majority of a quorum of disinterested Trustees or
by independent legal counsel that the Covered Person was not liable by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in his office ("Disabling Conduct"); or
(iii) a determination is made to indemnify the Covered Person under
procedures approved by the Board of Trustees which in the opinion of
independent legal counsel are not inconsistent with the Investment Company
Act of 1940, as amended (the "1940 Act"). Said Article VI further provides
that the Registrant shall indemnify any Covered Person against any such
liabilities and expenses incurred in connection with the defense or
disposition of any other type of proceeding except with respect to any
matter as to which the Covered Person shall have engaged in Disabling
Conduct or shall have been finally adjudicated not to have acted in good
faith and in the reasonable belief that such Covered Person's action was in
or not opposed to the best interests of the Registrant.
Item 26. Business and Other Connections of Investment Adviser.
The Managers Funds LLC, a registered investment adviser, serves
as investment adviser to the Essex Aggressive Growth Fund. The Managers
Funds LLC is a subsidiary of Affiliated Managers Group, Inc. ("AMG") and
AMG serves as its Managing Member. The Managers Funds LLC serves
exclusively as an investment adviser to investment companies registered
under the 1940 Act. The business and other connections of the officers and
directors of The Managers Funds LLC, are listed in Schedules A and D of its
ADV Form as currently on file with the Commission, the text of which
Schedules are hereby incorporated herein by reference. The file number of
said ADV Form is 801-56365.
Essex Investment Management Company, LLC ("Essex') serves as sub-
adviser to the Essex Aggressive Growth Fund. AMG owns a majority interest
in Essex. Essex is the successor firm to Essex Investment Management
Company, Inc., which was formed in 1976. The business and other
connections of the officers and directors of Essex are listed in Schedules
A and D of its ADV Form as currently on file with the Commission, the text
of which Schedules are hereby incorporated herein by reference. The file
number of said ADV Form is 801-12548.
Frontier Capital Management Company, LLC ("Frontier") serves as sub-
adviser to the Frontier Growth Fund. AMG owns a majority interest
in Frontier. Frontier is the successor firm to Frontier Capital Management
Company, Inc., which was formed in 1980. The business and other
connections of the officers and directors of Frontier are listed in Schedules
A and D of its ADV Form as currently on file with the Commission, the text
of which Schedules are hereby incorporated herein by reference. The file
number of said ADV Form is _____________.
Item 27. Principal Underwriters.
(a) The Managers Funds LLC acts as principal underwriter for the
Registrant. The Managers Funds LLC also acts as principal underwriter for
The Managers Funds.
(b) The following information relates to the directors, officers
and partners of The Managers Funds LLC:
The business and other connections of the officers and directors of
The Managers Funds LLC are listed in Schedules A and D of its ADV Form as
currently on file with the Commission, the text of which Schedules are
hereby incorporated herein by reference. The file number of said ADV Form
is 801-56365.
(c) Not applicable.
Item 28. Location of Accounts and Records.
The accounts and records of the Registrant are maintained at the
offices of the Registrant at 40 Richards Avenue, Norwalk,
Connecticut 06854 and at the offices of the Custodian, State Street Bank
and Trust Company, 225 Franklin Street, Boston, Massachusetts 02106 and
1776 Heritage Drive, North Quincy, Massachusetts 01171 and at the offices
of the Transfer Agent, Boston Financial Data Services, Inc. 1776 Heritage
Drive, North Quincy, Massachusetts 01171.
Item 29. Management Services.
There are no management-related service contracts other than the
Investment Management Agreement relating to management services described
in Parts A and B.
Item 30. Undertakings.
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
as amended, and the Investment Company Act of 1940, as amended,
the Registrant has duly caused this Amendment to the Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in this City of Boston and
Commonwealth of Massachusetts on the 19th day of June 2000.
MANAGERS AMG FUNDS
By:/s/John Kingston, III
John Kingston, III
Secretary
Signature Capacity Date
Jack W. Aber* Trustee June 19, 2000
Jack W. Aber
William E. Chapman, II* Trustee June 19, 2000
William E. Chapman, II
Sean M. Healey* Trustee June 19, 2000
Sean M. Healey
Edward J. Kaier* Trustee June 19, 2000
Edward J. Kaier
Eric Rakowski* Trustee June 19, 2000
Eric Rakowski
Peter Lebovitz* President and Principal June 19, 2000
Peter Lebovitz Executive Officer
/s/ Donald Rumery Treasurer, Principal Financial Officer
Donald Rumery and Principal Accounting Officer June 19, 2000
By:/s/John Kingston, III
*John Kingston, III pursuant to power of attorney filed herewith.
<PAGE>
Exhibit d.2
-------------
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of the ____ day of _______, 2000 between
THE MANAGERS FUNDS LLC, a limited liability company organized
under the laws of the State of Delaware and having its principal
place of business in Norwalk, Connecticut (the "Adviser"), and
MANAGERS AMG FUNDS, a Massachusetts business trust having its
principal place of business in Norwalk, Connecticut (the
"Trust").
WHEREAS, the Adviser is engaged principally in the business
of rendering investment management services and is registered as
an investment adviser under the Investment Advisers Act of 1940,
as amended; and
WHEREAS, the Trust engages in business as an open-end
management investment company and is so registered under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust is authorized to issue shares of
beneficial interest in separate series with each such series
representing interests in a separate portfolio of securities and
other assets; and
WHEREAS, the Trust intends to offer shares in a second
series, the Frontier Growth Fund, such series (the "Second
Fund"), together with all other series established by the Trust
with respect to which the Adviser renders management and
investment advisory services pursuant to the terms of this
Agreement, being herein collectively referred to as the "Funds"
and individually as a "Fund".
NOW THEREFORE, WITNESSETH: That it is hereby agreed between
the parties hereto as follows:
1. APPOINTMENT OF ADVISER.
(a) Second Fund. The Trust hereby appoints the Adviser
to act as manager and investment adviser to the Second Fund for
the period and on the terms herein set forth. The Adviser accepts
such appointment and agrees to render the services herein set
forth, for the compensation herein provided.
(b) Additional Funds. In the event that the Trust
establishes one or more series of shares other than the Second
Fund with respect to which it desires to retain the Adviser to
render management and investment advisory services hereunder, it
shall so notify the Adviser in writing, indicating the advisory
fee to be payable with respect to the additional series of
shares. If the Adviser is willing to render such services on the
terms provided for herein, it shall so notify the Trust in
writing, whereupon such series of shares shall become a Fund
hereunder.
