SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [XX]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
- --------------------------
[ ] Preliminary Proxy Statement [ ] Confidential, For Use
of the Commission
Only (as permitted by
Rule 14a-6(e)(2))
[XX] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant
to Rule 14a-11(c) or Rule 14a-12
The Managers Funds
------------------
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
- --------------------------------------------------
[XX] No fee required.
[ ] Fee computed on table below per Exchange Act
Rules 14a-6(i)(1) 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:
<Page>
[LOGO OMITTED: MANAGERS]
40 RICHARDS AVENUE
NORWALK, CONNECTICUT 06854
800-835-3879
WWW.MANAGERSFUNDS.COM
MANAGERS VALUE FUND
MANAGERS CAPITAL APPRECIATION FUND
MANAGERS SMALL COMPANY FUND
MANAGERS SPECIAL EQUITY FUND
MANAGERS INTERNATIONAL EQUITY FUND
MANAGERS EMERGING MARKETS EQUITY FUND
MANAGERS INTERMEDIATE BOND FUND
MANAGERS BOND FUND
MANAGERS GLOBAL BOND FUND
MANAGERS MONEY MARKET FUND
March 10, 2003
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 March 3, 2003.
I am sure that you, like most people, lead a busy life and are
tempted to put this proxy statement aside. Please do not! 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 en-
<Page>
closed postage prepaid envelope or, if you prefer, you can also
vote by telephone or on the internet; our preference is via the
internet since it saves the Funds money and your vote is
tabulated immediately.
The primary purpose of this shareholder meeting is to approve
an amendment to the Declaration of Trust that would allow
the Funds to issue additional classes of shares. If this proposal
is approved, the Funds' Board of Trustees will have the ability
to create new classes of shares with features, such as investment
minimums and servicing arrangements, that are tailored to appeal
to particular categories of investors. We believe this will help
the Funds attract additional assets which can benefit existing
shareholders. You are also being asked to elect a Trustee. And,
shareholders of the Money Market Fund are being asked to approve
a technical change to one of the Fund's investment policies. Each
proposal is described in greater detail in the enclosed proxy
statement.
At a meeting held on February 10, 2003, the Board of Trustees
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 vote on two 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.
<Page>
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 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
feel 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>
OVERVIEW OF PROXY STATEMENT
---------------------------
IMPORTANT INFORMATION FOR SHAREHOLDERS OF
THE MANAGERS FUNDS
Although we encourage you to read the full text of the enclosed
proxy statement, here is a brief overview of some matters
affecting your Fund that will be the subject of a shareholder
vote.
Q. WHEN WILL THE SHAREHOLDER MEETING BE HELD?
A. The meeting will be held on April 22, 2003, at 10:00 a.m.
Eastern Time at the offices of The Managers Funds LLC, 40
Richards Avenue, Norwalk, Connecticut 06854. This meeting will
cover those issues listed in this proxy statement, 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 March 3,
2003. Only those shareholders that owned shares at that time
are entitled to vote at the meeting.
Q. WHAT ARE THE ISSUES THAT WILL BE CONSIDERED AT THE SHAREHOLDER
MEETING?
A. At the meeting, shareholders will be asked to consider the
following matters:
<Table>
Proposal Funds Affected
- ------------------------------------------------ --------------
1. To amend the Declaration of Trust to permit
the creation of multiple classes of shares
for any Fund; All Funds
2. To elect Peter M. Lebovitz as a Trustee of
the Trust; and All Funds
3. To approve an amendment to the investment Managers Money
restriction regarding underwriting Market Fund
securities of other issuers for Managers
Money Market Fund.
Q. HOW DOES THE BOARD OF TRUSTEES RECOMMEND
THAT I VOTE?
A. The Board of Trustees recommends that you
vote FOR each of the proposals on the
enclosed proxy card(s).
</Table>
<Page>
Q. WHY ARE THE TRUSTEES PROPOSING TO AMEND THE DECLARATION OF
TRUST TO ALLOW THE FUNDS TO ISSUE ADDITIONAL CLASSES OF SHARES?
A. The amendment to the Declaration of Trust (Proposed Amendment)
would allow the Funds to offer additional classes of shares. The
characteristics of any additional classes, such as minimum
investment amounts, shareholder servicing arrangements and
related expense structures, could be tailored to address the
unique needs of different types of investors. The Trustees
believe that with this capability the Funds will be able to
take advantage of additional opportunities for the sale of Fund
shares which would increase Fund assets, thereby producing
economies of scale that benefit all Fund shareholders. The
creation of any additional class of shares will not affect the
characteristics of shares held by existing Fund shareholders.
Q. WHY ARE THE TRUSTEES PROPOSING THAT SHAREHOLDERS ELECT PETER
M. LEBOVITZ AS TRUSTEE?
A. Mr. Lebovitz is currently a Trustee, but is the only Trustee
who has not been elected by shareholders. The Trustees appointed
Mr. Lebovitz to the Board in March 2002 as permitted under the
Fund's Declaration of Trust and The Investment Company Act of
1940, as amended, (the "1940 Act"). The 1940 Act permits the
Trustees to fill a vacancy on the Board of Trustees without
shareholder approval, only if, immediately after filling the
vacancy, at least two-thirds of the Trustees then holding office
have been elected by the shareholders of the Trust. The 1940 Act
requires the Trust to call a shareholder meeting for the election
of Trustees if at any time less than a majority of the Trustees
have been elected by shareholders. Because of Trustee retirements
or otherwise, the Board of Trustees may in the future need to
fill vacancies on the Board. Since a proxy is being sent for
other purposes anyway, the Trustees are presenting Mr. Lebovitz
to shareholders for election at this meeting in order to avoid a
possible expense to the Funds associated with calling a
shareholder meeting expressly for that purpose.
<Page>
Q. WHY ARE THE TRUSTEES PROPOSING AN AMENDMENT TO THE INVESTMENT
RESTRICTION REGARDING UNDERWRITING SECURITIES OF OTHER ISSUERS
FOR MANAGERS MONEY MARKET FUND?
A. The proposed change will amend the fundamental investment
restriction regarding underwriting securities of other issuers
for Managers Money Market Fund. The amendment is designed to
clarify that the Fund may invest substantially all of its assets
in another investment company (as is currently the Fund's
practice) even if, as a result, the Fund were technically
deemed to be an underwriter of the securities of the other
investment company under the federal securities laws. This change
will not affect the way in which the Fund is managed.
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 proposals you may vote on, then return the card(s) in the
postage-paid envelope. You can also vote by faxing your proxy
card(s) to us at (203) 831-4120 or by calling (800) 690-6903 and
recording your vote by telephone or on the internet
at the website indicated on your ballot card.
