SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-12
THE MUNDER FRAMLINGTON FUNDS TRUST
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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[_] Fee paid previously with preliminary materials.
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0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid
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[LOGO] MUNDERFUNDS
ST. CLAIR FUNDS, INC.
THE MUNDER FRAMLINGTON FUNDS TRUST
THE MUNDER FUNDS, INC.
THE MUNDER FUNDS TRUST
480 PIERCE STREET
BIRMINGHAM, MICHIGAN 48009
(800) 468-6337
February 21, 2003
Dear Munder Funds Shareholder:
Please take note that a Special Meeting of Shareholders of certain of the
separate investment series of St. Clair Funds, Inc. ("St. Clair"), The Munder
Framlington Funds Trust ("Framlington"), The Munder Funds, Inc. ("Company"),
and The Munder Funds Trust ("Trust"), will be held on April 28, 2003, at The
Community House, Adams Room, 380 South Bates Street, Birmingham, Michigan 48009
at 10:00 a.m., Eastern time ("Meeting").
The purpose of the meeting is to ask shareholders to consider the following
proposals:
1. To approve the election of Directors/Trustees for St. Clair,
Framlington, the Company and the Trust;
2. To approve a proposed Agreement and Plan of Reorganization and
Redomiciliation ("Reorganization Agreement"), pursuant to which each series
of St. Clair, each series of Framlington, each series of the Company named
in the attached Notice of Special Meeting of Shareholders (other than Munder
Fund of Funds) and each series of the Trust (each a "Fund" and collectively,
the "Funds") would be reorganized as separate series of Munder Series Trust,
a newly-created Delaware statutory trust ("New Trust");
3. To approve the elimination or amendment of certain of the Funds'
fundamental investment restrictions in order to modernize such Funds'
investment restrictions and to increase their investment flexibility;
4. To approve the reclassification of certain Funds' fundamental
investment objectives as non-fundamental; and
5. To transact such other business as may properly come before the
Meeting and any adjournments or postponements thereof.
The Boards of Directors of St. Clair and the Company and the Boards of
Trustees of Framlington and the Trust (referred to herein together as the
"Board") have determined that shareholders of each applicable series will
benefit from each of the proposals.
If shareholders of each Fund approve the Reorganization Agreement described
in the accompanying materials, all of the assets of such Fund will be exchanged
for a number of shares of a corresponding series of the New Trust ("New Fund")
representing the same aggregate net asset value on or about April 29, 2003
("Reorganization"). Shares of each class of such New Fund will then be
transferred to
the shareholders of the corresponding class of the Fund in complete liquidation
of the 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. As a result, it is anticipated that shareholders will not
recognize any gain or loss in connection with the proposed Reorganization.
In addition to the Reorganization, shareholders of each Fund (except Munder
Fund of Funds) are also asked to approve the modification, reclassification or
elimination of each Fund's fundamental investment restrictions. Shareholders of
Munder Multi-Season Growth Fund and Munder Real Estate Equity Investment Fund
are also asked to reclassify the fundamental investment objectives of those
Funds as non-fundamental. These changes are intended to streamline and make
uniform the restrictions applicable to all Funds in order to promote ease of
administration of the investment program of each Fund and to modernize the
investment limitations currently applicable to each Fund. Neither the Funds'
investment advisor, Munder Capital Management, nor the sub-advisor, Framlington
Overseas Investment Management Limited, presently intends to alter the way in
which manages any of the Funds, nor does either believe that the proposed
changes will, either individually or in the aggregate, materially affect the
investment risk associated with any Fund.
We strongly invite your participation by asking you to review these
materials and complete and return your proxy card as soon as possible.
Detailed information about each of the proposals is contained in the
enclosed materials. Please exercise your right to vote by completing, dating
and signing the enclosed proxy card. A self-addressed, postage-paid envelope
has been enclosed for your convenience. It is very important that you vote and
that your voting instructions be received no later than April 27, 2003.
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 1-877-456-6339.
Sincerely,
/s/ James C. Robinson
James C. Robinson
President
St. Clair Funds, Inc.
The Munder Framlington Funds Trust
The Munder Funds, Inc.
The Munder Funds Trust
St. Clair Funds, Inc.
Liquidity Plus Money Market Fund
Munder Institutional Government
Money Market Fund
Munder Institutional Money Market
Fund
Munder Institutional S&P MidCap
Index Equity Fund
Munder Institutional S&P SmallCap
Index Equity Fund
The Munder Framlington Funds
Trust
Munder Emerging Markets Fund
Munder Healthcare Fund
Munder International Growth Fund
The Munder Funds, Inc.
Munder Fund of Funds
Munder Future Technology Fund
Munder International Bond Fund
Munder Micro-Cap Equity Fund
Munder MidCap Select Fund
Munder Multi-Season Growth Fund
Munder NetNet Fund
Munder Power Plus Fund
Munder Real Estate Equity Investment
Fund
Munder Small-Cap Value Fund
The Munder Funds Trust
Munder Balanced Fund
Munder Bond Fund
Munder Cash Investment Fund
Munder Index 500 Fund
Munder Intermediate Bond Fund
Munder International Equity Fund
Munder Large-Cap Value Fund
Munder Michigan Tax-Free Bond
Fund
Munder Small Company Growth Fund
Munder Tax-Free Bond Fund
Munder Tax-Free Money Market
Fund
Munder Tax-Free Short-Intermediate
Bond Fund
Munder U.S. Government Income
Fund
Munder U.S. Treasury Money Market
Fund
480 PIERCE STREET
BIRMINGHAM, MICHIGAN 48009
(800) 468-6337
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 28, 2003
-----------------
To the Shareholders:
St. Clair Funds, Inc. ("St. Clair"), The Munder Framlington Funds Trust
("Framlington"), The Munder Funds, Inc. ("Company"), and The Munder Funds Trust
("Trust"), on behalf of each of their series named above, will hold a special
meeting of their shareholders ("Meeting") at The Community House, Adams Room,
380 South Bates Street, Birmingham, Michigan 48009, on April 28, 2003 at 10:00
a.m., Eastern Time, for the following purposes:
1. To approve the election of Directors/Trustees of St. Clair,
Framlington, the Company and the Trust;
2. To approve an Agreement and Plan of Reorganization and Redomiciliation
providing for (i) the acquisition of all of the assets of each series of St.
Clair, each series of Framlington, each series of the Company named above
(other than Munder Fund of Funds) and each series of the Trust (each a
"Fund" and collectively, the "Funds") by a corresponding series
("New Fund") of the Munder Series Trust, a new Delaware statutory trust
("New Trust"), in exchange for shares of the New Fund and the assumption of
all liabilities of each Fund by the corresponding New Fund and (ii) the
subsequent liquidation of each Fund;
3. To approve the amendment or elimination of certain of the Funds'
fundamental investment restrictions in order to modernize their investment
restrictions and increase their investment flexibility;
4. To approve the reclassification of certain Funds' fundamental
investment objectives as non-fundamental; and
5. To consider and act upon any other business as may properly come
before the Meeting and any adjournments thereof.
You are entitled to vote at the Meeting and any adjournment(s) or
postponement(s) thereof if you owned shares of any series of St. Clair,
Framlington, the Company or the Trust listed above at the close of business on
February 12, 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 (1) Read the Proxy Statement and
have your Proxy card at hand. have your Proxy card at hand.
(2) Call the toll-free number that (2) Go to the website that appears on
appears on your Proxy card. your Proxy card.
(3) Enter the control number set forth (3) Enter the control number set forth
on the Proxy card and follow the on the Proxy card and follow the
simple instructions. 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.
PLEASE RESPOND--WE ASK THAT YOU VOTE PROMPTLY IN ORDER TO AVOID
THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION.
YOUR VOTE IS IMPORTANT.
By Order of the Boards of Directors/Trustees,
/s/ Stephen J. Shenkenberg
Stephen J. Shenkenberg
Secretary
February 21, 2003
St. Clair Funds, Inc.
Liquidity Plus Money Market Fund ("Liquidity Plus")
Munder Institutional Government Money Market Fund ("Government Money Market")
Munder Institutional Money Market Fund ("Institutional Money Market")
Munder Institutional S&P MidCap Index Equity Fund ("S&P MidCap Index")
Munder Institutional S&P SmallCap Index Equity Fund ("S&P SmallCap Index")
The Munder Framlington Funds Trust
Munder Emerging Markets Fund ("Emerging Markets")
Munder Healthcare Fund ("Healthcare")
Munder International Growth Fund ("International Growth")
The Munder Funds, Inc.
Munder Fund of Funds ("Fund of Funds")
Munder Future Technology Fund ("Future Technology")
Munder International Bond Fund ("International Bond")
Munder Micro-Cap Equity Fund ("Micro-Cap Equity")
Munder MidCap Select Fund ("MidCap Select")
Munder Multi-Season Growth Fund ("Multi-Season Growth")
Munder NetNet Fund ("NetNet")
Munder Power Plus Fund ("Power Plus")
Munder Real Estate Equity Investment Fund ("Real Estate")
Munder Small-Cap Value Fund ("Small-Cap Value")
The Munder Funds Trust
Munder Balanced Fund ("Balanced")
Munder Bond Fund ("Bond")
Munder Cash Investment Fund ("Cash Investment")
Munder Index 500 Fund ("Index 500")
Munder Intermediate Bond Fund ("Intermediate Bond")
Munder International Equity Fund ("International Equity")
Munder Large-Cap Value Fund ("Large-Cap Value")
Munder Michigan Tax-Free Bond Fund ("Michigan Tax-Free")
Munder Small Company Growth Fund ("Small Company Growth")
Munder Tax-Free Bond Fund ("Tax-Free Bond")
Munder Tax-Free Money Market Fund ("Tax-Free Money Market")
Munder Tax-Free Short-Intermediate Bond Fund ("Tax-Free Short-Intermediate
Bond")
Munder U.S. Government Income Fund ("U.S. Government Income")
Munder U.S. Treasury Money Market Fund ("U.S. Treasury Money Market")
-----------------
PROXY STATEMENT
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SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 28 , 2003
This Proxy Statement is being furnished to you in connection with the
solicitation of proxies by the Boards of Directors/Trustees ("Board") of St.
Clair Funds, Inc. ("St. Clair"), The Munder Framlington Funds Trust
("Framlington"), The Munder Funds, Inc. ("Company"), and The Munder Funds Trust
("Trust"), on
1
behalf of each of their series named above, to be voted at a Special Meeting of
Shareholders to be held on April 28, 2003, at The Community House, Adams Room,
380 South Bates Street, Birmingham, Michigan 48009, at 10:00 a.m., Eastern time
("Meeting"), for the purposes set forth below and described in greater detail
in this Proxy Statement.
For purposes of this Proxy Statement, each series of St. Clair, each series
of Framlington, each series of the Company (other than Fund of Funds) and each
series of the Trust listed above may be referred to as a "Fund" or collectively
as the "Funds." Fund of Funds will be identified separately to the extent
applicable.
The following Proposals will be considered and acted upon at the Meeting:
- Proposal Fund(s) Affected Page
------------------------------------------------- ---------------- ----
1. To approve the election of Directors/Trustees All Funds and 5
Fund of Funds
2. To approve an Agreement and Plan of Reorganization All Funds 13
and Redomiciliation, a form of which is set forth in
Exhibit A, providing for the acquisition of all of the
assets of each Fund by a corresponding series ("New
Fund") of the Munder Series Trust, a new Delaware
statutory trust ("New Trust"), in exchange for shares
of the New Fund, the assumption of all liabilities of
each Fund by the corresponding New Fund, and the
subsequent liquidation of each Fund
3. To approve the amendment or elimination of the 34
fundamental investment restrictions regarding:
3.A Diversification All Funds 36
3.B Borrowing All Funds 38
3.C Senior Securities All Funds 39
3.D Underwriting Securities All Funds 40
3.E Real Estate All Funds 40
3.F Making Loans All Funds 41
3.G Concentration of Investments All Funds 42
3.H Commodities All Funds 43
3.I Pledging, Mortgaging and Hypothecating Fund All Funds 44
Assets
3.J Illiquid Securities Liquidity Plus 45
3.K Investments for Control All Funds except 46
Liquidity Plus
2
- Proposal Fund(s) Affected Page
----------------------------------- -------------------------------- ----
3.L Investments in Other Investment Balanced, Bond, Cash Investment, 46
Companies Index 500, International Equity,
Intermediate Bond, Large-Cap
Value, Michigan Tax-Free, Small
Company Growth, Tax-Free
Bond, Tax-Free Money Market,
Tax-Free Short-Intermediate
Bond, U.S. Government Income,
U.S. Treasury Money Market
3.M Writing and Selling Options Balanced, Bond, Cash Investment, 47
Index 500, International Equity,
Intermediate Bond, Large-Cap
Value, Michigan Tax-Free Bond,
Small Company Growth, Tax-
Free Bond, Tax-Free Money
Market, Tax-Free Short-
Intermediate Bond, U.S.
Government Income, U.S.
Treasury Money Market
3.N Interests in Oil, Gas, Etc. Balanced, Bond, Cash Investment, 47
Index 500, International Equity,
Intermediate Bond, Large-Cap
Value, Michigan Tax-Free Bond,
Small Company Growth, Tax-
Free Bond, Tax-Free Money
Market, Tax-Free Short-
Intermediate Bond, U.S.
Government Income, U.S.
Treasury Money Market
3.O Margin Activities and Short All Funds except Government 48
Selling Money Market, Institutional
Money Market, S&P MidCap
Index Equity and S&P SmallCap
Index Equity
3.P Reverse Repurchase Agreements Emerging Markets, Government 48
Money Market, Healthcare,
Institutional Money Market,
International Growth, S&P
MidCap Index, S&P
SmallCap Index
3
- Proposal Fund(s) Affected Page
-------------------------------------------- ----------------- ----
Tax-Free Short- 49
3.Q Joint Accounts Intermediate Bond
3.R Investments in which Director/Officer is Tax-Free Short- 49
Invested Intermediate Bond
3.S Unseasoned Companies Tax-Free Short- 50
Intermediate Bond
4. To approve the reclassification of the Fund's Multi-Season 51
fundamental investment objective as non- Growth and Real
fundamental Estate
You are entitled to vote at the Meeting and any adjournment(s) or
postponement(s) if you owned shares of any Fund or the shares of the Fund of
Funds at the close of business on February 12, 2003 ("Record Date"). The date
of the first mailing of the proxy cards and this Proxy Statement to
shareholders will be on or about February 21, 2003.
