As filed with the Securities and Exchange Commission on December 21, 2001
Registration Nos. 33-30913
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
[_] Pre-Effective Amendment No. [_] Post-Effective Amendment No.
(Check appropriate box or boxes)
The Munder Funds Trust
(Exact Name of Registrant as Specified in Charter)
480 Pierce Street, Birmingham, Michigan 48009
(Address of Principal Executive Offices) (Zip code)
Registrant's Telephone Number: (248) 647-9200
Stephen J. Shenkenberg
Munder Capital Management
480 Pierce Street
Birmingham, MI 48009
(Name and Address of Agent for Service)
Copy to:
Jane Kanter, Esq.
Dechert
1775 Eye Street, NW
Washington, DC 20006
Approximate Date of Proposed Public Offering: As soon as practicable after this
Registration Statement becomes effective.
It is proposed that this Registration Statement become effective on January 22,
2002 pursuant to Rule 488.
No filing fee is due because an indefinite number of shares have been deemed to
be registered in reliance on Section 24(f) under the Investment Company Act of
1940, as amended.
THE MUNDER FUNDS TRUST
Cross Reference Sheet
Pursuant to Rule 481(a) Under the Securities Act of 1933
Form N-14 Prospectus/Proxy
- --------- Statement Caption
Item No. -----------------
- -------
Part A
- ------
Item 1. Beginning of Registration Statement and Cover Page
Outside Front Cover Page of Prospectus
Item 2. Beginning and Outside Back Cover Page of Cover Page
Prospectus
Item 3. Fee Table, Synopsis Information and Risk Summary
Factors
Item 4. Information About the Transaction Letter to Shareholders; Common Questions and
Answers About the Proposed Reorganization;
Summary; Reasons for the Reorganization;
Information About the Reorganization
Item 5. Information About the Registrant Letter to Shareholders; Common Questions and
Answers About the Proposed Reorganization;
Summary; Comparison of Investment Objectives
and Policies; Information About Management of
the Global Financial Services Fund and the
Large-Cap Value Fund; Additional Information
About the Global Financial Services Fund and
the Large-Cap Value Fund
Item 6. Information About the Company Being Acquired Summary; Comparison of Investment Objectives
and Policies; Information about Management of
the Global Financial Services Fund and the
Large-Cap Value Fund; Additional Information
About the Global Financial Services Fund and
the Large-Cap Value Fund
Item 7. Voting Information Voting Information
Item 8. Interest of Certain Persons and Experts Management's Discussion of Fund Performance and
Financial Highlights
Item 9. Additional Information Required for Not Applicable
Reoffering by Persons Deemed to be
Underwriters
Part B Statement of Additional
- ------ Information Caption
-------------------
Item 10. Cover Page Cover Page
Item 11. Table of Contents Not Applicable
Item 12. Additional Information About the Registrant Statement of Additional Information of The
Munder Funds dated October 31, 2001/1/
Item 13. Additional Information About the Company Statement of Additional Information of The
Being Acquired Munder Funds dated October 31, 2001/1/
Item 14. Financial Statements Annual Report of The Munder Funds (Class A, B,
C, II and Y) for fiscal year ended June 30,
2001/2/
Annual Report of The Munder Funds (Class K) for fiscal
year ended June 30, 2001/3/
Part C
- ------
Item 15. Indemnification
Item 16. Exhibits
Item 17. Undertakings
________________________
/1/ Incorporated herein by reference to the Registration Statement of the
Registrant on Form N-1A dated October 29, 2001 (File No. 33-30913).
/2/ Incorporated herein by reference to the Annual Report of the Registrant
(Class A, B, C, II and Y) on Form N-30D filed August 30, 2001 (File No.
811-05899).
/3/ Incorporated herein by reference to the Annual Report of the Registrant
(Class K) on form N-30D filed August 30, 2001 (File No. 811-05899).
THE MUNDER FRAMLINGTON FUNDS TRUST
MUNDER FRAMLINGTON GLOBAL FINANCIAL SERVICES FUND
480 Pierce Street
Birmingham, Michigan 48009
(800) 239-3334
Special Meeting of Shareholders to be held March 22, 2002
Dear Shareholder:
Please take note that a SPECIAL MEETING OF SHAREHOLDERS OF THE MUNDER
FRAMLINGTON GLOBAL FINANCIAL SERVICES FUND, a series of The Munder Framlington
Funds Trust ("Munder Framlington"), will be held on Friday, March 22, 2002, at
480 Pierce Street, Birmingham, Michigan 48009, at 10:00 a.m., Eastern time
("Meeting").
The Board of Trustees ("Board") of Munder Framlington has proposed that the
Munder Framlington Global Financial Services Fund ("Global Financial Services
Fund") be reorganized with and into the Munder Large-Cap Value Fund, formerly
known as the Munder Equity Income Fund ("Large-Cap Value Fund"), a separate
series of The Munder Funds Trust ("Trust"), to seek future economies of scale
and to eliminate certain costs of running the Funds separately. If shareholders
of the Global Financial Services Fund approve the Agreement and Plan of
Reorganization ("Reorganization Agreement") described in the accompanying
materials, all of the assets of the Global Financial Services Fund will be
exchanged for an equivalent dollar amount of shares of the Large-Cap Value Fund
on or about April 5, 2002 ("Reorganization"). The shares of the Large-Cap Value
Fund will then be transferred to the shareholders of the Global Financial
Services Fund in complete liquidation of the Global Financial Services Fund. The
proposed transaction is intended to be a tax-free reorganization. As a result,
it is anticipated that shareholders will not recognize any gain or loss in
connection with the proposed Reorganization. We strongly invite your
participation by asking you to review these materials and complete and return
your proxy card as soon as possible.
The Global Financial Services Fund has a significant number of smaller
shareholders. It is therefore especially important that you vote on this matter
to avoid the need for costly additional proxy solicitations to obtain a quorum.
The Board believes that shareholders of the Global Financial Services Fund
will benefit from the proposed Reorganization. The proposed Reorganization will
enable shareholders of the Global Financial Services Fund to experience higher
asset levels in the combined Large-Cap Value Fund, which will result in the
fixed and relatively fixed costs associated with operating the Global Financial
Services Fund being spread over a larger asset base, thereby reducing per share
expenses paid by Global Financial Services Fund shareholders. While current
shareholders of the Large-Cap Value Fund will likely not realize these same
benefits immediately following the proposed Reorganization, they will hopefully
benefit in a similar manner at some point in the future as the addition of the
assets from the Global Financial Services Fund moves the Large-Cap Value Fund
closer to achieving certain economies of scale. However, following the
Reorganization, the Large-Cap Value Fund is expected to have only marginally
higher operating expenses.
The Board strongly urges you to vote FOR approval of the proposed
Reorganization Agreement.
As a result of the Reorganization, the Global Financial Services Fund would
be combined with Large-Cap Value Fund and you would become a shareholder of the
Large-Cap Value Fund, receiving shares of the Large-Cap Value Fund having an
aggregate net asset value equal to the aggregate net asset value of your
investment in the Global Financial Services Fund. No sales charges will be
imposed as a result of the Reorganization. The closing of the Reorganization
will be conditioned upon, among other things, receiving an opinion of counsel to
the effect that the proposed Reorganization will qualify as a tax-free
reorganization for Federal income tax purposes.
The Global Financial Services Fund seeks long-term capital appreciation.
The Large-Cap Value Fund seeks long-term capital appreciation and current
income. The Global Financial Services Fund and the Large-Cap Value Fund have a
common investment adviser (Munder Capital Management), a common administrator
(State Street Bank and Trust Company) and a common distributor (Funds
Distributor, Inc.).
Detailed information about the proposed Reorganization and the reasons for
it are contained in the enclosed materials. Please exercise your right to vote
by completing, dating and signing the enclosed proxy card. A self-addressed,
postage-paid envelope has been enclosed for your convenience. It is very
important that you vote and that your voting instructions be received no later
than March 21, 2002.
NOTE: You may receive more than one proxy package if you hold shares in
more than one account. You must return separate proxy cards for separate
holdings. We have provided postage-paid return envelopes for each, which require
no postage if mailed in the United States.
If you have any questions after considering the enclosed materials, please
call 1-800-239-3334.
Sincerely,
/s/ James C. Robinson
James C. Robinson
President
The Munder Funds Trust
THE MUNDER FRAMLINGTON FUNDS TRUST
MUNDER FRAMLINGTON GLOBAL FINANCIAL SERVICES FUND
480 Pierce Street
Birmingham, Michigan 48009
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held on March 22, 2002
To the Shareholders of
Munder Framlington Global Financial Services Fund
of The Munder Framlington Funds Trust:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of the
Munder Framlington Global Financial Services Fund ("Global Financial Services
Fund"), a series of The Munder Framlington Funds Trust ("Munder Framlington"),
will be held at 480 Pierce Street, Birmingham, Michigan 48009, on Friday, March
22, 2002, at 10:00 a.m., Eastern time, for the following purposes:
(1) To approve or disapprove an Agreement and Plan of Reorganization
providing for the acquisition of all of the assets of the Global
Financial Services Fund by the Munder Large-Cap Value Fund,
formerly known as the Munder Equity Income Fund ("Large-Cap Value
Fund"), a series of The Munder Funds Trust ("Trust"), and the
assumption of all liabilities of the Global Financial Services
Fund by the Large-Cap Value Fund in exchange for shares of the
Large-Cap Value Fund and the subsequent liquidation of the Global
Financial Services Fund; and
(2) To transact such other business as may properly come before the
Meeting or any adjournments or postponements thereof.
The Board of Trustees has fixed the close of business on January 15,
2002, as the Record Date for determination of shareholders entitled to notice
of, and to vote at, the Meeting and any adjournments or postponements thereof.
EACH SHAREHOLDER WHO DOES NOT EXPECT TO ATTEND THE MEETING IN PERSON
IS REQUESTED TO DATE, FILL IN, SIGN AND RETURN PROMPTLY THE ENCLOSED FORM OF
PROXY IN THE ENCLOSED ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED
STATES.
By Order of the Board of Trustees,
/s/ Stephen J. Shenkenberg
Stephen J. Shenkenberg
Secretary
PROXY STATEMENT/PROSPECTUS DATED JANUARY 25, 2002
THE MUNDER FRAMLINGTON FUNDS TRUST
480 Pierce Street
Birmingham, Michigan 48009
(800) 239-3334
Special Meeting of Shareholders of
Munder Framlington Global Financial Services Fund
to be held March 22, 2002
This combined Proxy Statement and Prospectus ("Proxy Statement/Prospectus")
is being furnished in connection with the solicitation of proxies by the Board
of Trustees ("Board") of the Munder Framlington Global Financial Services Fund
("Global Financial Services Fund"), a series of The Munder Framlington Funds
Trust ("Munder Framlington"), for a Special Meeting of Shareholders of the
Global Financial Services Fund ("Meeting"). The Meeting will be held on Friday,
March 22, 2002, at 10:00 a.m., Eastern time, at 480 Pierce Street, Birmingham,
Michigan 48009.
At the Meeting, shareholders of the Global Financial Services Fund will be
asked to consider and act upon the following proposals:
(1) To approve or disapprove an Agreement and Plan of Reorganization
providing for the acquisition of all of the assets of the Global
Financial Services Fund by the Munder Large-Cap Value Fund, formerly
known as the Munder Equity Income Fund ("Large-Cap Value Fund"), a
series of The Munder Funds Trust ("Trust"), and the assumption of all
liabilities of the Global Financial Services Fund by the Large-Cap
Value Fund in exchange for shares of the Large-Cap Value Fund and the
subsequent liquidation of the Global Financial Services Fund; and
(2) To transact such other business as may properly come before the Meeting
or any adjournments or postponements thereof.
This Proxy Statement/Prospectus is soliciting shareholders of the Global
Financial Services Fund to approve an Agreement and Plan of Reorganization
("Reorganization Agreement"). The Reorganization Agreement contemplates the
transfer of all of the assets of the Global Financial Services Fund to the
Large-Cap Value Fund and the assumption by the Large-Cap Value Fund of all of
the liabilities of the Global Financial Services Fund in exchange for shares of
the Large-Cap Value Fund having an aggregate value equal to the net asset value
of Global Financial Services Fund ("Reorganization"). The Global Financial
Services Fund would then distribute to its shareholders the portion of the
shares of the Large-Cap Value Fund to which each such shareholder is entitled.
This would result in a liquidation of the Global Financial Services Fund.
-2-
Under the proposed Reorganization Agreement, each shareholder of the Global
Financial Services Fund would be entitled to receive shares of the Large-Cap
Value Fund having an aggregate value equal to the aggregate value of the shares
of the Global Financial Services Fund held by that shareholder, as of the close
of business on the business day of the closing of the Reorganization. You are
being asked to approve the Reorganization Agreement pursuant to which the
Reorganization transaction would be accomplished. Because shareholders of the
Global Financial Services Fund are being asked to approve a transaction that
will result in their holding shares of the Large-Cap Value Fund, this Proxy
Statement also serves as a Prospectus for the Large-Cap Value Fund.
If the Reorganization Agreement is approved by shareholders of the Global
Financial Services Fund, holders of Class A shares of the Global Financial
Services Fund will receive Class A shares of the Large-Cap Value Fund, and no
sales charge will be imposed on the Class A shares of the Large-Cap Value Fund
received by Global Financial Services Fund shareholders. Holders of Class B,
Class II, Class K and Class Y shares of the Global Financial Services Fund will
receive Class B, Class C, Class K and Class Y shares, respectively, of the
Large-Cap Value Fund. Subsequent to the Reorganization, any contingent deferred
sales charge ("CDSC") that applied to a shareholder's Class B or Class II shares
of the Global Financial Services Fund at the time of Reorganization will
continue to apply for the holding period applicable at the time of the
Reorganization. In calculating any applicable CDSC, the period during which a
shareholder held the Class B or Class II shares of the Global Financial Services
Fund will be included in the holding period.
This transaction is being structured as a tax-free reorganization. See
"Information About the Reorganization -- Federal Income Tax Consequences."
Shareholders should consult their tax advisors to determine the actual impact of
the Reorganization in light of their individual tax circumstances.
The Global Financial Services Fund is a diversified series of Munder
Framlington. The Global Financial Services Fund's goal is to provide long-term
capital appreciation. The Global Financial Services Fund pursues its goal by
investing, under normal market conditions, at least 80% of its assets in equity
securities of U.S. and foreign companies that are principally engaged in the
financial services industries or companies providing services primarily within
the financial services industries. The Global Financial Services Fund focuses
specifically on companies that are likely to benefit from the growth or
consolidation in the financial services industries.
The Large-Cap Value Fund is a diversified series of the Trust. The
Large-Cap Value Fund's goal is to provide shareholders with long-term capital
appreciation and current income. The Large-Cap Value Fund pursues its goal by
investing primarily in equity securities that Munder Capital Management ("MCM")
believes are trading at a valuation discount relative to the marketplace, their
peers and historical levels. Under normal circumstances, the Large-Cap Value
Fund will invest at least 80% of its assets in equity securities of
large-capitalization companies.
While the investment objectives and policies of the Global Financial
Services Fund and the Large-Cap Value Fund are compatible, there are certain
differences in investment policies,
-3-
which are described under "Comparison of Investment Objectives and Policies" in
this Proxy Statement/Prospectus.
MCM serves as investment adviser for the Global Financial Services Fund and
the Large-Cap Value Fund. Framlington Overseas Investment Management Limited
("Framlington"), an affiliate of MCM, is the sub-adviser for the Global
Financial Services Fund. MCM and Framlington are described in more detail under
"Information About Management of the Global Financial Services Fund and the
Large-Cap Value Fund."
This Proxy Statement/Prospectus, which should be retained for future
reference, sets forth concisely the information about the Large-Cap Value Fund
that a prospective investor should know before investing. A Statement of
Additional Information dated January 25, 2002 relating to this Proxy
Statement/Prospectus and the Reorganization is incorporated herein by reference
into this Proxy Statement/Prospectus. If you would like to receive a copy of the
Statement of Additional Information relating to this Proxy Statement/Prospectus
and the Reorganization and any subsequent shareholder reports, call (800)
239-3334, or write the Funds at 480 Pierce Street, Birmingham, Michigan 48009
and you will be mailed one free of charge.
The following documents have been filed with the Securities and Exchange
Commission ("SEC"): (i) the Prospectus of the Global Financial Services Fund and
the Large-Cap Value Fund (Class A, Class B, Class C and Class II shares) dated
October 31, 2001, as supplemented on November 15, 2001 and January ___, 2002;
(ii) the Prospectus for the Global Financial Services Fund and the Large-Cap
Value Fund (Class K shares) dated October 31, 2001, as supplemented on November
15, 2001, December 21, 2001 and January ___, 2002; (iii) the Prospectus for the
Global Financial Services Fund and the Large-Cap Value Fund (Class Y shares)
dated October 31, 2001, as supplemented on November 15, 2001, December 21, 2001
and January ___, 2002; (iv) the Statement of Additional Information for the
Global Financial Services Fund and the Large-Cap Value Fund dated October 31,
2001, as supplemented on January ___, 2002; (v) the Annual Report for the Global
Financial Services Fund and the Large-Cap Value Fund (Class A, Class B, Class C,
Class II and Class Y) dated June 30, 2001; and (vi) the Annual Report for the
Global Financial Services Fund and the Large-Cap Value Fund (Class K) dated June
30, 2001. Copies of these documents, the Statement of Additional Information
related to this Proxy Statement/Prospectus and any subsequently released
shareholder reports are available upon request and without charge by calling or
writing to the Global Financial Services Fund or the Large-Cap Value Fund at the
telephone number or address listed for the Funds on the cover page of this Proxy
Statement/Prospectus.
Accompanying this Proxy Statement/Prospectus as Exhibit A is a copy of the
Agreement and Plan of Reorganization pertaining to the transaction.
MUTUAL FUND SHARES ARE NOT BANK DEPOSITS AND ARE NOT INSURED OR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS
OF PRINCIPAL.
-4-
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROXY STATEMENT/PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-5-
TABLE OF CONTENTS
Page
----
Common Questions and Answers About the Proposed Reorganization ................................. --
Summary ........................................................................................ --
Reasons for the Reorganization ................................................................. --
Information About the Reorganization ........................................................... --
Comparison of Investment Objectives and Policies ............................................... --
Management's Discussion of Fund Performance and Financial Highlights ........................... --
How to Purchase, Sell and Exchange Shares ...................................................... --
Information About Management of the Global Financial Services Fund
and the Large-Cap Value Fund .......................................................... --
Comparative Information on Shareholders' Rights ................................................ --
Additional Information About the Global Financial Services Fund
and the Large-Cap Value Fund .......................................................... --
Other Business ................................................................................. --
Voting Information ............................................................................. --
Legal Matters .................................................................................. --
Exhibit A: Agreement and Plan of Reorganization ............................................... A-1
-6-
COMMON QUESTIONS AND ANSWERS
ABOUT THE PROPOSED REORGANIZATION
Q. How will the Reorganization affect me?
A. The assets of the Global Financial Services Fund will be combined with
those of the Large-Cap Value Fund and you will become a shareholder of
the Large-Cap Value Fund. Following the Reorganization, you will
receive shares of the Large-Cap Value Fund that are equal in value to
the shares of the Global Financial Services Fund that you held
immediately prior to the closing of the Reorganization. (Shareholders
of Class A shares, Class B shares, Class II shares, Class K shares and
Class Y shares of the Global Financial Services Fund will receive Class
A shares, Class B shares, Class C shares, Class K shares and Class Y
shares, respectively, of the Large-Cap Value Fund.)
Q. Why is the Reorganization being recommended?
A. The primary purposes of the proposed Reorganization are to seek future
economies of scale and to eliminate certain costs associated with
operating the Global Financial Services Fund and the Large-Cap Value
Fund separately. We believe the Reorganization will benefit
shareholders of the Global Financial Services Fund without adversely
impacting shareholders of the Large-Cap Value Fund.
As a result of declining assets and disappointing performance, expense
ratios for the Global Financial Services Fund are increasing. Without
significant asset growth from sales or improvement in the performance
of securities markets generally, the Global Financial Services Fund's
expenses are expected to increase further. In addition, Global
Financial Services Fund's small asset size has made it increasingly
difficult to maintain a diversified portfolio.
We also believe that the Global Financial Services Fund and the
Large-Cap Value Fund have compatible investment objectives and
policies, as described in detail below. The Reorganization will result
in combining the assets of these two Funds and consolidating their
operations.
Combining the assets of the Funds is intended to provide various
benefits to shareholders of the Global Financial Services Fund who
become shareholders of the Large-Cap Value Fund (as well as to existing
and future investors of the Large-Cap Value Fund). For example, the
proposed Reorganization will enable shareholders of the Global
Financial Services Fund to experience higher asset levels in the
combined Large-Cap Value Fund, which will result in the fixed and
relatively fixed costs associated with operating the Global Financial
Services Fund, such as accounting and printing expenses, being spread
over a larger asset base, thereby reducing per share expenses paid by
Global Financial Services Fund shareholders. It is not anticipated that
current shareholders of the Large-Cap Value Fund will realize these
same benefits as a result of the proposed Reorganization but will
hopefully benefit in a similar manner at some point in the future as
the addition of the assets from the Global Financial Services Fund
moves the Large-Cap Value Fund closer to achieving certain economies of
scale. (See also the next
-7-
question regarding operating expenses of the Funds.) Higher asset
levels also should benefit portfolio management by permitting larger
individual portfolio investments that may result in reduced transaction
costs and/or more favorable pricing.
Q. How do the fees paid by the Large-Cap Value Fund compare to those
payable by the Global Financial Services Fund?
A. The total per share operating expenses of the Large-Cap Value Fund are
lower than those of the Global Financial Services Fund. Pro forma fee
and expense information is included for your reference in this Proxy
Statement/Prospectus.
Q. Will I have to pay any sales load, commission or other transactional
fee in connection with the Reorganization?
A. No. The full value of your shares of the Global Financial Services Fund
will be exchanged for shares of the indicated class of the Large-Cap
Value Fund without any sales load, commission or other transactional
fee being imposed. MCM will bear all of the expenses of both Funds in
connection with the Reorganization, except for brokerage fees and
brokerage expenses associated with the Reorganization.
Q. Who will serve as investment adviser and provide other services to the
Large-Cap Value Fund?
A. The Large-Cap Value Fund has the same investment adviser (MCM), the
same administrator (State Street Bank and Trust Company) and the same
distributor (Funds Distributor, Inc.) as the Global Financial Services
Fund. The Global Financial Services Fund also has a sub-adviser,
Framlington, an affiliate of MCM. A team of professional portfolio
managers employed by MCM makes investment decisions for the Large-Cap
Value Fund.
Q. Will I have to pay any Federal income taxes as a result of the
Reorganization?
A. The transaction is intended to qualify as a tax-free reorganization for
Federal income tax purposes. Assuming the Reorganization qualifies for
such treatment, shareholders would not recognize taxable gain or loss
as a result of the Reorganization. As a condition to the closing of the
Reorganization, the Global Financial Services Fund will receive an
opinion of counsel to the effect that the Reorganization will qualify
as a tax-free reorganization for Federal income tax purposes. You
should separately consider any state, local and other tax consequences
in consultation with your tax advisor. Opinions of counsel are not
binding on the IRS or the courts.
Q. Will I continue to be able to exchange my shares for shares of other
funds of the Munder family of mutual funds?
A. Yes. Holders of Class A, Class B, Class C, Class K and Class Y
shares of the Large-Cap Value Fund may, either before or after the
Reorganization, exchange their shares for shares of the same class of
other funds of The Munder Funds, Inc., the Trust and Munder
Framlington ("Munder Funds"), subject to certain restrictions
described in the prospectus
-8-
of each fund. Before requesting any such exchange, shareholders should
carefully review the applicable prospectus for the other fund to ensure
that the fund meets their investment objectives and needs.
