FORM OF SUB-ADVISORY AGREEMENT
Attention: Xxxxx Xxxxxxx Associates, Inc.
RE: Sub-Advisory Agreement
The [Managers 500 Plus / Managers Short Duration
Government / Managers Intermediate Government] Fund (the "Fund")
is a series of The Managers Trust [I / II], a Massachusetts business trust
(the "Trust") that is registered as an investment company under the
Investment Company Act of 1940, as amended, (the "Act"), and subject
to the rules and regulations promulgated thereunder.
The Managers Funds LLC (the "Manager") acts as the manager
and administrator of the Trust pursuant to the terms of a Management
Agreement with the Trust. The Manager is responsible for the day-to-
day management and administration of the Fund and the coordination of
investment of the Funds assets. However, pursuant to the terms of the
Management Agreement, specific portfolio purchases and sales for the
Funds investment portfolios or a portion thereof, are to be made by
advisory organizations recommended by the Manager and approved by
the Trustees of the Trust.
1. Appointment as a Sub-Adviser. The Manager, being duly
authorized, hereby appoints and employs Xxxxx Xxxxxxx Associates, Inc.
("Sub-Adviser") as a discretionary asset manager, on the terms and
conditions set forth herein, of the assets of the Fund (those assets being
referred to as the "Fund Account").
2. Portfolio Management Duties.
(a) Subject to the supervision of the Manager and of
the Trustees of the Trust, the Sub-Adviser shall manage
the composition of the Fund Account, including the
purchase, retention and disposition thereof, in
accordance with the Funds investment objectives,
policies and restrictions as stated in the Fund's
Prospectus and Statement of Additional Information
(such Prospectus and Statement of Additional
Information for the Fund as currently in effect and as
amended or supplemented in writing from time to time,
being herein called the Prospectus).
(b) The Sub-Adviser shall maintain such books and
records pursuant to Rule 31a-1 under the Act and Rule
204-2 under the Investment Advisers Act of 1940, as
amended (the Advisers Act), with respect to the Fund
Account as shall be specified by the Manager from time
to time, and shall maintain such books and records for
the periods specified in the rules under the Act or the
Advisers Act. In accordance with Rule 31a-3 under the
Act, the Sub-Adviser agrees that all records under the
Act shall be the property of the Trust.
(c) The Sub-Adviser shall provide the Trusts
Custodian, and the Manager on each business day with
information relating to all transactions concerning the
Fund Account. In addition, the Sub-Adviser shall be
responsive to requests from the Manager or the Trust's
Custodian for assistance in obtaining price sources for
securities held in the Fund Account, as well as for
periodically reviewing the prices of the securities assigned
by the Manager or the Trust's Custodian for
reasonableness and advising the Manager should any such
prices appear to be incorrect.
(d) The Sub-Adviser agrees to maintain adequate
compliance procedures to ensure its compliance with the
1940 Act, the Advisers Act and other applicable federal
and state regulations, and review information provided
by the Manager to assist the Manager in its compliance
review program.
(e) The Sub-Adviser agrees to maintain an
appropriate level of errors and omissions or professional
liability insurance coverage.
3. Allocation of Brokerage. The Sub-Adviser shall have
authority and discretion to select brokers, dealers and futures
commission merchants to execute portfolio transactions initiated by the
Sub-Adviser, and for the selection of the markets on or in which the
transactions will be executed.
(a) In doing so, the Sub-Adviser's primary responsibility
shall be to obtain the best net price and execution for the
Fund. However, this responsibility shall not be deemed
to obligate the Sub-Adviser to solicit competitive bids for
each transaction, and the Sub-Adviser shall have no
obligation to seek the lowest available commission cost
to the Fund, so long as the Sub-Adviser determines that
the broker, dealer or futures commission merchant is
able to obtain the best net price and execution for the
particular transaction taking into account all factors the
Sub-Adviser deems relevant, including, but not limited
to, the breadth of the market in the security or
commodity, the price, the financial condition and
execution capability of the broker, dealer or futures
commission merchant and the reasonableness of any
commission for the specific transaction and on a
continuing basis. The Sub-Adviser may consider the
brokerage and research services (as defined in Section
28(e) of the Securities Exchange Act of 1934, as amended)
made available by the broker to the Sub-Adviser viewed
in terms of either that particular transaction or of the
Sub-Adviser's overall responsibilities with respect to its
clients, including the Fund, as to which the Sub-Adviser
exercises investment discretion, notwithstanding that the
Fund may not be the direct or exclusive beneficiary of
any such services or that another broker may be willing
to charge the Fund a lower commission on the particular
transaction.
