File No. 2-84012
811-3752
Rule 14(c)-5
October 12, 1998
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)
Preliminary 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 a preliminary information statement
prepared for Managers Income Equity Fund and Managers
International Equity Fund (the "Funds"), each 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-advisers or to make changes to existing sub-advisory
agreements with the approval of the Trust's Trustees, but without
shareholder approval. Enclosed please find an information
statement and cover letter for the Funds.
The information statement describes new sub-advisory
agreements between The Managers Funds, L.P., the investment
manager for the Trust, and one of the current sub-advisers for
each of the Funds, Scudder Kemper Investments, Inc. In both
cases, the new agreements were necessary because of a change in
the ownership structure of the majority owner of the sub-adviser
for each of the Funds which could be considered to result in an
"assignment" of the previous agreements.
No filing fees are included in connection with this filing.
The Trust intends to mail definitive copies of this
information statement on or about October 22, 1998. Please
direct questions or comments regarding this filing to Judith L.
Shandling, Esq. of Swidler Berlin Shereff Friedman, LLP at (212)
891-9459.
Sincerely,
/s/Donald S. Rumery
Donald S. Rumery
Secretary
cc: Judith L. Shandling, Esq.
<PAGE>
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934
(Amendment No. )
Check the appropriate box:
[ X ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as
permitted by Rule 14c-5(d)(2))
[ ] 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.
<PAGE>
[The Managers Funds Logo]
October 1998
Dear Shareholder of The Managers Funds:
The enclosed information statement details a recent merger
transaction involving the majority owner of one of the current
sub-advisers of both Managers Income Equity Fund and Managers
International Equity Fund. Zurich Insurance Company ("Zurich")
is the majority owner of Scudder Kemper Investments, Inc.
("Scudder Kemper"), a sub-adviser for Managers Income Equity and
Managers International Equity Funds. On September 7, 1998,
Zurich entered into a transaction with B.A.T Industries p.l.c
("BAT"), in which Zurich merged with the financial services
business of BAT. Pursuant to the terms of the merger agreement,
the financial businesses of the two companies will be combined
under a holding company called, Zurich Financial Services. Under
federal securities regulations, this transaction represents a
"change in control" of Zurich, and ultimately Scudder Kemper, and
requires the approval of new sub-advisory agreements by the
Trustees of The Managers Funds. The Board of Trustees approved
the new agreements at a meeting on September 14, 1998.
This change in ownership is not expected to impact either the
investment process or the day-to-day operations of Scudder
Kemper. Furthermore, there have been no changes in the senior
investment personnel of Scudder Kemper who are responsible for
managing Managers Income Equity Fund or Managers International
Equity Fund as a result of the transaction.
As a matter of regulatory compliance, we send you this
information statement which describes the management structure of
the Fund, and the details of the new ownership structure of the
majority owner of Scudder Kemper, as well as the terms of the sub-
advisory agreements 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,
/s/Robert P. Watson
Robert P. Watson
President
<PAGE>
PRELIMINARY COPY
THE MANAGERS FUNDS
Managers Income Equity Fund and
Managers International Equity Fund
40 Richards Avenue
Norwalk, Connecticut 06854
____________________
INFORMATION STATEMENT
____________________
This information statement is being provided to the
shareholders of Managers Income Equity Fund and Managers
International 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 Trust's
manager to hire new sub-advisers 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.
The majority owner of Scudder Kemper Investments, Inc., one
of the sub-advisers of both Managers Income Equity Fund and
Managers International Equity Fund, has agreed to bear the costs
associated with preparing and distributing this information
statement, which will be mailed on or about October 22, 1998.
The Trust
Managers Income Equity Fund (the "Income Equity Fund") and
Managers International Equity Fund (the "International Equity
Fund") are each investment portfolios 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-advisers (the "Sub-
Advisers") to manage the portfolio of each investment portfolio
of the Trust (each a "Fund"), to review and monitor the
performance of these Sub-Advisers on an ongoing basis, and to
recommend changes in the roster of Sub-Advisers to the Trustees
as appropriate. The Manager is responsible for allocating the
Fund's assets among the Sub-Advisers for each Fund that has more
than one Sub-Adviser. The portion of a Fund's assets managed by
a Sub-Adviser may be adjusted from time to time in the sole
discretion of the Manager, and it is possible that an approved
Sub-Adviser 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-Advisers of that
Fund. The Funds, therefore, pay no fees to the Sub-Advisers.