Q. What happens if the Reorganization is not approved?
A. If the Reorganization is not approved by shareholders, the Global Financial
Services Fund will be liquidated as soon as is practicable following the
Meeting. Any shares of the Global Financial Services Fund outstanding on
the date of the liquidation will be automatically redeemed by Munder
Framlington on that date. The proceeds of any such redemption will be equal
to the net asset value of such shares after all charges, taxes, expenses
and liabilities of the Global Financial Services Fund have been paid or
provided for. In the event of a liquidation, the Class A and the Class II
shareholders of the Global Financial Services Fund who receive proceeds in
the liquidation will not be entitled to receive a refund of any front-end
sales load they paid when they purchased their shares. Any contingent
deferred sales charges that would otherwise be charged upon the redemption
of Class B and Class II shares of the Global Financial Services Fund will
be imposed if Class B and Class II shareholders are redeemed as a result of
the liquidation.
SUMMARY
This summary is qualified in its entirety by reference to the additional
information contained elsewhere in this Proxy Statement/Prospectus and the
Agreement and Plan of Reorganization ("Reorganization Agreement"), a copy of
which is attached to this Proxy Statement/Prospectus as Exhibit A.
Proposed Reorganization
At a meeting of the Board on November 13, 2001, the Board approved the
Reorganization Agreement. Subject to the approval of the shareholders of the
Global Financial Services Fund, the Reorganization Agreement provides for:
. the transfer of all of the assets of the Global Financial Services
Fund to the Large-Cap Value Fund and the assumption by the Large-Cap
Value Fund of all of the liabilities of the Global Financial Services
Fund in exchange for shares of the Large-Cap Value Fund having an
aggregate value equal to the assets and liabilities of the Global
Financial Services Fund;
. the distribution to each of the shareholders of the Global Financial
Services Fund of shares of the Large-Cap Value Fund having an
aggregate net asset value equal to the aggregate net asset value of
the shares of the Global Financial Services Fund held by that
shareholder; and
. the complete liquidation of the Global Financial Services Fund.
We expect the Reorganization to be effective upon the close of business on
April 5, 2002, or on a later date as the parties may agree ("Closing Date"). As
a result of the Reorganization,
-9-
each shareholder of the Global Financial Services Fund will become the owner of
the number of full and fractional shares of the Large-Cap Value Fund having an
aggregate net asset value equal to the aggregate net asset value of the
shareholder's Global Financial Services Fund shares as of the close of business
on the Closing Date. Shareholders of Class A shares, Class B shares, Class II
shares, Class K shares and Class Y shares of the Global Financial Services Fund
will receive Class A shares, Class B shares, Class C shares, Class K shares and
Class Y shares, respectively, of the Large-Cap Value Fund. See "Information
About the Reorganization" below.
For the reasons set forth below under "Reasons for the Reorganization," the
Board of Trustees of Munder Framlington, including all of the Trustees who are
not "interested persons"("Independent Trustees"), as that term is defined in the
Investment Company Act of 1940, as amended ("1940 Act"), has concluded that the
Reorganization would be in the best interests of the shareholders of the Global
Financial Services Fund and that the interests of the Global Financial Services
Fund's existing shareholders would not be diluted as a result of the
Reorganization, and therefore has submitted the Reorganization Agreement for
approval to you, the Global Financial Services Fund's shareholders. The Board
recommends that you vote "FOR" the proposed Reorganization Agreement effecting
the Reorganization. The Board of Trustees for the Trust has also approved the
Reorganization on behalf of the Large-Cap Value Fund.
Approval of the Reorganization will require the affirmative vote of the
holders of a majority of the outstanding shares of the Global Financial Services
Fund with all classes voting together and not by class. See "Voting
Information."
Investment Objectives, Policies and Restrictions
The Global Financial Services Fund and the Large-Cap Value Fund have
compatible investment objectives, policies and restrictions. The Global
Financial Services Fund's goal is to provide long-term capital appreciation. The
Global Financial Services Fund pursues its goal by investing, under normal
market conditions, at least 80% of its assets in equity securities of U.S. and
foreign companies that are principally engaged in the financial services
industries or companies providing services primarily within the financial
services industries. The Global Financial Services Fund focuses specifically on
companies that are likely to benefit from growth or consolidation in the
financial services industries.
The Large-Cap Value Fund's goal is to provide long-term capital
appreciation and current income. The Large-Cap Value Fund pursues its goal by
investing primarily in equity securities that MCM believes are trading at a
valuation discount relative to the marketplace, their peers and historical
levels. Under normal circumstances, the Large-Cap Value Fund will invest at
least 80% of its assets in equity securities of large-capitalization companies.
For this purpose, large-capitalization companies are companies having a market
capitalization within the range of companies included in the Russell 1000
Index(R), an index that measures the performance of the 1,000 largest
publicly-traded stocks in the U.S. stock market.
Although the respective investment objectives of the Global Financial
Services Fund and the Large-Cap Value Fund are compatible, you should consider
certain differences in the
-10-
investment policies of, and portfolio securities held by, each Fund. See
"Comparison of Investment Objectives and Policies" below.
Performance of the Global Financial Services Fund and the Large-Cap Value Fund
The bar chart and table below give some indication of the risk of an
investment in each Fund. The bar chart shows each Fund's performance for each
full calendar year since its inception. The table shows how each Fund's average
annual total returns for different calendar periods over the life of the Fund
compares to those of certain broad based securities market indices. Both the bar
chart and table assume reinvestment of dividends and distributions. Past
performance is not an indication of future performance.
The annual returns in the bar charts, the best and worst quarter returns
and the average annual total return chart are those of each Fund's Class Y
shares. Please see "Summary Comparison of Fees and Expenses" below for
information about the difference between the share classes. Performance for
Class A, Class B, Class C, Class II and Class K shares, net of any sales charges
(loads) and shareholder servicing fee/12b-1 fees, would have been similar
because the shares are invested in the same portfolio of securities and have the
same portfolio management. Because of different sales charges and fees and
expenses, performance of each class will differ.
Global Financial Services Fund Large-Cap Value Fund
------------------------------ ------------------------
Calendar Year Returns (%) Calendar Year Returns(%)
[bar charts through 12/31/01 here]
Best quarter (% and time period) Best quarter (% and time period)
_____% (quarter ended ___________) _____% (quarter ended ___________)
Worst quarter (% and time period) Worst quarter (% and time period)
_____% (quarter ended ___________) _____% (quarter ended ___________).
The table below shows what the average annual total returns each Fund would
have been for certain periods compared to the Morgan Stanley Capital
International World Index(R) ("MSCI World Index") and Russell 1000 Value
Index(R). Each index is unmanaged and is not subject to fees and expenses
typically associated with the management of investment company portfolios.
Investments cannot be made directly in either index. Comparisons with each
index, therefore, are of limited use. They are included because they are widely
known and may help you to understand the universe of securities from which each
Fund is likely to select its holdings.
-11-
- --------------------------------------------------------------------------------------------------------------
Since Inception Since Inception
of Global Financial of the Large-Cap
Services Fund Value Fund
Year Ended (6/24/98 - (7/5/94 -
12/31/01 12/31/01)/(1)/ 12/31/01)/(2)/
-------- -------------- --------------
- --------------------------------------------------------------------------------------------------------------
Global Financial Services Fund/(1)/ _____% _____% --
- --------------------------------------------------------------------------------------------------------------
Large-Cap Value Fund /(2)/ _____% -- _____%
- --------------------------------------------------------------------------------------------------------------
MSCI World Index(R)/(3)/ _____% _____% _____%
- --------------------------------------------------------------------------------------------------------------
Russell 1000 Value Index(R)/(4)/ _____% _____% _____%
- --------------------------------------------------------------------------------------------------------------
____________________
1. The Global Financial Services Fund commenced operations on June 24, 1998.
Index comparisons begin on June 30, 1998.
2. The Large-Cap Value Fund commenced operations on July 5, 1994. Index
comparisons begin on June 30, 1994.
3. The Morgan Stanley Capital International (MSCI) World Index(R) is an
unmanaged index used to measure common stock price movement in developed
countries.
4. The Russell 1000 Value Index(R) is an unmanaged index that measures the
performance of those Russell 1000 Index(R) companies (the largest 1,000
U.S. publicly-traded securities) with lower price-to-book ratios and lower
forecasted growth values.
Summary Comparison of Fees and Expenses
The following tables compare the fees and expenses of each class of the
Global Financial Services Fund and the Large-Cap Value Fund and show the
estimated fees and expenses for each class on a pro forma basis, giving effect
to the proposed Reorganization. We have estimated these pro forma numbers in
good faith, based on information contained in the Annual Reports for the
previous fiscal year for each class of shares for each Fund, with certain
adjustments.
Since the figures shown for the Global Financial Services Fund and the
Large-Cap Value Fund are as of the Funds' fiscal year-end, certain adjustments
have been made in calculating the pro forma expenses in order to reflect a new
fee arrangement with the Funds' transfer agent that became effective January 1,
2002. The new arrangement with the transfer agent significantly increases the
actual expenses of the Global Financial Services Fund but slightly reduces the
actual expenses of the Large-Cap Value Fund.
The fee and expense information shown on the table below is organized as
follows:
. Column 1 reflects the actual fees and expenses of each class of the
Global Financial Services Fund calculated at the Fund's fiscal year
end, June 30, 2001.
. Column 2 reflects the actual fees and expenses of each class of the
Large-Cap Value Fund calculated at the Fund's fiscal year end, June
30, 2001.
. Column 3 reflects the pro forma fees and expenses of the Large-Cap
Value Fund as if the Reorganization had occurred on June 30, 2001.
These pro forma fees and expenses, however, have been adjusted to
reflect the change in transfer agent
-12-
expenses, as well as any expected savings that may occur as a result
of the Funds being combined in the Reorganization.
Additional information regarding the performance of the Funds is contained
in "Management's Discussion of Fund Performance and Financial Highlights" in
this Proxy Statement/Prospectus.
Global
------
Financial Large-Cap Value
--------- --------------- Combined
Class A Shares Services Fund Fund Pro Forma
------------- ---- ---------
Shareholder Fees (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) ............................... 5.50%(a) 5.50%(a) 5.50%(a)
Maximum Deferred Sales Charge (Load)
(as a percentage of redemption proceeds) .......................... None(b) None(b) None(b)
Maximum Sales Charge (Load) Imposed on Reinvested Dividends ............ None None None
Redemption Fee ......................................................... None None None
Exchange Fee ........................................................... None None None
Annual Fund Operating Expenses (expenses that are deducted
from Fund assets) as a percentage of average net assets)
Management Fee .................................................... 0.75% 0.75% 0.75%
Distribution and/or Service (12b-1) Fees .......................... 0.25% 0.25% 0.25%
Other Expenses .................................................... 1.65% 0.22% ____%
Total Annual Fund Operating Expenses ................................... 2.65%(c) 1.22%(d) ____%(e)
Global
------
Financial Large-Cap Value
--------- --------------- Combined
Class B Shares Services Fund Fund Pro Forma
------------- ---- ---------
Shareholder Fees (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) ............................... None None None
Maximum Deferred Sales Charge (Load)
(as a percentage of redemption proceeds) .......................... 5.00%(f) 5.00%(f) 5.00%(f)
Maximum Sales Charge (Load) Imposed on Reinvested Dividends ............ None None None
Redemption Fee ......................................................... None None None
Exchange Fee ........................................................... None None None
Annual Fund Operating Expenses (expenses that are deducted
from Fund assets) (as a percentage of average net assets)
Management Fee .................................................... 0.75% 0.75% 0.75%
Distribution and/or Service (12b-1) Fees .......................... 1.00% 1.00% 1.00%
Other Expenses .................................................... 1.65% 0.22% ____%
Total Annual Fund Operating Expenses ................................... 3.40%(c) 1.97%(d) ____%(e)
-13-
Global
------
Financial Large-Cap Value
--------- ---------------
Services Fund Fund
------------- ---- Combined
Class II Shares/Class C Shares Class II Shares Class C Shares Pro Forma
--------------- -------------- ---------
Shareholder Fees (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) ........................... 1.00% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of redemption proceeds) ...................... 1.00%(g) 1.00%(h) 1.00%(i)
Maximum Sales Charge (Load) Imposed on Reinvested Dividends ........ None None None
Redemption Fee ..................................................... None None None
Exchange Fee ....................................................... None None None
Annual Fund Operating Expenses (expenses that are deducted
from Fund assets) (as a percentage of average net assets)
Management Fee ................................................ 0.75% 0.75% 0.75%
Distribution and/or Service (12b-1) Fees ...................... 1.00% 1.00% 1.00%
Other Expenses ................................................ 1.65% 0.22% ____%
Total Annual Fund Operating Expenses ............................... 3.40%(c) 1.97%(d) ____%(e)
Global
------
Financial Large-Cap Value
--------- --------------- Combined
Class K Shares Services Fund Fund Pro Forma
------------- ---- ---------
Shareholder Fees (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) ........................... None None None
Maximum Deferred Sales Charge (Load)
(as a percentage of redemption proceeds) ...................... None None None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends ........ None None None
Redemption Fee ..................................................... None None None
Exchange Fee ....................................................... None None None
Annual Fund Operating Expenses (expenses that are deducted
from Fund assets) (as a percentage of average net assets)
Management Fee ................................................ 0.75% 0.75% 0.75%
Distribution and/or Service (12b-1) Fees ...................... 0.25% 0.25% 0.25%
Other Expenses ................................................ 1.65% 0.22% ____%
Total Annual Fund Operating Expenses ............................... 2.65%(c) 1.22%(d) ____%(e)
Global
------
Financial Large-Cap Value
--------- --------------- Combined
Class Y Shares Services Fund Fund Pro Forma
------------- ---- ---------
Shareholder Fees (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) ........................... None None None
Maximum Deferred Sales Charge (Load)
(as a percentage of redemption proceeds) ...................... None None None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends ........ None None None
Redemption Fee ..................................................... None None None
Exchange Fee ....................................................... None None None
-14-
Global
------
Financial Large-Cap
--------- --------- Combined
Class Y Shares Services Fund Value Fund Pro Forma
------------- ---------- ---------
Annual Fund Operating Expenses (expenses that are deducted
from Fund assets) (as a percentage of average net assets)
Management Fee .............................................. 0.75% 0.75% 0.75%
Distribution and/or Service (12b-1) Fees .................... None None None
Other Expenses .............................................. 1.65% 0.22% ____%
Total Annual Fund Operating Expenses ............................. 2.40%(c) 0.97%(d) ____%(e)
___________________
(a) The sales charge declines as the amount invested increases.
(b) A contingent deferred sales charge (CDSC) is a one-time fee charged at the
time of redemption. A 1% CDSC applies to redemptions of Class A shares
within one year of investment that were purchased with no initial sales
charge as part of an investment of $1,000,000 or more. A CDSC on Class A
shares of the Large-Cap Value Fund acquired by holders of Class A shares of
the Global Financial Services Fund pursuant to the Reorganization will only
be imposed on redemptions on which a CDSC would have applied to the Class A
shares of the Global Financial Services Fund.
(c) If the new transfer agent fee had been in effect during the fiscal year
ended June 30, 2001, the total operating expenses of the Global Financial
Services Fund would have been approximately:
Class A
Class B
Class II
Class K
Class Y
(d) If the new transfer agent fee had been in effect during the fiscal year
ended June 30, 2001, the total operating expenses of the Large-Cap Value
Fund would have been approximately:
Class A
Class B
Class C
Class K
Class Y
(e) The pro forma fees and expenses shown in the table reflect the following
adjustments: the new transfer agent fee as if it had been in effect during
the fiscal year ended June 30, 2001; the effect of spreading fixed fees and
expenses over a broader shareholder base; and the elimination of
duplicative fees paid on a per fund basis.
(f) The CDSC payable upon redemption of Class B shares declines over time.
(g) The CDSC applies to redemptions of Class II shares within eighteen months
of purchase.
(h) The CDSC applies to redemptions of Class C shares within one year of
purchase.
(i) The CDSC applies to redemptions of Class C shares within one year of
purchase. However, the CDSC will apply to Class C shares of the Large-Cap
Value Fund acquired by holders of Class II shares of the Global Financial
Services Fund pursuant to the Reorganization to the same extent the CDSC
would have applied to the Class II shares of the Global Financial Services
Fund.
-15-
Example
This Example is intended to help you compare the cost of investing in each
Fund and the combined Large-Cap Value Fund with the cost of investing in other
mutual funds.
The Example assumes that you invest $10,000 in each Fund for the time
periods indicated and then redeem all of your shares at the end of those
periods. The example also assumes that your investment has a 5% return each year
and that each Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions your costs would be:
Class A Shares
1 year 3 years 5 years 10 years
------ ------- ------- --------
Global Financial Services Fund $803 $1,328 $1,878 $3,369
Large-Cap Value Fund $667 $ 916 $1,183 $1,946
Pro Forma: the Funds Combined $ $ $ $
Class B Shares Assuming You Sold Your Shares at the End of the Period
1 year 3 years 5 years 10 years
------ ------- ------- --------
Global Financial Services Fund $843 $1,345 $1,969 $3,512*
Large-Cap Value Fund $700 $ 918 $1,262 $2,099*
Pro Forma: the Funds Combined $ $ $ $
* Reflects conversion of Class B shares to Class A shares (which pay lower
ongoing expenses) approximately eight years after the date of original
purchase.
Class B Shares Assuming You Stayed in the Fund
1 year 3 years 5 years 10 years
------ ------- ------- --------
Global Financial Services Fund $343 $1,045 $1,769 $3,512*
Large-Cap Value Fund $200 $ 618 $1,062 $2,099*
Pro Forma: the Funds Combined $ $ $ $
* Reflects conversion of Class B shares to Class A shares (which pay lower
ongoing expenses) approximately eight years after the date of original
purchase.
Class II/C Shares Assuming You Sold Your Shares at the End of the Period
1 year 3 years 5 years 10 years
------ ------- ------- --------
Global Financial Services Fund (Class II) $539 $1,134 $1,852 $3,748
Large-Cap Value Fund (Class C) $300 $ 618 $1,062 $2,296
Pro Forma: the Funds Combined $ $ $ $
Class II/C Shares Assuming You Stayed in the Fund
1 year 3 years 5 years 10 years
------ ------- ------- --------
Global Financial Services Fund (Class II) $439 $1,134 $1,852 $3,748
Large-Cap Value Fund (Class C) $200 $ 618 $1,062 $2,296
Pro Forma: the Funds Combined $ $ $ $
-16-
Class K Shares
1 year 3 years 5 years 10 years
------ ------- ------- --------
Global Financial Services Fund $268 $823 $1,405 $2,983
Large-Cap Value Fund $124 $387 $ 670 $1,477
Pro Forma: the Funds Combined $ $ $ $
Class Y Shares
1 year 3 years 5 years 10 years
------ ------- ------- --------
Global Financial Services Fund $243 $748 $1,280 $2,736
Large-Cap Value Fund $ 99 $309 $ 536 $1,190
Pro Forma: the Funds Combined $ $ $ $
Following the Reorganization and in the ordinary course of business as a
mutual fund, certain holdings of the Global Financial Services Fund that are
transferred to the Large-Cap Value Fund in connection with the Reorganization
may be sold. The portfolio management team for the Large-Cap Value Fund expects
to sell a significant portion of the Global Financial Services Fund's foreign
holdings shortly after the Reorganization. Any sales of the Global Financial
Services Fund's holdings may result in additional transaction costs for the
Large-Cap Value Fund (which will not be assumed or paid by MCM) and will be a
taxable event that will result in the realization of taxable gains or losses
from such sales for the Large-Cap Value Fund.
Purchase and Redemption Procedures
Purchases and redemptions of shares are subject to certain minimum
investment requirements, charges, and waivers of charges applicable to the
various classes of both the Global Financial Services Fund and the Large-Cap
Value Fund. For details on how to purchase or redeem shares of either Fund, see
"How to Purchase, Sell and Exchange Shares."
Exchange Privileges
You may exchange shares of each class of each Fund for shares of the same
class in other Munder Funds to the extent the class exists and shares are
offered for sale in the shareholder's state of residence and subject to any
applicable sales charge. You may exchange Class C or Class II shares for Class C
or Class II shares of other Munder Funds, based on their relative net asset
values ("NAVs"). Class B, Class C and Class II shares will continue to age from
the date of the original purchase and will retain the same CDSC rate in effect
before the exchange. We will not impose any exchange fee on any of these
exchange privileges. Any exchange will be a taxable event for which you may have
to recognize a gain or loss under Federal income tax law. We reserve the right
to amend or terminate the exchange privilege at any time. See "How to Purchase,
Sell and Exchange Shares -- Exchanging Shares," below.
Dividends and Distributions
The Global Financial Services Fund declares and pays dividends from net
investment income, if any, at least annually. The Large-Cap Value Fund declares
and pays dividends from net investment income, if any, at least quarterly. Both
Funds distribute net realized capital gains, if any, at least annually. As
described in more detail in "How to Purchase, Sell and Exchange Shares --
Distributions," below, dividends are generally subject to Federal income tax.
For both Funds, all dividends and distributions are reinvested automatically in
additional shares of the
-17-
respective Fund at net asset value, without a sales charge or CDSC, unless the
shareholder elects to be paid in cash. Following the Reorganization, Global
Financial Services Fund shareholders that have elected to receive distributions
in cash will continue to receive distributions in such manner from the Large-Cap
Value Fund. See "How to Purchase, Sell and Exchange Shares -- Distributions" in
the Proxy Statement/Prospectus for more information.
Tax Consequences
Prior to completion of the Reorganization, the Global Financial
Services Fund will have received from counsel an opinion to the effect that the
Reorganization will qualify as a tax-free reorganization for Federal income tax
purposes. See "Information about the Reorganization -- Federal Income Tax
Consequences."
Shareholder Voting Rights
Neither the Global Financial Services Fund, a series of a Massachusetts
business trust, nor the Large-Cap Value Fund, a series of a different
Massachusetts business trust, holds annual shareholder meetings. The 1940 Act
requires that a shareholder meeting be called for the purpose of electing
Trustees at such time as fewer than a majority of Trustees holding office have
been elected by shareholders. Either Fund will hold a shareholder meeting upon
the written request of shareholders holding at least 10% of that Fund's
outstanding shares.
Appraisal Rights
Under the laws of the Commonwealth of Massachusetts and the Trust's
Declaration of Trust, shareholders of the Large-Cap Value Fund do not have
appraisal rights in connection with a combination or acquisition of the assets
of another fund. Under the laws of the Commonwealth of Massachusetts and Munder
Framlington's Declaration of Trust, shareholders of the Global Financial
Services Fund do not have appraisal rights in connection with a combination or
acquisition of the assets of the Global Financial Services Fund by another
entity.
Risk Factors
Because the Global Financial Services Fund and the Large-Cap Value Fund
invest in similar types of securities, investment in these Funds involves
similar investment risks. These risks include those that are generally
associated with investing in equity securities. However, the Global Financial
Services Fund invests to a significant extent in foreign securities and
financial services securities, which have different risks than the domestic
securities in multiple different industries in which the Large-Cap Value Fund
invests most of its assets. See "Comparison of Investment Objectives and
Policies" herein.
REASONS FOR THE REORGANIZATION
Currently, the Global Financial Services Fund and the Large-Cap Value
Fund are investment portfolios of the same open-end management investment
company, but each Fund must separately bear certain costs of its own operations.
Consolidating their separate operations should generally benefit the
shareholders of both Funds by promoting more efficient operations on a more
cost-effective basis. Also, combining assets of the Funds should create future
-18-
economies of scale resulting from the larger asset base of the combined fund
after the Reorganization. However, there can be no assurance that the
combination of the Funds will produce more efficient operations on a
cost-effective basis or that economies of scale will be realized.
MCM believes that certain investment management efficiencies and other
benefits could be realized through the combination of the Funds. The
Reorganization would permit each Fund's shareholders to pursue substantially the
same investment goals in a larger fund. A larger fund should enhance the ability
of MCM to effect portfolio transactions on more favorable terms and give MCM
greater investment flexibility and the ability to select a larger number of
portfolio securities with the attendant benefits of increased diversification. A
larger fund should not be as significantly affected by high levels of
shareholder redemptions. In addition, the larger aggregate net assets should
enable the combined fund over the long term to obtain the benefits of economies
of scale, permitting the reduction of certain costs and expenses which may
result in lower overall expense ratios through the spreading of fixed costs of
operations over a larger asset base. As a general rule, economies of scale can
be realized with respect to fixed expenses, such as printing costs and fees for
certain professional services, although expenses that are based on the value of
assets or on the number of shareholder accounts, such as transfer agent fees,
would be largely unaffected by the Reorganization. Moreover, we cannot assure
you that economies of scale can be realized.