<Page>
[LOGO OMITTED: MANAGERS]
PLEASE VOTE
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
MANAGERS VALUE FUND
MANAGERS CAPITAL APPRECIATION FUND
MANAGERS SMALL COMPANY FUND
MANAGERS SPECIAL EQUITY FUND
MANAGERS INTERNATIONAL EQUITY FUND
MANAGERS EMERGING MARKETS EQUITY FUND
MANAGERS INTERMEDIATE BOND FUND
MANAGERS BOND FUND
MANAGERS GLOBAL BOND FUND
MANAGERS MONEY MARKET FUND
40 Richards Avenue
Norwalk, Connecticut 06854
800-835-3879
www.managersfunds.com
<Page>
TABLE OF CONTENTS
-----------------
<Table>
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS 1
INSTRUCTIONS FOR EXECUTING PROXY CARD 2
PROXY STATEMENT 3
PROPOSAL 1: To Amend the Declaration of Trust to
Permit the Creation of Multiple Classes of Shares
for any Fund 8
PROPOSAL 2: To Elect Peter M. Lebovitz as a
Trustee of the Trust 9
PROPOSAL 3: To Approve an Amendment to the
Investment Restriction Regarding Underwriting
Securities of Other Issuers for Managers Money
Market Fund 18
ADDITIONAL INFORMATION 20
Exhibits
- --------
Exhibit A -
Proposed Amendment to Declaration of Trust 23
Exhibit B -
Audit Committee Charter 29
Exhibit C -
Five Percent of Record or Beneficial Owners of
Each Fund's Outstanding Shares 31
</Table>
<Page>
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON April 22, 2003 AT 10:00 A.M.
TO SHAREHOLDERS OF THE MANAGERS FUNDS:
On April 22, 2003, The Managers Funds (the "Trust") will hold a
special meeting of the shareholders of Managers Value Fund,
Managers Capital Appreciation Fund, Managers Small Company Fund,
Managers Special Equity Fund, Managers International Equity Fund,
Managers Emerging Markets Equity Fund, Managers Intermediate Bond
Fund, Managers Bond Fund, Managers Global Bond Fund and Managers
Money Market Fund at the offices of The Managers Funds LLC (the
"Manager"), 40 Richards Avenue, Norwalk, Connecticut 06854. The
special meeting will begin at 10:00 a.m.
The meeting will be held for the following purposes:
1. To amend the Declaration of Trust to permit the
creation of multiple classes of shares for any Fund;
2. To elect Peter M. Lebovitz as a Trustee of the Trust;
and
3. To approve an amendment to the investment restriction
regarding underwriting securities of other issuers for Managers
Money Market Fund.
Only those shareholders that owned shares in a Fund at
the close of business on March 3, 2003 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
March 10, 2003
1
<Page>
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 BY
TELEPHONE OR ON THE INTERNET.
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:
<Table>
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
u/t/d 12/28/78 (2) Jane Doe
CUSTODIAL ACCOUNTS:
- -------------------
(1) John Smith, Cust. (1) John Smith
f/b/o John Smith, Jr. UGMA
(2) John Smith, Jr. (2) John Smith, Jr.,
Executor
</Table>
2
<Page>
[LOGO OMITTED: MANAGERS]
PLEASE VOTE
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
MANAGERS VALUE FUND
MANAGERS CAPITAL APPRECIATION FUND
MANAGERS SMALL COMPANY FUND
MANAGERS SPECIAL EQUITY FUND
MANAGERS INTERNATIONAL EQUITY FUND
MANAGERS EMERGING MARKETS EQUITY FUND
MANAGERS INTERMEDIATE BOND FUND
MANAGERS BOND FUND
MANAGERS GLOBAL BOND FUND
MANAGERS MONEY MARKET FUND
40 RICHARDS AVENUE
NORWALK, CONNECTICUT 06854
800-835-3879
WWW.MANAGERSFUNDS.COM
PROXY STATEMENT
FOR A SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 22, 2003
INTRODUCTION
- ------------
This proxy statement 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 special meeting
and any adjournment (the "Meeting") of the shareholders of
Managers Value Fund, Managers Capital Appreciation Fund, Managers
Small Company Fund, Managers Special Equity Fund, Managers Inter-
national Equity Fund, Managers Emerging Markets Equity Fund,
Managers Intermediate Bond Fund, Managers Bond Fund, Managers
Global Bond Fund and Managers Money Market 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 April 22, 2003 at 10:00 a.m., Eastern Time.
3
<Page>
The Trust is comprised of ten mutual funds, all 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, a subsidiary of
Affiliated Managers Group, Inc. ("AMG"), located at 600 Hale
Street, Prides Crossing, MA 01965, serves as investment manager
of each Fund and is responsible for the Funds' overall
administration. Managers Distributors, Inc., a wholly-owned
subsidiary of the Manager, serves as the Funds' distributor.
The principal executive offices of the Trust are located at
40 Richards Avenue, Norwalk, Connecticut 06854. The enclosed
proxy and this proxy statement are first being sent to
shareholders on or about March 12, 2003.
At the meeting, shareholders will be asked to act on the
following:
* Shareholders of all Funds will be asked to approve an amendment
to the Declaration of Trust permitting the Trustees to establish
multiples classes of shares for any Fund. (Proposal 1). The
proposed amendment is attached as Exhibit A to this proxy
statement.
* Shareholders of all Funds will be asked to elect Peter M.
Lebovitz as a Trustee of the Trust. (Proposal 2).
* Shareholders of Managers Money Market Fund only will be asked to
approve an amendment to the Fund's investment restriction
regarding underwriting securities of other issuers. (Proposal 3).
4
<Page>
The following table illustrates the matters on which shareholders
of each Fund will vote:
<Table>
PROPOSAL 1 2 3
- ----------------------------------- --- --- ---
MANAGERS VALUE FUND X X
MANAGERS CAPITAL APPRECIATION FUND X X
MANAGERS SMALL COMPANY FUND X X
MANAGERS SPECIAL EQUITY FUND X X
MANAGERS INTERNATIONAL EQUITY FUND X X
MANAGERS EMERGING MARKETS EQUITY FUND X X
MANAGERS INTERMEDIATE BOND FUND X X
MANAGERS BOND FUND X X
MANAGERS GLOBAL BOND FUND X X
MANAGERS MONEY MARKET FUND X X X
</Table>
All properly executed proxy cards 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 (i) sending written notice of
revocation to the Secretary of the Trust, (ii) the subsequent
execution and return of another proxy prior to the Meeting, (iii)
submitting a subsequent telephone vote, (iv) submitting a
subsequent internet vote, or (v) being present and voting in
person at the Meeting and giving oral notice of revocation to the
Chairman of the Meeting. The persons designated as 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 March 3, 2003 (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 Meeting.
