As filed with the Securities and Exchange Commission on June 6, 2003
Securities Act File No. _____
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[ ] Pre-Effective [ ] Post-Effective
Amendment No. _______ Amendment No. ________
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Managers Trust I
(Exact Name of Registrant as Specified in Charter)
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1-800-835-3879
(Registrant's Telephone Number, Including Area Code)
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40 Richards Avenue, Norwalk, Connecticut 06854
(Address of Principal Executive Offices, Including
Number, Street, State and Zip Code)
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Donald S. Rumery
The Managers Funds LLC
40 Richards Avenue, Norwalk, Connecticut 06854
(Name and Address of Agent for Service)
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Copies of all communications should be sent to:
Philip H. Newman, P.C.
Goodwin Procter LLP
Exchange Place, Boston, Massachusetts 02109
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Approximate Date of Proposed Public Offering:
As soon as practicable after this Registration Statement
becomes effective.
Title of Securities Being Registered:
Shares of Beneficial Interest of First Quadrant Tax-Managed
Equity Fund
a series of Managers Trust I
- ---------------------------------------------------------------------
No filing fee is required because an indefinite number of
shares of beneficial interest, without par value, of the Registrant
previously have been registered pursuant to Section 24(f) of the
Investment Company Act of 1940, as amended.
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective date
until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall thereafter
become effective in accordance with Section 8(a) of the Securities
Act of 1933, as amended or until the Registration Statement shall
become effective on such date as the Commission, acting pursuant to
said Section 8(a), may determine.
<Page>
THE MANAGERS TRUST I
--------------------
CONTENTS OF REGISTRATION STATEMENT ON FORM N-14
-----------------------------------------------
This Registration Statement consists of the following papers and
documents:
Cover Sheet
Table of Contents
First Quadrant Tax-Managed Equity Fund
Part A - Prospectus
Part B - Statement of Additional Information
Part C - Other Information
Signature Page
Exhibits
<Page>
MANAGERS TRUST I
40 Richards Avenue, Norwalk, Connecticut 06854
1-800-835-3879
PROSPECTUS
----------
This Prospectus is being furnished to shareholders of First
Quadrant Tax-Managed Equity Fund ("FQ Fund"), a series of Managers
AMG Funds ("AMG Trust"), in connection with an Agreement and Plan of
Reorganization (the "Plan") by and between The Managers Trust I on
behalf of its sole series also named First Quadrant Tax-Managed
Equity Fund (the "Fund"), and AMG Trust on behalf of FQ Fund. Under
the Plan, FQ Fund shareholders will receive in exchange for their FQ
Fund shares, shares of the Fund equal in total value to their
holdings in FQ Fund as of the closing date of the reorganization to
be accomplished by the Plan (the "Reorganization"). The Fund, which
has substantially the same investment objective and policies as FQ
Fund and for which FQ Fund's sub-advisor First Quadrant, L.P. also
serves as sub-advisor, is designed to be a continuation of FQ Fund.
After the Reorganization is complete, FQ Fund will be dissolved. The
Reorganization is expected to be effective on or about July 31, 2003.
In approving the Plan, the Board of Trustees of Managers AMG
Funds ("AMG Trust") considered, among other things, that the
shareholders of FQ Fund may benefit by becoming shareholders of the
Fund because the larger combined Fund resulting from the
Reorganization was expected to have lower operating expenses than FQ
Fund would have if it continued to operate as a stand-alone fund.
The Board of Trustees of the AMG Trust also noted that, as a result
of charges to be made in connection with the Reorganization, at the
time of the Reorganization, the Fund would have substantially the
same investment objective and policies as FQ Fund. The Board of
Trustees of the AMG Trust was also advised by legal counsel that the
Reorganization would be treated as a tax-free transaction for federal
tax purposes. Shareholders of FQ Fund are not being asked to vote on
the Plan or approve the Reorganization.
The Fund is a series of The Managers Trust I (the "Trust"), a
Massachusetts business trust registered as an open-end, diversified
management investment company that was organized on December 18,
1991. FQ Fund is a series of AMG Trust, organized as a Massachusetts
business trust on June 18, 1999 and registered as an open-end,
diversified management investment company, which consists of eight
separate series. Each Trust's principal executive offices are
located at 40 Richards Avenue, Norwalk, Connecticut 06854. Each
Trust's telephone number is 1-800-835-3879. The Managers Funds LLC
(the "Manager") serves as the investment manager to both the Fund and
FQ Fund. The investment objective of each Fund is to seek to achieve
long-term after-tax returns for investors.
This Prospectus, which you should read carefully and retain for
future reference, sets forth concisely the information that you
should know about the Trust and the Fund, and the transaction
contemplated by the Plan. [Certain financial reports to be
designated by amendment] accompany and are incorporated by reference
into (are legally part of) this Prospectus. A Statement of
Additional Information, dated [July 31], 2003 relating to the
proposed transaction described in this Prospectus has been filed with
the Securities and Exchange Commission (the "SEC") and is
incorporated by reference into (is legally part of) this Prospectus.
You can obtain free copies of these documents by calling the Fund at
1-800-835-3879 or by submitting a written request to the Fund's
principal executive offices. The Trust, the AMG Trust and each
series thereof, are subject to the informational requirements of the
Exchange Act of 1934, as amended, and the Investment Company Act of
1940, as amended, and in accordance therewith, file reports, proxy
material and other information with the SEC. Such reports, proxy
material and other information can be inspected and copied at the
public reference facilities maintained by the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549. Copies of such material also
can be obtained at prescribed rates from the Public Reference Branch,
Office of Consumer Affairs and Information Services, Securities and
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.
The SEC maintains a web site (http://www.sec.gov) that contains
the Statement of Additional Information dated [July 31], 2003 and
other material incorporated by reference, together with other
information regarding the Trust, AMG Trust and each series thereof.
We are not asking you for a proxy and you are requested not to
send us a proxy. These securities have not been approved or
disapproved by the Securities and Exchange Commission nor has the
Securities and Exchange Commission passed upon the accuracy or
adequacy of this Prospectus. Any representation to the contrary is a
criminal offense.
The date of this Prospectus is [July 31], 2003.
<Page>
TABLE OF CONTENTS
Prospectus
----------
PAGE
----
SYNOPSIS 1
- --------
The Reorganization and Related Actions 1
Investment Objectives And Policies 1
Purchases/Redemptions/Exchanges 2
Dividends And Other Distributions 2
PRINCIPAL RISK FACTORS 2
- ----------------------
Market Risk 2
Management Risk 2
Tax-Management Risk 2
FEES AND EXPENSES 3
THE REORGANIZATION 4
- ------------------
The Plan 4
Reasons for the Reorganization 5
Federal Income Tax Consequences 6
Description of Shares 6
Capitalization 7
INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES 7
- ---------------------------------------------------------
Investment Objective 7
Principal Investment Strategies 7
Additional Practices/Risks 8
PERFORMANCE SUMMARY 8
- -------------------
Annual Total Returns - Last Ten Calendar Years 10
SHAREHOLDER INFORMATION 11
- -----------------------
Pricing of Shares 11
Purchase of Shares 12
HOW TO PURCHASE SHARES 13
Redemption of Shares 14
INVESTOR SERVICES 15
OPERATING POLICIES 15
ACCOUNT STATEMENTS 16
DIVIDENDS AND DISTRIBUTIONS 16
TAX INFORMATION 16
(i)
<Page>
SHARE OWNERSHIP 17
- ---------------
Control Persons 17
Five Percent Holders 17
Shares Held by Officers and Trustees 17
SYNOPSIS 1
- --------
The Reorganization and Related Actions 1
Investment Objectives And Policies 1
Purchases/Redemptions/Exchanges 2
Dividends And Other Distributions 2
PRINCIPAL RISK FACTORS 2
- ----------------------
Market Risk 2
Management Risk 2
Tax-Management Risk 2
FEES AND EXPENSES 3
THE REORGANIZATION 4
- ------------------
The Plan 4
Reasons for the Reorganization 5
Federal Income Tax Consequences 6
Description of Shares 6
Capitalization 7
INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES 7
- ---------------------------------------------------------
Investment Objective 7
Principal Investment Strategies 7
Additional Practices/Risks 8
PERFORMANCE SUMMARY 8
- -------------------
Annual Total Returns - Last Ten Calendar Years 10
SHAREHOLDER INFORMATION 11
- -----------------------
Pricing of Shares 11
Purchase of Shares 12
HOW TO PURCHASE SHARES 13
- ----------------------
Redemption of Shares 14
INVESTOR SERVICES 15
OPERATING POLICIES 15
ACCOUNT STATEMENTS 16
DIVIDENDS AND DISTRIBUTIONS 16
TAX INFORMATION 16
SHARE OWNERSHIP 17
- ---------------
Control Persons 17
Five Percent Holders 17
Shares Held by Officers and Trustees 17
(ii)
<Page>
The Managers Trust I
40 Richards Avenue, Norwalk, Connecticut 06854
1-800-835-3879
PROSPECTUS
Dated [July 31], 2003
SYNOPSIS
--------
The Reorganization and Related Actions
- --------------------------------------
At a meeting held on March 14, 2003, the Board of Trustees of
AMG Trust unanimously approved the Plan which provides for the
transfer on a tax-free basis of the assets of FQ Fund to the Fund in
exchange for shares of the Fund and the assumption by the Fund of the
stated liabilities, if any, of FQ Fund. The Board of Trustees of
each Trust concluded that the Reorganization is in the best interests
of its shareholders and that the interests of each Fund's
shareholders would not be diluted as a result of the transaction.
Under the Plan, FQ Fund will transfer substantially all of its
assets to the Fund in exchange for shares of the Fund and the Fund's
assumption of all stated liabilities of FQ Fund. FQ Fund will then
distribute the shares of the Fund it has received to FQ Fund
shareholders in exchange for their shares of FQ Fund, and FQ Fund
will be dissolved. Immediately after the Reorganization, which is
expected to take place on or about July 31, 2003, each person who
held shares in FQ Fund will hold shares in the Fund with exactly the
same total value. The Plan provides that the costs and expenses of
the Reorganization, including the costs and expenses incurred in the
preparation and mailing of this Prospectus will be borne 40% by the
Manager, 48% by the Fund and 12% by FQ Fund.
The implementation of the Reorganization is subject to a number
of conditions set forth in the Plan. Among the significant
conditions (which may not be waived) are the receipt by the Fund and
FQ Fund of an opinion of counsel to the effect that the
Reorganization will be treated as a tax-free reorganization for
federal income tax purposes.
In anticipation of the Reorganization, the Fund, formerly known
as Managers U.S. Stock Market Plus Fund, has amended its investment
objective and policies to be substantially similar to those of
FQ Fund and adopted the name "First Quadrant Tax-Managed Equity
Fund." Through these actions, it is intended that the Fund serve for
all practical purposes as a continuation of FQ Fund.
Investment Objectives And Policies
- ----------------------------------
The Fund and FQ Fund have substantially the same investment
objective and policies, so that the description below also applies to
FQ Fund.
The Fund's investment objective is to seek to achieve long-term
after-tax returns for investors. The Fund pursues this objective by
investing in a diversified portfolio of U.S. equity securities
(generally common and preferred stocks) that reflect the
characteristics of the Russell 3000 Index (the "Benchmark") in terms
of industry, earnings growth, valuation and similar measurements.
Moreover, the Fund invests at least 80% of its assets in equity
securities, (generally common and preferred stocks) and in
approximately 75 to 250 stocks using quantitative models that analyze
top-down (market and economic) conditions and bottom-up (company
specific) data to enhance long-term returns through the stock
selection process. Consistent with its investment objective, the
Fund applies a variety of tax-sensitive investment techniques
designed to minimize taxable income and realized capital gains for
shareholders.
A-1
<Page>
Purchases/Redemptions/Exchanges
- -------------------------------
Each Fund's procedures to purchase and redeem shares and
exchange privilege are substantially the same. Shareholders should
refer to the "Shareholder Information" section of this Prospectus for
a more detailed discussion of these features of the Fund.
Dividends And Other Distributions
- ---------------------------------
Each Fund ordinarily declares and pays income dividends and net
capital gain distributions, if any, annually in December.
PRINCIPAL RISK FACTORS
----------------------
The Fund has substantially the same risk factors as FQ Fund, so
that the description below of the Fund's Principal Risk Factors also
applies to FQ Fund. Risk is the possibility that an investor will
lose money or not make any additional money by investing in the Fund
or FQ Fund.
Market Risk
- -----------
The Fund is subject to the risks generally of investing in
stocks, commonly referred to as "market risk." Market risk includes
the risk of sudden and unpredictable drops in value of the market as
a whole and periods of lackluster performance. Despite the unique
influences on individual companies, stock prices in general rise and
fall as a result of investors' perceptions of the market as a whole.
The consequences of market risk are that if the stock market drops in
value, the value of the Fund's portfolio of investments is also
likely to decrease in value. The increase or decrease in the value of
the Fund's investments, in percentage terms, may be more or less than
the increase or decrease in the value of the market.
Management Risk
- ---------------
The Fund is subject to management risk because it is an
actively managed investment portfolio. Management risk is the chance
that poor security selection will cause the Fund to underperform
other funds with similar objectives. The success of the Fund's
investment strategy depends significantly on the skill of its
Sub-Advisor, First Quadrant, L.P., in assessing the potential of the
securities in which the Fund invests. There can be no guarantee that
First Quadrant, L.P.'s application of its investment techniques and
risk analyses will produce the desired results.
Tax-Management Risk
- -------------------
First Quadrant, L.P. applies a variety of tax-management
investment strategies designed to minimize taxable income and capital
gains for shareholders. Notwithstanding the use of these strategies,
the Fund may have taxable income and may realize taxable capital
gains. The ability of the Fund to avoid realizing taxable gains may
be affected by the timing of cash flows into and out of the Fund
attributable to the payment of expenses and daily net sales and
redemptions. In addition, investors who purchase shares when the Fund
has large accumulated capital gains could receive a significant part
of the purchase price of their shares back as a taxable capital gain
distribution. Over time, securities with unrealized gains may
comprise a substantial portion of the Fund's assets.