2. DUTIES OF ADVISER. The Adviser, at its own expense,
shall furnish the following services and facilities to the Trust:
(a) Investment Program. The Adviser shall, subject to
the provisions of paragraph 11 hereof, (i) develop and furnish
continuously an investment program and strategy for each Fund in
compliance with that Fund's investment objective and policies as
set forth in the Trust's current Registration Statement, (ii)
provide research and analysis relative to the investment program
and investments of each Fund, (iii) determine (subject to the
overall supervision and review of the Board of Trustees of the
Trust) what investments shall be purchased, held, sold or
exchanged by each Fund and what portion, if any, of the assets of
each Fund shall be held in cash or cash equivalents, and (iv)
make changes on behalf of the Trust in the investments of each
Fund.
(b) Administration. The Adviser shall also manage,
supervise and conduct the other affairs and business of the Trust
and each Fund thereof and all matters incidental thereto, subject
always to the control of the Board of Trustees of the Trust and
to the provisions of the Trust's Master Trust Agreement and
By-laws, as amended, and the 1940 Act.
In connection therewith, the Adviser shall:
(i) furnish to the Trust necessary assistance in:
(A) the preparation of all reports now or
hereafter required by federal or other laws; and
(B) the preparation of prospectuses,
registration statements and amendments thereto that may be
required by federal or other laws or by the rules or regulations
of any duly authorized commission or administrative body.
(ii) furnish to the Trust office space in the
offices of the Adviser, or in such other place or places as may
be agreed upon from time to time, and all necessary office
facilities, simple business equipment, supplies, utilities and
telephone service.
(iii) furnish to the Trust all executive and
administrative personnel necessary for managing the affairs of
the Trust, including personnel to perform clerical, bookkeeping,
accounting and other office functions. These services are
exclusive of the necessary records or services, including
shareholder services and fund accounting services, of any
dividend disbursing agent, transfer agent, registrar or
custodian. The Adviser shall compensate all personnel, officers,
and directors of the Trust if such persons are also employees of
the Adviser or its affiliates.
(iv) arrange for providing and maintaining a bond
issued by a reputable insurance company authorized to do business
in the place where the bond is issued against larceny and
embezzlement covering each officer and employee of the Trust, the
Adviser and/or any sub-adviser who may singly or jointly with
others have access to funds or securities of the Trust, with
direct or indirect authority to draw upon such funds or to direct
generally the disposition of such funds. The bond shall be in
such reasonable amount as a majority of the Trustees who are not
"interested persons" of the Trust, as defined in the 1940 Act,
shall determine, with due consideration to the aggregate assets
of the Trust to which any such officer or employee may have
access. The premium, or portion thereof pursuant to an agreement
among the insured parties in the case of a joint insured bond,
for the bond shall be payable by the Trust in accordance with
paragraph 3(17).
3. ALLOCATION OF EXPENSES. Except for the services or
facilities to be provided by the Adviser set forth in Paragraph 2
above, the Trust assumes and shall pay all expenses for all other
Trust operations and activities and shall reimburse the Adviser
for any such expense incurred by the Adviser (it being understood
that the Trust shall allocate such expenses between or among the
Funds to the extent contemplated by its Master Trust Agreement).
The expenses to be borne by the Trust shall include, without
limitation:
(1) all expenses of organizing the Trust or forming
any series thereof, to the extent now or hereafter permitted
under generally accepted accounting principles applicable to
registered investment companies;
(2) all expenses (including information, materials and
services other than services of the Adviser) of preparing,
printing and mailing all annual, semiannual and periodic reports,
proxy materials and other communications (including registration
statements, prospectuses and amendments and revisions thereto)
furnished to existing shareholders of the Trust and/or regulatory
authorities;
(3) fees involved in registering and maintaining
registration of the Trust and its shares with the Securities and
Exchange Commission and state regulatory authorities;
(4) any other registration, filing or other fees in
connection with requirements of regulatory authorities;
(5) expenses, including the cost of printing of
certificates, relating to the issuance of shares of the Trust;
(6) to the extent not paid by the Trust's distributor,
the expenses of maintaining a shareholder account and furnishing,
or causing to be furnished, to each shareholder a statement of
his account, including the expense of mailing;
(7) taxes and fees payable by the Trust to federal,
state or other governmental agencies;
(8) expenses related to the redemption of its shares,
including expenses attributable to any program of periodic
redemption;
(9) all issue and transfer taxes, brokers' commissions
and other costs chargeable to the Trust in connection with
securities transactions to which the Trust is a party, including
any portion of such commissions attributable to research and
brokerage services as defined by Section 28(e) of the Securities
Exchange Act of 1934, as amended from time to time (the "1934
Act");
(10) the charges and expenses of the custodian
appointed by the Trust, or any depository utilized by such
custodian, for the safekeeping of its property;
(11) charges and expenses of any shareholder servicing
agents, transfer agents and registrars appointed by the Trust,
including costs of servicing shareholder investment accounts;
(12) charges and expenses of independent accountants
retained by the Trust;
(13) fees and expenses for legal services in connection
with the affairs of the Trust, including reasonable fees charged
and expenses incurred by the Adviser, if any, for performing such
legal services for the Trust;
(14) compensation and expenses of Trustees of the Trust
who are not "interested persons" of the Trust (as defined in the
1940 Act);
(15) expenses of shareholders' and Trustees' meetings;
(16) membership dues in, and assessments of, the
Investment Company Institute or similar organizations;
(17) insurance premiums on fidelity, errors and
omissions and other coverages;
(18) expenses incurred in connection with any
distribution plan adopted by the Trust in compliance with Rule
12b-1 of the 1940 Act;
(19) such other non-recurring expenses of the Trust as
may arise, including expenses of actions, suits, or proceedings
to which the Trust is a party and the legal obligation which the
Trust may have to indemnify its Trustees or shareholders with
respect thereto;
(20) fees and expenses incurred in connection with
registering and qualifying the Trust's shares with federal and
state regulatory authorities, including reasonable fees charged
and expenses incurred by the Adviser, if any, for performing such
services for the Trust; and
(21) fees and expenses for fund accounting services,
including reasonable fees charged and expenses incurred by the
Adviser, if any, for performing such fund accounting services for
the Trust.
4. FEES. For the services and facilities to be provided
by the Adviser as set forth in Paragraph 2 hereof, the Trust
shall pay to the Adviser an annual fee as set forth on Schedule A
to this Agreement.