5
<Page>
The following table sets forth the number of shares of beneficial
interest outstanding of each Fund as of the Record Date:
<Table>
FUND SHARES OUTSTANDING
- ------------------------------ ------------------
Managers Value Fund 2,375,358
Managers Capital Appreciation Fund 5,145,100
Managers Small Company Fund 1,975,615
Managers Special Equity Fund 36,882,325
Managers International Equity Fund 10,180,782
Managers Emerging Markets Equity Fund 2,198,107
Managers Intermediate Bond Fund 386,444
Managers Bond Fund 6,203,755
Managers Global Bond Fund 1,313,370
Managers Money Market Fund 73,803,795
</Table>
Under the By-Laws of the Trust, shares held by two or more
persons (whether as joint tenants, co-fiduciaries or other-wise)
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 proposal 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. A shareholder
vote may be taken on any proposal in this proxy statement prior
to such adjournment if sufficient votes have been received. Any
such adjournment will require the affirmative vote of a majority
of the shares present in person at the Meeting or represented
by proxy.
Each of Proposals 1 and 2 will be voted on by the shareholders of
all Funds, voting as a single class. Approval of Proposal 1
requires the affirmative vote of the lesser of (i) 67% of the
voting securities of the Trust present in person at the Meeting
or represented by proxy, if holders of more than 50% of the
shares of the Trust outstanding on the record date are present,
in person or
6
<Page>
by proxy, or (ii) more than 50% of the outstanding shares of the
Trust on the record date. Approval of Proposal 2 requires a
plurality of the shares of the Trust outstanding and entitled to
vote at the Meeting, with shareholders of all Funds voting
together. Approval of Proposal 3 for Managers Money Market Fund
requires the affirmative vote of the lesser of (i) 67% of the
voting securities of Managers Money Market Fund present in person
at the Meeting or represented by proxy, if holders of more than
50% of the shares of Managers Money Market Fund outstanding on
the record date are present, in person or by proxy, or (ii) more
than 50% of the outstanding shares of Managers Money Market Fund
on the record date.
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 Proposals 1 and 3 and will
therefore have the effect of a "no" vote. For Proposal 2,
abstentions and broker non-votes will not have any effect on the
outcome of the 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 by faxing their proxy card(s) to the Trust at (203)
831-4120 or by calling (800) 690-6903 and recording their vote by
telephone or on the internet at the website indicated on your
ballot card. 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; or
* By being present and voting in person at the Meeting and giving
oral notice of revocation to the Chairman of the Meeting.
7
<Page>
PROPOSAL 1: TO AMEND THE DECLARATION OF TRUST TO PERMIT THE
CREATION OF MULTIPLE CLASSES OF SHARES FOR ANY FUND
(SHAREHOLDERS OF ALL FUNDS)
The purpose of this proposal is to approve the adoption of an
amendment (the "Proposed Amendment") to the Trust's Declaration
of Trust that provides that the Trustees, without shareholder
approval, may divide the shares of any Fund into two or more
classes of shares. Separate classes are common in the mutual
fund industry, and are an efficient way of offering a specific
investment strategy to different types of investors without
creating separate funds for each type of investor. Each class of
a Fund represents an interest in the same portfolio of securities
held by that Fund but may have different dividend, liquidation,
voting and other rights, and may be offered with different
service features, distribution arrangements and fees. Each class
might also be subject to different minimum investment
requirements, exchange privileges and other features.
The Declaration of Trust does not currently contemplate the
establishment of multiple classes of shares of any Fund.
Furthermore, the Declaration of Trust does not currently permit
the Trustees, without shareholder approval, to amend the
Declaration of Trust, except in limited circumstances. As a
consequence, the Funds have been unable to offer alternative
class structures that address the unique needs of different types
of investors. The Manager has informed the Trustees that market
demand exists for additional classes of shares of the Funds, and
that offering additional classes may, over time, enable the Funds
to achieve higher total net assets, which may result in potential
cost savings for existing shareholders on a per share basis.
The Proposed Amendment provides the Trustees with the ability to
divide existing Funds into separate classes, create additional
classes of shares, and to take certain other actions (including
the liquidation of a class) as may be advisable under the
circumstances, in each case without a shareholder vote. The Pro-
posed Amendment will not affect the relative rights, preferences
8
<Page>
and obligations of the shares held by current shareholders.
Accordingly, the Trustees believe the proposed amendment would
be in the interests of existing shareholders of the Trust. A copy
of the proposed amendment is attached to this memorandum as
Exhibit A.
Approval of the Proposed Amendment requires the affirmative vote
of a "majority of the outstanding voting securities" of the
Trust, as defined in the 1940 Act. In other words, approval will
require the affirmative vote of the lesser of (i) a majority of
all outstanding shares of the Trust and (ii) 67% of the shares
voted at a meeting at which a majority of the shares are
represented. Shareholders of all Funds will vote together as a
single class on this Proposal.
Adoption of the Proposed Amendment will not alter in any way the
Trustees' existing fiduciary obligations to act with due care and
in the shareholders' interests, and will not result in any
changes in the Board of Trustees or officers or in the investment
policies and shareholder services described in the current
prospectus for each of the Funds.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR APPROVAL OF PROPOSAL 1.
PROPOSAL 2: TO ELECT PETER M. LEBOVITZ AS A TRUSTEE OF THE
TRUST
(SHAREHOLDERS OF ALL FUNDS)
The purpose of this proposal is to elect Peter M. Lebovitz as a
Trustee of the Trust. Mr. Lebovitz is the President and Chief
Executive Officer of the Manager. He was appointed to the Board
on March 7, 2002 by the other Trustees to fill the vacancy
created by the expansion of the board at that time.
The 1940 Act permits the Board to fill a vacancy on the Board of
Trustees without shareholder approval, but only if, immediately
thereafter, at least two-thirds of the Trustees then holding
office shall have been elected by the shareholders of the Trust.
9
<Page>
Mr. Lebovitz is currently the only Trustee who has not been
elected by the shareholders of the Trust, but in the future the
Board of Trustees may need to fill additional vacancies on the
Board that may occur if a previously elected Trustee resigns or
is unable to serve or if the size of the Board is expanded. If
there were a number of such vacancies, the Board of Trustees
could be required by the 1940 Act to call a shareholder meeting
to fill the vacancies. In addition, under the 1940 Act, the Trust
is required to call a shareholder meeting for the election of
Trustees if at any time less than a majority of the Trustees have
been elected by shareholders. The effect of electing Mr. Lebovitz
at this time is to decrease the likelihood that the Trust will
need to call a shareholder meeting with its associated expenses
in the foreseeable future to elect Trustees, which will result in
a potential savings for shareholders. Therefore, the Board of
Trustees has determined that it would be appropriate to present
Mr. Lebovitz to shareholders for election at this Meeting.
Information about Mr. Lebovitz is shown below. Mr. Lebovitz is an
interested person of the Trust within the meaning of the 1940 Act
by virtue of his positions with the Manager and Managers
Distributors, Inc.
