SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934
(Amendment No. )
Check the appropriate box:
[ X ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as
permitted by Rule 14c-5(d)(2))
[ ] Definitive Information Statement
_____________The Managers Funds______________
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii),
or 14c-5(g).
[ ] Fee computed on table below per Exchange Act
Rules 14c-5(g) and 0-11.
1) Title of each class of securities to which
transaction applies:
_________________________________________________
2) Aggregate number of securities to which transaction
applies:
__________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set
forth the amount on which the filing fee is calculated
and state how it was determined):
__________________________________________________
4) Proposed maximum aggregate value of transaction:
_________________________________________________
5) Total fee paid:
______________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
1) Amount Previously Paid:
______________________________________________________
2) Form, Schedule or Registration Statement No.:
______________________________________________________
3) Filing Party:
_______________________________________________________
4) Date Filed:
_______________________________________________________
[ X ] Filing fee no longer applicable.
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[THE MANAGERS FUNDS LOGO]
40 RICHARDS AVENUE
NORWALK, CONNECTICUT 06854
800-835-3879
WWW.MANAGERSFUNDS.COM
MANAGERS SPECIAL EQUITY FUND
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Dear Fellow Shareholder:
The enclosed information statement details a recent
acquisition involving United Asset Management Corporation
("UAM"), the owner of Pilgrim Baxter & Associates, Ltd. ("Pilgrim
Baxter"), one of the current sub-advisers of Managers Special
Equity Fund. On June 16, 2000, UAM entered into an Agreement and
Plan of Merger (the "Merger Agreement") with Old Mutual plc ("Old
Mutual") and OM Acquisition Corp. ("OMAC"), a subsidiary of Old
Mutual. Pursuant to the terms of the Merger Agreement, on
September 26, 2000, OMAC completed a tender offer for all the
outstanding shares of common stock of UAM. In the near future,
OMAC will be merged into UAM, and the surviving company will
continue to do business under UAM's name. Under federal
securities laws, the completion of the tender offer represents a
"change in control" of Pilgrim Baxter, which automatically caused
the then-existing sub-advisory agreement with Pilgrim Baxter to
terminate. In anticipation of this transaction, on September 8,
2000, the Board of Trustees of The Managers Funds approved a new
sub-advisory agreement with Pilgrim Baxter, which became
effective on September 26, 2000.
The change in ownership of Pilgrim Baxter is not expected to
impact either the investment process or the day-to-day operations
of Pilgrim Baxter. Furthermore, there have been no changes in
the senior investment personnel of Pilgrim Baxter who are
responsible for managing Managers Special Equity Fund. Apart
from the effective date of the agreement and the renewal period,
there are no differences between the new sub-advisory agreement
and the prior sub-advisory agreement. A copy of the new sub-
advisory agreement is attached to the information statement.
As a matter of regulatory compliance, we are sending you
this information statement, which describes the management
structure of the Fund and the details of the new ownership
structure of Pilgrim Baxter, as well as the terms of the sub-
advisory agreement which your Trustees have approved.
Please feel free to call us at (800) 835-3879 should you
have any questions on the enclosed information statement. We
thank you for your continued interest in The Managers Funds.
Sincerely,
/s/Peter M. Lebovitz
Peter M. Lebovitz
President
<PAGE>
[THE MANAGERS FUNDS LOGO]
40 RICHARDS AVENUE
NORWALK, CONNECTICUT 06854
800-835-3879
WWW.MANAGERSFUNDS.COM
MANAGERS SPECIAL EQUITY FUND
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____________________________
INFORMATION STATEMENT
____________________________
This information statement is being provided to the
shareholders of Managers Special Equity Fund in lieu of a proxy
statement, pursuant to the terms of an exemptive order which The
Managers Funds, a Massachusetts business trust (the "Trust"), has
received from the Securities and Exchange Commission. This
exemptive order permits the Trust's investment manager to hire
new sub-advisers and to make changes to existing sub-advisory
contracts with the approval of the Trustees, but without
obtaining shareholder approval. WE ARE NOT ASKING YOU FOR A
PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
Pilgrim Baxter & Associates, Ltd. ("Pilgrim Baxter"), one of
the sub-advisers of Managers Special Equity Fund, has agreed to
bear the costs associated with preparing and distributing this
information statement, which is being mailed on or about November
23, 2000.
