As filed with the Securities and Exchange Commission on February 5, 2003
Registration No. 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 Framlington 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 LLP
1775 I 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 March 7,
2003 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 FRAMLINGTON FUNDS TRUST
Cross Reference Sheet
Pursuant to Rule 481(a) Under the Securities Act of 1933
Prospectus/Proxy
Form N-14 Item No. Statement Caption
- ------------------ -----------------
Part A
- ------
Item 1. Beginning of Registration Statement and Cover Page
Outside Front Cover Page of Prospectus
Item 2. Beginning and Outside Back Cover Page of Cover Page
Prospectus
Item 3. Fee Table, Synopsis Information and Risk Summary
Factors
Item 4. Information About the Transaction Letter to Shareholders; Common Questions
and Answers About the Proposed
Reorganization; Summary; Reasons for the
Reorganization; Information About the
Reorganization
Item 5. Information About the Registrant Letter to Shareholders; Common Questions
and Answers About the Proposed
Reorganization; Summary; Comparison of
Investment Objectives and Policies;
Information About Management of the
Bio(Tech)/2/ Fund and the Healthcare Fund;
Additional Information About the
Bio(Tech)/2/ Fund and the Healthcare Fund.
Item 6. Information About the Company Summary; Comparison of Investment
Being Acquired Objectives and Policies; Information about
Management of the Bio(Tech)/2/ Fund and the
Healthcare Fund; Additional Information About
the Bio(Tech)/2/ Fund and the Healthcare
Fund.
Item 7. Voting Information Voting Information
Item 8. Interest of Certain Persons and Management's Discussion of Fund Performance
Experts and Financial Highlights
Item 9. Additional Information Required for Not Applicable
Reoffering by Persons Deemed to be
Underwriters
Part B Statement of Additional
- ------ Information Caption
-------------------
Item 10. Cover Page Cover Page
Item 11. Table of Contents Not Applicable
Item 12. Additional Information About the Statement of Additional Information of
Registrant The Munder Funds dated October 31, 2002/1/
Item 13. Additional Information About the Statement of Additional Information of
Company Being Acquired The Munder Funds dated October 31, 2002/1/
Item 14. Financial Statements Annual Report of The Munder Funds (Class
A, B, C, II and Y shares) for fiscal year
ended June 30, 2002/2/; Semi-Annual Report
of The Munder Funds (Class A, B, C, II
and Y shares)/3/ for the year ended
December 31, 2002
Annual Report of The Munder Funds (Class
K shares) for fiscal year ended June 30,
2002/4/; Semi-Annual Report of The Munder
Funds (Class K shares)/5/ for the year
ended December 31, 2002
Part C
- ------
Item 15. Indemnification
Item 16. Exhibits
Item 17. Undertakings
----------------
/1/ Incorporated herein by reference to the Registration Statement of the
Registrant on Form N-1A filed October 31, 2002 (File No. 333-15205).
/2/ Incorporated herein by reference to the Annual Report of the Registrant
(Class A, B, C, II and Y shares) on Form N-30D filed August 28, 2002 (File
No. 811-07897).
/3/ Incorporated herein by reference to the Semi-Annual Report of the
Registrant (Class A, B, C, II and Y shares) on Form N-30D filed _____, 2003
(File No. 811-07897).
/4/ Incorporated herein by reference to the Annual Report of the Registrant
(Class K shares) on Form N-30D filed August 28, 2002 (File No. 811-07897).
/5/ Incorporated herein by reference to the Semi-Annual Report of the
Registrant (Class K shares) on Form N-30D filed _____, 2003 (File No.
811-07897).
THE MUNDER FUNDS, INC.
MUNDER BIO(TECH)/2/ FUND
480 Pierce Street
Birmingham, Michigan 48009
(800) 468-6337
Special Meeting of Shareholders to be held April 16, 2003
Dear Shareholder:
Please take note that a SPECIAL MEETING OF SHAREHOLDERS OF THE MUNDER
BIO(TECH)/2/ FUND, a series of The Munder Funds, Inc. ("Company"), will be held
on Wednesday, April 16, 2003, at the offices of Munder Capital Management, 480
Pierce Street, Birmingham, Michigan 48009, at 10:00 a.m., Eastern time
("Meeting").
At the Meeting, shareholders of the Munder Bio(Tech)/2/ Fund ("Bio(Tech)/2/
Fund") will be asked to vote to elect the Company's Board of Directors ("Board")
and to consider a proposal that the Bio(Tech)/2/ Fund be reorganized.
Specifically, the Board has proposed that the Fund be reorganized with and into
the Munder Healthcare Fund ("Healthcare Fund"), a series of The Munder
Framlington Funds Trust, to seek future economies of scale and to eliminate
certain costs of running the Funds separately. If shareholders of the
Bio(Tech)/2/ Fund approve the Agreement and Plan of Reorganization
("Reorganization Agreement") described in the accompanying materials, all of the
assets of the Bio(Tech)/2/ Fund will be exchanged for an equivalent dollar
amount of shares of the Healthcare Fund on or about April 18, 2003
("Reorganization"). The shares of the Healthcare Fund will then be transferred
to the shareholders of the Bio(Tech)/2/ Fund in complete liquidation of the
Bio(Tech)/2/ 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 Bio(Tech)/2/ Fund has a significant number of smaller shareholder accounts.
It is therefore especially important that you vote on this matter to avoid the
need for costly additional proxy solicitations to obtain a quorum.
The Board believes that shareholders of the Bio(Tech)/2/ Fund will benefit from
the proposed Reorganization. The proposed Reorganization will enable
shareholders of the Bio(Tech)/2/ Fund to experience higher asset levels in the
combined Healthcare Fund, which will result in the fixed and relatively fixed
costs associated with operating the Bio(Tech)/2/ Fund being spread over a larger
asset base, thereby reducing per share expenses paid by Bio(Tech)/2/ Fund
shareholders. Detailed information about the proposed Reorganization and the
reasons for it are contained in the enclosed materials.
The Board strongly urges you to vote FOR approval of the proposed Reorganization
Agreement.
As a result of the Reorganization, the Bio(Tech)/2/ Fund would be combined with
Healthcare Fund and, if you are a shareholder of Bio(Tech)/2/ Fund at the time
of the Reorganization, you would become a shareholder of the Healthcare Fund,
receiving shares of the Healthcare Fund having an aggregate net asset value
equal to the aggregate net asset value of your investment in the Bio(Tech)/2/
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 goal of both the Bio(Tech)/2/ Fund and the Healthcare Fund is to provide
long-term capital appreciation. The Bio(Tech)/2/ Fund and the Healthcare Fund
also have a common investment advisor (Munder Capital
Management), a common sub-advisor (Framlington Overseas Investment Management
Limited), a common administrator (Munder Capital Management) and a common
distributor (Funds Distributor, Inc.).
Shareholders of the Bio(Tech)/2/ Fund are being asked to vote for the election
of eight nominees to serve as Directors for the Company. Votes cast by
shareholders of the Bio(Tech)/2/ Fund will be counted with the votes cast by the
shareholders of the other series of the Company. Shareholders of record, as of
February ___, 2003, of each of the other series of the Company have been sent
separate proxy materials containing the same information with respect to the
election of Directors.
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 April 16, 2003.
Whether or not you plan to attend the Meeting in person, please vote your
shares. In addition to voting by mail you may also vote by either telephone or
via the Internet, as follows:
To vote by Telephone: To vote by Internet:
- ----------------------------------------------------------------------------------------------------------------------------
(1) Read the Proxy Statement and have your Proxy card at (1) Read the Proxy Statement and have your Proxy card at
hand. hand.
(2) Call the 1-800 number that appears on your Proxy card. (2) Go to the website, [_]
(3) Enter the control number set forth on the Proxy card and (3) Enter the control number set forth on the Proxy card
follow the simple instructions. and follow the simple instructions.
- ----------------------------------------------------------------------------------------------------------------------------
We encourage you to vote by telephone or via the Internet using the control
number that appears on your enclosed proxy card. Use of telephone or Internet
voting will reduce the time and costs associated with this proxy solicitation.
Whichever method you choose, please read the enclosed proxy statement carefully
before you vote.
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
1-800-468-6337.
Sincerely,
James C. Robinson
President
The Munder Funds, Inc.
THE MUNDER FUNDS, INC.
MUNDER BIO(TECH)/2/ FUND
480 Pierce Street
Birmingham, Michigan 48009
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held on April 16, 2003
To the Shareholders of
Munder Bio(Tech)/2/ Fund
of The Munder Funds, Inc.:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of the Munder
Bio(Tech)/2/ Fund ("Bio(Tech)/2/ 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 Wednesday, April 16, 2003, at
10:00 a.m., Eastern time, for the following purposes:
(1) To elect Directors;
(2) To approve or disapprove an Agreement and Plan of Reorganization providing
for (i) the acquisition of all of the assets of the Bio(Tech)/2/ Fund by
the Munder Healthcare Fund ("Healthcare Fund"), a series of The Munder
Framlington Funds Trust, in exchange for shares of the Healthcare Fund and
the assumption of all liabilities of the Bio(Tech)/2/ Fund by the
Healthcare Fund and (ii) the subsequent liquidation of the Bio(Tech)/2/
Fund; and
(3) 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 February ___, 2003, as
the Record Date for determination of shareholders entitled to notice of, and to
vote at, the Meeting and any adjournments or postponements thereof.
EACH SHAREHOLDER WHO DOES NOT EXPECT TO ATTEND THE MEETING IN PERSON IS
REQUESTED TO DATE, FILL IN, SIGN AND RETURN PROMPTLY THE ENCLOSED FORM OF PROXY
IN THE ENCLOSED ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES.
By Order of the Board of Directors,
Stephen J. Shenkenberg
Secretary
March ___, 2003
PROXY STATEMENT/PROSPECTUS DATED MARCH ___, 2003
THE MUNDER FUNDS, INC.
480 Pierce Street
Birmingham, Michigan 48009
(800) 468-6337
Special Meeting of Shareholders of
Munder Bio(Tech)/2/ Fund
to be held April 16, 2003
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 Bio(Tech)/2/ Fund ("Bio(Tech)/2/ Fund"), a
series of The Munder Funds, Inc. ("Company"), for a Special Meeting of
Shareholders of the Bio(Tech)/2/ Fund ("Meeting"). The Meeting will be held on
Wednesday, April 16, 2003, 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 Bio(Tech)/2/ Fund will be asked to consider
and act upon the following proposals:
(1) To elect Directors;
(2) To approve or disapprove an Agreement and Plan of Reorganization
providing for (i) the acquisition of all of the assets of the
Bio(Tech)/2/ Fund by the Munder Healthcare Fund ("Healthcare Fund"), a
series of The Munder Framlington Funds Trust ("Framlington"), in
exchange for shares of the Healthcare Fund and the assumption of all
liabilities of the Bio(Tech)/2/ Fund by the Healthcare Fund and (ii)
the subsequent liquidation of the Bio(Tech)/2/ Fund; and
(3) To transact such other business as may properly come before the
Meeting or any adjournments or postponements thereof.
Shareholders of the Bio(Tech)/2/ Fund are being asked to vote for the election
of eight nominees to serve as Directors for the Company. Votes cast by the
shareholders of the Bio(Tech)/2/ Fund will be counted with the votes cast by the
shareholders of the other series of the Company. Separate proxy materials,
containing the same information with respect to the election of Directors, have
been sent to the shareholders of record, as of February ___, 2003, of each of
the other series of the Company.
In addition, this Proxy Statement/Prospectus is soliciting shareholders of the
Bio(Tech)/2/ Fund to approve an Agreement and Plan of Reorganization
("Reorganization Agreement"). The Reorganization Agreement contemplates the
transfer of all of the assets of the Bio(Tech)/2/ Fund to the Healthcare Fund in
exchange for shares of the Healthcare Fund having an aggregate value equal to
the net asset value of Bio(Tech)/2/ Fund and the assumption by the Healthcare
Fund of all of the liabilities of the Bio(Tech)/2/ Fund ("Reorganization"). The
Bio(Tech)/2/ Fund would then distribute to its shareholders the portion of the
shares of the Healthcare Fund to which each such shareholder is entitled. This
would result in the liquidation of the Bio(Tech)/2/ Fund.
Under the proposed Reorganization Agreement, each shareholder of the
Bio(Tech)/2/ Fund would be entitled to receive shares of the Healthcare Fund
having an aggregate value equal to the aggregate net asset value of the shares
of the Bio(Tech)/2/ 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 Bio(Tech)/2/ Fund are being asked to approve a transaction
that will result in their holding shares of the Healthcare Fund, this Proxy
Statement also serves as a Prospectus for the Healthcare Fund.
If the Reorganization Agreement is approved by shareholders of the Bio(Tech)/2/
Fund, holders of Class A shares of the Bio(Tech)/2/ Fund will receive Class A
shares of the Healthcare Fund, and no sales charge will be imposed on the Class
A shares of the Healthcare Fund received by Bio(Tech)/2/ Fund shareholders.
Holders of Class B, Class II, Class K and Class Y shares of the Bio(Tech)/2/
Fund will receive Class B, Class C, Class K and Class Y shares, respectively, of
the Healthcare Fund. Subsequent to the Reorganization, any contingent deferred
sales charge ("CDSC") that applied to a shareholder's Class B or Class II shares
of the Bio(Tech)/2/ Fund at the time of Reorganization will continue to apply
for the holding period applicable at the time of the Reorganization. In
calculating any applicable CDSC, the period during which a shareholder held the
Class B or Class II shares of the Bio(Tech)/2/ 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 Bio(Tech)/2/ Fund is a diversified series of the Company. The Bio(Tech)/2/
Fund's goal is to provide long-term capital appreciation. The Fund pursues its
goal by investing in equity securities of companies engaged in developing,
producing and marketing technologically advanced solutions for the healthcare
and medical fields. Such companies derive at least 50% of sales, earnings or
assets from biotechnology products, licenses and services. Although the Fund may
invest in securities of companies located in foreign countries with developed
securities markets, most of the companies in which the Fund invests are located
in the United States.
The Bio(Tech)/2/ Fund will invest in securities of companies whose principal
business is focused on the biotechnology sector, including:
- product companies--companies whose primary focus is to discover new
products or therapies to bring to the commercial market through the
research and development process;
- platform companies--companies whose primary focus is to discover
technology that may serve as the underpinning for internal discovery
programs of pharmaceutical or biotechnology product companies. As
platform companies mature, they often evolve into product companies;
and
- enabling companies--companies that sell equipment or consumables to
companies with research and development efforts focused on
biotechnology research.
Under normal circumstances, the Bio(Tech)/2/ Fund will invest at least 80% of
its assets in companies dedicated to biotechnological solutions for the
healthcare and medical fields. This investment strategy may not be changed
without 60 days' prior notice to shareholders.
The Healthcare Fund is a diversified series of Framlington. The Healthcare
Fund's goal is to provide long-term capital appreciation. The Fund pursues its
goal by investing in equity securities of companies providing healthcare and
medical services and products worldwide. Although the Fund may invest in
securities of companies located in foreign countries with developed securities
markets, most of the companies in which the Fund invests are located in the
United States.
The Healthcare Fund will invest in:
- drug and drug delivery companies;
- biotechnology firms;
- medical device and instrument manufacturers; and
-2-
- healthcare service companies, including HMOs, hospitals, product
distributors and clinical laboratories.
Under normal circumstances, the Healthcare Fund will invest at least 80% of its
assets in healthcare companies, which are companies for which at least 50% of
sales, earnings or assets arise from or are dedicated to health services or
medical technological activities. This investment strategy may not be changed
without 60 days' prior written notice to shareholders.
The Healthcare Fund's investments may include foreign securities of companies
located in countries with mature markets.
While the investment objectives and policies of the Bio(Tech)/2/ Fund and the
Healthcare Fund are compatible, there are certain differences in investment
policies, which are described under "Comparison of Investment Objectives and
Policies" in this Proxy Statement/Prospectus.
MCM serves as investment advisor for the Bio(Tech)/2/ Fund and the Healthcare
Fund. Framlington Overseas Investment Management Limited ("Sub-Advisor"), an
affiliate of MCM, is the sub-advisor for the Bio(Tech)/2/ Fund and the
Healthcare Fund. MCM and Framlington are described in more detail under
"Information About Management of the Bio(Tech)/2/ Fund and the Healthcare Fund."
This Proxy Statement/Prospectus, which should be retained for future reference,
sets forth concisely the information about the Healthcare Fund that a
prospective investor should know before investing. A Statement of Additional
Information dated March ____, 2003 relating to this Proxy Statement/Prospectus
and the Reorganization is incorporated herein by reference into this Proxy
Statement/Prospectus. If you would like to receive a copy of the Statement of
Additional Information relating to this Proxy Statement/Prospectus and the
Reorganization and any subsequent shareholder reports, call (800) 468-6337, 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 Bio(Tech)/2/ Fund (Class A, Class
B, Class II and Class Y shares) dated October 31, 2002, as supplemented on
February ___, 2003; (ii) the Prospectus of the Healthcare Fund (Class A, Class
B, Class C and Class Y shares) dated October 31, 2002, as supplemented on
February __, 2003; (iii) the Prospectus for the Bio(Tech)/2/ Fund and the
Healthcare Fund (Class K shares) dated October 31, 2002, as supplemented on
February __, 2003; (iv) the Statement of Additional Information for the
Bio(Tech)/2/ Fund and the Healthcare Fund dated October 31, 2002; (v) the Annual
Report for the Bio(Tech)/2/ Fund and the Healthcare Fund (Class A, Class B,
Class II and Class Y shares) dated June 30, 2002; (vi) the Semi-Annual Report
for the Bio(Tech)/2/ Fund and the Healthcare Fund (Class A, Class B, Class II
and Class Y shares) dated December 31, 2002; (vii) the Annual Report for the
Bio(Tech)/2/ Fund and the Healthcare Fund (Class K shares) dated June 30, 2002;
and (viii) the Semi-Annual Report for the Bio(Tech)/2/ Fund and the Healthcare
Fund (Class K shares) dated December 31, 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 calling the Bio(Tech)/2/ Fund or the Healthcare Fund at the
telephone number or by writing to the Funds at the address listed for the Funds
on the cover page of this Proxy Statement/Prospectus.
Accompanying this Proxy Statement/Prospectus as Exhibit A is a copy of the
Agreement and Plan of Reorganization pertaining to the transaction.
MUTUAL FUND SHARES ARE NOT BANK DEPOSITS AND ARE NOT INSURED OR GUARANTEED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. MUTUAL
FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL. 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.
-3-
TABLE OF CONTENTS
Page
----
PROPOSAL 1 ..................................................................................
Common Questions and Answers About the Election of Directors ...........................
Additional Information Regarding the Directors and Officers of the Company .............
PROPOSAL 2 ..................................................................................
Common Questions and Answers About the Proposed Reorganization ..........................
Summary .................................................................................
Reasons for the Reorganization ..........................................................
Information About the Reorganization ....................................................
Comparison of Investment Objectives and Policies ........................................
Management's Discussion of Fund Performance and Financial Highlights ....................
How to Purchase, Sell and Exchange Shares ...............................................
Information About Management of the Bio(Tech)/2/ Fund and the Healthcare Fund ...........
Comparison of Munder Series Trust, Framlington and the Company ..........................
Additional Information About the Bio(Tech)/2/ Fund and the Healthcare Fund ..............
Other Business ..........................................................................
Voting Information ......................................................................
Legal Matters ...........................................................................
Exhibit A: Agreement and Plan of Reorganization ......................................... A-1
-4-
----------------------------------
Proposal No. 1
ELECTION OF DIRECTORS
----------------------------------
COMMON QUESTIONS AND ANSWERS
ABOUT THE ELECTION OF DIRECTORS
What are shareholders being asked to approve in Proposal 1?
The purpose of this proposal is to elect a Board of Directors for the Company.
It is intended that the enclosed proxy will be voted for the election as
Directors of the Company of the eight nominees listed below ("Nominees"). All
Nominees named below except [insert name of nominee] are currently Directors of
the Company and each has served in that capacity since originally elected or
appointed.
Who are the Nominees to the Board?
Information about the Nominees, including their business addresses, ages and
principal occupations during the past five years, and other current
directorships of publicly traded companies or funds, are set forth in the table
below. A Nominee is deemed to be "independent" to the extent the Director is not
an "interested person" of the Company, as that term is defined in Section
2(a)(19) of the Investment Company Act of 1940, as amended ("1940 Act"). For
purposes of this Proxy Statement, "Fund Complex" means the series of St. Clair
Funds, Inc. ("St. Clair"), The Munder Framlington Funds Trust ("Framlington"),
the Company, The Munder Funds Trust ("Trust") and The Munder @Vantage Fund
("@Vantage").
Number of
Portfolios
in Fund
Position(s) Term of Office Principal Occupation(s) Complex* Other
with the and Length of During Overseen by Directorships
Name, Address and Age Company Time Served Past 5 Years Nominee Held by Nominee
- ----------------------------------------------------------------------------------------------------------------------------
Independent Nominees
Charles W. Elliott Director and Indefinite** Consultant, self-employed 35 None
c/o The Munder Funds Chairman Since 2/95 (since July 1995); Trustee of
480 Pierce Street @Vantage (since August 2000);
Suite 300 Trustee of Munder Series
Birmingham, MI 48009 Trust (since February 2003);
Age: 71 Director of St. Clair (since
February 2004); Trustee of
the Trust (since November
1989); Trustee of Framlington
(since November 1996).
John Rakolta, Jr. Director and Indefinite** Chairman and Chief Executive 35 None
c/o The Munder Funds Vice Chairman Since 2/93 Officer, Walbridge Aldinger
480 Pierce Street Company (construction
Suite 300 company) (since 1991);
Birmingham, MI 48009 Trustee of @Vantage (since
Age: 55 August 2000); Trustee of
Munder Series Trust (since
February 2003); Trustee of
the Trust (since April 1995);
Trustee of Framlington (since
November 1996); Director of
St. Clair (since April 1995).
-5-
Number of
Portfolios
in Fund
Position(s) Term of Office Principal Occupation(s) Complex* Other
with the and Length of During Overseen by Directorships
Name, Address and Age Company Time Served Past 5 Years Nominee Held by Nominee
- ------------------------------------------------------------------------------------------------------------------------------
David J. Brophy Director Indefinite** Professor of Finance, 35 DirectPlacement,
1025 Martin Place Since 5/93 University of Inc. (financial
Ann Arbor, MI 48104 Michigan-Business School technology
Age: 66 (since August 1966); Trustee company) (since
of @Vantage (since August February 2002).
2000); Trustee of Munder
Series Trust (since February
2003); Trustee of the Trust
(since April 1995); Trustee
of Framlington (since
November 1996); Director of
St. Clair (since April 1995).
Dr. Joseph E. Champagne Director Indefinite** Vice President, Macomb 35 None
c/o The Munder Funds Since 2/95 College (since 2001); Dean,
480 Pierce Street Macomb College (since
Suite 300 September 1997); Trustee of
Birmingham, MI 48009 @Vantage (since August 2000);
Age: 64 Trustee of Munder Series
Trust (since February 2003);
Trustee of the Trust (since
November 1989); Trustee of
Framlington (since November
1996); Director of St. Clair
(since February 1994).
Thomas D. Eckert Director Indefinite** Director, President and Chief 35 None
c/o The Munder Funds Since 2/93 Executive Officer, Capital
480 Pierce Street Automotive REIT (real estate
Suite 300 investment trust specializing
Birmingham, MI 48009 in retail automotive
Age: 55 properties) (since October
1997); Trustee of @Vantage
(since August 2000); Trustee
of Munder Series Trust (since
February 2003);Trustee of the
Trust (since April 1995);
Trustee of Framlington (since
November 1996); Director of
St. Clair (since April 1995).
Dr. Arthur T. Porter Director Indefinite** President and Chief Executive 35 None
3990 John R. Since 2/01 Officer of the Detroit
Detroit, MI 48201 Medical Center (since March
Age: 46 1999); Professor with Tenure
and Chairman of Radiation
Oncology of Wayne State
University School of Medicine
(March 1991 to March 1999);
Trustee of @Vantage (since
August 2000); Trustee of
Munder Series Trust (since
February 2003);Trustee of the
Trust (since February 2001);
Trustee of Framlington (since
February 2001); Director of
St. Clair (since February
2001).
-6-
Number of
Portfolios in
Fund
Position(s) Term of Office Principal Occupation(s) Complex* Other
Name, Address and with the and Length of During Overseen Directorships
Age Company Time Served Past 5 Years by Nominee Held by Nominee
- ------------------------------------------------------------------------------------------------------------------------------------
[insert name of nominee] N/A N/A [To be added.] 35 [To be added]
c/o The Munder Funds
480 Pierce Street
Suite 300
Birmingham, MI 48009
Age: ___
Interested Nominees
Michael T. Monahan+ Director Indefinite** President of Monahan Enterprises, 35 CMS Energy
3707 West Maple Rd. Since 8/00 LLC (consulting company) (since Corporation (energy
Suite 102 June 1999); Chairman of Munder company) (since
Bloomington Hills, MI Capital Management (investment December 2002);
48301 advisor) (October 1999 to Guilford Mills, Inc.
Age: 64 December 2000); Chairman and (supplier of
Chief Executive Officer of Munder automotive textile
Capital Management (October products) (since
1999 to December 1999); President October 2002).
of Comerica Incorporated (bank
holding company) (June 1992
to June 1999); Trustee of @Vantage
(since August 2000); Trustee of
Munder Series Trust (since
February 2003); Trustee of the
Trust (since August 2000); Trustee
of Framlington (since August
2000); Director of St. Clair (since
August 2000).
- -------------------
* The newly-created Munder Series Trust consists of 31 "shell" portfolios, as
of the date of this Proxy Statement/Prospectus. These portfolios were
formed in anticipation of the reorganizations and redomiciliations
discussed in Proposal 2. As a result, the series of Munder Series Trust
have not been included in the totals in this column.
** The Director may serve until his death, resignation, removal or retirement.
Pursuant to the By-Laws of the Company, a Director shall retire as a
Director at the end of the calendar year in which he or she attains the age
of 72 years.
+ Mr. Monahan is an "interested nominee" as defined in the 1940 Act. Mr.
Monahan owns stock in Comerica, Inc., the indirect parent company of MCM,
the Funds' investment advisor.
How will my vote on Proposal 1 be counted?
On February 11, 2003, the Board determined that shareholders of each series of
the Company should be asked to elect the Nominees as Directors of the Company.
The Board selected February ___, 2003 as the record date for the determination
of shareholders entitled to notice of and to vote at special meetings of
shareholders of each series to be held for the purpose of electing Directors.
Separate proxy materials containing the same information with respect to the
election of directors have been sent to the shareholders of each of the other
series of the Company. Election of the Directors of the Company will require a
plurality of the votes cast at the meeting by shareholders of all of the series
of the Company voting together. In other words, votes cast by the shareholders
of the Bio(Tech)/2/ Fund will be counted with the votes cast by all of the other
series of the Company with respect to the election of the Directors of the
Company.
-7-
ADDITIONAL INFORMATION REGARDING
THE DIRECTORS AND OFFICERS OF THE COMPANY
Executive Officers
Officers of the Company are elected annually by the Board of Directors to
oversee the day to day activities of each series of the Company, including the
Bio(Tech)/2/ Fund. The Board of Directors has elected officers for the Company.
Information about the executive officers of the Company, including their
business addresses, ages and principal occupations during the past five years
are set forth in the table below.
Position(s) Term of Office and
with the Length of Time
Name, Address and Age Company Served Principal Occupation(s) During Past 5 Years
- ---------------------------------------------------------------------------------------------------------------------------------
James C. Robinson President and through 2/04 Chairman and Chief Executive Officer of Munder Capital
480 Pierce Street Principal Since 5/00 Management (investment advisor) (January 2000 to present);
Suite 300 Executive Officer Chief Investment Officer/Fixed Income of Munder Capital
Birmingham, MI 48009 Management (January 1990 to January 2000). Vice President
Age 41 of @Vantage (since August 2000), Munder Series Trust
(since February 2003), St. Clair (since May 2000),
Framlington (since May 2000), Trust (since May 2000).
Stephen J. Shenkenberg Vice President through 2/04 General Counsel to Munder Capital Management (investment
480 Pierce Street and Secretary Since 8/00 advisor) (July 2000 to present); Deputy General Counsel of
Suite 300 Strong Capital Management, Inc. (investment advisor)
Birmingham, MI 48009 (November 1996 to July 2000). Vice President of @Vantage
Age 44 (since August 2000), Munder Series Trust (since February
2003), St. Clair (since August 2000), Framlington (since
August 2000), Trust (since August 2000).