(b) The Manager shall have the right to request that
specified transactions giving rise to brokerage
commissions, in an amount to be agreed upon by the
Manager and the Sub-Adviser, shall be executed by
brokers and dealers that provide brokerage or research
services to the Fund or the Manager, or as to which an
on-going relationship will be of value to the Fund in the
management of its assets, which services and relationship
may, but need not, be of direct benefit to the Fund
Account, so long as (i) the Manager determines that the
broker or dealer is able to obtain the best net price and
execution on a particular transaction and (ii) the Manager
determines that the commission cost is reasonable in
relation to the total quality and reliability of the
brokerage and research services made available to the
Fund or to the Manager for the benefit of its clients for
which it exercises investment discretion, notwithstanding
that the Fund Account may not be the direct or
exclusive beneficiary of any such service or that another
broker may be willing to charge the Fund a lower
commission on the particular transaction.
(c) The Sub-Adviser agrees that it will not execute any
portfolio transactions with a broker, dealer or futures
commission merchant which is an "affiliated person" (as
defined in the Act) of the Trust or of the Manager or of
any Sub-Adviser for the Trust except in accordance with
procedures adopted by the Trustees. The Manager agrees
that it will provide the Sub-Adviser with a list of brokers
and dealers, which are "affiliated persons" of the Trust,
the Manager or the Trust's Sub-Advisers.
4. Information Provided to the Manager and the Trust and to
the Sub-Adviser
(a) The Sub-Adviser agrees that it will make available to
the Manager and the Trust promptly upon their request
copies of all of its investment records and ledgers with
respect to the Fund Account to assist the Manager and
the Trust in monitoring compliance with the Act, the
Advisers Act, and other applicable laws. The Sub-
Adviser will furnish the Trust's Board of Trustees with
such periodic and special reports with respect to the
Fund Account as the Manager or the Board of Trustees
may reasonably request.
(b) The Sub-Adviser agrees that it will notify the
Manager and the Trust in the event that the Sub-Adviser
or any of its affiliates: (i) becomes subject to a statutory
disqualification that prevents the Sub-Adviser from
serving as investment adviser pursuant to this
Agreement; or (ii) is or expects to become the subject of
an administrative proceeding or enforcement action by
the Securities and Exchange Commission or other
regulatory authority. Notification of an event within (i)
shall be given immediately; notification of an event
within (ii) shall be given promptly. The Sub-Adviser has
provided the information about itself set forth in the
Registration Statement and has reviewed the description
of its operations, duties and responsibilities as stated
therein and acknowledges that they are true and correct
in all material respects and contain no material
misstatement or omission, and it further agrees to notify
the Manager immediately of any fact known to the Sub-
Adviser respecting or relating to the Sub-Adviser that
causes any statement in the Prospectus to become untrue
or misleading in any material respect or that causes the
Prospectus to omit to state a material fact.
(c) The Sub-Adviser represents that it is an investment
adviser registered under the Advisers Act and other
applicable laws and that the statements contained in the
Sub-Adviser's registration under the Advisers Act on
Form ADV as of the date hereof, are true and correct
and do not omit to state any material fact required to be
stated therein or necessary in order to make the
statements therein not misleading. The Sub-Adviser
agrees to maintain the completeness and accuracy in all
material respects of its registration on Form ADV in
accordance with all legal requirements relating to that
Form. The Sub-Adviser acknowledges that it is an
investment adviser to the Fund within the meaning of
the Act and the Advisers Act.