A-2
<Page>
FEES AND EXPENSES
-----------------
This table discloses the fees and expenses that you may pay if
you buy and hold shares of the Fund or FQ Fund and how those fees and
expenses may be affected by the Reorganization and related actions.
As shown by this table, there are no transaction charges when you buy
or sell shares of either Fund, nor will there be any such charges in
connection with or following the Reorganization.
Shareholder Fees (fees paid directly from your investment)
- ----------------------------------------------------------
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of the offering price) None
Maximum Deferred Sales Charge (Load) None
Maximum Sales Charge (Load) Imposed on Reinvested
Dividends and Other Distributions None
Exchange Fees None
Redemption Fees None
Maximum Account Fee None
Set forth below is a comparison of operating expenses for (a)
the Fund as it operated prior to the changes to its investment
objective and policies related to the Reorganization that will cause
it to operate in the substantially the same manner as FQ Fund going
forward and without giving effect to the Reorganization (under the
heading "The Fund (Pre-Reorganization)"), (b) FQ Fund and (c) the
Fund on a pro forma (estimated) basis after giving effect to the
Reorganization and related changes to the Fund's investment objective
and policies that will cause it to operate in the substantially the
same manner as FQ Fund going forward (under the heading "The Fund Pro
Forma Combined (Post Reorganization)").
Annual Fund Operating Expenses
------------------------------
(expenses that are deducted from the assets of the Fund and FQ Fund)
<Table>
The Fund
The Fund Pro Forma Combined
(Pre-Reorganization) FQ Fund (Post Reorganization)
-------------------- --------- ---------------------
Management Fee [0.70]% 0.85% [0.85]%
Distribution (12b-1) Fees(1) None 0.00% None
Other Expenses [0.97]%(1) 1.70% [0.55]%
------- ----- -------
Total Annual Fund Operating Expenses [1.67]% 2.55% [1.40]%
Fee Waiver and Reimbursement [-0.12]%(2) -1.55% (3) [-0.41]% (4)
------- ----- -------
Net Annual Fund Operating Expenses [1.55]% (1) 1.00% [0.99]%
======= ===== =======
</Table>
(1) Although FQ Fund is subject to a Rule 12b-1 Plan of Distribution
that permits payments of up to 0.25% of their average daily net
assets, no payments have been authorized to date. The Fund does
not have a Rule 12b-1 Plan of Distribution.
(2) The amount shown reflects the fact that the Manager contractually
agreed through August 1, 2003, to limit the Fund's Total Annual
Fund Operating Expenses (exclusive of taxes, interest, brokerage
and extraordinary items) to 0.88% of average daily net assets,
subject to later reimbursement by the Fund in certain
circumstances. In general, for a period of up to three years from
the time of any waiver or payment pursuant to a contractual
expense limitation, the Manager may recover from the Fund fees
waived and expenses paid to the extent that the Fund's Total
Annual Fund Operating Expenses do not exceed the contractual
expense limitation amount.
(3) The amount shown reflects the fact that the Manager and First
Quadrant, L.P. have contractually agreed through March 1, 2004 to
limit FQ Fund's Net Annual Fund Operating Expenses (exclusive of
taxes, interest, brokerage costs and extraordinary items) to 1.00%
subject to later reimbursement by the Fund in certain
circumstances. In general, for a period of up to three years from
the time of any waiver or payment pursuant to a contractual
expense limitation, the Manager may recover from FQ Fund fees
waived and expenses paid to the extent that FQ Fund's Total Annual
Fund Operating Expenses do not exceed the contractual expense
limitation amount.
A-3
<Page>
(4) The amount shown reflects the fact that the Manager has indicated
that it will contractually agree, commencing with the
Reorganization and continuing until at least August 1, 2004, to
limit the Fund's Total Annual Fund Operating Expenses (exclusive
of taxes, interest, brokerage and extraordinary items) to 0.99% of
average daily net assets, subject to later reimbursement by the
Fund in certain circumstances. In general, for a period of up to
three years from the time of any waiver or payment pursuant to a
contractual expense limitation, the Manager may recover from the
Fund fees waived and expenses paid to the extent that the Fund's
Total Annual Fund Operating Expenses do not exceed the contractual
expense limitation amount.
Example
- -------
The following Example is intended to help you understand the
various types of costs and expenses associated with your investment
in the Fund acquired as a result of the Reorganization. The Example
makes certain assumptions. It assumes that you invest $10,000 as an
initial investment for the time periods indicated and then redeem all
of your shares at the end of those periods. It also assumes that your
investment has a 5% total return each year, all dividends and
distributions are reinvested, and Fund operating expenses remain as
described above. Although your actual costs may be higher or lower,
based on the above assumptions, you would have to pay the following
amounts of total expenses if you closed your account at the end of
each of the following time periods:
<Table>
1 Year 3 Years 5 Years 10 Years
--------- ---------- --------- ----------
The Fund (Pre-
Reorganization) [$102] [$569] [$1,142] [$2,703]
FQ Fund $[____] $[____] $[____] $[____]
The Fund Pro
Forma Combined
(Post Reorganization) $[____] $[____] $[____] $[____]
</Table>
The example should not be considered a representation of past or
future expenses or rates of return, as actual expenses or returns may
be greater or lower than those shown and may change.
THE REORGANIZATION
------------------
The Plan
- --------
The terms and conditions under which the Reorganization will be
implemented are set forth in the Plan whose significant provisions
are summarized below. The Plan contemplates (i) the Fund's
acquisition of all of the assets of FQ Fund in exchange solely for
shares of the Fund, (ii) the assumption by the Fund of all of FQ
Fund's stated liabilities, if any, as of the closing date, and (iii)
FQ Fund's distribution on the closing date of shares of the Fund it
has acquired to FQ Fund shareholders. The value of FQ Fund's assets
to be acquired and the net asset value of a share of FQ Fund will be
determined immediately after the close of regular trading on the NYSE
and after the declaration of any dividends on the closing date, using
the valuation procedures described in the Fund's Declaration of Trust
("Declaration of Trust") and the then-current Prospectus and SAI of
the Fund, together with any other valuation procedures established by
the Trustees of the Trust on behalf of the Fund. In the event that
the NYSE or another primary trading market for portfolio securities
of the Fund or FQ Fund is subject to trading restrictions or is
closed to trading, or trading or the reporting of trading on the NYSE
or elsewhere shall be disrupted so that, in the judgment of the
respective officers of the Trust and AMG Trust, accurate appraisal of
the value of the net assets of the Fund or FQ Fund is impracticable,
the closing date will be postponed until the first trading day after
the day when trading is fully resumed and reporting is restored.
Immediately after the transfer of its assets for shares of the Fund,
FQ Fund will distribute pro rata to its shareholders of record the
shares of the Fund it receives in the Reorganization, so that each
A-4
<Page>
shareholder of FQ Fund will receive a number of full and fractional
shares of the Fund equal in value to his or her holdings in FQ Fund.
FQ Fund will then completely liquidate.
The Plan provides that the costs and expenses of the
Reorganization, including the costs and expenses incurred in the
preparation and mailing of this Prospectus will be borne 40% by the
Manager, 48% by the Fund and 12% by FQ Fund. The closing date is
expected to be on or about July 31, 2003. The implementation of the
Reorganization is subject to a number of conditions set forth in the
Plan. For instance, the Reorganization will not take place if the
Fund and FQ Fund do not receive the opinion of counsel to the effect
that the Reorganization will constitute a tax-free reorganization for
federal income tax purposes.
Reasons for the Reorganization
- ------------------------------
At a meeting held on March 14, 2003, the Board of Trustees of
AMG Trust, including all of the Trustees who are not "interested
persons" of the Trust (the "Independent Trustees") within the meaning
of the Investment Company Act of 1940, as amended (the "1940 Act"),
determined that the Reorganization was in the best interests of the
shareholders of FQ Fund, and that the interests of shareholders of FQ
Fund would not be diluted as a result of the Reorganization. In
approving the Reorganization, the Board of Trustees of the Trust and
AMG Trust considered a number of factors, including the following:
(1) the Fund will constitute for all practical purposes a
continuation of FQ Fund because the Fund will have
substantially the same objective and policies as FQ Fund;
(2) the Reorganization will permit fixed costs to be spread
over a larger asset base, which over time may result in
lower operating expenses for the Fund then would be
expected for FQ Fund;
(3) the Fund's expense limitation following the
Reorganization will be lower than FQ Fund's current
expense limitation;
(4) the Fund has substantial tax loss carryforwards that
may offer benefits in pursuing a tax-sensitive investment strategy for
FQ Fund shareholders who become shareholders of the Fund; and
(5) the Reorganization is expected to be treated as a tax-
free reorganization for federal tax purposes.
At a meeting of the Board of Trustees of the Trust held on
March 14, 2003, the Trust's Trustees, including all of the
Independent Trustees approved (i) the Plan and (ii) other actions
necessary to effect the combination of the Fund and FQ Fund into a
surviving entity that would operate in substantially the same manner
as FQ Fund going forward (the Plan and such other actions being
referred to collectively as the "Combination"). In approving the
Combination, the Trustees of the Trust considered a number of
factors, including the following: (a) the ongoing viability of the
Fund as it operated at that time (i.e. prior to any modifications
designed to make the Fund operate in the same manner as FQ Fund) was
questionable; (b) the Fund's prospects for attracting additional
assets were expected to improve following the Combination; (c)
consolidating the Fund and FQ Fund into a single fund could create a
more viable fund as a result of a larger asset base; (d) the
Combination would permit fixed costs to be spread over a larger asset
base and, over time, economies of scale could decrease the Fund's
operating expenses; (e) the investment objective and policies of the
Fund (prior to any changes associated with the Combination) and FQ
Fund were similar; (f) the Combination, unlike a liquidation or the
merger of the Fund into FQ Fund, would not have adverse tax
consequences for the Fund or Fund shareholders; and (g) following the
Combination, FQ Fund's tax loss carryforwards could offer additional
benefits to Fund shareholders under the Fund's revised tax-sensitive
investment strategy. The Trust's Board of Trustees also considered
the matters related to the approval of a new investment management
agreement with the Manager and a new sub-advisory agreement with
First Quadrant, L.P. The Board of Trustees of the Trust reviewed
alternatives to the Combination, such as maintaining the status quo
or liquidating the Fund, and determined that the Combination, and
specifically the reorganization contemplated by the Plan, would be in
the best interests of shareholders of the Fund.
A-5
<Page>
Federal Income Tax Consequences
- -------------------------------
As a condition to the Reorganization, the Trust and AMG Trust
will receive a legal opinion from Goodwin Procter LLP, to the effect
that the Reorganization should be a tax-free transaction from the
standpoint of the Fund and FQ Fund and their shareholders, which
means that: (1) no gain or loss will be recognized by FQ Fund upon
the transfer of its assets and liabilities to the Fund; (2) the tax
basis of the assets of FQ Fund in the hands of the Fund will be the
same as the tax basis of such assets in the hands of the FQ Fund
immediately prior to the transfer; (3) the Fund's holding period of
the assets of FQ Fund will include the period during which such
assets were held by FQ Fund; (4) no gain or loss will be recognized
by the Fund upon the receipt of the assets of FQ Fund in exchange for
shares of the Fund and the assumption by the Fund of the stated
liabilities of the FQ Fund; (5) no gain or loss will be recognized by
the shareholders of FQ Fund upon the receipt of shares of the Fund in
exchange for shares of FQ Fund; (6) the basis of the shares of the
Fund received by shareholders of FQ Fund will be the same as the
basis of the shares of FQ Fund for which they were exchanged; and (7)
the holding period of the shares of the Fund received by the
shareholders of FQ Fund will include the holding period of the shares
of FQ Fund exchanged for which they were, provided that, at the time
of the exchange, the shares of FQ Fund were held as capital assets.
The receipt of this an opinion is a condition to the
consummation of the Reorganization. Neither the Trust nor AMG Trust
has obtained an Internal Revenue Service ("IRS") private letter
ruling regarding the federal income tax consequences of the
Reorganization, and the IRS is not bound by advice of counsel. If
the transfer of the assets of FQ Fund in exchange for shares of the
Fund and the assumption by the Fund of all stated liabilities of FQ
Fund do not constitute a tax-free reorganization, each FQ Fund
shareholder generally will recognize gain or loss equal to the
difference between the value of the shares of the Fund the
shareholder acquires and the tax basis of the shareholder's FQ Fund
shares.
Shareholders of FQ Fund should consult their tax advisors
regarding the effect, if any, of the Reorganization in light of their
individual circumstances. Because the foregoing discussion relates
only to the federal income tax consequences of the Reorganization,
shareholders of FQ Fund should also consult tax advisors as to
foreign, state and local tax consequences for them, if any, of the
Reorganization.
Description of Shares
- ---------------------
The Trust is an open-end management investment company
organized as Massachusetts business trust in which the Fund
represents a separate series of shares of beneficial interest. The
Trust's Agreement and Declaration of Trust, as amended ("Trust
Instrument"), permits the Trustees to issue an unlimited number of
full and fractional shares without par value of one or more series
and to divide or combine the shares of any series, if applicable,
without changing the proportionate beneficial interest of each
shareholder in the Fund or assets of another series, if applicable.
Each share of the Fund represents an equal proportional interest in
the Fund with each other share. Upon liquidation of the Fund,
shareholders are entitled to share pro rata in the net assets of the
Fund available for distribution to such shareholders. Shares of the
Fund have no preemptive or conversion rights and are fully paid and
nonassessable.
The shareholders of the Trust are entitled to one vote for each
which share held (or a proportionate fractional vote in respect of a
fractional share) on matters on which shares of the Fund shall be
entitled to vote. Subject to the 1940 Act, the Trustees themselves
have the power to alter the number and the terms of office of the
Trustees, to lengthen their own terms, or to make their terms of
unlimited duration subject to certain removal procedures, and appoint
their own successors, provided however, that immediately after such
appointment the requisite majority of the Trustees have been elected
by the shareholders of the Trust. The voting rights of shareholders
are not cumulative so that holders of more than 50% of the shares
voting can, if they choose, elect all Trustees being selected while
the shareholders of the remaining shares would be unable to elect any
Trustees. Shareholders of the Trust have the right, upon the
declaration in writing or vote of more than two-thirds of its
outstanding shares, to remove a Trustee from office. It is the
intention of the Trust not to hold meetings of shareholders annually.
