File No. 811-3752
Rule 14(c)-5
April 23, 1999
VIA EDGAR
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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 No. 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 Intermediate Mortgage 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 Trust's Trustees, but without
shareholder approval.
The information statement describes a new sub-advisory
agreement between The Managers Funds, L.P., the investment
manager for the Trust, and Standish Ayer & Wood, Inc.
("Standish"), the new sub-adviser for the Fund. The new
agreement was necessary to implement the decision of the Trust's
Board of Trustees, acting on the investment manager's
recommendation, to hire Standish as the new sub-adviser for the
Fund.
In addition, the recent acquisition of The Managers Funds,
L.P. by Affiliated Managers Group, Inc. (and its restructuring as
The Managers Funds, LLC), resulted in the termination of the new
sub-advisory agreement shortly after it became effective.
Therefore, The Managers Funds LLC executed a new sub-advisory
agreement with Standish that is substantially identical to the
sub-advisory agreement in effect prior to the acquisition.
The Trust intends to mail definitive copies of this
information statement on or about May ___, 1999. 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 14c 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 0-11c(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>
[LOGO FOR THE MANAGERS FUNDS]
May ___, 1999
Dear Shareholder of Managers Intermediate Mortgage Fund:
The enclosed information statement details a recent portfolio
manager change and a new sub-advisory agreement for Managers
Intermediate Mortgage Fund. On March 5, 1999, the Board of
Trustees of The Managers Funds approved the recommendation of The
Managers Funds, L.P., the investment adviser to the Fund, to hire
Standish, Ayer & Wood, Inc. ("Standish") to replace Jennison
Associates, LLC as the portfolio manager of the Fund. The
recommendation reflected, among other things, the Manager's
opinion that Standish is appropriately suited to manage this Fund
since Standish has expertise in a broad array of mortgage
securities. The sub-advisory agreement with Standish took effect
on March 8, 1999.
On April 1, 1999, The Managers Funds, L.P. consummated an
agreement with Affiliated Managers Group, Inc. ("AMG") pursuant
to which The Managers Funds, L.P. converted to a Delaware limited
liability company (The Managers Funds, LLC) and AMG acquired a
100% interest in the capital of the Manager and a 95% interest in
its profits. Because it involved a change of control of the
Fund's investment adviser, completion of this transaction
terminated the sub-advisory agreement with Standish. Therefore,
The Managers Funds LLC executed a new sub-advisory agreement
dated April 1, 1999 with Standish relating to the Fund, the terms
of which are identical to the sub-advisory agreement executed on
March 8, 1999.
The new agreements with Standish and the transaction with AMG
will allow us to continue to provide you the services that you
have come to expect from us and, we believe, permit us to enhance
those services in certain instances.
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 support of The Managers Funds.
Sincerely,
/s/Peter M. Lebovitz
Peter M. Lebovitz
President
<PAGE>
PRELIMINARY COPY
THE MANAGERS FUNDS
MANAGERS INTERMEDIATE MORTGAGE FUND
40 RICHARDS AVENUE
NORWALK, CONNECTICUT 06854
____________________
INFORMATION STATEMENT
____________________
This information statement is being provided to the
shareholders of Managers Intermediate Mortgage Fund in lieu of a
proxy statement, pursuant to the terms of an exemptive order The
Managers Funds (the "Trust") has received from the Securities and
Exchange Commission which permits The Managers Funds LLC, the
investment manager to each investment portfolio of the Trust
(together, with each of its predecessor entities, the "Manager"),
to hire new sub-advisers and make changes to existing sub-
advisory contracts for each investment portfolio 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 May
__, 1999.
THE TRUST AND ITS INVESTMENT MANAGEMENT AGREEMENTS
The Trust entered into an investment management agreement
with respect to each investment portfolio of the Trust (each, a
"Fund") with The Managers Funds, L.P., the predecessor to The
Managers Funds LLC, dated August 17, 1990 (the "Previous
Management Agreement"). On April 1, 1999, The Managers Funds,
L.P. consummated an agreement with Affiliated Managers Group,
Inc. ("AMG") pursuant to which The Managers Funds, L.P. converted
to a Delaware limited liability company (The Managers Funds LLC)
and AMG acquired a 100% interest in the capital of the Manager
and a 95% interest in its profits. Because it involved a change
in control of the Fund's investment adviser, completion of this
transaction resulted in a termination of the Previous Management
Agreement. At a Special Meeting of the Shareholders on March 31,
1999, a new investment management agreement was approved between
the Trust, on behalf of each of the Funds, and the Manager to
take effect upon the closing of the transaction (the "New
Management Agreement").
Under the terms of both the Previous Management Agreement
and the New 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 investment portfolio of each 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 also responsible for allocating
the Fund's assets among the Sub-Advisers for a Fund, if such Fund
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. It is possible that, at certain
times, a Sub-Adviser under contract may be allocated none of a
Fund's assets to manage. 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, and the Manager is responsible for payment of all fees
payable to the Sub-Advisers of that Fund. The Funds, therefore,
pay no fees to the Sub-Advisers.