5. Compensation. The compensation of the Sub-Adviser for its
services under this Agreement shall be calculated and paid by the
Manager in accordance with the attached Schedule A. Pursuant to the
provisions of the Management Agreement between the Trust and the
Manager, the Manager is solely responsible for the payment of fees to the
Sub-Adviser, and the Sub-Adviser agrees to seek payment of its fees
solely from the Manager and not from the Trust or the Fund.
6. Other Investment Activities of the Sub-Adviser. The
Manager acknowledges that the Sub-Adviser or one or more of its
affiliates may have investment responsibilities or render investment
advice to or perform other investment advisory services for other
individuals or entities ("Affiliated Accounts"). The Manager agrees that
the Sub-Adviser or its affiliates may give advice or exercise investment
responsibility and take such other action with respect to other Affiliated
Accounts which may differ from the advice given or the timing or
nature of action taken with respect to the Fund Account, provided that
the Sub-Adviser acts in good faith and provided further, that it is the
Sub-Adviser's policy to allocate, within its reasonable discretion,
investment opportunities to the Fund Account over a period of time on
a fair and equitable basis relative to the Affiliated Accounts, taking into
account the investment objectives and policies of the Fund and any
specific investment restrictions applicable thereto. The Manager
acknowledges that one or more of the Affiliated Accounts may at any
time hold, acquire, increase, decrease, dispose or otherwise deal with
positions in investments in which the Fund Account may have an
interest from time to time, whether in transactions which involve the
Fund Account or otherwise. The Sub-Adviser shall have no obligation
to acquire for the Fund Account a position in any investment which any
Affiliated Account may acquire, and the Fund shall have no first refusal,
co-investment or other rights in respect of any such investment, either
for the Fund Account or otherwise.
7. Standard of Care. The Sub-Adviser shall exercise its best
judgment in rendering the services provided by it under this Agreement.
The Sub-Adviser shall not be liable for any act or omission, error of
judgment or mistake of law or for any loss suffered by the Manager or
the Trust in connection with the matters to which this Agreement
relates, provided that nothing in this Agreement shall be deemed to
protect or purport to protect the Sub-Adviser against any liability to the
Manager or the Trust or to holders of the Trust's shares representing
interests in the Fund to which the Sub-Adviser would otherwise be
subject by reason of willful malfeasance, bad faith or gross negligence on
its part in the performance of its duties or by reason of the Sub-Adviser's
reckless disregard of its obligations and duties under this Agreement.
8. Assignment. This Agreement shall terminate automatically in
the event of its assignment (as defined in the Act and in the rules adopted
under the Act). The Sub-Adviser shall notify the Trust in writing
sufficiently in advance of any proposed change of control, as defined in
Section 2(a)(9) of the Act, as will enable the Trust to consider whether an
assignment under the Act will occur, and to take the steps necessary to
enter into a new contract with the Sub-Adviser or such other steps as the
Board of Trustees may deem appropriate.
9. Amendment. This Agreement may be amended at any time,
but only by written agreement between the Sub-Adviser and the
Manager, which amendment is subject to the approval of the Trustees
and the shareholders of the Trust in the manner required by the Act.
10. Effective Date; Term. This Agreement shall become
effective on ________, 2000 and shall continue in effect for a term of
two years from that date. Thereafter, the Agreement shall continue in
effect only so long as its continuance has been specifically approved at
least annually by the Trustees, or the shareholders of the Fund in the
manner required by the Act. The aforesaid requirement shall be
construed in a manner consistent with the Act and the rules and
regulations thereunder.
11. Termination. This Agreement may be terminated by (i) the
Manager at anytime without penalty, upon notice to the Sub-Adviser
and the Trust, (ii) at any time without penalty by the Trust or by vote of
a majority of the outstanding voting securities of the Fund (as defined in
the Act) on notice to the Sub-Adviser or (iii) by the Sub-Adviser at any
time without penalty, upon thirty (30) days' written notice to the
Manager and the Trust.
12. Severability. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule, or otherwise, the
remainder of this Agreement shall not be affected thereby but shall
continue in full force and effect.