MCM further believes that as a result of declining assets and disappointing
performance, expense ratios for the Global Financial Services Fund are
increasing. Without significant asset growth from sales or improvement in the
performance of securities markets generally, the Global Financial Services
Fund's expenses are expected to increase further. In addition, Global Financial
Services Fund's small asset size has made it increasingly difficult to maintain
a diversified portfolio.
In light of the foregoing considerations, the Board unanimously concluded
that the Reorganization is in the best interests of the Global Financial
Services Fund and its shareholders and that the Reorganization would not result
in a dilution of shareholders' interests. Similarly, the Board of the Trust also
approved the Reorganization and determined that it is in the best interests of
the Large-Cap Value Fund and its shareholders to acquire the assets of the
Global Financial Services Fund and that the interests of the Large-Cap Value
Fund's shareholders would not be diluted as a result of the Reorganization.
INFORMATION ABOUT THE REORGANIZATION
Reorganization Agreement
The following summary of the Reorganization Agreement is qualified in its
entirety by reference to the form of Reorganization Agreement attached to this
Proxy Statement/Prospectus as Exhibit A. The Reorganization Agreement provides
that the Large-Cap Value Fund will acquire all of the assets, subject to all of
the liabilities, of the Global Financial Services Fund in exchange for shares of
the Large-Cap Value Fund. Subject to the satisfaction of the conditions
described below, such acquisition is scheduled to occur on the Closing Date, or
such later date as may be agreed upon by the parties. The net asset value per
share of the Global Financial
-19-
Services Fund and the net asset value per share of the Large-Cap Value Fund will
be determined by dividing the combined Large-Cap Value Fund's assets, less
liabilities, by the total number of its outstanding shares.
Both the Global Financial Services Fund and the Large-Cap Value Fund will
utilize State Street Bank and Trust Company to determine the value of their
respective portfolio securities. The Global Financial Services Fund and the
Large-Cap Value Fund also will use the same independent pricing services to
determine the value of each security so that State Street Bank and Trust Company
can determine the aggregate value of each Fund's portfolio. The method of
valuation employed will be in accordance with the procedures described in the
current prospectuses, as set forth in the Reorganization Agreement, which is
consistent with Rule 22c-1 under the 1940 Act and with the interpretations of
such rule by the SEC.
The number of full and fractional shares of the Large-Cap Value Fund you
will receive in the Reorganization will be equal in value to the value of your
Global Financial Services Fund shares as of the close of regularly scheduled
trading on the New York Stock Exchange ("NYSE") on the Closing Date. As promptly
as practicable after the Closing Date, the Global Financial Services Fund will
liquidate and distribute pro rata to its shareholders of record as of the close
of regularly scheduled trading on the NYSE on the Closing Date the shares of the
Large-Cap Value Fund received by the Global Financial Services Fund in the
Reorganization. We will accomplish the liquidation and distribution with respect
to each class of the Global Financial Services Fund's shares by the transfer of
the Large-Cap Value Fund shares then credited to the account of the Global
Financial Services Fund on the books of the Large-Cap Value Fund to open
accounts on the share records of the Large-Cap Value Fund in the names of the
Global Financial Services Fund shareholders. The aggregate net asset value of
Class A, Class B, Class C, Class K and Class Y Large-Cap Value Fund shares to be
credited to Class A, Class B, Class II, Class K and Class Y Global Financial
Services Fund shareholders, respectively, will, with respect to each class, be
equal to the aggregate net asset value of the shares of common stock ($0.01 par
value per share) of the Global Financial Services Fund of the corresponding
class owned by Global Financial Services Fund shareholders on the Closing Date.
All issued and outstanding shares of the Global Financial Services Fund will
simultaneously be canceled on the books of the Global Financial Services Fund,
although share certificates representing interests in Class A, Class B, Class
II, Class K and Class Y shares of the Global Financial Services Fund will
represent a number of Class A, Class B, Class C, Class K and Class Y shares,
respectively, of Large-Cap Value Fund shares after the Closing Date. The
Large-Cap Value Fund will not issue certificates representing the Class A, Class
B, Class C, Class K and Class Y Large-Cap Value Fund shares issued in connection
with such exchange.
After such distribution, Munder Framlington will take all necessary steps
under Massachusetts law, Munder Framlington's Declaration of Trust and any other
applicable law to effect a complete dissolution of the Global Financial Services
Fund.
The Board of Trustees of Munder Framlington has determined, with respect to
the Global Financial Services Fund and the Board of Trustees of the Trust has
determined, with respect to the Large-Cap Value Fund, that the interests of
shareholders of each of those Funds will not be diluted as a result of the
Reorganization and that participation in the Reorganization is in the best
interests of each of those Funds and its shareholders. MCM will bear the
expenses of the
-20-
Reorganization, including the cost of a proxy soliciting agent that has been
retained but excluding brokerage fees and brokerage expenses incurred in
connection with the Reorganization.
The Reorganization Agreement may be terminated and the Reorganization
abandoned at any time prior to the consummation of the Reorganization, before or
after approval by the shareholders of the Global Financial Services Fund, if
circumstances should develop that, in the Board's opinion, make proceeding with
the Reorganization inadvisable. The Reorganization Agreement provides that
Munder Framlington and the Trust may waive compliance with any of the covenants
or conditions made therein for the benefit of either Fund, other than the
requirements that: (i) the Reorganization Agreement be approved by shareholders
of the Global Financial Services Fund; and (ii) Munder Framlington receive the
opinion of Munder Framlington's counsel that the transaction contemplated by the
Reorganization Agreement will constitute a tax-free reorganization for Federal
income tax purposes.
Approval of the Reorganization Agreement will require the affirmative vote
of a majority of the shares of the Global Financial Services Fund, with all
classes voting together and not by class. See "Voting Information."
At its November 13, 2001 meeting, the Board also approved the liquidation
of the Global Financial Services Fund in the event that shareholders of the
Global Financial Services Fund do not approve the Reorganization. As a result,
if the Reorganization Agreement is not approved by the shareholders of the
Global Financial Services Fund, or is not consummated for any other reason, the
Global Financial Services Fund will be liquidated as promptly as possible. Any
shares of the Global Financial Services Fund outstanding on the date of the
liquidation will be automatically redeemed by Munder Framlington on that date.
The proceeds of any such redemption will be equal to the NAV of such shares
after all charges, taxes, expenses and liabilities of the Global Financial
Services Fund have been paid or provided for. In the event of a liquidation, the
Class A and the Class II shareholders of the Global Financial Services Fund who
receive proceeds in the liquidation will not be entitled to receive a refund of
any front-end sales load they paid when they purchased their shares. Any
contingent deferred sales charges that would otherwise be charged upon the
redemption of Class B and Class II shares of the Global Financial Services Fund
will be imposed if Class B and Class II shareholders are redeemed as a result of
the liquidation. Any liquidation would be expected to be a taxable event for
shareholders.
THE BOARD, INCLUDING ALL OF THE INDEPENDENT TRUSTEES, HAS UNANIMOUSLY
RECOMMENDED APPROVAL OF THE REORGANIZATION AGREEMENT.
Shareholders of the Global Financial Services Fund as of the Record Date
will receive shares of the Large-Cap Value Fund in accordance with the
procedures provided for in the Reorganization Agreement, as described above.
Each such share will be fully paid and non-assessable when issued and will have
no pre-emptive or conversion rights.
-21-
Description of the Large-Cap Value Fund's Shares
Full and fractional shares of the respective class of shares of common
stock of the Large-Cap Value Fund will be issued to the Global Financial
Services Fund's shareholders in accordance with the procedures detailed in the
Reorganization Agreement. The Large-Cap Value Fund no longer issues share
certificates. The shares of the Large-Cap Value Fund to be issued to Global
Financial Services Fund shareholders and recorded on the shareholder records of
the transfer agent will have no pre-emptive or conversion rights, except for
Class B shares, as more fully described below in "How to Purchase, Sell and
Exchange Shares."
Federal Income Tax Consequences
The Reorganization is intended to qualify for Federal income tax purposes
as a tax-free reorganization described in Section 368(a) of the Internal Revenue
Code of 1986, as amended ("Code"), with no gain or loss recognized as a
consequence of the Reorganization by the Large-Cap Value Fund, the Global
Financial Services Fund, or the shareholders of the Global Financial Services
Fund. As a condition to the closing of the Reorganization, the Global Financial
Services Fund will receive a legal opinion to that effect. That opinion will be
based upon certain representations and warranties made by the Global Financial
Services Fund and the Large-Cap Value Fund and certifications received from each
of the Funds and certain of their service providers.
Immediately prior to the Reorganization, the Global Financial Services Fund
will pay a dividend or dividends which, together with all previous dividends,
will have the effect of distributing to its shareholders all of the Global
Financial Services Fund's investment company taxable income for taxable years
ending on or prior to the Closing Date (computed without regard to any deduction
for dividends paid) and all of its net capital gain, if any, realized in taxable
years ending on or prior to the Closing Date (after reduction for any available
capital loss carryforward). Such dividends will be included in the taxable
income of the Global Financial Services Fund's shareholders.
As of June 30, 2001, the Global Financial Services Fund had a small unused
capital loss carryover of approximately $91,741. Capital loss carryovers (when
realized) are considered valuable tax attributes because they can reduce a
fund's future taxable income and thus reduce the taxable amount distributed to
fund shareholders.
The proposed Reorganization will affect the use of the capital loss
carryover in two respects. The first concerns the "sharing" of the capital loss
carryover with the shareholders of the Large-Cap Value Fund. If there were no
Reorganization, the capital loss carryover would inure solely to the benefit of
the shareholders of the Global Financial Services Fund. If the Reorganization
occurs, the capital loss carryover carries over (subject to the limitations
described below) to the Large-Cap Value Fund. That means that any resulting tax
benefits inures to all shareholders of the Large-Cap Value Fund (i.e., both
pre-Reorganization shareholders of the Global Financial Services Fund and
pre-Reorganization shareholders of the Large-Cap Value Fund).
-22-
The second manner in which the Reorganization will affect the use of the
capital loss carryover concerns certain limitations imposed under the Code with
respect to the use of these losses. Very generally, when more than 50 percent of
the stock of a "loss corporation" such as the Global Financial Services Fund is
acquired (as will be the case here), the Code imposes various limitations on the
use of loss carryovers following the acquisition. The amount of such loss
carryovers that can be used each year to offset post-acquisition income is
generally limited to an amount equal to the "federal long-term tax-exempt rate"
(the applicable rate as of November 2001 was 4.85%) multiplied by the value of
the "loss corporation's" equity. Furthermore, capital losses may generally be
carried forward for only eight years in the case of regulated investment
companies. Considering that the combined amount of capital loss carryovers and
built-in-losses as of June 30, 2001 was minimal, no substantial limitation on
the use of these losses is expected.
You should consult your tax advisor regarding the effect, if any, of the
proposed Reorganization in light of your individual circumstances. Since the
foregoing discussion only relates to the Federal income tax consequences of the
Reorganization, you should also consult your tax advisor as to state and other
local tax consequences, if any, of the Reorganization.
Capitalization
The following table shows the capitalization of the Global Financial
Services Fund and the Large-Cap Value Fund as of June 30, 2001, and on a pro
forma basis as of that date, giving effect to the proposed acquisition of assets
at net asset value.
As of June 30, 2001
--------------------------------------------------------
Global Financial Large-Cap Pro Forma after
---------------
CLASS A SHARES Services Fund Value Fund Reorganization
- -------------- ------------- ---------- --------------
Net Assets ................... $1,253,239 $ 6,653,904 $ 7,907,143
Net asset value per share .... $ 10.52 $ 13.06 $ 13.06
Shares outstanding ........... 119,171 509,512 605,448
As of June 30, 2001
--------------------------------------------------------
Global Financial Large-Cap Pro Forma after
---------------
CLASS B SHARES Services Fund Value Fund Reorganization
- -------------- ------------- ---------- --------------
Net Assets ................... $1,578,268 $10,904,968 $12,483,236
Net asset value per share .... $ 10.50 $ 12.97 $ 12.97
Shares outstanding ........... 150,295 841,032 962,471
As of June 30, 2001
--------------------------------------------------------
Global Financial Large-Cap Pro Forma after
---------------
CLASS C SHARES Services Fund Value Fund Reorganization
- -------------- ------------- ---------- --------------
Net Assets ................... N/A $ 3,780,828 $ 4,646,985
Net asset value per share .... N/A $ 12.96 $ 12.96
Shares outstanding ........... N/A 291,676 358,564
-23-
As of June 30, 2001
-----------------------------------------------------------------
Global Financial Large-Cap Pro Forma after
---------------
CLASS II SHARES Services Fund Value Fund Reorganization
- --------------- ------------- ---------- --------------
Net Assets ...................... $866,157 N/A N/A
Net asset value per share ....... $10.51 N/A N/A
Shares outstanding .............. 82,413 N/A N/A
As of June 30, 2001
-----------------------------------------------------------------
Global Financial Large-Cap Pro Forma after
---------------
CLASS K SHARES Services Fund Value Fund Reorganization
- -------------- ------------- ---------- --------------
Net Assets ...................... N/A $80,625,071 $80,625,071
Net asset value per share ....... N/A $13.06 $13.06
Shares outstanding .............. N/A 6,171,109 6,171,109
As of June 30, 2001
-----------------------------------------------------------------
Global Financial Large-Cap Pro Forma after
---------------
CLASS Y SHARES Services Fund Value Fund Reorganization
- -------------- ------------- ---------- --------------
Net Assets ....................... $3,298,270 $79,553,185 $82,851,455
Net asset value per share ........ $10.53 $13.07 $13.07
Shares outstanding ............... 313,290 6,088,267 6,339,056
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES
The following discussion comparing investment objectives, policies and
restrictions of the Global Financial Services Fund and the Large-Cap Value Fund
is based upon and qualified in its entirety by the respective investment
objectives, policies and restrictions sections of the prospectuses of the Global
Financial Services Fund and the Large-Cap Value Fund dated October 31, 2001, as
supplemented on November 15, 2001, December 21, 2001 with respect to Class K and
Class Y shares, and January ___, 2002.
Investment Objectives of Each Fund
The Global Financial Services Fund's goal is to provide long-term capital
appreciation. The Large-Cap Value Fund's goal is to provide shareholders with
long-term capital appreciation and current income. The investment objectives of
both Funds may be changed by the Board without shareholder approval; however,
shareholders would be notified of any such change.
Primary Investments of Each Fund
The Global Financial Services Fund seeks to achieve its investment
objective by investing, under normal market conditions, at least 80% of its
assets in equity securities of U.S. and foreign companies that are principally
engaged in the financial services industries or companies providing services
primarily within the financial services industries. The Global Financial
Services Fund focuses specifically on companies that are likely to benefit from
growth or consolidation in the financial services industries.
Examples of companies in the financial services industry are:
. commercial, industrial and investment banks;
-24-
. savings and loan associations;
. brokerage companies;
. consumer and industrial finance companies;
. real estate and leasing companies;
. insurance companies; and
. holding companies for each of the above.
A company is "principally engaged" in the financial services industry
if at least 50% of its gross income, net sales or net profits comes from
activities in the financial services industry or if the company dedicates more
than 50% of its assets to the production of revenues from the financial services
industry.
The Global Financial Services Fund's sub-adviser, Framlington, selects
companies using a "bottom-up approach" that identifies outstanding performance
of individual companies before considering the impact of economic trends.
Framlington evaluates companies by analyzing a number of factors, including the
growth prospects of a financial services company relative to the price of its
stock. Framlington allocates assets among countries based on:
. its analysis of the trends in the financial services industry in
particular regions;
. the relative valuation of financial services companies in different
regions; and
. its assessment of the prospects for a particular equity market and
its currency
Under normal market conditions, the Global Financial Services Fund
invests at least 80% of its assets in at least three different countries,
including the United States. The Global Financial Services Fund may invest in
companies located in both countries with mature markets and in those with
emerging markets.
The Large-Cap Value Fund seeks to achieve its investment objective by
investing primarily in companies whose equity securities are trading at a
valuation discount relative to the marketplace, their peers and historical
levels. Under normal circumstances, the Fund will invest at least 80% of its
assets in equity securities of large-capitalization companies.
Large-capitalization companies are companies having a market capitalization
within the range of companies included in the Russell 1000 Index. Based on the
most recent data available at the printing of the prospectus of the Large-Cap
Value Fund, dated October 31, 2001, such capitalizations were approximately $1.4
billion or greater.
MCM generally selects large companies with relatively low valuations
that it believes possess a catalyst for favorable or improved security values.
MCM may also consider one or more of the following factors:
. financial strength and strong fundamentals, including low price to
earnings ratios;
. improving earnings estimates and stock price trends;
-25-
. quality of management, profitability and industry leadership
position;
. current dividend; and
. unrecognized assets.
Neither the Global Financial Services Fund nor the Large-Cap Value Fund
may purchase more than 10% of the outstanding voting securities of any issuer.
Neither Fund may invest more than 25% of its total assets in any one industry,
except the Global Financial Services Fund may invest more than 25% of its total
assets in securities of issuers conducting their principal business activities
in the financial services industry.
Neither Fund may purchase securities on margin. The Large-Cap Value
Fund may not make short sales of securities, but the Global Financial Services
Fund may make short sales.
Portfolio Instruments and Practices
Borrowing. Under certain circumstances, each Fund may borrow money in
---------
an amount up to 5% of the value of its total assets for temporary purposes and
in an amount equal to one-third of its assets to meet redemptions. This is a
fundamental policy which can only be changed by shareholders.
Foreign Securities. The Global Financial Services Fund will invest,
------------------
under normal market conditions, at least 80% of its assets in securities of
issuers located in at least three countries, one of which may be the United
States. The Large-Cap Value Fund may invest up to 25% of its assets in foreign
securities.
Forward Foreign Currency Exchange Contracts. Each Fund may enter into
-------------------------------------------
forward foreign currency exchange contracts. A Fund may enter into these
contracts in order to protect against uncertainty in the level of future
exchange rates between a particular foreign currency and the U.S. dollar or
between two foreign currencies in which portfolio securities are or may be
denominated.
Futures Contracts and Options. Each Fund may purchase and sell futures
-----------------------------
contracts on securities, currencies and indices. Neither Fund will commit more
than 5% of its total assets to initial margin deposits on futures contracts. In
addition, each Fund may write covered call options, purchase put options,
purchase call options and write secured put options on securities, currencies,
indices and futures contracts, as described in the Statement of Additional
Information of each Fund.
Liquidity Management. Pending investment, to meet anticipated
--------------------
redemption requests, or as a temporary defensive measure if MCM, or Framlington
in the case of the Global Financial Services Fund, determines that market
conditions warrant, either Fund may also invest without limitation in
high-quality, short-term money market instruments including, among other things,
commercial paper, bankers' acceptances and negotiable certificates of deposit of
banks or
-26-
savings and loan associations, short-term corporate obligations and short-term
securities issued by, or guaranteed by, the U.S. Government and its agencies or
instrumentalities.
Repurchase Agreements, Reverse Repurchase Agreements and When-Issued
--------------------------------------------------------------------
Securities. Each Fund may enter into repurchase agreements with banks and
- ----------
broker-dealers that have been approved by MCM, or Framlington in the case of the
Global Financial Services Fund. Each Fund considers repurchase agreements that
mature in more than seven days to be illiquid.
In order to borrow funds for temporary purposes, each Fund may also
engage in reverse repurchase agreements, i.e., selling portfolio securities to
financial institutions such as banks and broker/dealers and agreeing to
repurchase them at a mutually specified date and price. In addition, in order to
secure prices deemed advantageous at the time, each Fund may purchase securities
on a when-issued or a delayed-delivery basis. A Fund will not enter into a
when-issued or delayed-delivery transaction for speculative purposes but only in
furtherance of its investment objective. Each Fund's when-issued or
delayed-delivery purchase transactions will not exceed 25% of the value of the
Fund's total assets absent unusual market conditions.
Restricted or Illiquid Securities. Each Fund may invest up to 15% of
---------------------------------
its net assets in restricted or illiquid securities. Restricted securities are
securities subject to legal or contractual restrictions on their resale.
Securities Lending. Each Fund may lend securities in its portfolio
------------------
representing up to 25% of total assets, taken at market value, to securities
firms and financial institutions, provided that each loan is secured
continuously by collateral in the form of cash or liquid securities with market
value at least equal (on a daily mark-to-market basis) to the current market
value of the securities loaned.
Portfolio Turnover Rate. The Large-Cap Value Fund intends to purchase
-----------------------
and hold securities for long-term capital appreciation and does not expect to
trade for short-term gain. The Global Financial Services Fund's portfolio
turnover rate for the fiscal year ended June 30, 2001 was 82%. The Large-Cap
Value Fund's portfolio turnover rate for the same period was 65%.
Additional Investment Restrictions. In addition to the restrictions
----------------------------------
described above, each Fund has adopted certain fundamental investment
restrictions that may be changed only with the approval of a majority of the
outstanding securities (as defined in the 1940 Act) of that Fund. These
restrictions are set forth in the Statement of Additional Information for each
Fund.
Risk Factors
The Global Financial Services Fund and the Large-Cap Value Fund are
subject to the following principal investment risks:
Stock Market Risk. The value of the securities in which the Funds
-----------------
invest may decline in response to developments affecting individual companies
and/or general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically fluctuated in
periodic cycles. In addition, the value of the Funds' investments may decline if
the particular companies the Funds invest in do not perform well.
-27-
Additionally, the Large-Cap Value Fund is subject to the following
principal investment risk:
Value Investing Risk. Value investing attempts to identify strong
--------------------
companies selling at a discount from their perceived true worth. Advisors using
this approach generally select stocks at prices, in their view, that are
temporarily low relative to the company's earnings, assets, cash flow and
dividends. Value investing is subject to the risk that the stocks' intrinsic
value may never be fully recognized or realized by the market, or their prices
may go down. In addition, there is the risk that a stock judged to be
undervalued may actually be appropriately priced. Value investing generally
emphasizes companies that, considering their assets and earnings history, are
attractively priced and may provide dividend income.
The Global Financial Services Fund is subject to the following
additional principal investment risks:
Sector Risk. The Global Financial Services Fund invests primarily in
-----------
companies which are principally engaged in the financial services industry and
companies providing services primarily within the financial services industry.
Financial services companies are subject to extensive governmental regulation
that may limit the financial commitments they can make and the interest rates
and fees they can charge. Insurance companies may be subject to severe price
competition. Adverse economic, business or political developments affecting the
financial services industry sector could have a major effect on the value of the
Global Financial Services Fund's investments. The value of the Global Financial
Services Fund's shares may fluctuate more than shares of a fund investing in a
broader range of securities.
Growth Investing Risk. The price of growth stocks may be more sensitive
---------------------
to changes in current or expected earnings than the prices of other stocks. The
price of growth stocks is also subject to the risk that the stock price of one
or more companies will fall or will fail to appreciate as anticipated by MCM, or
Framlington in the case of the Global Financial Services Fund, regardless of
movements in the securities markets.
Foreign Securities Risk. The Global Financial Services Fund's
-----------------------
investments in foreign securities, including depositary receipts, involve risks
not associated with investing in U.S. securities and can affect the Global
Financial Services Fund's performance. Foreign markets, particularly emerging
markets, may be less liquid, more volatile and subject to less government
supervision than domestic markets. There may be difficulties enforcing
contractual obligations, and it may take more time for trades to clear and
settle. The specific risks of investing in foreign securities, among others,
include:
Currency Risk: The risk that changes in currency exchange rates
-------------
will negatively affect securities denominated in, and/or receiving
revenues in, foreign currencies. Adverse changes in currency exchange
rates (relative to the U.S. dollar) may erode or reverse any potential
gains from the Global Financial Services Fund's investment in
securities denominated in a foreign currency or may widen existing
losses.
-28-
Emerging Markets Risk: There are greater risks involved in investing in
---------------------
emerging market countries and/or their securities markets. Generally, economic
structures in these countries are less diverse and mature than those in
developed countries, and their political systems are less stable. Investments in
emerging market countries may be affected by national policies that restrict
foreign investment in certain issuers or industries. The small size of their
securities markets and low trading volumes can make investments illiquid and
more volatile than investments in developed countries and such securities may be
subject to abrupt and severe price declines. As a result, should the Global
Financial Services Fund invest in emerging market countries, it may be required
to establish special custody or other arrangements before investing.