In the case of commencement or termination of this Agreement
with respect to any Fund during any calendar month, the fee with
respect to such Fund for that month shall be reduced
proportionately based upon the number of calendar days during
which it is in effect, and the fee shall be computed upon the
average daily net assets of such Fund for the days during which
it is in effect.
5. EXPENSE LIMITATION. The Adviser agrees that if the
total expenses of any Fund (exclusive of interest, taxes,
brokerage expenses, distribution expenses, extraordinary items
and any other items allowed to be excluded by applicable state
law) for any fiscal year of the Trust exceed the lowest expense
limitation imposed in any jurisdiction in which that Fund is then
making sales of its shares or in which its shares are then
qualified for sale, the Adviser will pay or reimburse such Fund
for that excess up to the amount of its advisory fee payable with
respect to that Fund during that fiscal year. The amount of the
monthly advisory fee payable under Paragraph 4 hereof shall be
reduced to the extent that the monthly expenses of that Fund, on
an annualized basis, would exceed the foregoing limitation. At
the end of each fiscal year of the Trust, if the aggregate annual
expenses chargeable to any Fund for that year exceed the
foregoing limitation based upon the average of the monthly
average net asset value of that Fund for the year, the Adviser
will promptly reimburse that Fund for the amount of such excess
to the extent not already reimbursed by reduction of the monthly
advisory fee. In the event that such expenses are within the
foregoing limitation, the Trust shall be obligated to pay the
Adviser excess amounts previously withheld from the advisory fee
during that fiscal year, provided that the amount of such payment
would not exceed the foregoing limitation.
In the event that this Agreement (i) is terminated with
respect to any one or more Funds as of a date other than the last
day of the fiscal year of the Trust or (ii) commences with
respect to one or more Funds as of a date other than the first
day of the fiscal year of the Trust, then the expenses of such
Fund or Funds shall be annualized and the Adviser shall pay to,
or receive from, the applicable Fund or Funds a pro rata portion
of the amount that the Adviser would have been required to pay or
would have received, if any, had this Agreement remained in
effect with respect to such Fund or Funds for the full fiscal
year.
6. PORTFOLIO TRANSACTIONS. In connection with the
management of the investment and reinvestment of the assets of
the Trust, the Adviser, acting by its own officers, directors or
employees or by a duly authorized subcontractor, is authorized to
select the brokers or dealers that will execute purchase and sale
transactions for the Trust. In executing portfolio transactions
and selecting brokers or dealers, if any, the Adviser will use
its best efforts to seek on behalf of a Fund the best overall
terms available. In assessing the best overall terms available
for any transaction, the Adviser shall consider all factors it
deems relevant, including the breadth of the market in and the
price of the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the
commission, if any, with respect to the specific transaction and
on a continuing basis. In evaluating the best overall terms
available, and in selecting the broker or dealer, if any, to
execute a particular transaction, the Adviser may also consider
the brokerage and research services (as those terms are defined
in Section 28(e) of the 1934 Act) provided to any Fund of the
Trust and/or other accounts over which the Adviser or an
affiliate of the Adviser exercises investment discretion. With
the prior approval of the Trustees, the Adviser may pay to a
broker or dealer who provides such brokerage and research
services a commission for executing a portfolio transaction which
is in excess of the amount of commission another broker or dealer
would have charged for effecting that transaction if the Adviser
determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services
provided. Such prior approval may be obtained from the Trustees
with respect to the Adviser's investment program and need not be
obtained on a transaction-by-transaction basis.
7. RELATIONS WITH TRUST. Subject to and in accordance
with the Master Trust Agreement and By-laws of the Trust and the
Limited Liability Company Agreement and By-laws of the Adviser,
it is understood that Trustees, officers, agents and shareholders
of the Trust are or may be interested in the Adviser (or any
successor thereof) as directors, officers, or otherwise, that
directors, officers, agents and shareholders of the Adviser (or
any successor) are or may be interested in the Trust as Trustees,
officers, shareholders or otherwise, that the Adviser (or any
such successor thereof) is or may be interested in the Trust as a
shareholder or otherwise and that the effect of any such adverse
interests shall be governed by said Master Trust Agreement,
Limited Liability Company Agreement and By-laws.
8. LIABILITY OF ADVISER. Neither the Adviser nor its
officers, directors, employees, agents or controlling persons or
assigns shall be liable for any error of judgment or mistake of
law or for any loss suffered by the Trust or its shareholders in
connection with the matters to which this Agreement relates;
provided that no provision of this Agreement shall be deemed to
protect the Adviser against any liability to the Trust or its
shareholders to which it might otherwise be subject by reason of
any willful misfeasance, bad faith or negligence in the
performance of its duties or the reckless disregard of its
obligations and duties under this Agreement. Nor shall any
provision hereof be deemed to protect any Trustee or officer of
the Trust against any such liability to which he might otherwise
be subject by reason of any willful misfeasance, bad faith or
negligence in the performance of his duties or the reckless
disregard of his obligations and duties.
9. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration. This Agreement shall become effective
with respect to the Second Fund on the date hereof and, with
respect to any additional Fund, on the date of receipt by the
Trust of notice from the Adviser in accordance with paragraph
1(b) hereof that the Adviser is willing to serve as Adviser with
respect to such Fund. Unless terminated as herein provided, this
Agreement shall remain in full force and effect for two years
from the date hereof with respect to the Second Fund and, with
respect to each additional Fund, for two years from the date on
which such Fund becomes a Fund hereunder. Subsequent to such
initial periods of effectiveness, this Agreement shall continue
in full force and effect for periods of one year thereafter with
respect to each Fund so long as such continuance with respect to
such Fund is approved at least annually (a) by either the
Trustees of the Trust or by vote of a majority of the outstanding
voting securities (as defined in the 1940 Act) of such Fund, and
(b) in either event, by the vote of a majority of the Trustees of
the Trust who are not parties to this Agreement or "interested
persons" (as defined in the 1940 Act) of any such party, cast in
person at a meeting called for the purpose of voting on such
approval. Notwithstanding the foregoing provisions of this
Section 9(a), the continuance of this Agreement with respect to
the Second Fund or any additional Fund is subject to the approval
of this Agreement by a majority of the outstanding voting
securities of that Fund at the first meeting of shareholders
after this Agreement becomes effective with respect to that Fund.
(b) Amendment. Any amendment to this Agreement shall
become effective with respect to a Fund upon approval of the
Adviser and a majority of the outstanding voting securities (as
defined in the 1940 Act) of that Fund.