13. Applicable Law. The provisions of this Agreement shall be
construed in a manner consistent with the requirements of the Act and
the rules and regulations thereunder. To the extent that state law is not
preempted by the provisions of any law of the United States heretofore
or hereafter enacted, as the same may be amended from time to time,
this Agreement shall be administered, construed, and enforced according
to the laws of the State of Connecticut.
THE MANAGERS
FUNDS LLC
BY:
Its:
DATE:
ACCEPTED:
XXXXX XXXXXXX ASSOCIATES, INC.
BY:
Its:
DATE:
ACKNOWLEDGED:
THE MANAGERS TRUST [I / II]
BY:
Its:
DATE:
SCHEDULES: A. Fee Schedule.
SCHEDULE A
SUB-ADVISER FEE
[Managers 500 Plus Fund:]
For services provided to the Fund Account, the Manager will
pay within five business days after the end of each calendar month the
Sub-Adviser a base monthly fee for each calendar month calculated on a
daily basis at an annual rate of .05% of daily net assets in the Fund
Account through ______, 2001 [i.e., first anniversary of closing date] and
an annual rate of .20% of daily net assets in the Fund Account thereafter;
provided, however, that if on any day after ______, 2001 [i.e., first
anniversary of closing date] the gross annualized fee received by the
Manager under the Management Agreement between the Trust and the
Manager is less than $1,365,300, then such annual fee rate shall be
reduced to .15% of daily net assets in the Fund for that day.
[Managers Short Duration Government Fund:]
For services provided to the Fund Account, the Manager will
pay within five business days after the end of each calendar month the
Sub-Adviser a base monthly fee for each calendar month calculated on a
daily basis at an annual rate of .05% of daily net assets in the Fund
Account through ______, 2001 [i.e., first anniversary of closing date] and
an annual rate of .10% of daily net assets in the Fund Account thereafter;
provided, however, that if on any day after ______, 2001 [i.e., first
anniversary of closing date] the gross annualized fee received by the
Manager under the Management Agreement between the Trust and the
Manager is less than $403,200, then such annual fee rate shall be reduced
to .05% of daily net assets in the Fund for that day.
[Managers Intermediate Government Fund:]
For services provided to the Fund Account, the Manager will
pay within five business days after the end of each calendar month the
Sub-Adviser a base monthly fee for each calendar month calculated on a
daily basis at an annual rate of .05% of daily net assets in the Fund
Account through ______, 2001 [i.e., first anniversary of closing date] and
an annual rate of .10% of daily net assets in the Fund Account thereafter;
provided, however, that if on any day after ______, 2001 [i.e., first
anniversary of closing date] the gross annualized fee received by the
Manager under the Management Agreement between the Trust and the
Manager is less than $325,800, then such annual fee rate shall be reduced
to .05% of daily net assets in the Fund for that day.
The fee shall be pro-rated for any calendar month during which
the contract is in effect for only a portion of the month.
The Sub-Adviser agrees that, during any period in which the
Manager has waived all or a portion of the management fee payable by
the Trust to the Manager under the Management Agreement with
respect to the Fund, if requested by the Manager, the Sub-Adviser will
waive a pro rata share (or such lesser share as the Manager may request)
of the sub-advisory fee payable hereunder with respect to the Fund, such
that the amount waived by the Sub-Adviser shall bear the same ratio to
the total amount of the sub-advisory fees payable hereunder with respect
to the Fund as the amount waived by the Manager bears to all fees
payable to the Manager under the Management Agreement with respect
to the Fund. In addition, the Sub-Adviser agrees that, during any period
in which the Manager has agreed to pay or reimburse the Trust for
expenses of the Fund, if requested by the Manager, the Sub-Adviser shall
pay or reimburse the Trust for a pro rata share (or such lesser share as
the Manager may request) of such expenses, such that the amount of
such excess expenses paid by the Sub-Adviser shall bear the same ratio to
the total amount of excess expenses payable with respect to the Fund as
the sub-advisory fee hereunder bears to all fees payable to the Manager
under the Management Agreement with respect to the Fund.
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