<Table>
NO. OF
NAME, DATE OF PRINCIPAL FUNDS IN OTHER
BIRTH AND POSITION(S) OCCUPATIONS FUND COMPLEX DIRECTOR-
HELD WITH TRUST AND DURING PAST OVERSEEN SHIPS SHIPS HELD
LENGTH OF TIME SERVED 5 YEARS BY TRUSTEE* BY TRUSTEE
- ----------------------- ------------------ ------------------- ---------------
Peter M. Lebovitz President and Chief 22 None
DOB: 1/18/55 Executive Officer, The
Trustee since 2002; Managers Funds LLC
President since 1999 (1999-Present); President,
Managers Distributors, Inc.
The Managers Funds (2000-Present); Director of
40 Richards Avenue Marketing, The Managers
Norwalk, CT 06854 Funds, LP (1994-1999);
Director of Marketing,
Hyperion Capital Management,
Inc. (1993-1994); Senior Vice
President, Greenwich Asset
Mgmt., Inc. (1989-1993)
</Table>
* The Fund Complex consists of The Managers Funds, Managers AMG
Funds, Managers Trust I, and Managers Trust II.
10
<Page>
OTHER TRUSTEES AND OFFICERS OF THE TRUST
- ----------------------------------------
Information about the Trustees and Officers of the Trust
(other than Mr. Lebovitz) is shown in the table below. The
Trustees provide broad supervision over the affairs of the Trust
and the Funds. The Trustees are experienced executives who meet
periodically throughout the year to oversee the Funds'
activities, review contractual arrangements with companies that
provide services to the Funds, and review the Funds' performance.
Unless otherwise noted, the address of each Trustee or Officer is
the address of the Trust: 40 Richards Avenue, Norwalk,
Connecticut 06854.
The Trustees hold office without limit in time except that (a)
any Trustee may resign; (b) any Trustee may be removed for cause
by at least two-thirds of the number of Trustees remaining after
such removal (provided that there shall not be fewer than 3
remaining Trustees); (c) shareholders may vote to remove a
Trustee at a special meeting of shareholders held at the written
request of shareholders of 10% or more of the outstanding shares
of the Trust.
The President, Treasurer and Secretary of the Trust are elected
by the Trustees and hold office until their respective successors
are chosen and qualified, or in each case until the officer dies,
resigns, is removed or becomes disqualified.
The Board of Trustees met five times during the fiscal year
ended December 31, 2002.
11
<Page>
INDEPENDENT TRUSTEES
- --------------------
The following Trustees are not interested persons of the Trust
within the meaning of the 1940 Act ("Independent Trustees"):
<Table>
NO. OF
NAME, DATE OF PRINCIPAL FUNDS IN OTHER
BIRTH AND POSITION(S) OCCUPATIONS FUND COMPLEX DIRECTOR-
HELD WITH TRUST AND DURING PAST OVERSEEN SHIPS SHIPS HELD
LENGTH OF TIME SERVED 5 YEARS BY TRUSTEE* BY TRUSTEE
- ----------------------- ------------------ ------------------- ---------------
Jack W. Aber Professor of Finance, 22 Trustee of
DOB: 9/9/37 Boston University Appleton Growth
Trustee since 1999 School of Management Fund (1 portfolio);
(1972-Present) Trustee of Third
Avenue Trust
(4 portfolios);
Trustee of Third
Avenue Variable
Series Trust
(1 portfolio)
William E. Chapman, II President and Owner, 22 Trustee of Third
DOB: 9/23/41 Longboat Retirement Avenue Trust
Trustee since 1999 Planning Solutions (4 portfolios);
(1998-Present); Hewitt Trustee of Third
Associates, LLC (part Avenue Variable
time) (provider of Series Trust
Retirement and (1 portfolio)
Investment Education
Seminars); President,
Retirement Plans Group,
Kemper Funds (1990-1998)
Edward J. Kaier Partner, Hepburn Wilcox 22 Trustee of Third
DOB: 9/23/45 Hamilton & Putnam (1977- Avenue Trust
Trustee since 1999 Present) (4 portfolios);
Trustee of Third
Avenue Variable
Series Trust
(1 portfolio)
Madeline H. McWhinney Member, Investment 14 None
DOB: 3/11/22 Committee, New Jersey
Trustee since 1987 Supreme Court (1990-
Present); Member, Advisory
Board on Professional Ethics,
New Jersey Supreme Court
(1983-1998); President, Dale,
Elliott & Company, Inc.
(Management Consultant)
(1977-1994)
</Table>
12
<Page>
<Table>
NO. OF
NAME, DATE OF PRINCIPAL FUNDS IN OTHER
BIRTH AND POSITION(S) OCCUPATIONS FUND COMPLEX DIRECTOR-
HELD WITH TRUST AND DURING PAST OVERSEEN SHIPS SHIPS HELD
LENGTH OF TIME SERVED 5 YEARS BY TRUSTEE* BY TRUSTEE
- ----------------------- ------------------ ------------------- ---------------
Steven J. Paggioli Consultant; Trustee, 14 None
DOB: 4/3/50 Professionally Managed
Trustee since 1993 Portfolios (1991-present);
formerly Executive Vice
President and Director,
The Wadsworth Group
(1986-2001); Executive
Vice President, and Director,
Investment Company
Administration, LLC
(1990-2001); Vice
President, Secretary
and Director, First Fund
Distributors, Inc.
(1991-2001)
Eric Rakowski Professor, University of 22 Trustee of Third
DOB: 6/5/58 California at Berkeley Avenue Trust
Trustee since 1999 School of Law (1990- (4 portfolios);
Present); Visiting Trustee of Third
Professor, Harvard Law Avenue Variable
School (1998-1999) Series Trust
(1 portfolio)
Thomas R. Schneeweis Professor of Finance, 14 None
DOB: 5/10/47 University of
Trustee since 1987 Massachusetts (1985-
Present); Managing
Director, Center for
International Securities
and Derivatives Markets
at the University of
Massachusetts, (1994-
Present); President and
Chief Executive Officer,
Schneeweis Partners,
LLC (2001-Present)
</Table>
* The Fund Complex consists of The Managers Funds, Managers AMG
Funds, Managers Trust I, and Managers Trust II.
13
<Page>
INTERESTED TRUSTEE
- ------------------
Sean M. Healey is an interested person of the Trust within the
meaning of the 1940 Act by virtue of his positions with, and
interest in securities of, Affiliated Managers Group, Inc.:
<Table>
NO. OF
NAME, DATE OF PRINCIPAL FUNDS IN OTHER
BIRTH AND POSITION(S) OCCUPATIONS FUND COMPLEX DIRECTOR-
HELD WITH TRUST AND DURING PAST OVERSEEN SHIPS SHIPS HELD
LENGTH OF TIME SERVED 5 YEARS BY TRUSTEE* BY TRUSTEE
- ----------------------- ------------------ ------------------- ---------------
Sean M. Healey President and Chief 22 None
DOB: 5/9/61 Operating Officer,
Trustee since 1999 Affiliated Managers
Group, Inc. (1999-
Present); Director,
Affiliated Managers
Group, Inc. (2001-
Present); Executive
Vice President,
Affiliated Managers
Group, Inc. (1995-
1999); Vice President,
Goldman, Sachs &
Company (1987-1995)
</Table>
* The Fund Complex consists of The Managers Funds, Managers AMG
Funds, Managers Trust I, and Managers Trust II.
