AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON SEPTEMBER 4, 2002
REGISTRATION NOS. 333-
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 October 4,
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
<Table>
<Caption>
Form N-14 Prospectus/Proxy
Item No. Statement Caption
- --------- -----------------
Part A
Item 1. Beginning of Registration Cover Page
Statement and Outside
Front Cover Page of
Prospectus
Item 2. Beginning and Outside Cover Page
Back Cover Page of
Prospectus
Item 3. Fee Table, Synopsis Summary
Information and Risk
Factors
Item 4. Information About the Letter to Shareholders;
Transaction Common Questions and Answers
About the Proposed
Reorganization; Summary;
Reasons for the
Reorganization; Information
About the Reorganization
Item 5. Information About the Letter to Shareholders;
Registrant Common Questions and Answers
About the Proposed
Reorganization; Summary;
Comparison of Investment
Objectives and Policies;
Information About Management
of the Money Market Fund and
the Cash Investment Fund;
Additional Information About
the Money Market Fund and the
Cash Investment Fund
Item 6. Information About the Summary; Comparison of
Company Being Acquired Investment Objectives and
Policies; Information about
Management of the Money
Market Fund and the Cash
Investment Fund; Additional
Information About the Money
Market Fund and the Cash
Investment Fund
</Table>
<Table>
<Caption>
Form N-14 Prospectus/Proxy
Item No. Statement Caption
- --------- -----------------
Item 7. Voting Information Voting Information
Item 8. Interest of Certain Financial Highlights
Persons and Experts
Item 9. Additional Information Not Applicable
Required for Reoffering
by Persons Deemed to be
Underwriters
</Table>
<Table>
Statement of Additional
Information Caption
-----------------------------
<Caption>
Part B
------
- --------- -----------------
Item 10. Cover Page Cover Page
Item 11. Table of Contents Not Applicable
Item 12. Additional Information Statement of Additional
About the Registrant Information of The Munder
Funds dated October 31,
2001(1)
Item 13. Additional Information Statement of Additional
About the Company Being Information of The Munder
Acquired Funds dated October 31,
2001(1)
Item 14. Financial Statements Annual Report of The Munder
Funds (Class A, B, C and Y)
for fiscal year ended June
30, 2002(2)
Part C
Item 15. Indemnification
Item 16. Exhibits
Item 17. Undertakings
</Table>
- ------------------------------------
(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, and Y) on Form N-30D filed August 28, 2002 (File
No. 811-07346).
THE MUNDER FUNDS, INC.
MUNDER MONEY MARKET FUND
480 PIERCE STREET
BIRMINGHAM, MICHIGAN 48009
(800) 239-3334
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD DECEMBER 11, 2002
Dear Shareholder:
Please take note that a SPECIAL MEETING OF SHAREHOLDERS OF THE MUNDER MONEY
MARKET FUND, a series of The Munder Funds, Inc. ("Company"), will be held on
December 11, 2002, at the offices of Munder Capital Management, 480 Pierce
Street, Birmingham, Michigan 48009, at 10:00 a.m., Eastern time ("Meeting").
The Board of Directors ("Board") of the Company has proposed that the
Munder Money Market Fund ("Money Market Fund") be reorganized with and into the
Munder Cash Investment Fund ("Cash Investment 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 Money
Market Fund approve the Agreement and Plan of Reorganization ("Reorganization
Agreement") described in the accompanying materials, all of the assets of the
Money Market Fund will be exchanged for an equivalent dollar amount of shares of
the Cash Investment Fund on or about December 13, 2002 ("Reorganization"). The
shares of the Cash Investment Fund will then be transferred to the shareholders
of the Money Market Fund in complete liquidation of the Money Market 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 Board believes that shareholders of the Money Market Fund will benefit
from the proposed Reorganization. The proposed Reorganization will enable
shareholders of the Money Market Fund to experience higher asset levels in the
combined Cash Investment Fund, which will result in the fixed and relatively
fixed costs associated with operating the Money Market Fund being spread over a
larger asset base, thereby reducing per share expenses paid by Money Market Fund
shareholders. While current
shareholders of the Cash Investment 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 Money Market Fund moves the Cash Investment Fund closer to
achieving certain economies of scale.
THE BOARD STRONGLY URGES YOU TO VOTE FOR APPROVAL OF THE PROPOSED
REORGANIZATION AGREEMENT.
As a result of the Reorganization, the Money Market Fund would be combined
with the Cash Investment Fund and you would become a shareholder of the Cash
Investment Fund, receiving shares of the Cash Investment Fund having an
aggregate net asset value equal to the aggregate net asset value of your
investment in the Money Market 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 Cash Investment Fund, like the Money Market Fund, seeks a high level of
current interest income consistent with maintaining liquidity and stability of
principal. Both the Money Market Fund and the Cash Investment Fund have engaged
Munder Capital Management as both their investment adviser and their
administrator. Both the Money Market Fund and the Cash Investment Fund also have
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 DECEMBER 10, 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,
[JAMES C. ROBINSON SIG]
James C. Robinson
President
The Munder Funds, Inc.
THE MUNDER FUNDS, INC.
MUNDER MONEY MARKET FUND
480 PIERCE STREET
BIRMINGHAM, MICHIGAN 48009
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 11, 2002
To the Shareholders of
Munder Money Market Fund
of The Munder Funds, Inc.
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of the Munder
Money Market Fund ("Money Market Fund"), a series of The Munder Funds, Inc.
("Company"), will be held at the offices of Munder Capital Management, 480
Pierce Street, Birmingham, Michigan 48009, on December 11, 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 Money Market
Fund by the Munder Cash Investment Fund ("Cash Investment Fund"), a
series of The Munder Funds Trust ("Trust"), and the assumption of all
liabilities of the Money Market Fund by the Cash Investment Fund in
exchange for shares of the Cash Investment Fund and the subsequent
liquidation of the Money Market Fund; and
(2) To transact such other business as may properly come before the Meeting
or any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on October 1, 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.
3
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 Directors,
[/s/ Stephen J. Shenkenberg]
Stephen J. Shenkenberg
Secretary
4
PROXY STATEMENT/PROSPECTUS DATED OCTOBER 7, 2002
THE MUNDER FUNDS, INC.
480 PIERCE STREET
BIRMINGHAM, MICHIGAN 48009
(800) 239-3334
SPECIAL MEETING OF SHAREHOLDERS OF
MUNDER MONEY MARKET FUND
TO BE HELD DECEMBER 11, 2002
This combined Proxy Statement and Prospectus ("Proxy Statement/
Prospectus") is being furnished in connection with the solicitation of proxies
by the Board of Directors ("Board") of the Munder Money Market Fund ("Money
Market Fund"), a series of The Munder Funds, Inc. ("Company"), for a Special
Meeting of Shareholders of the Money Market Fund ("Meeting"). The Meeting will
be held on December 11, 2002, at 10:00 a.m., Eastern time, at the offices of
Munder Capital Management, 480 Pierce Street, Birmingham, Michigan 48009.
At the Meeting, shareholders of the Money Market 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 Money Market
Fund by the Munder Cash Investment Fund ("Cash Investment Fund"), a
series of The Munder Funds Trust ("Trust"), and the assumption of all
liabilities of the Money Market Fund by the Cash Investment Fund in
exchange for shares of the Cash Investment Fund and the subsequent
liquidation of the Money Market 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 Money
Market Fund to approve an Agreement and Plan of Reorganization ("Reorganization
Agreement"). The Reorganization Agreement contemplates the transfer of all of
the assets of the Money Market Fund to the Cash Investment Fund and the
assumption by the Cash Investment Fund of all of the liabilities of the Money
Market Fund in exchange for shares of the Cash Investment Fund having an
aggregate value equal to the net asset value of the Money Market Fund
("Reorganization"). The
5
Money Market Fund would then distribute to its shareholders the portion of the
shares of the Cash Investment Fund to which each such shareholder is entitled.
This would result in a liquidation of the Money Market Fund.
Under the proposed Reorganization Agreement, each shareholder of the Money
Market Fund would be entitled to receive shares of the Cash Investment Fund
having an aggregate value equal to the aggregate value of the shares of the
Money Market 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 Money Market Fund
are being asked to approve a transaction that will result in their holding
shares of the Cash Investment Fund, this Proxy Statement also serves as a
Prospectus for the Cash Investment Fund.
If the Reorganization Agreement is approved by shareholders of the Money
Market Fund, holders of Class A, Class B, Class C and Class Y shares of the
Money Market Fund will receive Class A, Class B, Class C and Class Y shares,
respectively, of the Cash Investment Fund. Subsequent to the Reorganization, any
contingent deferred sales charge ("CDSC") that applied to a shareholder's Class
B or Class C shares of the Money Market 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 C shares of the Money Market 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 Money Market Fund is a diversified series of the Company. The Money
Market Fund's goal is to provide as high a level of current interest income as
is consistent with maintaining liquidity and stability of principal. The Money
Market Fund pursues its goal by investing in a broad range of U.S.
dollar-denominated money market instruments. The Money Market Fund invests
solely in U.S. dollar-denominated debt securities with remaining maturities of
13 months or less and maintains an average dollar-weighted portfolio maturity of
90 days or less.
6
The Cash Investment Fund is a diversified series of the Trust. The Cash
Investment Fund's goal is to provide as high a level of current interest income
as is consistent with maintaining liquidity and stability of principal. The Cash
Investment Fund pursues its goal by investing in a broad range of U.S.
dollar-denominated money market instruments. The Cash Investment Fund invests
solely in U.S. dollar-denominated debt securities with remaining maturities of
13 months or less and maintains an average dollar-weighted portfolio maturity of
90 days or less. See "Comparison of Investment Objectives and Policies" in this
Proxy Statement/Prospectus.
Munder Capital Management ("MCM") serves as investment adviser for the
Money Market Fund and the Cash Investment Fund. MCM is described in more detail
under "Information About Management of the Money Market Fund and the Cash
Investment Fund."
This Proxy Statement/Prospectus, which should be retained for future
reference, sets forth concisely the information about the Cash Investment Fund
that a prospective investor should know before investing. A Statement of
Additional Information dated October 7, 2002 relating to this Proxy
Statement/Prospectus and the Reorganization is incorporated 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 prospectuses, Statements of Additional
Information or 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 Money Market Fund and the Cash
Investment Fund (Class A, Class B, and Class C shares) dated October 31, 2001,
as supplemented on August 15, 2002; (ii) the Prospectus for the Money Market
Fund and the Cash Investment Fund (Class Y shares) dated October 31, 2001, as
supplemented on November 15, 2001, December 21, 2001 and August 15, 2002; (iii)
the Statement of Additional Information for the Money Market Fund and the Cash
Investment Fund dated October 31, 2001, as supplemented on January 24, 2002 and
August 15, 2002; and (iv) the Annual Report for the Money Market Fund and the
Cash Investment Fund (Class A, Class B, Class C and Class Y) dated June 30,
2002. In addition, on August 16, 2002, a post-effective amendment to the
Prospectus and Statement of Additional Information of the Cash Investment Fund
was filed with the SEC in order to add the Class B and Class C shares of that
Fund and is expected to become effective on or about October 15, 2002. Copies of
these
7
documents, the Statement of Additional Information related to this Proxy
Statement/Prospectus and any subsequently released prospectuses, Statements of
Additional Information or shareholder reports are available upon request and
without charge by calling or writing to the Money Market Fund or the Cash
Investment 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.