1
<PAGE>
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.
EXEMPTIVE ORDER
The Trust has received an exemptive order from the
Securities and Exchange Commission (Investment Company Release
No. 21412, Oct. 11, 1995) which permits the 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.
THE SUB-ADVISORY AGREEMENTS
Since October 1994, Jennison Associates, LLC ("Jennison")
has served as the Sub-Adviser to the Intermediate Mortgage Fund,
pursuant to a Sub-Advisory Agreement dated October 28, 1994 (the
"Jennison Agreement"). At a meeting held on March 5, 1999, 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 the recommendation
of The Managers Funds, L.P. to replace Jennison as Sub-Adviser to
the Fund with Standish, Ayer & Wood, Inc. ("Standish").
Accordingly, the Trustees approved a Sub-Advisory Agreement for
the Fund with Standish that became effective on March 8, 1999
(the "Standish Agreement").
The terms of the Standish Agreement were identical in all
respects to the Jennison Agreement, except for the date and the
identity of the Sub-Adviser and the addition of paragraphs:
(1) specifying that the Fund's securities for which Standish
will have investment responsibility will be designated in writing
by the Trust's custodian bank and confirmed by Standish;
(2) allowing, subject to certain provisos, Standish to receive
research through the use of "new issue" credits with respect to
new issues of securities underwritten by dealers selling as
principal.
(3) allowing Standish to combine purchase and sale orders for
the Fund with purchase and sale orders for its other clients,
provided that the combined trades are made in a manner that is
equitable and consistent with its fiduciary obligations to the
Fund and to Standish's other clients.
2
<PAGE>
The recommendation to hire Standish was made by the Manager
in the ordinary course of its on-going evaluation of sub-adviser
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 Standish's investment management style is
appropriately suited to the Fund and believes that Standish has
expertise in a broad array of mortgage securities. Standish
serves as the Sub-Adviser to Managers Short and Intermediate Bond
Fund, pursuant to a Sub-Advisory Agreement dated August 1, 1991.
Under the Previous Management Agreement and the New
Management Agreement, the Intermediate Mortgage Fund pays the
Manager a fee equal to 0.45% of the Fund's average daily net
assets. Pursuant to the Jennison Agreement, the Manager paid
Jennison a fee of 0.20% of the average daily net assets under
Jennison's management. Pursuant to the Standish Agreement, the
Manager pays Standish a fee of 0.20% of the Fund's average daily
net assets under its management. For the fiscal year ended
December 31, 1998, the Intermediate Mortgage Fund paid the
Manager $56,906, and the Manager paid $32,008 to Jennison. If
the Standish Agreement had been in effect for fiscal 1998, the
total management fee payable by the Fund to the Manager and the
Sub-Advisory fees payable by the Manager to the Sub-Adviser would
have been the same.
The change of control of the Manager that resulted in the
termination of the Previous Management Agreement also had the
effect of terminating the Standish Agreement. Therefore, On
April 1, 1999, the Manager entered into a new sub-advisory
agreement with Standish (the "New Standish Agreement"). Except
for the date, the New Standish Agreement is identical in all
respects (including the fee) to the Standish Agreement. The New
Standish Agreement, marked to show changes from the previous
agreement with Jennison, is attached to this information
statement as Exhibit A.
INFORMATION ON STANDISH
Following is a description of Standish, which is based on
information which it has provided. Standish is not affiliated
with the Manager or the Trust, other than by reason of serving as
Sub-Adviser to one or more Funds.
STANDISH, AYER & WOOD, INC.
One Financial Center, Suite 26
Boston, Massachusetts 02111
Standish, Ayer & Wood, Inc. was founded in 1933 and is a
privately owned corporation with 24 directors. As of December
31, 1998, Standish had more than $46.2 billion in assets under
management.
3
<PAGE>
The name and principal occupation of the directors and
principal executive officers of Standish are set forth below, the
address of each is that of Standish.