OFFICERS
- --------
<Table>
POSITION(S) HELD WITH
NAME AND TRUST AND LENGTH OF PRINCIPAL OCCUPATIONS
DATE OF BIRTH TIME SERVED DURING PAST 5 YEARS
- --------------- --------------------------- -------------------------------
Donald S. Rumery Treasurer since 1995; Director, Finance and Planning,
DOB: 5/29/58 Secretary since 1997 The Managers Funds LLC, (1994-
Present); Treasurer and
Chief Financial Officer, Managers
Distributors, Inc. (2000-Present);
Secretary and Treasurer of
Managers Trust I; Secretary and
Treasurer of Managers Trust II and
Treasurer of Managers AMG Funds
Galan G. Daukas Chief Financial Officer Chief Financial Officer, Managers
DOB: 10/24/63 since 2002 Trust I, Managers Trust II and
Managers AMG Funds (2002-
present); Chief Operating Officer,
The Managers Funds LLC (2002-
Present); Chief Operating Officer
and Chairman of the Management
Committee, Harbor Capital Mgmt.
Co., Inc. (2000-2002); Chief
Operating Officer, Fleet Investment
Advisors (1992-2000)
</Table>
14
<Page>
TRUSTEE SHARE OWNERSHIP
- -----------------------
Information in table below is currently as of December 31, 2002.
<Table>
Aggregate Dollar Range
of Equity Securities in
All Registered Investment
Dollar Range Companies Overseen
of Equity Securities by Trustee in Family of
in the Funds Investment Companies*
Beneficially Owned as Beneficially Owned as
of December 31, 2002 of December 31, 2002
--------------------- -------------------------
Independent Trustees:
- ---------------------
Jack W. Aber None $50,001 to $100,000
William E. Chapman II None Over $100,000
Edward J. Kaier $10,001 to $50,000 Over $100,000
Madeline H. McWhinney None $50,001 to $100,000
Steven J. Paggioli $10,001 to $50,000 Over $100,000
Eric Rakowski $1 to $10,000 $1 to $10,000
Thomas R. Schneeweis None $10,001 to $50,000
Interested Trustees:
- --------------------
Sean M. Healy None $50,001 to $100,000
Peter M. Lebovitz $1 to $10,000 Over $100,000
</Table>
* The Family of Investment Companies consists of The Managers
Funds, Managers AMG Funds, Managers Trust I, and Managers Trust II.
AUDIT COMMITTEE
- ---------------
The Board of Trustees has an Audit Committee consisting of the
Independent Trustees. Under the terms of its charter, which is
attached to this proxy statement as Exhibit B, the Audit
Committee (a) acts for the Trustees in overseeing the Trust's
financial reporting and auditing processes, (b) reviews and
assesses the performance of the Trust's independent public
accountants, (c) makes recommendations to the full board annually
as to the appointment of independent public accountants, (d)
meets periodically with the independent accountants to review the
annual audits and the services provided by the independent public
accountants and (e) reviews and reports to the full Board of
Trustees with respect to any material accounting, tax, valuation
or record keeping issues that may affect the Trust, its financial
statements or the
15
<Page>
amount of any dividend or distribution right, among other
matters. The Audit Committee met twice during the most recent
fiscal year.
INDEPENDENT ACCOUNTANTS
- -----------------------
The Trust has retained PricewaterhouseCoopers LLP as the Trust's
independent public accountants for the fiscal year ending
December 31, 2003. Representatives of PricewaterhouseCoopers LLP
are not expected to be present at the Meeting but are expected
to be available by telephone should the need for consultation
arise.
AUDIT FEES
- ----------
The Trust estimates that the aggregate fees billed by
PricewaterhouseCoopers LLP for professional services rendered in
connection with (i) the audit of the annual financial statements
set forth in the Trust's Annual Report for all Funds except for
Managers Money Market Fund for the year ended December 31, 2002,
(ii) the audit of the annual financial statements set forth in
the Trust's Annual Report for Managers Money Market Fund for the
year ended November 30, 2002, (iii) the Trust's Semi-Annual
Report for all Funds except for Managers Money Market Fund for
the period ended June 30, 2002 and (iv) the Trust's Semi-Annual
Report for Managers Money Market Fund for the period ended May
31, 2002 were approximately $199,500.
FINANCIAL INFORMATION SYSTEMS DESIGN & IMPLEMENTATION FEES
- ----------------------------------------------------------
For the fiscal year ended December 31, 2002,
PricewaterhouseCoopers LLP received no fees for financial
information systems design and implementation on behalf of the
Trust, the Manager or Managers Distributors, Inc.
16
<Page>
ALL OTHER FEES
- --------------
For the fiscal year ended December 31, 2002,
PricewaterhouseCoopers LLP was also paid approximately $54,750
for all other non-audit services rendered on behalf of the Trust,
which consisted of assisting in the preparation and/or review of
each Fund's federal income tax returns and received no fees for
providing other non-audit services from the Manager or Managers
Distributors, Inc.,
The Trust's Audit Committee has considered whether the provision
of non-audit services in connection with the preparation and
review of income tax returns as shown above is compatible with
maintaining PricewaterhouseCoopers LLP's independence.
TRUSTEES' COMPENSATION
- ----------------------
For their services as Trustees of The Managers Funds and other
mutual funds within The Managers Funds fund complex for the
fiscal year ended December 31, 2002, the Trustees were
compensated as follows:
COMPENSATION TABLE:
- -------------------
<Table>
Total Compensation
Aggregate from the Funds
Compensation and the Fund Complex
Name of Trustee from the Trust (a) Paid to Trustees (b)
- ----------------------- ------------------ --------------------
Independent Trustees:
- ---------------------
Jack W. Aber $24,500 $31,500
William E. Chapman II $24,500 $31,500
Edward J. Kaier $24,500 $31,500
Madeline H. McWhinney $24,500 $26,500
Steven J. Paggioli $23,500 $25,500
Eric Rakowski $24,000 $31,000
Thomas R. Schneeweis $24,000 $26,000
Interested Trustees:
- --------------------
Sean M. Healy None None
Peter M. Lebovitz None None
</Table>
(a) Compensation is calculated for the 12 months ended December 31,
2002. The Trust does not provide any pension or retirement
benefits for the Trustees.