The Trustees may call meetings of shareholders for action by
shareholder vote as may be required by either the 1940 Act or by the
Declaration of Trust.
A-6
<Page>
Under Massachusetts law, shareholders of a Massachusetts
business trust may, under certain circumstances, be held personally
liable for the obligations of the trust. However, the Trust's Trust
Instrument provides that shareholders shall not be subject to any
personal liability for the acts or obligations of the Fund and that
every written agreement, obligation, instrument or undertaking made
on behalf of the Fund shall contain a provision to the effect that
the shareholders are not personally liable thereunder. The Trust's
Trust Instrument also provides that if held liable for an obligation
of the Fund a shareholder will be entitled to reimbursement from the
general assets of the Fund. Thus, the risk of a shareholder
incurring a financial loss on account of its liability as a
shareholder of the Fund is limited to circumstances in which the Fund
would be unable to meet its obligations. The possibility that these
circumstances would occur is remote. The Trustees of the Trust
intend to conduct the operations of the Trust in a way as to avoid,
as far as possible, ultimate liability of the shareholders of the
Fund.
The Trust Investment further provides that the name of the
Trust refers to the Trustees collectively as Trustees, not as
individuals or personally, that no Trustee shall be responsible for
any neglect or wrongdoing of any officer, employee or agent of the
Trust or to any other Trustee, and that no Trustee, officer, employee
or agent is liable to any third persons in connection with the
affairs of the Fund, except if the liability arises from his or its
own bad faith, willful misfeasance, gross negligence or reckless
disregard of his or its duties to such third persons. It also
provides that all third persons shall look solely to the property of
the Fund for any satisfaction of claims arising in connection with
the affairs of the Fund. With the exceptions stated, the Trust's
Trust Instrument provides that a Trustee or officer is entitled to be
indemnified against all liability in connection with the affairs of
the Fund. The Trust shall continue without limitation of time
subject to the provisions in the Trust Instrument concerning
termination by action of the shareholders or by action of the
Trustees upon notice to the shareholders.
Capitalization
- --------------
The following table shows the actual capitalization of the Fund
and FQ Fund as of [__________], 2003, and the pro forma
capitalization of the Fund as if the Reorganization had occurred on
that date.
<Table>
PRO FORMA
COMBINED THE FUND FQ FUND
-------------- -------------- --------------
Net Assets (000) $[____________] $[____________] $[__________]
Net Asset Value per
share $[____________] $[____________] $[__________]
Shares
Outstanding (000) [____________] [____________] [__________]
</Table>
INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES
---------------------------------------------------------
Because the Fund and FQ Fund have substantially the same
investment objective and policies, the description of the Fund below
also applies to FQ Fund.
Investment Objective
- --------------------
The Fund's investment objective is to seek to achieve long-term
after-tax returns for investors.
Principal Investment Strategies
- -------------------------------
The Fund invests at least 80% of its assets in equity
securities. This policy may not be changed without providing
shareholders 60 days notice. First Quadrant L.P. the Fund's sub-
advisor pursues the Fund's objective by investing in a diversified
portfolio of U.S. equity securities (generally common and preferred
stocks) that reflects the characteristics of the Russell 3000 Index
(the "Benchmark") in terms of industry, earnings growth, valuation
and similar measurements. The Benchmark measures the performance of
the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable
U.S. equity market. At March 31, 2003, the Benchmark had a total
market capitalization range of approximately $3 million to $259
A-7
<Page>
billion. The Fund will ordinarily invest in approximately 75 to 250
stocks; however, the number of stocks in which the Fund invests will
vary depending on market conditions and the size of the Fund.
The Fund uses a proprietary quantitative analytical model to
construct its portfolio to reflect the characteristics of the
Benchmark and combine a top-down analysis of market and economic
conditions with a bottom-up stock selection review process to enhance
returns. The top-down analysis consists of a review of market and
economic data such as interest rates, commodity price changes, market
volatility levels, inflation expectations, credit spreads and foreign
exchange rates to identify those industries and sectors of the U.S.
economy that are likely to benefit from present and future economic
conditions. The Fund modify the industry weightings in its portfolio
relative to the Benchmark based on the top-down analysis, consistent
with maintaining tax efficiency for investors. In general, these
weightings will not differ from the industry weightings of the
Benchmark by more than 5%. In addition, consistent with minimizing
taxable gains and enhancing returns, the Fund's exposure (relative to
the Benchmark) to specific securities within an industry may be
underweighted or overweighted. Individual stocks are selected based
upon a bottom-up review of a variety of security-specific valuation
metrics, such as earnings revisions, earnings surprise signals,
insider trading, corporate actions and changes in various indices.
For temporary or defensive purposes, the Fund may invest,
without limit, in cash or high quality short-term debt securities,
including repurchase agreements. To the extent that the Fund is
invested in these instruments, it will not be pursuing their
investment objectives. First Quadrant, L.P., the Fund's sub-advisor,
may sell any security when it believes the sale is in the Fund's
interest. This may result in active and frequent trading or
portfolio securities which can increase portfolio turnover. Higher
portfolio turnover may adversely affect the Fund's performance by
increasing the Fund's transaction costs and may increase shareholder
tax liability. Short-term trading may increase the Fund's
transaction costs and may increase your tax liability.
First Quadrant, L.P. manages the Fund's portfolio to minimize
taxable distributions to shareholders. It applies a variety of tax-
sensitive investment techniques, including the following: 1)
investing in stocks that pay below-average dividends; 2) employing a
buy-and-hold strategy that will avoid realizing short-term capital
gains and defer as long as possible the realization of long-term
capital gains; and 3) realizing losses on specific securities or
specific tax lots of securities to offset realized gains. The Fund
can be expected to distribute a smaller percentage of its returns
each year than other equity mutual funds that are managed without
regard to tax considerations. There can be no assurance, however,
that taxable distributions can always be avoided.
Additional Practices/Risks
- --------------------------
The Fund may invest in derivatives. Derivatives, a category
that includes options and futures, are financial instruments whose
value derives from another security, an index or a currency. The
Fund may use derivatives to attempt to maintain exposure to the
equity markets while holding cash for temporary liquidity needs. The
principal risk of investing in derivatives is that the derivatives
may not perform as expected resulting in losses. With some
derivatives, there is also the risk that the counterparty may fail to
honor its contract terms, causing a loss.
PERFORMANCE SUMMARY
-------------------
The following performance information illustrate some of the
risks of investing in the Fund by showing year-by-year total returns
and how the performance of the Fund has varied since the Fund's
inception. The performance shown assumes that all dividend and
capital gain distributions have been reinvested. Two different
presentations of the Fund's performance are shown. The first,
labeled "Performance (Pre-Reorganization)," shows the Fund's
performance without giving effect to the Reorganization and related
changes to the Fund's investment objective and policies designed to
allow it to operate as a continuation of FQ Fund following the
Reorganization (as discussed elsewhere in this Prospectus). The
second presentation of performance, labeled "Pro Forma Performance
(Post-Reorganization)," is the performance of FQ Fund, as sub-advised
by First Quadrant, L.P., the Fund's sub-advisor, which is expected to
constitute the Fund's performance record following the
Reorganization. Past performance does not guarantee future results.
A-8
<Page>
PERFORMANCE (PRE-REORGANIZATION)
--------------------------------
Annual Total Returns - Since Inception (June 30, 1992)
<Table>
Calendar Year Annual Total Return
- --------------- -------------------
Dec-92* 10.6%
Dec-93 13.3%
Dec-94 1.8%
Dec-95 36.8%
Dec-96 24.4%
Dec-97 32.3%
Dec-98 26.4%
Dec-99 20.7%
Dec-00 -11.8%
Dec-01 -11.7%
</Table>
Best Quarter: [21.1% (4th Quarter 1998)]
Worst Quarter: [-15.3% (3rd Quarter 2001)]
(January 1, 2003 - June 30, 2003: ____%)
The following table compares the Fund's performance to that of
a broadly based securities market index. The table assumes that
dividends and capital gain distributions have been reinvested for
both the Fund and the applicable index. The past performance of the
Fund is not an indication of how the Fund will perform in the future.
Average Annual Total Returns(1)
(as of 12/31/02)
-------------------------------
<Table>
1 Year 5 Years Since Inception
-------- --------- ---------------
Return Before Taxes ______% ______% ______% (6/92)
Return After Taxes on
Distributions ______% ______% ______%
Return After Taxes on
Distributions and Sale
of Fund Shares ______% ______% ______%
S&P 500 Index (2) ______% ______% ______%
</Table>
(1) After-tax returns are calculated by Lipper. After-tax returns
are calculated using the historical highest individual federal
marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on an
investor's tax situation and may differ from those shown, and
after-tax returns are not relevant to investors who hold their
shares of the Fund through tax-deferred arrangements, such as
401(k) plans or individual retirement accounts.
(2) Reflects no deduction for fees, expenses or taxes. The S&P 500
Index consists of 500 stocks chosen by Standard & Poor's for
market size (generally the largest market value within their
industry), liquidity (trading volume is analyzed to ensure ample
liquidity and efficient share pricing), and industry group
representation (representing important industry segments within
the U.S. economy.). It is a market value weighted index (stock
price times number of shares outstanding), with each stock's
weight in the Index proportionate to its market value.
A-9
<Page>
PRO FORMA PERFORMANCE (POST REORGANIZATION)
Annual Total Returns - Last Ten Calendar Years
----------------------------------------------
Annual Total Returns - Last Ten Calendar Years
<Table>
Calendar Year Annual Total Return
- --------------- -------------------
Dec-93 13.3%
Dec-94 1.8%
Dec-95 36.8%
Dec-96 24.4%
Dec-97 32.3%
Dec-98 26.4%
Dec-99 20.7%
Dec-00 -11.8%
Dec-01 -11.7%
Dec-02 -23.0%
</Table>
Best Quarter: 21.1% (4th Quarter 1998)
Worst Quarter: -19.3% (3rd Quarter 2002)
(January 1, 2003 to June 30, 2003: -____%)
The following table compares the Fund's performance to that of
a broadly based securities market index. The table assumes that
dividends and capital gain distributions have been reinvested for
both the Fund and the index. As always, past performance is not an
indication of how the Fund will perform in the future.
Average Annual Total Return as of 12/31/02(1)
---------------------------------------------
<Table>
1 Year 5 Years 10 Years
----------- ---------- ----------
Return Before Taxes -22.99% -1.73% 9.05%
Return After Taxes on
Distributions -24.83% -5.59% 4.47%
Return After Taxes on
Distributions and Sale
of Fund Shares -14.08% -2.27% 5.67%
S&P 500 Index (2) -21.54% -0.71% 8.94%
Russell 3000 Index _____% _____% _____%
</Table>
The Russell 3000 Index is a market-capitalization weighted index of
3000 U.S. common stocks.
The S&P 500 Index is a market-capitalization weighted index of 500
U.S. common stocks.
(1) After-tax returns are calculated by Lipper. After-tax returns
are calculated using the historical highest individual federal
marginal income taxes and do not reflect the impact of state and
local taxes. Actual after-tax returns depend on an investor's
tax situation and may differ from those shown, and after-tax
returns are not relevant to investors who hold their shares of
the Fund through tax-deferred arrangements, such as 401(k) plans
or individual retirement accounts.
(2) The Fund previously provided information for the S&P 500 Index
for comparison with the Fund's returns. In connection with the
Reorganization the Fund has revised its investment objective and
policies to establish the Russell 3000 Index as a Fund benchmark.
Consistent with these changes, the Fund intends to provide
information with respect to the Russell 3000 Index for
comparative purposes going forward.
* Reflects no deduction for fees, expenses or taxes.
A-10
<Page>
MANAGEMENT
----------
The Managers Funds LLC (the "Manager"), located at 40 Richards
Avenue, Norwalk, Connecticut 06854, serves as investment manager to
the Fund and is responsible for the Fund's overall administration.
The Manager also monitors the performance, security holdings and
investment strategies of First Quadrant, L.P., the sub-advisor of the
Fund (the "Sub-Advisor or "FQ"). Managers Distributors, Inc. (the
"Distributor"), a wholly-owned subsidiary of the Manager, serves as
the Fund's distributor.
FQ has day-to-day responsibility for managing the Fund's
portfolio. FQ is located at 800 E. Colorado Boulevard, Suite 900,
Pasadena, California 91101. Affiliated Managers Group, Inc., whose
wholly owned subsidiary serves as Manager of the Manager, indirectly
owns a majority interest in FQ. As of December 31, 2002, FQ had
assets under management of approximately $13.3 billion.
Christopher G. Luck and R. Max Darnell are the lead portfolio
managers for the Fund. Mr. Luck is a Partner of FQ and a Director of
Equity Portfolio Management, positions he has held since March 1996,
and previously was the Director of Equity Management of its
predecessor, First Quadrant Corporation, since September 1995. Mr.
Darnell is a Partner and the Chief Investment Officer of, and a
portfolio manager for, FQ and has been with the firm since 1991.
The Fund is obligated by its investment management agreement to
pay an annual management fee to the Manager of 0.85% of the average
daily net assets of the Fund. The Manager, in turn, pays FQ 0.85% of
the average daily net assets of the Fund for its services as Sub-
Advisor. Under its investment management agreement with the Fund,
the Manager provides a variety of administrative services to the
Fund. The Manager receives no additional compensation from the Fund
for these services. Pursuant to a Reimbursement Agreement between
the Manager and FQ, FQ reimburses the Manager for the costs the
Manager bears in providing administrative, shareholder and other
additional services to the Fund. The Fund's arrangements with the
Manager and FQ are substantially the same as FQ Fund's. Prior to the
implementation of the new investment management agreement and sub-
advisory agreement described above, the Fund paid an investment
advisory fee to the Manager at the annual rate of .70% of its average
daily net assets.