(c) Termination. This Agreement may be terminated with
respect to any Fund at any time, without payment of any penalty,
by vote of the Trustees or by vote of a majority of the
outstanding voting securities (as defined in the 1940 Act) of
that Fund, or by the Adviser, in each case on sixty (60) days'
prior written notice to the other party.
(d) Automatic Termination. This Agreement shall
automatically and immediately terminate in the event of its
assignment (as defined in the 1940 Act).
(e) Approval, Amendment or Termination by Individual
Fund. Any approval, amendment or termination of this Agreement
by the holders of a majority of the outstanding voting securities
(as defined in the 1940 Act) of any Fund shall be effective to
continue, amend or terminate this Agreement with respect to any
such Fund notwithstanding (i) that such action has not been
approved by the holders of a majority of the outstanding voting
securities of any other Fund affected thereby, and (ii) that such
action has not been approved by the vote of a majority of the
outstanding voting securities of the Trust, unless such action
shall be required by any applicable law or otherwise.
10. SERVICES NOT EXCLUSIVE. The services of the Adviser to
the Trust hereunder are not to be deemed exclusive, and the
Adviser shall be free to render similar services to others so
long as its services hereunder are not impaired thereby.
11. SUBCONTRACTORS. The Trust hereby agrees that the
Adviser may subcontract for the performance of any of the
services contemplated to be rendered by the Adviser to any Fund
hereunder.
12. LIMITATION OF LIABILITY. The term "Managers AMG Funds"
means and refers to the Trustees from time to time serving under
the Master Trust Agreement of the Trust dated June 18, 1999 as
the same may subsequently thereto have been, or subsequently
hereto may be, amended. It is expressly agreed that the
obligations of the Trust hereunder shall not be binding upon any
of the Trustees, shareholders, nominees, officers, agents or
employees of the Trust personally, but shall bind only the trust
property of the Trust, as provided in the Master Trust Agreement.
The execution and delivery of this Agreement has been authorized
by the Trustees and the initial shareholder of the Trust and
signed by the President of the Trust, acting as such, and neither
such authorization by such Trustees and shareholder nor such
execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any liability
on any of them personally, but shall bind only the trust property
of the Trust as provided in its Master Trust Agreement.
13. RESERVATION OF NAME. The parties hereby acknowledge
that The Managers Funds LLC has reserved the right to grant the
nonexclusive use of the name "Managers" or any derivative thereof
to any other investment company, investment adviser, distributor
or other business enterprise, and to withdraw from the Trust the
use of the name "Managers". The name "Managers" will continue to
be used by the Trust so long as such use is mutually agreeable to
The Managers Funds LLC and the Trust.
14. MISCELLANEOUS.
(a) Notice. Any notice under this Agreement shall be
in writing, addressed and delivered or mailed, postage prepaid,
to the other party at such address as such other party may
designate in writing for the receipt of such notices.
(b) Severability. If any provision of this Agreement
shall be held or made invalid by a court decision, statute, rule
or otherwise, the remainder shall not be thereby affected.
(c) Applicable Law. This Agreement shall be construed
in accordance with and governed by the laws of the Commonwealth
of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first set forth above.
MANAGERS AMG FUNDS
By:
Name:
Title:
THE MANAGERS FUNDS LLC
By:
Name:
Title:
SCHEDULE A
FRONTIER GROWTH FUND
Advisory Fees pursuant to Section 2(a)
The Trust shall pay to the Adviser an annual gross
investment advisory fee equal to ____% of the average daily net
assets of the Frontier Growth Fund; provided, however, that the
Adviser agrees, for a period of not less than _______ (__)
months, to waive its advisory fee and pay or reimburse the Trust
for expenses of the Fund to the extent total expenses of the Fund
would otherwise exceed ____% of the Fund's average daily net
assets. Such fee shall be accrued daily and paid as soon as
practical after the last day of each calendar month.
In addition to the foregoing waiver, payment or
reimbursement (if any), the Adviser may from time to time
voluntarily waive all or a portion of the advisory fee payable
with respect to the Frontier Growth Fund and/or pay or reimburse
the Trust for expenses of the Fund. In addition to any amounts
otherwise payable to the Adviser as an advisory fee for current
services under the Investment Management Agreement, the Trust
shall be obligated to pay the Adviser all amounts previously
waived, paid or reimbursed by the Adviser with respect to the
Frontier Growth Fund, provided that the amount of such additional
payment in any year, together with all other expenses of the
Frontier Growth Fund, in the aggregate, would not cause the
Frontier Growth Fund's expense ratio in such year to exceed ____%
of the average daily net assets of the Frontier Growth Fund and
provided further that no additional payments shall be made with
respect to amounts waived, paid or reimbursed more than _____ (_)
years prior to the date the Fund accrues a liability with respect
to such additional payment.
Administration Fees Pursuant to Section 2(b)
None.
<PAGE>
Exhibit d.4
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SUB-ADVISORY AGREEMENT
AGREEMENT made as of the ____ day of _______, 2000, between
THE MANAGERS FUNDS LLC, a limited liability company organized
under the laws of the state of Delaware and having its principal
place of business in Norwalk, Connecticut (the "Adviser") and
FRONTIER CAPITAL MANAGEMENT COMPANY, LLC, a limited liability
company organized under the laws of the state of [Delaware] and
having its principal place of business at 99 Summer Street,
Boston, MA 02110 (the "Sub-Adviser").
WHEREAS, the Adviser is engaged principally in the business
of rendering investment management services and is registered as
an investment adviser under the Investment Advisers Act of 1940,
as amended (the "Advisers Act"); and
WHEREAS, the Sub-Adviser is engaged principally in the
business of rendering investment management services and is
registered as an investment adviser under the Advisers Act; and
WHEREAS, MANAGERS AMG FUNDS, a Massachusetts business trust
(the "Trust"), engages in business as an open-end management
investment company and is so registered under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust is authorized to issue shares of
beneficial interest in separate series, with each such series
representing interests in a separate portfolio of securities and
other assets; and
WHEREAS, the Trust currently intends to offer shares in a
Second series, the Frontier Growth Fund, such series together
with all other series subsequently established by the Trust with
respect to which the Sub-Adviser renders management and
investment advisory services pursuant to the terms of this
Agreement, being herein collectively referred to as the "Funds"
and individually as a "Fund"; and
WHEREAS, pursuant to an Investment Management Agreement,
dated as of ________, 2000, between the Trust and the Adviser
(the "Advisory Agreement"), the Adviser is required to perform
investment advisory services for the Funds.
