SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ X ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c)
or Section 240.14a-12
_____________THE MANAGERS FUNDS_________________
(Name of Registrant as Specified In Its Charter)
_______________________________________________________
(Name of Person(s) Filing Proxy Statement, if other
than Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act
Rules 14a-6(i)(4) 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 is 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:
_______________________________________________________
[THE MANAGERS FUNDS LOGO]
40 RICHARDS AVENUE
NORWALK, CONNECTICUT 06854
800-835-3879
WWW.MANAGERSFUNDS.COM
------------------------------------------------------------
<R ^ R/> MANAGERS CAPITAL APPRECIATION FUND
<R MANAGERS INCOME EQUITY FUND R/>
MANAGERS SPECIAL EQUITY FUND
MANAGERS INTERNATIONAL EQUITY FUND
MANAGERS EMERGING MARKETS EQUITY FUND
MANAGERS BOND FUND
MANAGERS SHORT AND INTERMEDIATE BOND FUND
MANAGERS GLOBAL BOND FUND
October <R ^ R/> <R 16 R/> , 2000
Dear Fellow Shareholder:
Enclosed is a proxy statement describing important
proposals to be considered at a meeting of the shareholders
of The Managers Funds. You are receiving the proxy
statement and are entitled to vote on these proposals
because you were a shareholder of one or more of the Funds
identified above on October 3, 2000.
I am sure that you, like most people, lead a busy life
and are tempted to put this proxy statement aside. Please
<R ^ R/> <R do not! R/> When shareholders do not vote,
the Funds incur additional expenses to pay for follow-up
mailings and telephone calls. Please take a few minutes to
review the proxy statement and cast your vote. You can
sign, date and return the proxy card in the enclosed postage
prepaid envelope or, if you prefer, you can also vote by
telephone or on the internet.
Unless you are a shareholder of all Funds, you are not
being asked to vote on all proposals, some of which relate
only to specific Funds. For example, shareholders of
Managers Special Equity Fund are being asked to approve the
addition of a new sub-adviser for the Fund and the
shareholders of Managers Income Equity Fund and Managers
Short and Intermediate Bond Fund are being asked to approve
changes to each Fund's investment objective. Only
shareholders of these Funds will vote on these proposals.
<PAGE>
Shareholders of all Funds are being asked to approve
changes to the investment restrictions of the Funds. We
believe that these changes will promote greater efficiency
in the management of the Funds and will permit the Funds to
adapt to changing regulatory and industry developments in a
more timely and cost-efficient manner. These changes will
also result in a standardization of the primary investment
restrictions that apply to all mutual funds within the
Managers Family of Funds. For similar reasons, we are asking
shareholders of all Funds to vote on a proposal to make the
investment objective of each Fund "nonfundamental." Each of
these proposals is described in greater detail in the
enclosed proxy statement.
At a meeting held on October 2, 2000, the Board of
Trustees of The Managers Funds considered and approved each
of these proposals, subject to obtaining your approval. The
Trustees have recommended that the shareholders of each Fund
vote FOR each of the proposals.
Because shareholders of all Funds are permitted to vote
on most of the proposals, we have prepared one proxy
statement, which reduces costs for the Funds. If you own
shares in more than one Fund, you will receive only one
proxy statement, but a separate proxy card for each of the
Funds that you own. Please sign and return your proxy
card(s) or vote by telephone or internet, as soon as
possible, to help the Funds avoid the additional cost of
engaging a proxy solicitation firm.
Your vote is important. Please take a moment now to
sign and return your proxy card(s) in the enclosed, postage-
paid return envelope. You may also vote <R ^ R/> by
phone, by fax or over the internet, or you may vote in
person at the shareholder meeting. If we do not receive
your executed proxy card(s) after a reasonable amount of
time, you may receive a telephone call from a proxy
solicitor reminding you to vote. If you have questions about
the shareholder meeting or any of the proposals, please fell
free to call us at 1-800-835-3879.
Thank you for your cooperation and continued support.
Sincerely,
/s/Peter M. lebovitz
Peter M. Lebovitz
President
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
Overview of Proxy Statement <R1 R/>
Notice of Special Meeting of Shareholders <R5 R/>
Instruction for Executing Proxy Card <R8
Proxy Statement 9R/>
<R ^ R/>
Proposal 1 - To consider the sub-advisory agreement
between <R R/> the Manager and <R ^ R/> Skyline Asset
Management, L.P <R R/> with respect to Managers Special Equity
Fund<R. 12R/>
Proposal 2 - To consider a change in the investment objective of <R
R/> Managers Income<R Equity Fund 16 R/> <R ^ R/>
Proposal 3 - To consider a change in the investment objective of <R
R/> Managers Short<R ^ R/> and Intermediate
Bond Fund <R 17 R/>
Proposal 4 - To consider making each Fund's investment objective <R
R/> nonfundamental <R 18 R/> <R ^ R/>
Proposal 5 - To consider amending or eliminating certain fundamental<R
R/> restrictions <R 19 R/> <R ^ R/>
Proposal 5A - To consider eliminating the restrictions regarding issuer
diversification <R 20 R/>
Proposal 5B - To consider amending the restriction regarding borrowing
<R 22 R/>
Proposal 5C - To consider amending the restriction regarding investments
<R R/> in<R ^ R/> real estate <R 23 R/>
Proposal 5D - To consider amending the restriction regarding the <R
R/> business of <R ^ R/> underwriting
securities issued by others <R 24 R/>
Proposal 5E - To consider amending the restriction regarding the <R
R/> making of loans <R 24 R/>
Proposal 5F - To consider amending the restriction regarding <R
R/> issuance of senior <R ^ R/> securities
<R 25 R/>
Proposal 5G - To consider eliminating the restriction regarding <R
R/> the participation in <R ^ R/> joint
trading accounts in securities <R 26 R/>
Proposal 5H - To consider eliminating the restriction regarding <R
R/> investments in <R ^ R/> unseasoned
issuers <R 27 R/>
Proposal 5I - To consider eliminating the restriction regarding <R
R/> investments in illiquid securities < 27 R/>
Proposal 5J - To consider eliminating the restrictions regarding <R
R/> investments in other investment companies <R 28 R/>
Proposal 5K - To consider eliminating the restriction regarding investments <R
R/> in companies <R ^ R/> in which officers
or directors of the Trust own stock <R 29 R/>
Proposal 5L - To consider eliminating the restriction prohibiting <R
R/> the purchase of <R ^ R/> securities for
the purpose of exercising <R R/> control or management
<R 30 R/>
Exhibits
Exhibit A - Sub-Advisory Agreement with Skyline Asset Management, L.P.
<R 33 R/>
Exhibit B - Current Investment Objectives of the Funds
<R 40 R/>
Exhibit C - Current and Proposed Fundamental Investment Restrictions
<R R/> of the <R ^ R/> Funds <R 41 R/>
Exhibit D - Five Percent Record or Beneficial Owners of Each
Fund's <R R/> Outstanding Shares <R 45 R/>
</TABLE>
<PAGE>
OVERVIEW OF PROXY STATEMENT
IMPORTANT INFORMATION FOR SHAREHOLDERS OF
THE MANAGERS FUNDS
Although we encourage you to read the full text of the
enclosed <R ^ R/> <R proxy statement R/> , here is a
brief overview of some matters affecting your Fund that will
be the subject of a shareholder vote.
Q. WHEN WILL THE <R ^ R/> <R SHAREHOLDER R/> MEETING
BE HELD?
A. The meeting will be held on November 30, 2000, at 10:30
a.m. Eastern Standard Time at the offices of The
Managers Funds LLC, 40 Richards Avenue, Norwalk,
Connecticut 06854. This meeting will cover those
issues listed in this <R ^ R/> <R proxy statement
R/> , as well as any other matters properly brought
before the meeting. The record date for determining
which shareholders are eligible to vote on those issues
has been set as the close of business on October 3,
2000. Only those shareholders that owned shares at
that time are entitled to vote at the <R ^ R/> <R
meeting R/> .
Q. WHAT ARE THE ISSUES THAT WILL BE CONSIDERED AT THE <R
^ R/> <R SHAREHOLDER R/> MEETING?
A. At the <R ^ R/> <R meeting R/> , shareholders will
be asked to consider the following matters:
PROPOSAL FUNDS AFFECTED
-------- ---------------
1. To approve a sub-advisory agreement Managers Special
between The Managers Funds LLC and Equity Fund
Skyline Asset Management, L.P., a
proposed new sub-adviser for
Managers Special Equity Fund;
2. To change the investment objective Managers Income
of Managers Income Equity Fund; Equity Fund
3. To change the investment objective Managers Short and
of Managers Short and Intermediate Intermediate Bond
Bond Fund; Fund
4. To make each Fund's investment All Funds
objective nonfundamental;
5. To change or eliminate certain of All Funds
the fundamental investment
restrictions of the Funds; <R and
R/>
6. To transact any other business All Funds
properly presented at the <R ^ R/>
<R meeting R/> .
<PAGE>
Q. HOW DOES THE BOARD OF TRUSTEES RECOMMEND THAT I VOTE?
A. The Board of Trustees recommends that you vote FOR each
of the <R ^ R/> <R proposals R/> on the enclosed
proxy card(s).
Q. WHY ARE THE TRUSTEES PROPOSING TO ADD <R SKYLINE AS
R/> A NEW
SUB-ADVISER FOR THE MANAGERS SPECIAL EQUITY FUND?
A. <R ^ R/> The Board of Trustees, acting on <R ^ R/>
<R the recommendation of the Manager, has determined that
it would be in the Fund's best interests to maintain a
significant exposure to value-oriented investment styles,
that, in light R/> of the current size and <R ^ R/> <R
anticipated R/> growth of the Fund, <R ^ R/> <R it would
be advisable R/> to add another sub-adviser to the Fund<R
^ R/> <R , and that Skyline Asset Management, L.P. would
be best suited to satisfy the Fund's investment needs.
After considering a variety of factors, the Board concluded
that Skyline is capable of providing high quality services
to the Fund, that Skyline is likely to maintain its
consistent investment philosophy and R/> value-oriented
investment <R ^ R/> <R strategy, and that Skyline's
investment style will complement R/> the investment styles
of the Fund's other sub-advisers.
Q. WHY ARE SHAREHOLDERS OF MANAGERS SPECIAL EQUITY FUND
BEING ASKED TO APPROVE THE SUB-ADVISORY AGREEMENT WITH
SKYLINE?
A. The Managers Funds has received an exemptive order from
the Securities and Exchange Commission that generally
permits the Trustees to approve Sub-Advisory Agreements
with sub-advisers to the Funds without seeking
shareholder approval when it otherwise would be
required. That order, however, requires shareholder
approval for sub-advisers that are affiliated with The
Managers Funds LLC (the "Manager"). The Manager is a <R
wholly-owned R/> subsidiary of Affiliated Managers
Group, Inc. ("AMG") and Skyline is a majority-owned
subsidiary of AMG. Accordingly, Skyline is affiliated
with the Manager for purposes of that order. Thus, the
shareholders of Managers Special Equity Fund must
approve a Sub-Advisory Agreement between the Manager
and Skyline before Skyline may begin serving as a sub-
adviser for the Fund.
Q. WILL THE INVESTMENT MANAGEMENT FEES PAID BY MANAGERS
SPECIAL EQUITY FUND BE THE SAME?
A. Yes. The rates and methods used in calculating the
fees for investment management services paid by
Managers Special Equity Fund to the Manager are not
affected by the number or identity of the Fund's sub-
advisers. Furthermore, the fees paid by the Manager to
Skyline will be the same as the fees paid to the other
sub-advisers of the Fund.
2
<PAGE>
Q. WHY ARE THE TRUSTEES PROPOSING TO CHANGE THE INVESTMENT
OBJECTIVE OF MANAGERS INCOME EQUITY FUND?
