File No. 2-84012
811-3752
Rule 14(c)-5
November 3, 1997
VIA EDGAR
Filing Desk Stop 1-4
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, DC 20549-1004
Re: The Managers Funds (File Nos. 2-84012
and 811-3752)
Information Statement
Commissioners:
On behalf of The Managers Funds, a Massachusetts business
trust (the "Trust") registered as an open-end management
investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), enclosed for filing in accordance with
Rule 14(c)-5 under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), is the definitive information statement
prepared for Managers Special Equity Fund (the "Fund"), a series
of the Trust. This information statement has been prepared in
accordance with a Securities and Exchange Commission exemptive
order received by the Trust (Investment Company Release No.
21412, Oct. 11, 1995) which permits the Trust's manager to hire
new Sub-advisors or to make changes to existing Sub-advisory
contracts with the approval of the Trust's Trustees, but without
shareholder approval. Enclosed please find an information
statement and cover letter for the Fund.
The information statement describes a new Sub-advisory
agreement between The Managers Funds, L.P., the investment
manager for the Trust and the current Sub-advisor for the Fund.
In this case, the new agreement was necessary due to a recent
portfolio manager change in the Fund.
No filing fees are included in connection with this filing.
The Trust intends to mail definitive copies of this
information statement on or about November 4, 1997. Please
direct questions or comments regarding this filing to Judith L.
Shandling, Esq. of Shereef, Friedman, Hoffman & Goodman, LLP at
(212) 891-9459.
Sincerely,
/s/Donald S. Rumery
Donald S. Rumery
Secretary
cc: Judith L. Shandling, Esq.
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities
Exchange Act of 1934
(Amendment No. )
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as
permitted by Rule 14c-5(d)(2))
[ X ] Definitive Information Statement
_____________The Managers Funds______________
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii),
or 14c-5(g).
[ ] Fee computed on table below per Exchange Act
Rules 14c-5(g) and 0-11.
1) Title of each class of securities to which
transaction applies:
_________________________________________________
2) Aggregate number of securities to which transaction
applies:
__________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set
forth the amount on which the filing fee is calculated
and state how it was determined):
__________________________________________________
4) Proposed maximum aggregate value of transaction:
_________________________________________________
5) Total fee paid:
______________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
1) Amount Previously Paid:
______________________________________________________
2) Form, Schedule or Registration Statement No.:
______________________________________________________
3) Filing Party:
_______________________________________________________
4) Date Filed:
_______________________________________________________
[X] Filing fee no longer applicable.
November 1997
Dear Managers Special Equity Fund Shareholder:
The enclosed information statement details a recent portfolio
manager change in Managers Special Equity Fund. On September 8,
1997, the Fund's Trustees approved the hiring of Kern Capital
Management, LLP ("KCM") to be added as a fourth portfolio manager
of the Fund.
KCM joins Pilgrim Baxter & Associates, Liberty Investment
Management, and Westport Asset Management, Inc., each managing
varying portions of the Fund as determined by the Manager. We
are optimistic that the Fund will continue to benefit under the
management of these four fine firms.
As a matter of regulatory compliance, we send you this
information statement which describes the management structure of
the Fund, ownership of KCM, as well as the terms of the Sub-
advisory agreement with KCM which your Trustees have approved.
Please feel free to call us at (800) 835-3879 should you have any
questions on the enclosed information statement. We thank you
for your continued interest in The Managers Funds.
Sincerely,
Robert P. Watson
President
See other side of this letter for supplementary information
regarding the Special Equity Fund.
THE MANAGERS FUNDS
EQUITY FUNDS
Supplement dated October 28, 1997
to Prospectus dated April 1, 1997
The Prospectus is hereby supplemented as
follows:
PURCHASE AND REDEMPTION OF FUND SHARES
The time at which transactions and shares are
priced, and the time until which orders are
accepted, may be changed in case of an
emergency or if the New York Stock Exchange
closes at a time other than 4:00 p.m. Eastern
Standard Time.