Only shareholders of record at the close of business on the Record Date will
be entitled to notice of, and to vote at, the Meeting. Shares represented by
proxies, unless previously revoked, will be voted at the Meeting in accordance
with the instructions of the shareholders. If no instructions are given, the
proxies will be voted in favor of the proposals. To revoke a proxy, the
shareholder giving such proxy must either (1) submit to the Funds (or the Fund
of Funds, as applicable) a subsequently dated proxy, (2) deliver to the Funds
(or the Fund of Funds, as applicable) a written notice of revocation, or (3)
otherwise give notice of revocation in open meeting, in all cases prior to the
exercise of the authority granted in the proxy.
The presence in person or by proxy of the holders of record of one-third of
the total outstanding shares of the Company, and a majority of the total
outstanding shares of St. Clair, Framlington, or the Trust shall constitute a
quorum at the Meeting for purposes of Proposal 1, permitting action to be taken
for the election of the Boards of Directors/Trustees. The presence in person or
by proxy of the holders of record of one-third of the outstanding shares of
each Fund that is a series of the Company, and a majority of the outstanding
shares of each Fund that is a series of St. Clair, Framlington, or the Trust
shall constitute a quorum at the Meeting for purposes of Proposals 2, 3 and 4
permitting action to be taken with respect to that Fund.
In the event that the necessary quorum to transact business or the vote
required to approve or reject any proposal is not obtained by the date of the
Meeting, a person named as proxy may propose one or more adjournments of the
Meeting for a reasonable period or periods to permit further solicitation of
proxies.
4
The persons named as proxies will vote in favor of such adjournment with
respect to any proposal those proxies which they are entitled to vote in favor
of that proposal and will vote against any such adjournment with respect to any
proposal those proxies required to be voted against that proposal.
If a shareholder wishes to participate in the Meeting, but does not wish to
authorize the execution of a proxy by telephone or through the Internet, the
shareholder may still submit the proxy form included with this Proxy Statement
or attend the Meeting in person.
The most recent annual report of St. Clair, Framlington, the Company and the
Trust, including financial statements, for the fiscal year ended June 30, 2002
(December 31, 2001 in the case of St. Clair), and the most recent semi-annual
report of St. Clair for the semi-annual period ended June 30, 2002, have been
mailed previously to shareholders. If you would like to receive additional
copies of these shareholder reports free of charge, or copies of any subsequent
shareholder report, please contact St. Clair, Framlington, the Company or the
Trust by writing to the address set forth on the first page of this proxy
statement or by calling 800-468-6337. Requested shareholder reports will be
sent by first class mail within three business days of the receipt of the
request.
-----------------
Proposal 1--All Funds and Fund of Funds
ELECTION OF THE DIRECTORS/TRUSTEES
-----------------
What are shareholders being asked to approve in Proposal 1?
The purpose of this proposal is to elect a Board of Directors for St. Clair
and the Company and a Board of Trustees for Framlington and the Trust. It is
intended that the enclosed proxy will be voted for the election as Directors of
St. Clair and the Company and Trustees of Framlington and the Trust of the
eight nominees listed below ("Nominees"). All Nominees named below except Mr.
John Engler are currently Directors of St. Clair and the Company and Trustees
of Framlington and the Trust 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/Trustee is not an "interested person" of St. Clair, Framlington, the
Company and the Trust, 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, Framlington, the
Company, the Trust and The Munder @Vantage Fund ("@Vantage").
5
Number of
Position(s) Portfolios
with St. Clair, Principal in Fund Other
Framlington, Term of Office and Occupation(s) Complex* Directorships
the Company, Length of Time During Overseen Held by
Name, Address and Age and the Trust Served Past 5 Years by Nominee Nominee
- --------------------- ----------------- -------------------- ----------------------- ---------- ----------------
Independent Nominees
Charles W. Elliott Director/Trustee Indefinite** Consultant, self- 35 None
c/o The Munder Funds and Chairman Company since 2/95 employed (since
480 Pierce Street St. Clair since 2/94 7/95); Trustee,
Suite 300 Trust since 11/89 @Vantage (since
Birmingham, MI 48009 Framlington since 8/00) and Munder
Age: 71 11/96 Series Trust (since
2/03).
John Rakolta, Jr. Director/Trustee Indefinite** Chairman and Chief 35 None
c/o The Munder Funds and Vice Chairman Company since 2/93 Executive Officer,
480 Pierce Street St. Clair since 4/95 Walbridge Aldinger
Suite 300 Trust since 4/95 Company
Birmingham, MI 48009 Framlington since (construction com-
Age: 55 11/96 pany) (since 1991);
Trustee, @Vantage
(since 8/00)
since and Munder
Series Trust (since
2/03).
David J. Brophy Director/Trustee Indefinite** Professor of Finance, 35 DirectPlacement,
c/o The Munder Funds Company since 5/93 University of Inc. (financial
480 Pierce Street St. Clair since 4/95 Michigan-Business technology
Suite 300 Trust since 4/95 School (since 8/66); company)
Birmingham, MI 48009 Framlington since Trustee, @Vantage (since 2/02).
Age: 66 11/96 (since 8/00) and
Munder Series
Trust (since 2/03).
Dr. Joseph E. Champagne Director/Trustee Indefinite** Vice President, 35 None
c/o The Munder Funds Company since 2/95 Macomb College
480 Pierce Street St. Clair since 2/94 (since 2001); Dean,
Suite 300 Trust since 11/89 Macomb College
Birmingham, MI 48009 Framlington since (since 9/97); Trustee,
Age: 64 11/96 @Vantage (since
8/00) and Munder
Series Trust (since
2/03).
Thomas D. Eckert Director/Trustee Indefinite** Director, President 35 None
c/o The Munder Funds Company since 2/93 and Chief Executive
480 Pierce Street St. Clair since 4/95 Officer, Capital
Suite 300 Trust since 4/95 Automotive REIT
Birmingham, MI 48009 Framlington since (real estate investment
Age: 55 11/96 trust specializing in
retail automotive
properties) (since
10/97); Trustee,
@Vantage (since
8/00) and Munder
Series Trust (since
2/03).
6
Number of
Position(s) Portfolios
with St. Clair, Principal in Fund Other
Framlington, Term of Office and Occupation(s) Complex* Directorships
the Company, Length of Time During Overseen Held by
Name, Address and Age and the Trust Served Past 5 Years by Nominee Nominee
- --------------------- ---------------- -------------------- ----------------------- ---------- -----------------
Dr. Arthur T. Porter Director/Trustee Indefinite** President and Chief 35 None
3990 John R. Company since 2/01 Executive Officer of
Detroit, MI 48201 St. Clair since 2/01 the Detroit Medical
Age: 46 Trust since 2/01 Center (since 3/99);
Framlington since Professor with Tenure
2/01 and Chairman of
Radiation Oncology
of Wayne State
University School of
Medicine (3/91 to
3/99); Trustee,
@Vantage (since
8/00) and Munder
Series Trust (since
2/03).
John Engler N/A N/A President of State and 35 Universal
c/o The Munder Funds Local Government/ Forest Products,
480 Pierce Street Vice President of Inc.
Suite 300 Government (manufacturer
Birmingham, MI 48009 Solutions for North and distributor
Age: 54 America, Electronic of lumber
Data Systems Corp. products)
(computer services) (since 1/03);
(since 1/03); Northwest
Governor of the State Airlines
of Michigan (1/91 to (airline)
1/03); Trustee, (since 1/03).
Munder Series Trust
(since 2/03).
Interested Nominees
Michael T. Monahan+ Director/Trustee Indefinite** President of Monahan 35 CMS Energy
3707 West Maple Rd. Company since 8/00 Enterprises, LLC Corporation
Suite 102 St. Clair since 8/00 (consulting company) (energy
Bloomfield Hills, MI 48301 Trust since 8/00 (since 6/99); company)
Age: 64 Framlington since Chairman of Munder (since 12/02);
8/00 Capital Management Guilford Mills,
(investment advisor) Inc. (supplier of
(10/99 to 12/00); automotive
Chairman and Chief textile products)
Executive Officer of (since 10/02).
Munder Capital
Management (10/99
to 12/99); President of
Comerica
Incorporated (bank
holding company)
(6/92 to 6/99);
Trustee, @Vantage
(since 8/00) and
Munder Series
Trust (since 2/03).
- --------
* The New Trust consists of 31 "shell" series of the date of this proxy
statement. The New Trust was formed solely for the purposes of completing
the Reorganization of the Funds, as described in Proposal 2. As a result,
the series of the New Trust have not been included in the totals in this
column.
** The Director/Trustee may serve until his death, resignation, removal or
retirement. Pursuant to the respective By-Laws of St. Clair, Framlington,
the Company and the Trust, any Director/Trustee shall retire as
Director/Trustee 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 Munder
Capital Management, the investment advisor to each series of St. Clair,
Framlington, the Company and the Trust.
7
Executive Officers
Officers of St. Clair, Framlington, the Company and the Trust are elected
annually by the Boards of Directors/Trustees to oversee the day-to-day
activities of each series of St. Clair, Framlington, the Company and the Trust,
respectively. The Boards of Directors/Trustees have elected officers for St.
Clair, Framlington, the Company and the Trust. Information about the executive
officers of St. Clair, Framlington, the Company and the Trust, including their
principal occupations during the past five years, are set forth in the Exhibit
B. Each of these officers are also officers and/or employees of Munder Capital
Management ("MCM").
Share Ownership
As of the Record Date, each of the Nominees, Directors, Trustees and
executive officers of St. Clair, Framlington, the Company and the Trust
solicited by this Proxy Statement beneficially owned individually and
collectively as a group ("Group") less than 1% of the outstanding shares of
each class of each series of St. Clair, Framlington, the Company and the Trust,
respectively, except as follows:
Amount and Nature of Percent
Fund/Name of Beneficial Owner Beneficial Ownership* of Class
----------------------------- ------------------------- --------
Future Technology
James C. Robinson 71,231.730 Class Y shares 5.42%
Group 82,121.451 Class Y shares 6.25%
Micro-Cap Equity
James C. Robinson 9,556.885 Class Y shares 2.04%
Group 13,114.622 Class Y shares 2.80%
NetNet
James C. Robinson 11,871.123 Class Y shares 4.00%
John Rakolta, Jr. 12,540.748 Class Y shares 4.23%
Group 31,716.311 Class Y shares 10.70%
Healthcare
James C. Robinson 8,094.668 Class Y shares 2.16%
Elyse G. Essick 4,550.666 Class Y shares 1.21%
Group 13,358.109 Class Y shares 3.56%
Emerging Markets
James C. Robinson 18,547.005 Class Y shares 2.36%
Group 19,453.218 Class Y shares 2.47%
- --------
* Each beneficial owner holds sole voting and investment power with respect to
all amounts shown, except that (1) Ms. Essick does not have voting power
with respect to 572.328 shares of Healthcare held through a retirement plan
and (2) certain members of the Group do not have voting power with respect
to 1,016.156 shares of Micro-Cap Equity, 848.703 shares of NetNet and
906.213 shares of Emerging Markets held through a retirement plan.
8
The following table sets forth the aggregate dollar range of equity
securities owned by each Nominee of the series of St. Clair, Framlington, the
Company and the Trust solicited by this Proxy Statement and of all funds in the
Fund Complex as of the Record Date. The information as to beneficial ownership
is based on statements furnished by each Nominee.
Aggregate Dollar
Range of Equity
Securities in All
Registered Investment
Companies Overseen
Dollar Range of by Director in
Equity Securities in Family of Investment
the Series Companies
-------------------- ---------------------
Independent Nominees
Charles W. Elliott Over $100,000
Cash Investment Over $100,000
Future Technology $10,001-$50,000
NetNet $10,001-$50,000
All other Funds None
John Rakolta, Jr. Over $100,000
Future Technology $10,001-$50,000
Index 500 Over $100,000
NetNet Over $100,000
All other Funds $50,001-$100,000
David J. Brophy $10,001-$50,000
NetNet $10,001-$50,000
All other Funds None
Joseph E. Champagne $10,001-$50,000
Balanced $1-$10,000
Future Technology $1-$10,000
Micro-Cap Equity $1-$10,000
NetNet $1-$10,000
U.S. Government Income $10,001-$50,000
All other Funds None
Thomas D. Eckert $50,001-$100,000
Healthcare $10,001-$50,000
Real Estate $10,001-$50,000
Small-Cap Value $10,001-$50,000
All other Funds None
Arthur T. Porter $10,001-$50,000
Balanced $10,001-$50,000
Index 500 $10,001-$50,000
Micro-Cap Equity $10,001-$50,000
All other Funds None
John Engler None None
9
Aggregate Dollar
Range of Equity
Securities in All
Registered Investment
Companies Overseen
Dollar Range of by Director in
Equity Securities in Family of Investment
the Series Companies
-------------------- ---------------------
Interested Nominee
Michael T. Monahan Over $100,000
Cash Investment $1-$10,000
Multi-Season Growth $10,001-$50,000
Small Company Growth $10,001-$50,000
Small-Cap Value $50,001-$100,000
Tax-Free Money Market Over $100,000
All other Funds $10,001-$50,000
It is expected that each Board of Directors/Trustees, each of which is
currently composed of one interested Director/Trustee and six Independent
Directors/Trustees, will meet at least quarterly at regularly scheduled
meetings. During the fiscal year ended June 30, 2002, the Boards of
Directors/Trustees of Framlington and the Company met four times and the Board
of Trustees of the Trust met five times. During the fiscal year ended December
31, 2002, the Board of Directors of St. Clair, which is currently composed of
one interested Director/Trustee and six Independent Directors/Trustees, also
met five times. Each incumbent Director/Trustee attended at least 75% of the
meetings of the Boards held during the last fiscal year, including the meetings
of the Boards' standing Committees on which such Director/Trustee was a member.
Material Relationships of Independent Directors/Trustees
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, which is the indirect parent company of
MCM, the Funds' investment adviser. 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. 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
Trustees of Framlington and the Trust who are not employees of MCM, the
investment advisor to each series of St. Clair, Framlington, the Company and the
10
Trust, or any of its affiliates and Directors of St. Clair and 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).
Each Trustee of @Vantage is paid an annual retainer of $4,000. 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. Trustees and 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/Trustees of St. Clair, Framlington, the Company and the Trust,
including committee fees, for the twelve-month period ended December 31, 2002.