Elyse G. Essick Vice President through 2/04 Chief Marketing Officer of Munder Capital Management
480 Pierce Street Since 4/95 (investment advisor) (September 1988 to present). Vice
Suite 300 President of @Vantage (since August 2000) and Munder
Birmingham, MI 48009 Series Trust (since February 2003), St. Clair (since April
Age 44 1995), Framlington (since November 1996), Trust (since
April 1995).
Peter K. Hoglund Vice President through 2/04 Chief Administration Officer of Munder Capital Management
480 Pierce Street and Principal Since 2/01 (investment advisor) (May 2000 to present); Associate of
Suite 300 Financial Officer Heartland Industrial Partners (a private equity group)
Birmingham, MI 48009 (October 1999 to May 2000); Sr. Portfolio Manager of
Age 36 Munder Capital Management (January 1995 to October 1999).
Vice President of @Vantage (since August 2000) and Munder
Series Trust (since February 2003), St. Clair (since
February 2001), Framlington (since February 2001), Trust
(since February 2001).
Cherie Ugorowski Treasurer and through 2/04 Controller of Munder Capital Management (investment
480 Pierce Street Principal Since 8/01 advisor) (June 2001 to present); Corporate Accounting
Suite 300 Accounting Manager, DaimlerChrysler Corporation (automotive
Birmingham, MI 48009 Officer manufacturer) (September 1999 to June 2001); Manager,
Age 34 Audit and Business Advisory Practice, Arthur Andersen LLP
(September 1990 to September 1999). Treasurer of @Vantage
(since August 2000) and Munder Series Trust (since February
2003), St. Clair (since August 2001), Framlington (since
August 2001), Trust (since August 2001).
-8-
Ownership of Bio(Tech)/2/ Fund Shares
As of the Record Date, the Nominees, Directors and officers of the Company
beneficially owned, as a group, less than 1% of the outstanding shares of the
Bio(Tech)/2/ Fund.
The following table sets forth the aggregate dollar range of equity securities
owned by each Nominee of the Bio(Tech)/2/ Fund and of all registered investment
companies in the same family of investment companies as of December 31, 2002.
The information as to beneficial ownership is based on statements furnished by
each Nominee.
Aggregate Dollar Range of Equity
Dollar Range of Equity Securities in All Registered Investment
Securities in the Companies Overseen by Director
Bio(Tech)/2/ Fund in the Family of Investment Companies
------------------------------------------------------------------------------------------------------------
Independent Nominees
Charles W. Elliott None Over $100,000
John Rakolta, Jr. None Over $100,000
David J. Brophy None $10,001-$50,000
Joseph E. Champagne None $10,001-$50,000
Thomas D. Eckert None $50,001-$100,000
Arthur T. Porter None None
[Additional Nominee] [ ] [ ]
Interested Nominee
Michael T. Monahan None Over $100,000
During the fiscal year ended June 30, 2002, the Board of Directors, which was
then composed of one interested Director and six Independent Directors, met
five times. It is expected that the Board of Directors will meet at least
quarterly at regularly scheduled meetings.
Material Relationships of Non-Interested Directors
Mr. Eckert is Director, President and Chief Executive Officer of Capital
Automotive REIT ("CARS"), a publicly-held real estate investment trust
specializing in retail automotive properties. During the calendar years 2001 and
2002, CARS had multiple secured lines of credit with leading commercial banks or
lending facilities, including one with Comerica Bank, a wholly-owned subsidiary
of Comerica Incorporated. Mr. Rakolta is Chairman and Chief Executive Officer,
Walbridge Aldinger Company ("Walbridge"), a privately-owned construction
company. During the calendar years 2001 and 2002, Walbridge had a stand-by line
of credit with Comerica Bank, a wholly-owned subsidiary of Comerica
Incorporated. In both cases, these lines of credit are standard agreements that
were negotiated at arm's-length and contain customary terms, conditions and
interest rates.
Compensation
Directors of the Company who are not employees of MCM or any of its affiliates
receive an aggregate annual retainer from St. Clair, Framlington, the Company
and the Trust for service on those organizations' respective Boards of $68,000
($90,000 for the Chairman) and receive an annual retainer of $4,000 for serving
on the Board of @Vantage. A Board member who is Chairman of a committee (Audit
Committee, Board Process and Compliance Oversight Committee, and/or Nominating
Committee) also receives an annual retainer of $3,000 for such service.
Directors are reimbursed for all out-of-pocket expenses relating to attendance
at such meetings.
The following table summarizes the compensation paid to the Directors of the
Company, including committee fees, for the twelve-month period ended December
31, 2002.
-9-
- ---------------------------------------------------------------------------------------------------------------------
Aggregate
Compensation Pension or Retirement Estimated Annual Total Compensation
from the Company Benefits Accrued as Benefits upon from Fund Complex
Name of Trustee (12 funds) (1) Part of Fund Expenses Retirement Paid to Directors
- ---------------------------------------------------------------------------------------------------------------------
Charles W. Elliott $31,123 None None $94,000
- ---------------------------------------------------------------------------------------------------------------------
John Rakolta, Jr. $24,624 None None $75,000
- ---------------------------------------------------------------------------------------------------------------------
David J. Brophy $23,583 None None $72,000
- ---------------------------------------------------------------------------------------------------------------------
Joseph E. Champagne $24,624 None None $75,000
- ---------------------------------------------------------------------------------------------------------------------
Thomas D. Eckert $24,624 None None $75,000
- ---------------------------------------------------------------------------------------------------------------------
Michael T. Monahan $23,583 None None $72,000
- ---------------------------------------------------------------------------------------------------------------------
Arthur T. Porter $23,583 None None $72,000
- ---------------------------------------------------------------------------------------------------------------------
(1) For the twelve month period ended December 31, 2002, Messrs. Mr. Elliott,
Mr. Eckert and Dr. Porter each deferred a portion of his compensation from
the Company pursuant to the deferred compensation plan described below. The
total compensation from the Company deferred by the Directors was $94,000
for Mr. Elliott, $75,000 for Mr. Eckert and $72,000 for Dr. Porter.
The Boards of Directors/Trustees of St. Clair, Framlington, the Company, the
Trust and @Vantage adopted a deferred compensation plan ("Plan") on August 14,
2001. The Plan permits each director/trustee who receives compensation from the
series of St. Clair, Framlington, the Company, the Trust and @Vantage to defer,
for a specified period of time, the receipt of all or some portion of the fees
earned for Board service. Following the Plan's adoption, each Director/Trustee
had 30 days to elect to defer fees earned from the series of St. Clair,
Framlington, the Company, the Trust and @Vantage for the remainder of the
calendar year 2001. For the calendar years after 2001, deferral elections must
be made prior to January 1 of the calendar year for which fees are to be
deferred. Previous deferral elections will automatically remain in effect for
subsequent years unless the Director/Trustee makes an alternative election prior
to January 1 of the calendar year for which fees are to be deferred. Amounts
deferred will be valued as if they were invested in one or more of the series of
St. Clair, Framlington, the Company, the Trust and @Vantage selected by the
deferring Director/Trustee. These amounts will not, however, actually be
invested in shares of the series of St. Clair, Framlington, the Company, the
Trust and @Vantage and the obligations of St. Clair, Framlington, the Company,
the Trust and @Vantage to make payments under the Plan will be unsecured general
obligations of the series of St. Clair, Framlington, the Company, the Trust and
@Vantage payable out of the general assets and property of the series of St.
Clair, Framlington, the Company, the Trust and @Vantage. A Director/Trustee may
elect to have the amounts earned under the Plan distributed (1) on a specified
date, (2) upon termination of Board service, or (3) the earlier of choice (1) or
(2). Payment of amounts earned under the Plan may be made in a lump sum or in
annual installments over the number of years specified by the Director/Trustee
(up to 10 years). If a Director/Trustee dies, the balance of the amounts earned
will be paid to his or her designated beneficiary in a lump sum.
The Munder Series Trust will assume the liabilities of the Healthcare Fund
existing under the Plan at the effective time of the reorganization and
redomiciliation of the Healthcare Fund as a series of Munder Series Trust, in
the event that the shareholders of that Fund approve the reorganization and
redomiciliation. In addition, Munder Series Trust has adopted a deferred
compensation plan that is substantially similar to the Plan in all material
respects and that will be effective at the time of the reorganization and
redomiciliation of the Healthcare Fund as a series of Munder Series Trust, in
the event that shareholders of that Fund approve the reorganization and
redomiciliation.
Standing Committees
The Company has a standing Audit Committee presently consisting of Messrs.
Eckert, Brophy, Porter and Rakolta. All are members of the Board and are not
considered to be "interested persons" of the Company, as that term is defined in
the 1940 Act ("Independent Directors"). The principal functions of the Company's
Audit Committee is to recommend to the Board the appointment of the Company's
independent auditors, to review with the auditors the scope and anticipated
costs of their audit and to receive and consider a report from the auditors
concerning their conduct of the audit, including any comments or recommendations
they might want to make in that connection. The Board has adopted a written
charter for the Audit Committee. During the last fiscal year ended June 30,
2002, the Company's Audit Committee met two times.
-10-
The Company has a Nominating Committee. The Nominating Committee presently
consists of Messrs. Brophy, Champagne, Eckert and Rakolta. The function of the
Nominating Committee is to recommend candidates for election to the Board as
independent board members. The Committee will not consider nominees recommended
by stockholders. During the last fiscal year ended June 30, 2002, the Company's
Nominating Committee met [____] times.
The Company has a Board Process and Compliance Oversight Committee. The Board
Process and Compliance Oversight Committee presently consist of Messrs.
Champagne, Monahan and Porter. The function of the Board Process and Compliance
Oversight Committee is to review and assess the adequacy of the Board's ongoing
adherence to industry corporate governance best practices and make
recommendations as to any appropriate changes; review and make recommendations
to the Board regarding director compensation and expense reimbursement policies;
undertake periodically to coordinate and facilitate evaluations of the Board and
recommend improvements, as appropriate; and meet with the Company's management
to review the ongoing adherence by the Company to its compliance guidelines and
review reports and other information concerning the status of the Company's
compliance with applicable regulatory requirements and valuation procedures.
During the last fiscal year ended June 30, 2002, the Company's Board Process and
Compliance Oversight Committee met four times.
The Nominees for Directors must be approved by a plurality of the votes cast by
shareholders of all the series of the Company (including the Bio(Tech)/2/ Fund)
in person or by proxy at the Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE ELECTION
EACH OF THE NOMINEES TO THE BOARD OF DIRECTORS.
----------------------------------
Proposal No. 2
APPROVAL OF THE AGREEMENT AND PLAN OF REORGANIZATION
----------------------------------
COMMON QUESTIONS AND ANSWERS
ABOUT THE PROPOSED REORGANIZATION
Q. How will the Reorganization affect me?
A. The assets of the Bio(Tech)/2/ Fund will be combined with those of the
Healthcare Fund and you will become a shareholder of the Healthcare Fund.
Following the Reorganization, you will receive shares of the Healthcare
Fund that are equal in value to the shares of the Bio(Tech)/2/ Fund that
you held immediately prior to the closing of the Reorganization.
(Shareholders of Class A shares, Class B shares, Class II shares, Class K
shares and Class Y shares of the Bio(Tech)/2/ Fund will receive Class A
shares, Class B shares, Class C shares, Class K shares and Class Y shares,
respectively, of the Healthcare Fund.)
While you are being asked to consider the Reorganization, shareholders of
the Healthcare Fund are simultaneously being asked to consider (i) the
reorganization and redomiciliation of the Healthcare Fund as a series of
Munder Series Trust ("MST"), a newly-created Delaware statutory trust, and
(ii) changes to the fundamental investment restrictions of the Healthcare
Fund. If shareholders of the Healthcare Fund approve the reorganization and
redomiciliation, and shareholders of the Bio(Tech)/2/ Fund approve the
Reorganization, immediately following the closing of the Reorganization,
the Healthcare Fund will be reorganized and redomiciled as a series of MST.
Thus, you will be a shareholder of the Healthcare Fund series of MST
following the Reorganization. If, on the other hand, shareholders of the
Bio(Tech)/2/ Fund approve the Reorganization, but shareholders of the
Healthcare
-11-
Fund do not approve the reorganization and redomiciliation of that Fund,
following the Reorganization you will be a shareholder of the Healthcare
Fund series of the Company. The reorganization and redomiciliation is
described further below.
Similarly, while the Bio(Tech)/2/ Fund and the Healthcare Fund currently
have substantially similar fundamental investment restrictions, to the
extent shareholders of the Healthcare Fund approve changes to the
fundamental investment restrictions of that Fund, the fundamental
investment restrictions of the Healthcare Fund will vary from the
fundamental investment restrictions of the Bio(Tech)/2/ Fund. These
potential differences are described further below.
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 Bio(Tech)/2/ Fund and the Healthcare Fund separately. We believe the
Reorganization will benefit shareholders of the Bio(Tech)/2/ Fund without
materially impacting shareholders of the Healthcare Fund.
As a result of declining assets and disappointing performance, expense
ratios for the Bio(Tech)/2/ Fund are increasing. Without significant asset
growth from sales or improvement in the performance of securities markets
generally, the Bio(Tech)/2/ Fund's expenses are expected to increase
further. The expense ratios of the Healthcare Fund have also increased over
the last year due to declining assets and disappointing performance.
However, we expect that the expense ratios of the Healthcare Fund will not
increase as a result of the Reorganization. In addition, we expect that the
Reorganization will promote greater efficiency in the operations of the
Healthcare Fund and, over the long-term, result in the reduction of certain
costs and expenses of the Healthcare Fund.
We also believe that the Bio(Tech)/2/ Fund and the Healthcare Fund have
compatible investment objectives and policies, as described in detail
below. The Reorganization will result in combining the assets of these two
Funds and consolidating their operations.
Combining the assets of the Funds is intended to provide various benefits
to shareholders of the Bio(Tech)/2/ Fund who become shareholders of the
Healthcare Fund (as well as to existing and future investors of the
Healthcare Fund). For example, the proposed Reorganization will enable
shareholders of the Bio(Tech)/2/ Fund to experience higher asset levels in
the combined Healthcare Fund, which will result in the fixed and relatively
fixed costs associated with operating the Bio(Tech)/2/ Fund, such as
transfer agency, accounting and printing expenses, being spread over a
larger asset base, thereby reducing per share expenses paid by Bio(Tech)/2/
Fund shareholders. (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 Healthcare Fund compare to those payable by the
Bio(Tech)/2/ Fund?
A. The total per share operating expenses of the Healthcare Fund are lower
than those of the Bio(Tech)/2/ 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 Bio(Tech)/2/ Fund will be
exchanged for shares of the indicated class of the Healthcare 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. However, the
-12-
Bio(Tech)/2/ Fund will bear the portion of the costs of this proxy
solicitation associated with the solicitation of shareholder approval of
Proposal 1.
Q. Who will serve as investment advisor and provide other services to the
Healthcare Fund?
A. The Healthcare Fund has the same investment advisor (MCM), the same
investment sub-advisor (Framlington Overseas Investment Management Limited,
an affiliate of MCM ("Sub-Advisor")), the same administrator (MCM), and the
same distributor (Funds Distributor, Inc.) as the Bio(Tech)/2/ Fund. A team
of professional portfolio managers employed by the Sub-Advisor makes
investment decisions for the Bio(Tech)/2/ Fund. The same team of
professional portfolio managers employed by the Sub-Advisor makes
investment decisions for the Healthcare Fund.
Q. Will I have to pay any Federal income taxes as a result of the
Reorganization?
A. The transaction is intended to qualify as a tax-free reorganization for
Federal income tax purposes. Assuming the Reorganization qualifies for such
treatment, shareholders would not recognize taxable gain or loss as a
result of the Reorganization. As a condition to the closing of the
Reorganization, the Bio(Tech)/2/ Fund will receive an opinion of counsel to
the effect that the Reorganization will qualify as a tax-free
reorganization for Federal income tax purposes. You should separately
consider any state, local and other tax consequences in consultation with
your tax advisor. Opinions of counsel are not binding on the IRS or the
courts.
Q. Will I continue to be able to exchange my shares for shares of other funds
of the Munder family of mutual funds?
A. Yes. Holders of Class A, Class B, Class C, Class K and Class Y shares of
the Healthcare 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 Framlington ("Munder Funds"), subject to certain
restrictions described in the prospectus of each Munder Fund. Before
requesting any such exchange, shareholders should carefully review the
applicable prospectus for the other fund to ensure that the fund meets
their investment objectives and needs.
Q. What happens if the Reorganization Agreement is not approved?
A. If the Reorganization Agreement is not approved by shareholders, the
Bio(Tech)/2/ Fund will be liquidated as soon as is practicable following
the Meeting. Any shares of the Bio(Tech)/2/ Fund outstanding on the date of
the liquidation will be automatically redeemed by the Company on that date.
The proceeds of any such redemption will be equal to the net asset value of
such shares after all charges, taxes, expenses and liabilities of the
Bio(Tech)/2/ Fund have been paid or provided for. In the event of a
liquidation, the Class A and the Class II shareholders of the Bio(Tech)/2/
Fund who receive proceeds in the liquidation will not be entitled to
receive a refund of any front-end sales load they paid when they purchased
their shares. Any contingent deferred sales charges that would otherwise be
charged upon the redemption of Class B and Class II shares of the
Bio(Tech)/2/ Fund will be imposed if Class B and Class II shareholders are
redeemed as a result of the liquidation.
-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 on February 11, 2003, the Board approved the Reorganization
Agreement. Subject to the approval of the shareholders of the Bio(Tech)/2/ Fund,
the Reorganization Agreement provides for:
- the transfer of all of the assets of the Bio(Tech)/2/ Fund to the
Healthcare Fund in exchange for shares of the Healthcare Fund having
an aggregate value equal to the assets and liabilities of the
Bio(Tech)/2/ Fund and the assumption by the Healthcare Fund of all of
the liabilities of the Bio(Tech)/2/ Fund;
- the distribution to each of the shareholders of the Bio(Tech)/2/ Fund
of shares of the Healthcare Fund having an aggregate net asset value
equal to the aggregate net asset value of the shares of the
Bio(Tech)/2/ Fund held by that shareholder; and
- the complete liquidation of the Bio(Tech)/2/ Fund.
The Reorganization is scheduled to be effective upon the close of business on
Friday, April 18, 2003, or on a later date as the parties may agree ("Closing
Date"). As a result of the Reorganization, each shareholder of the Bio(Tech)/2/
Fund will become the owner of the number of full and fractional shares of the
Healthcare Fund having an aggregate net asset value equal to the aggregate net
asset value of the shareholder's Bio(Tech)/2/ Fund shares as of the close of
business on the Closing Date. Shareholders of Class A shares, Class B shares,
Class II shares, Class K shares and Class Y shares of the Bio(Tech)/2/ Fund will
receive Class A shares, Class B shares, Class C shares, Class K shares and Class
Y shares, respectively, of the Healthcare Fund. See "Information About the
Reorganization" below.
For the reasons set forth below under "Reasons for the Reorganization," the
Board, including all of the Independent Directors, has concluded that the
Reorganization would be in the best interests of the shareholders of the
Bio(Tech)/2/ Fund and that the interests of the Bio(Tech)/2/ 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
shareholders of the Bio(Tech)/2/ Fund. The Board recommends that you vote "FOR"
the proposed Reorganization Agreement effecting the Reorganization. The Board of
Trustees of Framlington has also approved the Reorganization on behalf of the
Healthcare Fund.
Approval of the Reorganization will require the affirmative vote of the holders
of a majority of the outstanding shares of the Bio(Tech)/2/ Fund with all
classes voting together and not by class. See "Voting Information."
Effect of Proposed Reorganization and Redomiciliation of the Healthcare Fund
At a meeting on February 11, 2003, the Board approved an Agreement and Plan of
Reorganization and Redomiciliation with respect to the Healthcare Fund
("Redomiciliation Agreement"). If shareholders of the Healthcare Fund approve
the Redomiciliation Agreement, all of the assets of the Healthcare Fund will be
exchanged for a number of shares of a corresponding series ("New Fund") of the
Munder Series Trust, a newly-created Delaware statutory trust, representing the
same aggregate net asset value. If shareholders approve the Redomiciliation
Agreement, it is expected that the transfer would occur on or about April ___,
2003.
If shareholders of the Bio(Tech)/2/ Fund approve the Reorganization Agreement,
and the shareholders of the Healthcare Fund approve the Redomiciliation
Agreement, shareholders of the Bio(Tech)/2/ Fund will become shareholders of the
New Fund shortly after the closing of the Reorganization. On the other hand, if
shareholders of the Bio(Tech)/2/ Fund approve the Reorganization Agreement, but
the shareholders of the Healthcare Fund do not approve the Redomiciliation
Agreement, shareholders of the Bio(Tech)/2/ Fund will become shareholders of the
Healthcare Fund upon the closing of the Reorganization.
-14-
Unless otherwise specifically noted, the New Fund will be identical to the
Healthcare Fund.
Investment Objectives, Policies and Restrictions
The Bio(Tech)/2/ Fund and the Healthcare Fund have compatible investment
objectives, policies and restrictions. The goal of both the Bio(Tech)/2/ Fund
and the Healthcare Fund is to provide long-term capital appreciation. The
investment objective of both the Bio(Tech)/2/ Fund and Healthcare Fund may be
changed by the Board without shareholder approval; however, shareholders would
be notified of any such change. Although the respective investment objectives of
the Bio(Tech)/2/ Fund and the Healthcare Fund are identical, shareholders should
consider certain differences in the investment policies of, and portfolio
securities held by, each Fund.
The Bio(Tech)/2/ Fund is a diversified series of the Company. The Bio(Tech)/2/
Fund's goal is to provide long-term capital appreciation. The Fund pursues its
goal by investing in equity securities of companies engaged in developing,
producing and marketing technologically advanced solutions for the healthcare
and medical fields. Such companies derive at least 50% of sales, earnings or
assets from biotechnology products, licenses and services. Although the
Bio(Tech)/2/ Fund may invest in securities of companies located in foreign
countries with developed securities markets, most of the companies in which the
Fund invests are located in the United States.
The Bio(Tech)/2/ Fund will invest in securities of companies whose principal
business is focused on the biotechnology sector, including:
- product companies--companies whose primary focus is to discover new
products or therapies to bring to the commercial market through the
research and development process;
- platform companies--companies whose primary focus is to discover
technology that may serve as the underpinning for internal discovery
programs of pharmaceutical or biotechnology product companies. As
platform companies mature, they often evolve into product companies;
and
- enabling companies--companies that sell equipment or consumables to
companies with research and development efforts focused on
biotechnology research.
Under normal circumstances, the Bio(Tech)/2/ Fund will invest at least 80% of
its assets in companies dedicated to biotechnological solutions for the
healthcare and medical fields. This investment strategy may not be changed
without 60 days' prior notice to shareholders.
There is no limit on the market capitalization of the companies in which the
Bio(Tech)/2/ Fund may invest, or on the length of operating history for the
companies. Therefore, the Fund may invest in small companies and may invest
without limit in initial public offerings (IPOs). It is uncertain whether IPOs
will be available for investment by the Bio(Tech)/2/ Fund or what impact, if
any, they will have on the Fund's performance.
The Healthcare Fund is a diversified series of Framlington. The Healthcare
Fund's goal is to provide long-term capital appreciation. The Fund pursues its
goal by investing in equity securities of companies providing healthcare and
medical services and products worldwide. Although the Fund may invest in
securities of companies located in foreign countries with developed securities
markets, most of the companies in which the Fund invests are located in the
United States.
The Healthcare Fund will invest in:
- drug and drug delivery companies;
- biotechnology firms;
- medical device and instrument manufacturers; and
- healthcare service companies, including HMOs, hospitals, product
distributors and clinical laboratories.
-15-
Under normal circumstances, the Healthcare Fund will invest at least 80% of its
assets in healthcare companies, which are companies for which at least 50% of
sales, earnings or assets arise from or are dedicated to health services or
medical technological activities. This investment strategy may not be changed
without 60 days' prior written notice to shareholders.
The sub-advisor selects companies using a "bottom-up approach" that identifies
outstanding performance of the individual companies before considering the
impact of economic trends. The sub-advisor evaluates companies based on number
of factors, including:
- growth prospects;
- intellectual property base and scientific grounding; and
- strength of management.
The Healthcare Fund's investments may include foreign securities of companies
located in countries with mature markets.
As part of its principal investment strategies, the Bio(Tech)/2/ Fund may invest
in small companies and may invest without limit in IPOs. Although investment in
small companies and IPOs are not principal investment strategies of the
Healthcare Fund, the Healthcare Fund may make such investments. See "Comparison
of Investment Objectives and Policies" below.
Performance of the Bio(Tech)/2/ Fund and the Healthcare Fund
The bar charts and table that follow provide some indication of the risk of an
investment in each Fund. The bar charts show each Fund's performance for each
full calendar year since its inception. The table shows how each Fund's average
annual total returns for different calendar periods over the life of the Fund
compares to those of certain broad based securities market indices and other
selected indices.
The annual returns in the bar charts are for the Funds' Class Y shares.
Performance for Class A, Class B, Class C, Class II and Class K shares of each
Fund, net of applicable sales charges, would have been similar because the
shares are invested in the same portfolio of securities and have the same
portfolio management. Because of different sales charges and fees and expenses,
performance of each class will differ. Please see "Summary Comparison of Fees
and Expenses" below for information about the difference between the share
classes.
When you consider this information, please remember that each Fund's performance
in past years (before and after taxes) is not necessarily an indication of how
the Fund will perform in the future.
Bio(Tech)/2/ Fund Class Y
Total Return (%)
(per calendar year)
[BAR CHART APPEARS HERE]
2001 2002
(21.97)
-16-
Best quarter: [____% (quarter ended __________)]
Worst quarter: [____% (quarter ended __________)]
Healthcare Fund Class Y
Total Return (%)
(per calendar year)
[BAR CHART APPEARS HERE]
1997 1998 1999 2000 2001 2002
16.4 1.26 39.13 87.03 (21.21)
Best quarter: [____% (quarter ended __________)]
Worst quarter: [____% (quarter ended __________)]
The table below shows what the average annual total returns for the Bio(Tech)/2/
Fund would have been for certain periods compared to the Russell 2000 Index and
the NASDAQ Biotechnology Index and what the average annual total returns for the
Healthcare Fund would have been for certain periods compared to the Morgan
Stanley Capital International (MSCI) World Index and Russell 2000 Healthcare
Index. Each index is unmanaged and is not subject to fees and expenses typically
associated with the management of investment company portfolios. Investments
cannot be made directly in either index. Comparisons with each index, therefore,
are of limited use. They are included because they are widely known and may help
you to understand the universe of securities from which each Fund is likely to
select its holdings.