NOW, THEREFORE, WITNESSETH: That it is hereby agreed
between the parties hereto as follows:
1. APPOINTMENT OF SUB-ADVISER.
(a) Frontier Growth Fund. The Adviser hereby
employs the Sub-Adviser to provide investment advisory
services to the Frontier Growth Fund for the period and on
the terms herein set forth. The Sub-Adviser accepts such
appointment and agrees to render the services herein set
forth, for the compensation herein provided.
(b) Additional Funds. In the event that the
Trust establishes one or more series of shares other than
the Frontier Growth Fund with respect to which the Adviser
desires to retain the Sub-Adviser to render investment
advisory services hereunder, the Adviser shall so notify the
Sub-Adviser in writing, indicating the advisory fee to be
payable with respect to the additional series of shares. If
the Sub-Adviser is willing to render such services on the
terms provided for herein, it shall so notify the Adviser in
writing, whereupon such series shall become a Fund
hereunder.
2. DUTIES OF ADVISER AND SUB-ADVISER.
(i) Delivery of Documents. The Adviser has furnished
the Sub-Adviser with true copies of each of the following:
(a) The Trust's Master Trust Agreement, as filed
with the Secretary of State of the Commonwealth of
Massachusetts and all amendments and supplements
thereto (such Master Trust Agreement, as presently in
effect and as it shall from time to time be amended or
supplemented, is herein called the "Declaration");
(b) The Trust's By-Laws and amendments and
supplements thereto (such By-Laws, as presently in
effect and as it shall from time to time be amended and
supplemented, is herein called the "By-Laws");
(c) Resolutions of the Trust's Board of Trustees
authorizing the appointment of the Adviser and
Sub-Adviser and approving the Advisory Agreement and
this Agreement and copies of the minutes of the initial
meeting of shareholders of each Fund;
(d) The Trust's Notification of Registration on
Form N-8A under the 1940 Act as filed with the
Securities and Exchange Commission on ________, 2000
and all amendments thereto;
(e) The Trust's Registration Statement on Form
N-1A under the Securities Act of 1933 as amended (the
"1933 Act") and the 1940 Act (File Nos. 333-84639 and
811-9521) as filed with the Securities and Exchange
Commission on ________, 2000, and all amendments
thereto (the "Registration Statement");
(f) The most recent prospectus (such prospectus,
as in effect from time to time and all amendments and
supplements thereto are herein called the "Prospectus")
of each Fund;
(g) All resolutions of the Board of Trustees of
the Trust pertaining to the objectives, investment
policies and investment restrictions of the Fund; and
(h) Copies of the executed Advisory Agreement
between the Trust and the Adviser relating to each
Fund.
The Adviser will furnish the Sub-Adviser from time
to time with copies of all amendments of or supplements
to items (a), (b), (c), (e), (f), (g) and (h) to the
extent such amendments or supplements relate to or
affect the obligations of the Sub-Adviser hereunder
with respect to the Frontier Growth Fund or any other
series of the Trust that hereafter becomes a Fund
hereunder.
(ii) The Sub-Adviser, at its own expense, shall furnish
the following services to the Trust:
(a) Investment Program. The Sub-Adviser is
hereby authorized and directed and hereby agrees,
subject to the stated investment objective and policies
of the Funds as set forth in the Trust's current
Registration Statement and subject to the supervision
of the Adviser and the Board of Trustees of the Trust,
to (i) develop and furnish continuously an investment
program and strategy for each Fund in compliance with
that Fund's investment objective and policies as set
forth in the Trust's current Registration Statement,
(ii) provide research and analysis relative to the
investment program and investments of each Fund, (iii)
determine (subject to the overall supervision of the
Board of Trustees of the Trust) what investments shall
be purchased, held, sold or exchanged by each Fund and
what portion, if any, of the assets of each Fund shall
be held in cash or cash equivalents, and (iv) make
changes on behalf of the Trust in the investments of
each Fund. In accordance with paragraph 2(ii)(b), the
Sub-Adviser shall arrange for the placing of all orders
for the purchase and sale of securities and other
investments for each Fund's account and will exercise
full discretion and act for the Trust in the same
manner and with the same force and effect as the Trust
might or could do with respect to such purchases, sales
or other transactions, as well as with respect to all
other things necessary or incidental to the furtherance
or conduct of such purchases, sales or transactions.
The Sub-Adviser will make its officers and employees
available to meet with the Adviser's officers and
directors on due notice at reasonable times to review
the investments and investment program of each Fund in
the light of current and prospective economic and
market conditions.
In the performance of its duties hereunder, the
Sub-Adviser is and shall be an independent contractor
and except as expressly provided for herein or
otherwise expressly provided or authorized shall have
no authority to act for or represent any Fund or the
Trust in any way or otherwise be deemed to be an agent
of any Fund, the Trust or of the Adviser. If any
occasion should arise in which the Sub-Adviser gives
any advice to its clients concerning the shares of a
Fund, the Sub-Adviser will act solely as investment
counsel for such clients and not in any way on behalf
of the Trust or any Fund.
(b) Portfolio Transactions. In connection with
the management of the investment and reinvestment of
each Fund, the Sub-Adviser, acting by its own officers,
directors or employees or by a duly authorized
subcontractor, is authorized to select the broker or
dealers that will execute purchase and sale
transactions for the Trust.
In executing portfolio transactions and selecting
brokers or dealers, if any, the Sub-Adviser will use
its best efforts to seek on behalf of a Fund the best
overall terms available. In assessing the best overall
terms available for any transaction, the Sub-Adviser
shall consider all factors it deems relevant, including
the breadth of the market in and the price of the
security, the financial condition and execution
capability of the broker or dealer, and the
reasonableness of the commission, if any, with respect
to the specific transaction and on a continuing basis.
In evaluating the best overall terms available, and in
selecting the broker or dealer, if any, to execute a
particular transaction, the Sub-Adviser may also
consider the brokerage and research services (as those
terms are defined in Section 28(e) of the Securities
Exchange Act of 1934) provided to the Sub-Adviser with
respect to the Frontier Growth Fund and/or other
accounts over which the Sub-Adviser exercises
investment discretion. The Sub-Adviser may pay to a
broker or dealer who provides such brokerage and
research services a commission for executing a
portfolio transaction which is in excess of the amount
of commission another broker or dealer would have
charged for effecting that transaction if, but only if,
the Sub-Adviser determines in good faith that such
commission was reasonable in relation to the value of
the brokerage and research services provided.