Pension or
Retirement Total
Benefits Estimated Compensation
Aggregate Aggregate Aggregate Aggregate Accrued as Annual from Fund
Compensation Compensation Compensation Compensation Part of Benefits Complex Paid
Name of from the from the from from Fund upon to Directors/
Director/Trustee Company/(1)/ Trust/(1)/ Framlington/(1)/ St.Clair/(1)/ Expenses Retirement Trustees/(2)/
- ---------------- ------------ ------------ --------------- ------------ ---------- ---------- -------------
Charles W. Elliott $31,213 $41,015 $5,596 $12,176 None None $94,000
John Rakolta, Jr. $24,624 $32,356 $4,415 $ 9,605 None None $75,000
David J. Brophy $23,583 $30,989 $4,228 $ 9,200 None None $72,000
Joseph E. Champagne $24,624 $32,356 $4,415 $ 9,605 None None $75,000
Thomas D. Eckert $24,624 $32,356 $4,415 $ 9,605 None None $75,000
Michael T. Monahan $23,583 $30,989 $4,228 $ 9,200 None None $72,000
Arthur T. Porter $23,583 $30,989 $4,228 $ 9,200 None None $72,000
- --------
/(1)/ For the twelve-month period ended December 31, 2002, Mr. Elliott, Mr.
Eckert and Dr. Porter each deferred all of his compensation pursuant to
the deferred compensation plan described below. The total compensation
from St. Clair, Framlington, the Company, and the Trust deferred by the
Directors/Trustees was $90,000 for Mr. Elliott, $71,000 for Mr. Eckert
and $68,000 for Dr. Porter.
/(2)/ As of December 31, 2002, the Fund Complex consisted of 36 Funds.
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,
11
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. It is expected that the deferred fee arrangements
under the Plan will survive the Reorganization. The New 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.
Standing Committees
St. Clair, Framlington, the Company and the Trust each have a standing Audit
Committee presently consisting of Mr. Eckert, Dr. Brophy, Dr. Porter and
Mr. Rakolta. All are members of the Board and are not considered to be
"interested persons" of St. Clair, Framlington, the Company or the Trust, as
that term is defined in the 1940 Act ("Independent Directors/Trustees"). The
principal functions of each Audit Committee is to recommend to the Board the
appointment of the 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. Each Board has
adopted a written charter for the Audit Committee. During the most recent
fiscal year of each of St. Clair, Framlington, the Company and the Trust, the
Audit Committee met two times.
St. Clair, Framlington, the Company and the Trust each have a Nominating
Committee presently consisting of Dr. Brophy, Dr. Champagne, Mr. Eckert and Mr.
Rakolta. The function of each Nominating Committee is to recommend candidates
for election to the Board as independent board members. The Nominating
Committee will not consider nominees recommended by shareholders. During the
most recent fiscal year of each of St. Clair, Framlington, the Company and the
Trust, the Nominating Committee did not meet.
St. Clair, Framlington, the Company and the Trust each have a Board Process
and Compliance Oversight Committee presently consisting of Dr. Champagne,
Mr. Monahan and Dr. Porter. The function of each 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
12
with management to review the ongoing adherence by St. Clair, Framlington, the
Company and the Trust, respectively, to its applicable compliance guidelines
and review reports and other information concerning the status of its
compliance with applicable regulatory requirements and valuation procedures.
During the most recent fiscal year of each of St. Clair, Framlington, the
Company and the Trust, the Board Process and Compliance Oversight Committee met
four times.
Shareholder Approval: Election of the Nominees for Directors/Trustees must
be approved by a plurality of the votes cast in person or by proxy at the
Meeting at which a quorum exists. The votes of each series of St. Clair, each
series of Framlington, each series of the Company solicited by this Proxy
Statement and each series of the Trust will be counted together with respect to
the election of the Nominees for St. Clair, Framlington, the Company and the
Trust, respectively. For the purposes of determining the votes of the Company
cast for this Proposal, the votes cast at a separate meeting by shareholders of
two additional series of the Company that are not included in this Proxy
Statement will also be counted.
THE BOARDS OF DIRECTORS/TRUSTEES RECOMMENDS A VOTE "FOR" APPROVAL OF THE
ELECTION OF EACH OF THE NOMINEES TO THE BOARDS OF DIRECTORS/TRUSTEES.
-----------------
Proposal 2--All Funds
APPROVAL OF AN AGREEMENT AND PLAN OF
REORGANIZATION AND REDOMICILIATION
-----------------
At a meeting of the Board held on February 11, 2003, the Board approved on
behalf of each of St. Clair, Framlington, the Company and the Trust and their
respective Funds an Agreement and Plan of Reorganization and Redomiciliation
("Reorganization Agreement") substantially in the form attached to this Proxy
Statement as Exhibit A. Fund shareholders are now being asked to approve the
Reorganization Agreement. If shareholders of each Fund approve the proposal,
the Directors/Trustees and officers of St. Clair, Framlington, the Company and
the Trust will execute and implement the Reorganization Agreement on behalf of
such Fund. If approved, we expect the Reorganization to take effect on or about
April 29, 2003 ("Closing Date"), although that date may be adjusted in
accordance with the Reorganization Agreement.
What are shareholders being asked to approve in Proposal 2?
Shareholders of each Fund are asked to consider the proposed Reorganization
Agreement, which contemplates:
. the transfer of all of the assets of each Fund to the corresponding New
Fund in exchange for shares of the corresponding New Fund having an
aggregate value equal to the assets and liabilities of the Fund and the
assumption by the New Fund of all of the liabilities of the Fund;
13
. the distribution to each shareholder of each class of each Fund of the
same number of shares of the corresponding class of the corresponding New
Fund having an aggregate net asset value equal to the aggregate net asset
value of the shares of that class of the Fund held by that shareholder on
the Closing Date; and
. the subsequent complete liquidation of the Fund.
For a more detailed discussion of the terms of the Reorganization Agreement,
please refer to "Summary of the Reorganization Agreement," below.
Prior to shares of the New Funds being distributed to the Funds'
shareholders, the Funds, as sole shareholders of the New Trust, will be asked
to vote on certain issues regarding the organization of the New Trust. A Fund
will vote in favor of such matters regarding the organization of the New Trust
only to the extent that the shareholders of that Fund have voted in favor of
the proposed Reorganization. Thus, shareholders of the Funds, in approving the
proposed Reorganization, will also, in effect, be approving the following
matters with respect to the New Trust:
. Election of the Trustees;
. Approval of investment advisory agreements and, if applicable, approval
of a sub-advisory agreement, all of which will be substantially similar
to the agreements currently in place with respect to the Funds, except as
noted below;
. Approval of the Distribution and Service Plan with respect to each
applicable New Fund and its classes; and
. Approval of the liquidation and dissolution of St. Clair, Framlington,
the Company and the Trust, to the extent such approval is required.
Shareholders of the Funds are not being asked to vote separately on these
issues. More information on each of these items is discussed below under
"Matters On Which the New Funds Will Vote."
Why is the Board recommending the Reorganization?
The primary purposes of the proposed Reorganization are to seek future
economies of scale and to eliminate certain costs associated with operating
five different business entities--St. Clair, Framlington, the Company, the
Trust and @Vantage (which is not proposed to be part of the Reorganization)--in
three different states. In unanimously approving the Reorganization, the
Directors/Trustees of St. Clair, Framlington, the Company and the Trust
determined that the proposed Reorganization would be in the best interests of
each Fund and that the interests of each Fund's shareholders would not be
diluted as a result of the Reorganization. We summarize below the key factors
considered by the Directors/Trustees:
. The Funds' investment advisor, MCM, has informed the Directors/Trustees
that it believes that by establishing the New Trust and
14
reorganizing each Fund into that single entity, the New Funds should be
able to realize greater operating efficiencies.
. In recent years, many mutual funds have reorganized as Delaware statutory
trusts. MCM has also informed the Directors/Trustees that it believes
that the proposed Delaware statutory trust form provides the most
flexible and cost-efficient method of operating the Funds for the benefit
of Fund shareholders.
. The Directors/Trustees considered, with a few exceptions that are
discussed below, that the investment objective, policies and restrictions
of each Fund will be identical to those of the corresponding New Fund,
and the Funds will be managed by the same personnel and in accordance
with the same investment strategies and techniques utilized in the
management of each Fund immediately prior to the Reorganization.
What effect will the Reorganization have on the Funds and their shareholders?
Immediately after the Reorganization, shareholders of the Funds will own
shares of the corresponding class of each corresponding New Fund that are equal
in number and in value to the shares of each Fund that were held by those
shareholders immediately prior to the closing of the Reorganization. For
example, if you currently own 100 Class A shares of a Fund, immediately after
the closing of the Reorganization, you would own 100 Class A shares of the
corresponding New Fund having the same net asset value as your original 100
shares of the Fund.
As a result of the Reorganization, shareholders of those Funds that are
series of St. Clair or the Company, each of which is a Maryland corporation,
and Framlington and the Trust, each of which is a Massachusetts business trust,
will become shareholders of the New Funds, each of which is a series of a
Delaware statutory trust. For a comparison of certain attributes of these
entities that may affect shareholders of the Funds, please see "A Comparison of
the New Trust and St. Clair, Framlington, the Company and the Trust."
The Reorganization will not result in any change in the name, investment
objective or principal investment strategies, investment advisor, portfolio
managers or service providers of any of the Funds. Each New Fund will offer the
same shareholder services as its corresponding Fund.
Will there be any sales load, commission or other transactional fee in
connection with the Reorganization?
No. The full value of your shares of a Fund will be exchanged for shares of
the same class of the corresponding New Fund without any sales load, commission
or other transactional fee being imposed.
What will be the federal income tax consequences of the Reorganization?
As a condition to each Fund's obligation to consummate the Reorganization,
St. Clair, Framlington, the Company, the Trust and New Trust will receive an
15
opinion from legal counsel to the Funds to the effect that, on the basis of the
existing provisions of the Internal Revenue Code of 1986, as amended ("Tax
Code"), current administrative rules and court decisions, the transactions
contemplated by the Reorganization Agreement constitute a tax-free
reorganization for federal income tax purposes.
Who is bearing the expenses related to the Reorganization?
Each Fund will bear an allocated portion of all mailing, printing and
tabulation expenses associated with the Reorganization based upon the number of
shareholder accounts of each Fund. Legal costs will be allocated equally among
the Funds regardless of the assets of each Fund. Expenses associated with the
solicitation of proxies will be allocated among the Funds based upon the number
of shareholder accounts for Funds requiring proxy solicitation assistance.
SUMMARY OF THE REORGANIZATION AGREEMENT
We summarize below the important terms of the Reorganization Agreement. This
summary is qualified in its entirety by reference to the Reorganization
Agreement itself, which is set forth in Exhibit A to this Proxy Statement.
The Reorganization Agreement provides that each New Fund will acquire all of
the assets, subject to all of the liabilities, of the corresponding Fund in
exchange for shares of the New Fund. Subject to the satisfaction of the
conditions described below, such acquisition is scheduled to occur on the
Closing Date, or such later date as may be agreed upon by the parties. The
number of full and fractional shares of the New Fund you will receive in the
Reorganization will be equal to the number of full and fractional shares of the
Fund you own on the Closing Date and will be of the same class as the shares
you own on the Closing Date.
As part of the closing of the Reorganization, each Fund will liquidate and
distribute pro rata to its shareholders of record as of the close of regularly
scheduled trading on the New York Stock Exchange on the Closing Date the shares
of a New Fund received by the corresponding Fund in the Reorganization. We will
accomplish the liquidation and distribution with respect to each class of the
Fund's shares by the transfer of the New Fund shares then credited to the
account of the Fund on the books of the corresponding New Fund to newly-opened
accounts on the books of that New Fund in the names of the Fund shareholders.
All issued and outstanding shares of the Fund will simultaneously be canceled
on the books of the Fund. The New Fund will not issue certificates representing
the New Fund shares issued in connection with such exchange.
After such distribution, St. Clair, Framlington, the Company and the Trust
will take all necessary steps under applicable state law, their respective
governing instruments, and any other applicable law to effect a complete
dissolution of the
16
Funds and St. Clair, Framlington, the Company and the Trust. The Board has
determined, with respect to each Fund, that the interests of shareholders of
each Fund will not be diluted as a result of the Reorganization and that
participation in the Reorganization is in the best interests of each Fund and
its shareholders.
The Reorganization Agreement must be approved by shareholders of each Fund,
voting separately. In the event that shareholders of a particular Fund do not
approve the Reorganization of that Fund with and into the corresponding New
Fund, the Reorganization Agreement will continue to remain in full force and
effect with respect to the reorganizations, redomiciliations and liquidations
of the other Funds and their corresponding New Funds for which such shareholder
approval has been granted. The Reorganization Agreement further provides that
the benefits and obligations attendant to the Reorganization are severable with
respect to each Fund and its corresponding New Fund.
The Reorganization Agreement may be terminated and the Reorganization
abandoned, with respect to one or more Funds or with respect to all Funds, at
any time prior to the consummation of the Reorganization, before or after
approval by the shareholders of the Funds, if circumstances should develop
that, in the Board's opinion, make proceeding with the Reorganization
inadvisable with respect to such Fund(s). The Reorganization Agreement provides
that the New Trust, St. Clair, Framlington, the Company, or the Trust may waive
compliance with any of the covenants or conditions made therein for the benefit
of any Fund or New Fund, as applicable, other than the requirements that: (1)
the Reorganization Agreement be approved by shareholders of each Fund; and (2)
St. Clair, Framlington, the Company or the Trust each receive an opinion of
counsel that the transactions contemplated by the Reorganization Agreement will
constitute a tax-free reorganization for Federal income tax purposes.
COMPARISON OF THE NEW TRUST AND ST. CLAIR,
FRAMLINGTON, THE COMPANY AND THE TRUST
St. Clair and the Company are each Maryland corporations governed by its own
Articles of Incorporation, By-Laws and a Board of Directors. Framlington and
the Trust are each Massachusetts business trusts governed by its own
Declaration of Trust, By-Laws and a Board of Trustees. The New Trust is a
Delaware statutory trust governed by its own Declaration of Trust, By-Laws and
a Board of Trustees. The operations of the New Trust, St. Clair, Framlington,
the Company and the Trust 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.
17
General
Under the Declaration of Trust and By-Laws of the New Trust, the Trustees of
the New Trust will have more flexibility than Directors/Trustees of St. Clair,
Framlington, the Company and the Trust and, subject to applicable requirements
of the 1940 Act and Delaware law, broader authority to act, as further
described below. The increased flexibility may allow the Trustees of the New
Trust to react more quickly to changes in competitive and regulatory conditions
and, as a consequence, may allow the New Trust to operate in a more efficient
and economical manner. Delaware law also promotes ease of administration by
permitting the Board of the New Trust to take certain actions, for example,
establishing new investment series of the New Trust, without filing additional
documentation with the state, which would otherwise require additional time and
costs.
Importantly, the Trustees of the New Trust will have the same fiduciary
obligations to act with due care and in the interest of the New Funds and their
shareholders as do the Directors/Trustees with respect to the Funds and their
shareholders.