THE TRUST AND ITS FUND MANAGEMENT AGREEMENT
Managers Special Equity Fund (the "Fund") is an investment
portfolio of the Trust. The Trust has entered into a fund
management agreement with respect to each investment portfolio of
the Trust with The Managers Funds LLC (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 operations contracted to the custodian or the
transfer agent. As compensation for its services, the Manager
receives a management fee from the Fund, and the Manager is
responsible for payment of all fees payable to the Sub-Advisers
<PAGE>
of the Fund. The Fund, therefore, pays no fees directly 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 Investment Company Act of 1940, as amended (the "1940
Act") and the rules thereunder.
CHANGE IN CONTROL OF PILGRIM BAXTER AND THE NEW SUB-ADVISORY
AGREEMENT
Currently, the assets of the Fund are managed by Pilgrim
Baxter and three other Sub-Advisers: Westport Asset Management,
Inc. ("Westport"), Goldman Sachs Asset Management ("Goldman"),
and Kern Capital Management LLC ("Kern", and together with
Westport, Goldman and Pilgrim Baxter, the "Sub-Advisers"). At
any given time, each Sub-Adviser serves pursuant to a separate
sub-advisory agreement between the Manager and that Sub-Adviser
(each such agreement, a "Sub-Advisory Agreement"). At an in-
person meeting of the Board of Trustees held on September 8,
2000, the Trustees approved the recommendation of the Manager to
add Skyline Asset Management, L.P. ("Skyline") as fifth Sub-
Adviser to the Fund, and approved a Sub-Advisory Agreement with
Skyline (the "Skyline Agreement"), which is subject to
shareholder approval. The Skyline Agreement will be voted upon
by shareholders at a shareholder meeting on November 30, 2000.
If the Skyline Agreement is approved by shareholders, it will
become effective as soon as practicable thereafter.
Pilgrim Baxter is a wholly-owned subsidiary of United Asset
Management Corporation ("UAM"). UAM is a publicly held company
headquartered in Boston, Massachusetts, whose principal
activities are the provision of investment management services
through its more than 45 subsidiaries and the acquisition of
investment management firms. UAM has approximately $188 billion
in assets under management in institutional and individual
private accounts and mutual funds. On June 16, 2000, Old Mutual
plc, an English public limited company ("Old Mutual"), OM
Acquisition Corp., a Delaware corporation and a wholly-owned
subsidiary of Old Mutual ("OMAC") and UAM entered into an
Agreement and Plan of Merger (the "Agreement") for Old Mutual,
together with OMAC, to acquire UAM through a tender offer (the
"Tender Offer") all the outstanding shares of common stock (the
"Shares") of UAM and a subsequent merger of UAM and OMAC. OMAC
completed the Tender Offer on September 26, 2000; Old Mutual and
OMAC now own 93% of the Shares. Pursuant to the terms of the
Agreement, OMAC will merge into UAM, and the surviving company
will continue to do business under UAM's name. Because Old
<PAGE>
Mutual and OMAC own 93% of the Shares, this merger can be
effected without further shareholder action or waiting period,
and is expected to be completed promptly.