Geographic Risk: The economies and financial markets of certain
---------------
regions, such as Latin America and Asia, can be highly interdependent and
decline all at the same time.
Political/Economic Risk: Changes in economic and tax policies,
-----------------------
government instability, war or other political or economic actions or factors
may have an adverse effect on the Global Financial Services Fund's foreign
investments.
Regulatory Risk: Less information may be available about foreign
---------------
companies. In general, foreign companies are not subject to uniform accounting,
auditing and financial reporting standards or to other regulatory practices and
requirements as are U.S. companies.
Transaction Costs Risk: The costs of buying and selling foreign
----------------------
securities, including tax, brokerage and custody costs, generally are higher
than those involving domestic transactions.
[The rest of this page has intentionally been left blank.]
-29-
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
AND FINANCIAL HIGHLIGHTS
Management's Discussion of Fund Performance
The Investment Environment
The year ending June 30, 2001, was marked by a sharp deceleration in
economic growth. One year ago, in June 2000, the National Association of
Purchasing Management's (NAPM) Index, which provides a snapshot of the
strength in industrial activity, stood at 52.1. The dividing line between
an expansion and contraction in manufacturing activity is 50. By August,
2000, the Index had fallen below 50, indicating a contraction in the
manufacturing sector. After reaching a low of 41.2 in January, the Index
has rebounded slightly, reaching 44.7 by June 2001. As the 12-month time
period ended, therefore, manufacturing activity was continuing to contract.
In contrast to the manufacturing sector, Gross Domestic Product (GDP),
a measure of total economic activity, has remained positive although it has
decelerated sharply. Real GDP (adjusted for inflation) rose by 1.32%
between June 2000 and June 2001. This was a marked deceleration in growth
from the 5.22% GDP increase posted for June 1999 through June 2000.
Consumption, which accounts for approximately two-thirds of economic
activity, has held up reasonably well. Construction activity has also been
a source of strength. Business spending on equipment and software, however,
moved from a 13.19% increase for the year ending June 30, 2000 to a 4.00%
decline for the year ending June 30, 2001. As the economy slowed, inventory
accumulation slowed as well, turning negative in the first two quarters of
2001. Net exports have also taken their toll on growth. While imports have
fallen by 6.7% over the past year as the pace of domestic economic activity
declined, exports have fallen even faster in response to the slowing of the
global economy.
The news on inflation over the past year has been more positive than
the news on economic growth. As of June 2001, the Consumer Price Index
(CPI) was 3.31% higher than June 2000. This is lower than the 3.67% CPI
increase from June 1999 through June 2000.
Whether the economy is or will be in a technical recession (two
consecutive quarters of negative GDP growth), we will know with certainty
only in hindsight. What is clear is that slowing economic growth has had a
significant impact on the financial markets.
The Stock Market
The decline in economic growth, with its negative impact on actual and
anticipated corporate earnings, took a heavy toll on the stock market
during the year ending June 30, 2001. While there is debate about whether
the economy is in recession, there is no doubt that there is a profits
recession. S&P 500 earnings for the second quarter of 2001 are expected to
fall by 21.10%, compared to year-ago levels. By contrast, earnings for the
second quarter of 2000 increased 12.64% versus year-earlier levels.
For the year ending June 30, the S&P 500 Index generated a return of
-14.83%. Even with this double-digit negative performance, six of the 10
sectors of the S&P 500 Index turned in a positive return. In fact, the
financials and utilities sectors both earned returns of greater than 20%,
while the materials sector earned a return of over 18%. The weakness in the
S&P 500 Index came primarily from one sector: technology. With a 23.8%
weight in the Index and a return of -52.77% for the year, the technology
sector alone subtracted over 16 percentage points from the Index's return
for the 12-month time period. Although telecommunications services also had
a very
-30-
weak return (-30.24%), its relatively small weight in the Index limited its
impact on the performance of the S&P 500 Index.
Across the capitalization ranges of the stock market, smaller company
stocks had better relative performance than the larger-cap S&P 500 for the
year. The S&P MidCap 400 Index generated a return of 8.87% while the S&P
SmallCap 600 Index had an even stronger return of 11.12%.
International stocks trailed the U.S. stock market. The MSCI EAFE
Index, a widely followed benchmark for international stocks, posted a
-23.63% return for the year ending June 30.
The Munder Funds
The following paragraphs detail the performance of the Funds. Each Fund
offers its shares to investors in more than one class. These classes have
different sales charges and expenses, which affect performance. Performance
figures in the following narrative discussion represent the performance of
Class Y shares, net of Fund expenses. The Lipper Universe of Mutual Funds
referred to below are compiled by Lipper Analytical Services, Inc. and
categorized based on investment objectives.
MUNDER FRAMLINGTON GLOBAL FINANCIAL SERVICES FUND
Fund Manager: The Munder Framlington Global Financial Services Fund Team
The Fund posted a return of 0.17% for the year ending June 30, 2001,
relative to the 1.62% return of the MSCI Finance Sector Index and the
30.74% average return for the Lipper universe of financial services mutual
funds.
During the last half of 2000, the Fund's U.S. holdings significantly
outperformed their international counterparts. The U.K. was the best
performing region among the Fund's non-U.S. holdings while Japanese
financial stocks were relatively weak. European holdings generated slightly
negative returns during the third quarter of 2000, but moved into positive
territory in the fourth quarter as the euro strengthened against the U.S.
dollar.
The better relative performance of U.S. financial stocks continued
into the first half of 2001. However, the performance of the U.S. portion
of the Fund was held back during the first quarter by weakness in brokerage
holdings and large institutional banks. In the overseas portion of the
portfolio, European stocks were relatively weak, reflecting concerns about
future economic growth. Although Japanese stocks made modest progress when
valued in terms of yen, the Japanese stocks in the Fund fell by 6.3% when
translated into U.S. dollars.
The U.S. financial holdings in the Fund rebounded during the second
quarter of 2001. Performance was broad-based, with a number of
smaller-capitalization names posting good returns, including Metris (+62%),
Affiliated Managers (+31%), Radian (+19%) and Annaly Mortgage Management
(+22%). Citicorp, the largest holding in the Fund, rose by 17% for the
quarter.
In the non-U.S. portion of the Fund, U.K. financial stocks generated
better relative returns than Eurozone countries during the second quarter.
Banks were the strongest segment of the U.K. portion of the portfolio,
supported by the ongoing consolidation within the banking industry.
-31-
MUNDER LARGE-CAP VALUE FUND
Fund Manager: The Munder Large-Cap Value Fund Team
The Fund earned a return of 15.59% for the year ending June 30, 2001,
relative to the 10.34% return for the Russell 1000 Value Index and the
7.11% average return for the Lipper universe of equity income mutual funds.
Compared to the Lipper universe, the Fund has earned above-average returns
for the one-year time period ending June 30, 2001.
The Fund's approach to value investing is fairly straightforward. The
Fund invests in undervalued stocks with improving earnings estimates and
stock price trends. The current lack of companies with improving business
trends has led the Fund to invest defensively, choosing companies where
confidence in earnings is highest. This strategy has been rewarded with
strong performance during the last 12 months, although periodic waves of
optimism have pushed the stocks of struggling companies higher. The Fund's
discipline lagged the Russell 1000 Value Index during the market rebound of
April and May, and therefore for the second quarter of 2001. However, as
investors again focused on the difficult earnings environment near the end
of the quarter, the performance of the Fund improved.
We expect investor sentiment to continue to vacillate between optimism
regarding an expected rebound in the economy and the reality of the current
weakness in the economic environment. We are monitoring a number of
inexpensive stocks, waiting for evidence of stabilization in business
trends. It is possible that this patient approach will result in some lost
opportunity when the economy improves, but we feel it should reduce risk
during the current downturn. We believe that this is a prudent approach in
today's environment.
-32-
The following graphs represent the performance of each Fund since the inception
of its oldest class of shares. This includes a period of time since February 1,
1995 during which the Funds have been managed by Munder Capital Management or
its wholly-owned subsidiary World Asset Management and prior periods when the
Funds were managed by their predecessors. The chart following each line graph
sets forth performance information and the growth of a hypothetical $10,000
investment for multiple classes of shares. Differing sales charges and expenses
of classes not shown in the line graph will have an effect on performance. In
addition, the information contained in the charts and tables does not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or
upon the redemption of Fund shares. Past performance is no guarantee of future
results. Investment return and principal value of any investment will fluctuate
so that an investor's shares, upon redemption, may be worth more or less than
original cost. Total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
FRAMLINGTON GLOBAL FINANCIAL SERVICES FUND
---------------------------------------------------------------------
CLASS Y SHARE HYPOTHETICAL
---------------------------------------------------------------------
A Hypothetical Illustration of a $10,000 Initial Investment--Class Y
LIPPER FINANCIAL
MSCI WORLD FINANCE SERVICES FUNDS
CLASS Y MSCI WORLD INDEX INDEX AVERAGE
------- ---------------- ------------------ -----------------
6/24/98 10000.00 10000.00 10000.00 10000.00
6/30/98 10190.00 10127.00 10000.00 10000.00
10580.30 10112.20 10283.00 9903.00
8680.06 8765.18 8196.58 7854.07
8316.36 8921.71 7760.52 8083.41
9157.98 9729.79 8876.48 8694.51
9799.04 10309.90 9593.70 9216.18
10069.50 10815.20 9732.81 9487.14
9988.94 11053.50 9725.03 9494.73
9658.30 10761.00 9600.55 9404.53
9828.29 11210.60 10085.40 9662.21
10248.90 11654.10 10681.40 10273.80
9758.02 11229.80 9865.36 9883.43
6/30/99 10056.60 11755.20 10114.00 10156.20
10016.40 11721.50 9918.77 9714.41
9906.20 11702.40 9896.95 9231.61
9803.18 11590.50 9780.17 8875.27
10581.50 12194.50 10688.70 9891.49
10277.90 12539.20 10312.50 9538.36
10522.50 13555.70 10379.50 9353.32
9971.10 12781.00 9655.04 8903.42
9899.30 12817.00 9113.39 8167.11
10890.20 13704.50 10253.50 9341.54
10512.30 13126.60 9847.44 9056.62
10757.30 12795.90 10142.90 9545.68
6/30/00 10851.80 13228.50 10190.50 10000.00
11158.40 12856.80 10469.70 10000.00
11710.20 13276.70 11003.70 10901.00
11871.90 12572.30 11051.00 11294.50
11624.10 12363.20 11052.10 11307.00
11066.70 11614.20 10649.80 10864.90
12047.40 11803.70 11472.00 12012.20
12037.10 12033.00 11463.90 11923.30
11283.50 11017.40 10497.50 11427.30
10488.60 10295.80 9863.47 11102.70
11118.30 11059.40 9999.59 11459.10
10973.80 10922.10 9916.59 11926.70
6/30/01 10870.50 10581.40 9846.19 12013.70
------------------------------ ------------------------------
GROWTH OF A $10,000 INVESTMENT AVERAGE ANNUAL TOTAL RETURNS++
------------------------------ ------------------------------
Lipper
Financial One One Since Since
Class and With Without MSCI MSCI World Services Year Year Inception Inception
Inception Date Load Load World Index# Finance Index# Funds Average** w/load w/outload w/load w/out load
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS A-- 6/30/00 $9,437* $ 9,988 $ 7,999 $ 9,662 $ 12,878 (5.63)%* (0.12)% (5.63)%* (0.12)%
CLASS B-- 7/6/00 $9,268+ $ 9,755 $ 7,985 $ 9,576 $ 12,878 N/A N/A (7.32)%+ (2.45)%
CLASS II-- 7/20/00 $9,508+* $ 9,701 $ 7,982 $ 9,347 $ 12,014 N/A N/A (4.92)%+* 2.90)%
CLASS Y-- 6/24/98 N/A $ 10,871 $ 10,581 $ 9,846 $ 11,830 N/A 0.17% N/A 2.81%
* Reflects the deduction of the maximum sales charge of 5.50% for Class A
Shares or 1.00% for Class II Shares, if applicable.
+ Based on the declining contingent deferred sales charge (CDSC) schedule as
defined in the prospectus.
++ Total returns for Class B and Class II shares are aggregate total returns.
# The MSCI World Index is an unmanaged index used to measure common stock
price movement in developed countries. The MSCI World Finance Index is an
unmanaged index which follows four sub-sectors (Insurance, Financial
Services, Real Estate, and Banking) of the MSCI World Index.
** The Lipper Financial Services Funds Averages represent the average
performance of mutual funds universes compiled by Lipper Analytical
Services, Inc. The funds included in each universe are categorized under
the same investment objective as the applicable Fund and have been in
existence since the Fund's inception date. Lipper since inception
comparative returns for Class A, Class B, Class II and Class Y shares of
the Framlington Global Financial Services Fund are as of 6/30/00, 6/30/00,
7/31/00, and 6/30/98, respectively.
-33-
Large-Cap Value Fund
---------------------------------------------------------------------
CLASS Y SHARE HYPOTHETICAL
---------------------------------------------------------------------
A Hypothetical Illustration of a $10,000 Initial Investment--Class Y
LIPPER EQUITY
RUSSELL 1000 VALUE INCOME FUNDS
CLASS Y INDEX S&P 500 INDEX AVERAGE
------- ------------------ ------------- -------------
7/5/94 10000.00 10000.00 10000.00 10000.00
10090.00 10311.00 10328.00 10263.00
10190.00 10607.00 10750.00 10590.00
10140.00 10255.00 10487.00 10400.00
10167.00 10397.00 10723.00 10459.00
9905.00 9977.00 10333.00 10058.00
9951.00 10092.00 10486.00 10131.00
10246.00 10403.00 10757.00 10323.00
2/28/95 10602.00 10814.00 11176.00 10654.00
10809.00 11051.00 11506.00 10909.00
11066.00 11400.00 11844.00 11156.00
11456.00 11880.00 12317.00 11491.00
6/30/95 11523.00 12040.00 12602.00 11643.00
11678.00 12459.00 13020.00 11970.00
11740.00 12635.00 13053.00 12102.00
12251.00 13092.00 13603.00 12501.00
12272.00 12963.00 13555.00 12363.00
12856.00 13620.00 14149.00 12890.00
13361.00 13962.00 14422.00 13209.00
13700.00 14397.00 14912.00 13516.00
13657.00 14507.00 15051.00 13635.00
13799.00 14753.00 15195.00 13818.00
13682.00 14809.00 15419.00 13987.00
13842.00 14994.00 15816.00 14213.00
6/30/96 13972.00 15006.00 15877.00 14232.00
13512.00 14439.00 15176.00 13709.00
13823.00 14852.00 15497.00 14065.00
14391.00 15443.00 16368.00 14601.00
14822.00 16041.00 16819.00 14932.00
15663.00 17204.00 18089.00 15777.00
15517.00 16984.00 17731.00 15693.00
16088.00 17807.00 18838.00 16285.00
16414.00 18069.00 18986.00 16464.00
15992.00 17419.00 18208.00 15954.00
16449.00 18150.00 19294.00 16421.00
17304.00 19165.00 20473.00 17372.00
6/30/97 17945.00 19987.00 21383.00 18016.00
19253.00 21490.00 23085.00 19169.00
18510.00 20725.00 21792.00 18619.00
19535.00 21977.00 22987.00 19555.00
19299.00 21363.00 22219.00 18971.00
19808.00 22307.00 23248.00 19555.00
20539.00 22958.00 23647.00 20019.00
20652.00 22633.00 23910.00 20004.00
21592.00 24157.00 25634.00 21127.00
22762.00 25635.00 26946.00 22069.00
22537.00 25806.00 27218.00 22073.00
22172.00 25423.00 26750.00 21720.00
6/30/98 22132.00 25749.00 27836.00 21855.00
21253.00 25293.00 27541.00 21228.00
18917.00 21529.00 23559.00 18600.00
19924.00 22765.00 25069.00 19619.00
20834.00 24528.00 27107.00 20794.00
21674.00 25671.00 28750.00 21674.00
22658.00 26544.00 30406.00 22239.00
22517.00 26756.00 31677.00 22166.00
22281.00 26379.00 30691.00 21681.00
23495.00 26925.00 31919.00 22140.00
23495.00 29440.00 33154.00 23708.00
23147.00 29116.00 32372.00 23466.00
6/30/99 23728.00 29961.00 34169.00 24186.00
23444.00 29083.00 33103.00 23560.00
22541.00 28004.00 32937.00 22961.00
21702.00 27024.00 32035.00 22135.00
22814.00 28580.00 34062.00 22872.00
22266.00 28357.00 34754.00 22707.00
22629.00 28493.00 36801.00 22959.00
21280.00 27564.00 34953.00 22085.00
19384.00 25516.00 34293.00 20773.00
20925.00 28629.00 37647.00 22784.00
20976.00 28297.00 36513.00 22740.00
20774.00 28594.00 35765.00 23047.00
6/30/00 19863.00 27288.00 36648.00 22547.00
20333.00 27629.00 36075.00 22658.00
21524.00 29165.00 38316.00 23999.00
21757.00 29433.00 36293.00 23913.00
22753.00 30157.00 36140.00 24290.00
22246.00 29038.00 33291.00 23379.00
23492.00 30493.00 33453.00 24534.00
23369.00 30609.00 34640.00 24691.00
23072.00 29758.00 31482.00 23891.00
22453.00 28708.00 29487.00 23041.00
23260.00 30114.00 31779.00 24257.00
23453.00 30792.00 31992.00 24655.00
6/30/01 22959.00 30108.00 31213.00 24009.00
------------------------------ ----------------------------
GROWTH OF A $10,000 INVESTMENT AVERAGE ANNUAL TOTAL RETURNS
------------------------------ ----------------------------
Lipper One Five Since
Russell Equity One Year Five Years Since Inception
Class and With Without 1000 Income Year w/out Years w/out Inception w/out
Inception Date Load Load Value# S&P 500# Funds** w/load load w/load load w/load load
- --------------------------------------------------------------------------------------------------------------------------------
CLASS A-- 8/8/94 $21,127* $22,361 $ 29,200 $ 30,216 $ 23,478 8.96%* 15.32% 8.94%* 10.18% 11.46% 12.38%
CLASS B-- 8/9/94 N/A $21,244 $ 29,200 $ 30,216 $ 23,478 9.39%+ 14.39% 9.07%+ 9.35% N/A 11.55%
CLASS C-- 12/5/95 N/A $16,514 $ 22,107 $ 22,056 $ 18,724 13.40%+ 14.40% N/A 9.36% N/A 9.42%
CLASS Y-- 7/5/94 N/A $22,959 $ 30,108 $ 31,213 $ 24,009 N/A 15.59% N/A 10.44% N/A 12.63%
* Reflects the deduction of the maximum sales charge of 5.50% for Class A
Shares or 1.00% for Class II Shares, if applicable.
+ Based on the declining contingent deferred sales charge (CDSC) schedule as
defined in the prospectus.
++ Total returns for Class B and Class II shares are aggregate total returns.
# The Russell 1000 Value Index is an unmanaged index that measures performance
of those Russell 1000 companies (the 1,000 largest U.S. publicly traded
companies) with lower price-to-book ratios and lower forecasted growth rates.
The S&P 500 Index is a widely recognized unmanaged index that measures the
performance of the large-cap sector of the U.S. stock market. The Large-Cap
Value Fund has changed its primary market index from the S&P 500 to the
Russell 1000 Value Index which better represents the market in which the Fund
invests. Index since inception comparative returns for Class A, Class B,
Class C and Class Y shares of the Large-Cap Value Fund are as of 7/31/94,
7/31/94, 11/30/95and 6/30/94 respectively.
** The Lipper Equity Income Funds Averages represent the average performance of
mutual funds universes compiled by Lipper Analytical Services, Inc. The funds
included in each universe are categorized under the same investment objective
as the applicable Fund and have been in existence since the Fund's inception
date. Lipper since inception comparative returns for Class A, Class B, Class
C and Class Y shares of the Large-Cap Value Fund are as of 7/31/94,7/31/94,
11/30/95, and 6/30/94, respectively.
-34-
Financial Highlights
The financial highlights table is intended to help shareholders understand each
Fund's financial performance for the past 5 years (or, if shorter, the period
of the Fund's operations). Certain information reflects financial results for a
single Fund share. The total returns in the table represent the rate that an
investor would have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). The information has been
audited by Ernst & Young LLP, independent auditors, whose report, along with
each Fund's financial statements, are included in the annual reports of the
Funds, and are incorporated by reference into the Statement of Additional
Information. You may obtain the annual reports without charge by calling (800)
438-5789.
Framlington Global
Financial Services(a)
-----------------------------
Period Period Period
Ended Ended Ended
6/30/01 6/30/01 6/30/01
Class A Class B Class II
------- ------- --------
Net asset value, beginning of period......................................... $10.62 $10.79 $10.86
------ ------ ------
Income from investment operations:
Net investment income/(loss)................................................. 0.12 0.02 0.02
Net realized and unrealized gain/(loss) on investments....................... (0.13) (0.28) (0.34)
------ ------ ------
Total from investment operations............................................. (0.01) (0.26) (0.32)
------ ------ ------
Less distributions:
Dividends from net investment income......................................... (0.05) (0.02) (0.02)
Distributions from capital................................................... (0.04) (0.01) (0.01)
------ ------ ------
Total distributions.......................................................... (0.09) (0.03) (0.03)
------ ------ ------
Net asset value, end of period............................................... $10.52 $10.50 $10.51
====== ====== ======
Total return (b)............................................................. (0.12)% (2.45)% (2.99)%
====== ====== ======
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's)......................................... $1,253 $1,578 $ 866
Ratio of operating expenses to average net assets............................ 1.51%(c) 2.26%(c) 2.26%(c)
Ratio of net investment income/(loss) to average net assets.................. 0.81%(c) 0.06%(c) 0.06%(c)
Portfolio turnover rate...................................................... 82% 82% 82%
Ratio of operating expenses to average net assets without expenses reimbursed 2.65%(c) 3.40%(c) 3.40%(c)
- --------------------------------------------------------------------------------
(a)The Munder Framlington Global Financial Services Fund Class A Shares, Class
B Shares and Class II Shares commenced operations on July 3, 2000, July 7,
2000 and July 20, 2000, respectively.
(b)Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charge.
(c)Annualized.
-35-
Framlington Global Financial Services
Fund(a)
---------------------------------
Year Year Year Period
Ended Ended Ended Ended
6/30/01 6/30/00 6/30/99 6/30/98
------- ------- ------- -------
Net asset value, beginning of period......................................... $10.62 $10.02 $10.19 $10.00
------ ------ ------ ------
Income from investment operations:
Net investment income........................................................ 0.14 0.12 0.10 0.01
Net realized and unrealized gain/(loss) on investments....................... (0.11) 0.65 (0.23)(d) 0.18
------ ------ ------ ------
Total from investment operations............................................. 0.03 0.77 (0.13) 0.19
------ ------ ------ ------
Less distributions:
Dividends from net investment income......................................... (0.08) (0.17) (0.04) --
Distributions from capital................................................... (0.04) -- -- --
------ ------ ------ ------
Total distributions.......................................................... (0.12) (0.17) (0.04) --
------ ------ ------ ------
Net asset value, end of period............................................... $10.53 $10.62 $10.02 $10.19
====== ====== ====== ======
Total return(b).............................................................. 0.17% 7.89% (1.29)% 1.90%
====== ====== ====== ======
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's)......................................... $3,298 $4,466 $2,947 $1,834
Ratio of operating expenses to average net assets............................ 1.26% 1.25% 1.18% 1.14%(c)
Ratio of net investment income to average net assets......................... 1.06% 1.20% 1.16% 3.60%(c)
Portfolio turnover rate...................................................... 82% 65% 75% 0%
Ratio of operating expenses to average net assets without expenses reimbursed 2.40% 2.06% 2.45% 1.14%(c)
- --------------------------------------------------------------------------------
(a)The Munder Framlington Global Financial Services Fund Class Y shares
commenced operations on June 24, 1998.
(b)Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges.
(c)Annualized.