October 28, 1997
THE MANAGERS FUNDS
Managers Special Equity Fund
40 Richards Avenue
Norwalk, Connecticut 06854
____________________
INFORMATION STATEMENT
____________________
This information statement is being provided to the
shareholders of Managers Special Equity Fund in lieu of a proxy
statement, pursuant to the terms of an exemptive order the Trust
has received from the Securities and Exchange Commission which
permits the Fund's manager to hire new Sub-advisors and to make
changes to existing Sub-advisory contracts with the approval of
the Trustees, but without obtaining shareholder approval. We are
not asking you for a Proxy and you are requested not to send us a
Proxy.
This information statement will be mailed on or about
November 4, 1997.
The Trust
Managers Special Equity Fund (the "Special Equity Fund" or
the "Fund") is an investment portfolio of The Managers Funds, a
Massachusetts business trust (the "Trust"). The Trust has
entered into an investment management agreement with The Managers
Funds, L.P. (the "Manager"), dated August 17, 1990 (the
"Management Agreement"). Under the Management Agreement, it is
the responsibility of the Manager to select, subject to review
and approval by the Trustees, one or more Sub-advisors (the "Sub-
advisors") to manage the portfolio of each investment portfolio
of the Trust (each a "Fund"), to review and monitor the
performance of these Sub-advisors on an ongoing basis, and to
recommend changes in the roster of Sub-advisors to the Trustees
as appropriate. The Manager is responsible for allocating the
Fund's assets among the Sub-advisors for each Fund that has more
than one Sub-advisor. The portion of a Fund's assets managed by
a Sub-advisor may be adjusted from time to time in the sole
discretion of the Manager, and it is possible that an approved
Sub-advisor may not manage any portion of the Fund's assets. The
Manager is also responsible for conducting all business
operations of the Trust, except those operations contracted to
the custodian or transfer agent. As compensation for its
services, the Manager receives a fee from each Fund, out of which
the Manager renders all fees payable to the Sub-advisors of that
Fund. The Funds, therefore, pay no fees to the Sub-advisors.
The Manager recommends Sub-advisors for the Funds to the
Trustees based upon its continuing quantitative and qualitative
evaluation of the Sub-advisors' skills in managing assets
pursuant to specific investment styles and strategies. Short-
term investment performance, by itself, is not a significant
factor in selecting or terminating a Sub-advisor and the Manager
does not expect to recommend frequent changes of Sub-advisors.
The Sub-advisors do not provide any services to the Funds
except portfolio investment management and related record-keeping
services. However, in accordance with procedures adopted by the
Trustees, a Sub-advisor or its affiliated broker-dealer may
execute portfolio transactions for a Fund and receive brokerage
commissions in connection therewith as permitted by Section 17(e)
of the Investment Company Act of 1940, as amended (the "1940
Act"), and the rules thereunder.
The Sub-Advisory Agreement
At a meeting held on September 8, 1997, the Trustees,
including a majority of the non-interested Trustees, approved the
Manager's recommendation to add a fourth Sub-advisor, Kern
Capital Management, LLC ("KCM"). Accordingly, the Trustees
approved a Sub-advisory Agreement (the "KCM Agreement") with KCM
which became effective on September 9, 1997. The recommendation
to hire KCM was made by the Manager in the ordinary course of its
ongoing evaluation of Sub-advisor performance and investment
strategy and after extensive research of numerous candidate firms
and qualitative and quantitative analysis of each candidate's
organizational structure, investment process and style, and long-
term performance record. The Manager believes that KCM's
management style is appropriately suited to the Fund and expects
KCM 's micro-cap growth style to complement that of the Fund's
other Sub-advisors, Liberty Investment Management ("Liberty"),
Pilgrim Baxter & Associates ("PBA"), and Westport Asset
Management, Inc. ("Westport").
Under the Management Agreement, the Fund pays the Manager a
fee equal to 0.90% of the Fund's average daily net assets. From
this amount, the Manager has paid Liberty, PBA, and Westport a
fee of 0.50% of the Fund's average daily net assets under each
such Sub-advisor's management under the continuing agreements
with each Sub-advisor. Effective September 9, 1997, the Manager
will pay KCM a fee of 0.50% of the Fund's average daily net
assets under KCM's management under the new agreement. For the
fiscal year ended December 31, 1996, the Fund paid the Manager
$1,572,132, of which the Manager paid $266,030, $305,198 and
$302,171 to Liberty, PBA, and Westport, respectively. There is
no change in management fees payable by the Fund as a result of
the addition of KCM. The form of the KCM Agreement is attached
to this information statement as Exhibit A.
