File No. 2-84012
811-3752
Rule 14(c)-5
July 27, 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, enclosed for filing in accordance with Rule 14(c)-5
under the Securities Exchange Act of 1934, as amended, is a
preliminary information statement prepared for Managers Capital
Appreciation 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-advisers or to
make changes to existing sub-advisory agreements with the
approval of the Trustees of the Trust, 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 one of the current sub-advisers for
the Fund. The new agreement was necessary because of a change in
the ownership structure of the managing member of the sub-adviser
which could be considered to result in an "assignment" of the
previous agreement.
No filing fees are included in connection with this filing.
The Trust intends to mail definitive copies of this
information statement on or about August 6, 1998. Please direct
questions or comments regarding this filing to Judith L.
Shandling, Esquire of Shereff, Friedman, Hoffman & Goodman, 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):
[ X ] No Fee Required.
[ ] 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:
___________________________________________________
<PAGE>
August, 1998
Dear Shareholder of Managers Capital Appreciation Fund:
The enclosed information statement details a recent transaction
involving the parent company of the managing member of one of the
current sub-advisers of Managers Capital Appreciation Fund.
Affiliated Managers Group, Inc. ("AMG") is the managing member of
Essex Investment Management Co., LLC ("Essex"), a sub-adviser for
Managers Capital Appreciation Fund. A group of equity funds
managed by TA Associates, Inc. ("TA") is the largest equity
investor in AMG. At the end of May, 1998, two transactions
occurred: the largest stockholder of AMG, TA Associates, Inc.
("TA"), consummated a transaction in which one of the private
equity funds associated with TA distributed a portion of its
holdings, resulting in a reduction in the amount of voting
securities in AMG held by TA and a holder of non-voting shares in
AMG converted those shares to voting shares in AMG. Under
federal securities regulations, these transactions could be
considered to represent a "change in control" of AMG, and
ultimately Essex, and required the approval of a new sub-advisory
agreement by the Trustees of The Managers Funds. The Board of
Trustees approved the new agreement at a meeting on June 8, 1998.
This change in ownership is not expected to impact either the
investment process or the day-to-day operations of Essex.
Furthermore, there have been no changes in the senior investment
personnel of Essex who were responsible for managing Managers
Capital Appreciation 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
managing member of Essex, as well as the terms of the sub-
advisory agreement 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 CAPITAL APPRECIATION FUND
40 RICHARDS AVENUE
NORWALK, CONNECTICUT 06854
____________________________
INFORMATION STATEMENT
____________________________
This information statement is being provided to the
shareholders of Managers Capital Appreciation 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.
Essex Investment Management Co., LLC, one of the sub-
advisers of Managers Capital Appreciation Fund, has agreed to
bear the costs associated with preparing and distributing this
information statement, which will be mailed on or about August 6,
1998.
THE TRUST
Managers Capital Appreciation Fund (the "Capital
Appreciation 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-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, if any,
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
Essex Investment Management Co., LLC ("Essex") (or its
predecessor) has served as one of the sub-advisers to Managers
Capital Appreciation Fund since March 11, 1997, pursuant to a Sub-
Advisory Agreement dated March 10, 1997, subsequently amended and
dated March 20, 1998 (the "Previous Agreement"). Husic Capital
Management is also a Sub-Adviser to a portion of the Capital
Appreciation Fund. The Previous Agreement provides for
automatic termination of the Agreement in the event of its
"assignment," as defined in the 1940 Act. Affiliated Managers
Group, Inc. ("AMG") is the managing member of Essex. Until the
end of May, 1998, in excess of 26% of AMG's voting securities
were controlled by TA Associates, Inc. ("TA"), the largest equity
investor in AMG. However, at the end of May, 1998, one of the
private equity funds associated with TA distributed a portion of
its holdings of AMG's common stock to investors and shares of
AMG's non-voting common stock were converted by their holder into
voting common stock (the "Transaction"). The Transaction
resulted in a reduction in the percentage of voting securities in
AMG held by TA below the level that is presumed to constitute
control. This Transaction, under the 1940 Act, could therefore
be considered to constitute a change in control in AMG, and a
resulting change of control in Essex. It could therefore be
deemed to be a legal "assignment," and, as such, would terminate
the Previous Agreement. At a meeting held on June 8, 1998, the
Trustees, including a majority of the non-interested Trustees
(those Trustees who are not parties to the new agreement or
interested persons of such parties), approved a new Sub-Advisory
Agreement with Essex for the Capital Appreciation Fund (the "New
Agreement"). During the period from May 31, 1998 (the date of
the Transaction) to June 8, 1998, Essex performed portfolio
management services without a fee and the Manager waived the
portion of its fee from the Capital Appreciation Fund that it
would otherwise have paid to Essex.