(d)The amount shown at this caption for each share outstanding throughout the
period may not accord with the change in aggregate gains and losses in the
portfolio securities for the period because of the timing of purchases and
withdrawals of shares in relation to the fluctuating market values of the
portfolio.
-36-
Large-Cap Value Fund(a)
--------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
6/30/01 6/30/00(c) 6/30/99 6/30/98 6/30/97(c)
Class A Class A Class A Class A Class A
------- ---------- ------- ------- ----------
Net asset value, beginning of period.............................. $11.83 $ 14.98 $15.62 $15.21 $13.04
------ ------- ------ ------ ------
Income from investment operations:
Net investment income/(loss)...................................... 0.08 0.18 0.20 0.29 0.31
Net realized and unrealized gain/(loss) on investments............ 1.70 (2.58) 0.73 2.96 3.14
------ ------- ------ ------ ------
Total from investment operations.................................. 1.78 (2.40) 0.93 3.25 3.45
------ ------- ------ ------ ------
Less distributions:
Dividends from net investment income.............................. (0.07) (0.16) (0.18) (0.28) (0.32)
Distributions in excess of net investment income.................. -- (0.02) -- -- --
Distributions from net realized gains............................. (0.48) (0.57) (1.39) (2.56) (0.96)
------ ------- ------ ------ ------
Total distributions............................................... (0.55) (0.75) (1.57) (2.84) (1.28)
------ ------- ------ ------ ------
Net asset value, end of period.................................... $13.06 $ 11.83 $14.98 $15.62 $15.21
====== ======= ====== ====== ======
Total return (b).................................................. 15.32% (16.45)% 6.96% 23.03% 28.10%
====== ======= ====== ====== ======
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's).............................. $6,654 $ 5,121 $5,578 $9,545 $3,662
Ratio of operating expenses to average net assets................. 1.22% 1.23% 1.21% 1.19% 1.20%
Ratio of net investment income/(loss) to average net assets....... 0.52% 1.37% 1.44% 1.78% 2.28%
Portfolio turnover rate........................................... 65% 91% 50% 73% 62%
Ratio of operating expenses to average net assets without expenses
reimbursed....................................................... 1.22% 1.23% 1.21% 1.19% 1.20%
- --------------------------------------------------------------------------------
(a)The Munder Large-Cap Value Fund (formerly Munder Equity Income Fund) Class A
Shares, Class B Shares and Class C Shares commenced operations on August 8,
1994, August 9, 1994 and December 5, 1995, respectively.
(b)Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges.
(c)Per share numbers have been calculated using the average shares method.
-37-
Large-Cap Value Fund(a)
- ---------------------------------------------------------------------------------------------
Year Year Year Year Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended
6/30/01 6/30/00(c) 6/30/99 6/30/98 6/30/97(c) 6/30/01 6/30/00(c) 6/30/99 6/30/98 6/30/97(c)
Class B Class B Class B Class B Class B Class C Class C Class C Class C Class C
- ------- ---------- ------- ------- ---------- ------- ---------- ------- ------- ----------
$ 11.79 $ 14.93 $15.57 $15.17 $13.02 $11.78 $ 14.91 $15.55 $15.16 $13.01
- ------- ------- ------ ------ ------ ------ ------- ------ ------ ------
(0.02) 0.08 0.10 0.17 0.21 (0.02) 0.08 0.09 0.16 0.19
1.69 (2.57) 0.72 2.95 3.13 1.69 (2.56) 0.73 2.95 3.15
- ------- ------- ------ ------ ------ ------ ------- ------ ------ ------
1.67 (2.49) 0.82 3.12 3.34 1.67 (2.48) 0.82 3.11 3.34
- ------- ------- ------ ------ ------ ------ ------- ------ ------ ------
(0.01) (0.08) (0.07) (0.16) (0.23) (0.01) (0.08) (0.07) (0.16) (0.23)
-- -- -- -- -- -- -- -- -- --
(0.48) (0.57) (1.39) (2.56) (0.96) (0.48) (0.57) (1.39) (2.56) (0.96)
- ------- ------- ------ ------ ------ ------ ------- ------ ------ ------
(0.49) (0.65) (1.46) (2.72) (1.19) (0.49) (0.65) (1.46) (2.72) (1.19)
- ------- ------- ------ ------ ------ ------ ------- ------ ------ ------
$ 12.97 $ 11.79 $14.93 $15.57 $15.17 $12.96 $ 11.78 $14.91 $15.55 $15.16
======= ======= ====== ====== ====== ====== ======= ====== ====== ======
14.39% (17.07)% 6.18% 22.09% 27.16% 14.40% (17.02)% 6.18% 22.05% 27.17%
======= ======= ====== ====== ====== ====== ======= ====== ====== ======
$10,905 $ 3,961 $3,700 $1,694 $ 641 $3,781 $ 1,073 $1,366 $1,776 $ 766
1.97% 1.98% 1.97% 1.94% 1.95% 1.97% 1.98% 1.97% 1.94% 1.95%
(0.23)% 0.62% 0.69% 1.03% 1.53% (0.23)% 0.62% 0.69% 1.03% 1.53%
65% 91% 50% 73% 62% 65% 91% 50% 73% 62%
1.97% 1.98% 1.97% 1.94% 1.95% 1.97% 1.98% 1.97% 1.94% 1.95%
-38-
Large-Cap Value Fund (a)
--------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
6/30/01 6/30/00(c) 6/30/99 6/30/98 6/30/97(c)
Class K Class K Class K Class K Class K
------- ---------- -------- -------- ----------
Net asset value, beginning of period.............................. $ 11.84 $ 15.00 $ 15.64 $ 15.23 $ 13.05
------- -------- -------- -------- --------
Income from investment operations:
Net investment income............................................. 0.08 0.18 0.21 0.28 0.32
Net realized and unrealized gain/(loss) on investments............ 1.69 (2.59) 0.72 2.97 3.14
------- -------- -------- -------- --------
Total from investment operations.................................. 1.77 (2.41) 0.93 3.25 3.46
------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income.............................. (0.07) (0.18) (0.18) (0.28) (0.32)
Distributions from net realized gains............................. (0.48) (0.57) (1.39) (2.56) (0.96)
------- -------- -------- -------- --------
Total distributions............................................... (0.55) (0.75) (1.57) (2.84) (1.28)
------- -------- -------- -------- --------
Net asset value, end of period.................................... $ 13.06 $ 11.84 $ 15.00 $ 15.64 $ 15.23
======= ======== ======== ======== ========
Total return (b).................................................. 15.22% (16.49)% 6.95% 23.00% 28.12%
======= ======== ======== ======== ========
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's).............................. $80,625 $110,257 $205,364 $216,387 $212,415
Ratio of operating expenses to average net assets................. 1.22% 1.23% 1.21% 1.19% 1.20%
Ratio of net investment income to average net assets.............. 0.52% 1.37% 1.45% 1.78% 2.28%
Portfolio turnover rate........................................... 65% 91% 50% 73% 62%
Ratio of operating expenses to average net assets without expenses
reimbursed....................................................... 1.22% 1.23% 1.21% 1.19% 1.20%
- --------------------------------------------------------------------------------
(a)The Munder Large-Cap Value Fund (formerly the Munder Equity Income Fund)
Class K Shares commenced operations on July 5, 1994.
(b)Total return represents aggregate total return for the period indicated.
(c)Per share numbers have been calculated using the average shares method.
-39-
Large-Cap Value Fund(a)
-----------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
6/30/01 6/30/00(c) 6/30/99 6/30/98 6/30/97(c)
Class Y Class Y Class Y Class Y ClassY
------- ---------- ------- ------- ----------
Net asset value, beginning of period.............................. $ 11.84 $ 15.00 $ 15.64 $ 15.23 $ 13.05
------- ------- ------- ------- -------
Income from investment operations:
Net investment income............................................. 0.10 0.21 0.25 0.32 0.35
Net realized and/or unrealized gain/loss on investments........... 1.71 (2.59) 0.72 2.97 3.14
------- ------- ------- ------- -------
Total from investment operations.................................. 1.81 (2.38) 0.97 3.29 3.49
------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income.............................. (0.10) (0.18) (0.22) (0.32) (0.35)
Distributions in excess of net investment income.................. -- (0.03) -- -- --
Distributions from net realized gains............................. (0.48) (0.57) (1.39) (2.56) (0.96)
------- ------- ------- ------- -------
Total distributions............................................... (0.58) (0.78) (1.61) (2.88) (1.31)
------- ------- ------- ------- -------
Net asset value, end of period.................................... $ 13.07 $ 11.84 $ 15.00 $ 15.64 $ 15.23
======= ======= ======= ======= =======
Total return (b).................................................. 15.59% (16.28)% 7.22% 23.32% 28.43%
======= ======= ======= ======= =======
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's).............................. $79,553 $73,435 $39,368 $34,840 $29,674
Ratio of operating expenses to average net assets................. 0.97% 0.98% 0.96% 0.94% 0.95%
Ratio of net investment income to average net assets.............. 0.77% 1.62% 1.69% 2.03% 2.53%
Portfolio turnover rate........................................... 65% 91% 50% 73% 62%
Ratio of operating expenses to average net assets without expenses
reimbursed....................................................... 0.97% 0.98% 0.96% 0.94% 0.95%
- --------------------------------------------------------------------------------
(a)The Munder Large-Cap Value Fund Class Y Shares commenced operations on July
5, 1994.
(b)Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges.
(c)Per share numbers have been calculated using the average shares method.
-40-
HOW TO PURCHASE, SELL AND EXCHANGE SHARES
Purchasing Shares
Who May Purchase Shares
Class A and Class II shares of the Funds are sold at the net asset value
("NAV") next determined after a purchase order is received in proper form plus
any applicable sales charge. Please see "Summary Comparison of Fees and
Expenses" for information about sales charges.
Class B, Class C, Class K, and Class Y shares of the Funds are sold at NAV
next determined after a purchase order is received in proper form.
Customers (and their immediate family members) of banks and other financial
institutions that have entered into agreements with us to provide shareholder
services for customers may purchase Class K shares. Customers may include
individuals, trusts, partnerships and corporations.
The following persons may purchase Class Y shares of the Funds:
. fiduciary and discretionary accounts of institutions;
. institutional investors (including: banks; savings institutions;
credit unions and other financial institutions; corporations;
foundations; pension, profit sharing and employee benefit plans and
trusts; insurance companies; investment companies; investment
advisers, broker-dealers and other financial advisors acting for their
own accounts or for the accounts of their clients);
. directors, trustees, officers and employees of the Munder Funds, MCM
and the Funds' distributor;
. MCM's investment advisory clients; and
. family members of employees of MCM.
Broker-dealers or financial advisors (other than the Funds' distributor)
may charge you additional fees for shares you purchase through them.
Policies for Purchasing Shares
Investment minimums. The minimum initial investment for Class A, Class B,
-------------------
Class C and Class II shares is $2,500 per Fund for all accounts, with the
following exceptions. The minimum initial investment for all types of Individual
Retirement Accounts ("IRAs"), 403(b), Uniform Gifts to Minors Act ("UGMA") and
Uniform Transfers to Minors Act ("UTMA") accounts is $500 per Fund. The minimum
subsequent investment per Fund for all account types is $50. For those investors
who use the Automatic Investment Plan ("AIP"), the minimum initial
-41-
and subsequent investment per Fund is $50. We reserve the right to deduct a $6
quarterly fee for all AIP accounts that cease contributions before reaching the
applicable account minimum. Before imposing any such fee we will provide you
with 30 days' advance written notice.
Investment minimums for Class A, Class B, Class C and Class II shares do
not apply to purchases made through certain programs approved by the Funds in
which you pay an asset-based fee for advisory, administrative and/or brokerage
services. We reserve the right to waive any investment minimum. If you wish to
invest more than $250,000, you must purchase Class A or Class C shares.
The minimum initial investment for Class Y shares by fiduciary and
discretionary accounts of institutions and by institutional investors is
$500,000. Other investors are not subject to any minimum. There is no minimum
for subsequent investments.
There is no minimum initial or subsequent investment for Class K shares.
All Class K share purchases are effected through a customer's account at a
financial institution. Confirmations of share purchases will be sent to the
financial institution involved. Financial institutions (or their nominees) will
normally be the holders of record of Fund shares acting on behalf of their
customers, and will reflect their customers' beneficial ownership of shares in
the account statements provided by them to their customers.
Accounts below minimums. If your investment in Class A, Class B, Class C or
-----------------------
Class II shares of a Fund does not meet the applicable account minimum, you may
increase your balance to that level or that Fund account may be charged a
quarterly servicing fee of $6, which includes the cost of any applicable CDSC on
shares redeemed to pay the fee. The servicing fee is paid directly to the
affected Fund to offset the disproportionately high costs of servicing accounts
with low balances and is intended to benefit shareholders in the long term. In
limited circumstances and subject to our sole discretion, we may waive the
imposition of this fee. We also reserve the right, upon 30 days' advance written
notice, to redeem your account (and forward the redemption proceeds to you) if
its value is below the applicable new minimum.
Timing of orders
Purchase orders must be received by the Funds' distributor, transfer agent
or authorized dealer before the close of regular trading on the NYSE (normally,
4:00 p.m. Eastern time). Purchase orders received after that time will be
accepted as of the next business day.
Methods for Purchasing Shares
You may purchase Class A, Class B, Class C and Class II shares:
. By Broker and/or Financial Advisor. Any broker or financial advisor
----------------------------------
authorized by the Funds' distributor can sell you shares of the Funds.
Please note that brokers or financial advisors may charge you fees for
their services.
. By Mail. You may open an account by completing, signing and mailing an
-------
account application form and send a check or other negotiable bank
draft (payable to The
-42-
Munder Funds) for at least the minimum initial investment amount to:
The Munder Funds, c/o PFPC Inc., P.O. Box 9701, Providence, RI 02940,
or by overnight delivery, to The Munder Funds, c/o PFPC Inc., 4400
Computer Drive, Westborough, MA 01581. Be sure to specify on your
account application form the class of shares being purchased. If the
class is not specified, your purchase will automatically be invested
in Class A shares. For additional investments, send a letter
identifying the Fund and share class you wish to purchase, your name
and your account number with a check for $50 or more to the address
listed above. We reserve the right to refuse any payment such as
temporary checks, credit cards or third-party checks.
. By Wire. To open a new account, you should call the Funds at (800)
-------
438-5789 to obtain an account number and complete wire instructions
prior to wiring any funds. Within seven days of purchase, you must
send a completed account application form containing your certified
taxpayer identification number to the Funds' transfer agent at The
Munder Funds, c/o PFPC Inc., P.O. Box 9701, Providence, RI 02940, or
by overnight delivery, to The Munder Funds, c/o PFPC Inc., 4400
Computer Drive, Westborough, MA 01581. Wire instructions must state
the Fund name, share class, your registered name and your account
number. Your bank wire should be sent through the Federal Reserve Bank
Wire System to:
Boston Safe Deposit and Trust Company
Boston, MA
ABA# 011001234
DDA# 16-798-3
Account No.:
You may make additional investments in Class A, Class B, Class C or Class
II shares at any time using the wire procedures described above. Note that banks
may charge fees for transmitting wires.
You may purchase Class A, Class B, Class C or Class II shares through the
Automatic Investment Plan. You may purchase shares through the Reinstatement
Privilege.
You may purchase Class K shares through selected banks or other financial
institutions.
You may purchase Class Y shares through the Funds' transfer agent, through
the Funds' distributor or through arrangements with a broker-dealer, financial
advisor or other financial institution. Class Y shares purchased through a
broker-dealer, financial advisor or other financial institution should be
purchased through procedures established with that institution. Confirmations of
share purchases will be sent to the institution. In addition, Class Y shares may
be purchased by mail or by wire, in accordance with the instructions above for
opening a new account by mail or by wire. You may also purchase Class Y shares
through the Automatic Investment Plan.
-43-
Exchanging Shares
Policies for Exchanging Shares
. You may exchange your Fund shares for shares of the same class of
other Munder Funds based on their relative NAVs. You may exchange
Class II or Class C shares of a Fund for Class II or Class C shares,
respectively, of other Munder Funds, based on their relative NAVs.
. Class B, Class C and Class II shares will continue to age from the
date of the original purchase and will retain the same CDSC rate as
they had before the exchange.
. You must meet the minimum purchase requirements for the Munder Fund
that you purchase by exchange. If you are exchanging into shares of a
Munder Fund with a higher sales charge, you must pay the difference at
the time of the exchange. A share exchange is a taxable event and,
accordingly, you may realize a taxable gain or loss.
. Before making an exchange request, read the prospectus of the Munder
Fund you wish to purchase by exchange. You can obtain a prospectus for
any Munder Fund by contacting your broker or calling the Munder Funds
at (800) 438-5789.
. Brokers or financial advisors may charge you a fee for handling
exchanges.
. We may change, suspend or terminate the exchange privilege at any
time. You will be given notice of any material modifications except
where notice is not required.
Methods for Exchanging Shares
Exchanges By Telephone. You may give exchange instructions by telephone to
----------------------
the Funds at (800) 438-5789. You may not exchange shares by telephone if you
hold share certificates. We reserve the right to reject any telephone exchange
request and to place restrictions on telephone exchanges.
Exchanges By Mail. You may send exchange requests to your broker, to your
-----------------
financial advisor or you may send them directly to the Funds' transfer agent at
The Munder Funds, c/o PFPC Inc., P.O. Box 9701, Providence, RI 02940, or by
overnight delivery, to The Munder Funds, c/o PFPC Inc., 4400 Computer Drive,
Westborough, MA 01581.
Redeeming Shares
Redemption Price
We will redeem shares at the NAV next determined after we receive the
request in proper form. We will reduce the amount you receive by the amount of
any applicable CDSC.
-44-
Please see "How to Purchase, Sell and Exchange Shares -- Distribution
Arrangements" below for information about CDSCs.
Policies for Redeeming Shares
Class A, Class B, Class C or Class II shares. For your protection, a
--------------------------------------------
medallion signature guarantee is required for the following shares redemption
requests:
. redemption proceeds greater than $50,000;
. redemption proceeds not being made payable to the record owner of the
account;
. redemption proceeds not being mailed to the address of record on the
account;
. if the redemption proceeds are being transferred to another Munder
Fund account with a different registration;
. change in ownership or registration of the account; or
. changes to banking information without a voided check being supplied.
When a Fund requires a signature guarantee, a medallion signature guarantee
must be provided. Failure to follow this policy will result in a delay in
processing your redemption request.
A medallion signature guarantee may be obtained from a domestic bank or
trust company, broker, dealer, clearing agency, savings association, or other
financial institution which is participating in a medallion program recognized
by the Securities Transfer Association. The three recognized medallion programs
are Securities Transfer Agents Medallion Program ("STAMP"), Stock Exchanges
Medallion Program ("SEMP") and New York Stock Exchange, Inc. Medallion Signature
Program ("NYSE MSP"). Signature guarantees from financial institutions which are
not participating in one of these programs will not be accepted.
Class K and Class Y shares. Shares held by an institution on behalf of its
--------------------------
customers must be redeemed in accordance with instructions and limitations
pertaining to the account at that institution.
If we receive a redemption order for a Fund before 4:00 p.m. (Eastern
time), we will normally wire payment to the redeeming institution on the next
business day.
Methods for Redeeming Shares
Class A, Class B, Class C or Class II shares. You may redeem Class A, Class
--------------------------------------------
B, Class C or Class II shares of the Funds in several ways:
-45-
. By Mail. You may mail your redemption request to: The Munder Funds,
-------
c/o PFPC Inc., P.O. Box 9701, Providence, RI 02940, or by overnight
delivery, to The Munder Funds, c/o PFPC Inc., 4400 Computer Drive,
Westborough, MA 01581. The redemption request should state the name of
the Fund, share class, account number, amount of redemption, account
name and where to send the proceeds. All account owners must sign.
. By Telephone. You can redeem your shares by contacting your broker or
------------
your financial advisor, or by calling the Funds at (800) 438-5789.
There is no minimum requirement for telephone redemptions.
If you are redeeming at least $1,000 of shares and you have authorized
expedited redemption on your account application form, simply call the Funds
prior to 4:00 p.m. (Eastern time), and request the redemption proceeds be wired
to the commercial bank, registered broker-dealer or financial advisor you
designated on your account application form. We will send your redemption
proceeds to you on the next business day. We reserve the right at any time to
change or impose fees for this expedited redemption procedure.
During periods of unusual economic or market activity, you may experience
difficulties or delays in effecting telephone redemptions. In such cases you
should consider placing your redemption request by mail.
You may redeem shares through the Systematic Withdrawal Plan.
Class K and Class Y shares. You may redeem Class K and Class Y shares of
--------------------------
the Funds through your bank or other financial institution.
Additional Policies for Purchases, Exchanges and Redemptions
All Share Classes
-----------------
. We consider purchase, exchange or redemption orders to be in "proper
form" when all required documents are properly completed, signed and
received. We may reject any requests that are not in proper form.
. The Funds reserve the right to reject any purchase order, including
exchanges from other Munder Funds.
. At any time, the Funds may change any of their purchase, redemption or
exchange practices, and may suspend the sale of their shares.
. The Funds may delay sending redemption proceeds for up to seven days,
or longer if permitted by the SEC.
. We will typically send redemption amounts to you within seven business
days after you redeem shares. We may hold redemption amounts from the
sale of shares you
-46-
purchased by check until the purchase check has cleared, which may be
as long as 15 days.
. To limit the Funds' expenses, we no longer issue share certificates.
. A Fund may temporarily stop redeeming shares if:
. the NYSE is closed;
. trading on the NYSE is restricted;
. an emergency exists and the Fund cannot sell its assets or
accurately determine the value of its assets; or
. if the SEC orders the Fund to suspend redemptions.
. If accepted by a Fund, investors may purchase shares of the Fund with
securities which the Fund may hold. MCM, or Framlington in the case of
the Global Financial Services Fund, will determine if the securities
are consistent with the Fund's objectives and policies. If accepted,
the securities will be valued the same way the Fund values portfolio
securities it already owns. Call the Funds at (800) 438-5789 for more
information.
. The Funds reserve the right to make payment for redeemed shares wholly
or in part by giving the redeeming shareholder portfolio securities.
The shareholder may pay transaction costs to dispose of these
securities.
. We record all telephone calls for your protection and take measures to
identify the caller. As long as the Funds' transfer agent takes
reasonable measures to authenticate telephone requests on an
investor's account, neither the Funds, the Funds' distributor nor the
transfer agent will be held responsible for any losses resulting from
unauthorized transactions.
. If you purchased shares directly from the Funds, the Funds' transfer
agent will send you confirmations of the opening of an account and of
all subsequent purchases, exchanges or redemptions in the account. If
your account has been set up by a broker or other investment
professional, account activity will be detailed in their statements to
you.
. The exchange privilege is not intended as a vehicle for short-term
trading. Excessive exchange activity may interfere with portfolio
management and have an adverse effect on all shareholders. Each Fund
and its distributor reserve the right to refuse any purchase or
exchange request that could adversely affect the fund or its
operations, including those from any individual or group who, in the
Fund's view, is likely to engage in excessive trading or any order
considered market-timing activity. If a Fund refuses a purchase or
exchange request and the shareholder deems it necessary to
-47-
redeem his or her account, any CDSC as permitted by the prospectus
will be applicable.
Additionally, in no event will any Fund permit more than six exchanges
into or out of a Fund in any one-year period per account, tax
identification number, social security number or related investment
group. Exchanges among the Munder Money Market Funds are exempt from
this policy.
Class K and Class Y shares
--------------------------
. For Class Y shares, we may redeem your account if its value falls
below $2,500 upon 30 days' advance written notice.
. With regard to Class K and Class Y shares, financial institutions are
responsible for transmitting orders and payments for their customers
on a timely basis.
Shareholder Privileges
Automatic Investment Plan ("AIP"). Under the AIP you may arrange for
---------------------------------
periodic investments in Class A, Class B, Class C, Class II or Class Y shares of
a Fund through automatic deductions from a checking or savings account. To
enroll in the AIP you should complete the AIP application form or call the Funds
at (800) 438-5789. The minimum pre-authorized investment amount is $50. You may
discontinue the AIP at any time. We may discontinue the AIP on 30 days' written
notice to you.