Information on Kern Capital Management, LLC
Following is a description of KCM, which is based on
information provided by the Sub-advisor. The Sub-advisor is not
affiliated with the Manager.
KERN CAPITAL MANAGEMENT, LLC
114 West 47th Street
Suite 1926
New York, NY 10036
KCM is a Delaware limited liability company which is
controlled by Robert E. Kern, David G. Kern, and Fremont
Investment Advisors, Inc., a subsidiary of Fremont Investments,
Inc., which is affiliated with The Fremont Group. KCM commenced
operations in 1997, and as of September 1997, had approximately
$200 million under management.
KCM also serves as Sub-advisor to other investment companies
having similar investment objectives to the Fund as follows:
Net Assets
of Other Annual
Funds, as Fee
Other Funds of 9/30/97 Rate
Fremont U.S. Micro-
Cap Fund $210 million 1.50% on 1st $30 mill.
1.00% on next $70 mill.
0.75% sub-advisory fee
Fremont Institutional
U.S. Micro-Cap Fund $42 million 0.75%
Fremont U.S. Small-
Cap Fund $5 million 0.65%*
__________________________
* This fee is being waived until either the assets are $25
million or January 1, 1999.
The name and principal occupation of KCM's directors and
principal executive officers are set forth below; address of each
is that of KCM.
Name Principal Occupation
Robert E. Kern President, CEO,
Principal,
Portfolio Manager
David G. Kern Executive VP, Principal
Portfolio Manager
Judy Finger Senior VP, Principal,
Portfolio Manager
Board of Trustees' Recommendation
In approving the KCM Agreement, the Trustees, at an in-
person meeting held on September 8, 1997, considered a number of
factors, including (i) the nature and quality of the services
expected to be rendered by KCM to the Fund; (ii) KCM's investment
approach which is expected to complement that of Liberty, PBA,
and Westport and provide additional diversification to the Fund,
which is especially desirable for a small-cap fund; (iii) the
structure of KCM, its relatively recent founding, and its ability
to provide services to the Fund; and (iv) that the fees payable
by the Fund will not change as a result of the KCM Agreement.
ADDITIONAL INFORMATION
Other Matters
The Manager, located at 40 Richards Avenue, Norwalk,
Connecticut 06854, serves as the investment manager, principal
underwriter and Administrator of the Trust.
To the knowledge of the Trust, as of September 26, 1997, no
person beneficially owned more than five percent of the Fund's
outstanding shares.
The Trust is not required to hold annual meetings of
shareholders and, therefore, it cannot be determined when the
next meeting of shareholders will be held. Shareholder proposals
to be considered for inclusion in the proxy statement for the
next meeting of shareholders must be submitted a reasonable time
before the proxy statement is mailed. Whether a proposal
submitted will be included in the proxy statement will be
determined in accordance with applicable state and federal law.
Copies of the most recent annual and semi-annual reports are
available without charge. To obtain a copy, call or write the
Manager, at 40 Richards Avenue, Norwalk, CT 06854, (800) 835-
3879.
By Order of the Trustees,
DONALD S. RUMERY
Secretary
Dated: November 4, 1997
EXHIBIT A
FORM OF SUB-ADVISORY AGREEMENT
Attention: Robert E. Kern
Kern Capital Management, LLC
RE: Sub-Advisory Agreement
To whom it may concern:
The Managers Special Equity Fund (the "Fund") is a series of a
Massachusetts business trust (the "Trust") that is registered as
an investment company under the Investment Company Act of 1940,
as amended, (the "Act"), and subject to the rules and regulations
promulgated thereunder.
The Managers Funds, L.P. (the "Manager") acts as the manager and
administrator of the Trust pursuant to the terms of a Management
Agreement with the Trust. The Manager is responsible for the day-
to-day management and administration of the Fund and the
coordination of investment of the Fund's assets. However,
pursuant to the terms of the Management Agreement, specific
portfolio purchases and sales for the Fund's investment
portfolios or a portion thereof, are to be made by advisory
organizations recommended by the Manager and approved by the
Trustees of the Trust.