Average Annual Returns
(for periods ended December 31, 2002)
- -----------------------------------------------------------------------------------------------------------------------------
Since
1 Year 5 Years Inception/(1)/
% % %
- -----------------------------------------------------------------------------------------------------------------------------
Bio(Tech)/2/ Fund
- -----------------------------------------------------------------------------------------------------------------------------
Class Y
- -----------------------------------------------------------------------------------------------------------------------------
Return Before Taxes --
- -----------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions --
- -----------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares --
- -----------------------------------------------------------------------------------------------------------------------------
Russell 2000 Index/(2)/ (reflects no deductions of fees, expenses or taxes)
- -----------------------------------------------------------------------------------------------------------------------------
NASDAQ Biotechnology Index/(2)/ (reflects no deductions of fees, expenses or taxes) --
- -----------------------------------------------------------------------------------------------------------------------------
Class A
- -----------------------------------------------------------------------------------------------------------------------------
Return Before Taxes --
- -----------------------------------------------------------------------------------------------------------------------------
Russell 2000 Index/(2)/ (reflects no deductions of fees, expenses or taxes)
- -----------------------------------------------------------------------------------------------------------------------------
NASDAQ Biotechnology Index/(2)/ (reflects no deductions of fees, expenses or taxes) --
- -----------------------------------------------------------------------------------------------------------------------------
Class B
- -----------------------------------------------------------------------------------------------------------------------------
Return Before Taxes --
- -----------------------------------------------------------------------------------------------------------------------------
-17-
- -----------------------------------------------------------------------------------------------------------------------------
Since
1 Year 5 Years Inception/(1)/
% % %
- -----------------------------------------------------------------------------------------------------------------------------
Russell 2000 Index/(2)/ (reflects no deductions of fees, expenses or taxes)
- -----------------------------------------------------------------------------------------------------------------------------
NASDAQ Biotechnology Index/(2)/ (reflects no deductions of fees, expenses or taxes) --
- -----------------------------------------------------------------------------------------------------------------------------
Class II
- -----------------------------------------------------------------------------------------------------------------------------
Return Before Taxes --
- -----------------------------------------------------------------------------------------------------------------------------
Russell 2000 Index/(2)/ (reflects no deductions of fees, expenses or taxes)
- -----------------------------------------------------------------------------------------------------------------------------
NASDAQ Biotechnology Index/(2)/ (reflects no deductions of fees, expenses or taxes) --
- -----------------------------------------------------------------------------------------------------------------------------
Class K
- -----------------------------------------------------------------------------------------------------------------------------
Return Before Taxes
- -----------------------------------------------------------------------------------------------------------------------------
Russell 2000 Index/(2)/ (reflects no deductions of fees, expenses or taxes)
- -----------------------------------------------------------------------------------------------------------------------------
NASDAQ Biotechnology Index/(2)/ (reflects no deductions of fees, expenses or taxes)
- -----------------------------------------------------------------------------------------------------------------------------
Healthcare Fund
- -----------------------------------------------------------------------------------------------------------------------------
Class Y
- -----------------------------------------------------------------------------------------------------------------------------
Return Before Taxes
- -----------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions
- -----------------------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares
- -----------------------------------------------------------------------------------------------------------------------------
MSCI World Index/(2)/ (reflects no deductions of fees, expenses or taxes)
- -----------------------------------------------------------------------------------------------------------------------------
Russell 2000 Healthcare Index/(2)/ (reflects no deductions of fees, expenses or taxes)
- -----------------------------------------------------------------------------------------------------------------------------
Class A
- -----------------------------------------------------------------------------------------------------------------------------
Return Before Taxes
- -----------------------------------------------------------------------------------------------------------------------------
MSCI World Index/(2)/ (reflects no deductions of fees, expenses or taxes)
- -----------------------------------------------------------------------------------------------------------------------------
Russell 2000 Healthcare Index/(2)/ (reflects no deductions of fees, expenses or taxes)
- -----------------------------------------------------------------------------------------------------------------------------
Class B
- -----------------------------------------------------------------------------------------------------------------------------
Return Before Taxes
- -----------------------------------------------------------------------------------------------------------------------------
MSCI World Index/(2)/ (reflects no deductions of fees, expenses or taxes)
- -----------------------------------------------------------------------------------------------------------------------------
Russell 2000 Healthcare Index/(2)/ (reflects no deductions of fees, expenses or taxes)
- -----------------------------------------------------------------------------------------------------------------------------
Class C
- -----------------------------------------------------------------------------------------------------------------------------
Return Before Taxes
- -----------------------------------------------------------------------------------------------------------------------------
MSCI World Index/(2)/ (reflects no deductions of fees, expenses or taxes)
- -----------------------------------------------------------------------------------------------------------------------------
Russell 2000 Healthcare Index/(2)/ (reflects no deductions of fees, expenses or taxes)
- -----------------------------------------------------------------------------------------------------------------------------
Class K
- -----------------------------------------------------------------------------------------------------------------------------
Return Before Taxes
- -----------------------------------------------------------------------------------------------------------------------------
MSCI World Index/(2)/ (reflects no deductions of fees, expenses or taxes)
- -----------------------------------------------------------------------------------------------------------------------------
Russell 2000 Healthcare Index/(2)/ (reflects no deductions of fees, expenses or taxes)
- -----------------------------------------------------------------------------------------------------------------------------
- ----------
(1) The inception date for the Class Y, Class A, Class B, Class II and Class K
shares of the Bio(Tech)/2/ Fund is 11/1/00. The inception dates for the
Class Y, Class A, Class B, Class C and Class K shares of the Healthcare
Fund are 12/31/96, 2/14/97, 1/31/97, 1/13/97 and 4/1/97, respectively. The
index returns from inception dates for the Class Y, Class A, Class B, Class
C and Class K shares of the Healthcare Fund are from 1/1/97, 2/1/97,
2/1/97, 1/1/97 and 4/1/97, respectively.
(2) The Russell 2000 Index is an unmanaged index that measures the performance
of the bottom 2,000 (based on capitalization) of the 3,000 largest
capitalized U.S. publicly traded companies. The NASDAQ Biotechnology Index
is a modified capitalization-weighted index designed to measure the
performance of all NASDAQ stocks in the biotechnology sector. The Morgan
Stanley Capital International (MSCI) World Index is an unmanaged index that
measures the common stock price movement in developed countries. The
Russell 2000 Healthcare Index is an unmanaged index that measures the
performance of those Russell 2000 companies (the bottom 2,000 based on
capitalization of the 3,000 largest U.S. publicly-traded companies) within
the healthcare sectors.
Average annual returns reflect the imposition of the maximum front-end or
contingent deferred sales charge.
After-tax returns are calculated using the historical highest individual federal
marginal income tax rates and do not reflect the impact of state and local
taxes. Actual after-tax returns depend on an investor's tax situation and may
differ from those shown. If there is a capital loss at the end of the period,
the return after taxes on the distributions and sale of Fund shares may exceed
the return before taxes due to the tax benefit of realizing a capital loss upon
the sale of Fund shares, which is factored into the result. After-tax returns
shown are not relevant to investors who hold their Fund shares through
tax-deferred arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns for the Funds are shown only for the Class Y shares;
Class A, Class B, Class C, Class II and Class K shares will vary.
-18-
Summary Comparison of Fees and Expenses
The following tables compare the fees and expenses of each class of the
Bio(Tech)/2/ Fund and the Healthcare Fund and show the estimated fees and
expenses for each class on a pro forma basis, giving effect to the proposed
Reorganization. We have estimated these pro forma numbers in good faith, based
on information contained in the Annual Reports for the previous fiscal year for
each class of shares for each Fund, with certain adjustments.
Since the figures shown for the Bio(Tech)/2/ Fund and the Healthcare Fund are as
of the Funds' fiscal year ended June 30, 2002, certain adjustments have been
made in calculating the pro forma expenses in order to reflect:
(i) the full annual impact of a new fee arrangement with the
Funds' transfer agent that became effective January 1, 2002;
(ii) the full annual impact of a contractual fee waiver
arrangement with the Funds' transfer agent, effective March 1, 2002, under
which the transfer agent waives fees charged to a Fund in an amount
equivalent to the servicing fees the transfer agent collects from the
Fund's shareholders in connection with servicing shareholder accounts below
certain minimum balances; and
(iii) the full annual impact of a new administrative services
arrangement with MCM effective June 1, 2002.
The fee and expense information shown in the table below is organized as
follows:
- Column 1 reflects the actual fees and expenses of each class of the
Bio(Tech)/2/ Fund calculated at the Fund's fiscal year end, June 30,
2002, adjusted to reflect the effects of items (i), (ii) and (iii),
above, as if they had been in effect for the entire fiscal year.
- Column 2 reflects the actual fees and expenses of each class of the
Healthcare Fund calculated at the Fund's fiscal year end, June 30,
2002, adjusted to reflect the effects of items (i), (ii) and (iii),
above, as if they had been in effect for the entire fiscal year.
- Column 3 reflects the pro forma fees and expenses of the Healthcare
Fund as if the Reorganization had occurred on June 30, 2002. These pro
forma fees and expenses have also been adjusted to reflect the effects
of items (i), (ii) and (iii), above, as if they had been in effect for
the entire fiscal year, as well as any expected savings that may occur
as a result of the Funds being combined in the Reorganization.
Additional information regarding the performance of the Funds is contained in
"Management's Discussion of Fund Performance and Financial Highlights" in this
Proxy Statement/Prospectus.
Bio(Tech)/2/ Healthcare 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) 5.50%(a) 5.50%(a) 5.50%(a)
Maximum Deferred Sales Charge (Load)
(as a percentage of redemption proceeds) None (b) None (b) None (b)
Maximum Sales Charge (Load) Imposed on Reinvested Dividends None None None
Redemption Fees None 2%(c) 2%(c)
Exchange Fees None None None
-19-
Annual Fund Operating Expenses (expenses that are deducted
from Fund assets) (as a percentage of average net assets)
Management Fee 1.25% 0.91% 0.90%
Distribution and/or Service (12b-1) Fees 0.25% 0.25% 0.25%
Other Expenses 1.15%(d)(e)(f) 0.65%(g)(h)(i) 0.66%(j)
--------- --------- -------
Total Annual Fund Operating Expenses 2.65%(d)(e) 1.81%(g)(h) 1.81%(j)
Less Contractual Fee Waiver (0.07)%(i) (0.01)%(i) (0.02)%(j)
--------- --------- -------
Net Expenses 2.58% 1.80% 1.79%(j)
========= ========= =======
Bio(Tech)/2/ Healthcare Combined
Fund Fund 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) 5.00%(k) 5.00%(k) 5.00%(k)
Maximum Sales Charge (Load) Imposed on Reinvested Dividends None None None
Redemption Fees None 2%(c) 2%(c)
Exchange Fees None None None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets) (as a percentage of average net assets)
Management Fee 1.25% 0.91% 0.90%
Distribution and/or Service (12b-1) Fees 1.00% 1.00% 1.00%
Other Expenses 1.15%(d)(e)(f) 0.65%(g)(h)(i) 0.66%(j)
--------- -------- -------
Total Annual Fund Operating Expenses 3.40%(d)(e) 2.56%(g)(h) 2.56%(j)
Less Contractual Fee Waiver (0.07)%(i) (0.01)%(i) (0.02)%(j)
--------- --------- -------
Net Expenses 3.33% 2.55% 2.54%(j)
========= ========= =======
Bio(Tech)/2/ Healthcare
Fund Fund Combined
Class II Shares Class C Shares Pro Forma
--------------- -------------- ---------
Class II/C Shares
Shareholder Fees (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) 1.00% None 1.00%
Maximum Deferred Sales Charge (Load)
(as a percentage of redemption proceeds) 1.00%(l) 1.00%(m) 1.00%(n)
Maximum Sales Charge (Load) Imposed on Reinvested Dividends None None None
Redemption Fees None 2%(c) 2%(c)
Exchange Fees None None None
Annual Fund Operating Expenses (expenses that are
deducted from Fund assets) (as a percentage of average
net assets)
Management Fee 1.25% 0.91% 0.90%
Distribution and/or Service (12b-1) Fees 1.00% 1.00% 1.00%
Other Expenses 1.15%(d)(e)(f) 0.65%(g)(h)(i) 0.66%(j)
--------- --------- -------
Total Annual Fund Operating Expenses 3.40%(d)(e) 2.56%(g)(h) 2.56%(j)
Less Contractual Fee Waiver (0.07)%(i) (0.01)%(i) (0.02)%(j)
--------- --------- -------
Net Expenses 3.33% 2.55% 2.54%(j)
========= ========= =======
-20-
Bio(Tech)/2/ Healthcare Combined
Fund Fund Pro Forma
---- ---- ---------
Class K 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 Fees None None None
Exchange Fees None None None
Annual Fund Operating Expenses (expenses that are deducted
from Fund assets) (as a percentage of average net assets)
Management Fee 1.25% 0.91% 0.90%
Shareholder Servicing Fees 0.25% 0.25% 0.25%
Other Expenses 1.15%(d)(e)(f) 0.65%(g)(h)(i) 0.66%(j)
------- ------- -------
Total Annual Fund Operating Expenses 2.65%(d)(e) 1.81%(g)(h) 1.81%(j)
Less Contractual Fee Waiver (0.07)%(i) (0.01)%(i) (0.02)%(j)
------- ------- -------
Net Expenses 2.58% 1.80% 1.79%(j)
======= ======= =======
Bio(Tech)/2/ Healthcare 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 Fees None None None
Exchange Fees None None None
Annual Fund Operating Expenses (expenses that are deducted
from Fund assets) (as a percentage of average net assets)
Management Fee 1.25% 0.91% 0.90%
Other Expenses 1.15%(d)(e)(f) 0.65%(g)(h)(i) 0.66%(j)
------- ------- -------
Total Annual Fund Operating Expenses 2.40%(d)(e) 1.56%(g)(h) 1.56%(j)
Less Contractual Fee Waiver (0.07)%(i) (0.01)%(i) (0.02)%(j)
------- ------- -------
Net Expenses 2.33% 1.55% 1.54%(j)
======= ======= =======
- ----------
(a) The sales charge declines as the amount invested increases.
(b) A contingent deferred sales charge (CDSC) is a one-time fee charged at the
time of redemption. If you redeem within one year of purchase Class A
shares that were purchased with no initial sales charge as part of an
investment of $1 million or more, a 1% CDSC will apply upon redemption. A
CDSC on Class A shares of the Healthcare Fund acquired by holders of Class
A shares of the Bio(Tech)/2/ Fund pursuant to the Reorganization will only
be imposed on redemptions on which a CDSC would have applied to the Class A
shares of the Bio(Tech)/2/ Fund.
(c) Effective January 1, 2003, a short-term trading fee of 2% will be assessed
on redemptions made within 60 days of purchase of Class A, Class B or Class
C shares of the Healthcare Fund. This short-term trading fee will not apply
to shares of the Healthcare Fund acquired by shareholders of the
Bio(Tech)/2/ Fund as part of the Reorganization.
(d) Effective February 15, 2003, MCM discontinued its reimbursements of
operating expenses of the Bio(Tech)/2/ Fund. Prior to February 15, 2003,
MCM voluntarily agreed to reimburse the Bio(Tech)/2/ Fund for certain
operating expenses. As a result of the reimbursement, Other Expenses and
Total Annual Fund Operating Expenses based on the prior fiscal year (as
adjusted but before contractual fee waivers) would have been 0.82% and
2.32%, respectively for Class A shares and Class K shares, 0.82% and 3.07%,
respectively for each of Class B and Class II shares and 0.82% and 2.07%,
respectively for Class Y shares.
(e) Effective March 1, 2002, the transfer agent contractually agreed to waive,
for the period of its contract with the Bio(Tech)/2/ Fund, a portion of its
fees it charges the Fund in an amount equal to the servicing fees it
collects from Fund shareholders with accounts that have balances below the
specified minimum. As a result of this arrangement, during the fiscal year
ended June 30, 2002, the servicing fees collected by the transfer agent as
adjusted effectively reduced Other Expenses and Total Annual Fund Operating
Expenses by 0.07%.
(f) Actual unadjusted total operating expenses of the Bio(Tech)/2/ Fund for the
fiscal year ended June 30, 2002 were:
Class A 2.68%
Class B 3.43%
-21-
Class II 3.43%
Class K 2.68%
Class Y 2.43%
(g) From July 1, 2001 through March 31, 2002, MCM voluntarily agreed to
reimburse the Healthcare Fund for certain operating expenses. As of March
31, 2002 such reimbursements were discontinued. As a result of the
reimbursement, Other Expenses and Total Annual Fund Operating Expenses
based on the prior fiscal year (before contractual fee waivers) would have
been 0.48% and 1.64%, respectively for Class A shares and Class K shares,
0.48% and 2.39%, respectively for each of Class B and Class C shares and
0.48% and 1.39%, respectively for Class Y shares.
(h) Effective March 1, 2002, the transfer agent contractually agreed to waive,
for the period of its contract with the Healthcare Fund, a portion of its
fees it charges the Fund in an amount equal to the servicing fees it
collects from Fund shareholders with accounts that have balances below the
specified minimum. As a result of this arrangement, during the fiscal year
ended June 30, 2002, the servicing fees collected by the transfer agent as
adjusted effectively reduced Other Expenses and Total Annual Fund Operating
Expenses by 0.01%.
(i) Actual unadjusted total operating expenses of the Healthcare Fund for the
fiscal year ended June 30, 2002 were:
Class A 1.72%
Class B 2.47%
Class C 2.47%
Class K 1.72%
Class Y 1.47%
(j) The pro forma fees and expenses shown in the table reflect the following
adjustments: a decrease in the investment advisory fee applicable to the
combined Fund because the additional assets will allow the Fund to pass a
breakpoint in the applicable fee schedule; effect of spreading fixed fees
and expenses over a broader shareholder base; the new transfer agent fee as
if it had been in effect during the entire fiscal year ended June 30, 2002;
the contractual fee waiver under which the transfer agent waives fees
charged to a Fund in an amount equivalent to the servicing fees the
transfer agent collects from the Fund's shareholders in connection with
servicing shareholder accounts below certain minimum balances, as if it had
been in effect during the entire fiscal year ended June 30, 2002; the new
administrative services arrangement with MCM as if it had been in effect
during the entire fiscal year ended June 30, 2002; and the elimination of
duplicative fees paid on a per fund basis.
(k) The CDSC payable upon redemption of Class B shares declines over time.
(l) The CDSC applies to redemptions of Class II shares within eighteen months
of purchase.
(m) The CDSC applies to redemptions of Class C shares within one year of
purchase.
(n) The CDSC applies to redemptions of Class II shares within eighteen months
of purchase. However, the CDSC will apply to Class C shares of the
Healthcare Fund acquired by holders of Class II shares of the Bio(Tech)/2/
Fund pursuant to the Reorganization to the same extent the CDSC would have
applied to the Class II shares of the Bio(Tech)/2/ Fund.
Example
The Example is intended to help you compare the cost of investing in each Fund
and the Funds combined 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, that each Fund's operating expenses remain the same and that all dividends
and distributions are reinvested. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
Class A Shares
1 year 3 years 5 years 10 years
------ ------- ------- --------
Bio(Tech)/2/ Fund $803 $1,328 $1,878 $3,369
Healthcare Fund $724 $1,088 $1,476 $2,560
Pro Forma: the Funds Combined $724 $1,088 $1,476 $2,560
Class B Shares Assuming You Sold Your Shares at the End of the Period
1 year 3 years 5 years 10 years
------ ------- ------- --------
Bio(Tech)/2/ Fund $893 $1,345 $1,969 $3,512
Healthcare Fund $759 $1,096 $1,560 $2,709
Pro Forma: the Funds Combined $759 $1,096 $1,560 $2,709
* Reflects conversion of Class B shares to Class A shares (which pay lower
ongoing expenses) approximately eight years after the date of original
purchase.
-22-
Class B Shares Assuming You Stayed in the Fund
1 year 3 years 5 years 10 years
------ ------- ------- --------
Bio(Tech)/2/ Fund $343 $1,045 $1,769 $3,512
Healthcare Fund $259 $ 796 $1,360 $2,709
Pro Forma: the Funds Combined $259 $ 796 $1,360 $2,709
* Reflects conversion of Class B shares to Class A shares (which pay lower
ongoing expenses) approximately eight years after the date of original
purchase.
Class II/C Shares Assuming You Sold Your Shares at the End of the Period
1 year 3 years 5 years 10 years
------ ------- ------- --------
Bio(Tech)/2/ Fund $539 $1,134 $1,852 $3,748
Healthcare Fund $359 $ 796 $1,360 $2,895
Pro Forma: the Funds Combined $457 $ 889 $1,447 $2,966
Class II/C Shares Assuming You Stayed in the Fund
1 year 3 years 5 years 10 years
------ ------- ------- --------
Bio(Tech)/2/ Fund $439 $1,134 $1,852 $3,748
Healthcare Fund $259 $ 796 $1,360 $2,895
Pro Forma: the Funds Combined $357 $ 889 $1,447 $2,966
Class K Shares
1 year 3 years 5 years 10 years
------ ------- ------- --------
Bio(Tech)/2/ Fund $268 $823 $1,405 $2,983
Healthcare Fund $184 $569 $ 980 $2,127
Pro Forma: the Funds Combined $184 $569 $ 980 $2,127
Class Y Shares
1 year 3 years 5 years 10 years
------ ------- ------- --------
Bio(Tech)/2/ Fund $243 $748 $1,280 $2,736
Healthcare Fund $159 $493 $ 850 $1,856
Pro Forma: the Funds Combined $159 $493 $ 850 $1,856
Following the Reorganization and in the ordinary course of business, we expect
that certain holdings of the Bio(Tech)/2/ Fund that are transferred to the
Healthcare Fund in connection with the Reorganization may be sold. Such sales
may result in additional transaction costs for the Healthcare 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 Healthcare
Fund.
Purchase and Redemption Procedures
Purchases and redemptions of shares are subject to certain minimum investment
requirements, charges, and waivers of charges applicable to the various classes
of both the Bio(Tech)/2/ Fund and the Healthcare Fund. For details on how to
purchase or redeem shares of either Fund, see "How to Purchase, Sell and
Exchange Shares--Policies and Procedures for Your Investment."
Exchange Privileges
You may exchange shares of each class of each Fund for shares of the same class
in other Munder Funds to the extent the class exists and shares are offered for
sale in the shareholder's state of residence and subject to any applicable sales
charge. You may exchange Class C or Class II shares for Class C or Class II
shares of other Munder Funds, based on their relative net asset values ("NAVs").
Class B, Class C and Class II shares will continue to age from the date of the
original purchase and will retain the same CDSC rate in effect before the
exchange. We will not impose any exchange fee on any of these exchange
privileges. Any exchange will be a taxable event for which you may have to
recognize a gain or loss under Federal income tax law. We reserve the right to
amend or terminate the exchange privilege at any time. See "How to Purchase,
Sell and Exchange Shares--Policies and Procedures for Your Investment."
-23-
Dividends and Distributions
Both Funds declare and pay dividends from net investment income, if any, at
least annually and 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, Bio(Tech)/2/ Fund shareholders that have
elected to receive distributions in cash will continue to receive distributions
in such manner from the Healthcare Fund. See "How to Purchase, Sell and Exchange
Shares--Distributions."
Tax Consequences
Prior to completion of the Reorganization, the Bio(Tech)/2/ Fund will have
received from counsel an opinion to the effect that the Reorganization will
qualify as a tax-free reorganization for Federal income tax purposes. See
"Information about the Reorganization--Federal Income Tax Consequences."
Shareholder Voting Rights
Neither the Bio(Tech)/2/ Fund, a series of a Maryland corporation, nor the
Healthcare 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 Framlington's
Declaration of Trust, shareholders of the Healthcare Fund do not have appraisal
rights in connection with a combination or acquisition of the assets of another
fund. Under the laws of the State of Maryland, shareholders of the Bio(Tech)/2/
Fund do not have appraisal rights in connection with a combination or
acquisition of the assets of the Bio(Tech)/2/ Fund by another entity.
Risk Factors
Because the Bio(Tech)/2/ Fund and the Healthcare Fund invest in similar types of
securities, investment in these Funds involves similar investment risks. These
risks include those that are generally associated with investing in equity
securities. However, as part of its principal investment strategies, the
Bio(Tech)/2/ Fund may invest in small companies and may invest without limit in
IPOs. While the Healthcare Fund may also invest in small companies and IPOs,
such investments are not principal investment strategies of the Healthcare Fund.
See "Comparison of Investment Objectives and Policies" below.
Smaller Company Stock Risk. The stocks of small or medium-size companies may be
more susceptible to market downturn, and their prices may be more volatile than
those of larger companies. Small companies often have narrower markets and more
limited managerial and financial resources than larger, more established
companies. In addition, small company stocks typically are traded in lower
volume, and their issuers are subject to greater degrees of changes in their
earnings and prospects.
IPO Risk. Investments by the Bio(Tech)/2/ Fund in IPOs may result in increased
transaction costs and expenses and the realization of short-term capital gains
and distributions. In addition, in the period immediately following an IPO,
investments may be subject to more extreme price volatility than that of other
equity investments. The Fund may lose all or part of its investments if the
companies making their IPOs fail and their product lines fail to achieve an
adequate level of market recognition or acceptance.
-24-
REASONS FOR THE REORGANIZATION
Currently, the Bio(Tech)/2/ Fund and the Healthcare 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 Bio(Tech)/2/ Fund to pursue their investment goals in
a larger fund that has investment objectives, policies and restrictions that are
compatible with those of the Bio(Tech)/2/ Fund. A larger fund should enhance the
ability of MCM to effect portfolio transactions on more favorable terms and give
MCM greater investment flexibility and the ability to select a larger number of
portfolio securities with the attendant benefits of increased diversification. A
larger fund should not be as significantly affected by high levels of
shareholder redemptions. In addition, the larger aggregate net assets should
enable the combined fund over the long term to obtain the benefits of economies
of scale, permitting the reduction of certain costs and expenses which may
result in lower overall expense ratios through the spreading of fixed costs of
operations over a larger asset base. As a general rule, economies of scale can
be realized with respect to fixed expenses, such as printing costs and fees for
certain professional services, although expenses that are based on the value of
assets or on the number of shareholder accounts, such as transfer agent fees,
would be largely unaffected by the Reorganization. Moreover, we cannot assure
you that economies of scale can be realized.
As a result of declining assets and disappointing performance, expense ratios
for the Bio(Tech)/2/ Fund are increasing. Without significant asset growth from
sales or improvement in the performance of securities markets generally, the
Bio(Tech)/2/ Fund's expenses are expected to increase further. The expense
ratios of the Healthcare Fund have also increased over the last year due to
declining assets and disappointing performance. However, as shown in the table
of fees and expenses of the Funds (see "Summary Comparison of Fees and
Expenses"), we expect that the expense ratios of the Healthcare Fund will not
increase as a result of the Reorganization. In addition, for the reasons
expressed above, we expect that the Reorganization will promote greater
efficiency in the operations of the Healthcare Fund and, over the long-term,
result in the reduction of certain costs and expenses of the Healthcare Fund.
In light of the foregoing considerations, the Board unanimously concluded that
the Reorganization is in the best interests of the Bio(Tech)/2/ Fund and its
shareholders and that the Reorganization would not result in a dilution of
shareholders' interests. Similarly, the Board of Trustees of Framlington has
approved the Reorganization with respect to the Healthcare Fund and determined
that the Reorganization is in the best interests of shareholders of the
Healthcare Fund and that the interests of shareholders of the Healthcare Fund
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 Healthcare Fund will acquire all of the assets, subject to all of the
liabilities, of the Bio(Tech)/2/ Fund in exchange for shares of the Healthcare
Fund. Subject to the satisfaction of the conditions described below, such
acquisition is scheduled to occur upon the close of business on Friday, April
18, 2003, or on a later date as the parties may agree ("Closing Date"). The net
asset value per share of the Bio(Tech)/2/ Fund and the net asset value per share
of the Healthcare Fund will be determined by dividing the combined Healthcare
Fund's assets, less liabilities, by the total number of its outstanding shares.
-25-
Both the Bio(Tech)/2/ Fund and the Healthcare Fund will utilize State Street
Bank and Trust Company to determine the value of their respective portfolio
securities. The Bio(Tech)/2/ Fund and the Healthcare Fund also will use the same
independent pricing services to determine the value of each security so that
State Street Bank and Trust Company can determine the aggregate value of each
Fund's portfolio. The method of valuation employed will be in accordance with
the procedures described in the current prospectuses as set forth in the
Reorganization Agreement, which is consistent with Rule 22c-1 under the 1940 Act
and with the interpretations of such rule by the SEC.
The number of full and fractional shares of the Healthcare Fund you will receive
in the Reorganization will be equal in value to the value of your 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
Bio(Tech)/2/ 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 Healthcare Fund received by the Bio(Tech)/2/ Fund in the
Reorganization. We will accomplish the liquidation and distribution with respect
to each class of the Bio(Tech)/2/ Fund's shares by the transfer of the
Healthcare Fund shares then credited to the account of the Bio(Tech)/2/ Fund on
the books of the Healthcare Fund to open accounts on the share records of the
Healthcare Fund in the names of the Bio(Tech)/2/ Fund shareholders. The
aggregate net asset value of Class A, Class B, Class C, Class K and Class Y
Healthcare Fund shares to be credited to Class A, Class B, Class II, Class K and
Class Y Bio(Tech)/2/ Fund shareholders, respectively, will, with respect to each
class, be equal to the aggregate net asset value of the shares of common stock
($0.01 par value per share) of the Bio(Tech)/2/ Fund of the corresponding class
owned by Bio(Tech)/2/ Fund shareholders on the Closing Date. All issued and
outstanding shares of the Bio(Tech)/2/ Fund will simultaneously be canceled on
the books of the Bio(Tech)/2/ Fund, although share certificates representing
interests in Class A, Class B, Class II, Class K and Class Y shares of the
Bio(Tech)/2/ Fund will represent a number of the corresponding class of
Healthcare Fund shares after the Closing Date. The Healthcare Fund will not
issue certificates representing the Class A, Class B, Class C, Class K and Class
Y Healthcare Fund shares issued in connection with such exchange.
After such distribution, the Company will take all necessary steps under
Maryland law, the Company's charter and any other applicable law to effect a
complete dissolution of the Bio(Tech)/2/ Fund.