Shareholder Liability
Generally, liability is limited for shareholders of the New Trust to the
same extent as for shareholders of St. Clair and the Company. With respect to
Framlington and the Trust, as further noted below, there is the potential,
although only a remote possibility, that shareholders of Framlington and the
Trust may be liable for the obligations of such entity.
New Trust
The Declaration of Trust of the New 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 New Trust, the
New Funds 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.
St. Clair and Company
St. Clair and the Company are each organized as Maryland corporations, and
as such, its shareholders generally have no personal liability for its acts or
obligations.
Framlington and Trust
Under Massachusetts law, shareholders of a Massachusetts business trust
could, under certain circumstances, be held personally liable for the
obligations of
18
the trust. However, the Declarations of Trust for Framlington and the Trust
state that shareholders will not be subject to any personal liability in
connection with the assets of the trusts for the acts or obligations of the
trusts. The Declarations of Trust both provide 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 either Framlington or the Trust solely by reason
of his or her being or having been a shareholder. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability is
considered remote since it is limited to circumstances in which (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
In order to liquidate or dissolve a Fund (or class thereof) that is a series
of St. Clair or the Company, the Directors must first redeem all the
outstanding shares of that Fund, which the Directors may do without shareholder
approval. Once all the shares are redeemed, the Directors may then liquidate or
dissolve the Fund without shareholder approval. In contrast, Trustees of the
New Trust, Framlington or the Trust may resolve to liquidate or dissolve a Fund
or New Fund, or any class thereof, without prior shareholder approval and
without first redeeming all of the shares of the respective Fund or New Fund,
or class thereof, of those entities.
In the event of the liquidation or dissolution of any of the Funds or New
Funds the shareholders of that Fund/New Fund are entitled to receive, when and
as declared by the Board, the excess of the assets over the liabilities
belonging to the Fund/New Fund. The assets so distributed to shareholders of a
Fund/New Fund would be distributed among the shareholders in proportion to the
number of shares of that Fund/New Fund held by them and recorded on the books
of the Fund/New Fund.
New Trust
The Declaration of Trust of the New Trust permits a majority of the Trustees
to liquidate the New Trust, or any class or series of the New Trust, upon
written notice to shareholders, without submitting the matter for shareholder
approval.
St. Clair and Company
Maryland law requires shareholder approval of a dissolution of either the
Company or St. Clair. 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 corporation may first redeem all of the
shares outstanding of each applicable series and/or class, and then liquidate
the series or class, all without shareholder approval.
19
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.
Trust
The Declaration of Trust of the Trust permits liquidation of any class or
series of the Trust upon the approval of a majority of the Trustees, without
submitting the matter for shareholder approval. The Trustees may sell all of
the assets of the Trust in complete liquidation of the Trust upon the approval
of a majority of the outstanding shares of the Trust voting together if the
Trustees recommend such sale, or upon the approval of two-thirds of the
outstanding shares of the Trust voting together if the Trustees have not
recommended the sale.
Liability of Directors/Trustees
Directors/Trustees of each of the New Trust, St. Clair, Framlington, the
Company and the Trust are generally not liable to the respective entity absent
willful misfeasance, bad faith, gross negligence or reckless disregard of a
Trustee's duties. Furthermore, each entity permits indemnification of such
Directors/Trustees to the fullest extent permissible under applicable laws. The
New Trust specifically provides that indemnification includes any reasonable
expenses incurred by a Trustee in connection with the defense of any
proceeding, although such costs may be indemnified under the respective
applicable laws for the other entities. The New Trust further provides that any
Trustee designated to be a "financial expert" shall not be held to heightened
standard of care because of such designation.
New 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 New Trust or a beneficial owner
for any act, omission or obligation of the New Trust or any Trustee. In
addition, the Declaration of Trust provides that any Trustee who has been
designated a financial expert in the New Trust's registration statement will
not be subject to any greater 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. A Trustee or officer of the New Trust will be indemnified
by the New Trust to the fullest extent permitted by law against liability and
against all expenses reasonably incurred or paid by him or in connection with
the defense of any proceeding in which he or she becomes involved by virtue of
being or having been a Trustee or officer.
St. Clair
Absent willful misfeasance, bad faith, gross negligence or reckless
disregard of a Director's duties, a Director acting in such capacity shall not
be personally
20
liable to any person other than St. Clair or a beneficial owner for any act,
omission or obligation of the St. Clair or any Director. The By-Laws of St.
Clair provide that the corporation will indemnify the Directors to the fullest
extent permitted by Maryland law and the 1940 Act.
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.
Trust
The Declaration of Trust of the Trust provides that no Trustee shall be
personally liable for or on account of any contract, debt, tort, claim, damage,
judgment, or decree arising out of or connected with the administration or
preservation of the Trust property or the conduct of any of the affairs of the
Trust. However, the Declaration of Trust does not purport to protect or
indemnify a Trustee against any liability to which such person would otherwise
be subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such person's
office.
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
Shareholders of Framlington and the Trust generally have the right to
inspect their respective entity's records, accounts and books. Unless
shareholders of St. Clair and the Company hold more than 5% of the outstanding
shares of the corporation, they may inspect the records and accounts only to
the extent granted by the Directors. The New Trust withholds such right of
inspection unless granted by law or provided for in a resolution of the
Trustees of the New Trust or approved by shareholders at a meeting.
New Trust
Shareholders shall have the right to inspect the New Trust's accounts, books
or documents only to the extent such right is conferred by law, by the Trustees
or by resolution of the shareholders. No such rights have to date been
conferred.
21
St. Clair and Company
Except as required by Maryland law, shareholders of St. Clair and the
Company have only such right to inspect their respective corporation's records,
documents, accounts and books as may be granted by its Directors. Maryland
corporate law provides that one or more persons who together have owned at
least 5% of the outstanding shares of a corporation for at least six months
may, on written request, inspect the books of account and stock ledger of the
corporation.
Framlington and Trust
Shareholders of Framlington and the Trust 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 New Trust, St. Clair, Framlington, the Company nor the Trust 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 the individual Fund or
New Fund; (2) the matter involves any action that the Directors/Trustees have
determined will affect only the interests of one or more Fund or New Fund, 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.
As further noted below, the New Trust, St. Clair, Framlington, the Company
and the Trust do differ in the percentage of outstanding shares necessary for
shareholders to call a special meeting and in the ability of shareholders to
take action by written consent.
New Trust
The By-Laws for the New Trust permit special meetings of the shareholders to
be called by shareholders holding at least 10% of the outstanding shares of the
New 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.
22
Company
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 then outstanding voting
securities. Written shareholder consents in lieu of a meeting are required to
be signed by all shareholders.
St. Clair
A special meeting of shareholders of a Fund may be called upon the written
request of holders of not less than 25% of the votes entitled to be cast at the
meeting. Written shareholder consents in lieu of a meeting are required to be
signed by all shareholders.
Framlington and Trust
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
Unlike St. Clair, Framlington, the Company and the Trust, the New Trust
imposes no requirement for shareholder approval of a proposed merger,
reorganization, sale of assets, etc., of a New Fund. Shareholder approval may
be required, however, under the federal securities laws.
New Trust
Under the Declaration of Trust and Delaware law, the Trustees may generally
authorize mergers, consolidations, share exchanges and reorganizations of a New
Fund or the New 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 fund under certain circumstances, such as when the merging
funds have materially different advisory contracts or fundamental investment
restrictions.
St. Clair, Framlington, Company and Trust
A majority of the outstanding shares of a Fund must approve a merger of the
Fund with another business organization, or the sale or exchange of all or
substantially all of the property of the Fund.
23
Amendment of Charter Document
Trustees of the New Trust are granted the widest latitude to amend its
governing instruments without seeking shareholder approval. Generally, the
Directors/Trustees of St. Clair, Framlington, the Company and the Trust may
amend their charter documents without shareholder approval only where such
change would not materially alter shareholder rights.
New 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).
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 except as
otherwise provided in the corporation's charter or bylaws. The Company's
Articles of Incorporation provide that a majority of the outstanding shares
entitled to vote will be sufficient to approve an amendment.
St. Clair
The Articles of Incorporation provide that the Directors may amend, alter,
change or repeal any provision of the Articles of Incorporation so long as such
change does not affect the contract rights of outstanding securities, in which
case such shareholder approval is necessary. 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 except as otherwise provided in the corporation's charter
or bylaws. 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 and Trust
Generally, the Declaration of Trust of each of Framlington and the 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.
24
Derivative and Class Actions
Generally, shareholders of the New Trust, St. Clair, Framlington, the
Company and the Trust are permitted to bring derivative or class actions on
behalf of their respective entity only after such shareholders have first made
a demand upon the Board to bring the action on behalf of the applicable entity.
The requirements for shareholders of St. Clair, Framlington, the Company and
the Trust are governed by state law. The Declaration of Trust of the New Trust
specifically sets forth the procedural requirements a shareholder would need to
fulfill and additionally limits such actions to those brought by at least 10%
of the New Trust's or a New Fund's shareholders.
New Trust
Shareholders of the New Trust or any New Fund may not bring a derivative
action to enforce the right of the New Trust or New Fund 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
New Trust or the New Fund, as applicable, join in bringing the derivative
action. A shareholder of a particular New Fund is not entitled to participate
in a derivative action on behalf of a different New Fund of the New Trust.
St. Clair and 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 and Trust
Under the Declaration of Trust of each of Framlington and the 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 either Trust or Framlington or its shareholders. As a prerequisite
for bringing a derivative action in Massachusetts, a shareholder had to either
make a demand on the board to prosecute the litigation or allege facts showing
the futility of such a demand.
* * *
The foregoing is only a summary of certain characteristics of the operations
of the New Trust, St. Clair, Framlington, the Company and the Trust, their
relevant
25
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 Fund for a more
thorough description.
MATTERS ON WHICH THE NEW FUNDS WILL VOTE
As noted above, in approving the Reorganization Agreement, shareholders of
each Fund will also be authorizing that Fund to vote on various actions
regarding the New Funds and the New Trust. Fund shareholders are not being
asked to vote separately on these issues. One of these actions will be to
approve the election of Trustees of the New Trust. The nominees for election
will be the same Nominees elected under Proposal 1 at the Meeting. In addition,
shareholders of each Fund approving the Reorganization will also be approving
the liquidation and dissolution of that Fund and the liquidation and
dissolution of St. Clair, Framlington, the Company or the Trust, as applicable.
Below is additional information regarding some of the other actions to be taken
by the Funds with respect the New Funds and the New Trust in connection with
the Reorganization.
Investment Advisory and Sub-Advisory Agreements
The Reorganization Agreement requires each Fund, while it is the sole
shareholder of the corresponding New Fund, to approve investment advisory
agreements and, if applicable, an investment sub-advisory agreement that are
substantially the same as the existing investment advisory agreements for each
of the Funds, except as noted below. The proposed investment advisory and
sub-advisory agreements are the following:
(1) For all Funds except International Equity, Index 500, S&P MidCap Index
Equity and S&P SmallCap Index Equity:
A proposed investment advisory agreement by and between the New Trust,
on behalf of each applicable New Fund, and MCM that is substantially the
same as the current Amended and Restated Investment Advisory Agreement,
dated May 15, 2001, by and between St. Clair, Framlington, the Company
and the Trust, on behalf of their respective Funds except those noted
above, and MCM;
(2) For International Equity, Index 500, S&P MidCap Index Equity and S&P
SmallCap Index Equity:
A proposed investment advisory agreement by and between the New Trust,
on behalf of each applicable New Fund, and World Asset Management
("World"), a division of MCM, that is substantially the
26
same as the current Amended and Restated Investment Advisory Agreement,
dated May 15, 2001, as amended October 15, 2001, by and between the
Trust and St. Clair, on behalf of the Funds noted above, and World; and
(3) For Emerging Markets, Healthcare and International Growth ("Sub-Advised
Funds"):
An investment sub-advisory agreement by and among the New Trust, on
behalf of each applicable New Fund, MCM and Framlington Overseas
Investment Management Limited ("Sub-Advisor") that is substantially the
same as the current Amended and Restated Investment Sub-Advisory
Agreement, dated April 1, 2002, by and among Framlington, on behalf of
the Sub-Advised Funds, MCM and the Sub-Advisor.
Together, the two current Amended and Restated Investment Advisory
Agreements are referred to herein as the "Current Advisory Agreements." The
current Amended and Restated Investment Sub-Advisory Agreement is referred to
herein as the "Current Sub-Advisory Agreement" and, together with the Current
Advisory Agreements, the "Current Agreements." Together, the two proposed
Investment Advisory Agreements are referred to herein as the "New Advisory
Agreements." The proposed Investment Sub-Advisory Agreement is referred to
herein as the "New Sub-Advisory Agreement" and, together with the New Advisory
Agreements, the "New Agreements." For the purposes of this section, the term
"Advisor" refers to both MCM and its division, World.
The Funds have entered into Current Advisory Agreements with the Advisor
that were approved by Fund shareholders on November 20, 1998 for all Funds
except Future Technology, Power Plus and Government Money Market. The
shareholders approved the Current Advisory Agreements for Future Technology,
Power Plus and Government Money Market on May 4, 1999, February 25, 2001 and
May 15, 2001, respectively. The Current Sub-Advisory Agreement among the
Advisor, the Sub-Advisor and the Sub-Advised Funds was approved by the
shareholders of the Sub-Advised Funds on December 20, 2000. Subsequent to
shareholder approval of the Current Agreements, the Board of Directors/Trustees
has, from time to time, approved certain changes to the Agreements that did not
materially alter the terms of those Agreements and thus, did not require
shareholder approval. Such changes were last amended and restated in the form
of the agreements dated May 15, 2001 referenced above, and further amended but
not restated as noted above.
As of the date of this Proxy Statement, the Boards of Directors/Trustees
last approved the continuation of the Current Agreements on May 21, 2002. In
determining whether to approve the continuation of the Current Agreements, the
Board requested, and received from the Advisor and Sub-Advisor, information
that the Board believed to be reasonably necessary to reach their conclusion.
The Board
27
carefully evaluated this information and were advised by legal counsel to the
Funds and by legal counsel to the Independent Directors/Trustees with respect
to their deliberations. In considering the Current Agreements, the Boards of
Directors/Trustees reviewed numerous factors. The Board first reviewed each
series' investment performance during the previous year and for all relevant
prior periods. Although investment performance was a factor in determining that
the Current Agreements should be continued, the following factors were also
considered by the Board in evaluating the fairness and reasonableness of the
compensation to be paid to the Advisor and the Sub-Advisor: (a) services
provided under the Current Agreements; (b) requirements of the Funds for the
services provided by the Advisor and Sub-Advisor; (c) the quality of the
services expected to be provided; (d) fees payable for the services; (e) total
expenses of each Fund; (f) the Advisor's and Sub-Advisor's commitments to
operating the Funds at competitive expense levels; (g) profitability of both
the Adviser and Sub-Advisor with respect to their relationship with the Funds;
(h) the capabilities and financial condition of the Advisor and Sub-Advisor;
(i) current economic and industry trends; and (j) the historical relationship
between each of the Funds and the Advisor and Sub-Advisor, as applicable.