A. The Board of Trustees, acting on recommendation from
the Manager, has decided to change the investment
objective of Managers Income Equity Fund, subject to
shareholder approval. The proposed change will permit
each <R ^ R/> <R sub-adviser of the R/> Fund to
pursue its value strategy without being constrained by
an emphasis on income. This change is prompted by the
change, over time, <R ^ R/> <R in R/> the universe
of <R ^ R/> <R undervalued R/> equity securities <R
that are also income-producing R/> .
Q. WHY ARE THE TRUSTEES PROPOSING TO CHANGE THE INVESTMENT
OBJECTIVE OF MANAGERS SHORT AND INTERMEDIATE BOND FUND?
A. The Board of Trustees, acting on recommendation from
the Manager, has decided to change the investment
objective of Managers Short and Intermediate Bond Fund,
subject to shareholder approval. The change would
eliminate the requirement that the Fund maintain a
specified weighted average maturity for its portfolio.
The Board believes that the change is in the best
interests of shareholders because it will <R ^ R/> <R
better enable R/> the sub-adviser of the Fund to use
"average duration" (rather than average maturity) as
the relevant measure of interest-rate risk.
Q. WHY ARE THE TRUSTEES PROPOSING TO MAKE EACH FUND'S
INVESTMENT OBJECTIVE NON-FUNDAMENTAL?
A. The proposed change will permit the Board of Trustees,
in the future, to make changes to a Fund's investment
objectives without first obtaining shareholder
approval. This will provide the Board with the ability
to react to changes in the industry or in the market
place without <R ^ R/> <R delay and without the R/>
expense of <R holding R/> a shareholder meeting. The
Board would not change a Fund's investment objective
without notifying the Fund's shareholders.
Q. WHY ARE THE TRUSTEES PROPOSING TO CHANGE CERTAIN
INVESTMENT RESTRICTIONS?
A. The proposed changes will modernize and standardize the
fundamental investment restrictions for all Funds. The
Trustees believe that, over time, these changes will
permit the Funds to operate more efficiently and to
adapt to changing regulatory and industry conditions.
For the foreseeable future, the changes are not
expected to affect materially the way in which the
Funds are managed.
3
<PAGE>
Q. HOW DO I CONTACT YOU FOR MORE INFORMATION OR TO PLACE
MY VOTE?
A. If you have any questions, please call The Managers
Funds at (800) 835-3879 for additional information.
Use the enclosed proxy card(s) to record your vote for
each of the <R ^ R/> <R proposals R/> you may vote
on, then return the card(s) in the postage-paid
envelope. You can also vote <R by faxing R/> your
proxy card(s) <R ^ R/> to us at (203) 857-5316 or by
calling (800) 690-6903 and <R ^ R/> <R recording R/>
your vote by telephone or on the internet at
http://www.proxyvote.com.
4
<PAGE>
PLEASE VOTE
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
[THE MANAGERS FUNDS LOGO]
MANAGERS CAPITAL APPRECIATION FUND
MANAGERS INCOME EQUITY FUND
MANAGERS SPECIAL EQUITY FUND
MANAGERS INTERNATIONAL EQUITY FUND
MANAGERS EMERGING MARKETS EQUITY FUND
MANAGERS BOND FUND
MANAGERS SHORT AND INTERMEDIATE BOND FUND
MANAGERS GLOBAL BOND FUND
40 RICHARDS AVENUE
NORWALK, CONNECTICUT 06854
800-835-3879
WWW.MANAGERSFUNDS.COM
------------------------------------------------------------
<R ^ R/>
____________________________________________________
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
____________________________________________________
TO BE HELD ON NOVEMBER 30, 2000
AT 10:30 A.M.
TO SHAREHOLDERS OF THE MANAGERS FUNDS:
On November 30, 2000, The Managers Funds (the "Trust")
will hold a <R ^ R/> <R special meeting R/> of the
shareholders of Managers Capital Appreciation Fund, Managers
Income Equity Fund, Managers Special Equity Fund, Managers
International Equity Fund, Managers Emerging Markets Equity
Fund, Managers Bond Fund, Managers Short and Intermediate
Bond Fund and Managers Global Bond Fund at the offices of
The Managers Funds LLC (the "Manager"), 40 Richards Avenue,
Norwalk, Connecticut 06854. The <R special R/> meeting
will begin at 10:30 a.m.
5
<PAGE>
The meeting will be held for the following purposes:
1.To consider and act upon the approval of a Sub-Advisory
Agreement between the Manager and Skyline Asset Management,
L.P. ("Skyline") with respect to Managers Special Equity
Fund;
2.To consider a change in the investment objective of
Managers Income Equity Fund;
3.To consider a change in the investment objective of
Managers Short and Intermediate Bond Fund;
4.To consider making each Fund's investment objective
nonfundamental;
5.To consider the following changes to fundamental
investment restrictions of all Funds:
5A. To eliminate the restrictions regarding
issuer diversification.
5B. To amend the restriction regarding borrowing.
5C. To amend the restriction regarding
investments in real estate.
5D. To amend the restriction regarding
underwriting securities issued by others.
5E. To amend the restriction regarding the
making of loans.
5F. To amend the restriction regarding the
issuance of senior securities.
5G. To eliminate the restriction regarding
participation in joint trading accounts for
securities.
5H. To eliminate the restriction regarding
investments in unseasoned issuers.
5I. To eliminate the restriction regarding
investments in illiquid securities.
5J. To eliminate the restrictions regarding
investments in other investment companies.
5K. To eliminate the restriction regarding
investments in companies in which officers or
directors of the Trust own stock.
5L. To eliminate the restriction regarding
the purchase of securities for the purpose of
exercising control or management.
6
<PAGE>
6.To transact any other business properly presented at
the meeting.
Only those shareholders that owned shares in a Fund at
the close of business on <R ^ R/> <R October 3 R/> , 2000
can vote at this meeting or any adjournments that may take
place.
By Order of the Board of
Trustees,
/s/Donald S. Rumery
Donald S. Rumery
Secretary
Norwalk, Connecticut
<R October 16 R/> , 2000
------------------------------------------------------------
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE
MEETING IN PERSON OR BY PROXY. IF YOU DO NOT EXPECT TO
ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN
THE ENCLOSED PROXY CARD(S) IN THE POSTAGE-PAID ENVELOPE OR
BY FAX. YOU CAN ALSO VOTE <R ^ R/> BY TELEPHONE OR ON THE
INTERNET.
------------------------------------------------------------
7
<PAGE>
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for signing proxy cards may
be of assistance to you and may help to avoid the time and
expense involved in validating your vote if you fail to sign
your proxy card properly.
1. Individual Accounts: Sign your name exactly as it
appears on the proxy card.
2. Joint Accounts: Either party may sign, but the name of
the party signing should conform exactly to a name shown on
the proxy card.
3. All Other Accounts: The capacity of the individual
signing the proxy card should be indicated unless it is
reflected in the name of the proxy card. For example:
REGISTRATION VALID SIGNATURE
------------ ---------------
CORPORATE ACCOUNTS
(1) ABC Corp. (1) ABC Corp.
John Doe, Treasurer
(2) ABC Corp. (2) John Doe, Treasurer
c/o John Doe, Treasurer
(3) ABC Corp. Profit Sharing Plan (3) John Doe, Trustee
TRUST ACCOUNTS
(1) ABC Trust (1) Jane Doe, Trustee
(2) Jane Doe, Trustee (2) Jane Doe
u/t/d 12/28/78
CUSTODIAL OR ESTATE ACCOUNTS
(1) John Smith, Cust. (1) John Smith
f/b/o John Smith, Jr. UGMA
(2) John Smith Jr. (2) John Smith Jr., Executor
8
<PAGE>
[THE MANAGERS FUNDS LOGO]
MANAGERS CAPITAL APPRECIATION FUND
MANAGERS INCOME EQUTIY FUND
MANAGERS SPECIAL EQUITY FUND
MANAGERS INTERNATIONAL EQUITY FUND
MANAGERS EMERGING MARKETS EQUITY FUND
MANAGERS BOND FUND
MANAGERS SHORT AND INTERMEDIATE BOND FUND
MANAGERS GLOBAL BOND FUND
40 RICHARDS AVENUE
NORWALK, CONNECTICUT 06854
800-835-3879
WWW.MANAGERSFUNDS.COM
<R ^ R/> <R __________________________________ R/>
<R ^ R/> <R PROXY STATEMENT R/>
<R ^ R/> <R __________________________________ R/>
<R ^ R/> <R FOR A SPECIAL R/> MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 30, 2000
INTRODUCTION
This <R ^ R/> <R proxy statement R/> is furnished in
connection with the solicitation of proxies by the Board of
Trustees (the "Trustees") of The Managers Funds (the "Trust")
for use at a <R ^ R/> <R special meeting R/> and any
adjournment (the "Meeting") of the shareholders of Managers
Capital Appreciation Fund, Managers Income Equity Fund, Managers
Special Equity Fund, Managers International Equity Fund,
Managers Emerging Markets Equity Fund, Managers Bond Fund,
Managers Short and Intermediate Bond Fund, and Managers Global
Bond Fund (each a "Fund" and collectively, the "Funds") to be
held at the offices of The Managers Funds LLC (the "Manager"),
40 Richards Avenue, Norwalk Connecticut, on November 30, 2000 at
10:30 a.m., Eastern Standard Time.
The Trust is comprised of ten mutual funds, eight of which
are the subject of this proxy statement. Each such mutual fund
is a separate series of the Trust. The Trust is a registered
management investment company under the Investment Company Act
of 1940, as amended (the "1940 Act"), and is organized as a
Massachusetts business trust. The Manager serves as the
distributor and investment manager of each Fund.
The principal executive offices of the Trust are located at
40 Richards Avenue, Norwalk, Connecticut 06854. The enclosed
proxy and this <R ^ R/> <R proxy statement R/> are first
being sent to shareholders on or about <R October 19, R/>
2000.
9
<PAGE>
At the meeting, shareholders will be asked to act on the
following:
* Shareholders of Managers Special Equity Fund will be asked
to approve a Sub-Advisory Agreement with Skyline Asset
Management, L.P., a proposed new sub-adviser for the Fund.
Approval of the Sub-Advisory Agreement will not result in an
increase of any fees paid by Managers Special Equity Fund.
(PROPOSAL 1). The proposed Sub-Advisory Agreement is attached as
Exhibit A to this <R ^ R/> <R proxy statement R/> .
* Shareholders of Managers Income Equity Fund and Managers
Short and Intermediate Bond Fund will be asked to approve a
change in each Fund's respective investment objective.
(PROPOSALS 2 and 3).
* Shareholders of each Fund will be asked to <R ^ R/> <R
approve R/> making each Fund's investment objective
"nonfundamental". (PROPOSAL 4). <R Exhibit B to this proxy
statement lists the current investment objectives of the Funds.
R/>
* Shareholders of each Fund will be asked to approve the
amendment or elimination of certain fundamental investment
restrictions. (PROPOSALS 5A THROUGH 5L). <R ^ R/> <R
Exhibit C to this proxy statement lists the R/> current and
proposed fundamental investment restrictions of the Funds <R ^
R/> .