The Board has determined, with respect to the Bio(Tech)/2/ Fund, and the Board
of Trustees of Framlington has determined, with respect to the Healthcare Fund,
that the interests of shareholders of each of those Funds will not be diluted as
a result of the Reorganization and that participation in the Reorganization is
in the best interests of each of those Funds and its shareholders. MCM will bear
the expenses of the Reorganization, including the cost of a proxy soliciting
agent that has been retained but excluding brokerage fees and brokerage expenses
incurred in connection with the Reorganization. However, the Bio(Tech)/2/ Fund
will bear the portion of the costs of this proxy solicitation associated with
the solicitation of shareholder approval of Proposal 1. That allocated amount is
expected to be approximately [$_________/____% of the total expenses of the
solicitation expenses]. The types of expenses allocated to the Bio(Tech)/2/ Fund
may include, without limitation, legal fees, printing and mailing costs, and
fees and expenses of any proxy solicitation firm engaged.
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 Bio(Tech)/2/ Fund, if circumstances should
develop that, in the Board's opinion, make proceeding with the Reorganization
inadvisable. The Reorganization Agreement provides that the Company, on behalf
of the Bio(Tech)/2/ Fund, and Framlington, on behalf of the Healthcare Fund, 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 Bio(Tech)/2/ 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 Bio(Tech)/2/ Fund with all classes voting together
and not by class. See "Voting Information."
-26-
At its February 11, 2003 meeting, the Board also approved the liquidation of the
Bio(Tech)/2/ Fund in the event that shareholders of the Bio(Tech)/2/ Fund do not
approve the Reorganization. As a result, if the Reorganization Agreement is not
approved by the shareholders of the Bio(Tech)/2/ Fund, or is not consummated for
any other reason, the Bio(Tech)/2/ Fund will be liquidated as promptly as
possible. Any shares of the Bio(Tech)/2/ Fund outstanding on the date of the
liquidation will be automatically redeemed by the Company on that date. The
proceeds of any such redemption will be equal to the NAV of such shares after
all charges, taxes, expenses and liabilities of the Bio(Tech)/2/ Fund have been
paid or provided for. In the event of a liquidation, the Class A and the Class
II shareholders of the Bio(Tech)/2/ Fund who receive proceeds in the liquidation
will not be entitled to receive a refund of any front-end sales load they paid
when they purchased their shares. Any contingent deferred sales charges that
would otherwise be charged upon the redemption of Class B and Class II shares of
the Bio(Tech)/2/ Fund will be imposed if Class B and Class II shareholders are
redeemed as a result of the liquidation. Any liquidation would be expected to be
a taxable event for shareholders.
THE BOARD, INCLUDING ALL OF THE INDEPENDENT DIRECTORS, HAS UNANIMOUSLY
RECOMMENDED APPROVAL OF THE REORGANIZATION AGREEMENT.
Shareholders of the Bio(Tech)/2/ Fund as of the Record Date will receive shares
of the Healthcare 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.
Description of the Healthcare Fund's Shares
Full and fractional shares of the respective class of shares of beneficial
interest of the Healthcare Fund will be issued to the Bio(Tech)/2/ Fund's
shareholders in accordance with the procedures detailed in the Reorganization
Agreement. The Healthcare Fund no longer issues share certificates. The shares
of the Healthcare Fund to be issued to Bio(Tech)/2/ 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 Bio(Tech)/2/ Fund, the Healthcare Fund, the
Bio(Tech)/2/ Fund (except for "section 1256 contracts) or the shareholders of
the Bio(Tech)/2/ Fund. As a condition to the closing of the Reorganization, the
Bio(Tech)/2/ Fund will receive a legal opinion to that effect. That opinion will
be based upon certain representations and warranties made by the Bio(Tech)/2/
Fund and the Healthcare Fund and certifications received from each of the Funds
and certain of their service providers.
Immediately prior to the Reorganization, the Bio(Tech)/2/ 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 Bio(Tech)/2/ 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
Bio(Tech)/2/ Fund's shareholders.
As of June 30, 2002, the Bio(Tech)/2/ Fund had an unused capital loss carryover
in excess of $1.7 million. At that time, the Bio(Tech)/2/ Fund also had a
"built-in-loss" (i.e., the amount by which the tax basis of its investment
assets exceeded the fair market value of its assets) of $_____. Capital loss
carryovers and built-in-losses (when realized) are considered valuable tax
attributes because they can reduce a fund's future taxable income and thus
reduce the taxable amount distributed to fund shareholders.
The proposed Reorganization will affect the use of these tax attributes in two
respects. The first concerns the "sharing" of these tax attributes with the
shareholders of the Healthcare Fund. If there were no Reorganization, these tax
attributes would inure solely to the benefit of the shareholders of the
Bio(Tech)/2/ Fund. If the Reorganization occurs, these tax attributes carry over
(subject to the limitations described below) to the
-27-
Healthcare Fund. That means that any resulting tax benefits inures to all
shareholders of the Healthcare Fund (i.e., both pre-Reorganization shareholders
of the Bio(Tech)/2/ Fund and pre-Reorganization shareholders of the Healthcare
Fund).
The second manner in which the Reorganization will affect the use of the capital
loss carryover and built-in losses concerns certain limitations imposed under
the Code with respect to the use of these losses. Very generally, when more than
50% of the stock of a "loss corporation" such as the Bio(Tech)/2/ Fund is
acquired (as will be the case here), the Code imposes various limitations on the
use of loss carryovers and built-in-losses following the acquisition. The amount
of such loss carryovers and built-in-losses that can be used each year to offset
post-acquisition income is generally limited to an amount equal to the "federal
long-term tax-exempt rate" (the applicable rate as of February 2003 was 4.65%)
multiplied by the value of the "loss corporation's" equity. Furthermore, capital
losses may generally be carried forward for only eight years in the case of
regulated investment companies. Considering that the combined amount of capital
loss carryovers and built-in-losses as of June 30, 2002 was not inconsequential,
a substantial limitation on the use of these losses is expected.
You should consult your tax advisor regarding the effect, if any, of the
proposed Reorganization in light of your individual circumstances. Since the
foregoing discussion only relates to the Federal income tax consequences of the
Reorganization, you should also consult your tax advisor as to state and other
local tax consequences, if any, of the Reorganization.
Capitalization
The following table shows the capitalization of the Bio(Tech)/2/ Fund and the
Healthcare 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.
As of June 30, 2002
--------------------------------------------------------------------
Pro Forma after
---------------
CLASS A SHARES Bio(Tech)/2/ Fund Healthcare Fund Reorganization
- -------------- ----------------- --------------- --------------
Net Assets ........................ $3,048,927.54 $81,104,103.45 $84,153,030.99
Net asset value per share ......... $ 3.89 $ 16.11 $ 16.11
Shares outstanding ................ 783,786 5,034,395 5,223,652
As of June 30, 2002
--------------------------------------------------------------------
Pro Forma after
---------------
CLASS B SHARES Bio(Tech)/2/ Fund Healthcare Fund Reorganization
- -------------- ----------------- --------------- --------------
Net Assets ........................ $4,563,667.14 $119,265,872.18 $123,829,539.32
Net asset value per share ......... $ 3.83 $ 15.47 $ 15.47
Shares outstanding ................ 1,191,558 7,709,494 8,004,495
As of June 30, 2002
--------------------------------------------------------------------
Pro Forma after
---------------
CLASS II/C SHARES Bio(Tech)/2/ Fund Healthcare Fund Reorganization
- ----------------- ----------------- --------------- --------------
Net Assets ........................ $1,796,747.52 $61,910,652.90 $63,707,400.42
Net asset value per share ......... $ 3.84 $ 15.45 $ 15.45
Shares outstanding ................ 467,903 4,007,162 4,123,456
-28-
As of June 30, 2002
----------------------------------------------------------------
Pro Forma after
---------------
CLASS K SHARES Bio(Tech)/2/ Fund Healthcare Fund Reorganization
- -------------- ----------------- --------------- --------------
Net Assets ....................... $198.90 $436,618.24 $436,817.14
Net asset value per share ........ $ 3.90 $ 16.09 $ 16.09
Shares outstanding ............... 51 27,136 27,148
As of June 30, 2002
----------------------------------------------------------------
Pro Forma after
---------------
CLASS Y SHARES Bio(Tech)/2/ Fund Healthcare Fund Reorganization
- -------------- ----------------- --------------- --------------
Net Assets ....................... $850,960.67 $5,997,551.04 $6,848,511.71
Net asset value per share ........ $ 3.91 $ 16.32 $ 16.32
Shares outstanding ............... 217,637 367,497 419,639
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES
The following discussion comparing investment objectives, policies and
restrictions of the Bio(Tech)/2/ Fund and the Healthcare Fund is based upon and
qualified in its entirety by the respective investment objectives, policies and
restrictions sections of the prospectuses of the Bio(Tech)/2/ Fund and the
Healthcare Fund each dated October 31, 2002, as supplemented February __, 2003,
with respect to all classes of shares.
Investment Objectives of Each Fund
The investment objective of each Fund is to provide long-term capital
appreciation. The investment objective of the Bio(Tech)/2/ Fund and the
Healthcare Fund may be changed by the Board of Directors of the Company and the
Board of Trustees of Framlington, respectively, without shareholder approval;
however, shareholders would be notified of any such change. Although the
respective investment objectives of the Bio(Tech)/2/ Fund and the Healthcare
Fund are identical, shareholders should consider certain differences in the
investment policies of, and portfolio securities held by, each Fund.
Primary Investments of Each Fund
The Bio(Tech)/2/ Fund is a diversified series of the Company. The Bio(Tech)/2/
Fund's goal is to provide long-term capital appreciation. The Fund pursues its
goal by investing in equity securities of companies engaged in developing,
producing and marketing technologically advanced solutions for the healthcare
and medical fields. Such companies derive at least 50% of sales, earnings or
assets from biotechnology products, licenses and services. Although the Fund may
invest in securities of companies located in foreign countries with developed
securities markets, most of the companies in which the Fund invests are located
in the United States.
The Bio(Tech)/2/ Fund will invest in securities of companies whose principal
business is focused on the biotechnology sector, including:
- product companies--companies whose primary focus is to discover new
products or therapies to bring to the commercial market through the
research and development process;
- platform companies--companies whose primary focus is to discover
technology that may serve as the underpinning for internal discovery
programs of pharmaceutical or biotechnology product companies. As
platform companies mature, they often evolve into product companies;
and
-29-
- enabling companies--companies that sell equipment or consumables to
companies with research and development efforts focused on
biotechnology research.
Under normal circumstances, the Bio(Tech)/2/ Fund will invest at least 80% of
its assets in companies dedicated to biotechnological solutions for the
healthcare and medical fields. This investment strategy may not be changed
without 60 days' prior notice to shareholders.
There is no limit on the market capitalization of the companies in which the
Bio(Tech)/2/ Fund may invest, or on the length of operating history for the
companies. Therefore the Fund may invest in small companies and may invest
without limit in IPOs. It is uncertain whether IPOs will be available for
investment by the Fund or what impact, if any, they will have on the Fund's
performance.
The Healthcare Fund is a diversified series of Framlington. The Healthcare
Fund's goal is to provide long-term capital appreciation. The Fund pursues its
goal by investing in equity securities of companies providing healthcare and
medical services and products worldwide. Although the Fund may invest in
securities of companies located in foreign countries with developed securities
markets, most of the companies in which the Fund invests are located in the
United States.
The Healthcare Fund will invest in:
- drug and drug delivery companies;
- biotechnology firms;
- medical device and instrument manufacturers; and
- healthcare service companies, including HMOs, hospitals, product
distributors and clinical laboratories.
Under normal circumstances, the Healthcare Fund will invest at least 80% of its
assets in healthcare companies, which are companies for which at least 50% of
sales, earnings or assets arise from or are dedicated to health services or
medical technological activities. This investment strategy may not be changed
without 60 days' prior written notice to shareholders.
The sub-advisor selects companies using a "bottom-up approach" that identifies
outstanding performance of the individual companies before considering the
impact of economic trends. The sub-advisor evaluates companies based on number
of factors, including:
- growth prospects;
- intellectual property base and scientific grounding; and
- strength of management.
The Healthcare Fund's investments may include foreign securities of companies
located in countries with mature markets.
Neither Fund may purchase more than 10% of the outstanding voting securities of
any issuer. The Bio(Tech)/2/ Fund may not invest more than 25% of its total
assets in any one industry except that the Fund will invest more than 25% of its
assets in securities of companies dedicated to biotechnological solutions for
the healthcare and medical fields. The Healthcare Fund may not invest more than
25% of its total assets in securities issued by one or more issuers conducting
their principal business activities in the same industry except that the Fund
will invest more than 25% of its total assets in securities of issuers
conducting their principal business activities in healthcare industries.
The Bio(Tech)/2/ Fund may invest in small companies and may invest without limit
in IPOs. While the Healthcare Fund may also invest in small companies and IPOs,
such investments are not principal investment
-30-
strategies of the Healthcare Fund. In addition, each Fund may invest in
securities of companies located in foreign countries with developed securities
markets, most of the companies in which the Funds invest are located in the
United States. The Healthcare Fund may invest in foreign securities of companies
located in countries with mature markets. See "Comparison of Investment
Objectives and Policies" below.
Portfolio Instruments and Practices
Further information about each Fund's principal investment strategies and risks
is set forth below.
Borrowing. Money may be borrowed from banks for emergency purposes or
redemptions. 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 by a Fund may involve leveraging. If
the securities held by a Fund decline in value while these transactions are
outstanding, a Fund's net asset value will decline in value by proportionately
more than the decline in value of the securities. If shareholders of the
Healthcare Fund approve the proposed changes to that Fund's fundamental
investment restrictions regarding borrowing, this will no longer be a
fundamental investment restriction of the Healthcare Fund. However, the
Healthcare Fund would continue to be subject to the limitations on borrowing
imposed by the 1940 Act.
Derivatives. A Fund may, but is not required to, purchase derivative
instruments. Derivative instruments are financial contracts whose value is based
on an underlying security, a currency exchange rate, an interest rate or a
market index. Many types of instruments representing a wide range of potential
risks and rewards are derivatives, including futures contracts, options on
futures contracts, options and forward currency exchange contracts. Derivatives
can be used for hedging (attempting to reduce risk by offsetting one investment
position with another) or speculation (taking a position in the hope of
increasing return). A Fund may, but is not required to, use derivatives for
hedging purposes or for the purpose of remaining fully invested or maintaining
liquidity. A Fund will not use derivatives for speculative purposes. There can
be no assurance that a Fund will use derivatives to hedge any particular
position or risk, nor can there be any assurance that a derivative hedge, if
employed, will be successful.
The use of derivative instruments exposes a Fund to additional risks and
transaction costs. Risks of derivative instruments include: (1) the risk that
interest rates, securities prices and currency markets will not move in the
direction that a portfolio manager anticipates; (2) imperfect correlation
between the price of derivative instruments and movements in the prices of the
securities, interest rates or currencies being hedged; (3) the fact that skills
needed to use these strategies are different than those needed to select
portfolio securities; (4) the possible absence of a liquid secondary market for
any particular instrument and possible exchange imposed price fluctuation
limits, either of which may make it difficult or impossible to close out a
position when desired; (5) the risk that adverse price movements in an
instrument can result in a loss substantially greater than a Fund's initial
investment in that instrument (in some cases, the potential loss is unlimited);
(6) particularly in the case of privately-negotiated instruments, the risk that
the counterparty will not perform its obligations, which could leave a Fund
worse off than if it had not entered into the position; and (7) the inability to
close out certain hedged positions to avoid adverse tax consequences.
Foreign Securities. Each Fund may invest all or a substantial portion of its
total assets in foreign securities. Foreign securities include direct
investments in non-U.S. dollar-denominated securities traded outside of the
United States and dollar-denominated securities of foreign issuers traded in the
United States. Foreign securities also include indirect investments such as
American Depository Receipts ("ADRs"), European Depository Receipts ("EDRs") and
Global Depository Receipts ("GDRs"). ADRs are U.S. dollar-denominated receipts
representing shares of foreign-based corporations. ADRs are issued by U.S. banks
or trust companies, and entitle the holder to all dividends and capital gains
that are paid out on the underlying foreign shares. EDRs and GDRs are receipts
issued by European financial institutions. New York Registered Shares ("NYRs"),
also known as Guilder Shares since most of the issuing companies are Dutch, are
dollar-denominated certificates issued by foreign companies specifically for the
U.S. market.
-31-
Foreign securities involve special risks and costs. Investment in the securities
of foreign governments involves the risk that foreign governments may default on
their obligations or may otherwise not respect the integrity of their debt.
Direct investments in foreign securities may involve higher costs than
investment in U.S. securities, including higher transaction and custody costs as
well as the imposition of additional taxes by foreign governments. Foreign
investments may also involve risks associated with the level of currency
exchange rates, less complete financial information about the issuers, less
market liquidity, more market volatility and political instability. Future
political and economic developments, the possible imposition of withholding
taxes on dividend income, the possible seizure or nationalization of foreign
holdings, the possible establishment of exchange controls or freezes on the
convertibility of currency, or the adoption of other governmental restrictions
might adversely affect an investment in foreign securities. Additionally,
foreign issuers may be subject to less stringent regulation, and to different
accounting, auditing and recordkeeping requirements.
Currency exchange rates may fluctuate significantly over short periods of time
causing a Fund's net asset value to fluctuate as well. A decline in the value of
a foreign currency relative to the U.S. dollar will reduce the value of a
foreign currency-denominated security. To the extent that a Fund is invested in
foreign securities while also maintaining currency positions, it may be exposed
to greater combined risk. The Funds' respective net currency positions may
expose them to risks independent of their securities positions.
Securities Lending. The Funds may lend securities on a short-term basis to
qualified institutions. Securities lending may represent no more than 25% of the
value of each Fund's total assets (including the loan on collateral). By
reinvesting any cash collateral received in these transactions, additional
income gains or losses may be realized. 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. However, if the shareholders
of the Healthcare Fund approve a proposed change to that Fund's fundamental
investment restrictions on lending, this restriction would no longer be a
fundamental investment restriction of the Healthcare Fund and the percentage
limitation would be increased to 33 1/3 % and the risks associated with such
activities would be correspondingly increased. However, the Healthcare Fund
would continue to be subject to the limitations on lending imposed by the 1940
Act.
Short-Term Trading. The Funds may engage in short-term trading of portfolio
securities, including initial public offerings, which may result in increasing a
Fund's turnover rates. The historical portfolio turnover rates for the Funds are
shown in the Financial Highlights. See "Financial Highlights." A high rate of
portfolio turnover (100% or more) could produce higher trading costs and taxable
distributions, which could detract from a Fund's performance.
Temporary and Defensive Investing. Each Fund may invest in short-term
obligations, pending investment, in order to meet redemption requests or as a
defensive measure in response to adverse market or economic conditions. The Fund
may invest all or a portion of its assets in short-term obligations, such as
U.S. government obligations, high-quality money market instruments and
repurchase agreements with maturities of 13 months or less. A Fund may not
achieve its investment objective when its asset are invested in short-term
obligations.
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.
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. In this regard,
shareholders of the Healthcare Fund are currently being
-32-
asked to consider a series of proposals to change the fundamental investment
restrictions of that Fund as follows:
Borrowing
The Healthcare Fund's fundamental investment restriction regarding
borrowing, as stated above, has been proposed to be amended to permit
the Fund to borrow to the full extent permitted by the 1940 Act.
Therefore, no further board or shareholder action would be needed to
conform the borrowing restriction to future changes in the 1940 Act,
and interpretations thereunder, that govern borrowing by mutual funds.
While the Fund's current restrictions on borrowings comport with the
current 1940 Act restrictions, if the amended fundamental investment
restriction is adopted as proposed, the Fund would not need to seek
shareholder approval to change the relative percentages of the Fund
available for borrowing for temporary purposes, to meet redemption
requests, etc. if such changes still conformed to the then-current 1940
Act provisions and interpretative guidance thereunder.
Securities Lending
If approved by shareholders, the amended fundamental investment
restriction regarding the ability of the Healthcare Fund to make loans
would permit the Fund to lend its portfolio securities representing up
to 33-1/3% of its total assets. The Fund's current limit on securities
lending is 25% of its total assets. To the extent that the Healthcare
Fund would be permitted to lend up to the new maximum amount, it would
be subject to a greater degree to the risks associated with securities
lending. These risks include the possibility of loss to the Fund due to
(i) the inability of the borrower to return the securities; (ii) a
delay in recovery of the securities, or (iii) loss of rights in the
collateral should the borrower fail financially.
Other Changes to Fundamental Investment Restrictions
In addition to the changes on the restrictions regarding borrowing and
securities lending, the shareholders of Healthcare Fund are being asked
to eliminate the current fundamental investment restrictions of the
Fund that prohibit it from (1) purchasing securities on margin or
making short sales of securities or (2) making investments for the
purpose of exercising control or management over an issuer. Each of
these investment restrictions was based on the requirements formerly
imposed by state "blue sky" regulators as a condition to registration.
As a result of the National Securities Market Improvement Act of 1996,
which preempted many state securities provisions, this restriction is
no longer required and may be eliminated from the Fund's investment
restrictions. Nevertheless, there are no current expectations that the
Healthcare Fund will engage in such activities, except that it may
still engage, consistent with its investment policies, objectives and
strategies, in the types of activities that are exceptions to its
current fundamental investment restriction on margin accounts and
selling securities short, such as the use of short-term credits
necessary for the clearance of purchases and sales of portfolio
securities.
Risk Factors
Both the Bio(Tech)/2/ Fund and the Healthcare Fund are subject to the following
principal investment risks:
Stock Market Risk. The value of equity securities in which the Funds invest may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for extended
periods. For example, stock prices have historically fluctuated in periodic
cycles. In addition, the value of the Funds' investments may decline if the
particular companies the Funds invest in do not perform well.
Growth Investing Risk. The price of growth stocks may be more sensitive to
changes in current or expected earnings than the prices of other stocks. The
price of growth stocks is also subject to the risk that the stock price of one
or more companies will fall or will fail to appreciate as anticipated by MCM
regardless of movements in the securities markets.
-33-
Foreign Securities Risk. Investments by the Funds in foreign securities present
risks of loss in addition to those presented by investments in U.S. securities.
Foreign securities are generally more volatile and less liquid than U.S.
securities, in part because of greater political and economic risks and because
there is less public information available about foreign companies. Issuers of
foreign securities and foreign securities markets are generally not subject to
the same degree of regulation as are U.S. issuers and U.S. securities markets.
The reporting, accounting and auditing standards of foreign countries may
differ, in some cases significantly, from U.S. standards.
The Bio(Tech)/2/ Fund is subject to the following principal investment risks:
Sector Risk. The Fund will invest primarily in biotechnology sector and other
related technologies. The value of such companies is particularly vulnerable to
rapidly changing technology, extensive government regulation and relatively high
risks of obsolescence caused by scientific and technological advances. The value
of the Fund's shares may fluctuate more than shares of a fund investing in
broader range of securities.
Smaller Company Stock Risk. The stocks of small or medium-size companies may be
more susceptible to market downturn, and their prices may be more volatile than
those of larger companies. Small companies often have narrower markets and more
limited managerial and financial resources than larger, more established
companies. In addition, small company stocks typically are traded in lower
volume, and their issuers are subject to greater degrees of changes in their
earnings and prospects.
IPO Risk. Investments by the Bio(Tech)/2/ Fund in IPOs may result in increased
transaction costs and expenses and the realization of short-term capital gains
and distributions. In addition, in the period immediately following an IPO,
investments may be subject to more extreme price volatility than that of other
equity investments. The Fund may lose all or part of its investments if the
companies making their IPOs fail and their product lines fail to achieve an
adequate level of market recognition or acceptance.
The Healthcare Fund is subject to the following principal investment risk:
Sector Risk. The Fund will invest primarily in companies that are principally
engaged in the healthcare industry and companies providing services primarily
within the healthcare industry. Healthcare is particularly affected by rapidly
changing technology and extensive government regulation, including cost
containment measures. Adverse economic, business or political developments
affecting that industry sector could have a major effect on the value of the
Fund's investments. The value of the Fund's shares may fluctuate more than
shares of a fund investing in broader range of securities.
[THE REST OF THIS PAGE HAS INTENTIONALLY BEEN LEFT BLANK]
-34-
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
AND FINANCIAL HIGHLIGHTS
Management's Discussion of Fund Performance
The Stock Market
The S&P 500 Index generated a return of -17.99% for the year ending June 30,
2002. The weakness in the Index occurred primarily in the third quarter of 2001,
which included the September 11 terrorist attacks, and the second quarter of
2002, which was marked by a wave of accounting scandals. Performance was quite
mixed across the various sectors and size segments of the stock market. The only
two sectors of the S&P 500 universe to earn a positive return for the 12-month
period were consumer staples and materials. The weakest sectors were
telecommunications services, utilities and information technology. Size was
inversely related to performance, with the S&P SmallCap 600 Index generating a
0.27% return for the fiscal year, while the S&P MidCap 400 had a -4.72% return.
For the year ending June 30, international stock market indices outperformed the
S&P 500 Index. The Morgan Stanley EAFE Index (Europe, Asia and the Far East) had
a return of -9.21% while the FTSE World Ex-U.S. had a return of -8.47%. The more
aggressive Morgan Stanley Emerging Markets Free Index earned a positive return
of 1.31%.
As the Funds' fiscal year ended, investor confidence was still badly bruised by
the reports of corporate accounting fraud. As economic growth slowed during the
past few years, some companies tried to increase reported earnings through
questionable or downright fraudulent, accounting practices. The SEC has
announced that it will require chief executives and chief financial officers at
the 1,000 largest companies to formally certify that their books are accurate.
Both the SEC and Congress are considering additional regulation and changes to
accounting rules. The result will undoubtedly be increasingly standardized
accounting and a greater awareness by senior management as to how financial
results are derived and what is reported. Through all of this, it is important
to keep in mind that these scandals, as offensive as they are, are limited to a
handful of the more than 10,000 publicly traded companies in the U.S. The
short-term pain, as significant as it is, should lead to longer-term gain in the
form of improved accounting disclosures and greater standardization and
transparency of reported earnings.
The performance data contained in the following commentary is based on the Class
Y shares. Other classes of shares have different sales charges and expenses that
lower performance. The returns for the Funds do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or upon the redemption
of Fund shares. Please note that in some of the following commentary, the Funds
are compared to various stock market indices. It is important to remember that
the returns for the Funds are reported after the deduction of all expenses.
Since the market indices are not actual funds, there are no expenses netted
against their returns. Please note that you cannot invest directly in an index.
MUNDER BIO(TECH)/2/ FUND
Fund Manager: The Munder Bio(Tech)/2/ Fund Team
The Fund generated a return on -48.14% for the year ending June 30, 2002,
compared to the -49.78% return for the NASDAQ Biotech Index and -21.50% median
return for the Lipper universe of health/biotechnology mutual funds.
The absolute performance of the Fund reflected the negative returns generated by
the biotech sector of the stock market during the Fund's fiscal year. In
relative terms, however, the Fund outperformed its NASDAQ Biotech benchmark.
Because of its biotech focus, however, the Fund lagged the broader Lipper
universe of health/biotechnology mutual funds.
-35-
During the first half of the Fund's fiscal year, biotechnology stocks
experienced strong relative returns. Over the last few months of the period,
however, the biotech sector was severely hit for a number of reasons.
Traditional seasonal weaknesses in the calendar first quarter, negative
sentiment cultivated by the Imclone debacle and concerns about accounting
practices at Elan all contributed to poor stock price performance in the sector.
In general, investors were avoiding what are perceived as high-risk situations
and focusing on short-term news. In addition, there were isolated incidents of
biotech drugs failing to meet their trial objectives within the expected
timetable.
The above factors have combined to create what we believe is an attractive
opportunity for investors. Many of the valuation measures of profitable biotech
companies have fallen to historic lows, reaching levels that are almost half
those of the large-cap pharmaceutical companies. We do not believe that this
differential is sustainable, given the extreme differences in the potential for
growth between these two segments of the healthcare sector. The balance sheets
of many biotech companies appear well financed for their current business plans,
while many of the large drug companies are suffering due to current and
impending patent expirations, compounded by insufficient products in their own
pipelines. We feel it is highly likely that many of the large pharmaceutical
companies will pay a premium for good late-stage compounds being developed by
biotech companies.
MUNDER HEALTHCARE FUND
Fund Manager: The Munder Healthcare Fund Team
The Fund generated a return of -36.15% for the year ending June 30, 2002,
compared to the -35.26% return for the Russell 2000 Healthcare Index and -21.50%
median return for the Lipper universe of health/biotechnology mutual funds.
Compared to the Lipper universe, the Fund has earned above-median returns for
the one-month, nine-month, three-year and five-year time periods ending June 30.
During the first half of the Fund's fiscal year, the biotechnology segment of
the healthcare sector experienced strong relative returns. In contrast, major
drug stocks underperformed as several pharmaceutical companies reduced growth
estimates for 2002, including Merck, Bristol Myers Squibb and Eli Lilly.