The Manager has contractually agreed, until August 1, 2004, to
waive fees and pay or reimburse the Fund to the extent total expenses
of the Fund (exclusive of taxes, interest, brokerage costs and
extraordinary items) exceed 0.99% of the Fund's average daily net
assets. The Fund is obligated to repay the Investment Manager such
amounts waived, paid or reimbursed in future years provided that the
repayment occurs within three (3) years after the waiver or
reimbursement and that such repayment would not cause the Fund's
expenses in any such future year to exceed 0.99% of the Fund's
average daily net assets.
SHAREHOLDER INFORMATION
-----------------------
Pricing of Shares
- -----------------
The price at which you purchase and redeem your shares is equal
to the net asset value per share (NAV) next determined after your
purchase or redemption order is received on each day the New York
Stock Exchange (the "NYSE") is open for trading. The NAV is equal to
the Fund's net worth (assets minus liabilities) divided by the number
of shares outstanding. The Fund's NAV is calculated at the close of
regular business of the NYSE, usually 4:00 p.m. New York Time.
The Fund's investments are valued based on market values. If
market quotations are not readily available for any security, the
value of the security will be based on an evaluation of its fair
value, pursuant to procedures established by the Board of Trustees.
A-11
<Page>
MANAGERSCHOICE
- --------------
ManagersChoice (r) Program
ManagersChoice is a unique, comprehensive asset allocation
program offered exclusively through investment advisors and
consisting of several model portfolios using investments in various
other funds in any of our fund families. Your investment advisor
will work with you to select a portfolio to help achieve your goals
in the context of your tolerance for risk.
For more information on this program, contact your investment
advisor or visit our website at www.managersfunds.com. Please be
aware that an advisor may charge additional fees and expenses for
participation in this program.
Purchase of Shares
- ------------------
Cash investments in the Fund must be in U.S. dollars. Third-
party checks which are under $10,000 and are payable to an existing
shareholder who is a natural person (as opposed to a corporation or
partnership) and endorsed over to the Fund or State Street Bank and
Trust Company will be accepted.
Subject to approval by the Manager and FQ, you may be permitted
to purchase shares of the Fund by means of an in-kind contribution of
securities, which will be valued in accordance with the Fund's
pricing procedures. As with a cash purchase of shares, an in-kind
contribution will also be subject to the Fund's minimum investment
requirements.
The following table provides the minimum initial and additional
investments in the Fund directly or through ManagersChoice:
<Table>
DIRECT INVESTMENT MANAGERSCHOICE
INITIAL ADDITIONAL INITIAL ADDITIONAL
INVESTMENT INVESTMENT INVESTMENT INVESTMENT
----------- ----------- ----------- ----------
Regular accounts $5,000 $1,000 $50,000 $500
Traditional IRA $5,000 $1,000 $50,000 $500
Roth IRA $5,000 $1,000 $50,000 $500
</Table>
The Fund or the Distributor may, in its discretion, waive the
minimum initial or additional investment amounts at any time.
A Traditional IRA is an individual retirement account.
Contributions may be deductible at certain income levels and
earnings are tax-deferred while your withdrawals and distributions
are taxable in the year that they are made.
A Roth IRA is an IRA with non-deductible contributions and
tax-free growth of assets and distributions. The account must be
held for five years and certain other conditions must be met in
order to qualify.
You should consult your tax professional for more information on
IRA accounts.
If you invest through a third party such as a bank, broker-
dealer or other fund distribution organization, rather than directly
with the Fund, the policies, fees and minimum investment amounts may
be different than those described in this Prospectus. The Fund may
also participate in programs with many national brokerage firms which
limit the transaction fees for the shareholder and may pay fees to
these firms for participation in these programs.
A-12
<Page>
HOW TO PURCHASE SHARES
----------------------
<Table>
Initial Purchase Additional Purchases
------------------------ ---------------------------
Through your
Investment Advisor Contact your investment Send any additional
advisor or other investment monies to your
professional. investment professional
at the address appearing
on your account statement.
- ---------------------------------------------------------------------------
All Shareholders:
- -----------------
By Mail Complete the account Write a letter of instruc-
application. Mail the tion and a check
application and a check payable to Managers
payable to Managers AMG AMG Funds to:
Funds to:
Managers AMG Funds Managers AMG Funds
c/o Boston Financial c/o Boston Financial
Data Services, Inc. Data Services, Inc.
P.O. Box 8517 P.O. Box 8517
Boston, MA 02266-8517 Boston, MA 02266-8517
Include your account #
and Fund name on your
check
- ---------------------------------------------------------------------------
By Telephone Not Available If your account has
already been established,
call the Transfer
Agent at (800) 252-0682.
The minimum additional
investment is $1,000
- ---------------------------------------------------------------------------
By Internet Not Available If your account has
already been established,
see our website
at managersamg.com.
The minimum additional
investment is $1,000
- ---------------------------------------------------------------------------
</Table>
HOW TO PURCHASE SHARES (MANAGERSCHOICE Program Only)
- ------------------------------------------------------------
By Mail: To open your account, complete and sign the account
application and make your check payable to The Managers Funds.
Mail the check and account application to:
The Managers Funds
c/o PFPC Brokerage Services, Inc.
P.O. Box 9847
Pawtucket, RI 02940-8047
To purchase additional shares, write a letter of instruction
(or complete your investment stub). Send a check and investment
stub or written instructions to the above address.
By Telephone: After establishing this option on your account,
call a client service representative at (800) 358-7668. The
minimum additional investment is $500.
By Wire: Call the Fund at (800) 358-7668. Instruct your bank
to wire the money to Boston Safe Deposit and Trust; ABA #011-001234;
BFN-The Managers Funds A/C 04-5810, FBO Shareholder name, account
number and Portfolio name. Please be aware that your bank may charge
you a fee for this service.
By Internet: Not available.
- -------------------------------------------------------------------
Note: If you redeem shares following a purchase by check, the Fund
may hold the proceeds of your redemption for up to 15 calendar days
to ensure that the check has cleared.
A-13
<Page>
Redemption of Shares
--------------------
You may sell your shares at any time. Your shares will be sold
at the NAV next calculated after the Fund's Transfer Agent receives
your order in proper form. The Fund's NAV is calculated at the close
of business of the NYSE, usually 4:00 p.m. New York Time. Orders
received after 4:00 p.m. New York Time will receive the NAV per share
determined at the close of trading on the next NYSE trading day.
<Table>
INSTRUCTIONS
- ------------------------------------------------------------------------------
Through your Investment
Advisor Contact your investment advisor or other
investment professional.
- ------------------------------------------------------------------------------
All Shareholders:
By Mail Write a letter of instruction containing:
* the name of the Fund
* dollar amount or number of shares to be sold
* your name
* your account number
* signatures of all owners on account
Mail letter to:
Managers AMG Funds
c/o Boston Financial Data Services, Inc.
P.O. Box 8517
Boston, MA 02266-8517
- ------------------------------------------------------------------------------
By Telephone If you elected telephone redemption
privileges on your account application, call us
at (800) 252-0682.
- ------------------------------------------------------------------------------
By Internet See our website at www.managersamg.com
- ------------------------------------------------------------------------------
</Table>
HOW TO SELL SHARES (MANAGERSCHOICE Program Only)
- ------------------------------------------------------------
By Mail: Write a letter of instruction containing:
- the name of the portfolio(s)
- dollar amount or number of shares to be redeemed
- your name
- your account number(s)
- signature(s) of all account owners
and send the written instructions to The Managers Funds, c/o
PFPC Brokerage Services, Inc., P.O. Box 9847, Pawtucket, RI
02940-8047
By Telephone: After establishing this option on your account,
call a client service representative at (800) 358-7668.
Telephone redemptions are available only for redemptions which
are below $25,000 per Fund or $100,000 per Portfolio.
By Internet: Not available.
- -------------------------------------------------------------------
Note: If you redeem shares following a purchase by check, the Fund
may hold the proceeds of your redemption for up to 15 calendar days
to ensure that the check has cleared.
Redemptions of $25,000 and over require a signature guarantee.
A signature guarantee helps to protect against fraud. You can obtain
one from most banks and/or securities dealers. A notary public
cannot provide a signature guarantee. In joint accounts, both
signatures must be guaranteed.
Telephone redemptions are available only for redemptions which
are below $25,000.
For ManagersChoice(r): All redemptions greater than $100,000 per
Portfolio or $25,000 per Fund must be in writing and require a
medallion guarantee. A medallion guarantee is a signature guarantee
by a Guarantor Institution, which is participating in a Signature
Guarantee Program recognized by the Securities Transfer Associate
(STA). A Guarantor Institution is a financial institution, which
guarantees a signature. The financial institution may be a bank,
broker/dealer, credit union, national securities exchange, savings
association or other type of financial institution.
A-14
<Page>
INVESTOR SERVICES
-----------------
Automatic Reinvestment Plan allows your dividends and capital
gain distributions to be reinvested in additional shares of the Fund.
You can elect to receive cash.
Automatic Investments allows you to make automatic deductions
from a designated bank account.
Automatic Redemptions allows you to make automatic monthly
redemptions of $100 or more. Redemptions are normally completed on
the 25th day of each month. If the 25th day of any month is a
weekend or a holiday, the redemption will be completed on the next
business day.
Individual Retirement Accounts are available to you at no
additional cost. Call us at (800) 835-3879 for more information and
an IRA kit.
The Fund has an Exchange Privilege which allows you to exchange
your shares of the Fund for shares of other funds in the Managers
Funds Family of Funds. There is no fee associated with the Exchange
Privilege. You can request your exchange in writing, by telephone
(if elected on the application), by internet or through your
investment advisor, bank or investment professional. The Exchange
Privilege is available only if the account you are exchanging out of
and the account you are exchanging into are registered in the same
name with the same address and taxpayer identification number. Be
sure to read the Prospectus of any fund that you wish to exchange
into. When you purchase a fund's shares by exchange you do so on the
same terms as any new investment in that fund. The Fund reserves the
right to discontinue, alter or limit the Exchange Privilege at any
time. Note: Individual Fund exchanges are not permitted in the
ManagersChoice Program. Please consult your investment advisor for
more details.
An annual fee of $35 will be deducted from any ManagersChoice
account that is less than $250,000. Such fee may be waived or
modified at the sole discretion of The Managers.
OPERATING POLICIES
------------------
The Fund will not be responsible for any losses resulting from
unauthorized transactions (such as purchases, sales or exchanges) if
it follows reasonable security procedures designed to verify the
identity of the investor. You should verify the accuracy of your
confirmation statements immediately after you receive them. If you
do not want the ability to sell and exchange by telephone or
internet, call the Fund for instructions.
The Fund is a series of a "Massachusetts business trust." The
Board of Trustees may, without the approval of the shareholders,
create additional series at any time. Also at any time, the Board of
Trustees may, without shareholder approval, divide this series or any
other series into two or more classes of shares with different
preferences, privileges, and expenses.
The Fund reserves the right to:
* redeem an account if the value of the account falls below
$5,000 due to redemptions;
* suspend redemptions or postpone payments when the NYSE is
closed for any reason other than its usual weekend or
holiday closings or when trading is restricted by the
Securities and Exchange Commission;
* change the minimum investment amounts;
* delay sending out redemption proceeds for up to seven days
(this usually applies to very large redemptions without
notice, excessive trading or during unusual market
conditions);
* make a redemption-in-kind (a payment in portfolio securities
instead of in cash);
A-15
<Page>
* refuse a purchase order for any reason;
* refuse any exchange request if we determine that such
request could adversely affect the Fund, including if such
person or group has engaged in excessive trading (to be
determined in our discretion); and
* terminate or change the Exchange Privilege or impose fees in
connection with exchanges or redemptions, including fees
related to excessive trading.
ACCOUNT STATEMENTS
------------------
You will receive quarterly and yearly statements detailing your
account activity. All investors (other than IRA accounts) will also
receive a Form 1099-DIV annually, detailing the tax characteristics
of any dividends and distributions that you have received with
respect to your account. You will also receive a confirmation after
each trade executed in your account.
DIVIDENDS AND DISTRIBUTIONS
---------------------------
Income dividends and net capital gain distributions, if any,
are normally declared and paid in December.
We will automatically reinvest your distributions of dividends
and capital gains unless you tell us otherwise. You may change your
election by writing to us at least 10 days prior to the scheduled
payment date.
TAX INFORMATION
---------------
Please be aware that the following tax information is general
and refers to the provisions of the Internal Revenue Code of 1986, as
amended, which are in effect as of the date of this Prospectus. You
should consult a tax advisor about the status of your distributions
from the Fund.
All dividends and short-term capital gains distributions are
generally taxable to you as ordinary income. Capital gain dividends
will be taxed as long-term gains regardless of how long you held your
shares of the Fund. These provisions apply whether you receive a
distribution in cash or reinvest it for additional shares. An
exchange of the Fund's shares for shares of another fund will be
treated as a sale of the first Fund's shares and any gain on the
transaction may be subject to federal income tax.
Keep in mind that distributions may be taxable to you at
different rates depending on the length of time the Fund held the
applicable investment and not the length of time that you held your
Fund shares. When you do sell your Fund shares, a capital gain may
be realized, except for certain tax-deferred accounts, such as IRA
accounts.
Federal law requires the Fund to withhold taxes on
distributions paid to shareholders who;
* fail to provide a social security number or taxpayer
identification number;
* fail to certify that their social security number or
taxpayer identification number is correct; or
* fail to certify that they are exempt from withholding.
A-16
<Page>
SHARE OWNERSHIP
---------------
Control Persons
- ---------------
[As of ______, 2003, ___________ "controlled" (within the
meaning of the 1940 Act) the Fund. An entity which controls the Fund
could have effective voting control over the Fund. As of ________,
2003, no shareholder "controlled" (within the meaning of the 1940
Act) FQ Fund.
Five Percent Holders
- --------------------
Except as set forth below no person was known by the Trust or
AMG Trust to own of record 5% or more of the shares of the Fund or FQ
Fund as of ______, 2003. As of _____, 2003, neither Trust knew of
any person who beneficially owned 5% or more of the outstanding
shares of the Fund or FQ Fund.