ALTHOUGH THE MONEY MARKET FUND AND THE CASH INVESTMENT FUND SEEK TO PRESERVE THE
VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY
INVESTING IN THE FUNDS. MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
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.
8
TABLE OF CONTENTS
<Table>
<Caption>
Page
----
COMMON QUESTIONS AND ANSWERS ABOUT THE PROPOSED
REORGANIZATION......................................... 11
SUMMARY.................................................. 14
Proposed Reorganization........................... 14
Investment Objectives, Policies and
Restrictions................................... 15
Performance of the Money Market Fund and the Cash
Investment Fund................................ 15
Summary Comparison of Fees and Expenses........... 17
Example........................................... 21
Purchase and Redemption Procedures................ 23
Exchange Privileges............................... 23
Dividends and Distributions....................... 23
Tax Consequences.................................. 23
Shareholder Voting Rights......................... 24
Appraisal Rights.................................. 24
Risk Factors...................................... 24
REASONS FOR THE REORGANIZATION........................... 25
INFORMATION ABOUT THE REORGANIZATION..................... 26
Reorganization Agreement.......................... 26
Description of the Cash Investment Fund's
Shares......................................... 29
Federal Income Tax Consequences................... 29
Capitalization.................................... 30
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES......... 30
Investment Objectives of Each Fund................ 31
Primary Investments of Each Fund.................. 31
Portfolio Instruments and Practices............... 32
Risk Factors...................................... 34
FINANCIAL HIGHLIGHTS..................................... 35
HOW TO PURCHASE, SELL AND EXCHANGE SHARES................ 40
Purchasing Shares................................. 40
Methods for Purchasing Shares..................... 42
Exchanging Shares................................. 44
Redeeming Shares.................................. 45
Additional Policies for Purchases, Exchanges and
Redemptions.................................... 47
Shareholder Privileges............................ 49
</Table>
9
<Table>
<Caption>
Page
----
Distribution Arrangements......................... 50
12b-1 Fees........................................ 53
Other Information................................. 53
Pricing of Fund Shares............................ 54
Distributions..................................... 54
Federal Tax Consequences.......................... 55
INFORMATION ABOUT MANAGEMENT OF THE MONEY MARKET FUND AND
THE CASH INVESTMENT FUND............................... 56
Investment Adviser................................ 56
COMPARATIVE INFORMATION ON SHAREHOLDERS' RIGHTS.......... 57
Shareholder Liability............................. 57
Voting Rights..................................... 57
Liquidation or Dissolution........................ 58
Liability of Directors/Trustees................... 58
Rights of Inspection.............................. 58
ADDITIONAL INFORMATION ABOUT THE
MONEY MARKET FUND AND THE CASH INVESTMENT FUND......... 59
OTHER BUSINESS........................................... 60
VOTING INFORMATION....................................... 60
Proxy Solicitation................................ 60
Quorum............................................ 61
Vote Required..................................... 61
Effect of Abstentions and Broker "Non-Votes"...... 62
Adjournments...................................... 62
Share Information................................. 63
LEGAL MATTERS............................................ 64
Exhibit A: Agreement and Plan of Reorganization.......... A-1
</Table>
10
COMMON QUESTIONS AND ANSWERS
ABOUT THE PROPOSED REORGANIZATION
Q. HOW WILL THE REORGANIZATION AFFECT ME?
A. The assets of the Money Market Fund will be combined with those of the Cash
Investment Fund and you will become a shareholder of the Cash Investment
Fund. Following the Reorganization, you will receive shares of the Cash
Investment Fund that are equal in value to the shares of the Money Market
Fund that you held immediately prior to the closing of the Reorganization.
(Shareholders of Class A shares, Class B shares, Class C shares and Class Y
shares of the Money Market Fund will receive Class A shares, Class B shares,
Class C shares and Class Y shares, respectively, of the Cash Investment
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 Money Market Fund and the Cash Investment Fund separately. We believe
the Reorganization will benefit shareholders of the Money Market Fund
without adversely impacting shareholders of the Cash Investment Fund.
Shareholders of the Money Market Fund, especially the Class B and Class C
shareholders, have recently experienced disappointingly low yields. Although
the low yields can primarily be attributed to the temporarily declining
interest-rate environment, we believe the Cash Investment Fund is in a
better position to weather adverse changes in market conditions now and in
the future. In addition, the Money Market Fund is a relatively small fund
with a high number of small accounts and a slow growth rate. All of these
factors drive up the Fund's expense ratio. Without a significant increase in
assets, yields will continue to suffer. If yields remain low, investors will
seek other higher yielding alternatives and expense ratios will likely rise,
causing yields to drop even further. Accordingly, we feel merging the Money
Market Fund into the Cash Investment Fund would be in the best interests of
the Money Market Fund's shareholders.
The Money Market Fund and the Cash Investment Fund have identical 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.
11
Combining the assets of the Funds is intended to provide various benefits
to shareholders of the Money Market Fund who become shareholders of the
Cash Investment Fund (as well as to existing and future investors of the
Cash Investment Fund). For example, the proposed Reorganization will enable
shareholders of the Money Market Fund to experience higher asset levels in
the combined Cash Investment Fund, which will result in the fixed and
relatively fixed costs associated with operating the Money Market Fund,
such as transfer agency, accounting and printing expenses, being spread
over a larger asset base, thereby reducing per share expenses paid by Money
Market Fund shareholders. It is not anticipated that current shareholders
of the Cash Investment 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 Money
Market Fund moves the Cash Investment Fund closer to achieving certain
economies of scale. (See also the next 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 CASH INVESTMENT FUND COMPARE TO THOSE PAYABLE
BY THE MONEY MARKET FUND?
A. Both the management fees and the total per share operating expenses of the
Cash Investment Fund are lower than those of the Money Market 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 Money Market Fund will be
exchanged for shares of the indicated class of the Cash Investment 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.
12
Q. WHO WILL SERVE AS INVESTMENT ADVISER AND PROVIDE OTHER SERVICES TO THE CASH
INVESTMENT FUND?
A. The Cash Investment Fund has the same investment adviser (MCM), the same
administrator (also MCM) and the same distributor (Funds Distributor, Inc.)
as the Money Market 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. Accordingly, shareholders will not recognize
taxable gain or loss as a result of the Reorganization. As a condition to
the closing of the Reorganization, the Money Market 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 and Class Y shares of the Money
Market Fund may, either before or after the Reorganization, exchange their
shares for shares of the same class of other funds of the Company, the
Trust and The Munder Framlington Funds Trust ("Munder Funds"), subject to
certain restrictions described in the prospectus 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.
13
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 August 13, 2002, the Board approved the
Reorganization Agreement. Subject to the approval of the shareholders of the
Money Market Fund, the Reorganization Agreement provides for:
- the transfer of all of the assets of the Money Market Fund to the Cash
Investment Fund and the assumption by the Cash Investment Fund of all of
the liabilities of the Money Market Fund in exchange for shares of the
Cash Investment Fund having an aggregate value equal to the assets and
liabilities of the Money Market Fund;
- the distribution to each of the shareholders of the Money Market Fund of
shares of the Cash Investment Fund having an aggregate net asset value
equal to the aggregate net asset value of the shares of the Money Market
Fund held by that shareholder; and
- the complete liquidation of the Money Market Fund.
We expect the Reorganization to be effective upon the close of business on
December 13, 2002, or on a later date as the parties may agree ("Closing Date").
As a result of the Reorganization, each shareholder of the Money Market Fund
will become the owner of the number of full and fractional shares of the Cash
Investment Fund having an aggregate net asset value equal to the aggregate net
asset value of the shareholder's Money Market Fund shares as of the close of
business on the Closing Date. Shareholders of Class A shares, Class B shares,
Class C shares and Class Y shares of the Money Market Fund will receive Class A
shares, Class B shares, Class C shares and Class Y shares, respectively, of the
Cash Investment Fund. See "Information About the Reorganization" below.
For the reasons set forth below under "Reasons for the Reorganization," the
Board of Directors of the Company, including all of the Directors who are not
"interested persons" (as that term is defined in the Investment Company Act of
1940, as amended ("1940 Act")) of the Company ("Independent Directors"), has
concluded that the Reorganization would be in the best interests of the
shareholders of the
14
Money Market Fund and that the interests of the Money Market 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
Money Market 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
Cash Investment Fund.
Approval of the Reorganization will require the affirmative vote of the
holders of a majority of the outstanding shares of the Money Market Fund with
all classes voting together and not by class. See "Voting Information."
INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
The Money Market Fund and the Cash Investment Fund have identical
investment objectives and policies and have substantially similar investment
restrictions. The goal of both the Money Market Fund and the Cash Investment
Fund is to provide as high a level of current interest income as is consistent
with maintaining liquidity and stability of principal.
Each Fund pursues its goal by investing in a broad range of U.S.
dollar-denominated money market instruments. Each Fund invests solely in U.S.
dollar-denominated debt securities with remaining maturities of 13 months or
less and maintains an average dollar-weighted portfolio maturity of 90 days or
less.
PERFORMANCE OF THE MONEY MARKET FUND AND THE CASH INVESTMENT FUND
The bar charts and tables that follow give some indication of the risk of
an investment in the Funds. The bar charts show each Fund's performance for each
calendar year since inception. The table shows the Funds' average annual total
returns for different calendar periods over the life of each Fund. When you
consider this information, please remember the Funds' performance in past years
is not necessarily an indication of how the Funds will perform in the future.
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 and Class C shares, net of any sales charges (loads) and
shareholder servicing fee/12b-1 fees would have been substantially similar to
that of the Class Y shares of the Funds because the
15
shares are invested in the same portfolio of securities and have the same
portfolio management. However, the performance of the Class A, Class B and Class
C shares would have been lower than that of the Class Y shares because of the
higher fees and expenses of those classes of shares.
CASH INVESTMENT FUND CLASS Y
Total Return (%)
(per calendar year)
CASH INVESTMENT FUND CLASS Y GRAPHIC
YEAR TO DATE THROUGH JUNE 30, 2002: 0.84%
BEST QUARTER: 1.62% (quarter ended March 31, 1991)
WORST QUARTER: 0.54% (quarter ended December 31, 2001)
MONEY MARKET FUND CLASS Y
Total Return (%)
(per calendar year)
MONEY MARKET FUND CLASS Y GRAPHIC
YEAR TO DATE THROUGH JUNE 30, 2002: 0.65%
BEST QUARTER: 1.52% (quarter ended September 30, 2000)
WORST QUARTER: 0.48% (quarter ended December 31, 2001)
16
The table below shows what the average annual total returns each Fund would
have been for certain periods.