(b) Total compensation includes compensation paid during the 12-
month period ended December 31, 2002 for services as Trustees of
The Managers Funds, Managers AMG Funds, Managers Trust I and/or
Managers Trust II.
17
<Page>
As of March 3, 2003, all management personnel (i.e., the Trustees
and Officers) as a group owned less than 1% of the outstanding
shares of any Fund.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR APPROVAL OF PROPOSAL 2.
PROPOSAL 3: TO APPROVE AN AMENDMENT TO THE INVESTMENT RESTRICTION
REGARDING UNDERWRITING SECURITIES OF OTHER ISSUERS FOR MANAGERS
MONEY MARKET FUND
(MANAGERS MONEY MARKET FUND SHAREHOLDERS ONLY)
The 1940 Act requires every investment company to maintain a
fundamental policy with respect to engaging in the business of
underwriting the securities of other issuers. Consistent with
this requirement, the Money Market Fund's current policy
regarding underwriting the securities of other issuers is as
follows:
"[The Fund may] not underwrite securities of other issuers,
except to the extent that the Fund, in disposing of portfolio
securities, may be deemed an underwriter within the meaning of
the [Securities Act of 1933]."
Under the 1940 Act, if a policy is fundamental, the Fund may not
deviate from, or change the terms of, that policy without
shareholder approval.
The Trustees recommend that shareholders of Managers
Money Market Fund vote to amend the Fund's current policy
regarding underwriting securities of other issuers to read as
follows (additional language is surrounded by asterisks, deletions
are surrounded by parentheses):
18
<Page>
"[The Fund may] not underwrite securities of other issuers,
except to the extent that the Fund, **in disposing of portfolio
securities**, may be deemed an underwriter within the meaning
of the 1933 Act (in disposing of portfolio securities or in
connection with investments in other investment companies.)"
The Fund currently operates as a feeder fund in a master-feeder
investment fund structure and as a consequence, invests all of
its assets in the registered investment company that serves as
the structure's master fund. The primary purpose of the proposal
is to clarify that the Fund is not prohibited from investing in
other investment companies, even if, as a result of such
investment, the Fund is technically considered an underwriter
under federal securities laws. If the proposal is approved, the
new restriction may not be changed without the approval of
shareholders. Adoption of the proposed restriction concerning
underwriting securities of other issuers is not expected to
affect the master-feeder arrangement, the investment performance
of the Fund, or the securities or instruments in which the Fund
invests.
The Board of Trustees has concluded that the proposal will
benefit the Fund and its shareholders. The Trustees recommend
voting FOR the proposal. The amended fundamental restriction will
become effective upon shareholder approval. If the proposal is
not approved by the shareholders of the Fund, the Fund's current
restriction will remain unchanged.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHARE-
HOLDERS VOTE FOR APPROVAL OF PROPOSAL 3.
19
<Page>
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 proxy statement 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.
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 vote at the Meeting in person.
20
<Page>
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
Meeting.
FINANCIAL INFORMATION
- ---------------------
THE FUNDS' MOST RECENT ANNUAL REPORTS AND SEMI-ANNUAL REPORTS 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 C 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.
SHAREHOLDER PROPOSALS
- ---------------------
The Trust does not hold regularly scheduled meetings of the
shareholders of the Funds. 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 judgment.
21
<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.
March 10, 2003
By Order of the Trustees,
/s/ Donald S. Rumery
- --------------------
Donald S. Rumery
Secretary
22
<Page>
EXHIBIT A
---------
FORM OF AMENDMENT TO
DECLARATION OF TRUST
--------------------
The proposed amendment would add the following provision to the
Trust's Declaration of Trust:
"Section 5.12. Classes of Shares.
- ---------------------------------
In addition to all other powers set forth in this Declaration,
including without limitation the power to establish and designate
Series in accordance with Section 5.11, the Trustees shall have
exclusive power, without the requirement of Shareholder approval,
to issue classes of Shares of any Series or divide the Shares of
any Series into classes, each class having such different
dividend, liquidation, voting and other rights and
characteristics as the Trustees may determine, and may establish
and designate the specific classes of Shares of each Series.
The fact that a Series shall have initially been established
and designated without any specific establishment or designation
of classes (i.e., that all Shares of such Series are initially of
a single class), or that a Series shall have more than one
established and designated class, shall not limit the authority
of the Trustees to establish and designate separate classes, or
one or more additional classes, of said Series without approval
of the holders of the initial class thereof, or previously
established and designated class or classes thereof.
23
<Page>
The establishment and designation of any class of Shares of a
Series shall be effective upon the execution by a majority of the
then Trustees (or an officer of the Trust pursuant to the vote of
a majority of the Trustees) of an instrument setting forth such
establishment and designation of the relative rights and
preferences of such class of Shares, or as otherwise provided in
such instrument. At any time that there are no Shares outstanding
of any particular class of a Series previously established and
designated, the Trustees may, by an instrument executed by a
majority of their number (or an officer of the Trust pursuant to
the vote of a majority of the Trustees), abolish that class and
the establishment and designation thereof. Each instrument
referred to in this paragraph shall have the status of an
amendment to this Declaration.
If the Trustees shall divide the Shares of any Series into two or
more classes, the following provisions shall be applicable in
respect thereof:
(a) The number of authorized Shares and the number of Shares
of each class that may be issued shall be un-limited. The
Trustees may classify or reclassify any unissued Shares or
any Shares previously issued and reacquired of any class
into one or more classes that may be established and
designated from time to time. The Trustees may hold as
treasury shares (of the same or some other class), reissue
for such consideration and on such terms as they may
determine, or cancel any Shares of any class reacquired by
the Trust at their discretion from time to time.
24
<Page>
(b) All consideration received by the Trust for the issue or sale
of Shares of a particular class of a Series, together with all
assets in which such consideration is invested or reinvested, all
income, earnings, profits and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation of such
assets, and any funds or payments derived from any reinvestment
of such proceeds in whatever form the same may be, shall belong
to the Series and be allocable to that class of such Series,
subject only to the rights of creditors and except as may
otherwise be required by applicable tax laws, shall be so
recorded upon the books of account of the Trust and shall be held
by the Trustees in trust for the benefit of the holders of Shares
of that class of the Series. In the event that there are any
assets, income, earnings, profits and proceeds thereof, funds, or
payments which are not readily identifiable as belonging to any
particular class of a Series, the Trustees shall allocate them
among any one or more of the classes of such Series established
and designated from time to time in such manner and on such basis
as they, in their sole discretion, deem fair and equitable. Each
such allocation by the Trustees shall be conclusive and binding
upon the Shareholders of all Series and classes thereof for all
purposes.