Over the last few months of the period, the biotech sector was severely hit for
a number of reasons. Traditional seasonal weakness in the calendar first
quarter, negative sentiment cultivated by the Imclone debacle and concerns about
accounting practices at Elan all contributed to poor stock price performance in
the sector. In general, investors were avoiding what are perceived as high-risk
situations and focusing on short-term news. In addition, there were isolated
incidents of biotech drugs failing to meet their trial objectives within the
expected timetable. As a result, the Fund's heavy weighting in biotech stocks,
approximately 40% as of June 30, hurt performance during the last half of the
Fund's fiscal year.
Large pharmaceutical companies were weak throughout the twelve months ending
June 30. Reduced earnings growth estimates, thin pipelines for new drugs and the
expiration of key patents have hurt growth in this segment of the healthcare
market. In contrast, healthcare services stocks have proven to be more
resilient. There has been stronger earnings growth in this segment, and
investors have been attracted to its relatively defensive characteristics. A
positive regulatory environment is also developing. In the medical devices
arena, performance was boosted, particularly during the last half of the Fund's
fiscal year, by improved earnings and increased product launches, especially in
the cardiology and orthopedics area.
The following graphs represent the performance of each Fund since the inception
of its oldest class of shares. This includes a period of time since February 1,
1995 during which the Funds have been managed by MCM or its then wholly-owned
subsidiary World Asset Management and prior periods when the Funds were managed
by their predecessors. The chart following each line graph sets forth
performance information and the growth of a hypothetical $10,000 investment for
multiple classes of shares. Differing sales charges and expenses of classes not
shown in the line graph will have an effect on performance. In addition, the
information contained in the charts and tables does not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or upon the redemption
of Fund shares. Past performance is no guarantee of future results. Investment
return and
-36-
principal value of any investment will fluctuate so that an investor's shares,
upon redemption, may be worth more or less than original cost. Total returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of dividends.
Bio(Tech)/2/ Fund
CLASS Y SHARE HYPOTHETICAL
---------------------------------------------------------------------
A HYPOTHETICAL ILLUSTRATION OF A $10,000 INITIAL INVESTMENT -- CLASS
Y
[GRAPHIC IMAGE]
LIPPER
NASDAQ HEALTH/BIOTECHNOLOGY
CLASS Y RUSSELL 2000# BIOTECHNOLOGY INDEX# FUNDS AVERAGE**
------- ------------- -------------------- --------------------
11/1/00 10000.00 10000.00 10000.00 10000.00
8400.00 8973.00 8451.00 9385.00
8820.00 9744.00 8738.00 9859.00
8290.00 10251.00 8401.00 9099.00
6970.00 9579.00 7754.00 8754.00
5480.00 9111.00 6177.00 7690.00
6380.00 9823.00 7348.00 8336.00
7110.00 10065.00 7958.00 8674.00
6/30/01 7530.00 10421.00 8168.00 8768.00
6370.00 9857.00 7002.00 8417.00
6170.00 9539.00 7075.00 8292.00
5140.00 8255.00 5984.00 7767.00
6090.00 8738.00 6959.00 8190.00
6700.00 9414.00 7624.00 8670.00
6890.00 9995.00 7322.00 8623.00
6000.00 9891.00 6284.00 8020.00
5360.00 9620.00 6003.00 7754.00
5580.00 10393.00 6227.00 7940.00
4650.00 10488.00 5248.00 7360.00
4270.00 10022.00 4672.00 7044.00
6/30/02 3910.00 9525.00 4109.00 6407.00
GROWTH OF A $10,000 INVESTMENT AVERAGE ANNUAL TOTAL RETURNS
Lipper
Health/ One Since
NASDAQ Biotechnology Year Since Inception
Class and With Without Russell Biotechnology Funds One Year W/Out Inception W/Out
Inception Date Load Load 2000# Index# Average** w/load load W/Load Load
- ------------------------------------------------------------------------------------------------------------------------------------
Class A--11/1/00 $3,677* $3,890 $9,525 $4,109 $6,407 (51.01)%* (48.13)% (45.21)%* (43.32)%
Class B--11/1/00 $3,677+ $3,830 $9,525 $4,109 $6,407 (51.23)%+ (48.66)% (45.21)% + (43.85)%
Class II--11/1/00 $3,802*+ $3,840 $9,525 $4,109 $6,407 (49.71)% *+ (48.66)% (44.09)% * (43.76)%
Class Y--11/1/00 N/A $3,910 $9,525 $4,109 $6,407 N/A (48.14)% N/A (43.15)%
----------------------------
* Reflects the deduction of the maximum sales charge of 5.50% for Class
A shares or 1.00% for Class II shares, if applicable.
+ Based on the declining contingent deferred sales charge (CDSC)
schedule as defined in the prospectus.
# The Russell 2000 Index is an unmanaged index that measures the
performance of the bottom 2,000 (based on capitalization) of the 3,000
largest capitalized U.S. publicly traded companies. The NASDAQ
Biotechnology Index is a modified capitalization-weighted index
designed to measure the performance of all NASDAQ stocks in the
biotechnology sector.
** The Lipper Healthcare/Biotechnology Funds Average represents the
average performance of a universe of mutual funds compiled by Lipper
Analytical Services, Inc. The funds included are categorized under the
same investment objective as the Fund and have been in existence since
the Fund's inception date.
-37-
Healthcare Fund
CLASS Y SHARE HYPOTHETICAL
---------------------------------------------------------------------
A HYPOTHETICAL ILLUSTRATION OF A $10,000 INITIAL INVESTMENT -- CLASS
Y
[GRAPHIC IMAGE]
LIPPER
RUSSELL 2000 HEALTH/BIOTECHNOLOGY
CLASS Y MSCI WORLD INDEX# HEALTHCARE# FUNDS AVERAGE**
------- ----------------- ------------ --------------------
12/31/96 10000.00 10000.00 10000.00 10000.00
11020.00 10000.00 10535.00 10519.00
10590.00 10116.70 10200.00 10557.00
9610.00 9918.35 9163.00 9799.00
9030.00 10244.30 8738.00 9801.00
10290.00 10878.40 10098.00 10804.00
6/30/97 10890.00 11422.80 10392.00 11355.00
11120.00 11950.60 10481.00 11734.30
11120.00 11152.90 10657.00 11446.80
12339.90 11760.60 11884.00 12475.80
11699.40 11143.40 11246.00 12087.80
11649.10 11342.40 10988.00 12077.00
11638.60 11482.40 11029.00 12121.60
11848.10 11804.20 10817.00 12338.60
12598.10 12604.50 11704.00 13091.30
12948.30 13138.70 11983.00 13542.90
12938.00 13269.10 11743.00 13589.00
12138.40 13104.70 10799.00 13084.80
6/30/98 11838.60 13417.60 10786.00 13395.20
11100.00 13398.00 9948.00 13135.30
8380.50 11613.30 7594.00 10970.60
9810.21 11820.70 8963.00 12326.60
10239.90 12891.30 9624.00 12838.10
10810.30 13660.00 10109.00 13498.00
11787.50 14329.40 11388.00 14613.00
12130.50 14645.20 11462.00 14788.30
10838.60 14257.60 10252.00 14190.90
10323.80 14853.30 10130.00 14311.50
10112.10 15440.90 10153.00 13804.90
10374.10 14878.80 10541.00 13843.50
6/30/99 10606.40 15574.80 11295.00 14459.60
10838.70 15530.30 11338.00 14656.20
11313.50 15504.90 10982.00 14997.70
11393.80 15356.60 10765.00 14160.80
11101.00 16157.00 10293.00 14655.00
12645.10 16613.60 11440.00 15447.90
16399.40 17960.50 13453.00 16943.20
19931.90 16934.00 15488.00 18596.90
27500.00 16981.80 22610.00 22364.60
24200.00 18157.60 15533.00 20260.10
23140.00 17391.90 14957.00 20017.00
22716.60 16953.80 14619.00 20185.10
6/30/00 28821.80 17527.00 18410.00 23973.90
28973.20 17035.70 17874.00 23357.80
33252.00 17592.00 20562.00 26123.30
34918.10 16658.70 21109.00 27092.50
33589.50 16381.60 20328.00 26423.30
28731.60 15389.20 18092.00 24798.30
30670.60 15640.30 19690.00 26050.60
28930.40 15944.10 18993.00 24042.10
25657.20 14598.40 18007.00 23130.90
21120.40 13642.30 15855.00 20320.50
23451.00 14654.10 17751.00 22025.40
25232.60 14472.10 17751.00 22919.60
6/30/01 26475.50 14020.70 19028.00 23167.20
24124.00 14004.70 17172.00 22240.30
23192.80 13335.20 16710.00 21908.90
19836.80 12161.70 14710.00 20522.10
21907.80 12396.50 15228.00 21638.50
23202.60 13131.60 15785.00 22908.70
24165.40 13215.60 16548.00 22782.70
21732.00 12816.50 15150.00 21190.20
20334.60 12707.60 14018.00 20488.80
21141.90 13271.80 15080.00 20980.50
19163.00 12825.90 14593.00 19446.80
18199.10 12855.40 13794.00 18612.60
6/30/02 16905.20 12077.60 12318.00 16928.10
GROWTH OF A $10,000 INVESTMENT AVERAGE ANNUAL TOTAL RETURNS
Lipper
Russell Health/ Five Since
MSCI 2000 Biotechnology One Year Five Year Since Inception
Class and With Without World Healthcare Funds One Year W/Out Year W/Out Inception W/Out
Inception Date Load Load Index# Index# Average** W/Load Load W/Load Load W/Load Load
- ------------------------------------------------------------------------------------------------------------------------------------
Class A--2/14/97 $13,963* $14,779 $11,694 $12,076 $16,262 (39.78)%* (36.28)% 7.71%* 8.93% 6.41%* 7.54%
Class B--1/31/97 $14,456+ $14,556 $11,694 $11,692 $16,262 (39.94)%+ (36.78)% 7.84%+ 8.14% 7.05%+ 7.18%
Class II--1/13/97 N/A $15,412 $12,078 $12,318 $16.928 (37.40)%+ (36.77)% N/A 8.10% N/A 8.24%
Class Y--12/31/96 N/A $16,905 $12,078 $12,318 $16,928 N/A (36.15)% N/A 9.19% N/A 10.02%
-------------------------------
* Reflects the deduction of the maximum sales charge of 5.50% for Class
A shares.
+ Based on the declining contingent deferred sales charge (CDSC)
schedule as defined in the prospectus.
# The Morgan Stanley Capital International (MSCI) World Index is an
unmanaged index that measures the common stock price movement in
developed countries. The Russell 2000 Healthcare Index is unmanaged
index that measures the performance of those Russell 2000 companies
(the bottom 2,000 based on capitalization of the 3,000 largest U.S.
publicly traded companies) within the healthcare sectors. Index since
inception comparative returns for Class A, Class B, Class C and Class
Y shares of the Healthcare Fund are as of 2/28/97, 1/31/97, 12/31/96
and 12/31/96, respectively.
** The Lipper Health/Biotechnology Funds Average represents the average
performance of a universe of mutual funds compiled by Lipper Analytical
Services, Inc. The funds included are categorized under the same
investment objective as the Fund and have been in existence since the
Fund's inception date. Lipper since inception comparative returns for
Class A, Class B, Class C and Class Y shares of the Healthcare Fund are
as of 2/28/97, 1/31/97, 12/31/96 and 12/31/96, respectively.
-38-
Financial Highlights
The financial highlights tables are intended to help you understand each Fund's
financial performance of the past 5 years (or, if shorter, the period of the
Fund's operations). Certain information reflects financial results for a single
Fund share. The total returns in the table represent the rate that an investor
would have earned (or lost) on an investment in a particular class of the Fund
(assuming reinvestment of all dividends and distributions). The information has
been audited by Ernst & Young LLP, independent auditors, whose report along with
each Fund's financial statements, are included in the annual reports of the
Funds, and are incorporated by reference into the Statement of Additional
Information. You may obtain the annual reports and Statement of Additional
Information without charge by calling (800) 438-5789 or visit the website at
www.munder.com.
BIO(TECH)/2/ FUND(a) Year Period Year Period
(CLASS A and CLASS B) Ended Ended Ended Ended
6/30/02(c) 6/30/01(c) 6/30/02(c) 6/30/01(c)
Class A Class A Class B Class B
---------- ---------- ---------- ----------
Net asset value, beginning of period $ 7.50 $ 10.00 $ 7.45 $ 10.00
------- ------- ------- -------
Loss from investment operations:
Net investment loss (0.12) (0.13) (0.16) (0.16)
Net realized and unrealized loss on investments (3.49) (2.37) (3.46) (2.39)
------- ------- ------- -------
Total from investment operations (3.61) (2.50) (3.62) (2.55)
------- ------- ------- -------
Net asset value, end of period $ 3.89 $ 7.50 $ 3.83 $ 7.45
======= ======= ======= =======
Total return (b) (48.13)% (25.00)% (48.66)% (25.50)%
======= ======= ======= =======
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) $ 3,045 $ 5,425 $ 4,568 $ 7,748
Ratio of operating expenses to average net assets 2.25% 3.21%(d) 3.00% 3.96%(d)
Ratio of net investment loss to average net assets (2.17)% (2.74)%(d) (2.92)% (3.49)%(d)
Portfolio turnover rate 57% 26% 57% 26%
Ratio of operating expenses to average net assets
without expense waivers and reimbursements 2.68% 3.21%(d) 3.43% 3.96%(d)
- --------------------------------------------------------------------------------
(a)The Munder Bio(Tech)/2/ Fund Class A Shares and Class B Shares commenced
operations on November 1, 2000.
(b)Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges.
(c)Per share numbers have been calculated using the average shares method.
(d)Annualized.
-39-
BIO(TECH)/2/ FUND(a) Year Period Year Period
(CLASS II and CLASS Y) Ended Ended Ended Ended
6/30/02(c) 6/30/01(c) 6/30/02(c) 6/30/01(c)
Class II Class II Class Y Class Y
---------- ---------- ---------- ----------
Net asset value, beginning of period $ 7.47 $ 10.00 $ 7.53 $ 10.00
------- ------- ------- -------
Loss from investment operations:
Net investment loss (0.16) (0.16) (0.11) (0.11)
Net realized and unrealized loss on investments (3.47) (2.37) (3.51) (2.36)
------- ------- ------- -------
Total from investment operations (3.63) (2.53) (3.62) (2.47)
------- ------- ------- -------
Net asset value, end of period $ 3.84 $ 7.47 $ 3.91 $ 7.53
======= ======= ======= =======
Total return (b) (48.66)% (25.30)% (48.14)% (24.70)%
======= ======= ======= =======
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) $ 1,798 $ 3,862 $ 852 $ 1,778
Ratio of operating expenses to average net assets 3.00% 3.96%(d) 2.00% 2.96%(d)
Ratio of net investment loss to average net assets (2.92)% (3.49)%(d) (1.92)% (2.49)%(d)
Portfolio turnover rate 57% 26% 57% 26%
Ratio of operating expenses to average net assets
without expense waivers and reimbursements 3.43% 3.96%(d) 2.43% 2.96%(d)
- --------------------------------------------------------------------------------
(a)The Munder Bio(Tech)/2/ Fund Class II Shares and Class Y Shares commenced
operations on November 1, 2000.
(b)Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges.
(c)Per share numbers have been calculated using the average shares method.
(d)Annualized.
-40-
Bio(Tech)/2/
Fund(a)
--------------------
Period Period
Ended Ended
6/30/02(c) 6/30/01(c)
---------- ----------
Net asset value, beginning of period........................................................ $ 7.52 $ 10.00
------- -------
Loss from investment operations:
Net investment loss......................................................................... (0.13) (0.12)
Net realized and unrealized loss on investments............................................. (3.49) (2.36)
------- -------
Total from investment operations............................................................ (3.62) (2.48)
------- -------
Net asset value, end of period.............................................................. $ 3.90 $ 7.52
======= =======
Total return(b)............................................................................. (48.21)% (24.80)%
======= =======
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's)........................................................ $ -- (e) $ 21
Ratio of operating expenses to average net assets........................................... 2.25% 3.22%(d)
Ratio of net investment loss to average net assets.......................................... (2.17)% (2.75)%(d)
Portfolio turnover rate..................................................................... 57% 26%
Ratio of operating expenses to average net assets without expense reimbursements and waivers 2.68% 3.22%(d)
- --------------------------------------------------------------------------------
(a)The Munder Bio(Tech)/2/ Fund Class K Shares commenced operations on November
1, 2000.
(b)Total return represents aggregate total return for the period indicated.
(c)Per share numbers have been calculated using the average share method.
(d)Annualized.
(e)Net assets at end of period were less than $1,000.
-41-
HEALTHCARE FUND(a) Year Year Year Year Year
(CLASS A) Ended Ended Ended Ended Ended
6/30/02(c) 6/30/01(c) 6/30/00(c) 6/30/99(c) 6/30/98(c)
Class A Class A Class A Class A Class A
---------- ---------- ---------- ---------- ----------
Net asset value, beginning of period $ 25.31 $ 28.35 $ 10.46 $ 11.82 $10.89
------- -------- ------- ------- ------
Income/(Loss) from investment
operations:
Net investment loss (0.32) (0.35) (0.22) (0.13) (0.15)
Net realized and unrealized gain/(loss) on
investments (8.88) (1.93) 18.11 (1.13) 1.08
------- -------- ------- ------- ------
Total from investment operations (9.20) (2.28) 17.89 (1.26) 0.93
------- -------- ------- ------- ------
Less distributions:
Distributions from net realized gains -- (0.55) -- (0.08) --
Distributions in excess of net realized
gains -- (0.21) -- (0.02) --
------- -------- ------- ------- ------
Total distributions -- (0.76) -- (0.10) --
------- -------- ------- ------- ------
Net asset value, end of period $ 16.11 $ 25.31 $ 28.35 $ 10.46 $11.82
======= ======== ======= ======= ======
Total return (b) (36.28)% (8.38)% 171.03% (10.69)% 8.54%
======= ======== ======= ======= ======
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's) $81,129 $167,514 $79,441 $ 3,382 $4,984
Ratio of operating expenses to average net
assets 1.63% 1.55% 1.61% 1.61% 1.62%
Ratio of net investment loss to average net
assets (1.54)% (1.28)% (1.01)% (1.27)% (1.20)%
Portfolio turnover rate 38% 45% 60% 49% 47%
Ratio of operating expenses to average net
assets without expense waivers and
reimbursements 1.72% 1.55% 1.63% 1.92% 2.40%
- --------------------------------------------------------------------------------
(a)The Munder Healthcare Fund (formerly known as Munder Framlington Healthcare
Fund) Class A Shares commenced operations on February 14, 1997.
(b)Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges.
(c)Per share numbers have been calculated using the average shares method.
42
HEALTHCARE FUND(a) Year Year Year Year Year
(CLASS B) Ended Ended Ended Ended Ended
6/30/02(c) 6/30/01(c) 6/30/00(c) 6/30/99(c) 6/30/98(c)
Class B Class B Class B Class B Class B
---------- ---------- ---------- ---------- ----------
Net asset value, beginning of period $ 24.48 $ 27.64 $ 10.27 $ 11.69 $10.85
-------- -------- -------- ------- ------
Income/(Loss) from investment
operations:
Net investment loss (0.45) (0.53) (0.37) (0.21) (0.23)
Net realized and unrealized gain/(loss) on
investments (8.56) (1.87) 17.74 (1.11) 1.07
-------- -------- -------- ------- ------
Total from investment operations (9.01) (2.40) 17.37 (1.32) 0.84
-------- -------- -------- ------- ------
Less distributions:
Distributions from net realized gains -- (0.55) -- (0.08) --
Distributions in excess of net realized
gains -- (0.21) -- (0.02) --
-------- -------- -------- ------- ------
Total distributions -- (0.76) -- (0.10) --
-------- -------- -------- ------- ------
Net asset value, end of period $ 15.47 $ 24.48 $ 27.64 $ 10.27 $11.69
======== ======== ======== ======= ======
Total return (b) (36.78)% (9.04)% 169.13% (11.40)% 7.83%
======== ======== ======== ======= ======
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's) $119,253 $224,080. $102,859 $ 6,682 $8,664
Ratio of operating expenses to average net
assets 2.38% 2.30% 2.36% 2.36% 2.37%
Ratio of net investment loss to average net
assets (2.29)% (2.03)% (1.75)% (2.02)% (1.95)%
Portfolio turnover rate 38% 45% 60% 49% 47%
Ratio of operating expenses to average net
assets without expense waivers and
reimbursements 2.47% 2.30% 2.38% 2.67% 3.15%
- --------------------------------------------------------------------------------
(a)The Munder Healthcare Fund (formerly known as Munder Framlington Healthcare
Fund) Class B Shares commenced operations on January 31, 1997.
(b)Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges.
(c)Per share numbers have been calculated using the average shares method.
-43-
HEALTHCARE FUND(a) Year Year Year Year Year
(CLASS C) Ended Ended Ended Ended Ended
6/30/02(c) 6/30/01(c) 6/30/00(c) 6/30/99(c) 6/30/98(c)
Class C Class C Class C Class C Class C
---------- ---------- ---------- ---------- ----------
Net asset value, beginning of period $ 24.46 $ 27.62 $ 10.27 $ 11.69 $10.86
------- -------- ------- ------- ------
Income/(Loss) from investment
operations:
Net investment loss (0.45) (0.53) (0.40) (0.21) (0.23)
Net realized and unrealized gain/(loss) on
investments (8.56) (1.87) 17.75 (1.11) 1.06
------- -------- ------- ------- ------
Total from investment operations (9.01) (2.40) 17.35 (1.32) 0.83
------- -------- ------- ------- ------
Less distributions:
Distributions from net realized gains -- (0.55) -- (0.08) --
Distributions in excess of net realized
gains -- (0.21) -- (0.02) --
------- -------- ------- ------- ------
Total distributions -- (0.76) -- (0.10) --
------- -------- ------- ------- ------
Net asset value, end of period $ 15.45 $ 24.46 $ 27.62 $ 10.27 $11.69
======= ======== ======= ======= ======
Total return (b) (36.77)% (9.05)% 168.94% (11.40)% 7.73%
======= ======== ======= ======= ======
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's) $61,925 $122,087 $77,156 $ 1,652 $3,378
Ratio of operating expenses to average net
assets 2.38% 2.30% 2.36% 2.36% 2.37%
Ratio of net investment loss to average net
assets (2.29)% (2.03)% (1.75)% (2.02)% (1.95)%
Portfolio turnover rate 38% 45% 60% 49% 47%
Ratio of operating expenses to average net
assets without expense waivers and
reimbursements 2.47% 2.30% 2.38% 2.67% 3.15%
- --------------------------------------------------------------------------------
(a)The Munder Healthcare Fund (formerly known as Munder Framlington Healthcare
Fund) Class C Shares commenced operations on January 13, 1997.
(b)Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges.
(c)Per share numbers have been calculated using the average shares method.
-44-
Healthcare Fund(a)
----------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
6/30/02(c) 6/30/01(c) 6/30/00(c) 6/30/99(c) 6/30/98(c)
---------- ---------- ---------- ---------- ----------
Net asset value, beginning of period............................. $ 25.29 $28.31 $ 10.44 $ 11.80 $10.89
------- ------ ------- ------- ------
Income/(Loss) from investment operations:
Net investment loss.............................................. (0.32) (0.34) (0.19) (0.13) (0.14)
Net realized and unrealized gain/(loss) on investments........... (8.88) (1.92) 18.06 (1.13) 1.05
------- ------ ------- ------- ------
Total from investment operations................................. (9.20) (2.26) 17.87 (1.26) 0.91
------- ------ ------- ------- ------
Less distributions:
Distributions from net realized gains............................ -- (0.55) -- (0.08) --
Distributions in excess of net realized gains.................... -- (0.21) -- (0.02) --
------- ------ ------- ------- ------
Total distributions.............................................. -- (0.76) -- (0.10) --
------- ------ ------- ------- ------
Net asset value, end of period................................... $ 16.09 $25.29 $ 28.31 $ 10.44 $11.80
======= ====== ======= ======= ======
Total return(b).................................................. (36.35)% (8.32)% 170.91% (10.70)% 8.45%
======= ====== ======= ======= ======
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's)............................. $ 437 $ 990 $ 387 $ 60 $ 163
Ratio of operating expenses to average net assets................ 1.63% 1.55% 1.61% 1.61% 1.62%
Ratio of net investment loss to average net assets............... (1.54)% (1.28)% (1.01)% (1.27)% (1.21)%
Portfolio turnover rate.......................................... 38% 45% 60% 49% 47%
Ratio of operating expenses to average net assets without expense
waivers and reimbursements...................................... 1.72% 1.55% 1.63% 1.92% 2.40%
- --------------------------------------------------------------------------------
(a)The Munder Healthcare Fund (formerly Munder Framlington Healthcare Fund)
Class K Shares commenced operations on April 1, 1997.
(b)Total return represents aggregate total return for the period indicated.
(c)Per share numbers have been calculated using the average shares method.
-45-
HEALTHCARE FUND(a) Year Year Year Year Year
(CLASS Y) Ended Ended Ended Ended Ended
6/30/02(c) 6/30/01(c) 6/30/00(c) 6/30/99(c) 6/30/98(c)
Class Y Class Y Class Y Class Y Class Y
---------- ---------- ---------- ---------- ----------
Net asset value, beginning of period $ 25.57 $28.56 $ 10.50 $ 11.84 $10.89
------- ------ ------- ------- ------
Income/(Loss) from investment
operations:
Net investment income loss (0.27) (0.29) (0.13) (0.11) (0.11)
Net realized and unrealized gain/(loss) on
investments (8.98) (1.94) 18.19 (1.13) 1.06
------- ------ ------- ------- ------
Total from investment operations (9.25) (2.23) 18.06 (1.24) 0.95
------- ------ ------- ------- ------
Less distributions:
Distributions from net realized gains -- (0.55) -- (0.08) --
Distributions in excess of net realized
gains -- (0.21) -- (0.02) --
------- ------ ------- ------- ------
Total distributions -- (0.76) -- (0.10) --
------- ------ ------- ------- ------
Net asset value, end of period $ 16.32 $25.57 $ 28.56 $ 10.50 $11.84
======= ====== ======= ======= ======
Total return (b) (36.15)% (8.14)% 171.74% (10.42)% 8.72%
======= ====== ======= ======= ======
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's) $ 5,997 $9,640 $15,989 $ 5,303 $5,458
Ratio of operating expenses to average
net assets 1.38% 1.30% 1.36% 1.36% 1.37%
Ratio of net investment loss to average
net assets (1.29)% (1.03)% (0.76)% (1.03)% (0.95)%
Portfolio turnover rate 38% 45% 60% 49% 47%
Ratio of operating expenses to average
net assets without expense waivers and
reimbursements 1.47% 1.30% 1.38% 1.67% 2.15%
- --------------------------------------------------------------------------------
(a)The Munder Healthcare Fund (formerly known as Munder Framlington Healthcare
Fund) Class Y Shares commenced operations on December 31, 1996.
(b)Total return represents aggregate total return for the period indicated.
(c)Per share numbers have been calculated using the average shares method.
-46-
HOW TO PURCHASE, SELL AND EXCHANGE SHARES
Purchasing Shares
You may purchase Class A and Class II shares of the Funds at the net asset value
("NAV") next determined after we receive your purchase order in proper form,
plus any applicable sales charge. Please see "Summary Comparison of Fees and
Expenses" for information about sales charges.
You may purchase Class B, Class C, Class K or Class Y shares of the Funds at the
NAV next determined after we receive your purchase order in proper form.
Class Y shares are only available for purchase by limited types of investors.
Please see "Policies and Procedures for Your Investment" regarding eligibility
requirements.
Broker-dealers or financial advisors (other than the Funds' distributor) may
charge you additional fees for shares you purchase through them.
For information regarding policies and procedures associated with purchasing
shares of the Funds, including minimum investment requirements and available
sales charge waivers and reductions. Please see "Policies and Procedures for
Your Investment."
Exchanging Shares
You may exchange your Fund shares for shares of the same class of other Munder
Funds based on their relative NAVs. Class C shares may also be exchanged for
Class II shares of another Munder Fund.
For information regarding policies and procedures associated with exchanging
shares, please see "Policies and Procedures for Your Investment."
Redeeming Shares
You may redeem shares at the NAV next determined after we receive your
redemption request in proper form. We will reduce the amount you receive by the
amount of any applicable contingent deferred sales charge (CDSC).
For information regarding policies and procedures associated with redeeming
shares, including restrictions or fees imposed on redemptions, please see
"Policies and Procedures for Your Investment."
Share Class Selection
The Funds offer Class A, Class B, Class C or Class II, Class K and Class Y
shares. Class K shares and Class Y shares are only available to limited types of
investors.