The following table illustrates the matters on which
shareholders of each Fund will vote:
<TABLE>
<CAPTION>
PROPOSAL 1 2 3 4 5A 5B 5C 5D 5E 5F 5G 5H 5I 5J 5K 5L
-------------------------------------------------------------------------------
<S> <C><C> <C><C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MANAGERS X X X X X X X X X X X X X
CAPITAL
APPRECIATION
FUND
----------------------------------------------------------------------------
MANAGERS X X X X X X X X X X X X X X
INCOME EQUITY
FUND
----------------------------------------------------------------------------
MANAGERS X X X X X X X X X X X X X X
SPECIAL
EQUITY
FUND
----------------------------------------------------------------------------
MANAGERS X X X X X X X X X X X X X
INTERNATIONAL
EQUITY FUND
----------------------------------------------------------------------------
MANAGERS X X X X X X X X X X X X X
EMERGING
MARKETS
EQUITY FUND
----------------------------------------------------------------------------
MANAGERS X X X X X X X X X X X X X
BOND FUND
----------------------------------------------------------------------------
MANAGERS X X X X X X X X X X X X X X
SHORT AND
INTERMEDIATE
BOND FUND
----------------------------------------------------------------------------
MANAGERS X X X X X X X X X X X X X
GLOBAL
BOND FUND
</TABLE>
10
<PAGE>
R/> All properly executed <R ^ R/> <R proxy cards R/>
received prior to the Meeting will be voted at the Meeting in
accordance with the marked instructions. Unless instructions
are marked to the contrary, shares represented by the proxies
will be voted FOR all the proposals. Any shareholder may revoke
his or her proxy card(s) at any time prior to the Meeting by
sending written notice of revocation to the Secretary of the
Trust or by attending the Meeting and voting in person. The <R
persons designated as R/> proxies, in their discretion, may
vote upon such other matters as may properly come before the
meeting. The Board of Trustees of the Trust is not aware of any
other matters to come before the Meeting.
Holders of record of the shares of the Fund at the close of
business on October 3, 2000 (the "Record Date"), as to any
matter on which they are entitled to vote, will be entitled to
one vote per share and a fractional vote on each fractional
share on all business presented at the <R ^ R/> Meeting.
The following table sets forth the number of shares of
beneficial interest outstanding of each Fund as of the Record
Date:
FUND SHARES OUTSTANDING
----- ------------------
Managers Capital Appreciation Fund <R 6,942,518.98 R/>
Managers Income Equity Fund <R 2,854,966.40 R/>
Managers Special Equity Fund <R24,157,915.08 R/>
Managers International Equity Fund <R12,855,059.11 R/>
Managers Emerging Markets Equity Fund <R 1,458,363.93 R/>
Managers Bond Fund <R 2,635,740.58 R/>
Managers Short and Intermediate Bond Fund <R 1,621,397.80 R/>
Managers Global Bond Fund <R 1,958,412.28 R/>
Under the By-Laws of the Trust, shares held by two or more
persons (whether as joint tenants, co-fiduciaries or otherwise)
will be voted as follows: (1) if only one person votes, his or
her vote will bind all others; (2) if more than one person votes
and such persons disagree as to any vote to be cast, the proxy
will not be voted as to that item of business.
In the event that the necessary quorum to transact business
or the vote required to approve any <R ^ R/> <R proposal R/>
is not obtained at the Meeting, the individuals named as proxies
may propose one or more adjournments of the Meeting in
accordance with the applicable law to permit further
solicitation of proxies. <R ^ R/>
Each proposal will be voted on separately by shareholders
of each Fund. Approval of each proposal for each Fund requires
the affirmative vote of the lesser of (i) 67% of the voting
securities of the Fund present in person at the Meeting or
represented by proxy, if holders of more than 50% of the shares
of the Fund outstanding on the record date are present, in
person or by proxy, or (ii) more than 50% of the outstanding
shares of the Fund on the record date.
11
<PAGE>
Abstentions and broker non-votes (i.e., proxies sent in by
brokers and other nominees which cannot be voted on the
proposal(s) because the beneficial owners have not given
instructions) will be considered to be shares present at the
Meeting, but not voting in favor of any of the proposals and
will therefore have the effect of a "no" vote.
Shareholders can vote by marking the enclosed proxy card(s)
and returning the card(s) in the postage-paid envelope.
Shareholders can also vote <R by faxing R/> their proxy
card(s) <R ^ R/> to the Trust at (203) 857-5316 or by calling
(800) 690-6903 and <R ^ R/> <R recording R/> their vote by
telephone or on the internet at http://www.proxyvote.com. Any
shareholder who has given a proxy has the right to revoke the
proxy any time prior to its exercise:
* By written notice of the proxy's revocation to the
Secretary of the Trust at the above address prior to the
Meeting;
* By the subsequent execution and return of another proxy
prior to the Meeting;
* By submitting a subsequent telephone vote;
* By submitting a subsequent internet vote; <R or R/>
* By being present and voting in person at the Meeting and
giving oral notice of revocation to the Chairman of the Meeting.
PROPOSAL 1: TO CONSIDER THE APPROVAL OF A SUB-ADVISORY AGREEMENT
BETWEEN THE MANAGER AND SKYLINE ASSET MANAGEMENT, L.P.
FOR MANAGERS SPECIAL EQUITY FUND
(MANAGERS SPECIAL EQUITY FUND SHAREHOLDERS ONLY)
At the Meeting, the shareholders of Managers Special Equity
Fund will consider the approval of a sub-advisory agreement
between the Manager and Skyline Asset Management, L.P.
("Skyline"), a proposed new sub-adviser for Managers Special
Equity Fund. If Proposal 1 is approved by shareholders, the new
sub-advisory agreement will become effective as soon as
practicable thereafter.
THE TRUST AND ITS INVESTMENT MANAGEMENT AGREEMENT
The Trust has entered into an investment management
agreement with respect to each investment portfolio of the Trust
with the Manager dated April 1, 1999 (the "Management
Agreement"). Under the terms of 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" and each a "Sub-Adviser") to manage the investment
portfolio of the 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 the Fund, if such Fund has more than
one Sub-Adviser. The portion of the Fund's assets managed by a
Sub-Adviser may be adjusted from time to time in the sole
discretion of the Manager. The Manager is also responsible for
conducting all business operations of the Trust, except those
12
<PAGE>
operations contracted to the custodian or the transfer agent.
As compensation for its services, the Manager receives a fee
from the Fund, and the Manager is responsible for payment of all
fees payable to the Sub-Advisers of the Fund. The Fund,
therefore, pays no fees <R directly R/> to the Sub-Advisers.
The Manager recommends Sub-Advisers for the Fund 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 Fund
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 the Fund and
receive brokerage commissions in connection therewith as
permitted by Section 17(e) of the 1940 Act and the rules
thereunder.
Under the 1940 Act, a shareholder vote is generally
required to approve a new sub-advisory agreement involving a
mutual fund. The Manager and the Trust have received an
exemptive order from the Securities and Exchange Commission <R
("SEC") R/> that permits the Trustees to approve sub-advisory
agreements between the Manager and sub-advisers without
obtaining shareholder approval. That order, however, requires
shareholder approval for sub-advisers that have certain
affiliations with the Manager. The Manager has proposed that
Skyline be appointed as <R a R/> new sub-adviser to the Fund.
<R ^ R/> Affiliated Managers Group, Inc. ("AMG") <R owns
substantially all interests in the Manager, R/> and Skyline is
a majority-owned subsidiary of AMG. Accordingly, <R Skyline is
an affiliate of the Manager for purposes of the order. For this
reason, R/> shareholders of the Fund must approve the sub-
advisory agreement between the Manager and Skyline if Skyline is
to serve as a sub-adviser for the Fund.
THE SUB-ADVISORY AGREEMENTS
Currently, the assets of the Fund are managed by four Sub-
Advisers: Westport Asset Management, Inc. ("Westport"), Goldman
Sachs Asset Management ("Goldman"), Pilgrim Baxter & Associates,
Ltd. ("Pilgrim") and Kern Capital Management<R ^ R/> LLC
("Kern", and together with Westport, Goldman and Pilgrim, the
"Current Sub-Advisers"). Each Current Sub-Adviser serves
pursuant to a separate sub-advisory agreement between the
Manager and that Current Sub-Adviser (each such agreement<R ,
R/> a "Current Sub-Advisory Agreement"). At a meeting of the
Board of Trustees held on September 8, 2000, the Trustees,
including a majority of the Trustees who are not "interested
persons" of the Trust within the meaning of the 1940 Act (the
"Independent Trustees"), approved the recommendation of the
Manager to add Skyline as a Sub-Adviser to the Fund<R ^ R/> <R
and R/> approved a sub-advisory agreement for the Fund with
Skyline that would become effective upon approval by
shareholders (the "Skyline Agreement").
The recommendation to hire Skyline 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
13
<PAGE>
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 recommendation to add another Sub-Adviser was prompted by
the current size of the Fund and its anticipated growth. The
Manager determined that the investment philosophy and strategy
of any additional sub-adviser should be consistent with the risk
profile of the Fund. In this regard, the Manager determined
that it was in the best interest of the Fund's shareholders to
add a value-oriented sub-adviser. The Manager believes that
Skyline's value-oriented investment style is appropriately
suited for the Fund and consistent with the Manager's desire to
maintain focus (within a single Sub-Adviser) and diversification
(across Sub-Advisers) for the Fund.
Under the Management Agreement, the Fund pays the Manager a
fee equal to 0.90% of the Fund's average daily net assets. From
this fee, the Manager pays Westport, Goldman, Pilgrim and Kern a
fee of 0.50% of the average daily net assets under the Current
Sub-Adviser Agreements. Pursuant to the Skyline Agreement, the
Manager would pay Skyline the same fee; i.e., a fee of 0.50% of
the Fund's average daily net assets under Skyline's management.
For the fiscal year ended December 31, 1999, the Fund paid the
Manager <R ^ R/> <R $9,364,371 R/> , and the Manager paid
$1,620,782 to Westport, $817,339 to Goldman, $1,764,389 to
Pilgrim and $941,203 to Kern under their respective Current Sub-
Advisory Agreements. If the Skyline Agreement had been in
effect for fiscal 1999, the total management fee payable by the
Fund to the Manager and the total amount of the sub-advisory
fees payable by the Manager to the Sub-Advisers would have been
the same. However, the Current Sub-Advisers would have received
a smaller portion of the Sub-Adviser fees as a portion of those
fees would have been paid to Skyline<R ^ R/> .
Apart from the identity of the Sub-Adviser and the
effective date of the agreement, there are no differences
between the Skyline Agreement and <R ^ R/> <R any R/> of the
Current Sub-Adviser Agreements. A copy of the Skyline Agreement
is attached as Exhibit A.
INFORMATION ABOUT SKYLINE
Skyline is a registered investment adviser located at 311
South Wacker Drive, Suite 4500, Chicago, Illinois. Skyline was
formed in 1995 and is organized as a limited partnership. As of
December 31, 1999, Skyline had approximately $742 million in
assets under management. The general partner of Skyline is AMG,
a publicly-traded Delaware corporation which acquires majority
interests in investment management firms, including the Manager.
<R AMG is located at Two International Place, Boston,
Massachusetts 02110. R/>
The name and principal occupation of the principal
executive officers of Skyline are set forth below. The address
of each is that of Skyline.
14
<PAGE>
NAME POSITION
------ --------
William M. Dutton Managing Partner and Chief Investment Officer
William F. Fiedler Partner and Securities Analyst
Kenneth S. Kailin Partner, Portfolio Management
Stephen F. Kendall Partner and Chief Operating Officer
Geoffrey P. Lutz Partner, Institutional Marketing
Michael Maloney Partner and Securities Analyst
Mark N. Odegard Partner and Securities Analyst
Skyline acts as an investment adviser for the following
investment company, which <R has R/> a similar objective to
the Managers Special Equity Fund:
NET ASSETS OF
FUND, AS ANNUAL
FUND OF 12/31/99 FEE RATE
-------- ----------- -------------
Skyline Special Equities Portfolio $223,345,905<R ^ R/> <R 1.48%1 R/>
1Under its advisory agreement with Skyline Special Equities
Portfolio, Skyline pays all of the ordinary operating expenses of
that fund, except the fees and expenses of the fund's non-interested
trustees.
SKYLINE'S INVESTMENT PHILOSOPHY
Skyline has developed a disciplined investment approach for
investing in the small capitalization, value sector of the
equities market. It employs a fundamental, bottom-up
methodology characterized by the following three factors:
* A value-oriented approach, selecting stocks with below-
average valuations;
* Attention to earnings, seeking companies with above-average
attractive earnings growth prospects; and
* Emphasis on investments in small companies whose
outstanding shares have an aggregate market value of less than
$2 billion.