THE FUND
--------
Name and Address Percentage Ownership
---------------- --------------------
[Charles Schwab & Co. Inc.
101 Montgomery Street
San Francisco, CA 94104-4122] [40%]
FQ FUND
-------
Name and Address Percentage Ownership
---------------- --------------------
[Citcam Stock Co.
c/o Citizens National Bank
P.O. Box 111
Cameron, TX 76520-0111] [21%]
[Charles Schwab & Co., Inc.
Special Custody
A/C FBO Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122] [19%]
[Fiduciary Trust Co. Intl.
FBO Marjorie B. Pelino-Large Cap
P.O. Box 3199
Church Street Station
New York, NY 10008-3199] [12%]
[PFPC Brokerage Services
House Account FBO Managers Funds
211 South Gulph Road
King of Prussia, PA 19406-3101] [5%]
Shares Held by Officers and Trustees
- ------------------------------------
As of _______, 2003, all management personnel of the Trust (its
i.e., Trustees and Officers) as a group owned beneficially less than
1% of the outstanding shares of the Fund. As of ________, 2003, all
management personnel of AMG Trust (i.e., Trustees and officers) as a
group owned beneficially less than 1% of the outstanding shares of FQ
Fund.
A-17
<Page>
PART B
STATEMENT OF ADDITIONAL INFORMATION
-----------------------------------
Acquisition of the Assets of
FIRST QUADRANT TAX-MANAGED EQUITY FUND
a series of
Managers AMG Funds
40 Richards Avenue
Norwalk, Connecticut 06854
By and in Exchange for Shares of
FIRST QUADRANT TAX-MANAGED EQUITY FUND
a series of
The Managers Trust I
40 Richards Avenue
Norwalk, Connecticut 06854
- -------------------------------------------------------------------
This Statement of Additional Information relates specifically to
the proposed transfer of all or substantially all of the assets and
liabilities of First Quadrant Tax-Managed Equity Fund ("FQ Fund"),
a series of Managers AMG Funds, to First Quadrant Tax-Managed
Equity Fund (the "Fund"), a series of The Managers Trust I, in
exchange for shares of the Fund. This Statement of Additional
Information consists of this cover page and the following
documents, each of which accompany this Statement of Additional
Information and are incorporated by reference into (are legally
part of) of this Statement of Additional Information:
(1) the Statement of Additional Information of the Fund dated
[July 31, 2003];
(2) [certain financial reports of the Fund - to be designated
by amendment]; and
(3) [certain financial reports of FQ Fund - to be designated
by amendment].
This Statement of Additional Information, which is not a
prospectus, supplements and should be read in conjunction with the
Prospectus of the Fund dated July 31, 2003. A copy of the
Prospectus may be obtained without charge by contacting Managers
Trust I at 40 Richards Avenue, Norwalk, CT 06854 or by telephoning
Managers Trust I toll free at (800) 835-3879.
The date of this Statement of Additional Information is [July 31],
2003.
<Page>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
PAGE
----
Additional Information About the Fund and FQ Fund B _
Historical Financial Statements B _
Pro Forma Financial Statements B _
Miscellaneous B _
<Page>
ADDITIONAL INFORMATION ABOUT THE FUND AND FQ FUND
-------------------------------------------------
This Statement of Additional Information is accompanied by the
following documents which contain additional information about the
Fund and FQ Fund and which are incorporated by reference into (are
legally part of this:
(1) the Statement of Additional Information of the Fund dated
[July 31, 2003], as filed with the Securities and Exchange
Commission on _______, 2003 (Registration No. ___-______, EDGAR
accession number ____________);
(2) [certain financial reports of the Fund - to be designated
by amendment] ], as filed with the Securities and Exchange
Commission on _______, 200_ (Registration No. ___-______, EDGAR
accession number ____________); and
(3) [certain financial reports of FQ Fund - to be designated by
amendment] ], as filed with the Securities and Exchange
Commission on _______, 200_ (Registration No. ___-______, EDGAR
accession number ____________).
HISTORICAL FINANCIAL STATEMENTS
-------------------------------
[To be designated by amendment]
PRO FORMA FINANCIAL STATEMENTS
------------------------------
[To be provided by amendment]
MISCELLANEOUS
-------------
AVAILABLE INFORMATION
- ---------------------
The Trust and AMG Trust and their respective series are subject to
the informational requirements of the Securities Exchange Act of
1934 and the Investment Company Act of 1940. Accordingly, they
file reports, proxy material and other information with the SEC
which can be inspected and copied at the Public Reference
Facilities maintained by the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of these materials also can be
obtained at prescribed rates from the Public Reference Branch,
Office of Consumer Affairs and Information Services, Securities and
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C.
20549.
LEGAL MATTERS
- -------------
Certain legal matters in connection with the issuance of shares as
part of the Reorganization have been passed upon by Goodwin Procter
LLP, counsel to the Trust.
EXPERTS
- -------
[Matters relating to the audited financial statements the Fund and
FQ Fund to be discussed by amendment]
<Page>
PART C
------
OTHER INFORMATION
Item 15. INDEMNIFICATION
- ------------ ------------------------------------------
Reference is made to Article VIII, Sections 1, 2 and
3 of Registrant's Declaration of Trust with respect to the
indemnification of the trustees and officers of Registrant
against liabilities which may be incurred by them in such
capacities
Insofar as indemnification for liabilities arising
under the Securities Act of 1933, as amended, may be
permitted to trustees, officers and controlling persons of
the Registrant pursuant to the Registrant's Declaration of
Trust, or otherwise, the Registrant has been advised that,
in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses
incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such trustee,
officer or controlling person in connection with the
securities being registered, then the Registrant will,
unless in the opinion of its counsel the matter has been
settled by a controlling precedent, submit to a court of
appropriate jurisdiction the question of whether
indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
<Table>
Item 16. EXHIBITS
EXHIBIT NUMBER EXHIBIT TITLE
- --------------- -----------------------------------------------------
(1) Declaration of Trust dated December 17, 1991. (iii)
(2) By-Laws. (ii)
(3) Not Applicable.
(4) Agreement and Plan of Reorganization. (filed herewith)
(5) Instruments Defining Rights of Security Holders. (i)
(6)(i) Fund Management Agreement between The Managers Funds LLC
and Managers Trust I, dated as of August 1, 2000. (iv)
(6)(ii) Sub-Advisory Agreement between The Managers Funds LLC
and Smith Breeden Associates, Inc., dated
August 1, 2000. (iv)
(7) Distribution Agreement between Managers Distributors, Inc.
and Managers Trust I dated August 1, 2000. (v)
(8) Not Applicable.
(9) Custodian Contract between The Bank of New York and
Managers Trust I dated August 5, 2002. (vi)
(10) Not applicable.
(11) Legal Opinion. (i)
(12) Legal Opinion with respect to tax matters.
(to be filed by amendment)
(13)(i) (h)(i) Administration and Shareholder Servicing Agreement,
dated as of August 1, 2000. (iv)
(13)(ii) Transfer Agency and Service Agreement between Managers
Trust I and State Street Bank and Trust Company, dated as
of August 1, 2000. (iv)
(14) Consents of PricewaterhouseCoopers. (to be filed by amendment)
(15) Not applicable.
(16)(i) Power of Attorney for the Trustees of the Registrant dated
March 14, 2003. (filed herewith)
(16)(ii) Power of Attorney for the Officers of the Registrant dated
March 14, 2003. (filed herewith )
C-1
<Page>
(17) Not applicable.
- ----------- --------------------------------------------------------------
(i) Filed as an exhibit to the Registrant's Registration Statement
on Form N1-A, Registration Nos. 033-44909, 811-6520
(filed April 14, 1992).
(ii) Filed as an exhibit to the Registrant's Registration Statement
on Form N1-A, Registration Nos. 033-44909; 811-6520
(filed August 1, 1995).
(iii) Filed as an exhibit to the Registrant's Registration Statement
on Form N1-A, Registration Nos. 033-44909; 811-6520
(filed July 31, 1998).
(iv) Filed as an exhibit to the Registrant's Registration Statement
on Form N1-A, Registration Nos. 033-44909; 811-6520
(filed August 1, 2000).
(v) Filed as an exhibit to the Registrant's Registration Statement
on Form N1-A, Registration Nos. 033-44909; 811-6520
(filed August 1, 2001).
(vi) Filed as an exhibit to the Registrant's Registration Statement
on Form N1-A, Registration Nos. 033-44909; 811-6520
(filed May 30, 2003).
Item 17 UNDERTAKINGS
- ----------- --------------------------------------------------------------
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a
prospectus which is a part of this registration statement by
any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c) of the Securities Act, the reoffering
prospectus will contain the information called for by the
applicable registration form for the reofferings by persons who
may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as a part of an
amendment to the registration statement and will not be used
until the amendment is effective, and that, in determining any
liability under the 1933 Act, each post-effective amendment shall
be deemed to be a new registration statement for the securities
offered therein, and the offering of the securities at that time
shall be deemed to be the initial bona fide offering of them.
</Table>
C-2
<Page>
=====================================================================
Exhibit No. (4) Agreement and Plan of Reorganization
=====================================================================
AGREEMENT AND PLAN OF REORGANIZATION
------------------------------------
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is
made as of this 14th day of March, 2003, by and between Managers
Trust I (the "Acquiring Trust"), a Massachusetts business trust with
its principal place of business at 40 Richards Ave. Norwalk, CT
06854, on behalf of its series, Managers U.S. Stock Market Plus Fund
(the "Acquiring Fund") and Managers AMG Funds (the "Acquired
Trust"), a Massachusetts business trust with its principal place of
business at 40 Richards Ave. Norwalk, CT 06854, on behalf of its
series, First Quadrant Tax-Managed Equity Fund (the "Acquired
Fund"). All references in this Agreement to action taken by the
Acquiring Fund or the Acquired Fund shall be deemed to refer to
action taken by the Acquiring Trust or the Acquired Trust, as the
case may be.
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section
368(a)(1) of the United States Internal Revenue Code of 1986, as
amended (the "Code"). The reorganization (the "Reorganization") will
consist of the transfer of all of the assets of the Acquired Fund to
the Acquiring Fund in exchange solely for voting shares of
beneficial interest of the Acquiring Fund (the "Acquiring Fund
Shares"), the assumption by the Acquiring Fund of the Stated
Liabilities of the Acquired Fund described in paragraph 1.3, and the
distribution of the Acquiring Fund Shares to the shareholders of the
Acquired Fund in complete liquidation of the Acquired Fund as
provided herein, all upon the terms and conditions hereinafter set
forth in this Agreement.
WHEREAS, the Acquiring Fund and the Acquired Fund are open-
end, registered investment companies of the management type or a
series thereof, and the Acquired Fund owns securities which
generally are assets of the character in which the Acquiring Fund is
permitted to invest;
WHEREAS, the Trustees of the Acquiring Trust have determined
that the exchange of all of the assets of the Acquired Fund for
Acquiring Fund Shares and the assumption of the Stated Liabilities
of the Acquired Fund described in paragraph 1.3, by the Acquiring
Fund is in the best interests of the Acquiring Fund and its
shareholders and that the interests of the existing shareholders of
the Acquiring Fund would not be diluted as a result of this
transaction; and
WHEREAS, the Trustees of the Acquired Trust have determined
that the exchange of all of the assets of the Acquired Fund for
Acquiring Fund Shares and the assumption of the Stated Liabilities
of the Acquired Fund described in paragraph 1.3 by the Acquiring
Fund is in the best interests of the Acquired Fund and its
shareholders and that the interests of the existing shareholders of
the Acquired Fund would not be diluted as a result of this
transaction.
NOW, THEREFORE, in consideration of the premises and of the
covenants and agreements hereinafter set forth, the parties hereto
covenant and agree as follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND TO THE ACQUIRING FUND
IN EXCHANGE FOR THE ACQUIRING FUND SHARES, THE ASSUMPTION OF
THE STATED LIABILITIES OF THE ACQUIRED FUND AND THE
LIQUIDATION OF THE ACQUIRED FUND
1.1 Subject to the requisite approval of the Acquired Fund
shareholders and the other terms and conditions herein set
forth and on the basis of the representations and warranties
contained herein,
<Page>
the Acquired Trust, on behalf of the Acquired Fund agrees to
transfer all of the Acquired Fund's assets, as set forth in
paragraph 1.2, to the Acquiring Trust, on behalf Acquiring Fund, and
the Acquiring Fund agrees in exchange therefor: (i) to deliver to
the Acquired Fund the number of full and fractional Acquiring Fund
Shares determined by dividing the value of the Acquired Fund's net
assets, computed in the manner and as of the time and date set forth
in paragraph 2.1, by the net asset value of one Acquiring Fund
Share, computed in the manner and as of the time and date set forth
in paragraph 2.2; and (ii) to assume the Stated Liabilities of the
Acquired Fund described in paragraph 1.3. Such transactions shall
take place at the closing provided for in paragraph 3.1
(the "Closing").
1.2 The assets of the Acquired Fund to be acquired by the
Acquiring Fund shall consist of all assets and property, including,
without limitation, all cash, cash equivalents, securities,
commodities and futures interests and dividends or interest or other
receivables that are owned by the Acquired Fund and any deferred or
prepaid expenses shown as an asset on the books of the Acquired Fund
on the closing date provided for in paragraph 3.1 (the
"Closing Date") (collectively, "Assets").
1.3 The Acquired Fund will endeavor to discharge all of its
known liabilities and obligations prior to the Closing Date. The
Acquiring Fund shall assume only those accrued and unpaid
liabilities of the Acquired Fund set forth in the Acquired Fund's
statement of assets and liabilities as of the Closing Date (as
defined in Section 3.1) delivered by the Trust, on behalf of the
Acquired Fund to the Acquiring Trust, on behalf of the Acquiring
Fund, pursuant to paragraph 7.2 hereof (the "Stated Liabilities").