Current management fees were also reviewed in the context of the Advisor's
and Sub-Advisor's profitability. In addition, the Board reviewed an analysis
prepared by an independent third-party comparing each Fund's expense ratio,
advisory fee and performance with comparable mutual funds. Among other things,
the Board considered the following factors in evaluating the continuation of
the Current Agreements: (a) the fairness and reasonableness of the investment
advisory fee payable to the Advisor and Sub-Advisor under the Current
Agreements in light of the investment advisory services provided, the costs of
these services, the profitability of the Advisor's and Sub-Advisor's
relationship with the Funds, and the amount of the fees paid compared to fees
paid by other investment companies; (b) the nature, quality and extent of the
investment advisory (or sub-advisory) services provided by the Advisor, in
light of the high quality services provided by the Advisor and Sub-Advisor in
their management of the Funds and the Funds' historic performance, including
the success of the Funds in achieving stated investment objectives; (c) the
Advisor's entrepreneurial commitment to the management of the Current Funds and
the continuing creation of a broad-based family of funds, which could entail a
substantial commitment of the Advisor's and Sub-Advisor's resources to the
successful operation of the Funds; (d) the Advisor's representations regarding
its staffing and capabilities to manage the Funds, including the retention of
personnel with relevant portfolio management experience; and (e) the overall
high quality of the personnel, operations, financial condition, investment
management capabilities, methodologies, and performance of the Advisor and
Sub-Advisor.
Based on its review of the information requested and provided, and following
extensive discussions concerning the information requested and reviewed by the
28
Board, the Board determined that continuing the Current Agreements was
consistent with the best interests of the Funds and their shareholders, and the
Board unanimously approved the Current Agreements for an additional annual
period on the basis of the foregoing review and discussions. In particular, the
Board noted the following factors, among others, in making its determination:
.. The terms of the Current Agreements, including the services to be provided
to the Funds and the advisory fees payable by the Funds, were generally
comparable to the terms of advisory arrangements within the industry and
within peer groups of mutual funds. The Board also noted that the Current
Agreements did not increase investment advisory fees payable by any Fund or
overall operating expenses of any Fund over historical fee and expense
levels. The Board also noted that the Advisor's profitability of operations
with respect to the Funds during the past year was lower than that of other
advisors, based upon the Board's review of publicly available information.
.. The Advisor and the Sub-Advisor have historically provided high-quality
services in their management of the Funds and are committed to the
successful operation of the Funds. Based upon the information provided to
the Board, the Board expected that the Advisor and the Sub-Advisor would
continue to provide high-quality services to the Funds. The Board reviewed
the performance of each Fund relative to its benchmark securities and market
indices and comparable funds and, given the difficult economic and market
environment, concluded that the performance of the Advisor and the
Sub-Advisor was acceptable under the circumstances. While the historical
relative performance of the Funds has varied over time, the Board concluded
that the Advisor and the Sub-Advisor were taking positive steps to improve
the performance of the Funds relative to their respective benchmarks. The
Advisor and the Sub-Advisor described for the Board the continuing
implementation of an investment management methodology focused on managing
the risk and reducing the negative variance of each Fund's performance
relative to its benchmark, which the Advisor and Sub-Advisor advised the
Board should produce more predictable long-term performance for each Fund
relative to its benchmark. In addition, the Board noted that the Advisor has
committed significant additional resources to the operation of the Funds in
recent years. While maintaining continuity of the management of the Funds,
the Advisor has also been increasing its capabilities by adding additional
investment management staff and upgrading systems.
Subsequent to May 2002, the Boards of Directors/Trustees continued to
receive regular updates on the performance of each of the Funds and other
matters relevant to the performance of the Advisor and Sub-Advisor.
On February 11, 2003, the Board of Trustees of the New Trust considered and
approved the New Advisory Agreements between the Advisor and the Trust, on
behalf of the Funds, and the New Sub-Advisory Agreement between the Advisor,
29
Sub-Advisor and the Trust, on behalf of the Sub-Advised Funds. The New
Agreements are substantially similar to the Current Agreements in all material
respects, including the term, except as discussed further below. The New
Agreements will each expire on May 21, 2003, unless the continuation of the New
Agreements for a one-year period is approved by the Board on or before May 21,
2003. When considering the approval of the New Agreements, the Board considered
the fact that (a) all but one of the members of the Board had participated in
the review of the Current Agreements in May 2002, and had been receiving
regular updates on the performance of each of the Funds and other matters
relevant to the performance of the Advisor and Sub-Advisor after that date; and
(b) the New Agreements are substantially similar to those of the Current
Advisory Agreements, including the term (which will expire on May 21, 2003),
subject to review and approval by the Board of the continuation of each New
Agreement for a one-year period.
Below is a discussion of the terms and other relevant information concerning
the Current Agreements. Unless otherwise noted, the New Agreements with respect
to the New Funds are identical to the Current Agreements with respect to the
Funds.
If not sooner terminated, each Current Advisory Agreement will continue in
effect until May 21, 2003, and for successive one-year periods thereafter,
provided that each continuance is specifically approved annually by (a) the
vote of a majority of the Board who are not parties to the Current Advisory
Agreement or interested persons (as defined in the 1940 Act), cast in person at
a meeting called for the purpose of voting on such approval, and (b) either (i)
the vote of a majority of the outstanding voting securities of the affected
Fund, or (ii) the vote of a majority of the Board. Each Current Advisory
Agreement is terminable with respect to a Fund by a vote of the Board, or by
the holders of a majority of the outstanding voting securities of the Fund, at
any time without penalty, upon 60 days' written notice to the Advisor. The
Advisor may also terminate its advisory relationship with respect to a Fund
without penalty upon 90 days' written notice to the Trust. Each Current
Advisory Agreement terminates automatically in the event of its assignment (as
defined in the 1940 Act).
Under the terms of the Current Advisory Agreements, the Advisor furnishes
continuing investment supervision to the Funds and is responsible for the
management of each Fund's portfolio. The responsibility for making decisions to
buy, sell or hold a particular security rests with the Advisor, subject to
review by the Board. In addition, with respect to the Sub-Advised Funds, the
Advisor furnishes overall investment management, oversees the purchase and sale
of portfolio securities by the Sub-Advisor, maintains books and records with
respect to the Sub-Advised Funds' securities transactions and provides periodic
and special reports to the Board as requested.
30
Under the terms of the Current Sub-Advisory Agreement, subject to the
supervision of the Advisor, the Sub-Advisor is responsible for the management
of each Sub-Advised Fund's portfolio, including decisions regarding purchases
and sales of portfolio securities by the Sub-Advised Funds. The Sub-Advisor is
also responsible for arranging the execution of portfolio management decisions,
including the selection of brokers to execute trades and the negotiation of
related brokerage commissions.
The Current Agreements each continue in effect for a period of two years
from their effective dates. If not sooner terminated, each Current Agreement
continues in effect for successive one-year periods thereafter, provided that
each continuance is specifically approved annually by (1) the vote of a
majority of the Independent Directors/Trustees who are not parties to either a
Current Advisory Agreement or Current Sub-Advisory Agreement, and (2) either
(a) the vote of a majority of the outstanding voting securities of the affected
Fund, or (b) the vote of a majority of the Board. Each Current Agreement is
terminable with respect to a Fund by vote of the Board, or by the holders of a
majority of the outstanding voting securities of the Fund, at any time without
penalty, on 60 days' written notice to the Advisor or, as applicable, the
Sub-Advisor. The Advisor may also terminate its Current Advisory Agreement with
respect to a Fund without penalty on 90 days' written notice to St. Clair,
Framlington, the Company or the Trust, as applicable. Similarly, the
Sub-Advisor may terminate its Current Sub-Advisory Agreement with respect to a
Sub-Advised Fund without penalty on 90 days' written notice to Framlington. The
Current Advisory Agreements and the Current Sub-Advisory Agreement each
terminate automatically in the event of its assignment, as that term is defined
in the 1940 Act.
The Current Agreements each provide that the Advisor or, as applicable, the
Sub-Advisor shall not be liable for any error of judgment or mistake of law or
for any loss suffered by a Fund in connection with the performance of the
agreement, except a loss resulting from a breach of fiduciary duty with respect
to the receipt of compensation for services or a loss resulting from willful
misfeasance, bad faith, or gross negligence on the part of the Advisor, or
Sub-Advisor, in the performance of its duties, or from reckless disregard by
the Advisor, or Sub-Advisor, of its duties and obligations thereunder.
Under the Current Advisory Agreements, the Funds pay the Advisor fees for
its services performed pursuant to these agreements. The fees, which are
computed daily and paid monthly, are stated as an annual rates for each Fund,
calculated as a percentage of the particular Fund's average daily net assets.
The fees applicable to each Fund, as well as the aggregate dollar amount paid
to the Advisor in the Funds' most recent fiscal year may be found in Exhibit C.
The rate of advisory fees to be paid to the Advisor under the New Advisory
Agreements with respect to the New Funds will be the same as under the Current
Advisory Agreements for each corresponding Fund, except that the fees will be
computed daily and paid daily,
31
rather than paid monthly as is the case under the Current Advisory Agreements.
The effect of this modification to the New Advisory Agreements would be to
decrease the amount of available and reinvestable cash on any given day, which
in turn may cause a decrease in the total return of the Funds. However, any
such decrease is not expected to be of a material amount.
Under the Current Sub-Advisory Agreement, the Advisor pays the Sub-Advisor a
fee for its services performed pursuant to that agreements. The fees, which are
computed daily and paid monthly, are stated as an annual rates for each Fund,
calculated as a percentage of the particular Fund's average daily net assets.
The fees applicable to each Fund, as well as the aggregate dollar amount paid
to the Advisor in the Funds' most recent fiscal year may also be found in
Exhibit C.
Distribution and Service Plans
The Reorganization Agreement also authorizes each Fund, while it is the sole
shareholder of its corresponding New Fund, to approve a proposed new
Distribution and Service Plan for each applicable class of that New Fund that
is substantially identical to the Amended and Restated Distribution and Service
Plan adopted by St. Clair, Framlington, the Company and the Trust for each
applicable class of each Fund ("Current Plan"). Below is a discussion of the
terms and other relevant information concerning the Current Plan. Unless
otherwise noted, the New Plan with respect to the New Funds and their classes
is identical to the Current Plan with respect to the Funds and their classes.
Under the Current Plan, adopted in accordance with Rule 12b-1 of the 1940
Act with respect to the each Class of shares, except Class K shares, each of
the Funds may use its assets with respect to those classes of shares to finance
activities relating to distribution of its shares and the provision of certain
shareholder services.
Under the Current Plan for Class A shares, Funds Distributor, Inc., the
Fund's distributor ("Distributor"), is paid an annual service fee at the rate
of up to 0.25% of the value of average daily net assets of the Class A shares
of each Fund. Under the Current Plan for Class B, Class C, Class II, Preferred
(Y-2) and Investor (Y-3) shares, the Distributor is paid an annual service fee
of up to 0.25% of the value of average daily net assets of the Class B, Class C
and Class II shares of each relevant Fund and an annual distribution fee at the
rate of up to 0.75% of the value of average daily net assets of the Class B,
Class C, Class II, Preferred (Y-2) and Investor (Y-3) of each relevant Fund.
Under the Current Plan for Class L shares of Liquidity Plus, the Distributor is
paid an annual service fee of 0.25% of the value of average daily net assets of
Liquidity Plus and an annual distribution fee at the rate of 0.10% of the value
of average daily net assets of Liquidity Plus.
Class K shares are sold to customers of banks and other financial
institutions that have entered into agreements with the Funds to provide
shareholder services.
32
Each Fund may pay to such financial institutions an annual service fee of not
more than 0.25%, or 0.15% in the case of the Money Market Funds, of the value
of the average daily net assets of the Class K shares beneficially owned by the
customers of these financial institutions.
Services provided by financial institutions under their Class K shares
service agreements may include: (1) aggregating and processing purchase and
redemption requests for Class K shares from customers and placing net purchase
and redemption orders with the Distributor; (2) providing customers with a
service that invests the assets of their accounts in Class K shares pursuant to
specific or pre-authorized instructions; (3) processing dividend payments on
behalf of customers; (4) providing information periodically to customers
showing their positions in Class K shares; (5) arranging for bank wires; (6)
responding to customer inquiries relating to the services performed by the
institutions; (7) providing sub-accounting with respect to Class K shares
beneficially owned by customers or the information necessary for
sub-accounting; (8) if required by law, forwarding shareholder communications
from the Funds (such as proxies, shareholder reports, annual and semi-annual
financial statements and dividend, distribution and tax notices) to customers;
(9) forwarding to customers proxy statements and proxies containing any
proposals regarding the Funds' arrangements with institutions; and (10)
providing such other similar services as the Funds may reasonably request to
the extent the institutions are permitted to do so under applicable statutes,
rules and regulations.
Under their terms for each of the classes of shares, the Current Plan will
continue from year to year, provided such continuance is approved annually by
vote of the Board, including a majority of the Independent Directors/Trustees
who have no direct or indirect financial interest in the operation of the
Current Plan ("Independent Plan Directors"). The Current Plan may not be
amended to increase the amount to be spent for distribution without shareholder
approval. All amendments of the Current Plan also must be approved by the
Directors/Trustees in the manner described above. The Current Plan be
terminated at any time, without penalty, by vote of a majority of the
Independent Plan Directors or by a vote of a majority of the outstanding voting
securities, as that term is defined in the 1940 Act, of the relevant class of
the respective Fund. Pursuant to the Current Plan, the Distributor will provide
the Board quarterly reports of amounts expended under the Plan and the purpose
for which such expenditures were made.
In the case of Class A, Class B, Class C, Class II, Class L, Preferred (Y-2)
and Investor (Y-3) shares of the Funds, the Directors/Trustees have determined
that the Current Plan will benefit St. Clair, Framlington, the Company and the
Trust and their respective shareholders by (1) providing an incentive for
broker or bank personnel to provide continuous shareholder servicing after the
time of sale; (2) retaining existing accounts; (3) facilitating portfolio
management flexibility through continued cash flow into the Funds; and (4)
maintaining a competitive sales structure in the mutual fund industry.
33
In the case of Class K shares of the Funds, the Directors/Trustees of St.