Skyline believes that selecting companies with below-average
valuations and above-average earnings growth prospects from a
universe of small capitalization stocks that have not been
thoroughly researched by others provides the potential for
exceptional performance at low risk.
PORTFOLIO MANAGER
If shareholders approve the addition of Skyline as a Sub-
Adviser to the Fund, it is expected that William M. Dutton and a
team of analysts will manage this portion of the Fund's
portfolio. Mr. Dutton is the managing partner and chief
investment officer of Skyline. Prior to joining Skyline, Mr.
Dutton was employed with Mesirow Financial, where he started as
15
<PAGE>
a securities analyst in the Brokerage Division and transferred
to the Asset Management Division in 1984. Since 1984, he has
been a portfolio manager responsible for managing small
capitalization equity portfolios and in 1992 was named
"Portfolio Manager of the Year" by Morningstar Inc. Mr. Dutton
is also a Certified Public Accountant.
EVALUATION BY THE BOARD
On September 8, 2000, the Skyline Agreement was approved by
the Trustees, including the Independent Trustees, subject to
approval by shareholders of the Fund. In approving the Skyline
Agreement, the Trustees considered<R ^ R/> <R a variety of
factors and concluded as follows:
(i) Skyline is capable of providing high quality service for the
Fund, as reflected by the qualification and experience of its
advisory personnel, its available organizational resources, and
its R/> long-term performance <R ^ R/> <R record; (ii)
Skyline has pursued its R/> investment philosophy and value-
oriented investment strategy <R ^ R/> <R consistently in the
past, and is likely to maintain such consistency in the future;
(iii) the vast majority of R/> the securities to be selected
for the Fund by Skyline <R ^ R/> <R will R/> differ from the
securities selected for the Fund by the Current Sub-Advisers; <R
(iv) Skyline's investment management approach will complement
that of the Current Sub-Advisers; and R/> (v) the current size
of the Fund and its expected growth <R ^ R/> <R make it
advisable to add another Sub-Adviser with a value-oriented
investment style. The Trustees also noted R/> that the fees
payable by the Fund will not change as a result of adding
Skyline as an additional Sub-Adviser to the Fund <R ^ R/> and
<R ^ R/> that the Skyline Agreement is identical in all
material <R ^ R/> <R respects R/> to the Current Sub-
Advisory Agreements. When making its decision on whether to
recommend the addition of Skyline as a new Sub-Adviser, the
Trustees were mindful of Skyline's affiliation with the Manager.
The Trustees reassured themselves that the Manager would provide
the same oversight functions with respect to Skyline as the
Manager provides with respect to <R each of R/> the Current
Sub-Advisers.
Based on the foregoing, the Trustees, including a majority
of the Independent Trustees, concluded that the Skyline
Agreement between the Manager and Skyline is in the best
interest of the Fund and its shareholders.
THE BOARD OF TRUSTEES <R ^ R/> RECOMMENDS THAT SHAREHOLDERS
VOTE FOR APPROVAL OF PROPOSAL 1.
PROPOSAL 2: TO CONSIDER A CHANGE IN THE INVESTMENT OBJECTIVE OF
MANAGERS INCOME EQUITY FUND
(MANAGERS INCOME EQUITY FUND SHAREHOLDERS ONLY)
The Managers Income Equity Fund currently has the following
investment objective:
"The Fund's objective is to achieve a high level of current
income from a diversified portfolio of income-producing
equity securities."
16
<PAGE>
Historically, the Fund has pursued its objective by
investing in undervalued, income-producing equity securities.
Each of the Fund's current Sub-Advisers pursues this value-
oriented strategy in an effort to generate returns from dividend
income as well as capital appreciation. Over time, the universe
of undervalued equity securities that are also income-producing
has contracted substantially. The Board believes that it would
be in the best interest of shareholders to change the Fund's
investment objective in a manner that permits each Sub-Adviser
to pursue its value strategy without being constrained by an
emphasis on income. Accordingly, the Board recommends that the
Fund's investment objective be changed as follows:
"The Fund's objective is to achieve long-term capital
appreciation through a diversified portfolio of equity
securities. Income is the Fund's secondary objective."
If the proposed change in the Fund's investment objective
is approved by <R ^ R/> shareholders, the change will become
effective as soon as practicable thereafter, but no sooner than
January 1, 2001, at which time the Fund's name will be changed
to "Managers Value Fund."
THE BOARD OF TRUSTEES <R ^ R/> RECOMMENDS THAT SHAREHOLDERS
VOTE FOR APPROVAL OF PROPOSAL 2.
PROPOSAL 3: TO CONSIDER A CHANGE IN THE INVESTMENT OBJECTIVE OF
MANAGERS SHORT AND INTERMEDIATE BOND FUND
(MANAGERS SHORT AND INTERMEDIATE BOND FUND SHAREHOLDERS ONLY)
The Managers Short and Intermediate Bond Fund currently has
the following investment objective:
"The Fund's objective is to achieve high current income
through a diversified portfolio of fixed-income securities
with an average portfolio maturity between one to five
years."
Because the Fund, in accordance with its investment
objective, invests primarily in fixed-income securities
(generally, bonds), the Fund is subject to interest-rate risk.
Interest-rate risk is the possibility that the market value of
portfolio securities will fluctuate as interest rates rise and
fall. One measure of interest-rate risk is weighted average
maturity ("WAM"). The WAM of a fund's portfolio is computed by
weighting <R ^ R/> <R the remaining maturity of each security
(the period of time until R/> the security comes due) by the
market value of the security <R and averaging all such
maturities. WAM is expressed in years R/> . Pursuant to the
current position of the staff of the SEC with regard to a bond
fund using the term "short and intermediate" in its name, the
Fund is required to maintain a WAM of between one and five
years. The Fund has expressed this requirement as part of its
investment objective.
17
<PAGE>
The Board believes that "average duration" is a more
accurate measure of a <R ^ R/> <R fund's R/> interest-rate
sensitivity than WAM. <R ^ R/> <R Average duration is
similar to WAM, but R/> the computation of <R average R/>
duration takes into account not only a security's maturity date,
but also the timing of all interest and principal payments on
the security. <R ^ R/> <R Average duration is also expressed
R/> in years. The longer a fund's <R average R/> duration,
the more sensitive the fund is to shifts in interest rates.
Thus, a fund with <R ^ R/> <R an average R/> duration of 10
years has twice as much interest rate volatility as a fund with
a five-year <R average R/> duration. Historically, the Fund
has maintained an average duration of between <R ^ R/> <R two
R/> and <R ^ R/> <R four R/> years which has been closely
aligned with the average duration of the Fund's primary
investment benchmark.
The Board believes that it is in the best interest of
shareholders for the Fund to continue to maintain an average
duration similar to the duration of the benchmark. However,
based on the type of securities in which the Fund invests, it is
possible for the Fund to hold a portfolio with a WAM in excess
of <R ^ R/> <R five R/> years, without exceeding its
targeted average duration. Therefore, the Board recommends
eliminating from the Fund's investment objective the requirement
to maintain a specific WAM. The proposed new objective is as
follows:
"The Fund's objective is to achieve high current income
through a diversified portfolio of fixed-income
securities."
If the proposed change in the Fund's investment objective
is approved by shareholders, the change will become effective as
soon as practicable thereafter, but no sooner than January 1,
2001, at which time the Fund's name will be changed to "Managers
Intermediate Bond Fund."
<R THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS VOTE FOR
APPROVAL OF PROPOSAL 3. R/>
PROPOSAL 4: TO CONSIDER MAKING <R ^ R/> <R EACH R/> FUND'S
INVESTMENT OBJETIVES NONFUNDAMENTAL
(SHAREHOLDERS OF ALL FUNDS)
Under the 1940 Act, a mutual fund's investment objective
may be classified as either "fundamental" or "nonfundamental."
A fundamental investment objective may be changed only by vote
of a fund's shareholders. A nonfundamental investment objective
may be changed at any time by a fund's board of trustees without
approval by shareholders.
The investment objectives for each of the Funds were
established as fundamental in response to then current industry
practices. In recent years, it has become customary in the
mutual fund industry for a fund's board to reserve the right to
change the fund's investment objective without shareholder
approval. This practice is desirable because it permits the
board of a mutual fund to modify the fund's investment
objectives according to regulatory, industry or market
conditions without delay and without the expense of holding a
shareholder meeting.
18
<PAGE>
The Board of Trustees has determined that it would be
advisable to reclassify each Fund's investment objective as
nonfundamental.
Except for the proposed changes to the investment
objectives of Managers Income Equity Fund and Managers Short and
Intermediate Bond Fund described in Proposals 2 and 3,
respectively, of this <R ^ R/> <R proxy statement R/> , the
Trustees have no current intention to change the investment
objectives of any Fund. If at any time in the future the
Trustees were to approve a change in a Fund's investment
objective, shareholders of such Fund would be given notice of
the change; however, shareholders would not be asked to approve
such change. The current investment objective of each Fund is
identified in Exhibit B to this proxy statement.
The shareholders of each Fund will vote separately on this
proposal.
The Trustees have considered the enhanced management
flexibility to respond to market, industry or regulatory changes
that would accrue to the Funds if each Fund's fundamental
investment objectives were reclassified as nonfundamental. At a
meeting of the Trustees held on October 2, 2000, the Trustees
voted to approve the reclassification of the investment
objective of each Fund as nonfundamental. If Proposal 4 is
approved by shareholders, the reclassification of each Fund's
investment objective will become effective <R ^ R/> as soon as
practicable thereafter, but no sooner than January 1, 2001.
THE BOARD OF TRUSTEES <R ^ R/> RECOMMENDS THAT SHAREHOLDERS
VOTE FOR APPROVAL OF PROPOSAL 4.
PROPOSALS 5A THROUGH 5L: TO CONSIDER AMENDING OR ELIMINATING
CERTAIN FUNDAMENTAL INVESTMENT RESTRICTIONS.
(ALL FUNDS)
The Board of Trustees has proposed that shareholders
approve amending or eliminating certain fundamental investment
restrictions of each of the Funds. The proposed changes to the
investment restrictions of each Fund are based on
recommendations prepared by the Manager, which were reviewed and
approved by the Board at a meeting held on October 2, 2000.
Under the 1940 Act, all investment policies of a mutual
fund must be classified as either "fundamental" or
"nonfundamental." A fundamental policy may not be changed
without the approval of the fund's shareholders; a
nonfundamental policy may be changed by the board of trustees
without shareholder approval. Under the 1940 Act, only certain
policies are required to be classified as fundamental.
Some of the fundamental investment restrictions for <R ^
R/> <R the Funds R/> reflect regulatory, business or industry
conditions <R in existence at the time the Funds commenced
operations R/> , which in many cases are no longer in effect.
The Board recently reviewed each Fund's fundamental investment
restrictions and determined that it would be in the best
interest of each Fund to eliminate certain investment
19
<PAGE>
restrictions that are not required under applicable law, and to
modify certain restrictions that are required to be fundamental.
The Board also analyzed the various fundamental investment
restrictions of all of the mutual funds within the Managers
Family of Funds, and where practical and appropriate to a Fund's
investment objective, proposed to standardize investment
restrictions. Substantially all of the proposed investment
restrictions set forth below are expected to become standard for
<R ^ R/> <R all mutual funds R/> in the Managers Family of
Funds.
The Board believes that the ability of the Manager and the
Sub-Advisers to manage the Funds' portfolios in a changing
regulatory or investment environment will be enhanced by
approval of these proposals. In addition, the Board believes
that approval of these proposals will reduce the need for future
shareholder meetings, thereby reducing the Funds' ongoing costs
of operation. Furthermore, it is anticipated that increased
standardization will help to promote operational efficiencies
and facilitate monitoring of compliance with investment
restrictions.
At the Meeting, shareholders of each Fund will vote on each
of the proposals separately. <R ^ R/> <R If approved by
shareholders, a R/> change to a Fund's investment restriction
<R ^ R/> will become effective as soon as practicable
thereafter, but no sooner than January 1, 2001.