25
<Page>
(c) The assets belonging to each particular class of a Series
shall be charged with the liabilities of the Trust in respect of
that class of such Series, and all expenses, costs, charges and
reserves attributable to that class of such Series. Any general
liabilities, expenses, costs, charges or reserves of a Series
which are not readily identifiable as belonging to any particular
class of such Series shall be allocated and charged by the
Trustees to and among any one or more of the classes of such
Series established and designated from time to time in such
manner and on such basis as the Trustees, in their sole
discretion, deem fair and equitable. Each allocation of
liabilities, expenses, costs, charges and reserves by the
Trustees shall be conclusive and binding upon the Shareholders of
a Series and all classes thereof for all purposes. The Trustees
shall have full discretion, to the extent not inconsistent with
the 1940 Act, to determine which items are capital, and each such
determination and allocation shall be conclusive and binding upon
the Shareholders.
(d) The net asset value per Share of a Series that has been
divided into classes shall be determined separately for each such
class, and shall be equal to the quotient obtained by dividing
the value of the net assets of the Series allocable to the class
(being the value of the assets belonging to the Series as
determined in accordance with Section 7.1 hereof and allocable to
the class, less the liabilities belonging to such class) by the
total number of Shares of such class outstanding.
26
<Page>
(e) Dividends and distributions on Shares of a Series that has
been divided into classes shall be determined separately for each
class of such Series and paid from the assets belonging to and
allocable to each such class, after providing for actual and
accrued liabilities belonging to that class. All dividends and
distributions on Shares of a particular class shall be
distributed pro rata to the holders of Shares of that class in
proportion to the number of Shares of that class held by such
holders at the date and time of record established for the
payment of such dividends or distributions. Such dividends and
distributions may be made in cash or Shares of that class or
another class of such Series or a combination thereof as
determined by the Trustees or pursuant to any program that the
Trustees may have in effect at the time for the election by each
Shareholder of the mode of the making of such dividend or
distribution to that Shareholder.
(f) Whenever the Shares of a Series are otherwise required or
permitted to vote under this Declaration, the Shares of each
class of the Series shall vote together with all other classes of
such Series with respect to such matter, except that when (i)
required by applicable law, including the 1940 Act and Rules 18f-
2 and 18f-3 thereunder, or (ii) the Trustees have determined that
the matter to be voted upon affects only the interests of one or
more classes of the Series, then only the Shareholders of such
class or classes shall be entitled to vote thereon.
(g) The Trustees, without the requirement of Shareholder
approval, may redesignate, reclassify or convert the Shares of a
class of any Series into a new or existing class of Shares of the
same Series on such fair and equitable terms and conditions as
the Trustees may determine in their sole discretion.
27
<Page>
To the fullest extent necessary to implement the underlying
purpose and intent of this Section 5.12, this Section shall
qualify each other provision set forth in this Declaration and
all references to Series in this Declaration shall be deemed to
incorporate or additionally include references to the classes
thereof as the context may require. Any conflict or need for
clarification as between this Section 5.12 and any other pro-
vision of this Declaration shall be resolved by the Trustees in
their sole discretion."
28
<Page>
EXHIBIT B
---------
AUDIT COMMITTEE CHARTER
-----------------------
1. MEMBERSHIP, COMPOSITION AND GOVERNANCE.
---------------------------------------
a. The Audit Committee for The Managers Funds (the "Fund") shall
consist of three or more Trustees, none of whom shall be
"interested persons" (within the meaning of the Investment
Company Act of 1940, as amended) of the Fund, or any adviser
or sub-adviser thereto. The members of the Audit Committee shall
be appointed by the Board of Trustees, which shall also determine
the number and term of such members. Unless otherwise determined
by the Board, the members of the Audit Committee shall appoint
one member of the Audit Committee to serve as the Chairman of the
Audit Committee.
b. Meetings of the Audit Committee shall be held at such times
and at such places as determined from time to time by the
Committee, but not less frequently than annually. In addition,
the Chairman of the Audit Committee shall have the power to call
meetings of the Audit Committee at any time. A majority of the
members of the Audit Committee shall constitute a quorum for
purposes of transacting business at any meeting of the Audit
Committee.
1. POWERS AND DUTIES.
------------------
The Audit Committee shall have the following powers and duties:
a. To act for the Board in overseeing the Fund's financial
reporting and auditing processes. To perform this function, the
Committee shall have direct access to the Chief Executive
Officer, Chief Financial Officer, and all senior financial
personnel of the Fund and the adviser, as well as the independent
auditors. In addition, the Committee may meet with other officers
and employees of the adviser and other service providers for the
Fund when, in the judgment of the Committee, such meetings are
warranted.
29
<Page>
b. To review and assess the performance of the independent public
auditors and make recommendations to the full Board annually as
to the appointment of independent public auditors.
c. To meet periodically with the independent auditors to review
the scope of the annual audit and the policies relating to
internal procedures and controls and to review with the
independent auditors accounting principles employed in the Fund's
financial reports and any proposed changes therein; to approve
professional non-audit services provided by the independent
auditors; to consider the possible effect of providing such
services on the auditor's independence; to review the range of
fees of the auditors for both audit and non-audit services; and
to review the results of the examination of the Fund's financial
statements by the independent auditors.
d. To review, as appropriate, the annual audited financial
statements of the Fund and the management letter issued by the
independent auditors.
e. To review and report to the full Board with respect to any
material accounting, tax, valuation, or record keeping issues
that may affect the Fund, its financial statements or the amount
of any dividend or distribution rate.
f. To direct and supervise investigations into any matters within
its scope, including integrity of reported facts and figures,
ethical conduct, and appropriate disclosure.
g. To make recommendations or reports on matters that, in its
judgment, should receive the attention of the Board of Trustees
of the Fund.
h. To retain special counsel and other experts or consultants
at the expense of the Fund as a resource to assist the Commit-tee
in discharging its responsibilities.
30
<Page>
EXHIBIT C
---------
5% OF RECORD OR BENEFICIAL OWNERS OF EACH FUND'S OUTSTANDING SHARES
- -------------------------------------------------------------------
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
CONTROL PERSONS
- ---------------
As of March 3, 2003 Charles Schwab & Co., Inc., located at 101
Montgomery Street, San Francisco CA, "controlled" (within the
meaning of the 1940 Act) the Managers Special Equity Fund, the
Managers Emerging Markets Equity Fund and the Managers Bond Fund.
As of March 3, 2003, National Financial Services Corp., located
at 200 Liberty Street, New York New York, "controlled" (within
the meaning of the 1940 Act) the Managers International Equity
Fund and Managers Emerging Markets Fund. As of March 3, 2003,
PFPC Brokerage Services, located at 211 South Gulph Road, King of
Prussia PA, "controlled" (within the meaning of the 1940 Act) the
Managers Value Fund, the Managers Small Company Fund and the
Managers Global Bond Fund. As of March 3, 2003, Affiliated Managers
Group, Inc., located at 600 Hale Street, Prides Crossing MA,
"controlled" (within the meaning of the 1940 Act) the Managers
Money Market Fund. Affiliated Managers Group, Inc. ("AMG") is the
parent company of The Managers Funds LLC, the Funds' investment
manager and Managers Distributors, Inc., the Funds' distributor.