Clair, Framlington, the Company and the Trust have determined that there is a
reasonable likelihood that the agreements with banks and other financial
institutions will benefit the Funds and their shareholders by affording the
Funds greater flexibility in connection with the servicing of the accounts of
the beneficial owners of their shares in an efficient manner.
With respect to Class B, Class C, Class II, Preferred (Y-2) and Investor
(Y-3) shares of each Fund, the Distributor expects to pay sales commissions to
dealers authorized to sell a Fund's Class B, Class C, Class II, Preferred (Y-2)
and Investor (Y-3) shares at the time of sale. The Distributor will use its own
funds (which may be borrowed) to pay such commissions pending reimbursement by
the Current Plan. In addition, MCM or the Distributor, or any of their
affiliates may from time to time pay for shareholder services or distribution
out of their own resources without additional cost to the Funds or their
shareholders.
The aggregate fees paid to the Distributor pursuant to the Current Plan for
the Class A, Class B, Class C, Class II and Class L shares during the Funds'
most recent fiscal year are set forth in Exhibit C. During the fiscal years
ended December 31, 2002, the Funds made no payments to the Distributor under
the Current Plan for the Preferred (Y-2) and Investor (Y-3) shares because
those share classes had not yet commenced operations.
* * *
Shareholder Approval: Approval of Proposal 2 will require the affirmative
vote of a majority of the outstanding shares of a Fund, with all classes voting
together and not by class. Shareholders are entitled to one vote for each Fund
share. Fractional shares are entitled to proportional voting rights.
THE BOARD, INCLUDING THE INDEPENDENT DIRECTORS/TRUSTEES, UNANIMOUSLY RECOMMENDS
THAT THE SHAREHOLDERS OF EACH FUND APPROVE THE REORGANIZATION AGREEMENT.
-----------------
Proposal 3--All Funds
AMENDMENT OR ELIMINATION OF CERTAIN FUNDAMENTAL INVESTMENT RESTRICTIONS
-----------------
What are shareholders being asked to approve in Proposal 3?
The 1940 Act requires each Fund to adopt fundamental investment restrictions
with respect to several specific types of activities, including the Fund's
ability to
34
(1) borrow money; (2) issue senior securities; (3) underwrite securities issued
by other persons; (4) purchase or sell real estate; (5) purchase or sell
commodities; (6) make loans to other persons; and (7) concentrate its
investments in any particular industry or group of industries. The 1940 Act
also requires each Fund to state whether it is a diversified or non-diversified
Fund, as those terms are defined in the 1940 Act. In addition, the 1940 Act
permits each Fund to designate any other of its policies as fundamental
policies, as the Fund deems necessary or desirable.
In order to modify, eliminate or reclassify a Fund's fundamental investment
restrictions, including its classification as a diversified or non-diversified
Fund, the 1940 Act requires that any such change be approved by a majority of
the Fund's outstanding voting securities. The Board is proposing that
shareholders approve revisions to certain of the Funds' fundamental investment
restrictions, as described more fully in this Proxy Statement, in an effort to
standardize the Funds' investment restrictions and permit the Funds the maximum
investment flexibility under current law. The current fundamental investment
restrictions of each of the Funds that are proposed to be revised at this
Meeting are set forth in Exhibit D to this Proxy Statement.
Why are shareholders being asked to approve changes to the Funds' investment
restrictions?
St. Clair, Framlington, the Company and the Trust were organized at
different times and under different state laws. As a result, the Funds' current
investment restrictions often vary from one another and, in some cases, are
more prohibitive than the rules and regulations under the 1940 Act and
applicable guidance by the Securities and Exchange Commission ("SEC") and its
staff otherwise require, limiting investment strategies and resulting in
operating inefficiencies and costs.
Many of the Funds' current fundamental investment restrictions can be traced
back to federal or state securities law requirements that were in effect when
the Funds were organized. These restrictions have subsequently been made less
restrictive or are no longer applicable to the Funds. For example, the National
Securities Markets Improvement Act of 1996 ("NSMIA") preempted many investment
restrictions formerly imposed by state securities laws and regulations, so
those state requirements no longer apply. As a result, the current restrictions
unnecessarily limit the investment strategies available to MCM and the
Sub-Advisor in managing each Fund's assets. In addition, the lack of uniform
standards applicable across all of the Funds leads to operating inefficiencies
and increases the costs of compliance monitoring.
Due to these and other factors, the Board recommends to Fund shareholders
the approval of certain changes to the Funds' fundamental investment
restrictions. The Funds' fundamental investment restrictions that are proposed
to be amended, the language of each proposed revised investment restriction,
and a discussion of the rationale for each suggested change is provided below.
35
In general, only those investment restrictions that the 1940 Act
specifically requires to be fundamental (i.e., those from which registered
investment companies cannot deviate without shareholder authorization) will
remain fundamental investment restrictions of the Funds. However, shareholders
are being asked to approve amendments to these investment restrictions, as set
forth in Proposals 3.A-3.H. Investment restrictions that are currently deemed
fundamental by each Fund, but which the 1940 Act does not require to be
fundamental, are proposed to be eliminated entirely, or reclassified as
non-fundamental. Those fundamental investment restrictions that are proposed to
be eliminated entirely or reclassified as non-fundamental are addressed in
Proposals 3.I--3.S.
What effect will the proposed changes to the Funds' investment restrictions
have on the Funds?
While Proposal 3 is intended to provide MCM and the Sub-Advisor with greater
flexibility in managing each Fund's portfolio, should shareholders approve the
Proposals, the Funds would continue to be managed subject to the limitations
imposed by the 1940 Act and the rules and interpretive guidance provided
thereunder, as well as the investment objectives, strategies, and policies
expressed in each Fund's prospectus. Importantly, neither MCM nor the
Sub-Advisor presently intends to alter the way in which it manages any of the
Funds, nor does it believe that the proposed changes will, either individually
or in the aggregate, materially affect the investment risk associated with any
Fund.
In addition, approval of changes to the Funds' fundamental investment
restrictions will not be dependent upon your vote on Proposal 2 regarding the
Reorganization. Therefore, if approved by shareholders, these changes would
take effect regardless of the vote with respect to the Reorganization. Should
shareholders also approve the proposed Reorganization, each New Fund would have
as its fundamental investment restrictions those revised fundamental investment
restrictions approved by the corresponding Fund's shareholders. Should a Fund's
shareholders not approve a proposal to amend, eliminate or reclassify a
particular fundamental investment restriction, the Fund's current fundamental
investment restriction, as set forth in Exhibit D, would continue to apply
unchanged.
Modification of the Funds' Fundamental Investment Restrictions
Proposal 3.A--Diversification
Applicable Funds--All Funds
Proposed New Fundamental Investment Restriction: If the proposed amendment
is approved by shareholders, each Fund's sub-classification as a diversified or
non-diversified Fund would read:
Each Fund, except those listed below, shall be a "diversified company" as
that term is defined in the 1940 Act, and as interpreted or modified by
36
regulatory authority having jurisdiction, from time to time. Each of the
following Funds shall be a "non-diversified company" as that term is defined
in the 1940 Act:
. Future Technology Fund, and
. International Bond Fund.
Discussion of Proposed Modification
Section 8(b) of the 1940 Act requires each series of an investment company
to state whether it is "diversified" or "non-diversified," as those terms are
defined in the 1940 Act. As the term "diversified" is used in the 1940 Act, and
as reflected in the Funds' current fundamental investment restrictions, a
diversified fund may not, with respect to 75% of its total assets, (1) invest
more than 5% of its total assets in the securities of one issuer, or (2) hold
more than 10% of the outstanding securities of such issuer ("75% test"). Under
the 1940 Act, a "non-diversified" fund is any fund that is not considered
diversified and is not, therefore, constrained by the 75% test.
No change is being proposed to a Fund's designation as a diversified or
non-diversified Fund (except as discussed below with respect to Michigan
Tax-Free Bond Fund and Tax-Free Short-Intermediate Bond Fund). Instead, the
proposed change would modify the Funds' fundamental investment restrictions
regarding each Fund's sub-classification under the 1940 Act to rely on the
definitions of the terms diversified and non-diversified in the 1940 Act rather
than stating the relevant percentage limitations expressed under current law.
Thus, this investment restriction will apply to each Fund the requirements of
the 1940 Act, as they may be amended from time to time, without the Funds'
Board or shareholders taking further action. With respect to those Funds that
are permitted to be non-diversified, the restriction is simplified by
eliminating the particular percentage limitations applicable to each
non-diversified Fund. This would be consistent with the 1940 Act, which only
requires that a Fund state whether it is diversified or non-diversified.
It is not anticipated that this change would have any effect on the
operations of the Funds. The Funds would remain subject to the same limitations
on their investments under the definition of "diversified" and
"non-diversified" as embodied in the Funds' current fundamental policies
(except as noted below with respect to Liquidity Plus), as well as to any
additional restrictions on concentration under the 1940 Act (as discussed in
Proposal 3.G) or other investment restrictions of the Funds. In addition, each
of the Funds, whether diversified or non-diversified, will remain subject to
the relevant diversification provisions of the Tax Code, which require that at
the end of each quarter of a Fund's taxable year, with respect to 50% of the
value of the Fund's total assets, the Fund has invested no more than 5% of its
total assets in any one issuer and holds no more than 10% of such issuer's
outstanding voting securities.
37
Special note regarding Liquidity Plus: If the shareholders of the Liquidity
Plus approve the amendment to this fundamental investment restriction, it is
further proposed that as a non-fundamental investment restriction, the Fund
would adhere to the 5% limit on investments in a single issuer with respect to
100% (rather than 75%) of its portfolio as a non-fundamental investment
restriction. This requirement is currently a part of that Fund's fundamental
investment restriction; if changed to a non-fundamental investment restriction,
the Board may change this policy in the future without shareholder approval.
Special note regarding Michigan Tax-Free Bond Fund and Tax-Free
Short-Intermediate Bond Fund: Each of these Funds is currently described as a
non-diversified fund in the applicable fundamental investment restriction,
although each of these Funds has been operating as a diversified Fund. As a
result, it is proposed that these Funds no longer be listed among the
non-diversified Funds. This change will have no effect on the current
operations or investment program of these Funds.
Proposal 3.B--Borrowing
Applicable Funds--All Funds
Proposed New Fundamental Investment Restriction: If the proposed amendment
is approved by shareholders, each Fund's fundamental investment restriction
regarding borrowing would read:
Each Fund may not borrow money, except as permitted under the 1940 Act,
and as interpreted or modified by regulatory authority having jurisdiction,
from time to time.
Discussion of Proposed Modification
Unless further restricted, all investment companies are limited in the
amount they may borrow by the 1940 Act. At the present time, the 1940 Act
permits a Fund to borrow from banks in an amount up to 33 1/3% of the Fund's
assets, including the amount borrowed. A Fund may also issue a note evidencing
a temporary loan (i.e., one that must be repaid within 60 days), as long as it
does not exceed 5% of the Fund's total assets. The proposed restriction would
permit the Funds 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.
The current fundamental investment restrictions on borrowing for Funds that
are series of St. Clair (except Liquidity Plus), Framlington and the Company
provide, consistent with the limits imposed under the 1940 Act, that each Fund
may borrow in an amount up to 5% of its total assets for temporary emergency
purposes and in an amount up to 33 1/3% of its assets to meet redemptions. In
contrast, the current fundamental investment restrictions on borrowing for
Funds that are series of the Trust, as well as Liquidity Plus, provide that
each such Fund may borrow up
38
to one-third of its assets to meet redemption requests, but if at any time such
Fund's aggregate borrowings exceed 5% of its assets, the Fund will not be
permitted to make additional investments. If the proposed restriction is
adopted, the effect will be to permit the Funds of the Trust and Liquidity Plus
to borrow more than allowed under current investment restrictions, which may
subject these Funds to a greater degree to the risks associated with borrowing.
To the extent that any borrowing made by a Fund involves leveraging, the
Fund may be subject to the risk that if the securities held by the Fund decline
in value while these transactions are outstanding, the Fund's net asset value
will decline in value by proportionately more than the decline in value of the
securities. Thus, borrowing may exaggerate the effect on a Fund's net asset
value and may increase the volatility of the Fund. In addition, any money
borrowed will be subject to interest and other costs, which may exceed the gain
on securities purchased with borrowed funds.
Proposal 3.C--Senior Securities
Applicable Funds--All Funds
Proposed New Fundamental Investment Restriction: If the proposed amendment
is approved by shareholders, each Fund's fundamental investment restriction
regarding issuing senior securities would read:
Each Fund may not issue any senior security, except as permitted under
the 1940 Act, and as interpreted or modified by regulatory authority having
jurisdiction, from time to time. Among other things, this would permit a
Fund to: (i) enter into commitments to purchase securities in accordance
with a Fund's investment program, including, without limitation, reverse
repurchase agreements, delayed delivery securities and when-issued
securities, to the extent permitted by its investment program and other
restrictions; (ii) engage in short sales of securities to the extent
permitted in its investment program and other restrictions; and (iii)
purchase or sell futures contracts and related options to the extent
permitted by its investment program and other restrictions.
Discussion of Proposed Modification
The 1940 Act prohibits Funds from issuing senior securities, except for
borrowings where certain conditions are met. In addition, under the 1940 Act
certain types of transactions entered into by a Fund, including repurchase
agreements, short sales, and when-issued and delayed delivery transactions, may
be considered forms of indebtedness and, therefore, senior securities.
Currently, these activities are permissible investments under the 1940 Act so
long as certain collateral or coverage requirements designed to protect
shareholders are met.
39
Under each Fund's current fundamental investment restriction, each Fund is
prohibited from issuing senior securities except for borrowings and other
transactions for which the proper level of asset coverage is maintained as
required by the 1940 Act or SEC interpretation. The proposed amended
restriction on issuing senior securities does not alter this, although it does
identify some of the types of activities in which the Funds may engage that may
involve the issuance of senior securities, but which are currently permissible
under the 1940 Act and applicable related guidance. Thus, the proposed amended
restriction does not change the current restrictions for any of the Funds,
because in all cases, the Funds will continue to be subject to the limitation
on borrowing and may engage in such other activities only to the extent
permitted by applicable SEC interpretation. Furthermore, a Fund would not be
able to engage in such activities unless its investment policies and strategies
so permit.
Proposal 3.D--Underwriting Securities
Applicable Funds--All Funds
Proposed New Fundamental Investment Restriction: If the proposed amendment
is approved by shareholders, each Fund's fundamental investment restriction
regarding underwriting securities would read:
Each Fund may not act as an underwriter of securities within the meaning
of the Securities Act of 1933, as amended ("1933 Act"), except as permitted
under the 1933 Act, and as interpreted or modified by regulatory authority
having jurisdiction, from time to time. Among other things, to the extent
that the Fund may be deemed to be an underwriter within the meaning of the
1933 Act, this would permit a Fund to act as an underwriter of securities in
connection with the purchase and sale of its portfolio securities in the
ordinary course of pursuing its investment objective, investment policies
and investment program.