Although the proposed changes to each Fund's investment
restrictions generally give broader authority to make certain
investments or engage in certain practices than do the current
investment restrictions of the Funds, the Manager does not
currently intend to change in any material way the principal
investment strategies or operations of any Fund.
THE BOARD OF TRUSTEES <R ^ R/> RECOMMENDS THAT SHAREHOLDERS
VOTE FOR APPROVAL OF PROPOSALS 5A THROUGH 5L.
PROPOSAL 5A: TO CONSIDER ELIMINATING THE INVESTMENT
RESTRICTIONS REGARDING ISSUER DIVERSIFICATION
Each Fund currently has the following restrictions
regarding the extent to which a Fund may invest in any single
issuer (the "Issuer Percentage Restrictions"):
"A Fund may not invest in securities of any one issuer
(other than securities issued by the U.S. Government, its
agencies and instrumentalities), if immediately after and as
a result of such investment the current market value of the
holdings of its securities of such issuer exceeds 5% of its
total assets. The Global Bond Fund may invest up to 50% of
its assets in bonds issued by foreign governments which may
include up to 25% of such assets in any single government
issuer."
"A Fund may not acquire more than 10% of the outstanding
voting securities of any one issuer."
20
<PAGE>
In substance, the Issuer Percentage Restrictions limit a Fund's
investments in the securities of any single issuer to 5% of the
Fund's assets and 10% of the issuer's outstanding voting stock,
except the Issuer Percentage Restrictions permit Managers Global
Bond Fund to invest up to 25% of its assets in any single
government issuer.
The Board proposes that shareholders approve the
elimination of the Issuer Percentage Restrictions. Elimination
will permit each Fund to invest in securities of a single issuer
to the extent permitted by applicable law.
<R ALL FUNDS, OTHER THAN MANAGERS GLOBAL BOND FUND R/>
Each Fund, other than Managers Global Bond Fund (each such
Fund, a "Diversified Fund"), has elected to be classified as a
"diversified company" under the 1940 Act. As a diversified
company, at least 75% of the value of each Diversified Fund's
total assets must be represented by cash and cash items, U.S.
Government securities, securities of other investment companies,
and other securities limited with respect to any one issuer to
an amount not greater in value than 5% of the value of the
Diversified Fund's total assets and not more than 10% of the
outstanding voting securities of such issuer (the
"Diversification Requirement"). As with the Issuer Percentage
Restrictions, the Diversification Requirement has the effect,
with respect to 75% of a Diversified Fund's assets, of limiting
investments by the Diversified Fund in the securities of any
single issuer <R (other than U.S. Government securities and
securities of other investment companies) R/> to 5% of the
Diversified Fund's assets and 10% of the issuer's outstanding
voting stock. A Diversified Fund may not change its
classification as a diversified company without shareholder
approval.
The Issuer Percentage Restrictions currently create an
investment limitation that is more restrictive than the
Diversification Restriction, because these restrictions apply to
100% of a Fund's assets. By eliminating the Issuer Percentage
Restrictions, each Diversified Fund will have the flexibility to
invest a larger portion of its assets in any single issuer when
the Manager or Sub-Adviser deems an investment opportunity
attractive. <R ^ R/> <R To the extent a Fund increases its
investment in securities of a single issuer, it will also
increase the volatility that results from changes in the market
value of such securities.
For R/> each Diversified Fund, the Issuer Percentage
Restrictions <R ^ R/> <R also R/> create a limitation on the
ability of a Fund to adapt to regulatory changes should the
Diversification Requirement under the 1940 Act change in the
future. By eliminating the Issuer Percentage Restrictions at
this time, each Diversified Fund will be able to respond to
future changes in the Diversification Requirement without delay
and without the expense of holding a shareholder meeting. <R
R/> If the Issuer Percentage Restrictions are eliminated
for a Diversified Fund, it will continue to be subject to the
limitations of the Diversification Requirement. For this reason,
approval of Proposal 5A is not expected to materially affect the
operations of any Diversified Fund.
21
<PAGE>
<R MANAGERS GLOBAL BOND FUND R/>
Managers Global Bond Fund is not classified as a
diversified company under the 1940 Act and thus <R is R/> not
subject to the Diversification Requirement. Elimination of the
Issuer Percentage Restrictions for the Managers Global Bond
Fund, therefore, will permit the Fund to invest without
limitation in the securities of any one issuer. However, for
tax purposes Managers Global Bond Fund intends to continue to
qualify as a "regulated investment company" (commonly referred
to as "RIC"). To qualify as a RIC, the Fund must satisfy the
diversification requirements of the Internal Revenue Code.
Specifically, these requirements require that, at the end of
each quarter of its taxable year, (i) the Fund invest no more
than 25% of its total assets in the securities of any one
issuer, except for securities of the U.S. Government or other
RICs, and (ii) at least 50% of the value of the Fund's assets
must be represented by cash and cash items, U.S. Government
securities, securities of other RICs, and other securities. For
purposes of these requirements, "other securities" does not
include investments in the securities of any one issuer that
represent more than 5% of the value of the Fund's total assets
or more than 10% of such issuer's outstanding voting securities.
If the Issuer Percentage Restrictions are eliminated, the
Managers Global Bond Fund's portfolio could include the
securities of a smaller total number of issuers than prior to
such elimination. Thus, changes in the financial condition or
credit-worthiness of a single issuer <R ^ R/> <R could R/>
cause greater fluctuation <R in the per share value of the Fund
R/> than if the Fund were required to hold the securities of a
greater number of issuers.
PROPOSAL 5B: TO CONSIDER AMENDING THE INVESTMENT RESTRICTION
REGARDING BORROWING
Each Fund currently has the following fundamental
investment restriction regarding borrowing:
"A Fund may not borrow money, except from banks for
temporary or extraordinary or emergency purposes and then
only in amounts up to 10% of the value of the Fund's total
assets, taken at cost, at the time of such borrowing (and
provided such borrowings do not exceed in the aggregate one-
third of the market value of the Fund's total assets less
liabilities other than the obligations represented by the
bank borrowings). It will not mortgage, pledge or in any
other manner transfer any of its assets as security for any
indebtedness, except in connection with any such borrowing
and in amounts up to 10% of the value of the Fund's net
assets at the time of such borrowing."
The Board proposes that shareholders approve replacing each
Fund's current investment restriction regarding borrowing with
the following restriction:
"A Fund may not borrow money, except (i) in amounts not to
exceed 33 1/3% of the value of the Fund's total assets
(including the amount borrowed) taken at market value from
banks or through reverse repurchase agreements or forward
roll transactions, (ii) up to an additional 5% of its total
assets for temporary purposes, (iii) in connection with
22
<PAGE>
short-term credits as may be necessary for the clearance of
purchases and sales of portfolio securities and (iv) the
Fund may purchase securities on margin to the extent
permitted by applicable law. For purposes of this
investment restriction, investments in short sales, roll
transactions, futures contracts, options on futures
contracts, securities or indices and forward commitments,
entered into in accordance with the Fund's investment
policies, shall not constitute borrowing."
The primary purpose of the proposed change is to permit each
Fund to borrow to the full extent permitted by applicable law.
<R The current investment restriction prohibits a Fund from
borrowing, except from a bank for temporary or emergency
purposes and only in amounts up to 10% of the Fund's assets. R/>
The 1940 Act permits a mutual fund to borrow <R from a bank for
any purpose R/> , provided that the fund maintains at least 300%
asset coverage, which means, in effect, that a fund is permitted
to borrow up to an amount equal to 50% of its total assets. <R
^ R/> <R In addition, the 1940 Act permits a fund to borrow an
amount not to exceed 5% of its assets from either a bank or a
non-bank for temporary purposes. R/>
The proposed new investment restriction also differs from
the current restriction in that it does not limit the authority
of a Fund to pledge its assets. The 1940 Act does not require a
Fund to limit the pledging of assets in this manner and such a
limitation may impair the ability of a Fund to borrow money on
favorable terms or to engage in certain investment techniques
that involve pledging assets.
The Board believes that the proposed changes to the Fund's
borrowing restriction will give the Manager greater flexibility
in managing the liquidity needs of a Fund by allowing the Fund
to use borrowings to satisfy redemptions or settle securities
transactions to the maximum extent permitted under the 1940 Act.
<R Under the proposed new investment restriction, a Fund would
be permitted to borrow for any purpose, which would include
borrowing for portfolio leverage. If the Fund were to borrow
for leverage purposes, such borrowings would magnify the effect
of a change in the market value of the Fund's portfolio. R/>
The Board has no current intention<R , however, R/> of
authorizing borrowing for leverage purposes and will not change
this policy for any Fund without <R ^ R/> notifying
shareholders.
PROPOSAL 5C: TO CONSIDER AMENDING THE INVESTMENT RESTRICTION
REGARDING INVESTMENTS IN REAL ESTATE
Each Fund currently has the following fundamental
investment restriction regarding investing in real estate:
"A Fund may not purchase or sell real estate; provided,
however, that it may invest in securities secured by real
estate or interests therein or issued by companies which
invest in real estate or interests therein."
The Board proposes that shareholders approve replacing each
Fund's current fundamental investment restriction with the
following:
23
<PAGE>
"A Fund may not purchase or sell real estate, except that
the Fund may (i) acquire or lease office space for its own
use, (ii) invest in securities of issuers that invest in
real estate or interests therein, (iii) invest in securities
that are secured by real estate or interests therein, (iv)
purchase and sell mortgage-related securities and (v) hold
and sell real estate acquired by the Fund as a result of the
ownership of securities."
The proposed change clarifies that a Fund may acquire a
security or other instrument that is secured by a mortgage or
other interest in real estate (subject to the Fund's investment
objective and policies and to other limitations regarding
diversification and concentration) and that the Fund may hold
real estate acquired as a result of the ownership of such
securities. Although the proposed change will have no current
impact on any Fund, adoption of the proposed investment
restriction will <R ^ R/> <R assist in standardizing the
investment restrictions of all mutual funds within the Managers
Family of Funds R/> .
PROPOSAL 5D: TO CONSIDER AMENDING THE INVESTMENT RESTRICTION
REGARDING UNDERWRITING SECURITIES ISSUED BY OTHERS
Each Fund currently has the following fundamental
investment restriction regarding underwriting securities issued
by others:
"A Fund may not engage in the business of underwriting
securities issued by others."
The Board proposes that shareholders approve replacing each
Fund's current fundamental investment restriction with the
following:
"A Fund may not underwrite the securities of other issuers,
except to the extent that, in connection with the
disposition of portfolio securities, the Fund may be deemed
to be an underwriter under the Securities Act of 1933."
The primary purpose of the proposed change is to clarify
that a Fund is not prohibited from selling restricted securities
if, as a result of the sale, the Fund is considered an
underwriter under federal securities law. Although the proposed
change will have no current impact on any Fund, adoption of the
proposed investment restriction will <R ^ R/> <R assist in
standardizing the investment restrictions of all mutual funds
within the Managers Family of Funds R/> .
PROPOSAL 5E: TO CONSIDER AMENDING THE INVESTMENT RESTRICTION
REGARDING THE MAKING OF LOANS
Each Fund currently has the following fundamental
investment restriction regarding the making of loans:
24
<PAGE>
"A Fund may not make loans to any person or firm; provided,
however, that the making of a loan shall not be construed
to include (i) the acquisition for investment of bonds,
debentures, notes or other evidences of indebtedness of any
corporation or government entity which are publicly
distributed or of a type customarily purchased by
institutional investors (which are debt securities,
generally rated not less than Baa by Moody's or BBB by
Standard & Poor's, privately issued and purchased by such
entities as banks, insurance companies and investment
companies), or (ii) the entry into "repurchase agreements."
It may lend its portfolio securities to broker-dealers or
other institutional investors if, as a result thereof, the
aggregate value of all securities loaned does not exceed 33
<R ^ R/> l/3% of its total assets."