AVERAGE ANNUAL TOTAL RETURN
(FOR THE PERIODS ENDED DECEMBER 31, 2001)
<Table>
<Caption>
- -----------------------------------------------------------------------------------------
SINCE
INCEPTION
SINCE INCEPTION OF THE CASH
OF THE MONEY INVESTMENT
1 YEAR 5 YEARS 10 YEARS MARKET FUND(1) FUND(2)
- -----------------------------------------------------------------------------------------
Money Market Fund(1) 3.74% 4.86% -- 4.67% --
- -----------------------------------------------------------------------------------------
Cash Investment
Fund(2) 3.82% 5.02% 4.55% -- 4.88%
- -----------------------------------------------------------------------------------------
</Table>
- ------------------------------------
(1) The Money Market Fund commenced operations on August 18, 1993.
(2) The Cash Investment Fund commenced operations on March 14, 1990.
You may call 1-800-438-5789 to obtain each Fund's current 7-day yield.
SUMMARY COMPARISON OF FEES AND EXPENSES
The following tables compare the fees and expenses of each class of the
Money Market Fund and the Cash Investment 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.
17
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 Money
Market Fund calculated at the Fund's fiscal year end, June 30, 2002.
- Column 2 reflects the actual fees and expenses of each class of the Cash
Investment Fund calculated at the Fund's fiscal year end, June 30, 2002.
- Column 3 reflects the pro forma fees and expenses of the Cash Investment
Fund as if the Reorganization had occurred on June 30, 2002. These pro
forma fees and expenses have been adjusted to reflect any expected
savings that may occur as a result of the Funds being combined in the
Reorganization.
<Table>
<Caption>
MONEY CASH
MARKET INVESTMENT COMBINED
FUND FUND PRO FORMA
CLASS A SHARES ------ ---------- ---------
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(a) None(b) 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......................... 0.40% 0.35% 0.35%
Distribution and/or Service (12b-1)
Fees................................. 0.25% 0.25% 0.25%
Other Expenses......................... 0.41% 0.16% 0.17%
Total Annual Fund Operating Expenses..... 1.06% 0.76% 0.77%
</Table>
18
<Table>
<Caption>
MONEY CASH
MARKET INVESTMENT COMBINED
FUND FUND (C) PRO FORMA
CLASS B SHARES ------ ---------- ---------
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%(d) 5%(d) 5%(d)
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......................... 0.40% 0.35% 0.35%
Distribution and/or Service (12b-1)
Fees................................. 1.00% 1.00% 1.00%
Other Expenses......................... 0.41% 0.16% 0.17%
Total Annual Fund Operating Expenses..... 1.81% 1.51% 1.52%
</Table>
<Table>
<Caption>
MONEY CASH
MARKET INVESTMENT COMBINED
FUND FUND (C) PRO FORMA
CLASS C SHARES ------ ---------- ---------
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)... 1%(e) 1%(e) 1%(e)
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......................... 0.40% 0.35% 0.35%
Distribution and/or Service (12b-1)
Fees................................. 1.00% 1.00% 1.00%
Other Expenses......................... 0.41% 0.16% 0.17%
Total Annual Fund Operating Expenses..... 1.81% 1.51% 1.52%
</Table>
19
<Table>
<Caption>
MONEY CASH
MARKET INVESTMENT COMBINED
FUND FUND PRO FORMA
CLASS Y SHARES ------ ---------- ---------
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......................... 0.40% 0.35% 0.35%
Other Expenses......................... 0.41% 0.16% 0.17%
Total Annual Fund Operating Expenses..... 0.81% 0.51% 0.52%
</Table>
- ------------------------------------
(a) A contingent deferred sales charge (CDSC) is a one-time fee charged at the
time of redemption. If you redeem Class A shares of the Money Market Fund
that were acquired through an exchange from another Munder Fund or Funds
that you purchased as part of an investment of $1,000,000 or more, and your
redemption occurs within one year of your original Munder Fund purchase(s),
a 1% CDSC will apply upon redemption. Any CDSC on Class A shares of the
Money Market Fund that was applicable on the Reorganization Date will
continue to apply after the Reorganization and will continue to age from the
date of the original Munder Fund purchase(s).
(b) Effective October 31, 2002, if you redeem Class A shares of the Cash
Investment Fund that were acquired after October 31, 2002 through an
exchange from another Munder Fund or Funds that you purchased as part of an
investment of $1,000,000 or more, and your redemption occurs within one year
of your original Munder Fund purchase(s), a 1% CDSC will apply upon
redemption. For purposes of this CSDC, Class A shares of the Cash Investment
Fund received in the Reorganization will continue to age from the date of
the original Munder Fund purchase(s) rather than from the date the Class A
shares of the Money Market Fund were acquired.
(c) Expenses for Class B shares and Class C shares, which had not commenced
operations as of the date of this Proxy/Prospectus, are based on historical
information for Class A shares.
(d) The CDSC payable upon redemption of Class B shares declines over time.
(e) The CDSC applies to redemptions of Class C shares within one year of
purchase.
20
EXAMPLE
This Example is intended to help you compare the cost of investing in each
Fund and the combined Cash Investment 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. 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
<Table>
<Caption>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
MONEY MARKET FUND $108 $337 $585 $1,294
CASH INVESTMENT FUND $ 78 $243 $422 $ 942
PRO FORMA: THE FUNDS COMBINED $ 79 $246 $428 $ 954
</Table>
Class B Shares Assuming You Sold Your Shares at the End of the Period
<Table>
<Caption>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
MONEY MARKET FUND $684 $869 $1,180 $1,930*
CASH INVESTMENT FUND $654 $777 $1,024 $1,599*
PRO FORMA: THE FUNDS COMBINED $655 $780 $1,029 $1,610*
</Table>
- ------------------------------------
* Reflects conversion of Class B shares to Class A shares (which pay lower
ongoing expenses) approximately eight years after the date of original
purchase.
21
Class B Shares Assuming You Stayed in the Fund
<Table>
<Caption>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
MONEY MARKET FUND $184 $569 $980 $1,930*
CASH INVESTMENT FUND $154 $477 $824 $1,599*
PRO FORMA: THE FUNDS COMBINED $155 $480 $829 $1,610*
</Table>
- ------------------------------------
* 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 C Shares Assuming You Sold Your Shares at the End of the Period
<Table>
<Caption>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
MONEY MARKET FUND $284 $569 $980 $2,127
CASH INVESTMENT FUND $254 $477 $824 $1,802
PRO FORMA: THE FUNDS COMBINED $255 $480 $829 $1,813
</Table>
Class C Shares Assuming You Stayed in the Fund
<Table>
<Caption>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
MONEY MARKET FUND $184 $569 $980 $2,127
CASH INVESTMENT FUND $154 $477 $824 $1,802
PRO FORMA: THE FUNDS COMBINED $155 $480 $829 $1,813
</Table>
Class Y Shares
<Table>
<Caption>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
MONEY MARKET FUND $83 $259 $450 $1,002
CASH INVESTMENT FUND $52 $164 $285 $ 640
PRO FORMA: THE FUNDS COMBINED $53 $167 $291 $ 653
</Table>
Following the Reorganization and in the ordinary course of business as a
mutual fund, certain holdings of the Money Market Fund that are transferred to
the Cash Investment Fund in connection with the Reorganization may be sold. Any
sales of the Money Market Fund's holdings may result in additional transaction
costs for the Cash Investment 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 Cash Investment Fund.
22
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 Money Market Fund and the Cash Investment 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 shares of each Fund for Class
C or Class II shares of other Munder Funds, based on their relative net asset
values ("NAVs"). Class B and Class C 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 Money Market Fund and the Cash Investment Fund each declare dividends
from net investment income daily and pay them monthly. 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 respective Fund at net asset value, without a sales charge or CDSC, unless
the shareholder elects to be paid in cash. Following the Reorganization, Money
Market Fund shareholders that have elected to receive distributions in cash will
continue to receive distributions in such manner from the Cash Investment 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 Money Market Fund will have
received from counsel an opinion to the effect that the
23
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 Money Market Fund, a series of a Maryland corporation, nor the
Cash Investment Fund, a series of a Massachusetts business trust, holds annual
shareholder meetings. The 1940 Act requires that a shareholder meeting be called
for the purpose of electing Directors/ Trustees at such time as fewer than a
majority of Directors/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 Cash Investment Fund do not have
appraisal rights in connection with a combination or acquisition of the assets
of another entity. Under the laws of the State of Maryland and the Company's
Articles of Incorporation, shareholders of the Money Market Fund do not have
appraisal rights in connection with a combination or acquisition of the assets
of the Money Market Fund by another entity.
RISK FACTORS
Because the Money Market Fund and the Cash Investment Fund invest in
identical types of securities, investment in these Funds involves identical
investment risks. See "Comparison of Investment Objectives and Policies" herein.
Credit (or Default) Risk. An issuer of a security may default on its
payment obligations. Also, an issuer may suffer adverse changes in its financial
condition that could lower the credit quality of a security, leading to greater
volatility in the price of the security and in shares of a Fund. A change in the
quality rating of a bond can also affect the bond's liquidity and make it more
difficult for the Fund to sell.
Interest Rate Risk. An increase in prevailing interest rates will cause
fixed income securities held by the Fund to decline in value. When interest
rates fall, the reverse is true. Longer-term bonds are generally more sensitive
to interest rates changes than shorter-term bonds. Generally, the
24
longer the average maturity of the bonds held by each Fund, the more the Fund's
share price will fluctuate in response to interest rate changes.
Prepayment Risk. The Funds may experience losses when an issuer exercises
its right to pay principal on an obligation held by the Fund (such as an
asset-backed security or mortgage-backed security) earlier than expected. This
may happen during a period of declining interest rates. Under these
circumstances, each Fund may be unable to recoup all of its initial investment
and will suffer from having to reinvest in lower yielding securities. The loss
of higher yielding securities and the reinvestment at lower interest rates can
reduce each Fund's income, total return and share price. Rates of prepayment,
faster or slower than expected, could reduce each Fund's yield, increase the
volatility of the Fund and/or cause a decline in net asset value. Certain types
of mortgage-backed securities, such as collateralized mortgage obligations, may
be more volatile and less liquid than other types.
REASONS FOR THE REORGANIZATION
Currently, the Money Market Fund and the Cash Investment Fund are
investment portfolios of separate open-end management investment companies, and
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
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 the shareholders of the Money Market Fund to pursue
their investment goals in a larger fund that has investment objectives, policies
and restrictions that are identical with those of the Money Market 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 also not be as
significantly affected in the event of high levels of shareholder redemptions.
In addition, the larger aggregate net assets should enable the combined fund
over the long term to obtain the
25
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.
In light of the foregoing considerations, the Board of Directors of the
Company unanimously concluded that the Reorganization is in the best interests
of the Money Market Fund and its shareholders and that the Reorganization would
not result in a dilution of the interests of the Money Market Funds
shareholders. Similarly, the Board of Trustees of the Trust also approved the
Reorganization and determined that it is in the best interests of the Cash
Investment Fund and its shareholders to acquire the assets of the Money Market
Fund and that the interests of the Cash Investment 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 Cash Investment Fund will acquire all of the assets, subject to all of
the liabilities, of the Money Market Fund in exchange for shares of the Cash
Investment 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 Money
Market Fund and the net asset value per share of the Cash Investment Fund will
be determined by dividing the combined Cash Investment Fund's assets, less
liabilities, by the total number of its outstanding shares.