The Sub-Adviser may buy securities for a Fund at
the same time it is selling such securities for another
client account and may sell securities for a Fund at
the time it is buying such securities for another
client account. In such cases, subject to applicable
legal and regulatory requirements, and in compliance
with such procedures of the Trust as may be in effect
from time to time, the Sub-Adviser may effectuate cross
transactions between a Fund and such other account if
it deems this to be advantageous. The Sub-Adviser also
may cause a Fund to enter into other types of
investment transactions (e.g., a long position on a
particular securities index) at the same time it is
causing other client accounts to take opposite economic
positions (e.g., a short position on the same index).
On occasions when the Sub-Adviser deems the
purchase or sale of a security to be in the best
interest of a Fund as well as other clients, the
Sub-Adviser, to the extent permitted by applicable laws
and regulations, and in compliance with such procedures
of the Trust as may be in effect from time to time, may
aggregate the securities to be sold or purchased in
order to obtain the best execution and lower brokerage
commissions, if any. In such event, allocation of the
securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by
the Sub-Adviser in the manner it considers to be the
most equitable and consistent with its fiduciary
obligations to the subject Fund and to such clients.
The Sub-Adviser will advise the Funds' custodian
or such depository or agents as may be designated by
the custodian and the Adviser promptly of each purchase
and sale of a portfolio security, specifying the name
of the issuer, the description and amount or number of
shares of the security purchased, the market price, the
commission and gross or net price, the trade date and
settlement date and the identity of the effecting
broker or dealer. The Sub-Adviser shall not have
possession or custody of any Fund investments. The
Trust shall be responsible for all custodial agreements
and the payment of all custodial charges and fees and,
upon the Sub-Adviser giving proper instructions to the
custodian, the Sub-Adviser shall have no responsibility
or liability for the acts, omissions or other conduct
of the custodian.
The Sub-Adviser shall, upon due notice from the
Adviser, provide such periodic and special reports
describing any such research, advice or other services
received and the incremental commissions, net price or
other consideration to which they relate.
Notwithstanding the foregoing, the Sub-Adviser
agrees that the Adviser shall have the right by written
notice to identify securities that may not be purchased
on behalf of any Fund and/or brokers and dealers
through which portfolio transaction on behalf of the
Funds may not be effected, including, without
limitation, brokers or dealers affiliated with the
Adviser. The Sub-Adviser shall refrain from purchasing
such securities for the Fund or directing any portfolio
transaction to any such broker or dealer on behalf of
the Fund, unless and until the written approval of the
Adviser to do so is obtained, but the Sub-Adviser shall
not be liable to the Frontier Growth Fund for so
acting. In addition, the Sub-Adviser agrees that it
shall not direct portfolio transactions for the Fund
through any broker or dealer that is an "affiliated
person" of the Sub-Adviser (as that term is defined in
the Act or interpreted under applicable rules and
regulations of the Securities and Exchange Commission)
without the prior written approval of the Adviser and
in no event shall the Sub-Adviser direct portfolio
transactions on behalf of the Fund to any broker/dealer
in recognition of sales of shares of any investment
company or receipt of research or other service without
prior written approval of the Adviser. The Adviser
agrees that it will provide the Sub-Adviser with a list
of brokers and dealers that are "affiliated persons" of
the Funds.
(c) Reports. The Sub-Adviser shall render to the
Board of Trustees of the Trust such periodic and
special reports as the Board of Trustees may request
with respect to matters relating to the duties of the
Sub-Adviser set forth herein.
3. SUB-ADVISORY FEE.
For the services to be provided by the Sub-Adviser as
provided in Paragraph 2 hereof, the Adviser shall pay to the
Sub-Adviser an annual fee as set forth on Schedule A to this
Agreement.
In the case of commencement or termination of this Agreement
with respect to any Fund during any calendar month, the fee with
respect to such Fund for that month shall be reduced
proportionately based upon the number of calendar days during
which it is in effect, and the fee shall be computed during the
average daily net assets of such Fund for the days during which
it is in effect.
4. EXPENSES.
During the term of this Agreement, the Sub-Adviser will bear
all expenses incurred by it in the performance of its duties
hereunder, other than those expenses specifically assumed by the
Trust hereunder. The Trust shall assume and shall pay (i) issue
and transfer taxes chargeable to the Trust in connection with
securities transactions to which any Fund is a party, and (ii)
interest on borrowed money, if any. In addition to these
expenses, the Trust shall pay all brokers' and underwriting
commissions chargeable to the Trust in connection with the
securities transactions to which any Fund is a party.
5. COMPLIANCE WITH APPLICABLE REGULATIONS.
In performing its duties hereunder, the Sub-Adviser
(i) shall establish compliance procedures (copies of
which shall be provided to the Adviser, and shall be
subject to review and approval by the Adviser)
reasonably calculated to ensure compliance at all times
with: all applicable provisions of the 1940 Act and
the Advisers Act, and any rules and regulations adopted
thereunder; Subchapter M of the Internal Revenue Code
of 1986, as amended; the provisions of the Registration
Statement; the provisions of the Declaration and the By-
Laws of the Trust, as the same may be amended from time
to time; and any other applicable provisions of state,
federal or foreign law.
(ii) acknowledges that the Trust has adopted a written
code of ethics complying with the requirements of Rule
17j-1 under the Act and that the Sub-Adviser and
certain of its employees, officers and directors may be
subject to reporting requirements thereunder and,
accordingly, agrees that it shall, on a timely basis,
furnish, and shall cause its employees, officers and
directors to furnish, to the Adviser and/or to the
Trust, all reports and information required to be
provided under such code of ethics with respect to such
persons.
(iii) agrees that it will maintain for the Trust
all and only such records as required under Rules 31a-1
and 31a-2 under the 1940 Act in respect to its services
hereunder and that such records are the property of the
Trust and further agrees to surrender promptly to the
Trust any such records upon the Trust's request all in
accordance with Rule 31a-3 under the 1940 Act.
6. LIABILITY OF SUB-ADVISER; INDEMNIFICATION.
Neither the Sub-Adviser nor the officers, directors,
employees, agents, or legal representatives (collectively,
"Related Persons") of the Sub-Adviser shall be liable for any
error of judgment or mistake of law, or for any loss suffered by
any Fund or its shareholders in connection with the matters to
which this Agreement relates; provided that, except as set forth
in the succeeding paragraph, no provision of this Agreement shall
be deemed to protect the Sub-Adviser or its Related Persons
against any liability to which it might otherwise be subject by
reason of any willful misfeasance, bad faith or negligence or the
reckless disregard of the Sub-Adviser's obligations and duties
(each of which is hereby referred to as a "Culpable Act") under
this Agreement.