The Board proposes that shareholders approve replacing each
Fund's current fundamental investment restriction regarding the
making of loans with the following:
"A Fund may not make loans, except that the Fund may
(i) lend portfolio securities in accordance with the Fund's
investment policies up to 33 1/3% of the Fund's total assets
taken at market value, (ii) enter into repurchase
agreements<R ^ R/> <R and R/> (iii) purchase all or a
portion of an issue of debt securities, bank loan
participation interests, bank certificates of deposit,
bankers' acceptances, debentures or other securities,
whether or not the purchase is made upon the original
issuance of the <R ^ R/> <R securities." R/>
The proposed amendment to each Fund's investment
restrictions regarding the making of loans will not materially
affect the operations of any Fund. Adoption of the proposed
change will <R ^ R/> permit each Fund to lend securities and
cash to the full extent permitted by applicable law <R and
assist in standardizing the investment restrictions of all
mutual funds within the Managers Family of Funds R/> <R ^ R/> .
PROPOSAL 5F: TO CONSIDER AMENDING THE INVESTMENT RESTRICTION
REGARDING THE ISSUANCE OF SENIOR SECURITIES
Each Fund currently has the following fundamental
investment restriction regarding the issuance of senior
securities:
"A Fund may not issue senior securities."
The Board proposes that shareholders approve replacing each
Fund's current fundamental investment restriction regarding the
issuance of senior securities with the following:
"A Fund may not issue senior securities. For purposes of
this restriction, borrowing money, making loans, the
issuance of shares of beneficial interest in multiple
classes or series, the deferral of Trustees' fees, the
purchase or sale of options, futures contracts, forward
commitments and repurchase agreements entered into in
accordance with the Fund's investment policies, are not
deemed to be senior securities."
25
<PAGE>
The proposed change will standardize this investment
restriction for all Funds and clarify that certain transactions
will not constitute the issuance of a "senior security" for
purposes of the restriction. In general, under the 1940 Act, a
"senior security" is an obligation of a fund that has a claim to
the fund's assets or earnings that takes precedence over the
claims of the fund's shareholders. The 1940 Act generally
prohibits a mutual fund from issuing any senior security, except
that a mutual fund is permitted to borrow money from a bank. In
addition, a fund may engage in certain types of investment
transactions that might otherwise be considered a "senior
security," provided that certain conditions are met. For
example, a transaction that obligates a fund to pay money at a
future date (e.g., the purchase of securities to be settled on a
date that is beyond the normal settlement period) may be
considered a "senior security." Under the 1940 Act, a mutual
fund is permitted to enter into this type of transaction if it
maintains a segregated account containing liquid securities in
an amount equal to its obligation to pay cash for the securities
at a future date.
The proposed change will permit each Fund to borrow money
(consistent with its borrowing policies) and to engage in other
investment techniques permitted under the 1940 Act that might
otherwise be deemed to violate the Fund's current investment
restriction. Adoption of the proposal will facilitate the
Manager's compliance efforts <R ^ R/> <R , assist in
standardizing the investment restrictions of all mutual funds
within the Managers Family of Funds, and R/> allow a Fund to
respond to developments in the <R ^ R/> <R securities markets
and to R/> regulatory <R ^ R/> <R changes R/> without delay
and without the expense of holding a shareholder meeting.
PROPOSAL 5G: TO CONSIDER ELIMINATING THE INVESTMENT RESTRICTION
REGARDING THE PARTICIPATION IN JOINT TRADING ACCOUNTS IN
SECURITIES
Each Fund currently has the following fundamental
investment restriction regarding participating in joint trading
accounts in securities:
"A Fund may not participate on a joint or a joint and
several basis in any trading account in securities. The
"bunching" of orders for the sale or purchase of marketable
portfolio securities with other accounts under the
management of The Managers Funds LLC or any portfolio
manager in order to save brokerage costs or to average
prices shall not be considered a joint securities trading
account."
The Board of Trustees proposes that shareholders approve
eliminating this restriction. The Manager and the Board do not
believe that a blanket prohibition against these types of
transactions is in the best interests of the Funds. It is <R ^
R/> <R commonplace in the mutual fund industry for affiliated
funds to obtain exemptive relief from the SEC that permits such
funds R/> to purchase securities through joint trading
accounts. By eliminating the above restriction, a Fund <R ^
R/> <R would R/> be able to engage in such transactions <R
with other mutual funds within the Managers Family of Funds R/>
if it obtains such <R ^ R/> exemptive <R ^ R/> <R relief
from the SEC, R/> without having to obtain shareholder
approval.
26
<PAGE>
The proposed change will not materially affect the
operations of any Fund. Elimination of this investment
restriction will allow each Fund greater investment flexibility
and will allow a Fund to respond to <R ^ R/> <R developments
in the securities markets and to regulatory changes R/> without
delay and without the expense of holding a shareholder meeting.
PROPOSAL 5H: TO CONSIDER ELIMINATING THE INVESTMENT RESTRICTION
REGARDING INVESTMENTS IN UNSEASONED ISSUERS
Each Fund currently has the following fundamental
investment restriction regarding investing in securities of
issuers which have been in operation for less than three years
(the "Unseasoned Issuer Restriction").
<R ^ R/> <R "A R/> Fund may not invest in securities of
an issuer which together with any predecessor, has been in
operation for less than three years if, as a result, more
than 5% of its total assets would then be invested in such
securities."
The Board proposes that shareholders approve the
elimination of the Unseasoned Issuer Restriction. The
restriction is not required by the 1940 Act and is based, in
part, on requirements formerly imposed by state "blue sky"
regulators as a condition to registration. These state law
requirements are no longer applicable to mutual funds. <R In
general, unseasoned issuers tend to have smaller revenues,
narrower product lines, less management depth and experience,
smaller shares of their product or service markets, and fewer
resources than more mature companies. Accordingly, investments
in unseasoned issuers tend to involve greater risks than
investments in more mature companies. To the extent that a Fund
increases its investments in unseasoned issuers, it may also
increase its volatility. R/>
The proposed change will not materially affect the
operations of any Fund. Elimination of this restriction will
allow a Fund greater investment flexibility and will allow a
Fund to respond to <R ^ R/> <R developments in the securities
markets and to regulatory changes R/> without delay and without
the expense of holding a shareholder meeting.
PROPOSAL 5I: TO CONSIDER ELIMINATING THE INVESTMENT RESTRICTION
REGARDING INVESTMENTS IN ILLIQUID SECURITIES
Each Fund currently has the following fundamental
investment restriction regarding investing in illiquid
securities:
"A Fund may not invest more than 15%, of the value of its
net assets in illiquid instruments including, but not
limited to, securities for which there are no readily
available market quotations, dealer (OTC) options, assets
used to cover dealer options written by it, repurchase
agreements which mature in more than <R ^ R/> <R seven
R/> days, variable rate industrial development bonds which
are not redeemable on <R ^ R/> <R seven R/> days demand
27
<PAGE>
and investments in time deposits which are non-negotiable
and/or which impose a penalty for early withdrawal."
The Board proposes that shareholders approve the
elimination of this fundamental investment restriction. Under
the 1940 Act, a mutual fund is required to maintain a high
degree of liquidity in its portfolio to ensure that the fund is
able to meet shareholder requests for redemptions. Current
regulatory interpretations of the requirement provide that a
mutual fund may not invest more than 15% of its assets (10% in
the case of a money market mutual fund) in "illiquid"
securities. From time to time, regulatory interpretations of
the types of securities that must be treated as "illiquid" as
well as the specific percentage limitations on investments in
illiquid securities <R ^ R/> <R have R/> changed.
If the proposed change is approved, each Fund will continue
to be subject to the regulatory limitations on investments in
illiquid securities described above, as modified from time to
time by the SEC. Accordingly, eliminating the investment
restriction is not expected to materially affect the operation
of any Fund. At the same time, elimination will allow a Fund to
respond to <R ^ R/> <R developments R/> in the <R ^ R/> <R
securities markets R/> and to regulatory changes without delay
and without the expense of holding a shareholder meeting.
PROPOSAL 5J: TO CONSIDER ELIMINATING THE RESTRICTIONS REGARDING
THE PURCHASE OF SECURITIES OF OTHER INVESTMENT COMPANIES
Each Fund currently has the following fundamental
investment restrictions regarding the purchase of securities of
other investment companies:
"A Fund may not purchase the securities of other funds or
investment companies except (i) in connection with a merger,
consolidation, acquisition of assets or other reorganization
approved by its shareholders, (ii) for shares in the Money
Market Fund in accordance with an order of exemption issued
by the Securities and Exchange Commission (the "SEC"), and
(iii) each Fund, may purchase securities of investment
companies where no underwriter or dealer's commission or
profit, other than customary broker's commission, is
involved and only if immediately thereafter not more than
(a) 3% of such company's total outstanding voting stock is
owned by the Fund, (b) 5% of the Fund's total assets, taken
at market value, would be invested in any one such company
or (c) 10% of the Fund's total assets, taken at market
value, would be invested in such securities."
"A Fund may not invest [more than] 10% of its total assets
in shares of other investment companies investing
exclusively in securities in which it may otherwise invest."
The Board proposes that shareholders approve eliminating
these restrictions. These restrictions are not required by the
1940 Act and were based, in part, on requirements formerly
imposed by state "blue sky" regulators as a condition to
registration. These state law requirements are no longer
applicable to mutual funds.
28
<PAGE>
If these restrictions are eliminated, a Fund will continue
to be subject to the limitations on investments in other
registered investment companies imposed under the 1940 Act. In
general, the 1940 Act prohibits a mutual fund from (i) acquiring
more than 3% of the voting stock of any other investment
company, (ii) investing more than 5% of its total assets in any
one investment company or (iii) investing more than 10% of its
total assets in any two or more investment companies. However,
under the 1940 Act, these limitations do not apply to purchases
of shares of an investment company by a <R ^ R/> <R mutual
fund that charges a sales load of not more than 1 1/2% R/>
(such as each of the Funds<R ^ R/> <R , which charge no sales
loads) R/> provided that such fund, <R ^ R/> <R together
with all affiliates R/> , does not own more than 3% <R of the
outstanding shares R/> of such investment company.
Eliminating the investment restrictions will allow each
Fund greater investment flexibility and will allow the Funds to
respond to <R ^ R/> <R developments R/> in the <R ^ R/> <R
securities markets R/> and to regulatory changes without delay
<R ^ R/> <R and without R/> the expense of holding a
shareholder meeting. <R ^ R/> <R For example R/> , subject
to regulatory and Board approval, a Fund may wish to buy shares
of <R an affiliated R/> money market <R ^ R/> <R fund R/>
as a means of investing excess cash on a short term basis. The
removal of the restrictions will permit such investments,
subject to appropriate exemptive relief from the SEC. <R ^ R/>
<R To the extent a Fund invests in other investment companies,
the Fund may indirectly incur duplicative expenses and fees,
such as management fees R/> .
PROPOSAL 5K: TO CONSIDER ELIMINATING THE INVESTMENT RESTRICTION
ON INVESTMENTS IN COMPANIES INWHICH OFFICERS OR DIRECTORS OF
THE TRUST OWN STOCK
Each Fund currently has the following fundamental
investment restriction regarding the investing in securities of
issuers in which officers and directors of the Trust own stock:
"A Fund may not purchase or retain the securities of an
issuer if, to the Trust's knowledge, one or more of the
directors, trustees or officers of the Trust, or the
portfolio manager responsible for the investment of the
Trust's assets or its directors or officers, individually
own beneficially more than l/2 of l% of the securities of
such issuer and together own beneficially more than 5% of
such securities."
The Board proposes that shareholders approve elimination of
this restriction. The restriction is not required by the 1940
Act and is based, in part, on requirements formerly imposed by
state "blue sky" regulators as a condition to registration.
These state law requirements are no longer applicable to mutual
funds.