The Manager recommends Sub-Advisers for the Funds to the
Trustees based upon its continuing quantitative and qualitative
evaluation of the Sub-Advisers' 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-Adviser, and the Manager
does not expect to recommend frequent changes of Sub-Advisers.
The Sub-Advisers 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-Adviser, 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
Scudder Kemper Investments, Inc. ("Scudder Kemper") (or its
predecessor) has served as one of the Sub-Advisers to Managers
Income Equity Fund since August 1991, and as one of the Sub-
Advisers to Managers International Equity Fund since December
1989, pursuant to Sub-Advisory Agreements dated July 23, 1991 and
November 29, 1989, respectively. Both Sub-Advisory Agreements
were subsequently amended on September 8, 1997 (the "Previous
Agreements"). Chartwell Investment Partners, L.P. is a sub-
adviser to a portion of the Income Equity Fund, and Lazard Asset
Management Co. is a sub-adviser to a portion of the International
Equity Fund. Each of the Previous Agreements provides for
automatic termination of the Agreement in the event of its
"assignment," as defined in the 1940 Act. Until September 7,
1998, Zurich Insurance Company ("Zurich") owned 69.5% of Scudder
Kemper and was the majority owner of Scudder Kemper. On
September 7, 1998, Zurich consummated a transaction with B.A.T
Industries p.l.c., a U.K. company ("BAT"), in which Zurich merged
with the financial services business of BAT (the "Transaction").
The resulting company, Zurich Financial Services, is
approximately 57% owned by former Zurich shareholders (through a
new holding company, Zurich Allied AG, a Swiss corporation) and
approximately 43% owned by former BAT shareholders (through a new
holding company, Allied Zurich, a U.K. corporation). This
Transaction represents a change in ownership of Zurich, and
ultimately Scudder Kemper, which could be considered a legal
"assignment" of the Previous Agreements, and, as such, have the
effect of terminating the Previous Agreements. At a meeting held
on September 14, 1998, the Trustees, including a majority of the
non-interested Trustees (those Trustees who are not parties to
the New Agreements or interested persons of such parties),
approved new Sub-Advisory Agreements with Scudder Kemper for each
of the Funds (the "New Agreements"). During the period from
September 7, 1998 (the date of the closing of the Transaction) to
September 14, 1998 (the date of Board approval), Scudder Kemper
continued to perform portfolio management services. For this
period, Scudder Kemper received the lesser of fees that would
have otherwise been payable during the period under the New
Agreements or actual costs for providing services during the
period. The Manager will accordingly adjust the portion of its
fee from the Funds that it would otherwise have paid to Scudder
Kemper.
Under the respective Management Agreements, the Income
Equity Fund and International Equity Fund each pay the Manager a
fee equal to 0.75% and 0.90%, respectively, of each Funds'
average daily net assets. From this amount, the Manager has paid
(under the Previous Agreements) and will continue to pay (under
the New Agreements) Scudder Kemper a fee of 0.35% and 0.50% of
the average daily net assets under Scudder Kemper's management
for the Income Equity Fund and International Equity Fund,
respectively. For the fiscal year ended December 31, 1997, the
Income Equity Fund and International Equity Fund paid the Manager
$465,345 and $3,010,430, respectively, of which the Manager paid
Scudder Kemper $120,096 and $833,362, respectively, for each of
the Funds.
Each of the New Agreements is attached to this information
statement as Exhibit A.
Information on Scudder Kemper
Following is a description of Scudder Kemper, which is based
on information provided by Scudder Kemper. Scudder Kemper is not
affiliated with the Manager.
SCUDDER KEMPER INVESTMENTS, INC.