Under the Management Agreement, the Capital Appreciation
Fund pays the Manager a fee equal to 0.80% of the Fund's average
daily net assets. From this amount, the Manager has paid (under
the Previous Agreement) and will continue to pay (under the New
Agreement) Essex a fee of 0.40% of the average daily net assets
under Essex's management for the Capital Appreciation Fund. For
the fiscal year ended December 31, 1997, the Capital
Appreciation Fund paid the Manager $797,930, of which the Manager
paid Essex Investment Management Co., LLC $156,460, for the
Capital Appreciation Fund.
Apart from a change in the date, the New Agreement is
identical to the Previous Agreement. The New Agreement is
attached to this information statement as Exhibit A.
INFORMATION ON ESSEX
Following is a description of Essex, which is based on
information provided by Essex. Essex is not affiliated with the
Manager.
ESSEX INVESTMENT MANAGEMENT CO., LLC
125 High Street, 29th Floor
Boston, Massachusetts 02110-2702
The predecessor of Essex Investment Management Co., LLC was
formed in 1976, and, Essex is 68% owned by AMG and the employees
of Essex, with AMG being the managing member and owning a
majority of the profits. Prior to the Transaction, in excess of
26% of AMG's voting securities were controlled by TA Associates,
Inc., the largest equity investor in AMG.
AMG, the managing member of Essex, is a publicly-traded
Delaware corporation which acquires interests in investment
management firms. AMG maintains its offices at Two International
Place, 23rd Floor, Boston, Massachusetts 02110. TA Associates,
Inc., and the group of private equity funds managed by TA, is
located at High Street Tower, Suite 2500, 125 High Street,
Boston, Massachusetts.
The name and principal occupation of the directors and
principal executive officers of Essex are set forth below. The
address of each is that of Essex.
NAME POSITION
Joseph C. McNay Chief Investment Officer, Chairman and
Portfolio Manager
Stephen D. Cutler President and Portfolio Manager
Stephen R. Clark Executive Vice President, Treasurer and
Portfolio Manager
Colin McNay Vice President and Portfolio Manager
R. Daniel Beckham Vice President, Portfolio Manager and
Director of Marketing
Christopher P. McConnell Vice President, Chief Financial Officer
Essex does not act as an investment adviser to any other
investment company which has similar objectives to the Capital
Appreciation Fund.
BOARD OF TRUSTEES' RECOMMENDATION
Essex advised the Trust that the Transaction was not
expected to result in any material change in the portfolio
management of the Fund by Essex. Thus, the Transaction was not
expected to result in any changes from the past investment
approaches or styles of Essex.
In approving the New Agreement, the Trustees, at an in-
person meeting held on June 8, 1998, considered a number of
factors, including (i) the nature and quality of the services
that will continue to be rendered by Essex to the Fund; (ii) the
representations by Essex to the Trustees that Essex expects that
it will continue to operate with substantially similar senior
investment personnel, and that the same persons who had
historically been responsible for the investment policies of
Essex will continue to direct the investment policies of Essex,
and there will be no dilution in the scope and quality of the
advisory services which have been provided to the Fund as a
result of the Transaction; (iii) that the fees payable by the
Fund will not change as a result of the New Agreement; and (iv)
the commitment of Essex to pay or reimburse the Fund 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 June 30, 1998, no
person beneficially owned more than 5% of the Fund's outstanding
shares. As of June 30, 1998, the directors and officers of the
Fund owned less than 1% of the Fund's outstanding shares.
As of June 30, 1998, Essex had no affiliated brokers to
which it paid a commission, and it does not anticipate that Essex
will pay any such commissions in 1998.
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: August 6, 1998
Exhibit A
- ---------
SUB-ADVISORY AGREEMENT
ATTENTION: MALCOLM MACCOLL
ESSEX INVESTMENT MANAGEMENT CO., LLC
RE: SUB-ADVISORY AGREEMENT
To whom it may concern:
The Managers Capital Appreciation 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 Essex Investment
Management Company, 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 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 June 8, 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: June 29, 1998
-----------------------------
ACCEPTED:
BY: /s/Christopher P. McConnell
----------------------------------
Its: V.P. & C.F.O.
----------------------------------
DATE:June 9, 1998
----------------------------------
Acknowledged:
The Managers Funds
BY: Donald S. Rumery
-----------------------------
Its: Secretary/Treasurer
-----------------------------
DATE:June 29, 1998
-----------------------------
SCHEDULES: A. Fee Schedule.
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 0.40% 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.