Discussion of Proposed Modification
The proposed restriction with respect to underwriting securities is
substantially similar to the current restrictions for each of the Funds.
However, it clarifies and makes uniform the exception from the prohibition for
all Funds.
Proposal 3.E--Real Estate
Applicable Funds--All Funds
Proposed New Fundamental Investment Restriction: If the proposed amendment
is approved by shareholders, each Fund's fundamental investment restriction
regarding investments in real estate would read:
Each Fund may not purchase or sell real estate or any interests therein,
except as permitted under the 1940 Act, and as interpreted or modified by
40
regulatory authority having jurisdiction, from time to time. Among other
things this would permit a Fund to: (i) acquire or lease office space for
its own use; (ii) invest in securities of issuers that invest in real estate
or interests therein; (iii) invest in mortgage-related securities and other
securities that are secured by real estate or interests therein; or (iv)
hold and sell real estate acquired by the Fund as a result of the ownership
of securities.
Discussion of Proposed Modification
The proposed change maintains each Fund's general restriction on buying or
selling real estate, but excepts certain real estate-related activities from
the restriction. The proposed restriction would permit the Funds to acquire or
lease office space for their own use, although it is not anticipated that any
of the Funds will do so. The proposed restriction would also permit the Funds
to hold and sell real estate acquired as a result of the ownership of
securities (for example, as the holder of a bond in a company that goes
bankrupt). Each Fund would also be able to invest in mortgage-backed securities
and securities of issuers that invest in real estate interests, to the extent
consistent with its other investment policies and strategies.
Proposal 3.F--Making Loans
Applicable Funds--All Funds
Proposed New Fundamental Investment Restriction: If the proposed amendment
is approved by shareholders, each Fund's fundamental investment restriction
regarding making loans would read:
Each Fund may not make loans, except as permitted under the 1940 Act, and
as interpreted or modified by regulatory authority having jurisdiction, from
time to time. Notwithstanding this limitation, a Fund may, among other
things: (i) enter into repurchase agreements, (ii) lend portfolio
securities; and (iii) acquire debt securities without being deemed to be
making a loan.
Discussion of Proposed Modification
The proposed change permits the Funds to engage in securities lending to the
extent permitted by the 1940 Act and by then-current SEC policy. The staff of
the SEC currently limits loans of a Fund's securities to one-third of the
Fund's assets, including any collateral received from the loan, provided that
loans are 100% collateralized by cash or cash equivalents. The Funds' current
restrictions are consistent with this limitation and, in some cases, are set
lower than the maximum allowed under the 1940 Act. Should the SEC staff modify
the requirements governing a fund's loan of its securities in the future, under
the proposed restriction, each Fund would be able to take advantage of that
increased flexibility without requiring further shareholder action.
41
This proposal would result in a change to the fundamental investment
restrictions of the Funds that are series of Framlington and of the Company to
increase the amount of their total assets available for lending from 25% to
33 1/3%. In addition, each of the Funds has been subject to a non-fundamental
policy limiting securities lending to no more than 25% of a Fund's assets. In
light of this amendment, the non-fundamental policy would also be changed to
read 33 1/3%. Therefore, each of the Funds could be subject to a greater extent
to the risks associated with securities lending. These risks include the
possibility of loss to a Fund due to (1) the inability of the borrower to
return the securities; (2) a delay in recovery of the securities, or (3) loss
of rights in the collateral should the borrower fail financially.
Proposal 3.G--Concentration of Investments
Applicable Funds--All Funds
Proposed New Fundamental Investment Restriction: If the proposed amendment
is approved by shareholders, each Fund's fundamental investment restriction
regarding concentration of investments would read:
Each Fund, except those Funds noted below, may not "concentrate" its
investments in a particular industry, except as permitted under the 1940
Act, and as interpreted or modified by regulatory authority having
jurisdiction, from time to time, provided that, without limiting the
generality of the foregoing: (a) this limitation will not apply to a Fund's
investments in: (i) securities of other investment companies; (ii)
securities issued or guaranteed as to principal and/or interest by the U.S.
Government, its agencies or instrumentalities; (iii) with respect to the
Money Market Funds only, instruments issued by domestic branches of U.S.
banks (including U.S. branches of foreign banks subject to regulation under
U.S. laws applicable to domestic banks and, to the extent that its parent is
unconditionally liable for the obligation, foreign branches of U.S. banks);
or (iv) repurchase agreements (collateralized by the instruments described
in clause (ii) and, with respect to the Money Market Funds, clause (iii));
(b) wholly-owned finance companies will be considered to be in the
industries of their parents if their activities are primarily related to the
financing activities of the parents; and (c) utilities will be divided
according to their services, for example, gas, gas transmission, electric
and gas, electric and telephone will each be considered a separate industry.
Each of following Funds may concentrate its investments in the particular
industry described:
(a) the Real Estate Equity Investment Fund may concentrate in securities
of issuers in the real estate industry;
(b) the NetNet Fund may concentrate in securities of companies engaged in
the research, design, development, manufacturing or distribution of
products, processes or services for use with Internet or Intranet
related businesses;
42
(c) the Future Technology Fund may concentrate in the technology industry;
(d) the Power Plus Fund may concentrate in securities of companies that
are primarily engaged in non-regulated energy and power activities;
and
(e) the Healthcare Fund may concentrate in securities of issuers
conducting their principal business activities in healthcare
industries.
Discussion of Proposed Modification
With the exception of the five Funds named above, each Fund currently has,
and will continue to have, a fundamental investment restriction that prohibits
the Fund from concentrating its investments in any one industry. While the 1940
Act does not define what constitutes "concentration" in an industry, the SEC
staff has taken the position that investment of more than 25% of a Fund's total
assets in one or more issuers conducting their principal business activities in
the same industry (excluding the U.S. Government, its agencies or
instrumentalities) constitutes concentration. The Funds' current fundamental
restrictions are consistent with this interpretation. Nevertheless, the
proposed change would permit investment in an industry up to the most recently
prescribed limits under the 1940 Act and accompanying SEC interpretations. It
also promotes uniformity among the Funds' restrictions to the exceptions to
this restriction.
Proposal 3.H--Commodities
Applicable Funds--All Funds
Proposed New Fundamental Investment Restriction: If the proposed amendment
is approved by shareholders, each Fund's fundamental investment restriction
regarding investments in commodities would read:
Each Fund may not purchase physical commodities or contracts relating to
physical commodities, except as permitted under the 1940 Act, and as
interpreted or modified by regulatory authority having jurisdiction, from
time to time.
Discussion of Proposed Modification
The current fundamental investment restrictions prohibit the Funds from
investing in commodities or commodity contracts, but except certain financial
instruments, such as futures contracts and options on futures contracts, which
under some interpretations may be deemed commodities. Consistent with the
requirement of the 1940 Act, the proposed restriction prohibits only the
purchase of physical commodities; it does not limit the Funds' purchase or sale
of derivatives that have a value tied to the value of a financial index,
financial instrument or other asset and allows investments for both hedging and
non-hedging purposes. These derivatives
43
include, for example, options, futures contracts and options on futures
contracts. Other types of financial instruments, such as forward commitments
and swaps, might also be deemed to be commodity contracts. Such strategies are
generally accepted under modern portfolio management and are regularly used by
many mutual funds and other institutional investors. The proposed restriction
also permits each Fund to enter into foreign currency transactions, in
accordance with its investment objective and strategies.
While several of the Funds may already invest in derivatives, the proposed
restriction may expand the types of derivatives in which those Funds may invest
and may allow Funds that could not previously invest in derivatives to invest
in derivatives for the first time, if such investments are otherwise in
accordance with the Fund's investment objective and strategies. To the extent a
Fund invests in these derivative instruments, it will be exposed 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 Fund's 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 the 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 the 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.
However, notwithstanding the above, it is not currently proposed that any
Fund's investment policies be changed to permit additional derivatives
investments. Without such a change, each Fund will continue to be subject to
the limitations currently in effect in each Fund's prospectus or statement of
additional information. This proposed change does, however, reserve to the
Directors/ Trustees the ability to change a Fund's derivatives policy at a
later date without further shareholder action.
Elimination/Reclassification of Certain Fundamental Investment Restrictions of
the Funds
Proposal 3.I--Pledging, Mortgaging and Hypothecating Fund Assets Applicable
Funds--All Funds
Proposal
It is proposed that the fundamental investment restriction on pledging,
mortgaging and hypothecating a Fund's assets be eliminated in its entirety.
44
Reasons for the Elimination of the Investment Restriction
The restriction on pledging, mortgaging and hypothecating a fund's assets
was based on the requirements formerly imposed by state "blue sky" regulators
as a condition to registration. As a result of NSMIA, this restriction is no
longer required and may be eliminated from the Funds' fundamental investment
restrictions. The Funds' current limits on pledging may conflict with each
Fund's ability to borrow money to meet redemption requests or for temporary
emergency purposes. This conflict arises because banks may require borrowers
such as the Funds to pledge assets in order to collateralize the amount
borrowed. These collateral requirements are typically for amounts at least
equal to, and often larger than, the principal amount of the loan. The Funds'
current restrictions, however, could be read to prevent these types of
collateral arrangements and could therefore have the effect of reducing the
amount that the Funds may borrow in these situations. Although the Funds
currently plan to engage only in pledging in connection with borrowing money
for redemptions or temporary emergency purposes, pledging assets could decrease
the Funds' ability to liquidate assets. If the Funds pledged a large portion of
their assets, the ability to meet redemption requests or other obligations
could be delayed. In any event, the Fund's current borrowing limits would
remain consistent with limits prescribed under the 1940 Act, as more fully
described in Proposal 3.B, above.
Proposal 3.J--Illiquid Securities
Applicable Funds--Liquidity Plus only
Proposal
It is proposed that the fundamental investment restriction regarding
investments in illiquid securities be reclassified as a
non-fundamental investment restriction.
Reasons for the Reclassifying the Investment Restriction as Non-Fundamental
The restrictions on investments in illiquid securities were required to be
deemed fundamental based on the requirements formerly imposed by state "blue
sky" regulators as a condition to registration. However, as a result of NSMIA,
this restriction is no longer required to be a fundamental investment
restriction. It is proposed instead that the restriction be made a
non-fundamental investment restriction. The Liquidity Plus Fund's ability to
invest in illiquid securities would still be subject to applicable federal
regulatory limitations on investments in illiquid securities. For example, the
SEC's current policy is that money market funds, such as Liquidity Plus, may
only invest up to 10% of their net assets in illiquid securities. By making
this policy non-fundamental, the Board would be able to revise these percentage
limitations or make such other changes as may be allowed by SEC interpretations
in the future without obtaining further shareholder approval.
45
Proposal 3.K--Investments for Control
Applicable Funds--All Funds except Liquidity Plus
Proposal
It is proposed that the fundamental investment restriction on investments
made for purposes of exercising control over, or management of, the issuer be
eliminated in its entirety.
Reasons for the Elimination of the Investment Restriction
The investment restriction on investing in a security for the purpose of
obtaining or exercising control over, or management of, the issuer was based on
the requirements formerly imposed by state "blue sky" regulators as a condition
to registration. As a result of NSMIA, this restriction is no longer required
and may be eliminated from the Funds' investment restrictions.
Proposal 3.L--Investments in Other Investment Companies
Applicable Funds--Balanced, Bond, Cash Investment, Index 500,
International Equity, Intermediate Bond, Large-Cap
Value, Michigan Tax-Free Bond, Small Company Growth,
Tax-Free Bond, Tax-Free Money Market, Tax-Free
Short-Intermediate Bond, U.S. Government Income, U.S.
Treasury Money Market
Proposal
It is proposed that the fundamental investment restriction on investments in
other investment companies be eliminated in its entirety.
Reasons for the Elimination of the Investment Restriction
The fundamental investment restriction on investments in other investment
companies was based on requirements formerly imposed by state "blue sky"
regulators as a condition to registration. As a result of NSMIA, this
restriction is no longer required to be among a Fund's fundamental investment
restrictions. In addition, the Funds' stated restrictions conform to the 1940
Act restrictions on investments in other investment companies. These Funds
would remain subject to the limitations on investments in other investment
companies imposed on all mutual funds under the 1940 Act. However, because the
proposed language would track any future changes in the applicable law and
interpretative guidance, each Fund would be able to take advantage of that
increased flexibility without requiring further shareholder action.
46
Proposal 3.M--Writing and Selling Options
Applicable Funds--Balanced, Bond, Cash Investment, Index 500, International
Equity, Intermediate Bond, Large-Cap Value, Michigan Tax-Free
Bond, Small Company Growth, Tax-Free Bond, Tax-Free Money
Market, Tax-Free Short-Intermediate Bond, U.S. Government
Income, U.S. Treasury Money Market
Proposal
It is proposed that the fundamental investment restriction on writing and
selling put and call options and similar financial instruments be eliminated
in its entirety.
Reasons for the Elimination of the Investment Restriction
The fundamental investment restriction on writing and selling put and call
options and similar financial instruments was based on the requirements
formerly imposed by state "blue sky" regulators as a condition to registration.
As a result of NSMIA, this restriction is no longer required and may be
eliminated from the Funds' fundamental investment restrictions. This proposal
also provides consistency with the proposed changes to the fundamental
restriction on issuing senior securities (See Proposal 3.C), which clarifies
that the Funds may purchase or sell futures contracts and related options to
the extent permitted by its investment program and other restrictions.
Proposal 3.N--Interests in Oil, Gas, Etc.
Applicable Funds--Balanced, Bond, Cash Investment, Index 500, International
Equity, Intermediate Bond, Large-Cap Value, Michigan Tax-Free
Bond, Small Company Growth, Tax-Free Bond, Tax-Free Money
Market, Tax-Free Short-Intermediate Bond, U.S. Government
Income, U.S. Treasury Money Market
Proposal
It is proposed that the fundamental investment restriction on purchasing
oil, gas, etc. interests be eliminated in its entirety.
Reasons for the Elimination of the Investment Restriction
The fundamental investment restriction on purchasing or selling interests in
oil, gas, etc. was based on the requirements formerly imposed by state "blue
sky"
47
regulators as a condition to registration. As a result of NSMIA, this
restriction is no longer required and may be eliminated from the Funds'
investment restrictions. Nevertheless, there are no current expectations that
the Funds will engage in such activities.