Both the Money Market Fund and the Cash Investment Fund will utilize State
Street Bank and Trust Company to determine the value of their respective
portfolio securities. The Money Market Fund and the Cash Investment Fund also
will use the same independent pricing services to determine the value of each
security so that State Street Bank and Trust
26
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 Cash Investment Fund you
will receive in the Reorganization will be equal in value to the value of your
Money Market 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 Money Market 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 Cash Investment Fund
received by the Money Market Fund in the Reorganization. We will accomplish the
liquidation and distribution with respect to each class of the Money Market
Fund's shares by the transfer of the Cash Investment Fund shares then credited
to the account of the Money Market Fund on the books of the Cash Investment Fund
to open accounts on the share records of the Cash Investment Fund in the names
of the Money Market Fund shareholders. The aggregate net asset value of Class A,
Class B, Class C and Class Y Cash Investment Fund shares to be credited to Class
A, Class B, Class C and Class Y Money Market 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 Money Market Fund
of the corresponding class owned by Money Market Fund shareholders on the
Closing Date. All issued and outstanding shares of the Money Market Fund will
simultaneously be canceled on the books of the Money Market Fund, although share
certificates representing interests in Class A, Class B, Class C and Class Y
shares of the Money Market Fund will represent a number of Class A, Class B,
Class C and Class Y shares, respectively, of Cash Investment Fund shares after
the Closing Date. The Cash Investment Fund will not issue certificates
representing the Class A, Class B, Class C and Class Y Cash Investment Fund
shares issued in connection with such exchange.
After such distribution, the Company will take all necessary steps under
Maryland law, the Company's Articles of Incorporation and any other applicable
law to effect a complete dissolution of the Money Market Fund.
The Board of Directors of the Company has determined, with respect to the
Money Market Fund, and the Board of Trustees of the Trust has
27
determined, with respect to the Cash Investment 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 Reorganization, including the cost of a proxy soliciting agent
that has been retained.
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 Money Market Fund, if circumstances
should develop that, in the Board's opinion, make proceeding with the
Reorganization inadvisable. The Reorganization Agreement provides that the
Company 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 Money Market Fund; and (ii) the Company receive the opinion of the
Company'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 Money Market Fund, with all classes voting
together and not by class. See "Voting Information." If the Reorganization
Agreement is not approved by the shareholders of the Money Market Fund, or is
not consummated for any other reason, the Board will consider other possible
courses of action.
THE BOARD OF DIRECTORS OF THE COMPANY, INCLUDING ALL OF THE INDEPENDENT
DIRECTORS, HAS UNANIMOUSLY RECOMMENDED APPROVAL OF THE REORGANIZATION AGREEMENT.
Shareholders of the Money Market Fund as of the Record Date will receive
shares of the Cash Investment 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, except for Class B shares, as more fully described below in
"How to Purchase, Sell and Exchange Shares."
28
DESCRIPTION OF THE CASH INVESTMENT FUND'S SHARES
Full and fractional shares of the respective class of shares of beneficial
interest of the Cash Investment Fund will be issued to the Money Market Fund's
shareholders in accordance with the procedures detailed in the Reorganization
Agreement. The Cash Investment Fund no longer issues share certificates. The
shares of the Cash Investment Fund to be issued to Money Market 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 Cash Investment Fund, the Money Market
Fund, or the shareholders of the Money Market Fund. As a condition to the
closing of the Reorganization, the Money Market Fund will receive a legal
opinion to that effect. That opinion will be based upon certain representations
and warranties made by the Money Market Fund and the Cash Investment Fund and
certifications received from each of the Funds and certain of their service
providers.
Immediately prior to the Reorganization, the Money Market 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 Money Market 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
Money Market Fund's shareholders.
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.
29
CAPITALIZATION
The following table shows the capitalization of the Money Market Fund and
the Cash Investment Fund as of June 30, 2002, and on a pro forma basis as of
that date, giving effect to the proposed acquisition of assets at net asset
value.
<Table>
<Caption>
AS OF JUNE 30, 2002
------------------------------------------------
MONEY MARKET CASH INVESTMENT PRO FORMA AFTER
CLASS A SHARES FUND FUND REORGANIZATION
-------------- ------------ --------------- ---------------
Net Assets.............. $11,703,599 $123,370,332 135,073,931
Net asset value per
share................. $1.00 $1.00 $1.00
Shares outstanding...... 11,706,424 123,370,517 135,076,941
</Table>
<Table>
<Caption>
AS OF JUNE 30, 2002
------------------------------------------------
MONEY MARKET CASH INVESTMENT PRO FORMA AFTER
CLASS B SHARES FUND FUND REORGANIZATION
-------------- ------------ --------------- ---------------
Net Assets.............. $35,448,780 N/A $ 35,448,780
Net asset value per
share................. $1.00 $1.00(a) $1.00
Shares outstanding...... 35,450,379 N/A 35,450,379
</Table>
<Table>
<Caption>
AS OF JUNE 30, 2002
------------------------------------------------
MONEY MARKET CASH INVESTMENT PRO FORMA AFTER
CLASS C SHARES FUND FUND REORGANIZATION
-------------- ------------ --------------- ---------------
Net Assets.............. $12,988,809 N/A $ 12,988,809
Net asset value per
share................. $1.00 $1.00(a) $1.00
Shares outstanding...... 12,989,462 N/A 12,989,462
</Table>
<Table>
<Caption>
AS OF JUNE 30, 2002
------------------------------------------------
MONEY MARKET CASH INVESTMENT PRO FORMA AFTER
CLASS Y SHARES FUND FUND REORGANIZATION
-------------- ------------ --------------- ---------------
Net Assets.............. $12,459,328 $251,633,834 $264,093,162
Net asset value per
share................. $1.00 $1.00 $1.00
Shares outstanding...... 12,460,303 251,636,422 264,096,725
</Table>
- ------------------------------------
(a) The net asset values per share for Class B and Class C shares, which had not
commenced operations as of the date of this Proxy/Prospectus, are estimated
based on the net asset value per share for Class A shares.
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES
The following discussion comparing investment objectives, policies and
restrictions of the Money Market Fund and the Cash Investment Fund is based upon
and qualified in its entirety by the respective investment
30
objectives, policies and restrictions sections of the prospectuses of the Money
Market Fund and the Cash Investment Fund dated October 31, 2001 with respect to
all classes of shares, as supplemented August 15, 2002 with respect to Class A,
Class B and Class C shares and November 15, 2001, December 21, 2001 and August
15, 2002 with respect to Class Y shares. In addition, on August 16, 2002, a
post-effective amendment to the Prospectus of the Cash Investment Fund was filed
with the SEC in order to add the Class B and Class C shares of that Fund and is
expected to become effective on or about October 15, 2002.
INVESTMENT OBJECTIVES OF EACH FUND
The investment objective of both the Money Market Fund and the Cash
Investment Fund is to provide as high a level of current interest income as is
consistent with maintaining liquidity and stability of principal. However, the
Money Market Fund's investment objective is "fundamental" and cannot be changed
without a shareholder vote. The Cash Investment Fund's investment objective may
be changed by the Board without shareholder approval. Shareholders of the Cash
Investment Fund would be notified of any such change.
PRIMARY INVESTMENTS OF EACH FUND
Each Fund seeks to achieve its investment objective by investing in a broad
range of U.S. dollar-denominated money market instruments. Each Fund invests
solely in U.S. dollar-denominated debt securities with remaining maturities of
13 months or less and maintain an average dollar-weighted portfolio maturity of
90 days or less. Each Fund's investments may include fixed and variable rate
securities.
As of June 30, 2002, each Fund's portfolio was invested in the same four
basic types of securities in the following percentages:
<Table>
<Caption>
MONEY MARKET CASH INVESTMENT
TYPE OF SECURITY FUND FUND
---------------- ------------ ---------------
Commercial Paper............... 52.35% 56.45%
Certificates of Deposit........ 23.38% 23.08%
Corporate Bonds and Notes...... 0.87% 4.71%
Repurchase Agreements.......... 23.40% 15.16%
------- -------
100.00% 100.00%
</Table>
31
PORTFOLIO INSTRUMENTS AND PRACTICES
Asset-Backed Securities. Subject to applicable maturity and credit
criteria, each Fund may purchase securities backed by mortgages, installment
sales contracts, credit card receivables or other assets. Mortgage-backed
securities carry additional risks. The price and yield of these securities
typically assume that the securities will be redeemed at a given time before
maturity. When interest rates fall substantially, these securities are generally
redeemed early because the underlying mortgages are often prepaid. In that case
a Fund would have to reinvest the money at a lower rate. In addition, the price
or yield of mortgage-backed securities may fall if they are redeemed later than
expected.
Foreign Securities. Each Fund may invest up to 25% of total assets in U.S.
dollar denominated money market securities of foreign issuers, which include
securities issued by foreign companies and foreign governments and their
agencies, instrumentalities or political subdivisions and supranational
organizations. Investments by a Fund in foreign securities involve risks in
addition to those of U.S. securities, in part because of higher political and
economic risks and because there is less public information available about
foreign companies.
Guaranteed Investment Contracts. Each Fund may invest in guaranteed
investment contracts. Guaranteed investment contracts are agreements of a Fund
to make payments, generally to an insurance company's general account, in
exchange for a minimum level of interest based on an index. Guaranteed
investment contracts are considered illiquid investments and are acquired
subject to a Fund's limitation on illiquid investments.
When-Issued Securities, Delayed Delivery Transactions and Forward
Commitments. A purchase of "when-issued" securities refers to a transaction made
conditionally because the securities, although authorized, have not yet been
issued. A delayed delivery or forward commitment transaction involves a contract
to purchase or sell securities for a fixed price at a future date beyond the
customary settlement period. Purchasing or selling securities on a when-issued,
delayed delivery or forward commitment basis involves the risk that the value of
the securities may change by the time they are actually issued or delivered.
These transactions also involve the risk that the seller may fail to deliver the
security or cash on the settlement date.
Zero Coupon Bonds. These are securities issued at a discount from their
face value because interest payments are typically postponed until maturity. The
market prices of zero coupon bonds generally are more
32
volatile than the market prices of interest-bearing securities and are likely to
respond to a greater degree to changes in interest rates than interest-bearing
securities having similar maturities and credit quality. A Fund's investments in
zero coupon bonds may require the Fund to sell some of its portfolio securities
to generate sufficient cash to satisfy certain income distribution requirements.
Stripped Securities. These securities are issued by the U.S. Government (or
agency or instrumentality), foreign governments or banks and other financial
institutions. They entitle the holder to receive either interest payments or
principal payments that have been "stripped" from a debt obligation. These
obligations include participations in trusts that hold U.S. Treasury or agency
securities. Stripped securities are very sensitive to changes in interest rates
and to the rate of principal repayments. A rapid or unexpected increase in
mortgage prepayments could severely depress the price of certain stripped
mortgage-backed securities and adversely affect a Fund's total returns.