Reinstatement Privilege. For 60 days after you sell Class A, Class B, Class
-----------------------
C or Class II shares of any Munder Fund, you may reinvest your redemption
proceeds in shares of the same class of the SAME Fund at NAV. Any CDSC you paid
on the amount you are reinvesting will be credited to your account. You may use
this privilege once in any given twelve-month period with respect to your shares
of a Fund. You, your broker or your financial advisor must notify the Funds'
transfer agent in writing at the time of reinvestment in order to eliminate the
sales charge on your reinvestment.
Systematic Withdrawal Plan ("SWP"). If you have an account value of $2,500
----------------------------------
or more in Class A, Class B, Class C or Class II shares of a Fund, you may
redeem shares on a monthly, quarterly, semi-annual or annual basis. The minimum
withdrawal is $50. We usually process withdrawals on the 20th day of the month
and promptly send you your redemption amount. You may enroll in the SWP by
completing the SWP application form available through the Funds' transfer agent.
To participate in the SWP you must have your dividends automatically reinvested
and may not hold share certificates. You may change or cancel the SWP at any
time upon notice to the Funds' transfer agent. You should not buy Class A shares
(and pay a sales charge) while you participate in the SWP and you must pay any
applicable CDSC when you redeem shares.
-48-
Distribution Arrangements
Share Class Selection
The Funds offer Class A, Class B, Class C and Class II shares. Each class
has its own cost structure, allowing you to choose the one that best meets your
requirements given the amount of your purchase and the intended length of your
investment. You should consider both ongoing annual expenses, including
applicable distribution and/or shareholder servicing fees as described in the
section entitled "12b-1 Fees," and any initial sales charge or CDSC in
estimating the costs of investing in a particular class of shares.
Class A shares
--------------
. Front end sales charge. There are several ways to reduce these sale
charges.
. Lower annual expenses than Class B, Class C and Class II shares.
Class B shares
--------------
. No front end sales charge. All your money goes to work for you right
away.
. A CDSC on shares you sell within six years of purchase.
. Higher annual expenses than Class A shares.
. Automatic conversion to Class A shares approximately eight years after
issuance, thus reducing future annual expenses. If you acquired Class
B shares of a Fund before November 8, 2000 or by exchanging shares of
another Munder Fund which you purchased before November 8, 2000, your
shares will convert automatically six years after issuance of the
original purchase.
. CDSC is waived for certain redemptions.
Class C shares
--------------
. No front end sales charge. All your money goes to work for you right
away.
. A CDSC on shares you sell within one year of purchase.
. Higher annual expenses than Class A shares.
. Shares do not convert to another class.
Class II shares
---------------
. Front end sales charge.
. A CDSC on shares you sell within eighteen months of purchase.
. Shares do not convert to another class.
-49-
. Higher annual expenses than Class A shares.
Each Fund also issues Class K and Class Y shares, which have different
sales charges, expense levels and performance. Please see "How to Purchase, Sell
and Exchange Shares -- Purchasing Shares -- Who May Purchase Shares" above for
further information on eligible investors of Class K and Class Y shares. Class K
shares carry no sales charges, have no conversion feature and have annual
expenses similar to those of Class A shares. Class Y shares carry no sales
charges, have no conversion feature and have lower annual expenses than other
share classes.
Applicable Sales Charge--Class A Shares
You can purchase Class A shares at NAV plus an initial sales charge. The
sales charge as a percentage of your investment decreases as the amount you
invest increases. The current sales charge rates and commissions paid to
selected dealers are as follows:
Sales Charge as a Percentage of
-------------------------------
Dealer Reallowance as a
Your Percentage
Amount of Purchase Investment (Net Asset Value) of Offering Price
------------------ ---------- ----------------- -----------------------
Less than $25,000 5.50% 5.82% 5.00%
$25,000 but less than $50,000 5.25% 5.54% 4.75%
$50,000 but less than $100,000 4.50% 4.71% 4.00%
$100,000 but less than $250,000 3.50% 3.63% 3.25%
$250,000 but less than $500,000 2.50% 2.56% 2.25%
$500,000 but less than $1,000,000 1.50% 1.52% 1.25%
$1,000,000 or more None* None* (see below)**
- -----------------
* No initial sales charge applies on investments of $1 million or more;
however, a CDSC of 1% is imposed on certain redemptions within one year of
purchase.
** The distributor will pay a 1% commission to dealers and other entities (as
permitted by applicable Federal and state law) who initiate and are
responsible for purchases of $1 million or more.
Sales Charge Waiver--General
We will waive the initial sales charge on Class A shares for the following types
of purchasers:
1. individuals with an investment account or relationship with MCM;
2. full-time employees and retired employees of MCM or its affiliates,
employees of the Funds' service providers and immediate family members
of such persons;
3. registered broker-dealers or financial advisors that have entered into
selling agreements with the distributor, for their own accounts or for
retirement plans for their employees or sold to registered
representatives for full-time employees (and their families) that
certify to the distributor at the time of purchase that such purchase
is for their own account (or for the benefit of their families);
4. certain qualified employee benefit plans as described below;
-50-
5. individuals who reinvest distributions from a qualified retirement
plan managed by MCM;
6. individuals who reinvest the proceeds of redemptions from Class Y
shares of another Munder Fund, within 60 days of redemption;
7. banks and other financial institutions that have entered into
agreements with the Munder Funds to provide shareholder services for
customers (including customers of such banks and other financial
institutions, and the immediate family members of such customers);
8. fee-based financial planners or employee benefit plan consultants
acting for the accounts of their clients;
9. employer sponsored retirement plans which are administered by
Universal Pensions, Inc. (UPI Plans) which meet the criteria described
below under "Sales Charge Waivers--Qualified Employer Sponsored
Retirement Plans"; and
10. employer sponsored 401(k) plans that are administered by Merrill Lynch
Group Employee Services (Merrill Lynch Plans) which meet the criteria
described below under "Sales Charge Waivers--Qualified Employer
Sponsored Retirement Plans."
Sales Charge Waivers--Qualified Employer Sponsored Retirement Plans
Qualified Sponsored Retirement Plans and UPI Plans. We will waive the
--------------------------------------------------
initial sales charge on purchases of Class A shares by: (i) employer sponsored
retirement plans that are qualified under Section 401(a) or Section 403(b) of
the Internal Revenue Code of 1986, as amended (each, a Qualified Employee
Benefit Plan) and (1) that invest $1,000,000 or more in Class A shares offered
by the Munder Funds, (2) that have at least 75 eligible plan participants or (3)
for which certain types of shareholder services are provided to plan
participants pursuant to an agreement with the Munder Funds; and (ii) UPI Plans
for employees participating in an employer-sponsored or administered retirement
program operating under Section 408A of the Internal Revenue Code. In addition,
we will waive the CDSC of 1% charged on certain redemptions within one year of
purchase for such accounts. These sales charge waivers do not apply to
Simplified Employee Pension Plans ("SEPs") or Individual Retirement Accounts
("IRAs"). Sales charge waivers for Merrill Lynch Plans are described below.
The distributor will pay a 1% commission to dealers and other entities (as
permitted by applicable Federal and state law) who initiate and are responsible
for purchases that meet the above criteria.
Merrill Lynch Plans. We will waive the initial sales charge on purchases of
-------------------
Class A shares and the CDSC of 1% for certain redemptions within one year of
purchase for all investments by Merrill Lynch Plans if:
-51-
(i) the Plan's recordkeeper on a daily valuation basis is Merrill Lynch
Group Employee Services ("Merrill Lynch") and, on the date the plan
sponsor signs the Merrill Lynch Recordkeeping Service Agreement, the
Plan has $3 million or more in assets invested in broker/dealer funds
not advised or managed by Merrill Lynch Asset Management, L.P. ("MLAM")
that are made available pursuant to a Services Agreement between Merrill
Lynch and a Fund's distributor and in funds advised or managed by MLAM
(collectively, the Applicable Investments); or
(ii) the Plan's recordkeeper on a daily valuation basis is an independent
recordkeeper whose services are provided through a contract or alliance
arrangement with Merrill Lynch, and on the date the plan sponsor signs
the Merrill Lynch Recordkeeping Service Agreement, the Plan has $3
million or more in assets, excluding money market funds, invested in
Applicable Investments; or
(iii) the Plan has 500 or more eligible employees, as determined by the
Merrill Lynch plan conversion manager, on the date the plan sponsor
signs the Merrill Lynch Recordkeeping Service Agreement.
The distributor will pay a 1% commission to dealers and other entities
(as permitted by Federal and state law) who initiate and are responsible for
purchases that meet the above criteria.
For further information on sales charge waivers, call (800) 438-5789.
Sales Charge Reductions
You may qualify for reduced sales charges in the following cases:
Letter of Intent. If you intend to purchase at least $25,000 of Class A
----------------
shares of the Funds, you may wish to complete the Letter of Intent section of
your account application form. By doing so, you agree to invest a certain amount
over a 13-month period. You would pay a sales charge on any Class A shares you
purchase during the 13 months based on the total amount to be invested under the
Letter of Intent. You can apply any investments you made in Class A shares in
any of the Munder Funds during the preceding 90-day period toward fulfillment of
the Letter of Intent (although there will be no refund of sales charges you paid
during the 90-day period). You should inform the Funds' transfer agent that you
have a Letter of Intent each time you make an investment.
You are not obligated to purchase the amount specified in the Letter of
Intent. If you purchase less than the amount specified, however, you must pay
the difference between the sales charge paid and the sales charge applicable to
the purchases actually made. The Funds' custodian will hold such amount in
escrow. The Funds' custodian will pay the escrowed funds to your account at the
end of the 13 months unless you do not complete your intended investment.
Quantity Discounts. You may combine purchases of Class A shares of
------------------
non-money market Munder Funds that are made by you, your spouse, your children
under age 21 and your IRA
-52-
when calculating the sales charge. You must notify your broker, your financial
advisor or the Funds' transfer agent to qualify.
Right of Accumulation. You may add the value of any other Class A shares of
---------------------
non-money market Munder Funds you already own to the amount of your next Class A
share investment for purposes of calculating the sales charge at the time of the
current purchase. You must notify your broker, your financial advisor or the
Funds' transfer agent to qualify.
Certain brokers or financial advisors may not offer these programs or may
impose conditions or fees to use these programs. You should consult with your
broker prior to purchasing the Funds' shares.
For further information on sales charge reductions, call (800) 438-5789.
Applicable Sales Charge--Class II Shares
You can purchase Class II shares at the NAV plus an initial sales charge.
The current sales charge rates and commissions paid to selected dealers are as
follows:
Sales Charge as a Percentage of Dealer Reallowance as
------------------------------- a Percentage of
Your Investment Net Asset Value the Offering Price
% % ------------------
------------------------------------ 1.00
1.00 1.10
CDSC
You pay a CDSC when you redeem:
. Class A shares that were bought without paying a front-end sales
charge as part of an investment of at least $1 million within one year
of buying them;
. Class B shares within six years of buying them;
. Class C shares within one year of buying them;
. Class II shares within eighteen months of buying them.
These time periods include the time you held Class B, Class C or Class II
shares of another Munder Fund which you may have exchanged for Class B, Class C
or Class II shares of the Fund you are redeeming. The CDSC for Class A shares,
Class C shares and Class II shares, if applicable, is 1.00%.
The CDSC schedule for Class B shares is set forth below. The CDSC is
calculated based on the original NAV at the time of your investment or the NAV
at the time of redemption, whichever is lower. Shares purchased through
reinvestment of distributions are not subject to a CDSC.
-53-
Year Since
Purchase CDSC %
-------- ------
First 5%
Second 4%
Third 3%
Fourth 3%
Fifth 2%
Sixth 1%
Seventh and thereafter 0%
If you sell some but not all of your shares, certain shares not subject to
a CDSC (i.e., shares purchased with reinvested dividends) will be redeemed
first, followed by shares subject to the lowest CDSC (typically shares held for
the longest time).
For example, assume an investor purchased 1,000 shares at $10 a share (for
a total cost of $10,000). Three years later, the shares have a net asset value
of $12 per share and during that time, the investor acquired 100 additional
shares through dividend reinvestment. If the investor then makes one redemption
of 500 shares (resulting in proceeds of $6,000, 500 shares X $12 per share), the
first 100 shares redeemed will not be subject to the CDSC because they were
acquired through reinvestment of dividends. With respect to the remaining 400
shares redeemed, the CDSC is charged at $10 per share (because the original
purchase price of $10 per share is lower than the current net asset value of $12
per share). Therefore, only $4,000 of the $6,000 such investor received from
selling his or her shares will be subject to the CDSC, at a rate of 3.00% (the
applicable rate in the third year after purchase).
At the time of purchase of Class B shares, Class C shares and Class II
shares, the Funds' distributor pays sales commissions of 4.00%, 1.00% and 2.00%,
respectively, of the purchase price to brokers that initiate and are responsible
for purchases of such Class B shares, Class C shares and Class II shares.
CDSC Waivers
We will waive the CDSC payable upon redemptions of Class B shares which
you purchased (or acquired through an exchange of shares of another Munder Fund)
for:
. redemptions made within one year after the death of a shareholder or
registered joint owner;
. minimum required distributions made from an IRA or other retirement
plan account after you reach age 70 1/2;
. involuntary redemptions made by the Fund;
. redemptions limited to 10% per year of an account's NAV if taken by
SWP. For example, if your balance on December 31st is $10,000, you can
redeem up to $1,000 that following year free of charge through SWP.
-54-
We will waive the CDSC payable upon redemptions of Class B shares which you
purchased after December 1, 1998 (or acquired through an exchange of shares of
another Munder Fund purchased after December 1, 1998) for:
. redemptions made from an IRA or other individual retirement plan
account established through Comerica Securities, Inc. after you reach
age 59 1/2 and after the eighteen month anniversary of the purchase
of Fund shares.
We will waive the CDSC for Class B shares for all redemptions by Merrill
Lynch Plans if:
(i) the Plan's recordkeeper on a daily valuation basis is Merrill Lynch;
or
(ii) the Plan's recordkeeper on a daily valuation basis is an independent
recordkeeper whose services are provided through a contract or
alliance arrangement with Merrill Lynch; or
(iii) the Plan has less than 500 eligible employees, as determined by the
Merrill Lynch plan conversion manager, on the date the plan sponsor
signs the Merrill Lynch Recordkeeping Service Agreement.
12b-1 Fees
The Funds have adopted a Distribution and Service Plan with respect to
their Class A, Class B, Class C and Class II shares allows each Fund to pay
distribution and other fees for the sale of its shares and for services provided
to shareholders. Under the plan, the Funds may pay up to 0.25% of the daily net
assets of Class A, Class B, Class C and Class II shares to pay for certain
shareholder services provided by institutions that have agreements with the
Funds or their service providers to provide such services. The Funds may also
pay up to 0.75% of the daily net assets of the Class B, Class C and Class II
shares to finance activities relating to the distribution of its shares.
Because the fees are paid out of each Fund's assets on an on-going basis,
over time these fees will increase the cost of an investment in a Fund and may
cost a shareholder more than paying other types of sales charges.
-55-
Service Agents
With respect to the Class K shares, the Funds' Distribution and Service
Plan allows each Fund to pay fees for services provided to shareholders. Under
the Distribution and Service Plan, the Funds may pay up to 0.25% of the daily
net assets of Class K shares for certain shareholder services provided by
institutions that have agreements with the Funds or their service providers to
provide such services. Because the fees are paid out of each Fund's assets on an
on-going basis, over time these fees will increase the cost of an investment in
a Fund and may cost a shareholder more than paying other types of sales charges.
Other Information
In addition to paying 12b-1 fees or service fees, the Funds may pay banks,
broker-dealers, financial advisors or other financial institutions fees for
sub-administration, sub-transfer agency and other shareholder services
associated with shareholders whose shares are held of record in omnibus or other
group accounts. The Funds' service providers, or any of their affiliates, may,
from time to time, make these types of payment or payments for other shareholder
services or distribution, out of their own resources and without additional cost
to the Funds or their shareholders. Please note that Comerica Bank, an affiliate
of MCM, receives a fee from the Funds for providing shareholder services to its
customers who own shares of the Funds.
Pricing of Fund Shares
Each Fund's NAV is calculated on each day the NYSE is open. The NAV per
share is the value of a single Fund share. Each Fund calculates NAV separately
for each class. The NAV is calculated by (1) taking the current value of a
Fund's total assets allocated to a particular class of shares, (2) subtracting
the liabilities and expenses charged to that class, and (3) dividing that amount
by the total number of shares of that class outstanding.
The Funds calculate NAV as of the close of regular trading on the NYSE,
normally 4:00 p.m. (Eastern time). If the NYSE closes at any other time, or if
an emergency exists, transaction deadlines and NAV calculations may occur at
different times. The NAV of each Fund is generally based on the current market
value of the securities held in the Fund.
If reliable current market values are not readily available for any
security, such security will be priced using its fair value as determined in
good faith by, or using procedures approved by, the Boards of Trustees of the
Funds. Fair value represents a good faith approximation of the value of a
security. The fair value of one or more securities may not, in retrospect, be
the prices at which those assets could have been sold during the period in which
the particular fair values were used in determining a Fund's NAV. As a result, a
Fund's sale or redemption of its shares at NAV, at a time when a holding or
holdings are valued at fair value, may have the effect of diluting or increasing
the economic interest of existing shareholders. The procedures established by
the Boards of Trustees for the Funds to fair value each Fund's securities
contemplate that MCM will establish a pricing committee to serve as its formal
oversight body for the valuation of each Fund's securities. The determinations
of the pricing committee will be reviewed by the Boards of Trustees of the Funds
at the regularly scheduled quarterly meeting of the Boards.
-56-
Debt securities with remaining maturities of 60 days or less are valued at
amortized cost, unless the Boards of Trustees determine that such valuation does
not constitute fair value at this time. Under this method, such securities are
valued initially at cost on the date of purchase (or the 61st day before
maturity).
Trading in foreign securities may be completed at times that vary from the
closing of the NYSE. A Fund values foreign securities at the latest closing
price on the exchange on which they are traded immediately prior to the closing
of the NYSE. Certain foreign currency exchange rates may also be determined at
the latest rate prior to the closing of the NYSE. Foreign securities quoted in
foreign currencies are translated into U.S. dollars at current rates. Because
foreign markets may be open at different times and on different days than the
NYSE, the value of a Fund's shares may change on days when shareholders are not
able to buy or sell their shares. Occasionally, events that affect the value of
a Fund's portfolio securities may occur between the time the principal market
for a Fund's foreign securities closes and the closing of the NYSE. If MCM
believes that such events materially affect the value of portfolio securities,
these securities may be valued at their fair market value as determined in good
faith by, or using procedures approved by, the Funds' Boards of Trustees. A Fund
may also fair value its foreign securities when a particular foreign market is
closed but the Fund is open. This policy is intended to assure a Fund's NAV
appropriately reflects securities' values at the time of pricing.
Distributions
As a shareholder, you are entitled to your share of a Fund's net income and
gains on its investments. A Fund passes substantially all of its earnings along
to its shareholders as distributions. When a Fund earns dividends from stocks
and interest from debt securities and distributes these earnings to
shareholders, it is called a dividend distribution. A Fund realizes capital
gains when it sells securities for a higher price than it paid. When these gains
are distributed to shareholders, it is called a capital gain distribution.
Both the Global Financial Services Fund pays dividends, if any, at least
annually. The Large-Cap Value Fund pay dividends, if any, at least quarterly.
Both Funds distribute their net realized capital gains, if any, at least
annually. Each Fund will pay distributions in additional shares of the same
class of that Fund.
It is possible that a Fund may make a distribution in excess of the Fund's
earnings and profits. You will treat such a distribution as a return of capital
which is applied against and reduces your basis in your shares. You will treat
the excess of any such distribution over your basis in your shares as gain from
a sale or exchange of the shares.
Federal Tax Consequences
Investments in a Fund may have tax consequences that you should consider.
This section briefly describes some of the more common federal tax consequences.
A more detailed discussion about the tax treatment of distributions from the
Funds and about other potential tax liabilities, including backup withholding
for certain taxpayers and about tax aspects of dispositions of shares of the
Funds, is contained in the Statement of Additional Information,
-57-
which is available to you upon request. You should consult your tax advisor
about your own particular tax situation.
Taxes on Distributions. You will generally have to pay federal income tax
----------------------
on all Fund distributions. Distributions will be taxed in the same manner
whether you receive the distributions in cash or in additional shares of the
Fund. Shareholders not subject to tax on their income, generally will not be
required to pay any tax on distributions.
Distributions that are derived from net long-term capital gains generally
will be taxed as long-term capital gains. Dividend distributions and short-term
capital gains generally will be taxed as ordinary income. The tax you pay on a
given capital gains distribution generally depends on how long the Fund held the
portfolio securities it sold. It does not depend on how long you held your Fund
shares.
Distributions are generally taxable to you in the tax year in which they
are paid, with one exception: distributions declared in October, November or
December, but not paid until January of the following year, are taxed as though
they were paid on December 31 in the year in which they were declared.
Shareholders generally are required to report all Fund distributions on
their federal income tax returns. Each year the Funds will send you information
detailing the amount of ordinary income and capital gains paid to you for the
previous year.
Taxes on Sales or Exchanges. If you sell shares of a Fund or exchange them
---------------------------
for shares of another Munder Fund, you generally will be subject to tax on any
taxable gain. Taxable gain is computed by subtracting your tax basis in the
shares from the redemption proceeds (in the case of a sale) or the value of the
shares received (in the case of an exchange). Because your tax basis depends on
the original purchase price and on the price at which any dividends may have
been reinvested, you should be sure to keep account statements so that you or
your tax preparer will be able to determine whether a sale will result in a
taxable gain.
Other Considerations. If you buy shares of a Fund just before the Fund
--------------------
makes any distribution, you will pay the full price for the shares and then
receive back a portion of the money you have just invested in the form of a
taxable distribution. If you have not provided complete, correct taxpayer
information, by law, the Funds must withhold a portion of your distributions and
redemption proceeds to pay federal income taxes.
INFORMATION ABOUT MANAGEMENT OF THE GLOBAL
FINANCIAL SERVICES FUND AND THE LARGE-CAP VALUE FUND
Investment Adviser
The current investment adviser of both the Global Financial Services Fund
and the Large-Cap Value Fund is Munder Capital Management ("MCM"). MCM is a
Delaware general partnership with principal offices at 480 Pierce Street,
Birmingham, Michigan 48009.
The Global Financial Services Fund has entered into a Sub-Advisory
Agreement with MCM and Framlington, which has been approved by the shareholders
of such Fund.
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Framlington is a subsidiary of Framlington Group Limited, incorporated in
England and Wales, which, through its subsidiaries, provides a wide range of
investment services. Framlington Group Limited is a wholly-owned subsidiary of
Framlington Holdings Limited which is, in turn, owned 49% by MCM and 51% by HSBC
plc, a banking and financial services organization based in the United Kingdom.
Under the terms of the Sub-Advisory Agreement, Framlington provides
sub-advisory services to the Global Financial Services Fund. Subject to the
supervision of MCM, Framlington is responsible for the management of the Global
Financial Services Fund's portfolio, including decisions regarding purchases and
sales of portfolio securities by the Global Financial Services Fund. Framlington
is also responsible for arranging the execution of portfolio management
decisions, including the selection of brokers to execute trades and the
negotiation of related brokerage commissions.
As of September 30, 2001, MCM and its then wholly-owned subsidiary managed
over $33.4 billion of assets for various institutional clients, including
investment companies, pension and profit sharing funds, foundations and
insurance companies, as well as for high net worth individuals. Of this amount,
approximately $18 billion was invested in equity securities.
The Global Financial Services Fund and the Large-Cap Value Fund each pay
MCM a monthly advisory fee computed at an annual rate of 0.75% of the Fund's
average daily net assets. The sub-advisory fee for the Global Financial Services
Fund is paid by MCM to Framlington.
Portfolio Managers
A team of professional portfolio managers employed by MCM and Framlington
makes investment decisions for the Global Financial Services Fund.
A team of professional portfolio managers employed by MCM makes investment
decisions for the Large-Cap Value Fund.
COMPARATIVE INFORMATION ON SHAREHOLDERS' RIGHTS
Munder Framlington and the Trust are Massachusetts business trusts and are
each governed by a Declaration of Trust, By-Laws, and a Board of Trustees. Both
the Global Financial Services Fund and the Large-Cap Value Fund are also
governed by applicable state and Federal law. Certain differences and
similarities between the two Funds are summarized below.