1. Appointment as a Sub-advisor. The Manager, being duly
authorized, hereby appoints and employs Kern Capital Management,
LLC ("Sub-advisor") as a discretionary asset manager, on the
terms and conditions set forth herein, of those assets of the
Fund which the Manager determines to allocate to the Sub-advisor
(those assets being referred to as the "Fund Account"). The
Manager may, from time to time, with the consent of the Sub-
advisor, make additions to the Fund Account and may, from time to
time, make withdrawals of any or all of the assets in the Fund
Account.
2. Portfolio Management Duties.
(a) Subject to the supervision of the Manager and of
the Trustees of the Trust, the Sub-advisor shall manage
the composition of the Fund Account, including the
purchase, retention and disposition thereof, in
accordance with the Fund's investment objectives,
policies and restrictions as stated in the Fund's
Prospectus and Statement of Additional Information
(such Prospectus and Statement of Additional
Information for the Fund as currently in effect and as
amended or supplemented in writing from time to time,
being herein called the "Prospectus").
(b) The Sub-advisor shall maintain such books and
records pursuant to Rule 31a-1 under the Act and Rule
204-2 under the Investment Advisers Act of 1940, as
amended (the "Advisers Act"), with respect to the Fund
Account as shall be specified by the Manager from time
to time, and shall maintain such books and records for
the periods specified in the rules under the Act or the
Advisers Act. In accordance with Rule 31a-3 under the
Act, the Sub-advisor agrees that all records under the
Act shall be the property of the Trust.
(c) The Sub-advisor shall provide the Trust's
Custodian, and the Manager on each business day with
information relating to all transactions concerning the
Fund Account. In addition, the Sub-advisor shall be
responsive to requests from the Manager or the Trust's
Custodian for assistance in obtaining price sources for
securities held in the Fund Account, as well as for
periodically reviewing the prices of the securities
assigned by the Manager or the Trust's Custodian for
reasonableness and advising the Manager should any such
prices appear to be incorrect.
(d) The Sub-advisor agrees to maintain adequate
compliance procedures to ensure its compliance with the
1940 Act, the Advisers Act and other applicable federal
and state regulations, and review information provided
by the Manager to assist the Manager in its compliance
review program.
(e) The Sub-advisor agrees to maintain errors and
omissions or professional liability insurance coverage
with minimum coverage limits of $5 million throughout
the term of this agreement.
3. Allocation of Brokerage. The Sub-advisor shall have
authority and discretion to select brokers, dealers and futures
commission merchants to execute portfolio transactions initiated
by the Sub-advisor, and for the selection of the markets on or in
which the transactions will be executed.
(a) In doing so, the Sub-advisor's primary
responsibility shall be to obtain the best net price
and execution for the Fund. However, this
responsibility shall not be deemed to obligate the Sub-
advisor to solicit competitive bids for each
transaction, and the Sub-advisor shall have no
obligation to seek the lowest available commission cost
to the Fund, so long as the Sub-advisor determines that
the broker, dealer or futures commission merchant is
able to obtain the best net price and execution for the
particular transaction taking into account all factors
the Sub-advisor deems relevant, including, but not
limited to, the breadth of the market in the security
or commodity, the price, the financial condition and
execution capability of the broker, dealer or futures
commission merchant and the reasonableness of any
commission for the specific transaction and on a
continuing basis. The Sub-advisor may consider the
brokerage and research services (as defined in Section
28(e) of the Securities Exchange Act of 1934, as
amended) made available by the broker to the Sub-
advisor viewed in terms of either that particular
transaction or of the Sub-advisor's overall
responsibilities with respect to its clients, including
the Fund, as to which the Sub-advisor exercises
investment discretion, notwithstanding that the Fund
may not be the direct or exclusive beneficiary of any
such services or that another broker may be willing to
charge the Fund a lower commission on the particular
transaction.