Securities Lending. Qualified institutions may borrow portfolio securities
on a short-term basis. By reinvesting any cash collateral received in these
transactions, additional income gains or losses may be realized. Securities
lending may represent no more than 33 1/3% of the value of the Money Market
Fund's total assets (including the loan on collateral) and no more than 25% of
the value of the Cash Investment Fund's total assets (including the loan on
collateral). The main risk when lending Fund securities is that if the borrower
fails to return the securities or the invested collateral has declined in value,
a Fund could lose money. Each Fund's securities lending percentage limitation is
a fundamental investment restriction that may not be changed without a
shareholder vote.
Borrowing and Reverse Repurchase Agreements. The Funds can borrow money
from banks and enter into reverse repurchase agreements with banks and other
financial institutions. Reverse repurchase agreements involve the sale of
securities held by a Fund subject to the Fund's agreement to repurchase them at
a mutually agreed upon date and price (including interest). Each Fund may borrow
money in an amount up to 5% of its assets for temporary emergency purposes and
in an amount up to 33 1/3% of its assets to meet redemptions. For each Fund,
this is a fundamental policy which can be changed only by shareholders.
Borrowings and reverse repurchase agreements by a Fund may involve leveraging.
If the securities held by the Fund decline in value while these transactions are
outstanding, the Fund's net asset value will decline in value by proportionately
more than the decline in value of the securities. In addition, reverse
repurchase agreements involve the risks that the interest income
33
earned by the Fund (from the investment of the proceeds) will be less than the
interest expense of the transaction, that the market value of the securities
sold by the Fund will decline below the price the Fund is obligated to pay to
repurchase the securities, and that the securities may not be returned to the
Fund.
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
Both the Money Market Fund and the Cash Investment Fund are subject to the
following principal investment risks:
Credit (or Default) Risk. An issuer of a security may default on its
payment obligations. Also, an issuer may suffer adverse changes in its financial
condition that could lower the credit quality of a security, leading to greater
volatility in the price of the security and in shares of a Fund. A change in the
quality rating of a bond can also affect the bond's liquidity and make it more
difficult for a Fund to sell.
Interest Rate Risk. An increase in prevailing interest rates will cause
fixed income securities held by a Fund to decline in value. When interest rates
fall, the reverse is true. Longer-term bonds are generally more sensitive to
interest rate changes than shorter-term bonds. Generally, the longer the average
maturity of the bonds held by a Fund, the more the Fund's share price will
fluctuate in response to interest rate changes.
Prepayment Risk. A Fund may experience losses when an issuer exercises its
right to pay principal on an obligation held by the Fund (such as an
asset-backed security or mortgage-backed security) earlier than expected. This
may happen during a period of declining interest rates. Under these
circumstances, a Fund may be unable to recoup all of its initial investment and
will suffer from having to reinvest in lower yielding securities. The loss of
higher yielding securities and the reinvestment at lower interest rates can
reduce a Fund's income, total return and share price. Rates of prepayment,
faster or slower than expected, could reduce a Fund's yield, increase the
volatility of a Fund and/or cause a decline in net-asset value. Certain types of
mortgage-backed securities, such as collateralized mortgage obligations, may be
more volatile and less liquid than other types.
34
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help shareholders understand
each Fund's financial performance for the past 5 years. 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 a particular class of the Fund (assuming reinvestment of all
dividends and distributions). The information has been audited by Ernst & Young
LLP, independent auditors. The independent auditors 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.
Financial Highlights for Class B and Class C shares of the Cash Investment Fund
are not provided as those classes had not yet commenced operations as of the
date of this Proxy/Prospectus.
<Table>
<Caption>
CASH INVESTMENT FUND (A)
----------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
6/30/02 6/30/01 6/30/00 6/30/99 6/30/98
CLASS A CLASS A CLASS A CLASS A CLASS A
------- ------- ------- ------- -------
Net asset value, beginning of
period $1.00 $1.00 $1.00 $1.00 $1.00
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.020 0.052 0.050 0.045 0.049
-------- -------- -------- -------- --------
Total from investment
operations 0.020 0.052 0.050 0.045 0.049
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
Dividends from net investment
income (0.020) (0.052) (0.050) (0.045) (0.049)
-------- -------- -------- -------- --------
Total distributions (0.020) (0.052) (0.050) (0.045) (0.049)
-------- -------- -------- -------- --------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
======== ======== ======== ======== ========
TOTAL RETURN (B) 1.97% 5.36% 5.13% 4.58% 5.04%
======== ======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Net assets, end of period (in
000's) $123,370 $117,222 $122,693 $135,705 $133,663
Ratio of operating expenses to
average net assets 0.76% 0.81% 0.80% 0.78% 0.76%
Ratio of net investment income
to average net assets 1.97% 5.20% 5.01% 4.48% 4.92%
Ratio of operating expenses to
average net assets without
expense waivers 0.76% 0.81% 0.80% 0.78% 0.76%
</Table>
- ------------------------------------
(a) The Munder Cash Investment Fund Class A Shares commenced operations on
December 1, 1992.
(b) Total return represents aggregate total return for the period indicated.
35
<Table>
<Caption>
CASH INVESTMENT FUND (A)
----------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
6/30/02 6/30/01 6/30/00 6/30/99 6/30/98
CLASS Y CLASS Y CLASS Y CLASS Y CLASS Y
------- ------- ------- ------- -------
Net asset value, beginning of
period $1.00 $1.00 $1.00 $1.00 $1.00
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.022 0.055 0.053 0.047 0.051
-------- -------- -------- -------- --------
Total from investment
operations 0.022 0.055 0.053 0.047 0.051
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
Dividends from net investment
income (0.022) (0.055) (0.053) (0.047) (0.051)
-------- -------- -------- -------- --------
Total distributions (0.022) (0.055) (0.053) (0.047) (0.051)
-------- -------- -------- -------- --------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
======== ======== ======== ======== ========
TOTAL RETURN (B) 2.23% 5.62% 5.39% 4.84% 5.30%
======== ======== ======== ======== ========
RATIOS TO AVERAGE NET
ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in
000's) $251,634 $203,875 $197,156 $358,125 $327,417
Ratio of operating expenses to
average net assets 0.51% 0.56% 0.55% 0.53% 0.51%
Ratio of net investment income
to average net assets 2.22% 5.45% 5.26% 4.72% 5.17%
Ratio of operating expenses to
average net assets without
expense waivers 0.51% 0.56% 0.55% 0.53% 0.51%
</Table>
- ------------------------------------
(a) The Munder Cash Investment Fund Class Y Shares commenced operations on March
14, 1990.
(b) Total return represents aggregate total return for the period indicated.
36
<Table>
<Caption>
MONEY MARKET FUND (A)
-----------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
6/30/02 6/30/01 6/30/00 6/30/99 6/30/98
CLASS A CLASS A CLASS A CLASS A CLASS A
------- ------- ------- ------- -------
Net asset value, beginning of
period $1.00 $1.00 $1.00 $1.00 $1.00
------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.017 0.051 0.048 0.044 0.048
------- ------- ------- ------- -------
Total from investment operations 0.017 0.051 0.048 0.044 0.048
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment
income (0.017) (0.051) (0.048) (0.044) (0.048)
------- ------- ------- ------- -------
Total distributions (0.017) (0.051) (0.048) (0.044) (0.048)
------- ------- ------- ------- -------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= =======
TOTAL RETURN (B) 1.74% 5.26% 4.86% 4.45% 4.89%
======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Net assets, end of period (in
000's) $11,704 $18,272 $37,245 $17,463 $14,749
Ratio of operating expenses to
average net assets 1.06% 0.92% 0.90% 0.87% 0.89%
Ratio of net investment income to
average net assets 1.77% 5.22% 4.77% 4.36% 4.78%
Ratio of operating expenses to
average net assets without
expense waivers 1.07% 0.92% 0.90% 0.87% 0.89%
</Table>
- ------------------------------------
(a) The Munder Money Market Fund Class A Shares commenced operations on July 3,
1995.
(b) Total return represents aggregate total return for the period indicated.
37
<Table>
<Caption>
MONEY MARKET FUND (A)
-----------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
6/30/02 6/30/01 6/30/00 6/30/99 6/30/98
CLASS B CLASS B CLASS B CLASS B CLASS B
------- ------- ------- ------- -------
Net asset value, beginning of
period $1.00 $1.00 $1.00 $1.00 $1.00
------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.010 0.044 0.040 0.036 0.040
------- ------- ------- ------- -------
Total from investment operations 0.010 0.044 0.040 0.036 0.040
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment
income (0.010) (0.044) (0.040) (0.036) (0.040)
------- ------- ------- ------- -------
Total distributions (0.010) (0.044) (0.040) (0.036) (0.040)
------- ------- ------- ------- -------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= =======
TOTAL RETURN (B) 0.98% 4.48% 4.10% 3.67% 4.09%
======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Net assets, end of period (in
000's) $35,449 $37,018 $25,005 $10,133 $ 658
Ratio of operating expenses to
average net assets 1.81% 1.67% 1.65% 1.62% 1.64%
Ratio of net investment income to
average net assets 1.02% 4.47% 4.02% 3.49% 4.04%
Ratio of operating expenses to
average net assets without
expense waivers 1.82% 1.67% 1.65% 1.62% 1.64%
</Table>
- ------------------------------------
(a) The Munder Money Market Fund Class B Shares commenced operations on February
16, 1994.
(b) Total return represents aggregate total return for the period indicated.
38
<Table>
<Caption>
MONEY MARKET FUND (A)
-----------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
6/30/02 6/30/01 6/30/00 6/30/99 6/30/98
CLASS C CLASS C CLASS C CLASS C CLASS C
------- ------- ------- ------- -------
Net asset value, beginning of
period $1.00 $1.00 $1.00 $1.00 $1.00
------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.010 0.044 0.040 0.036 0.040
------- ------- ------- ------- -------
Total from investment operations 0.010 0.044 0.040 0.036 0.040
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment
income (0.010) (0.044) (0.040) (0.036) (0.040)
------- ------- ------- ------- -------
Total distributions (0.010) (0.044) (0.040) (0.036) (0.040)
------- ------- ------- ------- -------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= =======
TOTAL RETURN (B) 0.98% 4.48% 4.10% 3.68% 4.10%
======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Net assets, end of period (in
000's) $12,989 $12,231 $9,196 $2,324 $ 1
Ratio of operating expenses to
average net assets 1.81% 1.67% 1.65% 1.62% 1.64%
Ratio of net investment income to
average net assets 1.02% 4.47% 4.02% 3.59% 4.03%
Ratio of operating expenses to
average net assets without
expense waivers 1.82% 1.67% 1.65% 1.62% 1.64%
</Table>
- ------------------------------------
(a) The Munder Money Market Fund Class C Shares commenced operations on October
17, 1996.
(b) Total return represents aggregate total return for the period indicated.