The proposed change will not materially affect the
operations of any Fund. Elimination would allow each Fund
greater investment flexibility and will allow a Fund to respond
to <R ^ R/> <R developments in the securities markets and to
regulatory changes R/> without delay and <R without R/> the
expense of holding a shareholder meeting<R ^ R/>
29
<PAGE>
PROPOSAL 5L: TO CONSIDER ELIMINATING THE INVESTMENT RESTRICTION
PROHIBITING THE PURCHASE OF SECURITIES FOR THE PURPOSE OF
EXERCISING CONTROL OR MANAGEMENT
Each Fund currently has the following fundamental
investment restriction regarding the purchase of securities of
companies for the purpose of exercising control or management:
"A Fund may not invest in companies for the purpose of
exercising control or management."
The Board proposes that shareholders approve elimination of
this restriction. The restriction is not required by the 1940
Act and is based, in part, on requirements formerly imposed by
state "blue sky" regulators as a condition to registration.
These state law requirements are no longer applicable to mutual
funds. The Manager and the Board <R ^ R/> believe that a
prohibition against these types of investments is <R no longer
R/> in the best interests of the Funds.
The proposed change will not materially affect the
operations of any Fund. Elimination would allow each Fund
greater investment flexibility and would allow the Fund to
respond to <R ^ R/> <R developments in the securities markets
and to regulatory changes R/> without delay and <R without R/>
the expense of holding a shareholder meeting.
ADDITIONAL INFORMATION
SOLICITATION OF PROXIES
Representatives of the Manager may solicit proxies by
telephone, letter or personally and will receive no additional
compensation for these services. The Trust may also use one or
more proxy solicitation firms to assist with the mailing and
tabulation effort and any special personal solicitation of
proxies. Banks, brokers, fiduciaries and nominees will, upon
request, be reimbursed by the Funds for their reasonable
expenses in sending proxy material to beneficial owners of
shares of the Funds. The cost of the solicitation of proxies
will be borne by the Funds. The cost of preparing, printing and
mailing the enclosed proxy card and <R ^ R/> <R proxy
statement R/> and all other costs incurred in connection with
the solicitation of proxies, including any additional
solicitation made by letter, telephone or telegraph will be paid
by the Funds. Certain solicitation costs will be directly
attributable to a Fund soliciting shareholder approval, while
other expenses of solicitation will not be directly attributable
to any specific Fund. Solicitation costs that are directly
attributable to a particular Fund will be borne by that Fund.
All other solicitation expenses will be allocated pro rata based
on the number of shareholder accounts of each Fund.
As the Meeting date approaches, shareholders who have not
voted their proxy may receive a telephone call asking them to
vote. In all cases where a telephonic proxy is solicited,
shareholders will be asked to give their full name, social
security number or employee identification number, address,
title (if applicable) and the number of shares owned, and to
confirm that they have received the proxy materials in the mail.
<R ^ R/>
30
<PAGE>
If a shareholder wishes to participate in the meeting, and
does not wish to authorize the execution of a proxy by
telephone, mail or internet, the shareholder may <R ^ R/> <R
vote at the R/> Meeting in person.
If you require additional information regarding the proxy
or replacement proxy cards, please call The Managers Funds toll
free at (800) 835-3879. Any proxy given by a shareholder,
whether in writing or by telephone, is revocable until voted at
the <R ^ R/> Meeting.
FINANCIAL INFORMATION
THE TRUST'S MOST RECENT ANNUAL REPORT AND SEMI-ANNUAL
REPORT ARE AVAILABLE UPON REQUEST, WITHOUT CHARGE, BY WRITING TO
THE MANAGERS FUNDS, 40 RICHARDS AVENUE, NORWALK, CONNECTICUT
06854, OR BY CALLING (800) 835-3879, OR ON OUR <R ^ R/>
WEBSITE AT WWW.MANAGERSFUNDS.COM.
<R RECORD OR R/> BENEFICIAL OWNERSHIP
Exhibit D contains information about the record or
beneficial ownership by shareholders of five percent (5%) or
more of each Fund's outstanding shares, as of the record date.
As of October 3, 2000, the Trustees and officers of the
Trust owned less than 1% of the outstanding shares of each Fund.
Since the beginning of fiscal year 1999, no Trustee has
purchased or sold securities of the Manager, Skyline or AMG
exceeding 1% of the outstanding securities of any class of the
Manager, Skyline or AMG.
SHAREHOLDER PROPOSALS
The Trust does not hold regularly scheduled meetings of the
shareholders of the Fund. Any shareholder desiring to present a
proposal for inclusion at the meeting of shareholders next
following this meeting should submit such proposal to the Trust
<R at R/> a reasonable time before the solicitation is made.
OTHER MATTERS TO COME BEFORE THE <R ^ R/> MEETING
The Board of Trustees knows of no business other than that
specifically mentioned in the Notice of <R ^ R/> Special
Meeting of Shareholders that will be presented or considered at
the Meeting. If any other matters are properly presented, it is
the intention of the persons named in the enclosed proxy to vote
in accordance with their best judgement.
31
<PAGE>
THE TRUSTEES RECOMMEND APPROVAL OF EACH PROPOSAL. ANY UNMARKED
PROXIES WITHOUT INSTRUCTIONS TO THE CONTRARY WILL BE VOTED IN
FAVOR OF APPROVAL OF THE PROPOSALS.
<R ^ R/> <R October 16 R/>, 2000
By Order of the Trustees,
/s/Donald S. Rumery
Donald S. Rumery
Secretary
32
<PAGE>
Exhibit A
<R ^ R/> <R SUB-ADVISORY AGREEMENT
ATTENTION: WILLIAM M. DUTTON, MANAGING PARTNER
SKYLINE ASSET MANAGEMENT, L.P.
RE: Sub-Advisory Agreement
The MANAGERS SPECIAL EQUITY FUND (the "Fund") is a series of a
Massachusetts business trust (the "Trust") that is registered as
an investment company under the Investment Company Act of 1940,
as amended, (the "Act"), and subject to the rules and
regulations promulgated thereunder.
The Managers Funds 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-ADVISER. The Manager, being duly
authorized, hereby appoints and employs Skyline Asset
Management, L.P. ("Sub-Adviser") 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-Adviser (those assets being referred to as the "Fund
Account"). The Manager may, from time to time, with the consent
of the Sub-Adviser, 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-Adviser 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-Adviser 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
33
<PAGE>
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-Adviser agrees that all records under
the Act shall be the property of the Trust.
(c) The Sub-Adviser 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-Adviser 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-Adviser 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-Adviser agrees to maintain an appropriate
level of errors and omissions or professional
liability insurance coverage.
3. ALLOCATION OF BROKERAGE. The Sub-Adviser shall have
authority and discretion to select brokers, dealers and futures
commission merchants to execute portfolio transactions initiated
by the Sub-Adviser, and for the selection of the markets on or
in which the transactions will be executed.
(a) In doing so, the Sub-Adviser'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-
Adviser to solicit competitive bids for each
transaction, and the Sub-Adviser shall have no
obligation to seek the lowest available commission
cost to the Fund, so long as the Sub-Adviser
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-Adviser 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-
Adviser 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-Adviser viewed in
terms of either that particular transaction or of the
Sub-Adviser's overall responsibilities with respect to
its clients, including the Fund, as to which the Sub-
Adviser exercises investment discretion,
notwithstanding that the Fund may not be the direct or
34
<PAGE>
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-Adviser, 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-Adviser 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-Adviser for the Trust except in
accordance with procedures adopted by the Trustees.
The Manager agrees that it will provide the Sub-
Adviser with a list of brokers and dealers which are
"affiliated persons" of the Trust, the Manager or the
Trust's Sub-Advisers.
4. INFORMATION PROVIDED TO THE MANAGER AND THE TRUST AND TO THE
SUB-ADVISER
(a) The Sub-Adviser 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-Adviser 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-Adviser agrees that it will notify the
Manager and the Trust in the event that the Sub-
Adviser or any of its affiliates: (i) becomes subject
to a statutory disqualification that prevents the Sub-
Adviser 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-
Adviser has provided the information about itself set
35
<PAGE>
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-Adviser
respecting or relating to the Sub-Adviser 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-Adviser represents that it is an
investment adviser registered under the Advisers Act
and other applicable laws and that the statements
contained in the Sub-Adviser'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-Adviser 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-Adviser
acknowledges that it is an "investment adviser" to the
Fund within the meaning of the Act and the Advisers
Act.
5. COMPENSATION. The compensation of the Sub-Adviser 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-Adviser, and the Sub-Adviser
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-ADVISER. The Manager
acknowledges that the Sub-Adviser 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-Adviser 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-Adviser acts in good faith and provided
further, that it is the Sub-Adviser'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-Adviser
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.
36
<PAGE>
7. STANDARD OF CARE. The Sub-Adviser shall exercise its best
judgment in rendering the services provided by it under this
Agreement. The Sub-Adviser 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-Adviser 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-Adviser 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-Adviser'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-Adviser 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-Adviser 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-Adviser 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 ________ 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-
Adviser 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-Adviser or (iii) by the Sub-Adviser 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
37
<PAGE>
administered, construed, and enforced according to the laws of
the State of Connecticut.
THE MANAGERS FUNDS LLC
BY:
Its:
DATE:
ACCEPTED:
BY:
Its:
DATE:
Acknowledged:
THE MANAGERS FUNDS
BY:
Its:
DATE:
SCHEDULES: A. FEE SCHEDULE.
38
<PAGE>
SCHEDULE A
SUB-ADVISER FEE
For services provided to the Fund Account, The Managers Funds
LLC will pay a base quarterly fee for each calendar quarter at
an annual rate of .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 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. R/>
39
<PAGE>
Exhibit B
<TABLE>
<CAPTION>
CURRENT INVESTMENT OBJECTIVES
FUND NAME INVESTMENT OBJECTIVE
-------- ---------------------
<S> <C>
Income Equity Fund To achieve a high level of
current income from a
diversified portfolio of
income-producing equity
securities.
Capital Appreciation Fund To achieve long-term capital
appreciation through a
diversified portfolio of
equity securities. Income is
the Fund's secondary
objective.
Special Equity Fund To achieve long-term capital
appreciation through a
diversified portfolio of
equity securities of small-
and medium-capitalization
companies.
International Equity Fund To achieve long-term capital
appreciation through a
diversified portfolio of
equity securities of non-U.S.
companies. Income is the
Fund's secondary objective.
Emerging Markets Equity Fund To achieve long-term capital
appreciation through a
diversified portfolio of
equity securities of
companies located in
countries designated by the
World Bank or the United
Nations to be a developing
country or an emerging
market.
Short and Intermediate Bond To achieve high current
Fund income through a diversified
portfolio of fixed-income
securities with an average
portfolio maturity between
one to five years.
Bond Fund To achieve a high level of
current income from a
diversified portfolio of
fixed-income securities.
Global Bond Fund To achieve income and capital
appreciation through a
portfolio of high quality
foreign and domestic fixed-
income securities.
40
<PAGE>
Exhibit C
</TABLE>
<TABLE>
<CAPTION>
INVESTMENT RESTRICTIONS
CURRENT INVESTMENT PROPOSED NEW INVESTMENT
RESTRICTIONS RESTRICTIONS
--------------------------------------------------------------
<S> <C>
(1)A Fund may not invest in Eliminate restriction.
securities of any one issuer
(other than securities issued
by the U.S. Government, its
agencies and
instrumentalities), if
immediately after and as a
result of such investment the
current market value of the
holdings of its securities of
such issuer exceeds 5% of its
total assets. The Global Bond
Fund may invest up to 50% of
its assets in bonds issued by
foreign governments which may
include up to 25% of such
assets in any single government
issuer.
(2)A Fund may not invest more than No change.
25% of the value of its total
assets in the securities of
companies primarily engaged in
any one industry (other than
the United States Government,
its agencies and
instrumentalities). Such
concentration may occur
incidentally as a result of
changes in the market value of
portfolio securities, but such
concentration may not result
from investment. Neither
finance companies as a group
nor utility companies as a
group are considered a single
industry for purposes of this
restriction.