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 and your eligibility to purchase those shares. You
should consider both ongoing annual expenses, including applicable distribution
and/or shareholder servicing fees (See "How to Purchase, Sell and Exchange
Shares--Distribution and Service Fees--12b-1 Fees"), and any initial sales
charge or CDSC in estimating the costs of investing in a particular class of
shares (See "How to Purchase, Sell and Exchange Shares--Applicable Sales
Charge").
Class A Shares
- Front-end sales charge. There are several ways to reduce these sale
charges.
- Lower annual expenses than Class B, Class C and Class II shares.
Class B Shares
- No front-end sales charge. All your money goes to work for you right
away.
- A CDSC on shares you sell within six years of purchase. The CDSC may
be waived for
-47-
certain redemptions.
- Higher annual expenses than Class A shares.
- Automatic conversion to Class A shares approximately eight years after
issuance, thus reducing future annual expenses. If you acquired Class
B shares of a Fund before November 8, 2000 or by exchanging shares of
another Munder Fund which you purchased before November 8, 2000, your
shares will convert automatically six years after issuance of the
original purchase.
- Cannot be used for investments over $250,000.
Class C Shares
- No front-end sales charge. All your money goes to work for you right
away.
- A CDSC on shares you sell within one year of purchase.
- Higher annual expenses than Class A shares.
- Shares do not convert to another class.
Class II Shares
- Front-end sales charge.
- A CDSC on shares you sell within eighteen months of purchase.
- Higher annual expenses than Class A shares.
- Shares do not convert to another class.
Class K Shares
Eligible Investors Only
- No front-end sales charge. All your money goes to work for you right
away.
- Lower annual expenses than Class B, Class C and Class II shares.
Class Y Shares
Eligible Investors Only
- No front-end sales charge. All your money goes to work for you right
away.
- Lower annual expenses than all other share classes.
Applicable Sales Charge
Front-End Sales Charge--Class A Shares
You can purchase Class A shares at NAV, plus an initial sales charge. Shares
purchased through reinvestment of distributions are not subject to a sales
charge. The sales charge as a percentage of your investment decreases as the
amount you invest increases. The current sales charge rates and commissions paid
to selected dealers are as follows:
Sales Charge as a Percentage of
-------------------------------
Dealer Reallowance as a
Your Percentage
Amount of Purchase Investment Net Asset Value of Offer Price
------------------ ---------- --------------- -----------------------
Less than $25,000 5.50% 5.82% 5.00%
$25,000 but less than $50,000 5.25% 5.54% 4.75%
$50,000 but less than $100,000 4.50% 4.71% 4.00%
$100,000 but less than $250,000 3.50% 3.63% 3.25%
$250,000 but less than $500,000 2.50% 2.56% 2.25%
$500,000 but less than $1,000,000 1.50% 1.52% 1.25%
$1,000,000 or more None* None* (see below)**
- -----------------
* No initial sales charge applies on investments of $1 million or more;
however, a CDSC of 1% is imposed on certain redemptions within one year of
purchase.
** The distributor will pay a 1% commission to dealers and other entities (as
permitted by applicable Federal and state law) who initiate and are
responsible for purchases of $1 million or more.
-48-
You may be eligible for a waiver or all or part of the front-end sales charge on
Class A shares. Please see "How to Purchase, Sell and Exchange Shares--Policies
and Procedures for Your Investment--CDSC Waivers."
Front-End Sales Charge--Class II Shares
You can purchase Class II shares at the NAV, plus an initial sales charge. The
current sales charge rate and commissions paid to selected dealers are as
follows:
Sales Charge as a Percentage of Dealer Reallowance as
------------------------------- a Percentage of
Your Investment Net Asset Value the Offering Price
---------------------------------------------- ------------------
1.00% 1.01% 1.00%
CDSCs
You pay a CDSC when you redeem:
- Class A shares purchased within one year of redemption as a part of an
investment of $1 million or more;
- Class B shares within six years of buying them;
- Class C shares within one year of buying them; or
- Class II shares within eighteen months of buying them.
These time periods include the time you held Class A, Class B, Class C or Class
II shares of another Munder Fund which you may have exchanged for Class A, Class
B, Class C or Class II shares of the Fund you are redeeming.
The CDSC is calculated based on the original NAV at the time of your investment
or the NAV at the time of redemption, whichever is lower. Shares purchased
through reinvestment of distributions are not subject to a CDSC.
The CDSC for Class A shares and Class II shares, if applicable, is 1.00%.
The CDSC schedule for Class B shares is set forth below.
Year Since
Purchase[d] CDSC
----------- ----
First 5.00%
Second 4.00%
Third 3.00%
Fourth 3.00%
Fifth 2.00%
Sixth 1.00%
Seventh and thereafter 0.00%
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, i.e., 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
-49-
from selling his or her shares will be subject to the CDSC, at a rate of 3.00%
(the applicable rate in the third year after purchase).
At the time of purchase of Class B shares, Class C shares and Class II shares,
the Funds' distributor pays sales commissions of 4.00%, 1.00% and 2.00%,
respectively, of the purchase price to brokers that initiate and are responsible
for purchases of such Class B shares, Class C shares and Class II shares.
The CDSC on Class B, Class C or Class II shares may be waived under certain
circumstances.
Policies and Procedures for Your Investment
Purchase Information
Who May Purchase Shares
All investors are eligible to purchase Class A, Class B, Class C or Class II
shares.
Customers (and their immediate family members) of banks and other financial
institutions that have entered into agreements with us to provide shareholder
services for customers may purchase Class K shares. Customers may include
individuals, trusts, partnerships and corporations. Financial institutions (or
their nominees) will normally be the holders of record of Fund shares acting on
behalf of their customers, and will reflect their customers' beneficial
ownership of shares in the account statements provided by them to their
customers.
Only the following investors may purchase Class Y shares:
- 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
advisors, 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.
Ineligible investors who select Class Y shares will be issued Class A shares.
Methods for Purchasing Shares
Investors may purchase Class A, Class B, Class II and Class Y shares through one
of the following means:
Through a Broker, Financial Advisor and/or Financial Institution. Any broker,
financial advisor or financial institution authorized by the Munder Funds'
distributor can sell you shares of the Funds. Please note that brokers,
financial advisors or other financial institutions may charge you fees for their
services. In addition, confirmations of share purchases will be sent to the
financial institution through which the purchase is made.
By Mail. For new accounts, you must complete, sign and mail an Account
Application and a check or other negotiable bank draft (payable to The Munder
Funds) for at least the minimum initial investment amount to:
The Munder Funds
P.O. Box 9701
Providence, RI 02940
or by overnight delivery to:
The Munder Funds
4400 Computer Drive
Westborough, MA 01581
-50-
You can obtain an Account Application by calling (800) 438-5789 and specifying
the class of shares you wish to purchase.
You must also specify the class of shares being purchased on your Account
Application. If the class is not specified or you are not eligible to purchase
the class you have selected, your purchase will automatically be invested in
Class A shares.
For additional investments, send an investment slip (the top portion of your
confirmation or statement) 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, including,
without limitation cash, temporary checks, credit cards or third-party checks.
By Wire. For new accounts, you must complete, sign and mail an Application Form
to the Funds at one of the addresses listed above. Once your account has been
established, you can wire funds for investment using the wire instructions
below. To obtain an Account Application, your account number or more
information, call (800) 438-5789.
Wire instructions
Bank ABA/Routing #: 011001234
Bank Account Number: 167983
Bank Account Name: The Munder Funds
RFB: (Fund Name and Class)
OBI: (Your Name and Acct#)
You may make additional investments at any time using the wire procedures
described above. Note that banks may charge fees for transmitting wires.
By Electronic Funds Transfer. For new accounts, you must complete, sign and mail
to the Funds at one of the addresses listed above on an Application Form with
the Banking Information section completed. Once your account has been
established, you can make investments by electronic funds transfer (EFT).
For existing accounts, if you completed the Banking Information section of your
Account Application and did not decline the EFT purchase privilege when you
opened your account, you may make additional investments by EFT. If you do not
currently have the EFT purchase privilege, you may complete, sign and mail to
the Funds an Electronic Funds Transfer Authorization Form. Once your request for
the EFT purchase privilege has been processed (which may take up to ten days),
you can make investments by EFT.
To make an investment by EFT, call (800) 438-5789 to request a transaction or to
establish an internet Personal Identification Number (PIN) for online
transactions at www.munder.com.
Please note that EFT transactions usually require two days to complete.
Through Automatic Investment Plan ("AIP"). Under an AIP you may arrange for
periodic investments in a Fund through automatic deductions from a bank account.
To enroll in an AIP you should complete the AIP section of your Account
Application or complete an Automatic Investment Plan Form. The minimum
investment amount is $50 per Fund per month. You may discontinue the AIP at any
time. We may discontinue the AIP on 30 days' written notice to you.
Investors may purchase Class K shares through selected banks or other financial
institutions. Please note that financial institutions may charge you fees for
their services. Confirmation of share purchases will be sent to the financial
institution involved.
Policies for Purchasing Shares
Investment minimums for Class A, B, C and II Shares. The minimum initial
investment for Class A, Class B, Class C, and Class II shares is $2,500 per Fund
for all accounts, with the following exceptions. The minimum initial investment
for all types of Individual Retirement Accounts ("IRAs"), Education Savings
Accounts
-51-
(ESAs), 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. If you use the Automatic Investment Plan
("AIP"), the minimum initial and subsequent investment per Fund is $50.
Investment minimums 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.
Investment minimums for Class Y Shares. The minimum initial investment for Class
Y shares by fiduciary and discretionary accounts of institutions and by
institutional investors is $100,000. Other eligible investors are not subject to
any minimum. There is no minimum for subsequent investments. We reserve the
right to waive any investment minimum.
Investment minimums for Class K Shares. There is no minimum initial or
subsequent investment for Class K shares.
Accounts below minimums. If your investment in Class A, Class B, Class C or
Class II shares of a Fund does not meet the applicable account minimum, or you
cease AIP contributions before reaching the applicable account minimum, you may
increase your balance to that level (either by a single investment or through
the AIP) or that Fund account will 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
reserve the right, upon 30 days' advance written notice, to redeem your Class A,
Class B, Class C or Class II shares account (and forward the redemption proceeds
to you) if its value is below the applicable minimum or to redeem your Class Y
shares if its value is below $2,500.
Timing of orders. Purchase orders must be received by the Funds or the Funds'
distributor, transfer agent or authorized dealer before the close of regular
trading on the NYSE (normally, 4:00 p.m. Eastern time) to receive that day's
NAV. Purchase orders received after that time will be accepted as of the next
business day.
Sales Charge Waivers and Reductions--Class A Shares
We will waive the initial sales charge on Class A shares for the following types
of purchasers:
1. individuals with an investment account or relationship with MCM;
2. full-time employees and retired employees of MCM or its affiliates,
employees of the Funds' service providers and immediate family members
of such persons;
3. registered broker-dealers or financial advisors that have entered into
selling agreements with the Funds' distributor, for their own accounts
or for retirement plans for their employees or sold to registered
representatives for full-time employees (and their families) that
certify to the distributor at the time of purchase that such purchase
is for their own account (or for the benefit of their families);
4. certain qualified employee benefit plans and employer sponsored
retirement plans;
5. individuals who reinvest distributions from a qualified retirement
plan managed by MCM;
6. individuals who reinvest the proceeds of redemptions from Class Y
shares of another Munder Fund, within 60 days of redemption;
7. banks and other financial institutions that have entered into
agreements with the Munder Funds to provide shareholder services for
customers (including customers of such banks and other financial
institutions, and the immediate family members of such customers);
8. fee-based financial planners or employee benefit plan consultants
acting for the accounts of their clients.
For further information on sales charge waivers, call (800) 438-5789.
-52-
Sales Charge Reductions
You may qualify for reduced sales charges in the following cases:
Letter of Intent. If you intend to purchase at least $25,000 of Class A shares
of the Funds, you can qualify for a reduced sales charge by completing a Letter
of Intent. To do this, complete the Letter of Intent section of your Account
Application or contact your broker or financial advisor. By doing so, you agree
to invest a certain amount over a 13-month period. You would pay a sales charge
on any Class A shares you purchase during the 13 months based on the total
amount to be invested under the Letter of Intent. You can apply any investments
you made in Class A shares in any of the Munder Funds during the preceding
90-day period toward fulfillment of the Letter of Intent (although there will be
no refund of sales charges you paid during the 90-day period). You should inform
the Funds' that you have a Letter of Intent each time you make an investment.
You are not obligated to purchase the amount specified in the Letter of Intent.
If you purchase less than the amount specified, however, you must pay the
difference between the sales charge paid and the sales charge applicable to the
purchases actually made. The Funds will hold such amount in escrow. The Funds
will pay the escrowed funds to your account at the end of the 13 months unless
you do not complete your intended investment.
Right of Accumulation. You may add the market value of any other Class A shares
of non-money market Munder Funds you already own to the amount of your next
Class A share investment for purposes of calculating the sales charge at the
time of the current purchase. You may also combine purchases of Class A shares
of non-money market Munder Funds that are made by you, your spouse and your
children under age 21 when calculating the sales charge. You must notify your
broker, your financial advisor or the Funds to qualify.
Certain brokers or financial advisors may not offer these programs or may impose
conditions or fees to use these programs. You should consult with your broker or
financial advisor prior to purchasing the Funds' shares.
For further information on sales charge reductions, call (800) 438-5789.
Redemption Information
Methods for Redeeming Shares
Shareholders may redeem Class A, Class B, Class C, Class II and Class Y shares
through one of the following means:
Through a Broker, Financial Advisor or Financial Institution. Contact your
broker, financial advisor or financial institution for more information.
By Mail. You may send a written request to the Funds containing (1) your account
number; (2) the name of the Fund to be redeemed and the dollar or share amount
to be redeemed; (3) the original signatures of all of the registered owners of
the account exactly as they appear in the registration; (4) the address to which
you wish to have the proceeds sent; and (5) medallion signature guarantees, if
necessary (see below). All redemption requests should be sent to:
The Munder Funds
P.O. Box 9701
Providence, RI 02940
or by overnight delivery to:
The Munder Funds
4400 Computer Drive
Westborough, MA 01581
-53-
For certain types of special requests, such as redemptions following the death
or divorce of a shareholder, the Funds may also require additional information
in order to process your request. Please call (800) 438-5789 to determine if
your request requires additional information.
For redemptions from IRA, ESA and 403(b) accounts, you will need to complete the
proper distribution form and indicate whether you wish to have federal income
tax withheld from your proceeds.
By Telephone. If you did not decline the telephone redemption privilege on your
Account Application, you may give redemption instructions for transactions
involving less than $50,000 per day by calling (800) 438-5789. If you do not
currently have the telephone redemption privilege, you may complete, sign and
mail to the Funds a Telephone Transaction Authorization Form. Once your request
for the telephone redemption privilege has been processed (which may take up to
ten days), you may make redemptions by telephone.
The Funds must receive a redemption request prior to the close of the NYSE to
effect the redemption at that day's closing share price. You may not make
telephone redemptions from an IRA, ESA or 403(b) account.
By Internet. If you established an internet Personal Identification Number
(PIN), you may redeem less than $50,000 per day from your account by clicking on
Account Access at www.munder.com. To establish an internet PIN, call (800)
438-5789.
As with redemptions by telephone the Funds must receive a redemption request
prior to the close of the NYSE to effect the redemption at that day's closing
share price. In the absence of other instructions, we will send the proceeds of
your redemption by check to your address of record (provided it has not changed
in the prior 30 days). If we have EFT or wire instructions for your account that
have not changed in the prior 30 days, you may request one of these redemption
methods.
You may not make internet redemptions from an IRA, ESA or 403(b) account.
Through Systematic Withdrawal Plan ("SWP"). If you have an account value of
$5,000 or more in a Fund, you may redeem Class A, Class B, Class C or Class II
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 a SWP by
completing the Systematic Withdrawal Plan Form available through the Funds. To
participate in a SWP you must have your dividends automatically reinvested. You
may change or cancel a SWP at any time upon notice to the Funds. You should not
buy Class A shares (and pay a sales charge) while you participate in a SWP and
you must pay any applicable CDSC when you redeem shares.
You may redeem Class K shares through your bank or other financial institution.
Policies for Redeeming Shares
Policies for redeeming Class A, Class B, Class C, Class II and Class Y Shares
are set forth below.
Where Proceeds are Sent. In the absence of other instructions, we will send the
proceeds of your redemption by check to your address of record (provided it has
not changed in the past 30 days). You may give other instructions by calling
(800) 438-5789.
If you have changed your address within the last 30 days, we will need a
medallion signature guarantee (see below) in order to send the proceeds to the
new address. Alternatively, if we have EFT or wire instructions for your account
that have not changed in the past 30 days, we can process your redemption using
one of these methods.
Short-Term Trading Fee. If you redeem Class A, Class B, Class C or Class II
shares of certain Funds (see "Summary--Summary Comparison of Fees and Expenses")
within 60 days of purchase, you will incur a 2% short-term trading fee (in
addition to any other applicable CDSC) upon redemption based on net assets at
the time of redemption. The short-term trading fee also applies when shares are
redeemed by exchange to another Munder Fund. The short-term trading fee is paid
directly to the Fund you redeem to offset the costs of buying
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and selling securities and is intended to protect existing shareholders. The
fee, which discourages short-term trading, more appropriately allocates expenses
generated by short-term trading to short-term investors so that long-term
investors do not subsidize the activities of short-term traders. We reserve the
right to waive the short-term trading fee in certain limited circumstances.
Medallion Signature Guarantee. For your protection, a medallion signature
guarantee is required for the following Class A, Class B, Class C and Class II
shares redemption requests:
- redemption proceeds greater than $50,000;
- redemption proceeds not being made payable to the record owner of the
account;
- redemption proceeds not being mailed to the address of record on the
account;
- redemption proceeds being mailed to an address of record that has
changed within the last 30 days;
- 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.
We reserve the right to require a medallion signature guarantee for other types
of redemption requests, including Class Y share redemptions.
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 that participates 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 that are not
participating in one of these programs will not be accepted.
Accounts Held Through Institutions. 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.
Redemptions Difficulties. During periods of unusual economic or market activity,
or due to technical reasons, you may experience difficulties or delays in
effecting telephone or internet redemptions. In such cases, you should consider
making your redemption request by mail.
CDSC Waivers. We will waive the CDSC payable upon redemptions of Class B, Class
C or Class II shares which you purchased (or acquired through an exchange of
shares of another Munder Fund) for:
- redemptions made within one year after the death or permanent
disability (as defined by the Social Security Administration) 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; and
- (Class B shares only) 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.
Other waivers of the CDSC on Class B, Class C or Class II shares may apply.
Please see the Fund's Statement of Additional Information or call (800) 438-5789
for more details.
Class K shares held by a financial institution on behalf of its customers must
be redeemed in accordance with instructions and limitations pertaining to the
account at that institution.
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Exchange Information
Methods for Exchanging Shares
Shareholders may exchange Class A, Class B, Class C, Class II and Class Y shares
through one of the following means:
Through a Broker, Financial Advisor or Financial Institution. Contact your
broker, financial advisor or other financial institution for more information.
By Mail. You may send a written request to the Funds containing (1) your account
number; (2) the name of the Fund from which your exchange will be made and the
dollar or share amount to be exchanged; (3) the name of the Munder Fund into
which your exchange will be made; and (4) the original signatures of all of the
registered owners of the account exactly as the appear in the registration. All
exchange requests should be sent to:
The Munder Funds
P.O. Box 9701
Providence, RI 02940
or by overnight delivery to:
The Munder Funds
4400 Computer Drive
Westborough, MA 01581
By Telephone. If you did not decline the telephone exchange privilege on your
Account Application, you may give exchange instructions by calling (800)
438-5789. If you do not currently have the telephone exchange privilege, you may
complete, sign and mail to the Funds a Telephone Transaction Authorization Form.
Once your request for the telephone exchange privilege has been processed (which
may take up to ten days), you can make exchanges by telephone.
The Funds must receive an exchange request prior to the close of the NYSE to
effect the exchange at that day's closing share price.
By Internet. If you established an internet Personal Identification Number
(PIN), you may exchange shares by clicking on Account Access at www.munder.com.
To establish an internet PIN, call (800) 438-5789.
The Funds must receive an exchange request prior to the close of the NYSE to
effect the exchange at that day's closing share price.
Policies for Exchanging Shares
Policies for exchanging Class A, Class B, Class C, Class II and Class Y shares
are set forth below.
- 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 or Class II shares of a Fund for Class C or
Class II shares of other Munder Funds based on their relative NAVs.
- Class A shares of a money market fund that (1) were acquired through
the use of the exchange privilege and (2) can be traced back to a
purchase or one or more Munder Funds for which a sales charge was
paid, may be exchanged for Class A shares of a Fund at NAV.
- Class A, Class B, Class C and Class II shares will continue to age
from the date of the original purchase and will retain the same CDSC
rate as they had before the exchange.
- You must meet the minimum purchase requirements for the Munder Fund
that you purchase by exchange.
- If you are exchanging into shares of a Munder Fund with a higher sales
charge, you must pay
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the difference at the time of the exchange.
- A share exchange is a taxable event and, accordingly, you may realize
a taxable gain or loss.
- Before making an exchange request, read the prospectus of the Munder
Fund you wish to purchase by exchange. You can obtain a prospectus for
any Munder Fund by contacting your broker, financial advisor or other
financial institution or by calling the Munder Funds at (800)
438-5789.
- The exchange privilege is not intended as a vehicle for short-term
trading. Excessive exchange activity may interfere with portfolio
management and have an adverse effect on all shareholders. Each Fund
and its distributor reserve the right to refuse any purchase or
exchange request that could adversely affect the Fund or its
operations, including those from any individual or group who, in our
view, is likely to engage in excessive trading or any order considered
market-timing activity. If a Fund refuses a purchase or exchange
request and the shareholder deems it necessary to redeem his or her
account, any CDSC as permitted by the prospectus will be applicable.
Additionally, in no event will any Fund permit more than six exchanges
into or out of a Fund in any one-year period per account, tax
identification number, social security number or related investment
group. Exchanges among the Munder Money Market Funds are exempt from
this policy.
- Brokers, financial advisors or other financial institutions 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.
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.
- We reserve the right to reject any purchase order, including exchanges
from other Munder Funds.
- At any time, we may change any of our purchase, redemption or exchange
practices or privileges, and may suspend the sale of Fund shares.
- We may delay sending redemption proceeds for up to seven days, or
longer if permitted by the SEC.
- To limit the Funds' expenses, we no longer issue share certificates.
- We may temporarily stop redeeming shares if:
(i) the NYSE is closed;
(ii) trading on the NYSE is restricted;
(iii) an emergency exists and the Fund cannot sell its assets or
accurately determine the value of its assets; or
(iv) if the SEC orders the Fund to suspend redemptions.
- We record all telephone calls for your protection and take measures to
identify the caller. As long as we take reasonable measures to
authenticate telephone requests on an investor's account, neither the
Funds, the Funds' distributor nor the Funds' transfer agent will be
held responsible for any losses resulting from unauthorized
transactions.
- Normally, we send redemption amounts to you on the next business day
after we receive your request in proper form. Same day processing is
available only for the money market funds, provided we receive notice
of the trade prior to the applicable cut-off time.
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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.
Class A, Class B, Class C, Class II and Class Y shares
- If you purchased shares directly from the Funds, we 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, financial advisor or other financial
institution, account activity will be detailed in their statements to
you. Brokers, financial advisors and other financial institutions are
responsible for transmitting orders and payments for their customers
on a timely basis.
Class K shares
- Your account activity will be detailed in your financial institutions
statement sent to you. Financial institutions are responsible for
transmitting orders and payments for their customers on a timely
basis.
Shareholder Privileges
Reinstatement Privilege. For 60 days after you sell shares of any Munder Fund,
you may reinvest your redemption proceeds in shares of Class A shares of any
Munder Fund at NAV (without paying a sales charge). You may use this privilege
once in any given twelve-month period with respect to your shares of a Fund.
You, your broker or your financial advisor must notify us in writing at the time
of reinvestment in order to eliminate the sales charge on your reinvestment.
Distribution and Service Fees
12b-1 Fees and Service Fees
The Funds have adopted a distribution and service plan ("Plan") under Rule 12b-1
of the 1940 Act with respect to Class A, Class B, Class C and Class II shares
but not with respect to Class K 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, Class C and Class II shares to pay for certain
shareholder services provided by institutions that have agreements with the
Funds or their service providers to provide such services. The Funds may also
pay up to 0.75% of the daily net assets of the Class B, Class C and Class II
shares to finance activities relating to the distribution of its shares.
With respect to the Class K shares, each Fund may pay fees for services provided
to shareholders. The Funds may pay up to 0.25% of the daily net assets of Class
K shares for certain shareholder services provided by institutions that have
agreements with the Funds or their service providers to provide such services.
Because the fees are paid out of each Fund's assets on an on-going basis, over
time these fees will increase the cost of an investment in a Fund and may cost a
shareholder more than paying other types of sales charges.
Other Information
In addition to paying 12b-1 fees or service fees, the Funds may pay banks,
broker-dealers, financial advisors or other financial institutions fees for
sub-administration, sub-transfer agency and other shareholder services
associated with shareholders whose shares are held of record in omnibus or other
group accounts. The Funds' service providers, or any of their affiliates, may,
from time to time, make these types of payment or payments for other shareholder
services or distribution, out of their own resources and without additional cost
to the Funds or their shareholders. Please note that Comerica Bank, an affiliate
of MCM, receives a fee from the Funds for providing shareholder services to its
customers who own shares of the Funds.
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Valuing 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. NAV is calculated by (1) taking the current value of a Fund's total
assets allocated to a particular class of shares, (2) subtracting the
liabilities and expenses charged to that class, and (3) dividing that amount by
the total number of shares of that class outstanding.
The Funds calculate NAV as of the close of regular trading on the NYSE, normally
4:00 p.m. (Eastern time). If the NYSE closes at any other time, or if an
emergency exists, transaction deadlines and NAV calculations may occur at
different times. The NAV of each Fund is generally based on the current market
value of the securities held in the Fund.
If reliable current market values are not readily available for a security, such
security will be priced using its fair value as determined in good faith by, or
using procedures approved by, the Board of Directors of the Funds. Fair value
represents a good faith approximation of the value of a security. The fair value
of one or more securities may not, in retrospect, be the prices at which those
assets could have been sold during the period in which the particular fair
values were used in determining a Fund's NAV. As a result, a Fund's sale or
redemption of its shares at NAV, at a time when a holding or holdings are valued
at fair value, may have the effect of diluting or increasing the economic
interest of existing shareholders. The procedures established by the Board of
Directors/Trustees for the Funds to fair value each Fund's securities
contemplate that MCM will establish a pricing committee to serve as its formal
oversight body for the valuation of each Fund's securities. Any determinations
of the pricing committee made during a quarter will be reviewed by the Board of
Directors/Trustees of the Funds at the next regularly scheduled quarterly
meeting of the Boards.
Debt securities with remaining maturities of 60 days or less are valued at
amortized cost, unless the Board of Directors/Trustees determine that such
valuation does not constitute fair value at this time. Under this method, such
securities are valued initially at cost on the date of purchase (or the 61st day
before maturity).
Trading in foreign securities may be completed at times that vary from the
closing of the NYSE. A Fund values foreign securities at the latest closing
price on the exchange on which they are traded immediately prior to the closing
of the NYSE. Certain foreign currency exchange rates may also be determined at
the latest rate prior to the closing of the NYSE. Foreign securities quoted in
foreign currencies are translated into U.S. dollars at current rates. Because
foreign markets may be open at different times and on different days than the
NYSE, the value of a Fund's shares may change on days when shareholders are not
able to buy or sell their shares. Occasionally, events that affect the value of
a Fund's portfolio securities may occur between the time the principal market
for a Fund's foreign securities closes and the closing of the NYSE. If MCM
believes that such events materially affect the value of portfolio securities,
these securities may be valued at their fair market value as determined in good
faith by, or using procedures approved by, the Funds' Board of Directors. A Fund
may also fair value its foreign securities when a particular foreign market is
closed but the Fund is open. This policy is intended to assure a Fund's NAV
appropriately reflects securities' values at the time of pricing.
Distributions
As a shareholder, you are entitled to your share of a Fund's net income and
capital gains on its investments. A Fund passes substantially all of its
earnings along to its shareholders as distributions. When a Fund earns dividends
from stocks and interest from debt securities and distributes these earnings to
shareholders, it is called a dividend distribution. A Fund realizes capital
gains when it sells securities for a higher price than it paid. When these gains
are distributed to shareholders, it is called a capital gain distribution.