39
<Table>
<Caption>
MONEY MARKET FUND (A)
------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
6/30/02 6/30/01 6/30/00 6/30/99 6/30/98
CLASS Y CLASS Y CLASS Y CLASS Y CLASS Y
------- ------- ------- ------- -------
Net asset value, beginning of
period $1.00 $1.00 $1.00 $1.00 $1.00
------- ------- ------- -------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.020 0.054 0.050 0.046 0.050
------- ------- ------- -------- -------
Total from investment operations 0.020 0.054 0.050 0.046 0.050
------- ------- ------- -------- -------
LESS DISTRIBUTIONS:
Dividends from net investment
income (0.020) (0.054) (0.050) (0.046) (0.050)
------- ------- ------- -------- -------
Total distributions (0.020) (0.054) (0.050) (0.046) (0.050)
------- ------- ------- -------- -------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======== =======
TOTAL RETURN (B) 1.99% 5.52% 5.13% 4.71% 5.14%
======= ======= ======= ======== =======
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Net assets, end of period (in
000's) $12,459 $12,730 $27,942 $139,388 $68,689
Ratio of operating expenses to
average net assets 0.81% 0.67% 0.65% 0.62% 0.64%
Ratio of net investment income to
average net assets 2.02% 5.47% 5.02% 4.55% 5.03%
Ratio of operating expenses to
average net assets without
expense waivers 0.82% 0.67% 0.65% 0.62% 0.64%
</Table>
- ------------------------------------
(a) The Munder Money Market Fund Class Y Shares commenced operations on August
18, 1993.
(b) Total return represents aggregate total return for the period indicated.
HOW TO PURCHASE, SELL AND EXCHANGE SHARES
PURCHASING SHARES
Purchase Price of Shares
Class A shares, Class B, Class C, and Class Y shares of the Funds are sold
at the net asset value ("NAV") next determined after a purchase order is
received in proper form.
Broker-dealers or financial advisors (other than the Funds' distributor)
may charge you additional fees for shares you purchase through them.
40
Who May Purchase Class Y Shares
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.
The Cash Investment Fund also issues Class K shares, which have different
sales charges, expense levels and performance. Class K shares are available to
limited types of investors. Call (800) 438-5789 to obtain more information about
that class.
Policies for Purchasing Shares
Investment minimums. The minimum initial investment for Class A, Class B
and Class C 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 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 and Class C 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.
41
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.
Accounts below minimums. If your investment in Class A, Class B or Class C
shares of a Fund does not meet the applicable account minimum (see "Investment
minimums" above), 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 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
Class A, Class B and Class C Shares of the Money Market Fund
You may only purchase Class A, Class B and Class C shares of the Money
Market Fund through an exchange of shares of the corresponding class of another
Munder Fund.
Class A, Class B and Class C Shares of the Cash Investment Fund
You may purchase Class A, Class B and Class C shares of the Cash Investment
Fund:
- By Broker and/or Financial Advisor. Any broker or financial advisor
authorized by the Funds' distributor can sell you shares of the Cash
Investment Fund. 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
42
negotiable bank draft (payable to The 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.
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 or Class C shares
of the Cash Investment Fund at any time using the wire procedures
described above. Note that banks may charge fees for transmitting wires.
- Through the Automatic Investment Plan.
Class Y Shares of the Funds
You may purchase Class Y shares of either the Money Market Fund or the Cash
Investment Fund 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
43
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 shown above for
the Class A, Class B and Class C shares of the Cash Investment Fund. You may
make additional investments in Class Y shares of either Fund at any time using
the wire procedures described above. Note that banks may change fees for
transmitting wires. You may also purchase Class Y shares through the Automatic
Investment Plan.
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 C shares of the Funds for Class C or Class II
shares of other Munder Funds, based on their relative NAVs.
- You may exchange Class A shares of the Cash Investment Fund for Class A,
Class B or Class C shares of other Munder Funds, based on their relative
NAVs.
- Class A shares of the Funds that were (1) acquired through the use of the
exchange privilege and (2) can be traced back to a purchase of shares in
one or more Munder Funds for which a sales charge was paid, can be
exchanged for Class A shares of another Munder Fund at NAV.
- Class B and Class C shares of the Funds 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
44
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, financial
advisor or other financial institution 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.
Please see "How to Purchase, Sell and Exchange Shares -- Distribution
Arrangements" below for information about CDSCs.
Policies for Redeeming Shares
Class A, Class B or Class C 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;
45
- 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 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.
Methods for Redeeming Shares
Class A, Class B or Class C Shares. You may redeem Class A, Class B or
Class C shares of the Funds in several ways:
- 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.
46
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.
- Free Checkwriting is available to holders of Class A shares of the Funds.
Class Y Shares. You may redeem Class Y shares of the Funds through your
bank, financial advisor or other financial institution. You may redeem a portion
of your shares of the Funds through the free checkwriting privilege.
If we receive a redemption order for either Fund before 12:00 noon (Eastern
time), we will normally wire payment to the redeeming institution on the same
business day. If an order for either Fund is received between 12:00 noon and
4:00 p.m. (Eastern time), payment is normally wired the next business day.
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.
47
- 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 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 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, investment professional or
institution, account activity will be detailed in their statements to
you.
48
Class A, B and C Shares
- We may redeem your account if its value falls below the minimum initial
investment as a result of redemptions (but not as a result of a decline
in NAV). You will be notified in writing and allowed 60 days to increase
the value of your account to the minimum investment level.
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. Financial institutions are
responsible for transmitting orders and payments for their customers with
regard to Class Y shares 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 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.
Systematic Withdrawal Plan ("SWP"). If you have an account value of $2,500
or more in Class A, Class B or Class C 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 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.
Free Checkwriting. Free checkwriting is available to holders of Class A and
Class Y shares of the Funds who complete a checkwriting authorization form and
return it to the Funds' transfer agent. You may write checks in the amount of
$500 or more but you may not close a Fund account by writing a check. We may
change or terminate this program on 30 days' notice to you.
49
DISTRIBUTION ARRANGEMENTS
Share Class Selection
The Funds both offer Class A, Class B, Class C and Class Y 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
- Although there is no front-end sales charge on the Funds, other Munder
Funds offering Class A shares are subject to such charges. There are
several ways to reduce these charges.
- Lower annual expenses than Class B and Class C 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 the Money Market Fund before November 8, 2000 or if you
acquired Class B shares of the Money Market Fund or Cash Investment Fund
by exchanging shares of another Munder Fund that 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.
50
- Higher annual expenses than Class A shares.
- Shares do not convert to another class.
Class Y Shares (Only available to certain eligible investors)
- No front end sales charge. All your money goes to work for you right
away.
- Lower annual expenses than Class A, Class B and Class C shares.
The Cash Investment Fund also issues Class K shares, which have different
sales charges, expense levels and performance. Class K shares carry no sales
charges, have no conversion feature and have lower annual expenses than other
share classes. Class K shares are only available to certain eligible investors.
CDSC
You pay a CDSC when you redeem:
- Class A shares of the Money Market Fund that were acquired through the
exchange of Class A shares of another Munder Fund purchased within one
year of redemption as part of an investment of $1,000,000 or more;
- Class A shares of the Cash Investment Fund that were acquired after
October 31, 2002, through the exchange of Class A shares of another
Munder Fund purchased within one year of redemption as part of an
investment of $1,000,000 or more;
- Class B shares of the Funds within six years of buying them;
- Class C shares of the Funds within one year of buying them;
These time periods include the time you held the shares you exchanged to
acquire Fund shares. The CDSC for Class C shares, if applicable, is 1%.
The CDSC schedule for Class B shares of the Funds 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.
51
Shares purchased through reinvestment of distributions are not subject to a
CDSC.
<Table>
<Caption>
YEAR SINCE
PURCHASE CDSC %
---------- ------
First 5%
Second 4%
Third 3%
Fourth 3%
Fifth 2%
Sixth 1%
Seventh and thereafter 0%
</Table>
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).
CDSC Waivers
We will waive the CDSC payable upon redemptions of Class B shares of the
Funds which you purchased 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; and
52
- 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.
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.
12B-1 FEES
The Funds have adopted a Distribution and Service Plan with respect to
their Class A, Class B and Class C shares that 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 and Class C 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 and Class C shares to finance activities
relating to the distribution of their 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.
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.
53
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 Funds' assets may be priced and the Funds may be open for
business on weekdays when the NYSE is closed, but the Federal Reserve Bank in
Boston is open. Purchase and redemption orders received and accepted prior to
4:00 p.m., Eastern time, on any day the money markets are open but the NYSE is
closed will be effected at the net asset value per share of the applicable class
of shares of the Fund determined as of 4:00 p.m., Eastern time, on that date. To
the extent that other Munder Funds are not open for business, no shareholder
exchange activity will be permitted with such other Funds on such days. The NAV
of each Fund is generally based on the current market value of the securities
held in the Fund.
In determining each Fund's NAV, securities are valued at amortized cost,
which is approximately equal to market value. Under this method the market value
of an instrument is approximated by amortizing the difference between the
acquisition cost and value at maturity of the instrument on a straight-line
basis over the remaining life of the instrument.
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.
The Funds declare dividends daily and pay the monthly. 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
54
Fund. If you wish to receive distributions in cash, either indicate this request
on your account application form or notify the Funds by calling (800) 438-5789.
If a purchase order for the Money Market Fund is accepted before 12:00 p.m.
(Eastern time), the investor will receive dividends for that day. If a purchase
order for the Cash Investment Fund is accepted before 2:45 p.m. (Eastern time),
the investor will receive dividends for that day. Otherwise the investor will
begin to earn dividends on the first business day following the day of purchase.
If a redemption for the Money Market Fund is received before 12:00 p.m.
(Eastern time), the redeeming shareholders will not receive dividends for that
day. If a redemption order for the Cash Investment Fund is received before 2:45
p.m. (Eastern time), the redeeming shareholder will not receive dividends for
that day.
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, 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. However, neither the Money Market Fund
nor the Cash Investment Fund expects to distribute any long-term capital gain.
Dividend distributions and distributions of short-term capital gains generally
will be taxed as ordinary income.
55
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 the shares of the Money Market Fund and the
shares of the Cash Investment Fund maintain at all relevant times a net asset
value of $1.00 per share (as is expected), then if you sell such shares or
exchange them for shares of another Munder Fund, you generally will not
recognize taxable gain or loss.
INFORMATION ABOUT MANAGEMENT OF THE MONEY MARKET FUND AND THE CASH INVESTMENT
FUND
INVESTMENT ADVISER
Munder Capital Management ("MCM"), 480 Pierce Street, Birmingham, Michigan
48009, is the investment adviser of each Fund. As of June 30, 2002, MCM managed
over $31.2 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 $15.0 billion was invested in equity securities, $8.8 billion were
invested in money market or other short-term instruments, $6.3 billion were
invested in other fixed income securities and $1.4 billion were invested in
balanced investments.
MCM provides overall investment management for the Funds, provides research
and credit analysis and is responsible for all purchases and sales of portfolio
securities.
During the fiscal year ended June 30, 2002, the Cash Investment Fund paid
an advisory fee at an annual rate of 0.35% of the average daily net assets of
the Fund and the Money Market Fund paid an advisory fee at an annual rate of
0.40% of the average daily net assets of the Fund.
56
COMPARATIVE INFORMATION ON SHAREHOLDERS' RIGHTS
The Company is a Maryland corporation and is governed by its Articles of
Incorporation, By-Laws and Board of Directors. The Trust is a Massachusetts
business trust and is governed by a Declaration of Trust, By-Laws and a Board of
Trustees. Both the Money Market Fund and the Cash Investment Fund are also
governed by applicable state and Federal law. Certain differences and
similarities between the two Funds are summarized below.