Neither the Sub-Adviser nor its Related Persons shall be
liable for any error of judgment or mistake of law, or for any
loss suffered by the Adviser or its Related Persons in connection
with the matters to which this Agreement relates; provided that
this provision shall not be deemed to protect the Sub-Adviser or
its Related Persons against any liability to which it might
otherwise be subject by reason of any Culpable Act by the
Sub-Adviser or its Related Persons.
The Adviser shall indemnify the Sub-Adviser and its Related
Persons and hold them harmless from and against any and all
actions, suits or claims whether groundless or meritorious and
from and against any and all losses, damages, costs, charges,
reasonable counsel fees, payments, expenses and liabilities
(collectively, "Damages") arising directly or indirectly out of
or in connection with the performance of services by the
Sub-Adviser or its Related Persons hereunder to the extent such
Damages result from any Culpable Act of the Adviser or any
Related Person of the Adviser.
The Sub-Adviser shall indemnify the Adviser and its Related
Persons from and against any Damages arising directly or
indirectly out of or in connection with the performance of
services by the Adviser or its Related Persons under this
Agreement or the Advisory Agreement, in each case, to the extent
such Damages result from any Culpable Act of the Sub-Adviser or
any of its Related Persons.
7. REPRESENTATIONS AND WARRANTIES.
(a) Adviser. The Adviser represents and warrants to
the Sub-Adviser that (i) the retention of the Sub-Adviser by the
Adviser as contemplated by this Agreement is authorized by the
respective governing documents of the Trust and the Adviser; (ii)
the execution, delivery and performance of each of this Agreement
and the Advisory Agreement does not violate any obligation by
which the Trust or the Adviser or their respective property is
bound, whether arising by contract, operation of law or
otherwise; and (iii) each of this Agreement and the Advisory
Agreement has been duly authorized by appropriate action of the
Trust and the Adviser and when executed and delivered by the
Adviser will be the legal, valid and binding obligation of the
Trust and the Adviser, enforceable against the Trust and Adviser
in accordance with its terms hereof subject, as to enforcement,
to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to general equitable principles
(regardless of whether enforcement is sought in a proceeding in
equity or law).
(b) Sub-Adviser. The Sub-Adviser represents and
warrants to the Adviser that (i) the retention of the Sub-Adviser
by the Adviser as contemplated by this Agreement is authorized by
the Sub-Adviser's governing documents; (ii) the execution,
delivery and performance of this Agreement does not violate any
obligation by which the Sub-Adviser or its property is bound,
whether arising by contract, operation of law or otherwise; and
(iii) this Agreement has been duly authorized by appropriate
action of the Sub-Adviser and when executed and delivered by the
Sub-Adviser will be the legal, valid and binding obligation of
the Sub-Adviser, enforceable against the Sub-Adviser in
accordance with its terms hereof, subject, as to enforcement, to
applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to general equitable principles
(regardless of whether enforcement is sought in a proceeding in
equity or law).
8. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration. This Agreement shall become effective
with respect to the Frontier Growth Fund on the date hereof and,
with respect to any additional Fund, on the date of receipt by
the Adviser of notice from the Sub-Adviser in accordance with
Paragraph 1(b) hereof that the Sub-Adviser is willing to serve as
Sub-Adviser with respect to such Fund. Unless terminated as
herein provided, this Agreement shall remain in full force and
effect for two years from the date hereof with respect to the
Frontier Growth Fund and, with respect to each additional Fund,
for two years from the date on which such Fund becomes a Fund
hereunder. Subsequent to such initial periods of effectiveness,
this Agreement shall continue in full force and effect for
periods of one year thereafter with respect to each Fund so long
as such continuance with respect to any such Fund is approved at
least annually (a) by either the Trustees of the Trust or by vote
of a majority of the outstanding voting securities (as defined in
the 1940 Act) of such Fund, and (b) in either event, by the vote
of a majority of the Trustees of the Trust who are not parties to
this Agreement or "interested persons" (as defined in the 1940
Act) of any such party, cast in person at a meeting called for
the purpose of voting on such approval.
(b) Amendment. This Agreement may be amended by
agreement of the parties, provided that the amendment shall be
approved both by the vote of a majority of the Trustees of the
Trust, including a majority of the Trustees who are not parties
to this Agreement or interested persons of any such party to this
Agreement cast in person at a meeting called for that purpose,
and by the holders of a majority of the outstanding voting
securities of the Trust.
(c) Termination. This Agreement may be terminated
with respect to any Fund at any time, without payment of any
penalty, (i) by vote of the Trustees of the Trust or by vote of a
majority of the outstanding voting securities (as defined in the
1940 Act) of that Fund, (ii) by the Adviser, or (iii) by the
Sub-Adviser, in each case on sixty (60) days' prior written
notice to the other party. Upon the effective date of termination
of this Agreement, the Sub-Adviser shall deliver all books and
records of the Trust or any Fund held by it (i) to such entity as
the Trust may designate as a successor sub-adviser, or (ii) to
the Adviser.
(d) Automatic Termination. This Agreement shall
automatically and immediately terminate in the event of its
assignment (as defined in the 1940 Act).
(e) Approval, Amendment or Termination by Individual
Fund. Any approval, amendment or termination of this Agreement
by the holders of a majority of the outstanding voting securities
(as defined in the 1940 Act) of any Fund shall be effective to
continue, amend or terminate this Agreement with respect to any
such Fund notwithstanding (i) that such action has not been
approved by the holders of a majority of the outstanding voting
securities of any other Fund affected thereby, and (ii) that such
action has not been approved by the vote of a majority of the
outstanding voting securities of the Trust, unless such action
shall be required by any applicable law or otherwise.
9. SERVICES NOT EXCLUSIVE.
The services of the Sub-Adviser to the Adviser in connection
with the Funds hereunder are not to be deemed exclusive, and the
Sub-Adviser shall be free to render similar services to others so
long as its services hereunder are not impaired thereby. It is
understood that the persons employed by the Sub-Adviser to assist
in the performance of its duties hereunder will not devote their
full time to such services and nothing hereunder contained shall
be deemed to limit or restrict the right of the Sub-Adviser to
engage in or devote time and attention to other businesses or to
render services of whatever kind or nature.