<TABLE>
<CAPTION>
NAME POSITION
- ------------- ------------------------------------
<S> <C>
Edward H. Ladd Chairman and Managing Director
George W. Noyes CEO, President and Managing Director
Caleb F. Aldrich Managing Director and Vice President
Davis B. Clayson Director and Vice President
Dolores S. Driscoll Managing Director and Vice President
Richard C. Doll Director and Vice President
Maria D. Furman Managing Director and Vice President
Richard S. Wood Managing Director, Vice President and
Secretary
Nicholas S. Battelle Director and Vice President
David H. Cameron Director and Vice President
Karen K. Chandor Director and Vice President
James E. Hollis III Director and Vice President
Laurence A. Manchester Director and Vice President
Arthur A. Parker Director and Vice President
Howard B. Rubin Director and Vice President
Austin C. Smith Director and Vice President
W. Charles Cook Director and Vice President
Joseph M. Corrado Director and Vice President
Mark A. Flaherty Director and Vice President
Raymond J. Kubiak Director and Vice President
Thomas P. Sorbo Director and Vice President
David C. Stuehr Director and Vice President
Michael W. Thompson Director and Vice President
Ralph S. Tate Managing Director and Vice President
</TABLE>
Standish acts as an investment adviser to other investment
companies having similar objectives to the Intermediate Mortgage
Fund as follows:
<TABLE>
<CAPTION>
Net Assets of
Other Fund, as Annual
Other Funds of 3/31/99 Fee Rate
- ------------ --------------- --------
<S> <C> <C>
Managers Short and
Intermediate Bond Fund $18,622,434 0.25%
Standish Scrutinized Fund $42,935,222 0.25%
</TABLE>
BOARD OF TRUSTEES' RECOMMENDATION
At an in-person meeting held on March 5, 1999, the Trustees,
in approving the Standish Agreement, considered a number of
factors, including (i) the nature and quality of the services
expected to be rendered by Standish to the Intermediate Mortgage
Fund; (ii) Standish's investment management approach and the
services it renders to the Short and Intermediate Bond Fund;
(iii) the structure of Standish and its ability to provide
services to the Intermediate Mortgage Fund; (iv) that the fees
payable by the Intermediate Mortgage Fund will not change as a
result of this Agreement; and (v) that the Standish Agreement was
identical in all material respects to the Jennison Agreement.
4
<PAGE>
Additionally, at the meeting held on March 5, 1999, the
Trustees approved, effective as of the date of the closing of the
transaction with AMG, the New Standish Agreement. In connection
with this approval, the Trustees considered that the terms of the
transaction did not contemplate any changes in the overall form
of the sub-advisory agreement with Standish, the advisory fees or
the Fund's objectives and policies. The Trustees considered the
proposed additional paragraphs in the New Standish agreement, and
determined that they were acceptable to the Fund.
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 April 23, 1999, no
individual person beneficially owned more than 5% of the Fund's
outstanding shares.
As of April 23, 1999, Standish is not affiliated with any
brokers, and the Fund did not pay commissions to any broker
affiliated with Standish during its fiscal year ended December
31, 1998.
As of April 23, 1999, the Trustees and Officers of the Fund
owned less than 1% of the outstanding shares of the 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: May ___, 1999
5
<PAGE>
EXHIBIT A
-----------
[MARKED TO SHOW CHANGES]
SUB-ADVISORY AGREEMENT
-------------------------
Attention: Howard Rubin
Standish, Ayer & Wood, Inc.
RE: Sub-Advisory Agreement
To whom it may concern:
The Managers Intermediate Mortgage 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 LLC (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 Standish, Ayer & Wood,
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.
The Manager represents and warrants to the Sub-Advisor that at
any such time State Street Bank and Trust Company ("State
Street"), the Manager's Custodian, delivers to the Sub-Advisor
any non-cash assets, State Street will provide to the Sub-Advisor
a true, correct and complete listing of the securities and other
assets of the Fund account, including in the case of non-cash
assets a full description of any material features thereof. The
Manager represents that the Fund has full title in all of the
Fund Account's assets. The Sub-Advisor will have no
responsibility or liability for any losses, claims or damages
resulting directly or indirectly from omissions, errors or
misstatements appearing on this listing. The Sub-Advisor will
not be responsible for additions to the Fund Account until
notification of such additions has been confirmed by the Sub-
Advisor.
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 a 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.
(d) With respect to new issues of securities
underwritten by dealers selling as principal, the Sub-
Advisor may receive research through the use of "new
issue" research credits; provided that the foregoing
shall not diminish any rights of the Fund, or duties of
the sub-adviser, under law..
(e) On occasions when the Sub-Advisor deems the
purchase or sale of a security to be in the best
interest of the Fund Account as well as other clients,
the Sub-Advisor, to the extent permitted by applicable
laws and regulations, may aggregate the securities to
be sold or purchased for the Fund Account and such
other clients in order to obtain the best overall
execution and lower brokerage commissions, if any, In
such event, allocation of the prices and amounts of
securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by
the Sub-Advisor in the manner it considers to be the
most equitable and consistent with its fiduciary
obligations to the Fund Account and to such clients.
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
respecting or relating to the Sub-Advisor 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 April 1, 1999 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. No such termination shall affect the liabilities and
obligations of the parties arising prior to such termination.
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 LLC
BY: /s/Peter M. Lebovitz
ITS: President
DATE:3/29/99
ACCEPTED:
BY: /s/
Its: Treasurer
DATE: 3/17/99
Acknowledged:
The Managers Funds
BY: /s/Peter M. Lebovitz
Its: President
DATE:3/29/99
SCHEDULES: A. Fee Schedule.
SCHEDULE A
SUB-ADVISOR FEE
For services provided to the Fund Account, The Managers Funds LLC
will pay a quarterly fee for each calendar quarter at an annual
rate of 0.20% of average daily net assets in the Fund Account
during the 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.