SHAREHOLDER LIABILITY
The Money Market Fund is organized as a series of a Maryland corporation,
and it shareholders generally have no personal liability for its acts or
obligations. The Cash Investment Fund is organized as a series 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 Declaration of Trust for the Trust states that shareholders
will not be subject to any personal liability in connection with the assets of
the Trust for the acts or obligations of the Trust. The Declaration of Trust
provides for indemnification out of the assets belonging to the respective
series of the 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 Trust solely by reason of his or her being or having been a
shareholder. Thus, 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 Money Market Fund nor the Cash Investment 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 Money Market Fund or the
Cash Investment 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
57
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 Money Market
Fund or the Cash Investment Fund, the shareholders of that Fund are entitled to
receive, when and as declared by the Boards of Directors/ Trustees of the
Company or 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 DIRECTORS/TRUSTEES
The By-laws of the Company provide that the Company will indemnify
Directors and officers of the Company to the fullest extent permitted by
Maryland law and the 1940 Act. The Declaration of Trust of the Trust provides
for indemnification of its trustees and officers. However, the By-laws and the
Declaration 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
Except as required by Maryland law, shareholders of the Money Market Fund
have only such right to inspect the records, documents, accounts and books of
the Fund as may be granted by the Directors of the Company. Maryland corporate
law provides that one or more persons who together have owned at least 5% of the
outstanding shares of the Money Market Fund for at least 6 months may, on
written request, inspect during usual business hours the books of account and
stock ledger of the Money Market Fund. Shareholders of the Cash Investment Fund
generally have the right to inspect the records, accounts and books of the
Trust, 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.
58
The foregoing is only a summary of certain characteristics of the
operations of the Money Market Fund, the Articles of Incorporation and By-laws
of the Company and Maryland law and the Cash Investment Fund, the Declarations
of Trust of the Trust, and Massachusetts law. The foregoing is not a complete
description 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 MONEY MARKET FUND AND THE CASH INVESTMENT FUND
Information about the Money Market Fund and the Cash Investment Fund is
included in (i) the current Prospectus for the Money Market Fund and the Cash
Investment Fund (Class A, Class B and Class C shares) dated October 31, 2001, as
supplemented on August 15, 2002; (ii) the Prospectus for the Money Market Fund
and the Cash Investment Fund (Class Y shares) dated October 31, 2001, as
supplemented on November 15, 2001, December 21, 2001 and August 15, 2002; and
(iii) the Statement of Additional Information for the Money Market Fund and the
Cash Investment Fund, dated October 31, 2001, as supplemented on January 24,
2002 and August 15, 2002, each of which have been filed with the SEC. In
addition, on August 16, 2002, a post-effective amendment to the Prospectus and
Statement of Additional Information of the Cash Investment Fund was filed with
the SEC in order to add the Class B and Class C shares of that Fund and is
expected to become effective on or about October 15, 2002. 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 Money Market
Fund or the Cash Investment Fund at the address or toll-free number listed on
the cover page of this Proxy Statement/Prospectus.
Both the Money Market Fund and the Cash Investment 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
59
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 Money Market Fund on or about October
7, 2002. Only shareholders of record as of the close of business on the Record
Date, October 1, 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 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 the Company 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, e-mail, or other personal contact by officers or employees of MCM and
its affiliates or by proxy soliciting firms retained by MCM. MCM has retained
Georgeson Shareholder Communications, Inc. ("Georgeson") to provide proxy
solicitation services in connection with the Meeting at an estimated cost of
$22,000. In addition, MCM may reimburse persons holding shares in their names or
names of their nominees for
60
expenses incurred in forwarding solicitation material to their beneficial
owners. The cost of the solicitation will be borne by MCM.
As the meeting date approaches, shareholders of the Money Market Fund may
receive a call from a representative of Georgeson if the Fund has not yet
received its vote. Authorization to permit Georgeson to execute proxies may be
obtained by telephonic or electronically transmitted instructions from
shareholders of the Money Market Fund. Proxies that are obtained telephonically
will be recorded in accordance with the procedures set forth below. Management
of the Money Market Fund believes that these procedures are reasonably designed
to ensure that the identity of the shareholder casting the vote is accurately
determined and that the voting instructions of the shareholder are accurately
determined. In all cases where a telephonic proxy is solicited, the Georgeson
representative is required to ask the shareholder for the shareholder's full
name, address, social security number or employer identification number, title
(if the person giving the proxy is authorized to act on behalf of an entity,
such as a corporation), the number of shares owned and to confirm that the
shareholder has received this Proxy Statement/Prospectus in the mail.
If the shareholder information solicited agrees with the information
provided to Georgeson by the Money Market Fund, the Georgeson representative has
the responsibility to explain the process, read the proposals listed on the
proxy card, and ask for the shareholder's instructions on each proposal. The
Georgeson representative, although permitted to answer questions about the
process, is not permitted to recommend to the shareholder how to vote, other
than to read any recommendation set forth in this Proxy Statement/Prospectus.
Georgeson will record the shareholder's instructions on the card. Within 72
hours, Georgeson will send the shareholder a letter or mailgram to confirm the
shareholder's vote and asking the shareholder to call Georgeson immediately if
the shareholder's instructions are not correctly reflected in the confirmation.
QUORUM
The holders of one-third of the shares of the Money Market 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 Money Market Fund, with all
classes voting together and not by class. Shareholders of the Money
61
Market 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 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.
62
SHARE INFORMATION
The chart below lists the number of shares of each class of the Money
Market Fund that were outstanding as of the close of business on the Record
Date:
SHARES OUTSTANDING ON RECORD DATE
<Table>
<Caption>
- --------------------------------------------------
CLASS MONEY MARKET FUND
- --------------------------------------------------
Class A
- --------------------------------------------------
Class B
- --------------------------------------------------
Class C
- --------------------------------------------------
Class Y
- --------------------------------------------------
</Table>
On October 1, 2002, to the knowledge of the Company and the Trust, the
following shareholders owned, either beneficially or of record, 5% or more of
the outstanding shares of the Funds:
<Table>
<Caption>
- -----------------------------------------------------------------------
NAME AND ADDRESS TYPE OF PERCENTAGE
NAME OF FUND OF OWNER OWNERSHIP OF FUND
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
</Table>
The Company has been advised by Comerica Bank and Munder Fund of Funds,
each an affiliate of MCM, that each intends to vote the shares of the Money
Market Fund over which it has voting power FOR and AGAINST each proposal at the
Meeting in the same proportions as the total votes that are cast FOR and AGAINST
that proposal by other shareholders of the Money Market 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 Directors of the Company
beneficially owned as a group less than 1% of the outstanding shares of the
Money Market 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 Cash
Investment Fund.]
The votes of the shareholders of the Cash Investment Fund are not being
solicited since their approval or consent is not necessary for the
Reorganization to take place.
63
LEGAL MATTERS
Certain legal matters concerning the issuance of shares of the Cash
Investment Fund will be passed upon by Dechert, 1775 Eye Street, N.W.,
Washington, D.C. 20006.
THE DIRECTORS OF THE COMPANY, INCLUDING THE INDEPENDENT DIRECTORS,
RECOMMEND APPROVAL OF THE REORGANIZATION AGREEMENT INCLUDING THE SALE OF ALL OF
THE ASSETS OF THE MONEY MARKET FUND TO THE CASH INVESTMENT FUND, THE TERMINATION
OF THE MONEY MARKET FUND AND THE DISTRIBUTION OF SHARES OF THE CASH INVESTMENT
FUND TO SHAREHOLDERS OF THE MONEY MARKET FUND, AND ANY UNMARKED PROXIES WITHOUT
INSTRUCTIONS TO THE CONTRARY WILL BE VOTED IN FAVOR OF APPROVAL OF THE
REORGANIZATION AGREEMENT.
64
THE MUNDER FUNDS, INC.
THE MUNDER FUNDS TRUST
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made as of this
13th day of August, 2002, 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 Munder Cash Investment
Fund, a separate series of the Trust ("Acquiring Fund"), and The Munder Funds,
Inc., a Maryland corporation ("Company"), with its principal place of business
at 480 Pierce Street, Birmingham, Michigan 48009, on behalf of the Munder Money
Market Fund, a separate series of the Company ("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 and
Class Y shares of beneficial interest ($0.001 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 Directors of the Company 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
A-1
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 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 C 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
A-2
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 and Class Y Acquiring
Fund Shares to be so credited to Class A, Class B, Class C 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 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 C 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 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.
A-3
VALUATION
1.7. 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 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.
1.8. The net asset value of a Class A, Class B, Class C 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 Directors.
1.9. The number of the Class A, Class B, Class C 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 C 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.
1.10. 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.
2. CLOSING AND CLOSING DATE
2.1. The Closing Date shall be December 13, 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.
2.2. The Company 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
A-4
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.
2.3. The Company 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 C 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.
A-5
2.4. In the event that on the Valuation Date (a) the New York Stock
Exchange or another primary trading market for portfolio securities of the
Acquiring Fund or the Acquired Fund (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 either the Board of Trustees of the Trust or the Board of
Directors of the Company, 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.
3. REPRESENTATIONS AND WARRANTIES
3.1. Except as has been fully disclosed to the Acquiring Fund in a written
instrument executed by an officer of the Company, the Company, 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 the Company,
which is a corporation duly organized, validly existing and in good standing
under the laws of the State of Maryland, with power under the Company's Articles
of Incorporation, as amended from time to time, to own all of its Assets and to
carry on its business as it is now being conducted;
(b) The Company 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 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
A-6
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 Company, 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;
(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 the Company's Articles of Incorporation or By-Laws or of any
agreement, indenture, instrument, contract, lease or other undertaking to which
the Company, 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 the Company, 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. The
Company, 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;
A-7
(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, 2002 have been audited by Ernst & Young LLP, independent auditors, 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, 2002, there has not been any material adverse
change in the Acquired Fund's financial condition, assets, liabilities or
business, other than changes occurring in the ordinary course of business, or
any incurrence by the Acquired Fund of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as otherwise disclosed to
and accepted by the Acquiring Fund. 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 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
A-8
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 the Company 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 Directors of the Company, 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 the Company, 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
A-9
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 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.
3.2. 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 the Company 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 on 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 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;
A-10
(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 the
Company, 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 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, 2002 have been audited by Ernst & Young LLP, independent auditors, 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, 2002, 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
A-11
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 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 and Class Y Acquiring Fund Shares
to be issued and delivered to the Acquired Fund, for the account of
A-12
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.
4.5. COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND
4.1. 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.
4.2. The Company 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.
4.3. The Acquired Fund covenants that the Class A, Class B, Class C and
Class Y Acquiring Fund Shares to be issued hereunder are not
A-13
being acquired for the purpose of making any distribution thereof, other than in
accordance with the terms of this Agreement.
4.4. 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.
4.5. 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.
4.6. 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.
4.7. 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 and Class Y Acquiring Fund Shares received at the
Closing.
4.8. 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.
4.9. The Company, 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) the Company'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.