An entity or person which "controls" the Fund could have
effective voting control over a Fund. Each of these shareholders
are omnibus processing organizations that hold Fund shares on
behalf of the shares' beneficial owners.
PRINCIPAL HOLDERS OF SECURITIES
- -------------------------------
As of March 3, 2003, the following persons or entities owned of
record more than 5% of the outstanding shares of the Funds:
<Table>
MANAGERS VALUE FUND # OF SHARES PERCENT
- ------------------- ----------- -------
PFPC Brokerage Services, King of Prussia, PA 1,194,052 50%
Charles Schwab & Co., Inc., San Francisco, CA 348,509 15%
Fidelity Investments Institutional, Covington, KY 333,718 14%
MANAGERS CAPITAL APPRECIATION FUND
- ----------------------------------
PFPC Brokerage Services, King of Prussia, PA 1,107,610 22%
Charles Schwab & Co., Inc., San Francisco, CA 1,042,467 20%
Mellon Bank, NA., Everett, MA 505,325 10%
Merrill Lynch, Pierce, Fenner & Smith,
Jacksonville, FL 483,580 9%
National Financial Services Corp., New York, NY 302,264 6%
MANAGERS SMALL COMPANY FUND
- ---------------------------
PFPC Brokerage Services, King of Prussia, PA 1,449,811 73%
Charles Schwab & Co., Inc., San Francisco, CA 140,054 7%
Key Bank TTEE FBO CLE FDN, Cleveland, OH 130,175 7%
MANAGERS SPECIAL EQUITY FUND
- ----------------------------
Charles Schwab & Co., Inc., San Francisco, CA 9,675,595 26%
National Financial Services Corp., New York, NY 3,749,219 10%
Fidelity Investments Institutional,Covington,KY 2,172,780 6%
31
<Page>
MANAGERS INTERNATIONAL EQUITY FUND # OF SHARES PERCENT
- ---------------------------------- ----------- ------
National Financial Services Corp., New York, NY 2,992,677 29%
Charles Schwab & Co., Inc., San Francisco, CA 2,013,787 20%
Merrill Lynch Pierce Fenner & Smith,
Jacksonville, FL 687,456 7%
MANAGERS EMERGING MARKETS EQUITY FUND
- -------------------------------------
National Financial Services Corp., New York, NY 702,022 32%
Charles Schwab & Co., Inc., San Francisco, CA 566,040 26%
PFPC Brokerage Services, King of Prussia, PA 296,958 14%
IMS & Co., Englewood, CO 177,396 8%
MANAGERS INTERMEDIATE BOND FUND
- -------------------------------
PFPC Brokerage Services, King of Prussia, PA 84,611 22%
Charles Schwab & Co., Inc., San Francisco, CA 73,140 19%
National Financial Services Corp., New York, NY 33,840 9%
Belbank & Co., Belvidere, IL 19,438 5%
American Documentaries, Inc., Walpole, NH 19,823 5%
MANAGERS BOND FUND
- ------------------
Charles Schwab & Co., Inc., San Francisco, CA 1,925,198 31%
Fidelity Investments Institutional, Covington, KY 982,874 16%
National Financial Services, Corp., New York, NY 575,415 9%
PFPC Brokerage Services, King of Prussia, PA 573,901 9%
MANAGERS GLOBAL BOND FUND
- -------------------------
PFPC Brokerage Services, King of Prussia, PA 667,037 52%
Charles Schwab & Co., Inc., San Francisco, CA 173,304 14%
National Financial Services, Corp., New York, NY 161,163 13%
MANAGERS MONEY MARKET FUND
- --------------------------
Affiliated Managers Group, Inc.* 33,644,310 46%
Yaxis Group LLC, New York, NY 13,545,552 18%
PFPC Brokerage Services, King of Prussia, PA 8,936,478 12%
</Table>
* Affiliated Managers Group, Inc. ("AMG") is the parent company
of The Managers Funds LLC, the Funds' investment manager and
Managers Distributors, Inc., the Funds' distributor. AMG is the
beneficial owner of the shares of Managers Money Market Fund
listed above and is expected to vote those shares in favor of
Proposals 1, 2 and 3.
Except as noted above, the Trust did not know of any person who,
as of March 3, 2003, beneficially owned more than 5% or more of
the outstanding shares of the Funds.
MANAGEMENT OWNERSHIP
- --------------------
As of March 3, 2003, all management personnel (i.e., Trustees and
Officers) as a group owned beneficially less than 1% of the
outstanding shares of any Fund.
32
<Page>
[THE MANAGERS FUNDS LOGO]
P.O. Box 9132
Hingham, MA 02043-9132
Managers Value Fund
Managers Capital Appreciation Fund
Managers Small Company Fund
Managers Special Equity Fund
Managers International Equity Fund
Managers Emerging Markets Equity Fund
Managers Intermediate Bond Fund
Managers Bond Fund
Managers Global Bond Fund
Managers Money Market Fund
You can also vote your proxy by faxing it to us at (203) 831-4120,
by calling (800) 690-6903 and recording your vote by telephone,
or on the internet at www.proxyweb.com.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
FUND NAME PRINTS HERE
The undersigned hereby appoints Galan G. Daukas and Donald S.
Rumery, 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 any
series of The Managers Funds standing in the name of the
undersigned with all powers which the undersigned would possess
if present at the Special Meeting of Shareholders to be
held April 22, 2003 at 10:00 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. THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF THE
ACCOMPANYING NOTICE OF SPECIAL MEETING AND PROXY STATEMENT.
Signature:__________________ Date:_____________
Signature:__________________ Date:_____________
Please sign exactly as your name appears hereon. When shares
are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please
give full title as such. If a corporation, please sign in
corporation name by President or other authorized officer.
If a partnership, please sign in partnership name by an
authorized person.
<Page>
Please fill in box(es) as shown using black or blue ink or
number 2 pencil. [XX]
PLEASE DO NOT USE FINE POINT PENS.
The Board of Trustees recommends a vote FOR Items 1, 2 and 3.
<Table>
FOR AGAINST ABSTAIN
------- ------- -------
ALL FUNDS
- ---------
1. Approving an amendment to the [ ] [ ] [ ]
Declaration of Trust to permit the
creation of multiple classes of shares
for any Fund.
ALL FUNDS
- ---------
2. Election of Peter M. Lebovitz as a [ ] [ ] [ ]
Trustee of the Trust.
MANAGERS MONEY MARKET FUND ONLY
- -------------------------------
3. Approving an amendment to the investment [ ] [ ] [ ]
restriction regarding underwriting
securities of other issuers for Managers
Money Market Fund.
</Table>
PLEASE SIGN ON REVERSE SIDE
<Page>