Shareholder Liability
Under Massachusetts law, shareholders of a Massachusetts business trust
could, under certain circumstances, be held personally liable for the
obligations of the trust. However, the Declarations of Trust for Munder
Framlington and the Trust state that shareholders will not be subject to any
personal liability in connection with the assets of the Trusts for the acts or
obligations of the Trusts. Each Declaration of Trust provides for
indemnification out of the assets belonging to the series of the respective
Trust with respect to which such shareholder's shares are issued, for all losses
and expenses of any shareholder held personally liable for the obligations of
the Trusts solely by reason of his or her being or having been a shareholder.
Thus,
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the risk of a shareholder incurring financial loss on account of shareholder
liability is considered remote since it is limited to circumstances in which a
disclaimer is inoperative and the Fund itself would be unable to meet its
obligations.
Voting Rights
Neither the Global Financial Services Fund nor the Large-Cap Value Fund
holds annual meetings of shareholders, although each may hold special meetings
for purposes of voting on certain matters as required under the 1940 Act.
Special meetings of shareholders of either Fund may be called upon the written
request of holders of not less than 10% of that Fund's then outstanding voting
securities. On each matter submitted to a vote of the shareholders of the Global
Financial Services Fund or the Large-Cap Value Fund, each shareholder is
entitled to one vote for each whole share owned and a proportionate fractional
vote for any fractional share outstanding in the shareholder's name on the
Fund's books. Shareholders of all classes of each Fund vote together as a Fund,
and not by class, except as otherwise required by applicable law or by that
Fund's charter documents, or when the matter affects only the interests of a
particular class.
Liquidation or Dissolution
In the event of the liquidation or dissolution of either the Global
Financial Services Fund or the Large-Cap Value Fund, the shareholders of that
Fund are entitled to receive, when and as declared by the Boards of Trustees of
Munder Framlington and the Trust, respectively, the excess of the assets over
the liabilities belonging to the Fund. The assets so distributed to shareholders
of a Fund would be distributed among the shareholders in proportion to the
number of shares of that Fund held by them and recorded on the books of the
Fund.
Liability of Trustees
The Declarations of Trust of Munder Framlington and the Trust both provide
for indemnification of their trustees and officers. However, the Declarations of
Trust do not purport to protect or indemnify a trustee or officer against any
liability to which such person would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such person's office.
Rights of Inspection
Shareholders of the Global Financial Services Fund and the Large-Cap Value
Fund generally have the right to inspect the records, accounts and books of
Munder Framlington and the Trust, respectively, as such right is permitted
shareholders of a Massachusetts business trust under Massachusetts corporation
law. Currently, each shareholder of a Massachusetts business trust is permitted
to inspect the records, accounts and books of a corporation for any legitimate
business purpose relative to the affairs of the corporation.
The foregoing is only a summary of certain characteristics of the
operations of the Global Financial Services Fund and the Large-Cap Value Fund,
the Declarations of Trust of Munder Framlington and the Trust, and Massachusetts
law. The foregoing is not a complete description
-60-
of the documents cited. Shareholders should refer to the provisions of such
documents and state laws governing each Fund for a more thorough description.
ADDITIONAL INFORMATION ABOUT THE
GLOBAL FINANCIAL SERVICES FUND
AND THE LARGE-CAP VALUE FUND
Information about the Global Financial Services Fund and the Large-Cap
Value Fund is included in (i) the current Prospectus for the Global Financial
Services Fund and the Large-Cap Value Fund (Class A, Class B, Class C and Class
II shares) dated October 31, 2001, as supplemented on November 15, 2001 and
January ___, 2002; (ii) the Prospectus for the Global Financial Services Fund
and the Large-Cap Value Fund (Class K shares) dated October 31, 2001, as
supplemented on November 15, 2001, December 21, 2001 and January ___, 2002;
(iii) the Prospectus for the Global Financial Services Fund and the Large-Cap
Value Fund (Class Y shares) dated October 31, 2001, as supplemented on November
15, 2001, December 21, 2001 and January ___, 2002; and (iv) the Statement of
Additional Information for the Global Financial Services Fund and the Large-Cap
Value Fund, dated October 31, 2001, as supplemented on January ___, 2002, each
of which have been filed with the SEC. Copies of these documents, the Statement
of Additional Information related to this Proxy Statement/Prospectus and any
subsequently released shareholder reports are available upon request and without
charge by writing or calling the Global Financial Services Fund or the Large-Cap
Value Fund at the address or toll-free number listed on the cover page of this
Proxy Statement/Prospectus.
Both the Global Financial Services Fund and the Large-Cap Value Fund are
subject to the informational requirements of the Securities Exchange Act of
1934, as amended, and in accordance therewith file reports and other information
including proxy material, reports and charter documents with the SEC. These
reports 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 and at the Midwest Regional Office of the SEC, 500 West
Madison Street, Suite 1400, Chicago, IL 60661. Copies of such material can also
be obtained from the Public Reference Branch, Office of Consumer Affairs and
Information Services, SEC, Washington, D.C. 20549 at prescribed rates.
OTHER BUSINESS
The Board does not intend to present any other business at the Meeting. If,
however, any other matters are properly brought before the Meeting, the persons
named in the accompanying form of proxy will vote thereon in accordance with
their judgment.
VOTING INFORMATION
This Proxy Statement/Prospectus is furnished in connection with a
solicitation of proxies by the Board to be used at the Meeting. This Proxy
Statement/Prospectus, along with a Notice of the Meeting and a proxy card, is
first being mailed to shareholders of the Global Financial Services Fund on or
about January 25, 2002. Only shareholders of record as of the close of business
on the Record Date, January 15, 2002, will be entitled to notice of, and to vote
at, the Meeting. If the enclosed form of proxy card is properly executed and
returned in time to be
-61-
voted at the Meeting, the proxies named therein will vote the shares represented
by the proxy in accordance with the instructions marked thereon. Unmarked but
properly executed proxy cards will be voted FOR the proposed Reorganization and
FOR any other matters deemed appropriate.
A proxy may be revoked at any time on or before the Meeting by written
notice to the Secretary of Munder Framlington at the address on the cover of
this Proxy Statement/Prospectus or by attending and voting at the Meeting.
Unless revoked, all valid and executed proxies will be voted in accordance with
the specifications thereon or, in the absence of such specifications, for
approval of the Reorganization Agreement and the Reorganization contemplated
thereby.
Proxy Solicitation
Proxies are solicited by mail. Additional solicitations may be made by
telephone, telegraph or personal contact by officers or employees of MCM and its
affiliates or by proxy soliciting firms retained by MCM. MCM has retained Proxy
Advantage to provide proxy solicitation services in connection with the Meeting
at an estimated cost of $5,000. The cost of the solicitation will be borne by
MCM.
Quorum
The holders of a majority of the shares of the Global Financial Services
Fund that are outstanding at the close of business on the Record Date and are
present in person or represented by proxy will constitute a quorum for the
Meeting.
Vote Required
Approval of the Reorganization Agreement will require the affirmative vote
of a majority of the outstanding shares of the Global Financial Services Fund,
with all classes voting together and not by class. Shareholders of the Global
Financial Services Fund are entitled to one vote for each share. Fractional
shares are entitled to proportional voting rights.
Effect of Abstentions and Broker "Non-Votes"
For purposes of determining the presence of a quorum for transacting
business at the Meeting, executed proxies marked as abstentions and broker
"non-votes" (that is, proxies from brokers or nominees indicating that such
persons have not received instructions from the beneficial owner or other
persons entitled to vote shares on a particular matter with respect to which the
brokers or nominees do not have discretionary power) will be treated as shares
that are present for quorum purposes but which have not been voted. As a result,
such abstentions and broker "non-votes" will have the effect of a vote against
the Reorganization Agreement.
Adjournments
In the event that sufficient votes to approve the Reorganization are not
received to approve the proposal, the persons named as proxies may propose one
or more adjournments of the Meeting to permit further solicitation of proxies.
Any such adjournment will require an affirmative vote by the holders of a
majority of the shares present in person or by proxy and entitled to vote at the
Meeting. In determining whether to adjourn the Meeting, the following
-62-
factors may be considered: the percentage of votes actually cast, the percentage
of negative votes actually cast, the nature of any further solicitation and the
information to be provided to shareholders with respect to the reasons for the
solicitation. Generally, votes cast in favor of a proposal will be voted in
favor of adjournment while votes cast against a proposal will be voted against
adjournment. The persons named as proxies will vote upon such adjournment after
consideration of the best interests of all shareholders.
Share Information
The chart below lists the number of shares of each class of the Global
Financial Services Fund that were outstanding as of the close of business on the
Record Date:
Shares Outstanding on Record Date
--------------------------------------------------------------
Class Global Financial Services Fund
----- ------------------------------
--------------------------------------------------------------
Class A
--------------------------------------------------------------
Class B
--------------------------------------------------------------
Class II
--------------------------------------------------------------
Class K
--------------------------------------------------------------
Class Y
--------------------------------------------------------------
On January 15, 2002, to the knowledge of Munder Framlington and the Trust,
the following shareholders owned, either beneficially or of record, 5% or more
of the outstanding shares of the Funds:
--------------------------------------------------------------------------------------
Name and Address Type of Percentage
Name of Fund of Owner Ownership of Fund
--------------------------------------------------------------------------------------
Global Financial Services Fund Comerica Bank Record _____%
FCO its Customers
One Detroit Center
500 Woodward Ave.
Detroit, Michigan
48226
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Large-Cap Value Fund
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Munder Framlington has been advised by Comerica Bank, an affiliate of MCM,
that it intends to vote the shares of the Global Financial Services Fund over
which it has voting power FOR and AGAINST each proposal at the Meeting in the
same proportions as the total votes that
-63-
are cast FOR and AGAINST that proposal by other shareholders of the Global
Financial Services Fund. Comerica Bank's economic interest in such shares, which
are primarily held for the benefit of its customers, is less than 1%.
[As of the Record Date, the officers and Trustees of Munder Framlington
beneficially owned as a group less than 1% of the outstanding shares of the
Global Financial Services Fund. As of the Record Date, the officers and Trustees
of the Trust beneficially owned as a group less than 1% of the outstanding
shares of the Large-Cap Value Fund.] [CONFIRM]
The votes of the shareholders of the Large-Cap Value Fund are not being
solicited since their approval or consent is not necessary for the
Reorganization to take place.
LEGAL MATTERS
Certain legal matters concerning the issuance of shares of the Large-Cap
Value Fund will be passed upon by Dechert, 1775 Eye Street, N.W., Washington,
D.C. 20006.
THE TRUSTEES OF MUNDER FRAMLINGTON, INCLUDING THE INDEPENDENT TRUSTEES,
RECOMMEND APPROVAL OF THE REORGANIZATION AGREEMENT INCLUDING THE SALE OF ALL OF
THE ASSETS OF THE GLOBAL FINANCIAL SERVICES FUND TO THE LARGE-CAP VALUE FUND,
THE TERMINATION OF THE GLOBAL FINANCIAL SERVICES FUND AND THE DISTRIBUTION OF
SHARES OF THE LARGE-CAP VALUE FUND TO SHAREHOLDERS OF THE GLOBAL FINANCIAL
SERVICES FUND, AND ANY UNMARKED PROXIES WITHOUT INSTRUCTIONS TO THE CONTRARY
WILL BE VOTED IN FAVOR OF APPROVAL OF THE REORGANIZATION AGREEMENT.
-64-
EXHIBIT A
THE MUNDER FRAMLINGTON FUNDS TRUST
THE MUNDER FUNDS TRUST
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made as of this
13/th/ day of November, 2001, by and between The Munder Funds Trust, a
Massachusetts business trust ("Trust"), with its principal place of business at
480 Pierce Street, Birmingham, Michigan 48009, on behalf of the Large-Cap Value
Fund, formerly the Munder Equity Income Fund, a separate series of the Trust
("Acquiring Fund"), and The Munder Framlington Funds Trust, a Massachusetts
business trust ("Munder Framlington"), with its principal place of business at
480 Pierce Street, Birmingham, Michigan 48009, on behalf of the Munder
Framlington Global Financial Services Fund, a separate series of Munder
Framlington ("Acquired Fund").
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 ("Code"). The reorganization and
liquidation will consist of the transfer of all of the assets of the Acquired
Fund to the Acquiring Fund in exchange solely for Class A, Class B, Class C,
Class K and Class Y shares of common stock ($0.01 par value per share) of the
Acquiring Fund ("Acquiring Fund Shares"), the assumption by the Acquiring Fund
of all liabilities of the Acquired Fund, 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 ("Reorganization"), all upon the terms and
conditions hereinafter set forth in this Agreement.
WHEREAS, the Acquired Fund and the Acquiring Fund are each a series of an
open-end, registered investment company of the management type and the Acquired
Fund owns securities that generally are assets of the character in which the
Acquiring Fund is permitted to invest;
WHEREAS, the Trustees of the Trust have determined, with respect to the
Acquiring Fund, that the exchange of all of the assets of the Acquired Fund for
Acquiring Fund Shares and the assumption of all liabilities of the Acquired Fund
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 Munder Framlington have determined, with respect to the
Acquired Fund, that the exchange of all of the assets of the Acquired Fund for
Acquiring Fund Shares and the assumption of all liabilities of the Acquired Fund
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 ACQUIRING FUND SHARES, THE ASSUMPTION OF ALL ACQUIRED FUND LIABILITIES
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, the Acquired Fund agrees to
transfer all of the Acquired Fund's assets, as set forth in paragraph 1.2, to
the Acquiring Fund, and the Acquiring Fund agrees in exchange therefor: (i) to
deliver to the Acquired Fund the number of full and fractional Class A, Class B,
Class C, Class K and Class Y Acquiring Fund Shares, determined by dividing the
value of the Acquired Fund's net assets with respect to each corresponding class
(Class A, Class B, Class II, Class K and Class Y, respectively), 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 of the corresponding class, computed in the
manner and as of the time and date set forth in paragraph 2.2; and (ii) to
assume all liabilities of the Acquired Fund, as set forth in paragraph 1.3. Such
transactions shall take place on the date of the closing provided for in
paragraph 3.1 ("Closing Date").
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, securities, commodities and futures interests and dividends or interests
receivable 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
(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
also assume all of the liabilities of the Acquired Fund, whether accrued or
contingent, known or unknown, existing at the Valuation Date as defined in
paragraph 2.1 (collectively, "Liabilities"). 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 (and in no event less than 98%) 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 with respect to each class of its shares, determined as of immediately
after the close of business on the Closing Date ("Acquired Fund Shareholders"),
on a pro rata basis within that class, the Acquiring Fund Shares of the
corresponding class received by the Acquired Fund pursuant to paragraph 1.1, and
will completely liquidate. Such distribution and liquidation will be
accomplished, with respect to each class of the Acquired Fund's shares, 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 Class A, Class B, Class C, Class K and Class Y
Acquiring Fund Shares to be so credited to Class A, Class B, Class II, Class K
and Class Y Acquired Fund Shareholders, respectively, shall, with respect to
each class, be equal to the aggregate net asset value of the shares of common
stock ($0.01 par value per share) of the
-2-
Acquired Fund ("Acquired Fund Shares") of the corresponding class owned by
Acquired Fund 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, although shares certificates representing interests in Class A,
Class B, Class II, Class K and Class Y shares of the Acquired Fund will
represent a number of the corresponding class of Acquiring Fund Shares after the
Closing Date, as determined in accordance with Section 2.3. The Acquiring Fund
shall not issue certificates representing the Class A, Class B, Class C, Class K
and Class Y Acquiring Fund Shares in connection with such exchange.
1.5 Ownership of Acquiring Fund Shares will be shown on the books of the
Acquiring Fund's Transfer Agent, as defined in paragraph 3.3.
1.6 Any reporting responsibility of the Acquired Fund including, but not
limited to, the responsibility for filing regulatory reports, tax returns, or
other documents with the Securities and Exchange Commission ("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.
2. VALUATION
2.1 The value of the Assets shall be the value of such Assets computed as
of immediately after the close of business 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 then-current prospectus and statement of additional information
with respect to the Acquired Fund, and valuation procedures established by the
Acquired Fund's Board of Trustees.
2.2 The net asset value of a Class A, Class B, Class C, Class K and Class
Y Acquiring Fund Share shall be the net asset value per share computed with
respect to that class as of the Valuation Date, using the valuation procedures
set forth in the Acquiring Fund's then-current prospectus and statement of
additional information, and valuation procedures established by the Acquiring
Fund's Board of Trustees.
2.3 The number of the Class A, Class B, Class C, Class K and Class Y
Acquiring Fund Shares to be issued (including fractional shares, if any) in
exchange for the Acquired Fund's Assets shall be determined with respect to each
such class by dividing the value of the net assets with respect to the Class A,
Class B, Class II, Class K and Class Y of the Acquired Fund, as the case may be,
determined using the same 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 State Street Bank and
Trust Company, in its capacity as administrator for the Acquired Fund and the
Acquiring Fund and shall be subject to confirmation by each Fund's record
keeping agent and by each Fund's independent accountants.
-3-
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be March 22, 2002, or such other date as the
parties may agree. All acts taking place at the closing of the transactions
provided for in this Agreement ("Closing") shall be deemed to take place
simultaneously as of immediately after the close of business on the Closing Date
unless otherwise agreed to by the parties. The close of business on the Closing
Date shall be as of 4:00 p.m., Eastern Time. The Closing shall be held at the
offices of the Trust or at such other time and/or place as the parties may
agree.
3.2 Munder Framlington shall direct State Street Bank and Trust Company,
as custodian for the Acquired Fund ("Custodian"), to deliver, at the Closing, a
certificate of an authorized officer stating that (i) the Assets shall have been
delivered in proper form to the Acquiring Fund within two business days 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
written instrument shall be presented by the Custodian to those persons at the
Custodian who have primary responsibility for the safekeeping of the assets of
the Acquiring Fund since the Custodian also serves as the custodian for the
Acquiring Fund. Such presentation shall be made for examination 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 to those persons
at the Custodian who have primary responsibility for the safekeeping of the
assets of the Acquiring Fund as of the Closing Date by book entry, in accordance
with the customary practices of the Custodian and of each securities depository,
as defined in Rule 17f-4 under the Investment Company Act of 1940, as amended
("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 Munder Framlington shall direct PFPC, Inc., in its capacity as
transfer agent for the Acquired Fund ("Transfer Agent"), 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 Class A, Class B, Class II, Class K and
Class Y shares owned by each such shareholder immediately prior to the Closing.
The Acquiring Fund shall issue and deliver to the Secretary of the Acquired
Fund prior to the Closing Date a confirmation evidencing that the appropriate
number of Acquiring Fund Shares will be credited to the Acquired Fund on the
Closing Date, or provide other evidence satisfactory to the Acquired Fund as of
the Closing Date 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.
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
-4-
Fund (each, an "Exchange") 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 Board of Trustees
of either the Trust or Munder Framlington, accurate appraisal of the value of
the net assets of the Acquiring Fund or the Acquired Fund, respectively, is
impracticable, the Closing Date shall be postponed until the first business day
after the day when trading shall have been fully resumed and reporting shall
have been restored.
4. REPRESENTATIONS AND WARRANTIES
4.1 Munder Framlington, on behalf of the Acquired Fund, represents and
warrants to the Trust as follows:
(a) The Acquired Fund is duly organized as a series of Munder
Framlington, which is a business trust duly organized, validly existing and in
good standing under the laws of the Commonwealth of Massachusetts, with power
under the Munder Framlington's Declaration of Trust, as amended, to own all of
its Assets and to carry on its business as it is now being conducted;
(b) Munder Framlington 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 the registration of
the Class A, Class B, Class II, Class K and Class Y Acquired Fund Shares under
the Securities Act of 1933, as amended ("1933 Act"), 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 1933 Act, the Securities Exchange Act of 1934, as amended ("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, Munder Framlington, 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 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;
-5-
(f) The Acquired Fund is not engaged currently, and the execution,
delivery and performance of this Agreement will not result, in (i) a material
violation of Munder Framlington's Declaration of Trust or By-Laws or of any
agreement, indenture, instrument, contract, lease or other undertaking to which
the Munder Framlington, on behalf of the Acquired Fund, is a party or by which
it is bound, or (ii) the acceleration of any obligation, or the imposition of
any penalty, under any agreement, indenture, instrument, contract, lease,
judgment or decree to which Munder Framlington, on behalf of the Acquired Fund,
is a party or by which it is bound;
(g) 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;
(h) Except as otherwise disclosed in writing to and accepted by the
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.
Munder Framlington, on behalf of the Acquired 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 Schedule of Investments of the Acquired Fund at
June 30, 2001 have been audited by Ernst & Young LLP, independent accountants,
and are in accordance with accounting principles generally accepted in the
United States of America ("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;
(j) Since June 30, 2001, 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. For the purposes of this subparagraph (j), a
decline in net asset value per share of Acquired Fund Shares due to declines in
market values of securities held by the Acquired Fund, 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;
(k) 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
-6-
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;
(l) For each taxable year of its operation (including the taxable
year ending on the Closing Date), the Acquired Fund has met (or will meet) the
requirements of Subchapter M of the Code for qualification as a regulated
investment company, has been (or will be) 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;
(m) 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 Munder Framlington and have been offered and sold in every
state and the District of Columbia in compliance in all material respects with
applicable registration requirements of the 1933 Act and state securities laws.
All of the issued and outstanding shares of the Acquired Fund will, at the time
of Closing, be held by 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;
(n) 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 Munder Framlington, on behalf of the
Acquired Fund, and, subject to the approval of the shareholders of the Acquired
Fund, this Agreement will constitute a valid and binding obligation of Munder
Framlington, on behalf of the Acquired Fund, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors' rights and to
general equity principles;
(o) 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
(p) The combined proxy statement and prospectus ("Proxy Statement")
to be included in the Registration Statement referred to in paragraph 5.6,
insofar as it relates to the Acquired Fund, will, on the effective date of the
Registration Statement and on the Closing Date (i) 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 were made, not materially misleading,
provided, however, that the representations and warranties of this subparagraph
(p) shall not apply to statements in or omissions from the Proxy Statement and
the Registration Statement made in reliance upon and in
-7-
conformity with information that was furnished by the Acquiring Fund for use
therein, and (ii) 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.
4.2 Except as has been fully disclosed to the Acquired Fund in a written
instrument executed by an officer of the Trust, the Trust, on behalf of the
Acquiring Fund, represents and warrants to Munder Framlington as follows:
(a) The Acquiring Fund is duly organized as a series of the Trust,
which is a business trust duly organized, validly existing, and in good standing
under the laws of the Commonwealth of Massachusetts with power under the Trust's
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 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 the registration of
the Class A, Class B, Class C, Class K and Class Y Acquiring Fund Shares under
the 1933 Act, 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 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 Trust, on behalf of the Acquiring Fund,
will have good and marketable title to the Acquiring Fund's assets, free of any
liens or other 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 engaged currently, and the execution,
delivery and performance of this Agreement will not result, in (i) a material
violation of the Trust's Declaration of Trust or By-Laws or of any agreement,
indenture, instrument, contract, lease or other undertaking to which the Trust,
on behalf of the Acquiring Fund, is a party or by which it is bound, or (ii) the
acceleration of any obligation, or the imposition of any penalty, under any
agreement, indenture, instrument, contract, lease, judgment or decree to which
the Trust, on behalf of the Acquiring Fund, is a party or by which it is bound;
(g) Except as otherwise disclosed in writing to and accepted by
Munder Framlington, 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 the
-8-
Acquiring Fund's knowledge, threatened against the Trust, on behalf of the
Acquiring Fund, or any of the Acquiring Fund's properties or assets that, if
adversely determined, would materially and adversely affect the Acquiring Fund's
financial condition or the conduct of its business. The 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 the Acquiring Fund's business or its ability to consummate the
transactions herein contemplated;
(h) The Statement of Assets and Liabilities, Statements of Operations
and Changes in Net Assets and Schedule of Investments of the Acquiring Fund at
June 30, 2001 have been audited by Ernst & Young LLP, independent accountants,
and are in accordance with GAAP consistently applied, and such statements
(copies of which have been furnished to the Acquired Fund) present fairly, in
all material respects, the financial condition of the Acquiring Fund as of such
date in accordance with GAAP, and there are 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;
(i) Since June 30, 2001, there has not 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. For purposes of this subparagraph (i), a
decline in net asset value per share of the Acquiring Fund Shares due to
declines in market values of securities held by the Acquiring Fund, 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;
(j) 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
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;
(k) 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, has been eligible to (or will be 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;
(l) 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 Trust and have been offered and sold in every state and
the District of Columbia in compliance in all material respects with applicable
registration requirements of the 1933 Act and state securities laws. The
Acquiring Fund does not have outstanding any options, warrants or other rights
to
-9-
subscribe for or purchase any Acquiring Fund Shares, nor is there outstanding
any security convertible into any Acquiring Fund Shares;
(m) 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 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, to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights and to general equity
principles;
(n) The Class A, Class B, Class C, Class K and Class Y 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 by the Acquiring Fund; and
(o) 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
(p) The Proxy Statement to be included in the Registration Statement
(and any amendment or supplement thereto), insofar as it relates to the
Acquiring Fund and the Acquiring Fund Shares, will, from the effective date of
the Registration Statement through the date of the meeting of shareholders of
the Acquired Fund contemplated therein and on the Closing Date (i) 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 were made, not materially
misleading, provided, however, that the representations and warranties of this
subparagraph (p) shall not apply to statements in or omissions from the Proxy
Statement and the Registration Statement made in reliance upon and in conformity
with information that was furnished by the Acquired Fund for use therein, and
(ii) 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 will 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 the
declaration and payment of customary dividends and distributions, and any other
distribution that may be advisable.