(b) The Manager shall have the right to request that
specified transactions giving rise to brokerage
commissions, in an amount to be agreed upon by the
Manager and the Sub-advisor, shall be executed by
brokers and dealers that provide brokerage or research
services to the Fund or the Manager, or as to which an
on-going relationship will be of value to the Fund in
the management of its assets, which services and
relationship may, but need not, be of direct benefit to
the Fund Account, so long as (i) the Manager determines
that the broker or dealer is able to obtain the best
net price and execution on a particular transaction and
(ii) the Manager determines that the commission cost is
reasonable in relation to the total quality and
reliability of the brokerage and research services made
available to the Fund or to the Manager for the benefit
of its clients for which it exercises investment
discretion, notwithstanding that the Fund Account may
not be the direct or exclusive beneficiary of any such
service or that another broker may be willing to charge
the Fund a lower commission on the particular
transaction
(c) The Sub-advisor agrees that it will not execute
any portfolio transactions with a broker, dealer or
futures commission merchant which is an "affiliated
person" (as defined in the Act) of the Trust or of the
Manager or of any Sub-advisor for the Trust except in
accordance with procedures adopted by the Trustees.
The Manager agrees that it will provide the Sub-advisor
with a list of brokers and dealers which are
"affiliated persons" of the Trust, the Manager or the
Trust's Sub-advisors.
4. Information Provided to the Manager and the Trust and to the
Sub-advisor
(a) The Sub-advisor agrees that it will make available
to the Manager and the Trust promptly upon their
request copies of all of its investment records and
ledgers with respect to the Fund Account to assist the
Manager and the Trust in monitoring compliance with the
Act, the Advisers Act, and other applicable laws. The
Sub-advisor will furnish the Trust's Board of Trustees
with such periodic and special reports with respect to
the Fund Account as the Manager or the Board of
Trustees may reasonably request.
(b) The Sub-advisor agrees that it will notify the
Manager and the Trust in the event that the Sub-advisor
or any of its affiliates: (i) becomes subject to a
statutory disqualification that prevents the Sub-
advisor from serving as investment adviser pursuant to
this Agreement; or (ii) is or expects to become the
subject of an administrative proceeding or enforcement
action by the Securities and Exchange Commission or
other regulatory authority. Notification of an event
within (i) shall be given immediately; notification of
an event within (ii) shall be given promptly. The Sub-
advisor has provided the information about itself set
forth in the Registration Statement and has reviewed
the description of its operations, duties and
responsibilities as stated therein and acknowledges
that they are true and correct in all material respects
and contain no material misstatement or omission, and
it further agrees to notify the Manager immediately of
any fact known to the Sub-advisor respecting or
relating to the Sub-advisor that causes any statement
in the Prospectus to become untrue or misleading in any
material respect or that causes the Prospectus to omit
to state a material fact.
(c) The Sub-advisor represents that it is an investment
adviser registered under the Advisers Act and other
applicable laws and that the statements contained in
the Sub-advisor's registration under the Advisers Act
on Form ADV as of the date hereof, are true and correct
and do not omit to state any material fact required to
be stated therein or necessary in order to make the
statements therein not misleading. The Sub-advisor
agrees to maintain the completeness and accuracy in all
material respects of its registration on Form ADV in
accordance with all legal requirements relating to that
Form. The Sub-advisor acknowledges that it is an
"investment adviser" to the Fund within the meaning of
the Act and the Advisers Act.
5. Compensation. The compensation of the Sub-advisor for its
services under this Agreement shall be calculated and paid by the
Manager in accordance with the attached Schedule A. Pursuant to
the provisions of the Management Agreement between the Trust and
the Manager, the Manager is solely responsible for the payment of
fees to the Sub-advisor, and the Sub-advisor agrees to seek
payment of its fees solely from the Manager and not from the
Trust or the Fund.