Both the Bio(Tech)/2/ Fund and the Healthcare Fund declare and pay dividend
distributions, if any, at least annually and distribute their net realized
capital gains, if any, at least annually.
It is possible that a Fund may make a distribution in excess of the Fund's
earnings and profits. You should treat such a distribution as a return of
capital which is applied against and reduces your basis in your shares. You
should treat the excess of any such distribution over your basis in your shares
as gain from a sale or exchange of the shares.
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Each Fund will pay both dividend and capital gain distributions in additional
shares of the same class of that Fund. If you wish to receive distributions in
cash, either indicate this request on your Account Application or notify the
Funds by calling (800) 438-5789.
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. Dividend distributions and short-term
capital gains generally will be taxed as ordinary income. The tax you pay on a
given capital gains distribution generally depends on how long the Fund held the
portfolio securities it sold. It does not depend on how long you held your Fund
shares.
Distributions are generally taxable to you in the tax year in which they are
paid, with one exception: distributions declared in October, November or
December, but not paid until January of the following year, are taxed as though
they were paid on December 31 in the year in which they were declared.
Shareholders generally are required to report all Fund distributions on their
federal income tax returns. Each year the Funds will send you information
detailing the amount of ordinary income and capital gains paid to you for the
previous year.
Taxes on Sales or Exchanges
If you sell shares of a Fund or exchange them for shares of another Munder Fund,
you generally will be subject to tax on any taxable gain. Taxable gain is
computed by subtracting your tax basis in the shares from the redemption
proceeds (in the case of a sale) or the value of the shares received (in the
case of an exchange). Because your tax basis depends on the original purchase
price and on the price at which any dividends may have been reinvested, you
should be sure to keep account statements so that you or your tax preparer will
be able to determine whether a sale will result in a taxable gain. If your tax
basis in the shares exceeds your redemption proceeds, you will recognize a
taxable loss on the sale of shares of a Fund.
Other Considerations
If you buy shares of a Fund just before the Fund makes any distribution, you
will pay the full price for the shares and then receive back a portion of the
money you have just invested in the form of a taxable distribution. If you have
not provided complete, correct taxpayer information, by law, the Funds must
withhold a portion of your distributions and redemption proceeds to pay federal
income taxes.
INFORMATION ABOUT MANAGEMENT OF THE BIO(TECH)/2/ FUND
AND THE HEALTHCARE FUND
Investment Advisor
The current investment advisor of both the Bio(Tech)/2/ Fund and the Healthcare
Fund is Munder Capital Management ("MCM"), 480 Pierce Street, Birmingham,
Michigan 48009. As of December 31, 2002, MCM had approximately $32.2 billion in
assets under management, of which $13.4 billion were invested in equity
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securities, $10.9 billion were invested in money market or other short-term
instruments, $6.7 billion were invested in other fixed income securities and
$1.3 billion were invested in balanced investments.
Framlington Overseas Investment Management Limited, an affiliate of MCM, serves
as sub-advisor to both the Bio(Tech)/2/ Fund and the Healthcare Fund.
MCM provides overall investment management for to each of the Funds and 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 Bio(Tech)/2/ Fund and the
Healthcare Fund paid advisory fees at an annual rate of 1.25% and 0.91%,
respectively, of their average daily net assets.
Portfolio Managers
A team of professional portfolio managers employed by the Sub-Advisor makes
investment decisions for the Healthcare Fund. The same team of professional
portfolio managers employed by the Sub-Advisor makes investment decisions for
the Bio(Tech)/2/ Fund.
COMPARISON OF MUNDER SERIES TRUST, FRAMLINGTON AND THE COMPANY
The Company is a Maryland corporation governed by its own Articles of
Incorporation, By-Laws and a Board of Directors. Framlington is a Massachusetts
business trust governed by its own Declaration of Trust, By-Laws and a Board of
Trustees. The Munder Series Trust is a Delaware statutory trust governed by its
own Declaration of Trust, By-Laws and a Board of Trustees. The operations of the
Munder Series Trust, Framlington and the Company are also governed by applicable
state and Federal law.
Certain differences and similarities between these entities are summarized
below, although this is not a complete list of comparisons. Shareholders should
refer to the provisions of these governing documents and the relevant state law
directly for a more thorough comparison. Copies of these governing documents are
available to shareholders without charge upon written request.
General
Under the Declaration of Trust and By-Laws of the Munder Series Trust, the
Trustees of the Munder Series Trust will have more flexibility than
Directors/Trustees of the Company and Framlington, subject to applicable
requirements of the 1940 Act and Delaware law, broader authority to act. The
increased flexibility may allow the Trustees of the Munder Series Trust to react
more quickly to changes in competitive and regulatory conditions and, as a
consequence, may allow the Munder Series Trust to operate in a more efficient
and economical manner. Delaware law also promotes ease of administration by
permitting the Board of the Munder Series Trust to take certain actions, for
example, establishing new investment series of the Munder Series Trust, without
filing additional documentation with the state, which would otherwise require
additional time and costs.
Importantly, the Directors' existing fiduciary obligations to act with due care
and in the interest of the Bio(Tech)/2/ Fund and the Healthcare Fund and their
shareholders will not be affected by the Reorganization or the redomiciliation
of the Healthcare Fund as a series of Munder Series Trust currently being
proposed to shareholders of the Healthcare Fund.
Shareholder Liability
Munder Series Trust
The Declaration of Trust of the Munder Series Trust provides that
shareholders are not personally liable for the debts, liabilities,
obligations and expenses incurred by, contracted for, or otherwise existing
with respect to the Munder Series Trust, the New Fund or any class of
shares. In addition, shareholders have the same limitation of personal
liability as is extended to shareholders of a Delaware for-profit
corporation. Furthermore, the Declaration of Trust provides for
indemnification against all loss and expense arising from any claim or
demand against any shareholder who is held personally liable solely by
reason of a claim or demand relating to being a shareholder, and not
because of the shareholder's
-61-
acts or omissions. The Munder Series Trust may, at its option, assume the
defense of any such claim made against a shareholder. Neither the Munder
Series Trust nor the applicable series will be responsible, however, for
satisfying any obligation arising from such a claim that has been settled
by the shareholder without the prior written notice to, and consent of, the
Munder Series Trust.
The Company
The Company is organized as a Maryland corporation, and as such, its
shareholders generally have no personal liability for its acts or
obligations.
Framlington
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 Framlington Declaration of 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 series 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 Framlington 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 (i) a court
determines that the respective trust should be treated as a partnership,
rather than as a business trust, despite the terms of the Declaration of
Trust and (2)(i) a contractual disclaimer is found to be inadequate, and
(ii) and the Fund itself would be unable to meet its obligations.
Liquidation or Dissolution
Generally, in the event of the liquidation or dissolution of a series of the
Company, Framlington or Munder Series Trust, the shareholders of that series are
entitled to receive, when and as declared by the Board, the excess of the assets
over the liabilities belonging to that series. The assets so distributed to
shareholders of series would be distributed among the shareholders in proportion
to the number of shares of that series held by them and recorded on the books of
that series.
Munder Series Trust
The Declaration of Trust of the Munder Series Trust permits a majority of
the Trustees to liquidate the Munder Series Trust, or any class or series
of the Munder Series Trust, upon written notice to shareholders, without
submitting the matter for shareholder approval.
The Company
Maryland law requires shareholder approval of a dissolution of the Company.
If no shares of a class or series are outstanding, a majority of the
Directors may vote to liquidate any class or series without shareholder
approval. Otherwise, the Company may first redeem all of the shares
outstanding of each applicable series and/or class, and then liquidate the
series or class without shareholder approval.
Framlington
The Declaration of Trust of Framlington permits liquidation of Framlington,
or any class or series of Framlington, without submitting the matter for
shareholder approval, upon the approval of a majority of the respective
Trustees.
Liability of Directors/Trustees
Munder Series Trust
Absent willful misfeasance, bad faith, gross negligence or reckless
disregard of a Trustee's duties, a Trustee acting in such capacity shall
not be personally liable to any person other than the Munder Series Trust
or a beneficial owner for any act, omission or obligation of the Munder
Series Trust or any Trustee. In addition, the Declaration of Trust provides
that any Trustee who has been designated a financial expert in the Munder
Series Trust's registration statement will not be subject to any greater
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duty of care in discharging such Trustee's duties and responsibilities by
virtue of such designation than a Trustee who has not been so designated.
The Company
The Articles of Incorporation of the Company provide that, except as
otherwise provided by Maryland law and the 1940 Act, a Director is not
liable to the Company or its shareholders for money damages. The Articles
of Incorporation also provide that the corporation will indemnify the
Directors to the fullest extent permitted by Maryland law and the 1940 Act.
Framlington
Absent willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of a Trustee acting in the
capacity of such office, Framlington's Declaration of Trust provides that
no Trustee will be liable to the Trust, any shareholder, Trustee, officer,
employee or agent thereof for any action or failure to act. The Declaration
of Trust further provides that Framlington will indemnify any Trustee to
the fullest extent possible under applicable law.
Rights of Inspection
Munder Series Trust
Shareholders shall have the right to inspect the Munder Series Trust's
accounts, books or documents only to the extent such right is conferred by
the Trustees or by resolution of the shareholders.
The Company
Except as required by Maryland law, shareholders of the Company have only
such right to inspect the Company's records, documents, accounts and books
as may be granted by the Directors. Maryland corporate law provides that
one or more persons who together have owned at least 5% of the outstanding
shares of the Bio(Tech)/2/ Fund for at least six months may, on written
request, inspect the books of account and stock ledger of the Bio(Tech)/2/
Fund.
Framlington
Shareholders of Framlington generally have the right to inspect the
records, accounts and books of the Trust, as such right is permitted to
shareholders of a Massachusetts business trust under Massachusetts
corporation law. Currently, each shareholder of a Massachusetts corporation
is permitted to inspect the records, accounts and books of a corporation
for any legitimate business purpose relative to the affairs of the
corporation.
Shareholder Meetings
Neither the Munder Series Trust, the Company, nor Framlington is required to
hold annual meetings of shareholders, although each may hold special meetings
for purposes of voting on certain matters as required under the 1940 Act. In
each case, on any matters submitted to a vote of the shareholders, all shares
entitled to vote are voted in the aggregate, except when (1) required by the
1940 Act, shares are voted by individual series; (2) the matter involves any
action that the Directors/Trustees have determined will affect only the
interests of one or more series, then only the shareholders of such series shall
be entitled to vote thereon; and (3) the matter involves any action that the
Directors/Trustees have determined will affect only the interests of one or more
classes, then only the shareholders of such class or classes shall be entitled
to vote thereon.
Munder Series Trust
The By-Laws for the Munder Series Trust permit special meetings of the
shareholders to be called by shareholders holding at least 10% of the
outstanding shares of the Munder Series Trust entitled to vote at such
meeting. Shareholders may also take action in lieu of a meeting by written
instrument signed by the holders of outstanding shares representing the
minimum number of votes that would be necessary to authorize or take that
action at a meeting.
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The Company
A special meeting of shareholders of a series may be called upon the
written request of holders of not less than 10% of that series' then
outstanding voting securities. Written shareholder consents in lieu of a
meeting are required to be signed by all shareholders.
Framlington
A special meeting of shareholders of a Fund may be called upon the written
request of holders of not less than 10% of that Fund's outstanding
securities entitled to vote. Written shareholder consents in lieu of a
meeting are required to be signed by shareholders representing a majority
of the shares.
Reorganization/Combination Transactions
Munder Series Trust
Under the Declaration of Trust and Delaware law, the Trustees may generally
authorize mergers, consolidations, share exchanges and reorganizations of a
series or the entire Munder Series Trust with another trust, series or
other business organization without shareholder approval, although such
approval may be separately required under the federal securities laws and
rules thereunder. For example, the 1940 Act and rules thereunder may
require a shareholder vote of a proposed merger involving affiliated funds
under certain circumstances, such as when the merging funds have materially
different advisory contracts or fundamental investment restrictions.
The Company and Framlington
A majority of the outstanding shares of a series must approve a merger of
that series with another business organization, or the sale or exchange of
all or substantially all of the property of that series.
Amendment of Charter Document
Munder Series Trust
The Trustees may generally restate, amend or otherwise supplement the
Trust's governing instrument, which includes the Declaration of Trust and
the By-Laws, without the approval of shareholders, subject to limited
exceptions (such as amendments affecting shareholders' voting rights).
The Company
The Articles of Incorporation provide that the Company reserves the right
to amend, alter, change or repeal any provision of the Articles of
Incorporation, and all rights conferred upon shareholders are granted
subject to this reservation. Under Maryland law, amendments to the charter
of a corporation, other than to change the name of the corporation, or a
class or series thereof, must be approved by a two-thirds of all votes
entitled to be cast. However, the Company's Articles of Incorporation
provide that a majority of the outstanding shares entitled to vote will be
sufficient to approve an amendment.
Framlington
Generally, the Framlington Declaration of Trust may only be amended by the
affirmative vote of the majority of shareholders. However, the Trustees may
amend the Declaration of Trust without shareholder approval to: (1) conform
it to the requirements of applicable federal laws or regulations; (2)
change the name of the Trust; or (3) make any other changes which do not
materially adversely affect the rights of shareholders.
Derivative and Class Actions
Munder Series Trust
Shareholders of the Munder Series Trust or any series thereof may not bring
a derivative action to enforce the right of the Munder Series Trust or that
series unless certain conditions are satisfied. The conditions include,
among others, that (1) the complaining shareholder submit a written demand
to the Board of Trustees and that demand must be refused, and (2) at least
10% of the shareholders of the Munder Series Trust or the series, as
applicable, join in bringing the derivative action. A shareholder of
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a particular series is not entitled to participate in a derivative action
on behalf of any other series of the Munder Series Trust.
The Company
Under Maryland law, shareholders may not bring a derivative action unless
they have first made a demand upon the corporation to sue in its own name
and the demand was refused. If the Directors improperly refuse to bring a
derivative suit or if the demand upon the Directors is excused, then a
plaintiff generally must then make the demand upon the corporation's other
shareholders before commencing suit.
Framlington
Under the Framlington Declaration of Trust, shareholders have the power to
vote to the same extent as the shareholders of a Massachusetts corporation
as to whether or not a court action, proceeding or claim should be brought
or maintained derivatively or as a class action on behalf of Framlington or
its shareholders.
* * *
The foregoing is only a summary of certain characteristics of the operations of
the Munder Series Trust, the Company, and Framlington and their relevant
corporate governance documents and relevant state 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 entity for a more
thorough description.
ADDITIONAL INFORMATION ABOUT THE
Bio(Tech)/2/ FUND AND THE HEALTHCARE FUND
Information about the Bio(Tech)/2/ Fund and the Healthcare Fund is included in
(i) the Prospectus of the Bio(Tech)/2/ Fund (Class A, Class B, Class II and
Class Y shares) dated October 31, 2002, as supplemented on February ___, 2003;
(ii) the Prospectus of the Healthcare Fund (Class A, Class B, Class C and Class
Y shares) dated October 31, 2002, as supplemented on February __, 2003; (iii)
the Prospectus for the Bio(Tech)/2/ Fund and the Healthcare Fund (Class K
shares) dated October 31, 2002, as supplemented on February __, 2003; (iv) the
Statement of Additional Information for the Bio(Tech)/2/ Fund and the Healthcare
Fund dated October 31, 2002; (v) the Annual Report for the Bio(Tech)/2/ Fund and
the Healthcare Fund (Class A, Class B, Class II and Class Y shares) dated June
30, 2002; (vi) the Semi-Annual Report for the Bio(Tech)/2/ Fund and the
Healthcare Fund (Class A, Class B, Class II and Class Y shares) dated December
31, 2002; (vii) the Annual Report for the Bio(Tech)/2/ Fund and the Healthcare
Fund (Class K shares) dated June 30, 2002; and (viii) the Semi-Annual Report for
the Bio(Tech)/2/ Fund and the Healthcare Fund (Class K shares) dated December
31, 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 calling the
Bio(Tech)/2/ Fund or the Healthcare Fund at the telephone number or by writing
to the Funds at the address listed for the Funds on the cover page of this Proxy
Statement/Prospectus.
Both the Bio(Tech)/2/ Fund and the Healthcare 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, DC 20549 and at the
Midwest Regional Office of the SEC, 500 West Madison Street, Suite 1400,
Chicago, IL 60661. Copies of such material can also be obtained from the Public
Reference Branch, Office of Consumer Affairs and Information Services, SEC,
Washington, DC 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.
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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 Bio(Tech)/2/ Fund on or about March
____, 2003. Only shareholders of record as of the close of business on the
Record Date, February ___, 2003, 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
election of directors, 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 also
retained ________ ("_____") to provide proxy solicitation services in connection
with the Meeting at an estimated cost of $______. In addition, MCM may reimburse
persons holding shares in their names or names of their nominees for 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 Bio(Tech)/2/ Fund may
receive a call from a representative of MCM or _____ if the Fund has not yet
received its vote. Authorization to permit MCM or ____to execute proxies may be
obtained by telephonic or electronically transmitted instructions from
shareholders of the Bio(Tech)/2/ Fund. Proxies that are obtained telephonically
will be recorded in accordance with the procedures set forth below. Management
of the Bio(Tech)/2/ 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 MCM or
______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
MCM or ____ by the Bio(Tech)/2/ Fund, the MCM or ____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 MCM or
____ 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. MCM or _____
will record the shareholder's instructions on the card. Within 72 hours, MCM or
_____ will send the shareholder a letter or mailgram to confirm the
shareholder's vote and asking the shareholder to call MCM or _____ immediately
if the shareholder's instructions are not correctly reflected in the
confirmation.
Quorum
The holders of one-third of the shares of the Bio(Tech)/2/ 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.
-66-
Vote Required
Election of the Nominees for Directors of the Company must be approved by a
plurality of the votes cast in person or by proxy at the Meeting at which a
quorum exists. Approval of the Reorganization Agreement will require the
affirmative vote of a majority of the outstanding shares of the Bio(Tech)/2/
Fund, with all classes voting together and not by class. Shareholders of the
Bio(Tech)/2/ 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. Accordingly, abstentions and
broker non-votes will have no effect on Proposal 1, for which the required vote
is a plurality of the votes cast, and will effectively be a vote against
adjournment and against Proposals 2, for which the required vote is a percentage
of the shares outstanding and entitled to vote on the matter.
Adjournments
In the event that sufficient votes to approve a proposal are not received, 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 with respect to a proposal, 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.
Share Information
The chart below lists the number of shares of each class of the Bio(Tech)/2/
Fund that were outstanding as of the close of business on the Record Date:
Shares Outstanding on Record Date
--------------------------------------------------------------------
Class Bio(Tech)/2/ Fund
----- -----------------
--------------------------------------------------------------------
Class A
--------------------------------------------------------------------
Class B
--------------------------------------------------------------------
Class II
--------------------------------------------------------------------
Class K
--------------------------------------------------------------------
Class Y
--------------------------------------------------------------------
On February ___, 2003, to the knowledge of the Company, the following
shareholders owned, either beneficially or of record, 5% or more of the
outstanding shares of the Funds:
- --------------------------------------------------------------------------------
Name and Address Type of Percentage of
Name of Fund of Owner Ownership Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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- -------------------------------------------------------------------------------
Name and Address Type of Percentage of
Name of Fund of Owner Ownership Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
[The Company has been advised by Comerica Bank, an affiliate of MCM, and Munder
Fund of Funds, for which MCM serves as investment adviser, that each intends to
vote the shares of the Bio(Tech)/2/ Fund and the Healthcare 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 Bio(Tech)/2/ Fund and the Healthcare Fund,
respectively. 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 _______ shares of the Bio(Tech)/2/ Fund, or approximately
_____% of the outstanding voting securities of the Fund. As of the Record Date,
the officers and Directors of the Company beneficially owned as a group _______
shares of the Healthcare Fund, or approximately ____% of the outstanding voting
securities of the Fund.]
The votes of the shareholders of the Healthcare Fund are not being solicited
since their approval or consent is not necessary for the Reorganization to take
place.
LEGAL MATTERS
Certain legal matters concerning the issuance of shares of the Healthcare Fund
will be passed upon by Dechert LLP, 1775 I Street, N.W., Washington, DC 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 BIO(TECH)2 FUND TO THE HEALTHCARE FUND, THE TERMINATION OF THE BIO(TECH)2
FUND AND THE DISTRIBUTION OF SHARES OF THE HEALTHCARE FUND TO SHAREHOLDERS OF
THE BIO(TECH)2 FUND, AND ANY UNMARKED PROXIES WITHOUT INSTRUCTIONS TO THE
CONTRARY WILL BE VOTED IN FAVOR OF APPROVAL OF THE REORGANIZATION AGREEMENT.
-68-
EXHIBIT A
THE MUNDER FUNDS, INC.
THE MUNDER FRAMLINGTON FUNDS TRUST
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made as of this _____
day of _______, 2003, by and between The Munder Framlington Funds Trust, a
Massachusetts business trust ("Munder Framlington"), with its principal place of
business at 480 Pierce Street, Birmingham, Michigan 48009, on behalf of the
Munder Healthcare Fund ("Acquiring Fund"), a separate series of Munder
Framlington, 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 Bio(Tech)/2/ Fund ("Acquired Fund"), a separate
series of the Company.
This Agreement is intended to be and is adopted as a plan of reorganization and
liquidation within the meaning of Section 368(a)(1) of the United States
Internal Revenue Code of 1986, as amended ("Code"). The reorganization and
liquidation will consist of the transfer of all of the assets of the Acquired
Fund to the Acquiring Fund in exchange solely for Class A, Class B, Class C,
Class K and Class Y shares of 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 Munder Framlington 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 liabilities of the Acquired Fund
by the Acquiring Fund is in the best interests of the Acquired Fund and its
shareholders and that the interests of the existing shareholders of the Acquired
Fund would not be diluted as a result of this transaction;
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND TO THE ACQUIRING FUND IN EXCHANGE
FOR ACQUIRING FUND SHARES, THE ASSUMPTION OF ALL ACQUIRED FUND LIABILITIES
AND THE LIQUIDATION OF THE ACQUIRED FUND
1.1. Subject to the requisite approval of the Acquired Fund shareholders
and the other terms and conditions herein set forth and on the basis of the
representations and warranties contained herein, the Acquired Fund agrees to
transfer all of the Acquired Fund's assets, as set forth in paragraph 1.2, to
the Acquiring Fund, and the Acquiring Fund agrees in exchange therefor: (i) to
deliver to the Acquired Fund the number of full and fractional Class A, Class B,
Class C, Class K and Class Y Acquiring Fund Shares, determined by dividing the
value of the Acquired Fund's net assets with respect to each corresponding class
(Class A, Class B, Class II,
Class K and Class Y, respectively), computed in the manner and as of the time
and date set forth in paragraph 2.1, by the net asset value of one Acquiring
Fund Share of the corresponding class, computed in the manner and as of the time
and date set forth in paragraph 2.2; and (ii) to assume all liabilities of the
Acquired Fund, as set forth in paragraph 1.3. Such transactions shall take place
on the date of the closing provided for in paragraph 3.1 ("Closing Date").
1.2. The assets of the Acquired Fund to be acquired by the Acquiring Fund
shall consist of all assets and property, including, without limitation, all
cash, securities, commodities and futures interests and dividends or interests
receivable that are owned by the Acquired Fund and any deferred or prepaid
expenses shown as an asset on the books of the Acquired Fund on the Valuation
Date (collectively, "Assets").
1.3. The Acquired Fund will endeavor to discharge all of its known
liabilities and obligations prior to the Valuation Date. The Acquiring Fund
shall assume all of the liabilities of the Acquired Fund, whether accrued or
contingent, known or unknown, existing at the Valuation Date as defined in
paragraph 2.1 (collectively, "Liabilities"). On or as soon as practicable prior
to the Closing Date, the Acquired Fund will declare and pay to its shareholders
of record one or more dividends and/or other distributions so that it will have
distributed substantially all (and in no event less than 98%) of its investment
company taxable income (computed without regard to any deduction for dividends
paid) and realized net capital gain, if any, for the current taxable year
through the Closing Date.
1.4. Immediately after the transfer of assets provided for in paragraph
1.1, the Acquired Fund will (a) distribute to the Acquired Fund's shareholders
of record with respect to each class of its shares as of the Closing as defined
in paragraph 3.1 ("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 (b) completely liquidate. Such
distribution and liquidation will be accomplished, with respect to each class of
the Acquired Fund's shares, by the transfer of the Acquiring Fund Shares then
credited to the account of the Acquired Fund on the books of the Acquiring Fund
to open accounts on the share records of the Acquiring Fund in the names of the
Acquired Fund Shareholders. The aggregate net asset value of Class A, Class B,
Class C, Class K and Class Y Acquiring Fund Shares to be so credited to Class A,
Class B, Class II, Class K and Class Y Acquired Fund Shareholders, respectively,
shall, with respect to each class, be equal to the aggregate net asset value of
the shares of common stock ($0.01 par value per share) of the Acquired Fund
("Acquired Fund Shares") of the corresponding class owned by Acquired Fund
Shareholders on the Closing Date. All issued and outstanding Acquired Fund
Shares will simultaneously be canceled on the books of the Acquired Fund,
although shares certificates representing interests in Class A, Class B, Class
II, Class K and Class Y Acquired Fund Shares will represent a number of the
corresponding class of Acquiring Fund Shares after the Closing Date, as
determined in accordance with Section 2.3. The Acquiring Fund shall not issue
certificates representing the Class A, Class B, Class C, Class K and Class Y
Acquiring Fund Shares in connection with such exchange.
1.5. Ownership of Acquiring Fund Shares will be shown on the books of the
Acquiring Fund's Transfer Agent, as defined in paragraph 3.3.
1.6. Any reporting responsibility of the Acquired Fund, including, but not
limited to, the responsibility for filing regulatory reports, tax returns, or
other documents with the Securities and Exchange Commission ("Commission"), any
state securities commission, and any Federal, state or local tax authorities or
any other relevant regulatory authority, is and shall remain the responsibility
of the Acquired Fund.
2. VALUATION
2.1. The value of the Assets shall be the value of such Assets as of 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"), computed using the valuation procedures set forth in the
then-current prospectus and statement of additional information with respect to
the Acquired Fund, and valuation procedures established by the Company's Board
of Directors.
-2-
2.2. The net asset value of a Class A, Class B, Class C, Class K and Class
Y Acquiring Fund Share shall be the net asset value per share computed with
respect to that class as of the Valuation Date, using the valuation procedures
set forth in the Acquiring Fund's then-current prospectus and statement of
additional information, and valuation procedures established by Munder
Framlington's Board of Trustees.
2.3. The number of the Class A, Class B, Class C, Class K and Class Y
Acquiring Fund Shares to be issued (including fractional shares, if any) in
exchange for the Acquired Fund's Assets shall be determined with respect to each
such class by dividing the value of the net assets with respect to the Class A,
Class B, Class II, Class K and Class Y of the Acquired Fund, as the case may be,
determined using the same valuation procedures referred to in paragraph 2.1, by
the net asset value of an Acquiring Fund Share, determined in accordance with
paragraph 2.2.
2.4. All computations of value shall be made by State Street Bank and Trust
Company, in its capacity as sub-administrator for the Acquired Fund and the
Acquiring Fund and shall be subject to confirmation by each Fund's administrator
and independent accountants.
3. CLOSING AND CLOSING DATE
3.1. The Closing Date shall be ____, 2003, 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 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 Munder
Framlington or at such other place as the parties may agree.
3.2. The Company shall direct State Street Bank and Trust Company, as
custodian for the Acquired Fund ("Custodian"), to deliver to Munder Framlington,
at the Closing, a certificate of an authorized officer stating that (i) the
Assets 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, as 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 such certificates and
other written instruments shall be transferred and delivered by the Acquired
Fund as of the Closing Date for the account of the Acquiring Fund duly endorsed
in proper form for transfer in such condition as to constitute good delivery
thereof. The Custodian shall deliver to those persons at the Custodian who have
primary responsibility for the safekeeping of the assets of the Acquiring Fund
as of the Closing Date by book entry, in accordance with the customary practices
of the Custodian and of each securities depository, as defined in Rule 17f-4
under the Investment Company Act of 1940, as amended ("1940 Act"), in which the
Acquired Fund's Assets are deposited, the Acquired Fund's Assets deposited with
such depositories. The cash to be transferred by the Acquired Fund shall be
delivered by wire transfer of Federal funds on the Closing Date.
3.3. The Company shall direct PFPC, Inc., in its capacity as transfer agent
for the Acquired Fund ("Transfer Agent"), to deliver to Munder Framlington at
the Closing a certificate of an authorized officer stating that its records
contain the names and addresses of the Acquired Fund Shareholders and the number
and percentage ownership of outstanding Class A, Class B, Class II, Class K and
Class Y shares owned by each such shareholder immediately prior to the Closing.