Although the ownership of UAM has changed, UAM's direct
ownership of Pilgrim Baxter was unaffected by the Tender Offer or
the pending merger (together, the "Transaction"). Also, the
Tender Offer did not result in any change in either Pilgrim
Baxter's investment process or the investment professionals
responsible for managing the assets of the Fund, and the pending
merger will not change this outcome. Old Mutual has assured
Pilgrim Baxter that Pilgrim Baxter will continue to operate with
substantially the same level of autonomy it enjoyed under UAM's
ownership. Nevertheless, consummation of the Tender Offer
resulted in an "assignment," as that term is defined in the 1940
Act, of the Sub-Advisory Agreement between the Manager and
Pilgrim Baxter with respect to the Fund, dated April 1, 1999 (the
"Prior Sub-Advisory Agreement"). As required by the 1940 Act,
upon completion of the Tender Offer, the Prior Sub-Advisory
Agreement terminated automatically. In anticipation of this
event, and to permit the Manager to continue to retain the
services of Pilgrim Baxter, the Manager requested that the
Trustees approve a new sub-advisory agreement (the "New Sub-
Advisory Agreement") with Pilgrim Baxter, effective September 26,
2000, identical in all material respects with the Prior Sub-
Advisory Agreement. The Board of Trustees, including a majority
of the Trustees that are not "interested persons" of the Trust,
approved the New Sub-Advisory Agreement on September 8, 2000,
which agreement became effective upon the completion of the
Tender Offer on September 26, 2000.
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 each Sub-Adviser a fee of 0.50% of the
average daily net assets under the Sub-Adviser Agreements. Under
the New Sub-Advisory Agreement, the Manager will continue to pay
Pilgrim Baxter the same fee. For the fiscal year ended December
31, 1999, the Fund paid the Manager $9,364,371, and the Manager
paid $1,620,782 to Westport, $817,339 to Goldman, $1,764,389 to
Pilgrim Baxter and $941,203 to Kern under their respective Sub-
Advisory Agreements.
Apart from the effective date of the agreement and the
renewal period, there are no differences between the New Sub-
Advisory Agreement and the Prior Sub-Advisory Agreement. A copy
of the New Sub-Advisory Agreement is attached as Exhibit A.
INFORMATION ABOUT PILGRIM BAXTER
The following is a description of Pilgrim Baxter, which is
based on information provided by Pilgrim Baxter. Pilgrim Baxter
is not affiliated with the Manager.
Pilgrim Baxter is a registered investment advisory firm and
a Delaware corporation. It is a wholly-owned subsidiary of UAM,
a Delaware corporation whose principal activities are the
provision of investment management services through its
subsidiaries and the acquisition of investment management firms.
UAM is headquartered in Boston. UAM is a wholly-owned subsidiary
of Old Mutual, which is a United Kingdom-based financial services
group with a substantial life insurance business in South Africa
and other countries in southern Africa and an integrated,
<PAGE>
international portfolio of activities in asset management,
banking, and general insurance. Old Mutual is an English public
limited company and its shares are traded at the London and
Johannesburg exchanges.
Pilgrim Baxter was founded in November 1982, by principals
who had worked together in the investment management department
of Philadelphia National Bank. As of June 30, 2000, Pilgrim
Baxter and its wholly-owned subsidiary Pilgrim Baxter Value
Investors, Inc. had approximately $24 billion in client assets
under management, $19 billion of which were mutual fund assets.
Pilgrim Baxter is headquartered at 825 Duportail Road, Wayne, PA
19087, and currently has offices located in Wayne, Pennsylvania
and Dallas, Texas.
The name and principal occupation of the directors and
principal officers of Pilgrim Baxter are set forth below.
Harold J. Baxter Chairman of the Board of Directors and Chief
Executive Officer
Gary L. Pilgrim President, Chief Investment Officer and
Director
Eric C. Schneider Chief Financial Officer and Treasurer
John M. Zerr General Counsel and Secretary
Carol W. Proffer Managing Director - Private Equity Group
Stephen M. Wellman Director of Operations
Amy S. Yuter Chief Compliance Officer
Pilgrim Baxter does not act as an investment adviser to
other investment companies having similar objectives to the Fund.
PBHG Fund Distributors is an affiliated broker of Pilgrim Baxter.