The Acquiring Fund shall assume only the Stated Liabilities and
shall not assume any other debts, liabilities or obligations of the
Acquired Fund. On or as soon as practicable prior to the Closing
Date, the Acquired Fund will declare and pay to its shareholders of
record one or more dividends and/or other distributions so that it
will have distributed substantially all of its investment company
taxable income (computed without regard to any deduction for
dividends paid) and realized net capital gain, if any, for the
current taxable year through the Closing Date.
1.4 Immediately after the transfer of Assets provided for in
paragraph 1.1, the Acquired Fund will distribute to the Acquired
Fund's shareholders of record (the "Acquired Fund Shareholders"), on
a pro rata basis, the Acquiring Fund Shares received by the Acquired
Fund pursuant to paragraph 1.1, and will completely liquidate. Such
distribution and liquidation will be accomplished by the transfer of
the Acquiring Fund Shares then credited to the account of the
Acquired Fund on the books of the Acquiring Fund to open accounts on
the share records of the Acquiring Fund in the names of the Acquired
Fund Shareholders. The aggregate net asset value of Acquiring Fund
Shares to be so credited to Acquired Fund Shareholders shall be
equal to the aggregate net asset value of the Acquired Fund shares
owned by such shareholders on the Closing Date. All issued and
outstanding shares of the Acquired Fund will simultaneously be
canceled on the books of the Acquired Fund. Ownership of Acquiring
Fund Shares will be shown on the books of the Acquiring Fund and the
Acquiring Trust will not issue certificates representing the
Acquiring Fund Shares; provided, however, that any share
certificates representing shares of the Acquired Fund that have been
issued by the Acquired Trust and have not been canceled prior to the
Closing shall, from and after the Closing Date, represent a
corresponding number of Acquiring Fund Shares determined in
accordance with Section 2.3.
2
<Page>
1.5 Any reporting responsibility of the Acquired Fund
including, but not limited to, the responsibility for filing of
regulatory reports, tax returns, or other documents with the U.S.
Securities and Exchange Commission (the "Commission"), any state
securities commission, and any federal, state or local tax
authorities or any other relevant regulatory authority, is and shall
remain the responsibility of the Acquired Fund.
1.6 All books and records of the Acquired Fund, including
all books and records required to be maintained under the Investment
Company Act of 1940, as amended (the "1940 Act") and the rules and
regulations thereunder, shall be available to the Acquiring Fund
from and after the Closing Date and shall be transferred to the
Acquiring Fund as soon as practicable following the Closing Date.
2. VALUATION
---------
2.1 The value of the Assets shall be the value of such
assets computed as of immediately after the close of regular trading
of the New York Stock Exchange and after the declaration of any
dividends on the Closing Date (such time and date being hereinafter
called the "Valuation Date"), using the valuation procedures set
forth in the Acquiring Trust's Declaration of Trust and the then-
current prospectus and statement of additional information, together
with any other valuation procedures established by the Trustees of
the Acquiring Trust.
2.2 The net asset value of an Acquiring Fund Share shall be
the net asset value per share computed on the Valuation Date, using
the valuation procedures referred to in paragraph 2.1.
2.3 The number of Acquiring Fund Shares to be issued
(including fractional shares, if any) in exchange for the Acquired
Fund's Assets shall be determined by dividing the value of the
Acquired Fund's net assets determined using the valuation procedures
referred to in paragraph 2.1, by the net asset value of an Acquiring
Fund Share, determined in accordance with paragraph 2.2.
2.4 All computations of value shall be made by or under the
direction of each Fund's respective record keeping agent, if
applicable, and shall be subject to review by Acquiring Fund's
record keeping agent and by each Fund's respective independent
accountants.
3. CLOSING AND CLOSING DATE
------------------------
3.1 The Closing of the transactions contemplated by this
Agreement shall be July 31, 2003, or such other date as the parties
may agree (the "Closing Date"). All acts taking place at the
Closing shall be deemed to take place simultaneously as of 4:00
p.m., Eastern Time on the Closing Date unless otherwise agreed by
the parties. The Closing shall be held at the offices of the
Acquiring Fund or at such other location as the parties may agree.
3.2 The Acquired Fund shall direct The Bank of New York, as
custodian for the Acquired Fund (the "Custodian"), to deliver, at
the Closing, a certificate of an authorized officer stating that (i)
Assets shall have been delivered in proper form to the Acquiring
Fund prior to or on the Closing Date, and (ii) all necessary taxes
in connection with the delivery of the Assets, including all
applicable federal and state stock transfer stamps, if any, have
been paid or provision for payment has been made. The Acquired
Fund's portfolio securities represented by a certificate or other
3
<Page>
written instrument shall be presented for examination by the
Custodian to the custodian for the Acquiring Fund no later than five
business days preceding the Closing Date, and shall be transferred
and delivered by the Acquired Fund as of the Closing Date for the
account of the Acquiring Fund duly endorsed in proper form for
transfer in such condition as to constitute good delivery thereof.
The Custodian shall deliver, as of the Closing Date, by book entry,
in accordance with the customary practices of the Custodian and the
securities depositories (as defined in Rule 17f-4 under the 1940
Act) in which the Acquired Fund's Assets are deposited, the Acquired
Fund's Assets deposited with such depositories. The cash to be
transferred by the Acquired Fund shall be delivered by wire transfer
of federal funds on the Closing Date.
3.3 The Acquired Fund shall direct Boston Financial Data
Service, Inc. (the "Transfer Agent"), on behalf of the Acquired
Fund, to deliver at the Closing a certificate of an authorized
officer stating that its records contain the names and addresses of
the Acquired Fund Shareholders and the number and percentage
ownership of outstanding Acquired Fund shares owned by each such
shareholder immediately prior to the Closing. The Acquiring Fund
shall issue and deliver a confirmation evidencing the Acquiring Fund
Shares to be credited on the Closing Date to the Acquired Fund, or
provide evidence satisfactory to the Acquired Fund that such
Acquiring Fund Shares have been credited to the Acquired Fund's
account on the books of the Acquiring Fund. At the Closing each
party shall deliver to the other such bills of sale, checks,
assignments, share certificates, if any, receipts or other documents
as such other party or its counsel may reasonably request to effect
the transactions contemplated in this Agreement.
3.4 In the event that on the Valuation Date (a) the New York
Stock Exchange or another primary trading market for portfolio
securities of the Acquiring Fund or the Acquired Fund shall be
closed to trading or trading thereupon shall be restricted, or (b)
trading or the reporting of trading on such Exchange or elsewhere
shall be disrupted so that, in the judgment of the respective
officers of the Acquired Fund and the Acquiring Fund, accurate
appraisal of the value of the net assets of the Acquiring Fund or
the Acquired Fund is impracticable, the Closing Date shall be
postponed until the first trading day after the day when trading
shall have been fully resumed and reporting shall have been
restored.
4. REPRESENTATIONS AND WARRANTIES
------------------------------
4.1 Except as has been disclosed to the Acquiring Fund in a
written instrument executed by an officer of the Acquired Trust, the
Acquired Trust, on behalf of the Acquired Fund, represents and
warrants to the Acquiring Trust, on behalf of the Acquiring Fund, as
follows:
(a) The Acquired Fund is duly organized as a series of
the Acquired Trust, a voluntary association of the type commonly
referred to as a Massachusetts business trust duly organized,
validly existing and in good standing under the laws of the
Commonwealth of Massachusetts, with power under its Declaration of
Trust, as amended and/or restated through the date hereof (the
Declaration of Trust of a Massachusetts business trust as amended
and/or restated through the date in question being hereinafter
referred to as its "Declaration of Trust") to own all of its
properties and assets and to carry on its business as it is now
being conducted;
4
<Page>
(b) The Acquired Trust is a registered investment
company classified as a management company of the open-end type, and
its registration with the Commission as an investment company under
the 1940 Act, and such registration is in full force and effect;
(c) No consent, approval, authorization, or order of
any court or governmental authority is required for the consummation
by the Acquired Fund of the transactions contemplated herein, except
such as have been obtained under the Securities Act of 1933, as
amended (the "1933 Act"), the Securities Exchange Act of 1934, as
amended (the "1934 Act") and the 1940 Act and such as may be
required by state securities laws;
(d) The current prospectus and statement of additional
information of the Acquired Fund and each prospectus and statement
of additional information of the Acquired Fund used at all times
prior to the date of this Agreement conforms or conformed at the
time of its use in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and
regulations of the Commission thereunder and does not or did not at
the time of its use include any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not materially misleading;
(e) On the Closing Date, the Acquired Trust, on behalf
of the Acquired Fund, will have good and marketable title to the
Assets and full right, power, and authority to sell, assign,
transfer and deliver such Assets hereunder free of any liens or
other encumbrances, and upon delivery and payment for such assets,
the Acquiring Trust, on behalf of the Acquiring Fund, will acquire
good and marketable title thereto, subject to no restrictions on the
full transfer thereof, including such restrictions as might arise
under the 1933 Act, other than as disclosed to the Acquiring Fund;
(f) The Acquired Fund is not, and the execution,
delivery and performance of this Agreement will not result, in a
material violation of the Acquired Trust's Declaration of Trust or
By-Laws or of any material agreement, indenture, instrument,
contract, lease or other undertaking to which the Acquired Trust, on
behalf of the Acquired Fund, is a party or by which it is bound;
(g) The execution, delivery and performance of this
Agreement will not result in the acceleration of any obligation, or
the imposition of any penalty, under any agreement, indenture,
instrument, contract, lease, judgment or decree to which the
Acquired Trust, on behalf of the Acquired Fund, is a party or by
which it is bound;
(h) All material contracts or other commitments of the
Acquired Fund (other than this Agreement and certain investment
contracts, including options, futures, and forward contracts) will
terminate without liability to the Acquired Fund on or prior to the
Closing Date;
(i) Except as otherwise disclosed in writing to and
accepted by the Acquiring Trust, on behalf of the Acquiring Fund, no
litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or, to
its knowledge, threatened against the Acquired Fund or any of its
properties or assets that, if adversely determined, would materially
and adversely affect its financial condition or the conduct of its
business. The Acquired Trust, on behalf of the Acquired Fund, knows
5
<Page>
of no facts which might form the basis for the institution of such
proceedings and is not a party to or subject to the provisions of
any order, decree or judgment of any court or governmental body
which materially and adversely affects its business or its ability
to consummate the transactions herein contemplated;
(j) The Statement of Assets and Liabilities,
Statements of Operations and Changes in Net Assets, and Portfolio of
Investments of the Acquired Fund at October 31, 2002 have been
audited by PricewaterhouseCoopers LLP, independent accountants, and
are in accordance with generally accepted accounting principles
("GAAP") consistently applied, and such statements (copies of which
have been furnished to the Acquiring Fund) present fairly, in all
material respects, the financial condition of the Acquired Fund as
of such date in accordance with GAAP, and there are no known
contingent liabilities of the Acquired Fund required to be reflected
on a balance sheet (including the notes thereto) in accordance with
GAAP as of such date not disclosed therein;
(k) Since October 31, 2002, there has not been any
material adverse change in the Acquired Fund's financial condition,
assets, liabilities or business, other than changes occurring in the
ordinary course of business, or any incurrence by the Acquired Fund
of indebtedness maturing more than one year from the date such
indebtedness was incurred, except as otherwise disclosed to and
accepted by the Acquiring Fund or as may arise under an agreement to
repay amounts reimbursed or fees waived by the Acquired Fund's
investment advisor. For the purposes of this subparagraph (k), a
decline in net asset value per share of the Acquired Fund due to
declines in market values of securities in the Acquired Fund's
portfolio, the discharge of Acquired Fund liabilities, or the
redemption of Acquired Fund shares by shareholders of the Acquired
Fund shall not constitute a material adverse change;
(l) On the Closing Date, all Federal and other tax
returns, dividend reporting forms, and other tax-related reports of
the Acquired Fund required by law to have been filed by such date
(including any extensions) shall have been filed and are or will be
correct in all material respects, and all Federal and other taxes
shown as due or required to be shown as due on said returns and
reports shall have been paid or provision shall have been made for
the payment thereof, and to the best of the Acquired Fund's
knowledge, no such return is currently under audit and no assessment
has been asserted with respect to such returns;
(m) For each taxable year of its operation (including
the taxable year ending on the Closing Date), the Acquired Fund has
met the requirements of Subchapter M of the Code for qualification
as a regulated investment company and has elected to be treated as
such, has been eligible to and has computed (or will compute) its
federal income tax under Section 852 of the Code, and will have
distributed all of its investment company taxable income and net
capital gain (as defined in the Code) that has accrued through the
Closing Date, and before the Closing Date will have declared
dividends sufficient to distribute all of its investment company
taxable income and net capital gain for the period ending on the
Closing Date;
(n) All issued and outstanding shares of the Acquired
Fund are, and on the Closing Date will be, duly and validly issued
and outstanding, fully paid and non-assessable by the Acquired Trust
(recognizing that under Massachusetts law shareholders of the
Acquired Fund could under certain circumstances be held personally
liable for its obligations). All of the issued and outstanding
shares of the Acquired Fund will, at the time of Closing, be held by
6
<Page>
the persons and in the amounts set forth in the records of the
Transfer Agent, on behalf of the Acquired Fund, as provided in
paragraph 3.3. The Acquired Fund does not have outstanding any
options, warrants or other rights to subscribe for or purchase any
of the shares of the Acquired Fund, nor is there outstanding any
security convertible into any of the Acquired Fund shares;
(o) The execution, delivery and performance of this
Agreement will have been duly authorized prior to the Closing Date
by all necessary action, if any, on the part of the Trustees of the
Acquired Trust, on behalf of the Acquired Fund, this Agreement will
constitute a valid and binding obligation of the Acquired Fund,
enforceable in accordance with its terms, subject, as to
enforcement, bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights and to general
equity principles; and
(p) The information to be furnished by the Acquired
Fund for use in registration statements, proxy materials and other
documents filed or to be filed with any federal, state or local
regulatory authority (including the National Association of
Securities Dealers, Inc.), which may be necessary in connection with
the transactions contemplated hereby, shall be accurate and complete
in all material respects and shall comply in all material respects
with Federal securities and other laws and regulations thereunder
applicable thereto; and
4.2 Except as has been disclosed to the Acquired Fund in a
written instrument executed by an officer of the Acquiring Trust,
the Acquiring Trust, on behalf of the Acquiring Fund, represents and
warrants to the Acquired Trust as follows:
(a) The Acquiring Fund is duly organized as a series
of the Acquiring Trust, a voluntary association of the type commonly
referred to as a Massachusetts business trust duly organized,
validly existing and in good standing under the laws of the
Commonwealth of Massachusetts, with power under its Declaration of