(3)A Fund may not acquire more Eliminate restriction.
than 10% of the outstanding
voting securities of any one
issuer.
(4)A Fund may not borrow money, A Fund may not borrow money,
except from banks for temporary except (i) in amounts not to
or extraordinary or emergency exceed 33<R - R/> 1/3% of the
purposes and then only in value of the Fund's total
amounts up to 10% of the value assets (including the amount
of the Fund's total assets, borrowed) taken at market
taken at cost, at the time of value from banks or through
such borrowing (and provided reverse repurchase agreements
such borrowings do not exceed or forward roll transactions,
in the aggregate one-third of (ii) up to an additional 5% of
the market value of the Fund's its total assets for temporary
total assets less liabilities purposes, (iii) in connection
other than the obligations with short-term credits as may
represented by the bank be necessary for the clearance
borrowings). It will not of purchases and sales of
mortgage, pledge or in any portfolio securities and (iv)
other manner transfer any of the Fund may purchase
its assets as security for any securities on margin to the
indebtedness, except in extent permitted by applicable
connection with any such law. For purposes of this
borrowing and in amounts up to investment restriction,
10% of the value of the Fund's investments in short sales,
net assets at the time of such roll transactions, futures
borrowing. contracts, options on futures
contracts, securities or
indices and forward
commitments, entered into in
accordance with the Fund's
investment policies, shall not
constitute borrowing.
41
<PAGE>
CURRENT INVESTMENT PROPOSED NEW INVESTMENT
RESTRICTIONS RESTRICTIONS
--------------------------------------------------------------
(5)A Fund may not invest in Eliminate restriction.
securities of an issuer which
together with any predecessor,
has been in operation for less
than three years if, as a
result, more than 5% of its
total assets would then be
invested in such securities.
(6)A Fund may not invest more than Eliminate restriction.
15%, of the value of its net
assets in illiquid instruments
including, but not limited to,
securities for which there are
no readily available market
quotations, dealer (OTC)
options, assets used to cover
dealer options written by it,
repurchase agreements which
mature in more than 7 days,
variable rate industrial
development bonds which are not
redeemable on 7 days demand and
investments in time deposits
which are non-negotiable and/or
which impose a penalty for
early withdrawal.
(7)A Fund may not invest in Eliminate restriction.
companies for the purpose of
exercising control or
management.
(8)A Fund may not purchase or sell A Fund may not purchase or
real estate; provided, however, sell real estate, except that
that it may invest in the Fund may (i) acquire or
securities secured by real lease office space for its own
estate or interests therein or use, (ii) invest in securities
issued by companies which of issuers that invest in real
invest in real estate or estate or interests therein,
interests therein. (iii) invest in securities
that are secured by real
estate or interests therein,
(iv) purchase and sell
mortgage-related securities
and (v) hold and sell real
estate acquired by the Fund as
a result of the ownership of
securities.
(9)A Fund may not purchase or sell No change.
physical commodities, except
that each Fund may purchase or
sell options and futures
contracts thereon.
(10) A Fund may not engage A Fund may not underwrite the
in the business of underwriting securities of other issuers,
securities issued by others. except to the extent that, in
connection with the
disposition of portfolio
securities, the Fund may be
deemed to be an underwriter
under the Securities Act of
1933.
(11) A Fund may not Eliminate restriction.
participate on a joint or a
joint and several basis in any
trading account in securities.
The "bunching" of orders for
the sale or purchase of
marketable portfolio securities
with other accounts under the
management of The Managers
Funds LLC or any portfolio
manager in order to save
brokerage costs or to average
prices shall not be considered
a joint securities trading
account.
42
<PAGE>
CURRENT INVESTMENT PROPOSED NEW INVESTMENT
RESTRICTIONS RESTRICTIONS
--------------------------------------------------------------
(12) A Fund may not make A Fund may not make loans,
loans to any person or firm; except that the Fund may
provided, however, that the (i) lend portfolio securities
making of a loan shall not be in accordance with the Fund's
construed to include (i) the investment policies up to 33<R
acquisition for investment of - R/> 1/3% of the Fund's total
bonds, debentures, notes or assets taken at market value,
other evidences of indebtedness (ii) enter into repurchase
of any corporation or agreements<R ^ R/> <R and
government entity which are R/> (iii) purchase all or a
publicly distributed or of a portion of an issue of debt
type customarily purchased by securities, bank loan
institutional investors (which participation interests, bank
are debt securities, generally certificates of deposit,
rated not less than Baa by bankers' acceptances,
Moody's or BBB by Standard & debentures or other
Poor's, privately issued and securities, whether or not the
purchased by such entities as purchase is made upon the
banks, insurance companies and original issuance of the
investment companies), or (ii) securities <R ^ R/> .
the entry into "repurchase
agreements." It may lend its
portfolio securities to broker-
dealers or other institutional
investors if, as a result
thereof, the aggregate value of
all securities loaned does not
exceed 33-l/3% of its total
assets.
(13) A Fund may not Eliminate restriction.
purchase the securities of
other Funds or investment
companies except (i) in
connection with a merger,
consolidation, acquisition of
assets or other reorganization
approved by its shareholders,
(ii) for shares in the Money
Market Fund in accordance with
an order of exemption issued by
the Securities and Exchange
Commission (the "SEC"), and
(iii) each Fund, may purchase
securities of investment
companies where no underwriter
or dealer's commission or
profit, other than customary
broker's commission, is
involved and only if
immediately thereafter not more
than (a) 3% of such company's
total outstanding voting stock
is owned by the Fund, (b) 5% of
the Fund's total assets, taken
at market value, would be
invested in any one such
company or (c) 10% of the
Fund's total assets, taken at
market value, would be invested
in such securities.
(14) A Fund may not Eliminate restriction.
purchase from or sell portfolio
securities to its officers,
trustees or other "interested
persons" (as defined in the
l940 Act) of the Fund,
including its portfolio
managers and their affiliates,
except as permitted by the 1940
Act.
43
<PAGE>
CURRENT INVESTMENT PROPOSED NEW INVESTMENT
RESTRICTIONS RESTRICTIONS
--------------------------------------------------------------
(15) A Fund may not Eliminate restriction.
purchase or retain the
securities of an issuer if, to
the Trust's knowledge, one or
more of the directors, trustees
or officers of the Trust, or
the portfolio manager
responsible for the investment
of the Trust's assets or its
directors or officers,
individually own beneficially
more than l/2 of l% of the
securities of such issuer and
together own beneficially more
than 5% of such securities.
(16) A Fund may not issue A Fund may not issue senior
senior securities. securities. For purposes of
this restriction, borrowing
money, making loans, the
issuance of shares of
beneficial interest in
multiple classes or series,
the deferral of Trustees'
fees, the purchase or sale of
options, futures contracts,
forward commitments and
repurchase agreements entered
into in accordance with the
Fund's investment policies,
are not deemed to be senior
securities.
(17) A Fund may not invest Eliminate restriction.
[more than] 10% of its total
assets in shares of other
investment companies investing
exclusively in securities in
which it may otherwise invest.
</TABLE>
44
<PAGE>
Exhibit D
<TABLE>
<CAPTION>
FIVE PERCENT RECORD OR BENEFICIAL OWNERSHIP <R OF EACH FUND'S
OUTSTANDING SHARES
Charles National Merrill
Schwab & Financial Lynch & Co.
Co., Inc. Services Inc.
Corp.
--------------------------------------------------------------
<S> <C> <C> <C>
Managers Income 20.18% -- --
Equity Fund
Managers Capital 32.10% 8.62% --
Appreciation
Fund
Managers Special 37.43% 8.10% --
Equity Fund
Managers 27.76% 8.96% 9.49%
International
Equity Fund
Managers Emerging 23.23% 16.67% --
Markets Equity
Fund
Managers Bond Fund 24.60% 12.05% --
Managers Short and 5.51% -- --
Intermediate
Bond Fund
Managers Global -- 12.25% --
Bond Fund
</TABLE>
45
<PAGE>
Charles Schwab & Co., Inc., National Financial Services Corp.
and Merrill Lynch & Co. Inc. each own all shares listed above of
record. The Trust is not aware of the identity of any person
owning beneficially five percent or more of any Fund's shares.
R/> <R ^ R/>
<PAGE>
The Board of Trustees recommends a vote FOR Items 1,2,3,4 and 5A-
5L. .
ITEM 1-APPROVAL OF SUB-ADVISORY FOR AGAINST ABSTAIN
AGREEMENT FOR MANAGERS SPECIAL / / / / / /
EQUITY FUND AND SKYLINE
ITEM 2-APPROVAL OF CHANGE OF FOR AGAINST ABSTAIN
INVESTMENT OBJECTIVE FOR / / / / / /
MANAGERS INCOME EQUITY FUND
ITEM 3-APPROVAL OF CHANGE OF FOR AGAINST ABSTAIN
INVESTMENT OBJECTIVE FOR / / / / / /
MANAGERS SHORT AND INTERMEDIATE
BOND FUND
ITEM 4-APPROVAL OF THE RECLASSIFICATION FOR AGAINST ABSTAIN
OF THE FUND'S INVESTMENT OBJECTIVES / / / / / /
FROM FUNDAMENTAL TO NONFUNDAMENTAL
ITEM 5- APPROVAL OF AMENDMENT OR
ELIMINATION OF CERTAIN NVESTMENT
RESTRICTIONS
5A. Issuer Diversification
FOR AGAINST ABSTAIN
/ / / / / /
5B. Borrowing
FOR AGAINST ABSTAIN
/ / / / / /
5C. Investments in Real Estate
FOR AGAINST ABSTAIN
/ / / / / /
5D. Underwriting Securities Issued by Others
FOR AGAINST ABSTAIN
/ / / / / /
5E. Making of Loans
FOR AGAINST ABSTAIN
/ / / / / /
5F. Senior Securities
FOR AGAINST ABSTAIN
/ / / / / /
5G. Participation in Joint trading accounts
FOR AGAINST ABSTAIN
/ / / / / /
5H. Investments in Securities of Unseasoned Issuers
FOR AGAINST ABSTAIN
/ / / / / /
5I. Investment in Illiquid Securities
FOR AGAINST ABSTAIN
/ / / / / /
5J. Investments in Other Investment Companies
FOR AGAINST ABSTAIN
/ / / / / /
5K. Investments in Companies in which Officers or Directors of the
Trust Own Stock
FOR AGAINST ABSTAIN
/ / / / / /
5L. Purchase of Securities for Control or Management Purposes
FOR AGAINST ABSTAIN
/ / / / / /
<PAGE>
[THE MANAGERS FUNDS LOGO]
40 Richards Avenue
Norwalk, CT 06854 -2325
[INSERT FUND'S NAME]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoints Donald S. Rumery, Secretary, and
Laura A. Pentimone, Assistant Secretary, as proxies, with power to act without
the other and with power of substitution, and hereby authorizes them to
represent and vote, as designated on the other side, all the shares of The
Managers Funds standing in the name of the undersigned with all powers which
the undersigned would possess if present at the Joint Special Meeting of
Shareholders to be held November 30, 2000 at 10:30 a.m. or any adjournment
thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE
MANNER DIRECTED HEREBY BY THE UNDERSIGNED SHAREHOLDER. IF NO
DIRECTION IS MADE, THE PROXIES WILL VOTE SHARES REPRESENTED BY THIS PROXY
FOR PROPOSALS LISTED ON THE REVERSE SIDE AND WILL
VOTE IN THEIR DISCRETION ON SUCH OTHER MATTERS THAT MAY
PROPERLY COME BEFORE THIS MEETING.
You can also vote your proxy by faxing it to us at (203) 857-5316, by
calling (800) 690-6903 and recording your vote by telephone, or on the internet
at www.proxyvote.com.
TO VOTE MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS.
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