6. Other Investment Activities of the Sub-advisor. The Manager
acknowledges that the Sub-advisor or one or more of its
affiliates may have investment responsibilities or render
investment advice to or perform other investment advisory
services for other individuals or entities ("Affiliated
Accounts"). The Manager agrees that the Sub-advisor or its
affiliates may give advice or exercise investment responsibility
and take such other action with respect to other Affiliated
Accounts which may differ from the advice given or the timing or
nature of action taken with respect to the Fund Account, provided
that the Sub-advisor acts in good faith and provided further,
that it is the Sub-advisor's policy to allocate, within its
reasonable discretion, investment opportunities to the Fund
Account over a period of time on a fair and equitable basis
relative to the Affiliated Accounts, taking into account the
investment objectives and policies of the Fund and any specific
investment restrictions applicable thereto. The Manager
acknowledges that one or more of the Affiliated Accounts may at
any time hold, acquire, increase, decrease, dispose or otherwise
deal with positions in investments in which the Fund Account may
have an interest from time to time, whether in transactions which
involve the Fund Account or otherwise. The Sub-advisor shall
have no obligation to acquire for the Fund Account a position in
any investment which any Affiliated Account may acquire, and the
Fund shall have no first refusal, co-investment or other rights
in respect of any such investment, either for the Fund Account or
otherwise.
7. Standard of Care. The Sub-advisor shall exercise its best
judgment in rendering the services provided by it under this
Agreement. The Sub-advisor shall not be liable for any act or
omission, error of judgment or mistake of law or for any loss
suffered by the Manager or the Trust in connection with the
matters to which this Agreement relates, provided that nothing in
this Agreement shall be deemed to protect or purport to protect
the Sub-advisor against any liability to the Manager or the Trust
or to holders of the Trust's shares representing interests in the
Fund to which the Sub-advisor would otherwise be subject by
reason of willful malfeasance, bad faith or gross negligence on
its part in the performance of its duties or by reason of the Sub-
advisor's reckless disregard of its obligations and duties under
this Agreement.
8. Assignment. This Agreement shall terminate automatically in
the event of its assignment (as defined in the Act and in the
rules adopted under the Act). The Sub-advisor shall notify the
Trust in writing sufficiently in advance of any proposed change
of control, as defined in Section 2(a)(9) of the Act, as will
enable the Trust to consider whether an assignment under the Act
will occur, and to take the steps necessary to enter into a new
contract with the Sub-advisor or such other steps as the Board of
Trustees may deem appropriate.
9. Amendment. This Agreement may be amended at any time, but
only by written agreement between the Sub-advisor and the
Manager, which amendment is subject to the approval of the
Trustees and the shareholders of the Trust in the manner required
by the Act.
10. Effective Date; Term. This Agreement shall become effective
on September 9, 1997 and shall continue in effect for a term of
two years from that date. Thereafter, the Agreement shall
continue in effect only so long as its continuance has been
specifically approved at least annually by the Trustees, or the
shareholders of the Fund in the manner required by the Act. The
aforesaid requirement shall be construed in a manner consistent
with the Act and the rules and regulations thereunder.
11. Termination. This Agreement may be terminated by (i) the
Manager at anytime without penalty, upon notice to the Sub-
advisor and the Trust, (ii) at any time without penalty by the
Trust or by vote of a majority of the outstanding voting
securities of the Fund (as defined in the Act) on notice to the
Sub-advisor or (iii) by the Sub-advisor at any time without
penalty, upon thirty (30) days' written notice to the Manager and
the Trust.
12. Severability. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule, or
otherwise, the remainder of this Agreement shall not be affected
thereby but shall continue in full force and effect.
13. Applicable Law. The provisions of this Agreement shall be
construed in a manner consistent with the requirements of the Act
and the rules and regulations thereunder. To the extent that
state law is not preempted by the provisions of any law of the
United States heretofore or hereafter enacted, as the same may be
amended from time to time, this Agreement shall be administered,
construed, and enforced according to the laws of the State of
Connecticut.
THE MANAGERS FUNDS, L.P.
BY: EAIMC HOLDINGS CORP.
General Partner
BY:
Its:
DATE:
ACCEPTED:
BY:
Its:
DATE:
Acknowledged:
The Managers Funds
BY:
Its:
DATE:
SCHEDULES: A.
Fee Schedule.
SCHEDULE A
SUB-ADVISOR FEE
For services provided to the Fund Account, The Managers Funds,
L.P. will pay, within 30 days of receipt of invoice from the Sub-
advisor, a base quarterly fee for each calendar quarter at an
annual rate of 0.50% of average net assets in the Fund Account
during the quarter. Average assets shall be determined using the
average daily assets in the Fund Account during the calendar
quarter. The fee shall be pro-rated for any calendar quarter
during which the contract is in effect for only a portion of the
quarter.