The Fund has paid no brokerage commissions to PBHG Fund
Distributors.
BOARD OF TRUSTEES' RECOMMENDATION
Based upon information provided by Pilgrim Baxter and the
recommendation of the Manager, on September 8, 2000, the Board of
Trustees approved the New Sub-Advisory Agreement. In approving
the New Sub-Advisory Agreement, the Trustees noted that, upon
completion of the Transaction, Pilgrim Baxter will continue to
operate with substantially the same senior investment personnel,
and that the same persons who had historically been responsible
for the investment policies of Pilgrim Baxter will continue to
direct the investment policies of Pilgrim Baxter with respect to
the Fund. The Trustees also noted that the fees payable by the
Fund will not change under the New Sub-Advisory Agreement and
that Pilgrim Baxter will pay or reimburse the Fund for the
expenses incurred in connection with the preparation and
distribution of this information statement. Accordingly, the
Trustees determined that it would be in the best interest of the
Fund to continue to retain Pilgrim Baxter as Sub-Adviser for the
Fund, notwithstanding the Transaction.
ADDITIONAL INFORMATION
The Manager, located at 40 Richards Avenue, Norwalk,
Connecticut 06854, serves as investment manager, principal
underwriter and administrator of the Trust.
<PAGE>
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 WEBSITE AT
WWW.MANAGERSFUNDS.COM.
RECORD OR BENEFICIAL OWNERSHIP
Exhibit B contains information about the record or
beneficial ownership by shareholders of five percent (5%) or more
of the Fund's outstanding shares, as of the record date.
As of November 8, 2000, the Trustees and officers of the
Trust owned less than 1% of the outstanding shares of the Fund.
Since the beginning of fiscal year 1999, no Trustee has purchased
or sold securities of the Manager, Pilgrim Baxter or UAM
exceeding 1% of the outstanding securities of any class of the
Manager, Pilgrim Baxter or UAM.
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
at a reasonable time before the solicitation is made.
OTHER MATTERS TO COME BEFORE THE MEETING
The Board of Trustees knows of no business other than that
specifically mentioned in the Notice of 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.
November 23, 2000
By Order of the Trustees,
/s/Donald S. Rumery
DONALD S. RUMERY
Secretary
<PAGE>
EXHIBIT A
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SUB-ADVISORY AGREEMENT
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ATTENTION: PILGRIM, BAXTER & ASSOCIATES, LTD.
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 PILGRIM, BAXTER &
ASSOCIATES, LTD. ("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
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
<PAGE>
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 exclusive beneficiary of any
such services or that another broker may be willing to
charge the Fund a lower commission on the particular
transaction.
<PAGE>
(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
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
<PAGE>
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.
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
<PAGE>
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 September 26, 2000 and shall continue in effect until April 1,
2001. 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 administered,
construed, and enforced according to the laws of the State of
Connecticut.
THE MANAGERS FUNDS LLC
BY:
Its:
DATE:
<PAGE>
ACCEPTED:
BY:
Its:
DATE:
Acknowledged:
THE MANAGERS FUNDS
BY:
Its:
DATE:
SCHEDULES: A. FEE SCHEDULE.
<PAGE>
SCHEDULE A
-----------
SUB-ADVISOR 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 0.50% of average net assets in the Fund
account during the quarter. Average assets shall be determined
using the average daily net assets in the Fund account during the
quarter. The fee shall be pro-rated for any calendar quarter
during which the contract is in effect for only a portion of the
quarter.
<PAGE>
EXHIBIT B
----------
FIVE PERCENT RECORD OR BENEFICIAL OWNERSHIP
---------------------------------------------
(as of November 8, 2000)
Charles Schwab & Co., Inc. 37%
National Financial Services Corp. 8%
Charles Schwab & Co., Inc. and National Financial Services Corp.
each own shares listed above of record. The Trust is not aware
of any person owning beneficially five percent or more of the
Fund's shares.