10. RESERVATION OF NAME.
(a) The parties hereby acknowledge that Frontier
Capital Management Company, LLC has reserved the right to grant
the nonexclusive use of the name "Frontier" or any derivative
thereof to any other investment company, investment adviser,
distributor or other business enterprise, and to withdraw from
the Trust the use of the name "Frontier." The name "Frontier"
will continue to be used by the Trust so long as such use is
mutually agreeable to Frontier Capital Management Company, LLC
and the Trust. The Adviser and the Trust acknowledge that the
Trust shall cease using the name "Frontier" as a part of the
Fund's name and that the Adviser, the Trust or any Fund, or any
of their affiliates, shall not promote the Trust or any Fund or
conduct the business of the Trust or any Fund in any way in such
name if this Agreement is terminated for any reason and the
Sub-Adviser does not expressly consent in writing to such use of
the name "Frontier." Future names adopted by the Trust for
itself or any Fund, insofar as such names include identifying
words requiring the consent of the Sub-Adviser, shall be the
property of the Sub-Adviser and shall be subject to the same
terms and conditions.
(b) The parties hereby acknowledge that The Managers
Funds LLC has reserved the right to grant the nonexclusive use of
the name "Managers" or any derivative thereof to any other
investment company, investment adviser, distributor or other
business enterprise, and to withdraw from the Trust the use of
the name "Managers." The name "Managers" will continue to be used
by the Trust so long as such use is mutually agreeable to The
Managers Funds LLC and the Trust. Frontier and the Trust
acknowledge that the Trust shall cease using the name "Managers"
as a part of the Trust's name and that Frontier, the Trust or any
Fund, or any of their affiliates, shall not promote the Trust or
any Fund or conduct the business of the Trust or any Fund in any
way in such name if this Agreement is terminated for any reason
and the Adviser does not expressly consent in writing to such use
of the name "Managers." Future names adopted by the Trust for
itself or any Fund, insofar as such names include identifying
words requiring the consent of the Adviser, shall be the property
of the Adviser and shall be subject to the same terms and
conditions.
11. MISCELLANEOUS.
(a) Notices. All notices or other communications
given under this Agreement shall be made by guaranteed overnight
delivery, telecopy or certified mail; notice is effective when
received. Notice shall be given to the parties at the following
addresses:
The Adviser: The Managers Funds LLC
40 Richards Avenue
Norwalk, Connecticut 06854
Facsimile No.: 203-857-5316
Attention: Peter Lebovitz
Sub-Adviser: Frontier Capital Management
Company, LLC
99 Summer Street
Boston, MA 02110
Facsimile No.: 617-261-0684
Attention: J. Kirk Smith
(b) Severability. If any provision of this Agreement
shall be held or made invalid by a court decision, statute, rule
or otherwise, the remainder shall not be thereby affected.
(c) Applicable Law. This Agreement shall be construed
in accordance with and governed by the laws of the Commonwealth
of Massachusetts.
(d) Counterparties. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute
one and the same instrument.
(e) Entire Agreement. This Agreement states the
entire agreement of the parties hereto, and is intended to be the
complete and exclusive statement of the terms hereof. It may not
be added to or changed orally, and may not be modified or
rescinded except by a writing signed by the parties hereto and in
accordance with the Investment Company Act of 1940, as amended,
when applicable.
IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have
caused this Agreement to be executed as of the date first set
forth above.
THE MANAGERS FUNDS LLC
By:
Name:
Title:
FRONTIER CAPITAL MANAGEMENT
COMPANY, LLC
By:
Name:
Title:
Acknowledged and agreed to as of the date first set forth
above with respect to the Trust's obligations under Paragraph 10
of this Agreement.
MANAGERS AMG FUNDS
By:
Name:
Title:
SCHEDULE A
Frontier Growth Fund
The Adviser shall pay to the Sub-Adviser an annual gross
investment sub-advisory fee equal to ____% of the average daily net
assets of the Frontier Growth Fund. Such fee shall be accrued
daily and paid as soon as practical after the last day of each
calendar month.
The Sub-Adviser may voluntarily waive all or a portion of the
sub-advisory fee payable from time to time hereunder. The Adviser
agrees that, during any period in which the Sub-Adviser has
voluntarily waived all or a portion of the sub-advisory fee
hereunder, if requested by the Sub-Adviser, the Adviser will waive
an equal amount (or such lesser amount as the Sub-Adviser may
request) of the advisory fee payable by the Trust to the Adviser
with respect to the Fund under the Advisory Agreement.
The Sub-Adviser agrees that, during any period in which the
Adviser has waived all or a portion of the advisory fee payable by
the Trust to the Adviser under the Advisory Agreement with respect
to the Fund, if requested by the Adviser, the Sub-Adviser will
waive a pro rata share (or such lesser share as the Adviser may
request) of the sub-advisory fee payable hereunder with respect to
the Fund, such that the amount waived by the Sub-Adviser shall bear
the same ratio to the total amount of the sub-advisory fees payable
hereunder with respect to the Fund as the amount waived by the
Adviser bears to all fees payable to the Adviser under the Advisory
Agreement with respect to the Fund.
The Adviser agrees that, in addition to any amounts otherwise
payable to the Sub-Adviser with respect to the Fund hereunder, the
Adviser shall pay the Sub-Adviser all amounts previously waived by
the Sub-Adviser to the extent that such amounts are subsequently
paid by the Trust to the Adviser under the Advisory Agreement, it
being further agreed that, with respect to any such amounts
subsequently paid by the Trust to the Adviser, the amount to be
paid by the Adviser to the Sub-Adviser shall bear the same ratio to
the total amount paid by the Trust as the total amount previously
waived by the Sub-Adviser bears to the total amount of the fees
previously waived by the Adviser under the Advisory Agreement with
respect to the Fund.
The Sub-Adviser agrees that, during any period in which the
Adviser has agreed to pay or reimburse the Trust for expenses of
the Fund, if requested by the Adviser, the Sub-Adviser shall pay or
reimburse the Trust for the entire amount of all such expenses of
the Fund (or such lesser amount as the Adviser may request). The
Adviser agrees that, in addition to any amounts otherwise payable
to the Sub-Adviser with respect to the Fund hereunder, the Adviser
shall pay the Sub-Adviser all amounts previously paid or reimbursed
by the Sub-Adviser to the extent that such amounts are subsequently
paid by the Trust to the Adviser under the Advisory Agreement.