Trust to own all of its properties and assets and to carry on its
business as it is now being conducted;
(b) The Acquiring Trust is a registered investment
company classified as a management company of the open-end type, and
its registration with the Commission as an investment company under
the 1940 Act, and such registration is in full force and effect;
(c) No consent, approval, authorization, or order of
any court or governmental authority is required for the consummation
by the Acquiring Fund of the transactions contemplated herein,
except such as have been obtained under the 1933 Act, the 1934 Act
and the 1940 Act and such as may be required by state securities
laws;
(d) The current prospectus and statement of additional
information of the Acquiring Fund and each prospectus and statement
of additional information of the Acquiring Fund used during the
three years previous to the date of this Agreement conforms or
conformed at the time of its use in all material respects to the
applicable requirements of the 1933 Act and the 1940 Act and the
rules and regulations of the Commission thereunder and does not or
did not at the time of its use include any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not materially
misleading;
(e) On the Closing Date, the Acquiring Trust, on
behalf of the Acquiring Fund, will have good and marketable title to
the Acquiring Fund's assets, free of any liens of other
7
<Page>
encumbrances, except those liens or encumbrances as to which the
Acquired Fund has received notice and necessary documentation at or
prior to the Closing;
(f) The Acquiring Fund is not, and the execution,
delivery and performance of this Agreement will not result, in a
material violation of the Acquiring Trust's Declaration of Trust or
By-Laws or of any material agreement, indenture, instrument,
contract, lease or other undertaking to which the Acquiring Trust,
on behalf of the Acquiring Fund, is a party or by which it is bound;
(g) The execution, delivery and performance of this
Agreement will not result, in the acceleration of any obligation, or
the imposition of any penalty, under any agreement, indenture,
instrument, contract, lease, judgment or decree to which the
Acquiring Trust, on behalf of the Acquiring Fund, is a party or by
which it is bound;
(h) Except as otherwise disclosed in writing to and
accepted by the Acquired Trust, on behalf of the Acquired Fund, no
litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or, to
its knowledge, threatened against the Acquiring Fund or any of its
properties or assets that, if adversely determined, would materially
and adversely affect its financial condition or the conduct of its
business. The Acquiring Trust, on behalf of the Acquiring Fund,
knows of no facts which might form the basis for the institution of
such proceedings and is not a party to or subject to the provisions
of any order, decree or judgment of any court or governmental body
which materially and adversely affects its business or its ability
to consummate the transactions herein contemplated;
(i) The Statement of Assets and Liabilities,
Statements of Operations and Changes in Net Assets and Portfolio of
Investments of the Acquiring Fund at March 31, 2003 will be audited
by PricewaterhouseCoopers LLP, independent auditors, and will be in
accordance with GAAP consistently applied, and such statements
(copies of which have been furnished to the Acquired Fund) will
present fairly, in all material respects, the financial condition of
the Acquiring Fund as of such date in accordance with GAAP, and
there will be no known contingent liabilities of the Acquiring Fund
required to be reflected on a balance sheet (including the notes
thereto) in accordance with GAAP as of such date not disclosed
therein;
(j) After March 31, 2003, there will not have been any
material adverse change in the Acquiring Fund's financial condition,
assets, liabilities or business, other than changes occurring in the
ordinary course of business, or any incurrence by the Acquiring Fund
of indebtedness maturing more than one year from the date such
indebtedness was incurred, except as otherwise disclosed to and
accepted by the Acquired Fund or as may arise under an agreement to
repay amounts reimbursed or fees waived by the Acquiring Fund's
investment advisor. For purposes of this subparagraph (j), a
decline in net asset value per share of the Acquiring Fund due to
declines in market values of securities in the Acquiring Fund's
portfolio, the discharge of Acquiring Fund liabilities, or the
redemption of Acquiring Fund Shares by shareholders of the Acquiring
Fund, shall not constitute a material adverse change;
(k) On the Closing Date, all Federal and other tax
returns, dividend reporting forms, and other tax-related reports of
the Acquiring Fund required by law to have been filed by such date
(including any extensions) shall have been filed and are or will be
correct in all material respects, and all Federal and other taxes
shown as due or required to be shown as due on said returns and
8
<Page>
reports shall have been paid or provision shall have been made for
the payment thereof, and to the best of the Acquiring Fund's
knowledge no such return is currently under audit and no assessment
has been asserted with respect to such returns;
(l) For each taxable year of its operation (including
the taxable year that includes the Closing Date), the Acquiring Fund
has met (or will meet) the requirements of Subchapter M of the Code
for qualification as a regulated investment company and has elected
to be treated as such (or will so elect), has been eligible to and
has computed (or will compute) its federal income tax under Section
852 of the Code and has distributed all of its investment company
taxable income and net capital gain (as defined in the Code) for
periods ending prior to the Closing Date;
(m) All issued and outstanding Acquiring Fund Shares
are, and on the Closing Date will be, duly and validly issued and
outstanding, fully paid and non-assessable by the Acquiring Trust
(recognizing that under Massachusetts law shareholders of the
Acquiring Fund could under certain circumstances be held personally
liable for its obligations). The Acquiring Fund does not have
outstanding any options, warrants or other rights to subscribe for
or purchase any Acquiring Fund Shares, nor is there outstanding any
security convertible into any Acquiring Fund Shares;
(n) The execution, delivery and performance of this
Agreement will have been fully authorized prior to the Closing Date
by all necessary action, if any, on the part of the Trustees of the
Acquiring Trust, on behalf of the Acquiring Fund, and this Agreement
will constitute a valid and binding obligation of the Acquiring
Fund, enforceable in accordance with its terms, subject, as to
enforcement, bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights and to general
equity principles;
(o) The Acquiring Fund Shares to be issued and
delivered to the Acquired Fund, for the account of the Acquired Fund
Shareholders, pursuant to the terms of this Agreement, will on the
Closing Date have been duly authorized and, when so issued and
delivered, will be duly and validly issued Acquiring Fund Shares,
and will be fully paid and non-assessable;
(p) The information to be furnished by the Acquiring
Fund for use in the registration statements, proxy materials and
other documents that may be necessary in connection with the
transactions contemplated hereby shall be accurate and complete in
all material respects and shall comply in all material respects with
Federal securities and other laws and regulations applicable
thereto; and
(q) That (i) from its effective date through the date
of the Closing, Registration Statement on Form N-14 of the Acquiring
Fund relating to the Acquiring Fund Shares issuable hereunder, and
any amendment or supplement thereto (the "Registration Statement"),
and (ii) from the date definitive proxy materials of the Acquiring
Fund related to the matters described in paragraph 5.2 (the "Proxy
Materials") are first distributed to shareholders through the date
of the shareholders meeting contemplated therein (and any
adjournments thereof), the Proxy Materials of the Acquiring Fund,
and any amendment or supplement thereto, shall (A) not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which such statements
9
<Page>
were made, not misleading, provided, however, that the
representations and warranties in this subparagraph (q) shall not
apply to statements in or omissions from the Registration Statement
and Proxy Materials made in reliance upon and in conformity with
information that was furnished by the Acquired Fund for use therein,
and (B) comply in all material respects with the provisions of the
1933 Act, the 1934 Act and the 1940 Act and the rules and
regulations thereunder.
5. COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND
-----------------------------------------------------
5.1 The Acquiring Fund and the Acquired Fund each covenants
to operate its business in the ordinary course between the date
hereof and the Closing Date, it being understood that such ordinary
course of business will include (i) the declaration and payment of
customary dividends and distributions and any other distribution
that may be advisable and (ii) other actions that the Acquiring Fund
or Acquired Fund may deem necessary or advisable to facilitate the
transactions contemplated by this Agreement.
5.2 The Acquiring Fund covenants to call a meeting of its
shareholders to consider and act upon (a) any amendments to the
Acquiring Fund's investment objectives and policies necessary to
cause them to be the same in all material respects as those of the
Acquired Fund provided such amendments require shareholder approval;
and (b) investment management and sub-advisory agreements
substantially similar to those of the Acquired Fund, so as to secure
shareholder approval prior to the Closing Date, and shall prepare
and distribute the Proxy Materials, complying in all material
respects with the requirements of the 1934 Act and 1940 Act
applicable to such solicitation.
5.3 The Acquiring Fund will prepare and distribute the
Registration Statement and deliver the prospectus relating to the
Acquiring Fund Shares to be issued hereunder, complying in all
material respects with the requirements of the 1933 Act, the 1934
Act and the 1940 Act, and the rules and regulations thereunder,
applicable to the distribution of Acquiring Fund Shares in the
Closing.
5.4 The Acquired Fund covenants that the Acquiring Fund
Shares to be issued hereunder are not being acquired for the purpose
of making any distribution thereof, other than in accordance with
the terms of this Agreement.
5.5 The Acquired Fund will assist the Acquiring Fund in
obtaining such information as the Acquiring Fund reasonably requests
concerning the beneficial ownership of the Acquired Fund shares.
5.6 Subject to the provisions of this Agreement, the
Acquiring Fund and the Acquired Fund will each take, or cause to be
taken, all action, and do or cause to be done, all things reasonably
necessary, proper or advisable to consummate and make effective the
transactions contemplated by this Agreement.
5.7 The Acquired Fund will provide the Acquiring Fund with
such information regarding the Acquired Fund reasonably necessary to
ensure compliance with the 1933 Act, the 1934 Act and the 1940 Act
in the preparation of (a) the Registration Statement and (b) the
Proxy Materials.
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5.8 If determined by the officers of the Acquiring Fund, in
their sole discretion, to be advisable, the Acquiring Fund will
effect a stock dividend or reverse split such that the net asset
value of the Acquiring Fund equals the net asset value of the
Acquired Fund on the Valuation Date.
5.9 As soon as is reasonably practicable after the Closing,
the Acquired Fund will make a liquidating distribution to its
shareholders consisting of the Acquiring Fund Shares received at the
Closing.
5.10 The Acquiring Fund and the Acquired Fund shall each use
its reasonable best efforts to fulfill or obtain the fulfillment of
the conditions precedent to effect the transactions contemplated by
this Agreement as promptly as practicable.
5.11 The Acquired Trust, on behalf of Acquired Fund,
covenants that the Acquired Trust will, from time to time, as and
when reasonably requested by the Acquiring Fund, execute and deliver
or cause to be executed and delivered all such assignments and other
instruments, and will take or cause to be taken such further action
as the Acquiring Trust, on behalf of the Acquiring Fund, may
reasonably deem necessary or desirable in order to vest in and
confirm (a) the Acquired Trust's, on behalf of the Acquired Fund's,
title to and possession of the Acquiring Fund Shares to be delivered
hereunder, and (b) the Acquiring Trust's, on behalf of the Acquiring
Fund's, title to and possession of all the assets and otherwise to
carry out the intent and purpose of this Agreement.
5.12 The Acquiring Fund will use all reasonable efforts to
obtain the approvals and authorizations required by the 1933 Act,
the 1940 Act and other applicable law as may be necessary in order
to continue its operations after the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
--------------------------------------------------------
The obligations of the Acquired Trust, on behalf of the
Acquired Fund, to consummate the transactions provided for herein
shall be subject, at the Acquired Trust's election, to the
performance by the Acquiring Trust, on behalf of the Acquiring Fund,
of all the obligations to be performed by it hereunder on or before
the Closing Date, and, in addition thereto, the following further
conditions:
6.1 All representations and warranties of the Acquiring
Trust, on behalf of the Acquiring Fund, contained in this Agreement
shall be true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Closing Date, with the
same force and effect as if made on and as of the Closing Date;
6.2 The Acquiring Trust shall have delivered to the Acquired
Trust a certificate executed in its name by its President or
Treasurer, in a form reasonably satisfactory to the Acquired Trust
and dated as of the Closing Date, to the effect that the
representations and warranties of the Acquiring Trust, on behalf of
the Acquiring Fund, made in this Agreement are true and correct at
and as of the Closing Date, except as they may be affected by the
transactions contemplated by this Agreement, and as to such other
matters as the Acquired Trust shall reasonably request;
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6.3 The Acquiring Trust, on behalf of the Acquiring Fund,
shall have performed all of the covenants and complied with all of
the provisions required by this Agreement to be performed or
complied with by the Acquiring Trust, on behalf of the Acquiring
Fund, on or before the Closing Date; and
6.4 The Acquired Fund and the Acquiring Fund shall have
agreed on the number of full and fractional Acquiring Fund Shares to
be issued in connection with the Reorganization after such number
has been calculated in accordance with paragraph 1.1.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
---------------------------------------------------------
The obligations of the Acquiring Trust, on behalf of the
Acquiring Fund, to complete the transactions provided for herein
shall be subject, at the Acquiring Trust's election to the
performance by the Acquired Trust, on behalf of the Acquired Fund,
all of the obligations to be performed by it hereunder on or before
the Closing Date and, in addition thereto, the following conditions:
7.1 All representations and warranties of the Acquired
Trust, on behalf of the Acquired Fund, contained in this Agreement
shall be true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Closing Date, with the
same force and effect as if made on and as of the Closing Date;
7.2 The Acquired Trust shall have delivered to the Acquiring
Fund a statement of the Acquired Fund's assets and liabilities, as
of the Closing Date, certified by the Treasurer of the Acquired
Trust;
7.3 The Acquired Trust shall have delivered to the Acquiring
Fund on the Closing Date a certificate executed in its name by its
President or Treasurer, in form and substance satisfactory to the
Acquiring Trust and dated as of the Closing Date, to the effect
that the representations and warranties of the Acquired Trust, on
behalf of the Acquired Fund, made in this Agreement are true and
correct at and as of the Closing Date, except as they may be
affected by the transactions contemplated by this Agreement, and
as to such other matters as the Acquiring Trust shall reasonably
request;
7.4 The Acquired Trust, on behalf of the Acquired Fund,
shall have performed all of the covenants and complied with all of
the provisions required by this Agreement to be performed or
complied with by the Acquired Trust, on behalf of the Acquired Fund,
on or before the Closing Date;
7.5 The Acquired Fund and the Acquiring Fund shall have
agreed on the number of full and fractional Acquiring Fund Shares to
be issued in connection with the Reorganization after such number
has been calculated in accordance with paragraph 1.1;
7.6 The Acquired Fund shall have declared and paid a
distribution or distributions prior to the Closing that, together
with all previous distributions, shall have the effect of
distributing to its shareholders (i) all of its investment company
taxable income and all of its net realized capital gains, if any,
for the period from the close of its last fiscal year to 4:00 p.m.