A-14
4.10. 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.
5. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Company, on behalf of the Acquired Fund, to
consummate the transactions provided for herein shall be subject, at the
Company's election, to the performance by the Trust, on behalf of the Acquiring
Fund, of all the obligations to be performed by it hereunder on or before the
Closing Date, and, in addition thereto, the following further conditions:
5.1. 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;
5.2. The Company, 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 the Company 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 the Company shall reasonably
request;
5.3. The Company, 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
5.4. The Acquired Fund and the Acquiring Fund shall have agreed on the
number of full and fractional Class A, Class B, Class C 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.
A-15
6. 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 the Company, 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:
6.1. All representations and warranties of the Company, 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;
6.2. The Company shall have delivered to the Acquiring Fund a statement of
the Acquired Fund's Assets and liabilities, as of the Closing Date, certified by
the Treasurer of the Company;
6.3. The Company, 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 the Company, on behalf of
the Acquired Fund, made in this Agreement are true and correct at and as of the
Closing Date, except as they may be affected by the transactions contemplated by
this Agreement, and as to such other matters as the Trust shall reasonably
request;
6.4. The Company, on behalf of the Acquired Fund, shall have performed all
of the covenants and complied with all of the provisions required by this
Agreement to be performed or complied with by the Company, on behalf of the
Acquired Fund, on or before the Closing Date;
6.5. The Acquired Fund and the Acquiring Fund shall have agreed on the
number of full and fractional Class A, Class B, Class C 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
6.6. 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
A-16
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.
7. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND AND THE
ACQUIRED FUND
If any of the conditions set forth below have not been satisfied on or
before the Closing Date with respect to the Company, 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:
7.1. 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 the Company's Articles of
Incorporation, By-Laws, applicable Maryland 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 the Company may waive the conditions set forth in this paragraph 8.1;
7.2. On the Closing Date no action, suit or other proceeding shall be
pending or, to the Trust's or to the Company'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;
7.3. 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 the Company 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;
7.4. 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
A-17
7.5. The parties shall have received the opinion of counsel to the Company
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 the Company of representations
it shall request of the Trust and the Company. Notwithstanding anything herein
to the contrary, neither the Trust nor the Company may waive the condition set
forth in this paragraph 8.5.
8. INDEMNIFICATION
8.1. 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.
8.2. The Company, 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.
9. BROKERAGE FEES AND EXPENSES
9.1. The Trust, on behalf of the Acquiring Fund, and the Company, 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.
9.2. 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
A-18
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 expenses would result in the disqualification of such
party as a "regulated investment company" within the meaning of Section 851 of
the Code.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1. The Trust and the Company 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.
10.2. 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.
11. TERMINATION
This Agreement may be terminated and the transactions contemplated hereby
may be abandoned by resolution of the either the Board of Trustees of the Trust
or the Board of Directors of the Company, 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.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as
may be deemed necessary or advisable by the authorized officers of the Company
and the Trust; provided, however, that following the meeting of the shareholders
of the Acquired Fund called by the Company 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 and Class Y Acquiring Fund
Shares to be issued to the Class A, Class B, Class C and Class Y Acquired Fund
Shareholders, respectively, under this Agreement to the detriment of such
shareholders without their further approval.
A-19
13. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by
facsimile, electronic delivery (i.e., e-mail) personal service or prepaid or
certified mail addressed to the Trust and the Company, 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.
14. HEADINGS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
14.1. The Article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2. 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.
14.3. 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.
A-20
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its President or Vice President.
THE MUNDER FUNDS, INC.
ON BEHALF OF ITS
MUNDER MONEY MARKET FUND
BY:
-------------------------------------
TITLE:
----------------------------------
THE MUNDER FUNDS TRUST
ON BEHALF OF ITS
MUNDER CASH INVESTMENT FUND
BY:
-------------------------------------
TITLE:
----------------------------------
A-21
PART B
THE MUNDER FUNDS TRUST
MUNDER CASH INVESTMENT FUND
- ------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
OCTOBER 7, 2002
- ------------------------------------------------------------------------------
<Table>
- -------------------------------------------------------------------
Acquisition of the Assets and
Liabilities of Munder Money
Market Fund
By and in Exchange for Shares
of Munder Cash Investment Fund
("Money Market Fund")
("Cash Investment Fund")
(a series of The Munder Funds,
Inc.)
(a series of The Munder Funds
Trust)
480 Pierce Street, Birmingham,
MI 48009
480 Pierce Street, Birmingham,
MI 48009
- -------------------------------------------------------------------
</Table>
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the Proxy Statement/
Prospectus dated October 7, 2002, relating specifically to the proposed transfer
of all of the assets of the Money Market Fund to the Cash Investment Fund and
the assumption of all the liabilities of the Money Market Fund in exchange for
shares of the Cash Investment Fund having an aggregate value equal to those of
the Money Market 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 of The Munder Funds Trust consists
of this cover page and the following documents, each of which was filed
electronically with the U.S. Securities and Exchange Commission and is
incorporated by reference herein:
(1) (i) the current Prospectus for the Money Market Fund and the Cash
Investment Fund (Class A, Class B and Class C shares) dated October
31, 2001, (previously filed on EDGAR, Accession No:
0000940180-01-500502), as supplemented August 15, 2002 (previously
filed on EDGAR, Accession No: 0000940180-02-001514) and ,
2002 (previously filed on EDGAR, Accession No: ); (ii) the
Prospectus
B-1
for the Money Market Fund and the Cash Investment 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: 0000940180-01-500669)
December 21, 2001 (previously filed on EDGAR, Accession No:
00940180-01-500736), and August 15, 2002 (previously filed on EDGAR,
Accession No: 0000940180-02-001514);
(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 24, 2002 (previously
filed on EDGAR, Accession No: 0000940180-02-000159), August 15, 2002
(previously filed on EDGAR, Accession No: 0000940180-02-001514), and
, 2002 (previously filed on EDGAR, Accession No:
); and
(3) Annual Report to Shareholders of The Munder Funds (Class A, Class
B, Class C and Class Y shares) for the fiscal year ended June 30, 2002
(previously filed on EDGAR, Accession No: 0000950124-02-002876).
B-2
PROXY CARD THE MUNDER FUNDS, INC. PROXY CARD
MUNDER MONEY MARKET FUND
SPECIAL MEETING OF SHAREHOLDERS DECEMBER 11, 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
Money Market Fund (Fund) of the Munder Funds, Inc. (Company) 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, Michigan, 48009, on Wednesday, December 11, 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
CHECK HERE IF YOU PLAN TO ATTEND THE MEETING. [ ]
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
[ ]
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: [X]
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 an Agreement and Plan of Reorganization providing for the
acquisition of all of the assets of the Munder Money Market Fund by the
Munder Cash Investment Fund and the assumption of all liabilities of the [ ] [ ] [ ]
Munder Money Market Fund by the Munder Cash Investment Fund in exchange for
shares of the Munder Cash Investment Fund and the subsequent liquidation of
the Munder Money Market 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.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN PROMPTLY IN THE POSTAGE-PAID ENVELOPE PROVIDED.
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. 34 to the Registrant's Registration Statement on
Form N-1A as filed on August 16, 2002.
<Table>
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.
</Table>
C-1
<Table>
(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.
(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.
</Table>
C-2
<Table>
(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.
(n) Form of Certificate of Classification of Shares pertaining to
Class A-3 and Class A-4 for the Cash Investment Fund is
incorporated herein by reference to Post-Effective Amendment
No. 34 to Registrant's Registration Statement on Form N-1A
filed with the Commission on August 16, 2002.
(2) Amended and Restated By-Laws, dated May 21, 2002, are incorporated
herein by reference to Post-Effective Amendment No. 34 to
Registrant's Registration Statement on Form N-1A filed with the
Commission on August 16, 2002.
(3) Not Applicable.
(4)* Form of Agreement and Plan of Reorganization.
</Table>
- ------------------------------------
<Table>
* Filed herewith as Exhibit A to the Proxy Statement/Prospectus.
</Table>
C-3
<Table>
(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 Funds, Inc. and Munder
Capital Management is incorporated herein by reference to
Post-Effective Amendment No. 34 to the Registrant's
Registrations Statement on Form N-1A filed with the Commission
on August 16, 2002.
(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.
(c) Amendment to Amended and Restated Investment Advisory
Agreement dated October 15, 2001, among Registrant, St. Clair
Funds, Inc. and World Asset Management LLC is incorporated
herein by reference to Post-Effective Amendment No. 34 to
Registrant's Registration Statement on Form N-1A filed with
the Commission on August 16, 2002.
(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.
</Table>
C-4
<Table>
(10) (a) Amended and Restated Combined Distribution and Service Plan,
dated August 13, 2002, is incorporated herein by reference to
Post-Effective Amendment No. 34 to the Registrant's
Registrations Statement on Form N-1A filed with the Commission
on August 16, 2002.
(10) (b) Amended and Restated Multi-Class Plan, dated August 13, 2002,
is incorporated herein by reference to Post-Effective
Amendment No. 34 to the Registrant's Registrations Statement
on Form N-1A filed with the Commission on August 16, 2002.
(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.
(15) Not Applicable.
(16) Powers of Attorney are incorporated herein by reference to
Post-Effective Amendment No. 30 and 31 to the Registrant's
Registration Statement on Form N-1A filed with the Commission on
October 25, 2000 and September 24, 2001, respectively.
</Table>
C-5
<Table>
<Caption>
Item 17. Undertakings.
- -------- -------------
(1) The undersigned Registrant agrees that prior to any
public reoffering of the securities registered
through the use of a prospectus which is a part of
this registration statement by any person or party
who is deemed to be an underwriter within the
meaning of Rule 145(c) of the Securities Act 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.
</Table>
C-6
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 4th day of September, 2002.
THE MUNDER 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:
<Table>
<Caption>
SIGNATURES TITLE DATE
---------- ----- ----
* Trustee September 4, 2002
- ------------------------------------
Charles W. Elliott
* Trustee September 4, 2002
- ------------------------------------
Joseph E. Champagne
* Trustee September 4, 2002
- ------------------------------------
Thomas D. Eckert
* Trustee September 4, 2002
- ------------------------------------
John Rakolta, Jr.
* Trustee September 4, 2002
- ------------------------------------
David J. Brophy
* Trustee September 4, 2002
- ------------------------------------
Michael T. Monahan
* Trustee September 4, 2002
- ------------------------------------
Arthur T. Porter
</Table>
C-7
<Table>
<Caption>
SIGNATURES TITLE DATE
---------- ----- ----
* President September 4, 2002
- ------------------------------------ (Principal
James C. Robinson Executive Officer)
* Treasurer September 4, 2002
- ------------------------------------ (Principal
Cherie Ugorowski Financial and
Accounting Officer)
</Table>
By: /s/ STEPHEN J. SHENKENBERG
----------------------------------------
Stephen J. Shenkenberg
as Attorney-in-Fact
C-8
INDEX OF EXHIBITS
(11) Opinion and Consent of Dechert regarding the issuance of shares.
(12) Form of opinion of Dechert regarding tax matters.
(14) Consent of Independent Accountants.
C-9