345 Park Avenue
New York, New York 10154
Scudder Kemper Investments, Inc. is a privately-held
Delaware corporation which is owned by Zurich Financial Services
and current and former employees of Scudder Kemper. Zurich
Financial Services owns approximately 69.5% of Scudder Kemper and
the aforementioned employees of Scudder Kemper approximately hold
the remaining 30.5%. Zurich Financial Services, a Swiss holding
company, is 57% owned by Zurich Allied AG and 43% owned by Allied
Zurich p.l.c.
Scudder Kemper, which resulted from the combination of the
businesses of Scudder and Zurich Kemper, an indirect subsidiary
of Zurich, in connection with the Scudder-Zurich transaction in
1997, is one of the largest and most experienced investment
counsel firms in the United States. Scudder was established in
1919 as a partnership and was restructured as a Delaware
corporation in 1985. Since December 31, 1997, Scudder Kemper has
served as investment adviser to both Scudder and Zurich Kemper
funds. As of June 30, 1998, Scudder Kemper has more than $200
billion in assets under management. The principal source of
Scudder Kemper's income is professional fees received from
providing continuing investment advice.
Founded in 1972, Zurich is a multinational, public
corporation organized under the laws of Switzerland. Its home
office is located at Mythenquai 2, 8002 Zurich, Switzerland.
Historically, Zurich's earnings have resulted from its operations
as an insurer as well as from its ownership of its subsidiaries
and affiliated companies. Zurich Allied AG and Allied Zurich
p.l.c were established as holding companies for the Transaction
and are located at Mythenquai 2, 8002 Zurich, Switzerland and
Windsor House, 50 Victoria Street, London, England, respectively.
Zurich Financial Services is located at Mythenquai 2, 8002
Zurich, Switzerland.
The name and principal occupation of the directors and
principal executive officers of Scudder Kemper are set forth
below.
Name Position Address
- ---- -------- -------
Edmond D. Villani President & CEO Scudder Kemper
Rolf Hueppi Chairman Zurich
Laurence W. Cheng Director Zurich
Markus Rohrbasser Director Zurich
Cornelia Small Director Scudder Kemper
Lynn S. Birdsong Director Scudder Kemper
Scudder Kemper acts as an investment adviser to other investment
companies having similar objectives to the Income Equity Fund as
follows:
Net Assets of
Other Funds, as Annual
Other Funds of 6/30/98 Fee Rate
- ----------- --------------- --------
Scudder Growth and
Income Fund $6,833,584,122 0.600% to $500
million
0.550% next $500
million
0.500% next $500
million
0.475% next $500
million
0.450% next $1
billion
0.425% next $1.5
billion
0.405% next $1.5
billion
0.3875% next $4
billion
0.370% over $10
billion
Scudder Kemper acts as an investment adviser to other investment
companies having similar objectives to the International Equity
Fund as follows:
Net Assets of
Other Funds, as Annual
Other Funds of 6/30/98 Fee Rate
- ----------- --------------- --------
Scudder International
Fund $2,884,919,345 0.900% to $500
million
0.850% next $500
million
0.800% next $1
billion
0.750% next $1
billion
0.700% thereafter
Board of Trustees' Recommendation
In connection with the Transaction, Scudder Kemper advised
the Trust that the Transaction was not expected to result in any
material change in the portfolio management of the Funds. Thus,
the Transaction was not expected to result in any changes in the
past investment approaches or styles of Scudder Kemper.
In approving the New Agreements, the Trustees, at an in-
person meeting held on September 14, 1998, considered a number of
factors, including (i) the nature and quality of the services
expected to be rendered by Scudder Kemper to each of the Funds;
(ii) the representations by Scudder Kemper to the Trustees
regarding the terms of the Transaction, including Scudder
Kemper's expectation that it will continue to operate with
substantially similar senior investment personnel, that the same
persons who had historically been responsible for the investment
policies of Scudder Kemper will continue to direct the investment
policies of Scudder Kemper, and that there will be no dilution in
the scope and quality of the advisory services which have been
provided to each of the Funds as a result of the Transaction;
(iii) that the fees payable by each of the Funds will not change
as a result of the New Agreements; and (iv) the commitment of
Zurich to pay or reimburse each of the Funds for the expenses
incurred in connection with the preparation and distribution of
this information statement.