12
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Eastern time on the Closing; and (ii) any undistributed investment
company taxable income and net realized capital gains from any
period to the extent not otherwise already distributed.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING
FUND AND THE ACQUIRED FUND
------------------------------------------------------------
If any of the conditions set forth below have not been
satisfied on or before the Closing Date with respect to the Acquired
Trust, on behalf of the Acquired Fund, or the Acquiring Trust, on
behalf of the Acquiring Fund, the other party to this Agreement
shall, at its option, not be required to consummate the transactions
contemplated by this Agreement:
8.1 Approval of the proposals described in paragraph 5.2 by
the requisite vote of the holders of the outstanding shares of the
Acquiring Fund in accordance with the provisions of the Acquiring
Trust's Declaration of Trust, By-Laws, applicable Massachusetts law
and the 1940 Act, and certified copies of the resolutions evidencing
such approval shall have been delivered to the Acquired Fund.
Notwithstanding anything herein to the contrary, neither the
Acquiring Trust nor the Acquired Trust may waive the conditions set
forth in this paragraph 8.1;
8.2 On the Closing Date no action, suit or other proceeding
shall be pending or, to the Acquired Trust's or the Acquiring
Trust's knowledge, threatened before any court or governmental
agency in which it is sought to restrain or prohibit, or obtain
damages or other relief in connection with, this Agreement or the
transactions contemplated herein;
8.3 All consents of other parties and all other consents,
orders and permits of Federal, state and local regulatory
authorities deemed necessary by the Acquiring Trust or the Acquired
Trust to permit consummation, in all material respects, of the
transactions contemplated hereby shall have been obtained, except
where failure to obtain any such consent, order or permit would not
involve a risk of a material adverse effect on the assets or
properties of the Acquiring Fund or the Acquired Fund, provided that
either party hereto may for itself waive any of such conditions;
8.4 The Registration Statement shall have become effective
under the 1933 Act and no stop orders suspending the effectiveness
thereof shall have been issued and, to the best knowledge of the
parties hereto, no investigation or proceeding for that purpose
shall have been instituted or be pending, threatened or contemplated
under the 1933 Act; and
8.5 The parties shall have received the opinion of Goodwin
Procter LLP addressed to the Acquired Trust and the Acquiring Trust
substantially to the effect that, based upon certain facts,
assumptions, and representations, the transaction contemplated by
this Agreement shall constitute a tax-free reorganization for
federal income tax purposes. The delivery of such opinion is
conditioned upon receipt by Goodwin Procter LLP of representations
it shall request of the Acquiring Trust and the Acquired Trust.
Notwithstanding anything herein to the contrary, neither the
Acquiring Trust nor the Acquired Trust may waive the condition set
forth in this paragraph 8.5.
9. BROKERAGE FEES AND EXPENSES
---------------------------
9.1 The Acquiring Trust, on behalf of the Acquiring Fund,
and the Acquired Trust, on behalf of the Acquired Fund, represent
and warrant to each other that there are no brokers or finders
entitled to receive any payments in connection with the transactions
provided for herein.
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9.2 The expenses relating to the proposed Reorganization
shall be borne in such manner as may be approved by the Trustees of
the Acquired and Acquiring Trusts.
10. ENTIRE AGREEMENT
----------------
The Acquiring Trust and the Acquired Trust agree that neither
party has made any representation, warranty or covenant not set
forth herein and that this Agreement constitutes the entire
agreement between the parties.
Except for covenants to be performed after the Closing, the
representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in
connection herewith shall not survive the consummation of the
transactions contemplated hereunder.
11. TERMINATION
-----------
This Agreement may be terminated and the transactions
contemplated hereby may be abandoned by either party by (i) mutual
agreement of the parties, or (ii) by either party if the Closing
shall not have occurred on or before July 31, 2003, unless such date
is extended by mutual agreement of the parties, or (iii) by either
party if the other party shall have materially breached its
obligations under this Agreement or made a material and intentional
misrepresentation herein or in connection herewith. In the event of
any such termination, this Agreement shall become void and there
shall be no liability hereunder on the part of any party or their
respective trustees or officers, except for any such material breach
or intentional misrepresentation, as to each of which all remedies
at law or in equity of the party adversely affected shall survive.
12. AMENDMENTS
----------
This Agreement may be amended, modified or supplemented in
such manner as may be mutually agreed in writing by the authorized
officers of the Acquiring Trust and the Acquired Trust.
13. NOTICES
-------
Any notice, report, statement or demand required or permitted
by any provisions of this Agreement shall be in writing and shall be
given by facsimile, personal service or prepaid or certified mail
addressed to the Acquired Trust, 40 Richards Avenue, Norwalk, CT
06854, or to the Acquiring Trust, 40 Richards Avenue, Norwalk, CT
06854, in each case with a copy to Goodwin Procter LLP, Exchange
Place, Boston, Massachusetts 02109, Attn: Philip H. Newman, P.C.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION
OF LIABILITY
-------------------------------------------------------------
14.1 The Article and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.
14
<Page>
14.2 This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts
without regard to its principles of conflicts of laws.
14.4 This Agreement shall bind and inure to the benefit of
the parties hereto and their respective successors and assigns, but
no assignment or transfer hereof or of any rights or obligations
hereunder shall be made by any party without the written consent of
the other party. Nothing herein expressed or implied is intended or
shall be construed to confer upon or give any person, firm or
corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of
this Agreement.
14.5 References in this Agreement to the Acquiring Trust mean
and refer to the Trustees from time to time serving under the
Declaration of Trust on file with the Secretary of The Commonwealth
of Massachusetts, as the same may be amended from time to time,
pursuant to which the Acquiring Trust conducts its business. It is
expressly agreed that the obligations of the Acquiring Trust
hereunder shall not be binding upon any of its Trustees,
shareholders, nominees, officers, agents, or employees of the
Acquiring Trust personally, but bind only the property of the
Acquiring Fund as provided in the Declaration of Trust of the
Acquiring Trust. Moreover, no series of the Acquiring Trust other
than the Acquiring Fund shall be responsible for the obligations of
the Acquiring Trust hereunder, and all persons shall look only to
the assets of the Acquiring Fund to satisfy the obligations of the
Acquiring Trust hereunder. The execution and the delivery of this
Agreement have been authorized by the Board of Trustees of the
Acquiring Trust, on behalf of the Acquiring Fund, and this Agreement
has been signed by authorized officers of the Acquiring Trust acting
as such, and neither such authorization by such Trustees, nor such
execution and delivery by such officers, shall be deemed to have
been made by any of them individually or to impose any liability on
any of them personally, but shall bind only the property of the
Acquiring Fund as provided in the Agreement and Declaration of Trust
of the Acquiring Trust.
14.6 References in this Agreement to the Acquired Trust mean
and refer to the Trustees from time to time serving under the
Declaration of Trust on file with the Secretary of The Commonwealth
of Massachusetts, as the same may be amended from time to time,
pursuant to which the Acquired Trust conducts its business. It is
expressly agreed that the obligations of the Acquired Trust
hereunder shall not be binding upon any of its Trustees,
shareholders, nominees, officers, agents, or employees of the
Acquired Trust personally, but bind only the property of the
Acquired Fund as provided in the Declaration of Trust of the
Acquired Trust. Moreover, no series of the Acquired Trust other
than the Acquired Fund shall be responsible for the obligations of
the Acquired Trust hereunder, and all persons shall look only to the
assets of the Acquired Fund to satisfy the obligations of the
Acquired Trust hereunder. The execution and the delivery of this
Agreement have been authorized by the Board of Trustees of the
Acquired Trust, on behalf of the Acquired Fund, and this Agreement
has been signed by authorized officers of the Acquired Trust acting
as such, and neither such authorization by such Trustees, nor such
execution and delivery by such officers, shall be deemed to have
been made by any of them individually or to impose any liability on
any of them personally, but shall bind only the property of the
Acquired Fund as provided in the Agreement and Declaration of Trust
of the Acquired Trust.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its President and its seal to be affixed
thereto and attested by its Secretary.
MANAGERS TRUST I, on behalf of its series,
MANAGERS U.S. STOCK MARKET PLUS FUND
By: ________________________________
Title: _____________________________
MANAGERS AMG FUNDS, on behalf of its series,
FIRST QUADRANT TAX-MANAGED EQUITY FUND
By: ________________________________
Title: _____________________________
16
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=====================================================================
Exhibit No. (16)(i) Power of Attorney for the Trustees of the
Registrant dated March 14, 2003
=====================================================================
POWER OF ATTORNEY
MANAGERS TRUST I
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each of the persons
whose name appears below hereby nominates, constitutes and appoints
Peter M. Lebovitz, Galan G. Daukas and Donald S. Rumery (with full
power to each of them to act alone) his or her true and lawful
attorney-in-fact and agent, for him or her and on his or her behalf
and in his or her place and stead in any way and all capacities, to
make, execute and sign the Registration Statement on Form N-14 under
the Securities Act of 1933 of Managers Trust I (the "Fund"), and any
and all amendments and supplements thereto, and to file the same
with the Securities and Exchange Commission, and any other regulatory
authority having jurisdiction over the offer and sale of shares of
common stock of the Fund, and any and all exhibits and other documents
requisite in connection therewith, granting unto said attorneys and
each of them, full power and authority to perform each and every act
and thing requisite and necessary to be done in and about the premises
as fully to all intents and purposes as each of the undersigned
officers or Trustees himself or herself might or could do.
IN WITNESS WHEREOF, the undersigned officers and Trustees have
hereunto set their hands this 14th day of March, 2003.
Signature Signature
--------- ---------
/s/ Jack W. Aber /s/ William E. Chapman, II
- ------------------------------ -------------------------------
Jack W. Aber, Trustee William E. Chapman, II, Trustee
/s/ Edward J. Kaier /s/ Madeline H. McWhinney
- ------------------------------ -------------------------------
Edward J. Kaier, Trustee Madeline H. McWhinney, Trustee
/s/ Steven J. Paggioli /s/ Eric Rakowski
- ------------------------------ -------------------------------
Steven J. Paggioli, Trustee Eric Rakowski, Trustee
/s/ Thomas R. Schneeweis /s/ Sean M. Healey
- ------------------------------ -------------------------------
Thomas R. Schneeweis, Trustee Sean M. Healey, Trustee
/s/ Peter M. Lebovitz
- ------------------------------
Peter M. Lebovitz, Trustee
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=====================================================================
Exhibit No. (16)(ii) Power of Attorney for the Officers of the
Registrant dated March 14, 2003
=====================================================================
POWER OF ATTORNEY
MANAGERS TRUST I
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each of Peter M. Lebovitz,
Galan G. Daukas and Donald S. Rumery, whose signatures appear below,
hereby nominates, constitutes and appoints each of the others (with
full power to each of them to act alone) his true and lawful
attorney-in-fact and agent, for him and on his behalf and in his place
and stead in any way and all capacities, to make, execute and sign the
Registration Statement on Form N-14 under the Securities Act of 1933
of Managers Trust I (the "Fund"), and any and all amendments and
supplements thereto, and to file the same with the Securities and
Exchange Commission, and any other regulatory authority having
jurisdiction over the offer and sale of shares of common stock of the
Fund, and any and all exhibits and other documents requisite in
connection therewith, granting unto said attorneys and each of them,
full power and authority to perform each and every act and thing
requisite and necessary to be done in and about the premises as fully
to all intents and purposes as the undersigned himself might or
could do.
IN WITNESS WHEREOF, the undersigned persons have hereunto set
their hand this 14th day of March, 2003.
Signature Title
--------- --------------
/s/ Peter M. Lebovitz
- ------------------------------ President
Peter M. Lebovitz
/s/ Galan G. Daukas
- ------------------------------ Chief Financial Officer
Galan G. Daukas
/s/ Donald S. Rumery
- ------------------------------ Treasurer and Secretary
Donald S. Rumery
<Page>
=====================================================================
SIGNATURES
----------
As required by the Securities Act of 1933, this registration
statement has been signed on behalf of the registrant, in the City of
Norwalk and State of Connecticut, on the 6th day of June, 2003.
MANAGERS TRUST I
By: /s/ Donald S. Rumery
------------------------
Name: Donald S. Rumery
Title: Treasurer
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed below by the following
persons in the capacities and on the date indicated.
Signature Title Date
- -------------------- ------------------ -----------
*
- --------------------
Peter M. Lebovitz President and Trustee June 6, 2003
*
- --------------------
Galan G. Daukas Chief Financial Officer June 6, 2003
/s/ Donald S. Rumery
- -------------------- Treasurer, Secretary and
Donald S. Rumery Chief Accounting Officer June 6, 2003
*
- --------------------
Jack W. Aber Trustee June 6, 2003
*
- --------------------
William E. Chapman, II Trustee June 6, 2003
*
- --------------------
Sean M. Healey Trustee June 6, 2003
*
- --------------------
Edward J. Kaier Trustee June 6, 2003
*
- --------------------
Madeline H. McWhinney Trustee June 6, 2003
*
- --------------------
Steven J. Paggioli Trustee June 6, 2003
*
- --------------------
Eric Rakowski Trustee June 6, 2003
*
- --------------------
Thomas R. Schneeweis Trustee June 6, 2003
* By /s/ Donald S. Rumery pursuant to Power of Attorney.
--------------------
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