The Acquiring Fund shall deliver to the Secretary of the Acquired Fund a
confirmation evidencing that (a) the appropriate number of Acquiring Fund Shares
have been credited to the Acquired Fund's account on the books of the Acquiring
Fund pursuant to paragraph 1.1 prior to the actions contemplated by paragraph
1.3 and (b) the appropriate number of Acquiring Fund Shares have been credited
to the accounts of the Acquired Fund Shareholders on the books of the Acquiring
Fund pursuant to paragraph 1.4. At the Closing each party shall deliver to the
other such bills of sale, checks, assignments, share certificates, if any,
receipts or other documents as such other party or its counsel may reasonably
request.
-3-
3.4. In the event that on the Valuation Date (a) the New York Stock
Exchange or another primary trading market for portfolio securities of the
Acquiring Fund or the Acquired Fund (each, an "Exchange") shall be closed to
trading or trading thereupon shall be restricted, or (b) trading or the
reporting of trading on such Exchange or elsewhere shall be disrupted so that,
in the judgment of the Board of Directors of the Company and the Board of
Trustees of Munder Framlington, accurate appraisal of the value of the net
assets of the Acquired Fund or the Acquiring Fund, respectively, is
impracticable, the Closing Date shall be postponed until the first business day
after the day when trading shall have been fully resumed and reporting shall
have been restored.
4. REPRESENTATIONS AND WARRANTIES
4.1. Except as has been fully disclosed to the Acquiring Fund prior to the
date of this Agreement in a written instrument executed by an officer of the
Company, the Company, on behalf of the Acquired Fund, represents and warrants to
Munder Framlington 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
("Charter"), 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 II, Class K and Class Y
Acquired Fund Shares under the Securities Act of 1933, as amended ("1933
Act"), is in full force and effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Acquired
Fund of the transactions contemplated herein, except such as may be
required under the 1933 Act, the Securities Exchange Act of 1934, as
amended ("1934 Act"), the 1940 Act and state securities laws;
(d) The current prospectus and statement of additional information of
the Acquired Fund and each prospectus and statement of additional
information of the Acquired Fund used at all times prior to the date of
this Agreement conforms or conformed at the time of its use in all material
respects to the applicable requirements of the 1933 Act and the 1940 Act
and the rules and regulations of the Commission thereunder; and does not or
did not at the time of its use include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not materially misleading;
(e) On the Valuation 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, Munder Framlington, 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;
(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 Charter 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;
-4-
(h) 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 Company, with respect to 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;
(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
accountants, and are in accordance with accounting principles generally
accepted in the United States of America ("GAAP") consistently applied, and
such statements (copies of which have been furnished to the Acquiring Fund)
present fairly, in all material respects, the financial condition of the
Acquired Fund as of such date in accordance with GAAP, and there are no
known contingent liabilities of the Acquired Fund required to be reflected
on a balance sheet (including the notes thereto) in accordance with GAAP as
of such date not disclosed therein;
(j) The Statement of Assets and Liabilities, Statements of Operations
and Changes in Net Assets, and Schedule of Investments of the Acquired Fund
at December 31, 2002 (unaudited) are, or will be when sent to Acquired Fund
Shareholders in the regular course, in accordance with GAAP consistently
applied, and such statements (copies of which have been, or will be,
furnished to the Acquiring Fund) present or will present fairly, in all
material respects, the financial condition of the Acquired Fund as of such
date in accordance with GAAP, including all 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;
(k) 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. For the purposes of
this subparagraph (k), 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;
(l) On the Closing Date, all Federal and other tax returns, dividend
reporting forms, and other tax-related reports of the Acquired Fund
required by law to have been filed by such date (including any extensions)
shall have been filed and are or will be correct in all material respects,
and all Federal and other taxes shown as due or required to be shown as due
on said returns and reports shall have been paid or provision shall have
been made for the payment thereof and, to the best of the Acquired Fund's
knowledge, no such return is currently under audit and no assessment has
been asserted with respect to such returns;
(m) For each taxable year of its operation (including the taxable
year ending on the Closing Date), the Acquired Fund has met (or will meet)
the requirements of Subchapter M of the Code for qualification as a
regulated investment company, has been (or will be) eligible to and has
computed (or will compute) its Federal income tax under Section 852 of the
Code, and will have distributed all of its investment company taxable
income and net capital gain (as defined in the Code) that has accrued
through the Closing Date, and before the Closing Date will have declared
dividends sufficient to distribute all of its investment company taxable
income and net capital gain for the period ending on the Closing Date;
(n) All issued and outstanding Acquired Fund Shares 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, territory and the District of Columbia in compliance in all material
-5-
respects with applicable registration requirements of the 1933 Act and
other securities laws. All of the issued and outstanding Acquired Fund
Shares 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 Acquired Fund Shares, nor is there outstanding any
security convertible into any of the Acquired Fund Shares;
(o) The execution, delivery and performance of this Agreement has
been duly authorized 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
constitutes 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;
(p) The information to be furnished by the Acquired Fund for use in
registration statements, proxy materials and other documents filed or to be
filed with any Federal, state or local regulatory authority (including the
National Association of Securities Dealers, Inc.), which may be necessary
in connection with the transactions contemplated hereby, shall be accurate
and complete in all material respects and shall comply in all material
respects with Federal securities and other laws and regulations thereunder
applicable thereto; and
(q) 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 (q) 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
Acquiring Fund for use therein, and (ii) comply in all material respects
with the provisions of the 1933 Act, the 1934 Act, and the 1940 Act and the
rules and regulations thereunder.
4.2. Except as has been fully disclosed to the Acquired Fund prior to the
date of this Agreement in a written instrument executed by an officer of Munder
Framlington, Munder Framlington, 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 Munder
Framlington, which is a business trust duly organized, validly existing,
and in good standing under the laws of the Commonwealth of Massachusetts,
with power under Munder Framlington's Declaration of Trust to own all of
its properties and assets and to carry on its business as it is now being
conducted;
(b) Munder Framlington is a registered investment company classified
as a management company of the open-end type, and its registration with the
Commission as an investment company under the 1940 Act and the registration
of the Class A, Class B, Class C, Class K and Class Y Acquiring Fund Shares
under the 1933 Act, is in full force and effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Acquiring
Fund of the transactions contemplated herein, except such as may be
required under the 1933 Act, the 1934 Act, the 1940 Act and 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
-6-
material fact or omit to state anymaterial fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not materially misleading;
(e) On the Closing Date, Munder Framlington, on behalf of the Acquiring
Fund, will have good and marketable title to the Acquiring Fund's assets, free
of any liens or other encumbrances, except those liens or encumbrances as to
which the Acquired Fund has received notice and necessary documentation at or
prior to the Closing;
(f) The Acquiring Fund is not engaged currently, and the execution,
delivery and performance of this Agreement will not result, in (i) a material
violation of Munder Framlington's Declaration of Trust or By-Laws or of any
agreement, indenture, instrument, contract, lease or other undertaking to which
Munder Framlington, 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 Munder Framlington, on behalf of the Acquiring Fund, is a
party or by which it is bound;
(g) No litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or, to its knowledge,
threatened against Munder Framlington, with respect to 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. Munder Framlington, 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 accountants, and
are in accordance with GAAP consistently applied, and such statements (copies of
which have been furnished to the Acquired Fund) present fairly, in all material
respects, the financial condition of the Acquiring Fund as of such date in
accordance with GAAP, and there are no known contingent liabilities of the
Acquiring Fund required to be reflected on a balance sheet (including the notes
thereto) in accordance with GAAP as of such date not disclosed therein;
(i) The Statement of Assets and Liabilities, Statements of Operations and
Changes in Net Assets, and Schedule of Investments of the Acquired Fund at
December 31, 2002 (unaudited) are, or will be when sent to Acquiring Fund
Shareholders in the regular course, in accordance with GAAP consistently
applied, and such statements (copies of which have been, or will be, furnished
to the Acquired Fund) present or will present fairly, in all material respects,
the financial condition of the Acquiring Fund as of such date in accordance with
GAAP, including all 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;
(j) 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 (j), a
decline in net asset value per share of the Acquiring Fund Shares due to
declines in market values of securities held by the Acquiring Fund, the
discharge of Acquiring Fund liabilities, or the redemption of Acquiring Fund
Shares by shareholders of the Acquiring Fund, shall not constitute a material
adverse change;
(k) On the Closing Date, all Federal and other tax returns, dividend
reporting forms, and other tax-related reports of the Acquiring Fund required by
law to have been filed by such date
-7-
(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;
(l) For each taxable year of its operation (including the taxable year
that includes the Closing Date), the Acquiring Fund has met (or will meet) the
requirements of Subchapter M of the Code for qualification as a regulated
investment company, 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;
(m) All issued and outstanding Acquiring Fund Shares are, and on the
Closing Date will be, duly and validly issued and outstanding, fully paid and
non-assessable by Munder Framlington and have been offered and sold in every
state, territory and the District of Columbia in compliance in all material
respects with applicable registration requirements of the 1933 Act and other
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;
(n) The execution, delivery and performance of this Agreement has been
duly authorized by all necessary action, if any, on the part of the Trustees of
Munder Framlington, on behalf of the Acquiring Fund, and this Agreement
constitutes a valid and binding obligation of Munder Framlington, on behalf 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;
(o) The Class A, Class B, Class C, Class K and Class Y Acquiring Fund
Shares to be issued and delivered to the Acquired Fund, for the account of the
Acquired Fund Shareholders, pursuant to the terms of this Agreement, will on the
Closing Date have been duly authorized and, when so issued and delivered, will
be duly and validly issued Acquiring Fund Shares, and will be fully paid and
non-assessable by the Acquiring Fund; and
(p) The information to be furnished by the Acquiring Fund for use in the
registration statements, proxy materials and other documents that may be
necessary in connection with the transactions contemplated hereby shall be
accurate and complete in all material respects and shall comply in all material
respects with Federal securities and other laws and regulations applicable
thereto; and
(q) 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
(q) 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.
-8-
5. COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND
5.1. The Acquiring Fund and the Acquired Fund each will operate its
business in the ordinary course between the date hereof and the Closing Date, it
being understood that such ordinary course of business will include the
declaration and payment of customary dividends and distributions, and any other
distribution that may be advisable.
5.2. 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.
5.3. The Acquired Fund covenants that the Class A, Class B, Class C, Class
K and Class Y Acquiring Fund Shares to be issued hereunder are not being
acquired for the purpose of making any distribution thereof, other than in
accordance with the terms of this Agreement.
5.4. The Acquired Fund will assist the Acquiring Fund in obtaining such
information as the Acquiring Fund reasonably requests concerning the beneficial
ownership of the Acquired Fund Shares.
5.5. Subject to the provisions of this Agreement, the Acquiring Fund and
the Acquired Fund will each take, or cause to be taken, all action, and do or
cause to be done, all things reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement.
5.6. The Acquired Fund will provide the Acquiring Fund with information
reasonably necessary for the preparation of the Proxy Statement (referred to in
paragraph 4.1(q)) to be included in a Registration Statement on Form N-14
("Registration Statement"), in compliance with the 1933 Act, the 1934 Act and
the 1940 Act, in connection with the meeting of the shareholders of the Acquired
Fund to consider approval of this Agreement and the transactions contemplated
herein.
5.7. The Acquiring Fund and the Acquired Fund shall each use its
reasonable best efforts to fulfill or obtain the fulfillment of the conditions
precedent to effect the transactions contemplated by this Agreement as promptly
as practicable.
5.8. 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
Munder Framlington, 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) Munder Framlington's, on behalf of the
Acquiring Fund's, title to and possession of all the Assets and to otherwise to
carry out the intent and purpose of this Agreement.
5.9. The Acquiring Fund will use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act and such of
the state blue sky or securities laws as may be necessary in order to continue
its operations after the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the 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 Munder Framlington, on behalf of the Acquiring
Fund, of all the obligations to be performed by it hereunder on or before the
Closing Date, and, in addition thereto, the following further conditions:
6.1. All representations and warranties of Munder Framlington, 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;
-9-
6.2. Munder Framlington, 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 Munder
Framlington, 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;
6.3. Munder Framlington, 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 Munder Framlington, on
behalf of the Acquiring Fund, on or before the Closing Date; and
6.4. The Acquired Fund and the Acquiring Fund shall have agreed on the
number of full and fractional Class A, Class B, Class C, Class K and Class Y
Acquiring Fund Shares to be issued in connection with the Reorganization after
such number has been calculated in accordance with paragraph 1.1.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of Munder Framlington, on behalf of the Acquiring Fund, to
complete the transactions provided for herein shall be subject, at Munder
Framlington'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:
7.1. 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;
7.2. 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;
7.3. 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 Munder Framlington 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 Munder
Framlington shall reasonably request;
7.4. 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;
7.5. The Acquired Fund and the Acquiring Fund shall have agreed on the
number of full and fractional Class A, Class B, Class C, Class K and Class Y
Acquiring Fund Shares to be issued in connection with the Reorganization after
such number has been calculated in accordance with paragraph 1.1; and
7.6. The Acquired Fund shall have declared and paid a distribution or
distributions prior to the Closing that, together with all previous
distributions, shall have the effect of distributing to its shareholders (i) all
of its investment company taxable income and all of its net realized capital
gains, if any, for the period from the close of its last fiscal year to 4:00
p.m. Eastern time on the Closing Date; and (ii) any undistributed investment
company taxable income and net realized capital gains from any period to the
extent not otherwise already distributed.
-10-
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND AND THE
ACQUIRED FUND
If any of the conditions set forth below have not been satisfied on or before
the Closing Date with respect to the Company, on behalf of the Acquired Fund, or
Munder Framlington, on behalf of the Acquiring Fund, the other party to this
Agreement shall be entitled, at its option, to refuse to consummate the
transactions contemplated by this Agreement:
8.1. The Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the holders of the outstanding shares of the
Acquired Fund in accordance with the provisions of the Company's Charter and
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 Company nor
Munder Framlington may waive the conditions set forth in this paragraph 8.1;
8.2. On the Closing Date no action, suit or other proceeding shall be
pending or, to the Company's or Munder Framlington's knowledge, threatened
before any court or governmental agency in which it is sought to restrain or
prohibit, or obtain damages or other relief in connection with, this Agreement
or the transactions contemplated herein;
8.3. All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities deemed necessary by
the Company or Munder Framlington to permit consummation, in all material
respects, of the transactions contemplated hereby shall have been obtained,
except where failure to obtain any such consent, order or permit would not
involve a risk of a material adverse effect on the assets or properties of the
Acquiring Fund or the Acquired Fund, provided that either party hereto may for
itself waive any of such conditions;
8.4. The Registration Statement shall have become effective under the 1933
Act and no stop orders suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending, threatened
or contemplated under the 1933 Act; and
8.5. The parties shall have received the opinion of counsel to the Company
addressed 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 Company and Munder
Framlington. Notwithstanding anything herein to the contrary, neither the
Company nor Munder Framlington may waive the condition set forth in this
paragraph 8.5.
9. INDEMNIFICATION
9.1. Munder Framlington, out of the Acquiring Fund's assets and property,
agrees to indemnify and hold harmless the Acquired Fund from and against any and
all losses, claims, damages, liabilities or expenses (including, without
limitation, the payment of reasonable legal fees and reasonable costs of
investigation) to which the Acquired Fund may become subject, insofar as such
loss, claim, damage, liability or expense (or actions with respect thereto)
arises out of or is based on any breach by the Acquiring Fund of any of its
representations, warranties, covenants or agreements set forth in this
Agreement.
9.2. 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.
-11-
10. BROKERAGE FEES AND EXPENSES
10.1. Munder Framlington, 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.
10.2. The expenses relating to the proposed Reorganization will be borne
solely by Munder Capital Management and its affiliates. No such expenses shall
be borne by the Acquired Fund or the Acquiring Fund, except for brokerage fees
and expenses incurred in connection with the Reorganization. The costs of the
Reorganization shall include, but not be limited to, costs associated with
obtaining any necessary order of exemption from the 1940 Act, if any,
preparation of the Registration Statement, printing and distributing the Proxy
Statement, legal fees, accounting fees, securities registration fees, and
expenses of holding shareholders' meetings. Notwithstanding any of the
foregoing, expenses will in any event be paid by the party directly incurring
such expenses if and to the extent that the payment by another person of such
expenses would result in the disqualification of such party as a "regulated
investment company" within the meaning of Section 851 of the Code.
11. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
11.1. The Company and Munder Framlington agree that neither party has made
any representation, warranty or covenant, on behalf of either the Acquired Fund
or the Acquiring Fund, not set forth herein and that this Agreement constitutes
the entire agreement between the parties.
11.2. The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated hereunder. The
covenants to be performed after the Closing and the obligations of each of the
Acquired Fund and Acquiring Fund in Sections 9.1 and 9.2 shall survive the
Closing.
12. TERMINATION
This Agreement may be terminated and the transactions contemplated hereby may be
abandoned by resolution of the Company's Board of Directors or Munder
Framlington's Board of Trustees, at any time prior to the Closing Date, if
circumstances should develop that, in the opinion of that Board, make proceeding
with the Agreement inadvisable.
13. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as may be
deemed necessary or advisable by the authorized officers of the Company and
Munder Framlington; 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, Class K and
Class Y Acquiring Fund Shares to be issued to the Class A, Class B, Class II,
Class K and Class Y Acquired Fund Shareholders, respectively, under this
Agreement to the detriment of such shareholders without their further approval.
14. NOTICES
Any notice, report, statement or demand required or permitted by any provisions
of this Agreement shall be in writing and shall be given by facsimile,
electronic delivery (i.e., e-mail) personal service or prepaid or certified mail
addressed to the Company and Munder Framlington, 480 Pierce Street, Birmingham,
MI 48009, attn: Stephen J. Shenkenberg, in each case with a copy to Dechert LLP,
1775 I Street, N.W., Washington, DC 20006, attn: Jane A. Kanter.
-12-
15. HEADINGS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
15.1. The Article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
15.2. This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts without regard to its principles
of conflicts of laws.
15.3. This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed by its President or Vice President.
THE MUNDER FUNDS, INC., on behalf of its
MUNDER BIO(TECH)/2/ FUND
By: _______________________________
Title:______________________________
THE MUNDER FRAMLINGTON FUNDS TRUST,
on behalf of its MUNDER HEALTHCARE FUND
By: _______________________________
Title:______________________________
-13-
PART B
THE MUNDER FRAMLINGTON FUNDS TRUST
Munder Healthcare Fund
------------------------------------------------------------------------------
Statement of Additional Information
________, 2003
------------------------------------------------------------------------------
Acquisition of the Assets and Liabilities of By and in Exchange for Shares of
Munder Bio(Tech)/2/ Fund Munder Healthcare Fund
("Bio(Tech)/2/ Fund") ("Healthcare Fund")
(a series of The Munder Funds, Inc.) (a series of The Munder Framlington Funds Trust)
480 Pierce Street, Birmingham, MI 48009 480 Pierce Street, Birmingham, MI 48009
This Statement of Additional Information, which is not a prospectus, supplements
and should be read in conjunction with the Proxy Statement/Prospectus dated
______, 2003, relating specifically to the proposed transfer of all of the
assets of the Bio(Tech)/2/ Fund to the Healthcare Fund and the assumption of all
the liabilities of the Bio(Tech)/2/ Fund in exchange for shares of the
Healthcare Fund having an aggregate value equal to those of the Bio(Tech)/2/
Fund. To obtain a copy of the Proxy Statement/Prospectus, please write to The
Munder Funds, Inc., 480 Pierce Street, Birmingham, MI 48009 or call (248)
647-9201. The transfers are to occur pursuant to an Agreement and Plan of
Reorganization. This Statement of Additional Information incorporates by
reference the following described documents, each of which accompanies this
Statement of Additional Information:
(1) (i) the current Prospectus for the Bio(Tech)/2/ Fund (Class A, Class
B, Class II and Class Y shares) dated October 31, 2002 (previously
filed on EDGAR, Accession No: 0000940180-02-001725), as supplemented
on February __, 2003 (previously filed on EDGAR, Accession No:
________); (ii) the Prospectus for the Healthcare Fund (Class A, Class
B, Class C and Class Y shares) dated October 31, 2002 (previously
filed on EDGAR, Accession No: 0000940180-02-001727), as supplemented
on February __, 2003 (previously filed on EDGAR, Accession No:
_______); and (iii) the Prospectus for the Bio(Tech)/2/ Fund and
Healthcare Fund (Class K shares) dated October 31, 2002 (previously
filed on EDGAR, Accession No: 0000940180-02-001727), as supplemented
on February __, 2003 (previously filed on EDGAR, Accession No:
_______);
(2) The Statement of Additional Information of The Munder Framlington
Funds Trust dated October 31, 2002 (previously filed on EDGAR,
Accession No: 0000940180-02-001727)
(3) Annual Report to Shareholders of The Munder Framlington Funds Trust
(Class A, Class B, Class C, Class II and Class Y shares) for the
fiscal year ended June 30, 2002 (previously filed on EDGAR, Accession
No: 0000950124-02-002875);
(4) Semi-Annual Report to Shareholders of The Munder Framlington Funds
Trust (Class A, Class B, Class C, Class II and Class Y shares) for the
year ended December 31, 2002 (previously filed on EDGAR, Accession No:
_____________________);
B-1
(5) Annual Report to Shareholders of The Munder Framlington Funds Trust
(Class K shares) for the fiscal year ended June 30, 2002 (previously
filed on EDGAR, Accession No.: 0000950124-02-002875); and
(6) Semi-Annual Report to Shareholders of The Munder Framlington Funds
Trust (Class K shares) for the year ended December 31, 2002
(previously filed on EDGAR, Accession No.: ____________________).
B-2
VOTING ON THE INTERNET
.. Read the Proxy Statement and have this card at hand
.. Log on to www.proxyweb.com
.. Enter the control number shown to the left and follow the on-screen
instructions
.. Do not return this paper ballot
VOTING BY PHONE
.. Read the Proxy Statement and have this card at hand
.. Call toll-free 1-888-221-0697
.. Enter the control number shown to the left and follow the on-screen
instructions
.. Do not return this paper ballot
PROXY CARD PROXY CARD
THE MUNDER FUNDS, INC. SPECIAL MEETING OF SHAREHOLDERS April __, 2003
The Munder Bio(Tech)/2/ Fund This Proxy is Solicited on Behalf of the
Board of Directors.
The undersigned revoke(s) all previous proxies and appoint(s) Stephen J.
Shenkenberg, Munder Bio(Tech)/2/ Fund (Fund) of The Munder Funds, Inc. that the
undersigned is entitled to vote at the Special Meeting of Shareholders of the
Fund to be held at the (Location to be determined), on ____, April __, 2003 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.
PLEASE VOTE ON THE REVERSE SIDE, SIGN AND DATE THIS PROXY AND RETURN PROMPTLY IN
THE POSTAGE-PAID ENVELOPE PROVIDED.
Dated ________________________
-----------------------------------------
-----------------------------------------
Signature
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.
Munder XXXX
Please fill in box(es) as shown using black or blue ink or number 2 pencil. [X]
PLEASE DO NOT USE FINE POINT PENS.
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.
1. ELECTIONS OF DIRECTOR NOMINEES: FOR WITHHOLD WITHHOLDING AUTHORITY
all nominees all nominees for individual nominees listed
01) David J. Brophy 05) TBN [_] [_] [_]
02) Joseph E. Champagne 06) Michael T. Monahan
03) Thomas D. Eckert 07) Arthur T. Porter
04) Charles W. Elliott 08) John Rakolta, Jr.
(INSTRUCTION: To withhold authority to vote for any individual nominee mark
"WITHHOLDING AUTHORITY for individual nominees listed" box at right and write
that nominee's name below.)
- --------------------------------------------
- --------------------------------------------
2. To approve an Agreement and Plan of Reorganization providing for the FOR AGAINST ABSTAIN
acquisition of all of the assets of the Munder Bio(Tech)/2/ Fund by the
Munder Healthcare Fund and the assumption of all liabilities of the Munder
Bio(Tech)/2/ Fund by the Munder Healthcare Fund in exchange for shares of
the Munder Healthcare Fund and the subsequent liquidation of the Munder [_] [_] [_]
Bio(Tech)/2/ Fund.
3. 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.
THE MUNDER FRAMLINGTON FUNDS TRUST
PART C
OTHER INFORMATION
Item 15. Indemnification
The response to this item is incorporated by reference to Item 25 of Part C of
Post-Effective Amendment No. 14 to the Registrant's Registration Statement on
Form N-1A as filed on October 31, 2002.
Item 16. Exhibits
(1) (a) Declaration of Trust 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 December 19,
1996.
(b) Certificate of Designation of New Shares and Classification of
Shares on behalf of the Registrant is incorporated herein by
reference to Post-Effective Amendment No. 5 to the Registrant's
Registration Statement on Form N-1A filed with the Commission on
August 28, 1998.
(c) Certificate of Designation of Classification of Shares on behalf
of the Registrant is incorporated herein by reference to
Post-Effective Amendment No. 9 to the Registrant's Registration
Statement on Form N--1A filed with the Commission on March 21,
2000.
(2) Amended and Restated By-Laws, dated May 21, 2002, are 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 October 31, 2002.
(3) Not Applicable.
(4)** Form of Agreement and Plan of Reorganization.
(5) Not Applicable.
(6) (a) Amended and Restated Investment Advisory Agreement, dated May 15,
2001, among Registrant, The Munder Funds, Inc., The Munder Funds
Trust, St. Clair Funds, Inc. and Munder Capital Management 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 October 31, 2002.
(b) Amended and Restated Investment Sub-Advisory Agreement, dated
April 1, 2002, among Registrant, The Munder Funds, Inc., Munder
Capital Management and Framlington Overseas Management Investment
Limited 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 October 31, 2002.
- ---------------------
** Filed herewith as Exhibit A to the Proxy Statement/Prospectus.
C-1
(7) Amended and Restated Combined Distribution Agreement, dated May 15,
2001, among Registrant, The Munder Funds, Inc., The Munder Funds
Trust, St. Clair Funds, Inc. and Funds Distributor, Inc. is
incorporated herein by reference to Post-Effective Amendment No. 13 to
the Registrant's Registration Statement on Form N-1A filed with the
Commission on October 29, 2001.
(8) Not Applicable.
(9) Master Custodian Agreement, dated September 26, 2001, among
Registrant, The Munder Funds, Inc., The Munder Funds Trust, St. Clair
Funds, Inc. and State Street Bank and Trust Munder Framlington is
incorporated herein by reference to Post-Effective Amendment No. 13 to
the Registrant's Registration Statement on Form N-1A filed with the
Commission on October 29, 2001.
(10) (a) Amended and Restated Combined Distribution and Service Plan, dated
August 13, 2002, 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 October 31,
2002.
(b) Amended and Restated Multi-Class Plan 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
October 31, 2002.
(11) Form of 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 Auditors to be filed by amendment.
(15) Not Applicable.
(16) Powers of Attorney.
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.
(3) The undersigned Registrant agrees to file in a Post-Effective
Amendment to this Registration Statement a final tax opinion upon the
closing of the transaction.
C-2
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 5/th/ day of February, 2003.
THE MUNDER FRAMLINGTON FUNDS TRUST
By: /s/ James C. Robinson
------------------------------
James C. Robinson, President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
date indicated:
Signatures Title Date
- ---------- ----- ----
* Trustee February 5, 2003
- ---------------------------
Charles W. Elliott
* Trustee February 5, 2003
- ---------------------------
Joseph E. Champagne
* Trustee February 5, 2003
- ---------------------------
Thomas D. Eckert
* Trustee February 5, 2003
- ---------------------------
John Rakolta, Jr.
* Trustee February 5, 2003
- ---------------------------
David J. Brophy
* Trustee February 5, 2003
- ---------------------------
Michael T. Monahan
* Trustee February 5, 2003
- ---------------------------
Arthur T. Porter
/s/ James C. Robinson President February 5, 2003
- ---------------------------
James C. Robinson (Principal Executive Officer)
/s/ Peter K. Hoglund Vice President February 5, 2003
- ---------------------------
Peter K. Hoglund (Principal Financial Officer)
/s/ Cherie N. Ugorowski Treasurer February 5, 2003
- ---------------------------
Cherie N. Ugorowski (Principal Accounting Officer)
* By: /s/ Stephen J. Shenkenberg
--------------------------
Stephen J. Shenkenberg
as Attorney-in-Fact
C-3
INDEX OF EXHIBITS
(11) Form of opinion and consent of Dechert regarding legality of issuance of
shares and other matters.
(12) Form of opinion of Dechert regarding tax matters.
(16) Powers of Attorney.