5.2 Munder Framlington will call a meeting of the shareholders of the
Acquired Fund to consider and act upon this Agreement and to take all other
action necessary to obtain approval of the transactions contemplated herein.
-10-
5.3 The Acquired Fund covenants that the Class A, Class B, Class C, Class
K and Class Y 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.
5.4 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.
5.5. 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.
5.6. The Acquired Fund will provide the Acquiring Fund with information
reasonably necessary for the preparation of the Proxy Statement (referred to in
paragraph 4.1(p)) to be included in a Registration Statement on Form N-14
("Registration Statement"), in compliance with the 1933 Act, the 1934 Act and
the 1940 Act, in connection with the meeting of the shareholders of the Acquired
Fund to consider approval of this Agreement and the transactions contemplated
herein.
5.7. As soon as is reasonably practicable after the Closing, the Acquired
Fund will make a liquidating distribution to its shareholders consisting of the
Class A, Class B, Class C, Class K and Class Y Acquiring Fund Shares received at
the Closing.
5.8 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.
5.9 Munder Framlington, on behalf of the Acquired Fund, covenants that it
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 Trust, on behalf of the Acquiring Fund, may reasonably deem necessary or
desirable in order to vest in and confirm (a) Munder Framlington's, on behalf of
the Acquired Fund's, title to and possession of the Acquiring Fund Shares to be
delivered hereunder, and (b) the 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.
5.10 The Acquiring Fund will use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act and such of
the state blue sky or securities laws 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 Munder Framlington, on behalf of the Acquired Fund,
to consummate the transactions provided for herein shall be subject, at Munder
Framlington's election, to the performance by the Trust, on behalf of the
Acquiring Fund, of all the obligations
-11-
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 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 Trust, on behalf of the Acquiring Fund, shall have delivered
to the Acquired Fund a certificate executed in the name of the Acquiring Fund by
its President or Vice President and its Treasurer or Assistant Treasurer, in a
form reasonably satisfactory to Munder Framlington and dated as of the Closing
Date, to the effect that the representations and warranties of the 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 Munder
Framlington shall reasonably request;
6.3. The 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 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 Class A, Class B, Class C, Class K and Class Y
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 Trust, on behalf of the Acquiring Fund, to
complete the transactions provided for herein shall be subject, at the Trust's
election, to the performance by Munder Framlington, on behalf of the Acquired
Fund, of 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 Munder Framlington, 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. Munder Framlington 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 Munder Framlington;
7.3. Munder Framlington, on behalf of the Acquired Fund, shall have
delivered to the Acquiring Fund a certificate executed in the name of the
Acquired Fund by its President or Vice President and its Treasurer or Assistant
Treasurer, in a form reasonably satisfactory to the Trust and dated as of the
Closing Date, to the effect that the representations and warranties of Munder
Framlington, on behalf of the Acquired Fund, made in this Agreement are true and
correct at and
-12-
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 Trust shall
reasonably request;
7.4 Munder Framlington, 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 Munder Framlington, 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 Class A, Class B, Class C, Class K and Class Y
Acquiring Fund Shares to be issued in connection with the Reorganization after
such number has been calculated in accordance with paragraph 1.1; and
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. Eastern time on the Closing Date; 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 Munder Framlington, on behalf of the
Acquired Fund, or the 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 The Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of the outstanding shares of
the Acquired Fund in accordance with the provisions of Munder Framlington'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 Acquiring Fund. Notwithstanding anything herein to the
contrary, neither the Trust nor Munder Framlington 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 Trust's or to Munder Framlington'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 Trust or Munder Framlington 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;
-13-
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 counsel to Munder
Framlington 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 counsel to Munder
Framlington of representations it shall request of Munder Framlington and the
Trust. Notwithstanding anything herein to the contrary, neither the Trust nor
Munder Framlington may waive the condition set forth in this paragraph 8.5.
9. INDEMNIFICATION
9.1 The Trust, out of the Acquiring Fund's assets and property, agrees
to indemnify and hold harmless the Acquired Fund from and against any and all
losses, claims, damages, liabilities or expenses (including, without limitation,
the payment of reasonable legal fees and reasonable costs of investigation) to
which the Acquired Fund may become subject, insofar as such loss, claim, damage,
liability or expense (or actions with respect thereto) arises out of or is based
on any breach by the Acquiring Fund of any of its representations, warranties,
covenants or agreements set forth in this Agreement.
9.2 Munder Framlington, out of the Acquired Fund's assets and
property, agrees to indemnify and hold harmless the Acquiring Fund from and
against any and all losses, claims, damages, liabilities or expenses (including,
without limitation, the payment of reasonable legal fees and reasonable costs of
investigation) to which the Acquiring Fund may become subject, insofar as such
loss, claim, damage, liability or expense (or actions with respect thereto)
arises out of or is based on any breach by the Acquired Fund of any of its
representations, warranties, covenants or agreements set forth in this
Agreement.
10. BROKERAGE FEES AND EXPENSES
10.1 The Trust, on behalf of the Acquiring Fund, and Munder
Framlington, 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.
10.2 The expenses relating to the proposed Reorganization will be borne
solely by Munder Capital Management and its affiliates. No such expenses shall
be borne by the Acquired Fund or the Acquiring Fund, except for brokerage fees
and expenses incurred in connection with the Reorganization. The costs of the
Reorganization shall include, but not be limited to, costs associated with
obtaining any necessary order of exemption from the 1940 Act, if any,
preparation of the Registration Statement, printing and distributing the Proxy
Statement, legal fees, accounting fees, securities registration fees, and
expenses of holding shareholders' meetings. Notwithstanding any of the
foregoing, expenses will in any event be paid by the party directly incurring
such expenses if and to the extent that the payment by another person of such
-14-
expenses would result in the disqualification of such party as a "regulated
investment company" within the meaning of Section 851 of the Code.
11. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
11.1 The Trust and Munder Framlington agree that neither party has made
any representation, warranty or covenant, on behalf of either the Acquiring Fund
or the Acquired Fund, respectively, not set forth herein and that this Agreement
constitutes the entire agreement between the parties.
11.2 The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated hereunder. The
covenants to be performed after the Closing and the obligations of each of the
Acquired Fund and Acquiring Fund in Sections 9.1 and 9.2 shall survive the
Closing.
12. TERMINATION
This Agreement may be terminated and the transactions contemplated
hereby may be abandoned by resolution of the Board of Trustees of either the
Trust or Munder Framlington, at any time prior to the Closing Date, if
circumstances should develop that, in the opinion of that Board, make proceeding
with the Agreement inadvisable.
13. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner
as may be deemed necessary or advisable by the authorized officers of Munder
Framlington and the Trust; provided, however, that following the meeting of the
shareholders of the Acquired Fund called by Munder Framlington pursuant to
paragraph 5.2 of this Agreement, no such amendment may have the effect of
changing the provisions for determining the number of Class A, Class B, Class C,
Class K and Class Y Acquiring Fund Shares to be issued to the Class A, Class B,
Class II, Class K and Class Y Acquired Fund Shareholders, respectively, under
this Agreement to the detriment of such shareholders without their further
approval.
14. 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, electronic delivery (i.e., e-mail) personal service or prepaid or
certified mail addressed to the Trust and Munder Framlington, 480 Pierce Street,
Birmingham, Michigan 48009, attn: Stephen J. Shenkenberg, in each case with a
copy to Dechert, 1775 Eye Street, N.W., Washington, D.C. 20006, attn: Jane A.
Kanter.
15. HEADINGS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
15.1 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.
-15-
15.2 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.
15.3 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.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its President or Vice President.
THE MUNDER FRAMLINGTON FUNDS TRUST on
behalf of its
MUNDER FRAMLINGTON GLOBAL FINANCIAL
SERVICES FUND
By: ________________________________
Title:______________________________
THE MUNDER FUNDS TRUST on behalf of its
MUNDER LARGE-CAP VALUE FUND
By: ________________________________
Title:______________________________
-16-
PART B
THE MUNDER FUNDS TRUST
Munder Framlington Global Financial Services Fund
- --------------------------------------------------------------------------------
Statement of Additional Information
January 25, 2002
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Acquisition of the Assets and Liabilities of By and in Exchange for Shares of
Munder Framlington Global Financial Services Munder Large-Cap Value Fund
Fund ("Global Financial Services Fund") ("Large-Cap Value Fund")
(a series of The Munder Framlington (a series of The Munder Funds
Funds Trust) Trust)
480 Pierce Street, Birmingham, MI 48009 480 Pierce Street, Birmingham, MI
48009
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the Proxy
Statement/Prospectus dated January 25, 2002, relating specifically to the
proposed transfer of all of the assets of the Global Financial Services Fund to
the Large-Cap Value Fund and the assumption of all the liabilities of the Global
Financial Services Fund in exchange for shares of the Large-Cap Value Fund
having an aggregate value equal to those of the Global Financial Services Fund.
To obtain a copy of the Proxy Statement/Prospectus, please write to The Munder
Funds, Inc., 480 Pierce Street, Birmingham, MI 48009 or call (248) 647-9201. The
transfers are to occur pursuant to an Agreement and Plan of Reorganization. This
Statement of Additional Information incorporates by reference the following
described documents, each of which accompanies this Statement of Additional
Information:
(1) (i) the current Prospectus for the Global Financial Services Fund and
the Large-Cap Value Fund (Class A, Class B, Class C, and Class II
shares) dated October 31, 2001 (previously filed on EDGAR, Accession
No: 0000940180-01-500502), as supplemented on November 15, 2001
(previously filed on EDGAR, Accession No: 0000940180-01-500668) and
January ___, 2002 (previously filed on EDGAR, Accession No:________);
(ii) the Prospectus for the Global Financial Services Fund and the
Large-Cap Value Fund (Class K shares) dated October 31, 2001
(previously filed on EDGAR, Accession No: 0000940180-01-500502), as
supplemented on November 15, 2001 (previously filed on EDGAR,
Accession No: 0000940180-01-500668), December 21, 2001 (previously
filed on EDGAR, Accession No:________), and January ___, 2002
(previously filed on EDGAR, Accession No:________); and (iii) the
Prospectus for the Global Financial Services Fund and the Large-Cap
Value Fund (Class Y shares) dated October 31, 2001 (previously filed
on EDGAR, Accession No: 0000940180-01-
500502), as supplemented on November 15, 2001 (previously filed on EDGAR,
Accession No: 0000940180-01-500668), December 21, 2001 (previously filed
on EDGAR, Accession No:__________), and January ___, 2002 (previously filed
on EDGAR, Accession No: __________);
(2) The Statement of Additional Information of The Munder Funds Trust dated
October 31, 2001 (previously filed on EDGAR, Accession No:
0000940180-01-500502), as supplemented on January ___, 2002 (previously
filed on EDGAR, Accession No: ______________);
(3) Annual Report to Shareholders of The Munder Funds (Class A, Class B, Class
C, Class II and Class Y) for the fiscal year ended June 30, 2001
(previously filed on EDGAR, Accession No: 0000950124-01-503077); and
(4) Annual Report to Shareholders of The Munder Funds (Class K) for the fiscal
year ended June 30, 2001 (previously filed on EDGAR, Accession No.:
0000950124-01-503077).
PROXY CARD THE MUNDER FRAMLINGTON FUNDS TRUST PROXY CARD
Munder Global Financial Services Fund
SPECIAL MEETING OF SHAREHOLDERS MARCH 22, 2002
This Proxy is Solicited on Behalf of the Board of Directors.
The undersigned revoke(s) all previous proxies and appoint(s) Stephen J.
Shenkenberg, Melanie Mayo West or Mary Ann Shumaker or either one of them,
attorneys, with full power of substitution to vote all shares of the Munder
Framlington Global Financial Services Fund (Fund) of The Munder Framlington
Funds Trust (Trust) which the undersigned is entitled to vote at the Special
Meeting of Shareholders of the Fund to be held at the offices of Munder Capital
Management, 480 Pierce Street, Birmingham, MI 48009, on Friday, March 22, 2002
at 10:00 a.m. Eastern time, and at any adjournments or postponements thereof.
Receipt of the Notice of the Meeting and the accompanying Proxy Statement is
hereby acknowledged.
VOTE VIA THE INTERNET: https://vote.proxy-direct.com
VOTE VIA THE TELEPHONE: 1-800-597-7836
------------------------------------------------------
CONTROL NUMBER: 999 9999 9999 999
------------------------------------------------------
Note: Please sign your name exactly as it appears in
the registration. If shares are held in the name of
two or more persons, in whatever capacity, only ONE
need sign. When signing in a fiduciary capacity, such
as executor or attorney, please so indicate. When
signing on behalf of a partnership or corporation,
please indicate title.
------------------------------------------------------
Signature
------------------------------------------------------
Dated 12197_MFP
PLEASE VOTE ON THE REVERSE SIDE, SIGN AND DATE THIS PROXY AND RETURN PROMPTLY IN
THE POSTAGE-PAID ENVELOPE PROVIDED.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK. Example:
IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR THE PROPOSAL. As to
any other matter, said attorneys will vote in accordance with their best
judgment. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL.
---
FOR AGAINST ABSTAIN
1. To approve or disapprove an Agreement and Plan of
Reorganization providing for the acquisition of all
of the assets of the Fund by the Munder Large-Cap [ ] [ ] [ ]
Value Fund and the assumption of all liabilities of
the Fund by the Munder Large-Cap Value Fund in
exchange for shares of the Munder Large-Cap Value
Fund and the subsequent liquidation of the Fund.
2. To transact such other business as may properly come
before the Meeting or any adjournment or postponements
thereof.
Please refer to the Proxy Statement for a discussion of this matter.
Check here if you plan to attend the Meeting. __________
12197_MFP
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN PROMPTLY IN THE POSTAGE-PAID
ENVELOPE PROVIDED.
THE MUNDER FUNDS TRUST
PART C
OTHER INFORMATION
Item 15. Indemnification.
- -------- ---------------
The response to this item is incorporated by reference to Item 25 of
Part C of Post-Effective Amendment No. 32 to the Registrant's Registration
Statement on Form N-1A as filed on October 26, 2001.
Item 16. Exhibits
(1) (a) Declaration of Trust of the Registrant, dated August 30,
1989, is incorporated herein by reference to the Registrant's
Registration Statement on Form N-1A filed with the Commission on
September 1, 1989.
(b) Amendment No. 1 to Declaration of Trust of the Registrant is
incorporated herein by reference to Pre-Effective Amendment No. 1
to the Registrant's Registration Statement on Form N-1A filed
with the Commission on November 21, 1989.
(c) Amendment No. 2 to Declaration of Trust of the Registrant is
incorporated herein by reference to Post-Effective Amendment No.
1 to the Registrant's Registration Statement on Form N-1A filed
with the Commission on February 22, 1990.
(d) Amendment No. 3 to the Declaration of Trust is incorporated
herein by reference to Post-Effective Amendment No. 20 filed with
the Commission on June 28, 1995.
(e) Certificate of Classification of Shares, dated August 30,
1991, pertaining to Class D shares; Class E shares; Class F
shares; Class G shares; Class H shares; and Class I shares is
incorporated herein by reference to Post-Effective Amendment No.
7 to the Registrant's Registration Statement on Form N-1A filed
with the Commission on August 3, 1992.
(f) Certificate of Classification of Shares pertaining to Class
A-1 shares and Class A-2 shares; Class B-1 shares and Class B-2
shares; Class C-1 shares and Class C-2 shares; Class D-1 shares
and Class D-2 shares; Class E-1 shares and Class E-2 shares;
Class F-1 shares and Class F-2 shares; Class G-1 shares and Class
G-2 shares; Class H-1 shares and Class H-2 shares; Class I-1
shares and Class I-2 shares; Class J shares; Class J-1 shares;
and Class J-2 shares; and Class K shares; Class K-1 shares and
Class K-2 shares is incorporated herein by reference to
Post-Effective Amendment No. 7 to the Registrant's Registration
Statement on Form N-1A filed with the Commission on August 3,
1992.
(g) Certificate of Classification of Shares pertaining to Class L
shares, Class L-1 shares and Class L-2 shares is incorporated
herein by reference to Post-Effective Amendment No. 10 to the
Registrant's Registration Statement on Form N-1A filed with the
Commission on April 30, 1993.
C-1
(h) Certificate of Classification of Shares pertaining to Class M
shares, Class M-1 shares and Class M-2 shares is incorporated
herein by reference to Post-Effective Amendment No. 11 to the
Registrant's Registration Statement on Form N-1A filed with the
Commission on June 29, 1993.
(i) Certificate of Classification of Shares pertaining to Class N
shares, Class N-1 shares and Class N-2 shares is incorporated
herein by reference to Post-Effective Amendment No. 14 to the
Registrant's Registration Statement on Form N-1A filed with the
Commission on December 30, 1993.
(j) Certificate of Classification of Shares pertaining to Class O
shares, Class O-1 shares and Class O-2 shares; Class P shares,
Class P-1 shares and Class P-2 shares is incorporated herein by
reference to Post-Effective Amendment No. 15 to the Registrant's
Registration Statement on Form N-1A filed with the Commission on
February 28, 1994.
(k) Certificate of Classification of Shares pertaining to Class
A-3 shares; Class D-3 shares; Class E-3 shares; Class G-3 shares;
Class H-3 shares; Class I-3 shares; Class J-3 shares; Class K-3
shares; Class L-3 shares; Class M-3 shares; Class N-3 shares;
Class O shares; Class O-1 shares; Class O-2 shares; Class O-3
shares; Class P shares; Class P-1 shares; Class P-2 shares and
Class P-3 shares is incorporated herein by reference to
Post-Effective Amendment No. 17 to the Registrant's Registration
Statement on Form N-1A filed with the Commission on June 28,
1994.
(l) Certificate of Classification of Shares pertaining to Class
D-4 shares, E-4 shares, F-4 shares, G-4 shares, H-4 shares, I-4
shares, K-4 shares, L-4 shares, M-4 shares, N-4 shares, O-4
shares and P-4 shares is incorporated herein by reference to
Post-Effective Amendment No. 20 to the Registrant's Registrations
Statement on Form N-1A filed with the Commission on June 28,
1995.
(m) Certificate of Classification of Shares pertaining to Class
F-3 for the Index Fund Class B Shares is incorporated herein by
reference to Post-Effective Amendment No. 23 to the Registrant's
Registrations Statement on Form N-1A filed with the Commission on
October 28, 1996.
(2) Amended and Restated By-Laws, dated February 25, 2001, are
incorporated herein by reference to Post-Effective Amendment No.
32 to Registrant's Registration Statement on Form N-1A filed with
the Commission on October 26, 2001.
(3) Not Applicable.
(4)** Form of Agreement and Plan of Reorganization.
(5) Not Applicable.
(6) (a) Amended and Restated Investment Advisory Agreement, dated May
15, 2001, among Registrant, The Munder Trust, The Munder
Framlington Funds Trust, St. Clair
- ----------
** Filed herewith as Exhibit A to the Proxy Statement/Prospectus
C-2
Funds, Inc. and Munder Capital Management is incorporated herein
by reference to Post-Effective Amendment No. 32 to the
Registrant's Registrations Statement on Form N-1A filed with the
Commission on October 26, 2001.
(b) Amended and Restated Investment Advisory Agreement, dated May
15, 2001, among Registrant, St. Clair Funds, Inc. and World Asset
Management LLC is incorporated herein by reference to
Post-Effective Amendment No. 32 to the Registrant's Registrations
Statement on Form N-1A filed with the Commission on October 26,
2001.
(7) Amended and Restated Combined Distribution Agreement, dated May
15, 2001, among Registrant, The Munder Funds Trust, The Munder
Framlington Funds Trust, St. Clair Funds, Inc. and Funds
Distributor, Inc. is incorporated herein by reference to
Post-Effective Amendment No. 32 to the Registrant's Registrations
Statement on Form N-1A filed with the Commission on October 26,
2001.
(8) Not Applicable.
(9) Master Custodian Agreement, dated September 26, 2001, among
Registrant, The Munder Funds, Inc., The Munder Framlington Funds
Trust, St. Clair Funds, Inc. and State Street Bank and Trust
Company is incorporated herein by reference to Post-Effective
Amendment No. 32 to the Registrant's Registrations Statement on
Form N-1A filed with the Commission on October 26, 2001.
(10) (a) Amended and Restated Combined Distribution and Service Plan,
dated May 15, 2001, is incorporated herein by reference to
Post-Effective Amendment No. 32 to the Registrant's Registrations
Statement on Form N-1A filed with the Commission on October 26,
2001.
(10) (b) Amended and Restated Multi-Class Plan is incorporated herein
by reference to Post-Effective Amendment No. 32 to the
Registrant's Registrations Statement on Form N-1A filed with the
Commission on October 26, 2001.
(11) Opinion and consent of Dechert regarding legality of issuance of
shares and other matters.
(12) Form of opinion of Dechert regarding tax matters.
(13) Not Applicable.
(14) Consent of Independent Accountants to be filed by amendment.
(15) Not Applicable.
(16) Powers of Attorney are incorporated herein by reference to
Post-Effective Amendment No. 31 and 32 to the Registrant's
Registration Statement on Form N-1A filed with the Commission on
September 25, 2001 and October 26, 2001, respectively.
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
C-3
any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c) of the Securities Act of 1933, as amended,
the reoffering prospectus will contain the information called for
by the applicable registration form for 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 Securities Act of 1933, as amended, 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.
C-4
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement
has been signed on behalf of the Registrant, in the City of Birmingham, in the
State of Michigan, on the 21st day of December, 2001.
THE MUNDER FRAMLINGTON FUNDS TRUST
By: /s/ James C. Robinson
--------------------------------
James C. Robinson, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signatures Title Date
- ---------- ----- ----
* Trustee December 21, 2001
- ---------------------------
Charles W. Elliott
* Trustee December 21, 2001
- ---------------------------
Joseph E. Champagne
* Trustee December 21, 2001
- ---------------------------
Thomas D. Eckert
* Trustee December 21, 2001
- ---------------------------
John Rakolta, Jr.
* Trustee December 21, 2001
- ---------------------------
David J. Brophy
* Trustee December 21, 2001
- ---------------------------
Michael T. Monahan
* Trustee December 21, 2001
- ---------------------------
Arthur T. Porter
* President December 21, 2001
- --------------------------- (Principal Executive Officer)
James C. Robinson
* Treasurer December 21, 2001
- --------------------------- (Principal Financial and
Cherie Ugorowski Accounting Officer)
* By: /s/ Stephen J. Shenkenberg
---------------------------
Stephen J. Shenkenberg
as Attorney-in-Fact
C-5
INDEX OF EXHIBITS
(11) Opinion and Consent of Dechert regarding the issuance of shares.
(12) Form of opinion of Dechert regarding tax matters.