ADDITIONAL INFORMATION
Other Matters
The Manager, located at 40 Richards Avenue, Norwalk,
Connecticut 06854, serves as investment manager, principal
underwriter and Administrator of the Trust.
To the knowledge of the Trust, as of October 6, 1998, no
individual person beneficially owned more than 5% of each Fund's
outstanding shares.
As of June 30, 1998, Scudder Kemper is affiliated with
Zurich Capital Markets, but has not paid any commissions to such
broker relating to the funds.
As of June 30, 1998, the Trustees and Officers of each of
the Funds owned less than 1% of the outstanding shares of each
Fund.
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,
/s/Donald S. Rumery
DONALD S. RUMERY
Secretary
Dated: October 22, 1998
Exhibit A
---------
SUB-ADVISORY AGREEMENT
Attention: John Lamb
Scudder Kemper Investments, Inc.
RE: Sub-Advisory Agreement
To whom it may concern:
The Managers Income 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 Scudder Kemper
Investments, Inc. ("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 an appropriate
level of errors and omissions or professional liability
insurance coverage.
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.
(d) The Manager agrees to provide or cause to be
provided to the Sub-Advisor on an ongoing basis, such
information that is reasonably required by the Sub-
Advisor for performance by the Sub-Advisor of its
obligations under the Agreement, and the Sub-Advisor
shall not be in breach of any term of this Agreement or
be deemed to have acted negligently if the Manager
fails to provide or cause to be provided such required
information and the Sub-Advisor relies on the
information most recently furnished to the Sub-Advisor.
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 6, 1998 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: /s/Robert P. Watson
-----------------------------
Its: President
-----------------------------
DATE:September 15, 1998
-----------------------------
ACCEPTED:
BY: /s/Lynn S. Birdsong
----------------------------------
Its: Managing Director
----------------------------------
DATE:September 11, 1998
----------------------------------
Acknowledged:
The Managers Funds
BY: /s/Robert P. Watson
-----------------------------
Its: President
-----------------------------
DATE:September 15, 1998
-----------------------------
SCHEDULES: A. Fee Schedule.
<PAGE>
SCHEDULE A
SUB-ADVISOR FEE
-----------------
For services provided to the Fund Account, The Managers Funds,
L.P. will pay a base quarterly fee for each calendar quarter at
an annual rate of 0.35% 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.
<PAGE>
SUB-ADVISORY AGREEMENT
Attention: John Lamb
Scudder Kemper Investments, Inc.
RE: Sub-Advisory Agreement
To whom it may concern:
The Managers International 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 Scudder Kemper
Investments, Inc. ("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 an appropriate
level of errors and omissions or professional liability
insurance coverage.
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.
(d) The Manager agrees to provide or cause to be
provided to the Sub-Advisor on an ongoing basis, such
information that is reasonably required by the Sub-
Advisor for performance by the Sub-Advisor of its
obligations under the Agreement, and the Sub-Advisor
shall not be in breach of any term of this Agreement or
be deemed to have acted negligently if the Manager
fails to provide or cause to be provided such required
information and the Sub-Advisor relies on the
information most recently furnished to the Sub-Advisor.
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 6, 1998 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: /s/Robert P. Watson
-----------------------------
Its: President
-----------------------------
DATE:September 15, 1998
-----------------------------
ACCEPTED:
BY: /s/Lynn S. Birdsong
----------------------------------
Its: Managing Director
----------------------------------
DATE:September 11, 1998
----------------------------------
Acknowledged:
The Managers Funds
BY: /s/Robert P. Watson
-----------------------------
Its: President
-----------------------------
DATE:September 15, 1998
-----------------------------
SCHEDULES: A. Fee Schedule.
<PAGE>
SCHEDULE A
SUB-ADVISOR FEE
-----------------
For services provided to the Fund Account, The Managers Funds,
L.P. will pay 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.