Proposal 3.O--Margin Activities and Short Selling
Applicable Funds--All Funds except Government Money Market, Institutional Money
Market, S&P MidCap Index Equity and S&P SmallCap Index Equity
Proposal
It is proposed that the fundamental investment restriction on margin
activities and selling securities short be eliminated in its entirety.
Reasons for the Elimination of the Investment Restriction
The fundamental investment restrictions on margin activities and selling
securities short were based on the requirements formerly imposed by state "blue
sky" regulators as a condition to registration. As a result of NSMIA, this
restriction is no longer required and may be eliminated from the Funds'
fundamental investment restrictions. There are no current expectations that the
Funds will engage in such activities, except that the Funds may still engage in
activities that are exceptions to the Funds' current fundamental investment
restrictions, such as the use of short-term credits necessary for the clearance
of purchases and sales of portfolio securities.
Proposal 3.P--Reverse Repurchase Agreements
Applicable Funds--Emerging Markets, Government Money Market, Healthcare,
International Growth, Institutional Money Market, S&P MidCap
Index Equity, S&P SmallCap Index Equity
Proposal
It is proposed that the fundamental investment restriction regarding
investment in reverse repurchase agreements be eliminated in its entirety.
Reasons for the Elimination of the Investment Restriction
As proposed in Proposal 3.C regarding the fundamental investment restriction
on a Fund's issuance of senior securities, a Fund may enter into reverse
repurchase
48
agreements so long as doing so otherwise comports with a Fund's investment
program and other investment restrictions. In order to remain consistent with
the change to the fundamental restriction on issuing senior securities, this
general fundamental policy should be eliminated in its entirety.
To the extent a Fund enters into a reverse repurchase agreement, it will
incur the risks associated with that transaction, including the risk that the
market value of the securities sold by a Fund may decline below the repurchase
price. In addition, a Fund will pay interest on amounts obtained pursuant to a
reverse repurchase agreement.
Proposal 3.Q--Joint Accounts
Applicable Fund--Tax-Free Short-Intermediate Bond only
Proposal
It is proposed that the fundamental investment restriction participation in
a joint account be eliminated in its entirety.
Reasons for the Elimination of the Investment Restriction
The fundamental investment restriction on the Fund's participation in a
joint account was based on the requirements formerly imposed by state "blue
sky" regulators as a condition to registration. As a result of NSMIA, this
restriction is no longer required and may be eliminated from the Fund's
fundamental investment restrictions. Furthermore, the 1940 Act and rules
thereunder limit this type of transaction to the extent a Fund may participate
in a trading account jointly with an affiliate. Except in those transactions
that either the 1940 Act or the SEC has deemed, with the proper level of Board
oversight, to pose no problems of over- reaching by the affiliate, the Fund
would be required to seek an exemptive order from the SEC before engaging in
the type of activity covered by this restriction. Because the 1940 Act and
related regulations adequately protect the Fund and its shareholders, there is
no need to maintain this restriction.
Proposal 3.R--Investments in which a Trustee or Officer is Invested
Applicable Fund --Tax-Free Short-Intermediate Bond only
Proposal
It is proposed that the fundamental investment restriction on owning an
issuer's security where the Fund's officer or trustee also owns a specified
portion of that issuer be eliminated in its entirety.
49
Reasons for the Elimination of the Investment Restriction
The fundamental investment restriction on owning an issuer's security where
the Fund's officer or trustee also owns a specified portion of that issuer was
based on the requirements formerly imposed by state "blue sky" regulators as a
condition to registration. As a result of NSMIA, this restriction is no longer
required and may be eliminated from the Fund's fundamental investment
restrictions. Furthermore, Section 17 of the 1940 Act and the rules thereunder
limit this type of transaction insomuch as it may be deemed a joint transaction
with a person affiliated with the Fund.
Proposal 3.S--Unseasoned Companies
Applicable Fund--Tax-Free Short-Intermediate Bond only
Proposal
It is proposed that the fundamental investment restriction on investments in
issues with less than three years of operations companies be eliminated in its
entirety.
Reasons for the Elimination of the Investment Restriction
The fundamental investment restriction on investing in issuers that have
been in business for less than three years was based on the requirements
formerly imposed by state "blue sky" regulators as a condition to registration.
As a result of NSMIA, this restriction is no longer required and may be
eliminated from the Fund's fundamental investment restrictions. To the extent
the Fund invests in these types of issuers, it may be subject to greater risks.
Such companies may not have experience in operating through prolonged periods
of economic difficulty and, as a result, the price of their shares may be more
volatile than the shares of companies that have longer operating histories.
* * *
Shareholder Approval: Approval of each Proposal 3.A-3.S by a Fund will
require the affirmative vote of a majority of the outstanding voting securities
of the Fund, as that term is defined in the 1940 Act, with all classes voting
together and not by class. Shareholders are entitled to one vote for each Fund
share. Fractional shares are entitled to proportional voting rights.
THE BOARD, INCLUDING THE INDEPENDENT DIRECTORS/TRUSTEES, UNANIMOUSLY RECOMMENDS
THAT THE SHAREHOLDERS OF EACH FUND APPROVE PROPOSALS 3.A THROUGH 3.S.
50
-----------------
Proposal 4--Multi-Season Growth and Real Estate Only
RECLASSIFICATION OF EACH FUND'S FUNDAMENTAL
INVESTMENT OBJECTIVE AS NON-FUNDAMENTAL
-----------------
What are shareholders of Multi-Season Growth and Real Estate being asked to
approve in Proposal 4?
Shareholders are being asked to approve the reclassification of the
fundamental investment objective of each of Multi-Season Growth and Real Estate
Fund as a non-fundamental investment objective of each Fund. Multi-Season
Growth Fund's investment objective is "to provide long-term capital
appreciation." Real Estate Equity Investment Fund's investment objective is "to
provide both capital appreciation and current income." The proposed
reclassification will not result in any changes to these stated objectives.
Why are shareholders being asked to approve reclassification of the Funds'
investment objective?
As more fully explained above in Proposal 3, the 1940 Act permits each Fund
to designate any of its policies as a fundamental policy, as the Fund deems
necessary or desirable, even though the 1940 Act or other applicable law do not
require that policy to be deemed fundamental. A fundamental policy is one that
may only be changed by a vote of a majority of the Fund's outstanding voting
securities.
Multi-Season Growth and Real Estate are currently the only Funds whose
investment objective is deemed fundamental. The proposal to reclassify these
objectives as non-fundamental is consistent with the changes proposed in
Sub-Proposals 3.I-3.S above, which are intended to eliminate or reclassify any
fundamental policy of a Fund that is not required by the 1940 Act to be
fundamental. In order to promote uniformity among all the Funds, the Board
recommends the shareholders of the Multi-Season Growth and Real Estate approve
the reclassification of each Fund's fundamental investment objective.
What effect will the reclassification of each Fund's investment objective have
on the Funds?
While Proposal 4 is intended to promote consistency across all Funds, should
shareholders of Multi-Season Growth and Real Estate approve Proposal 4, these
Funds would continue to be managed subject to the same investment objectives,
strategies, and policies expressed in each Fund's prospectus, as well as the
limitations imposed by the 1940 Act and the rules and interpretive guidance
provided thereunder. Importantly, MCM does not presently intend to alter the
way in which it manages either Fund, nor does it believe that the proposed
change will affect the investment risk associated with either Fund. However, if
51
reclassified as a non-fundamental investment objective, the Board may change
either Funds' investment objective in the future without further shareholder
approval.
In addition, as with Proposal 3, approval of the reclassification of the
Funds' fundamental investment objective as non-fundamental will not be
dependent upon Proposal 2 regarding the Reorganization. Therefore, if approved
by shareholders, these changes would take effect regardless of the vote with
respect to the Reorganization. Should shareholders of Multi-Season Growth and
Real Estate also approve the proposed Reorganization, each corresponding New
Fund would have a non-fundamental investment objective identical to the Fund's
current investment objective. Should Multi-Season Growth or Real Estate Fund's
shareholders not approve this proposal to reclassify the fundamental investment
objective, the Fund's current investment objective would remain a fundamental
policy of that Fund.
* * *
Shareholder Approval: Approval of Proposal 4 by Multi-Season Growth or Real
Estate shareholders, as applicable, will require the affirmative vote of a
majority of the outstanding voting securities of that Fund, as that term is
defined in the 1940 Act, with all classes voting together and not by class.
Shareholders are entitled to one vote for each Fund share. Fractional shares
are entitled to proportional voting rights.
THE BOARD OF THE COMPANY, INCLUDING THE INDEPENDENT DIRECTORS, UNANIMOUSLY
RECOMMENDS THAT THE SHAREHOLDERS OF MULTI-SEASON GROWTH AND REAL ESTATE APPROVE
PROPOSAL 4.
-----------------
GENERAL INFORMATION ABOUT THE FUNDS
-----------------
MANAGEMENT AND OTHER SERVICE PROVIDERS
Set forth below is a description of the current service providers of the
Trust and the proposed service providers of the New Trust.
Advisor and Sub-Advisor
Munder Capital Management ("MCM"), 480 Pierce Street, Birmingham, Michigan
48009, is the investment advisor of each Fund. MCM is a Delaware general
partnership and its general partners are Munder Group LLC, WAM Holdings, Inc.
("WAM") and WAM Holdings II, Inc. ("WAM II"). WAM and WAM II are indirect
wholly-owned subsidiaries of Comerica Bank, which in turn,
52
is a wholly-owned subsidiary of Comerica Incorporated, a publicly-held bank
holding company. Comerica Incorporated owns or controls approximately 97% of
the partnership interests in MCM. World Asset Management, a division of MCM,
255 East Brown Street, Birmingham, Michigan 48009, is responsible for managing
Index 500, International Equity, S&P MidCap Index Equity, and S&P SmallCap
Index Equity. As of December 31, 2002, MCM had approximately $33.2 billion in
assets under management, of which $13.4 billion were invested in equity
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 ("Sub-Advisor"),
155 Bishopsgate, London, England EC2M 3XJ, serves as sub-adviser for Emerging
Markets, Healthcare and International Growth. The Sub-Advisor is a subsidiary
of Framlington Group Limited, incorporated in England and Wales, which, through
its subsidiaries, provides a wide range of investment services. Framlington
Group Limited is an indirect wholly- owned subsidiary of Framlington Holdings
Limited which is, in turn, owned 49% by MCM and 51% by HSBC plc, a banking and
financial services organization based in the United Kingdom.
Set forth in Exhibit E is certain information with respect to the executive
officers and directors of MCM and the Sub-Advisor.
Following the Reorganization, MCM and World Asset Management, as applicable,
will continue to serve the Funds as investment advisor; the Sub-Advisor will
continue to serve as sub-adviser for Emerging Markets, Healthcare and
International Growth.
Distributor, Administrator, Sub-Administrators, Custodian and Transfer Agency
Services
Following the Reorganization, the Funds' distributor and sub-administrator,
Funds Distributor, Inc., 60 State Street, Suite 1300, Boston, Massachusetts,
will continue to serve as the New Funds' distributor and sub-administrator; the
Funds' administrator, MCM, will continue to serve as the New Funds'
administrator; the Funds' sub-administrator and custodian, State Street Bank
and Trust Company, 225 Franklin Street, Boston, Massachusetts, will continue to
serve as the New Funds' sub-administrator and custodian; and the Funds'
transfer agent and dividend disbursing agent, PFPC Inc., 4400 Computer Drive,
Westborough, Massachusetts, will continue to serve as the New Funds' transfer
agent and dividend disbursing agent.
Independent Auditors
The firm of Ernst & Young LLP ("E&Y") has been selected as independent
auditors of the Funds of St. Clair, Framlington, the Company and the Trust.
Certain
53
information concerning the fees and services provided by E&Y to the Funds and
to MCM and its affiliates for the most recent fiscal years of the Funds is
provided below.
E&Y, in accordance with Independence Standards Board Standard No. 1 (ISB No.
1), has confirmed to the Audit Committee that they are independent auditors
with respect to the Funds.
Audit Fees. On behalf of the Funds of Framlington, the Company and the
Trust, the fee for professional services rendered for the audit by E&Y of the
annual financial statements of Framlington, the Company and the Trust were
$92,393, $319,211 and $424,837, respectively, for the fiscal year ended June
30, 2002. On behalf of the Funds of St. Clair, the fee for professional
services rendered for the audit by E&Y of the annual financial statements of
St. Clair were $106,127 for the fiscal year ended December 31, 2002.
Financial Information Systems Design and Implementation. The Funds of
Framlington, the Company and the Trust did not pay E&Y for any other
professional services relating to the Funds' financial information systems for
the fiscal year ended June 30, 2002. The Funds of St. Clair did not pay E&Y for
any other professional services relating to the Funds' financial information
systems for the fiscal year ended December 31, 2002. MCM did not pay E&Y for
any other professional services relating to the MCM's financial information
systems for the fiscal year ended December 31, 2002.
All Other Fees. The Funds of Framlington, the Company and the Trust paid E&Y
fees in the amounts of $2,370, $14,781 and $19,524, respectively for non-audit
services for the fiscal year ended June 30, 2002.
The Funds of St. Clair did not pay E&Y for any other non-audit services for
the fiscal year ended December 31, 2002.
MCM paid E&Y $166,400 for all other non-audit services rendered for the
fiscal year ended December 31, 2002. Comerica Incorporated paid E&Y $1,502,777
for all other non-audit services rendered for the fiscal year ended December
31, 2002. The Funds' Audit Committee has determined that the provision of the
services by E&Y to MCM and Comerica is compatible with maintaining E&Y's
independence.
E&Y examines annual financial statements for the Funds of St. Clair,
Framlington, the Company and the Trust and does not provide other non-audit and
tax-related services to St. Clair, Framlington, the Company and the Trust. MCM
and the Audit Committee of each St. Clair, Framlington, the Company and the
Trust have considered whether other non-audit services by E&Y are compatible
with maintaining the independence of E&Y in its audits of St. Clair,
Framlington, the Company and the Trust.
54
Representatives of E&Y are not expected to be present at the Special
Meeting, but have been given the opportunity to make a statement if they so
desire and will be available should any matter arise requiring their presence.
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.
SUBMISSION OF CERTAIN SHAREHOLDER PROPOSALS
St. Clair, Framlington, the Company and the Trust, do not hold annual
shareholder meetings. Any shareholder proposal intended to be presented at any
future meeting of shareholders must be received by St. Clair, Framlington, the
Company, or the Trust at its principal office a reasonable time before the
solicitation of proxies for such meeting in order for such proposal to be
considered for inclusion in that Proxy Statement relating to such meeting.
Shareholders wishing to submit proposals for inclusion in a proxy statement for
a subsequent shareholder meeting should send their written proposals to the
Secretary of the Funds, 480 Pierce Street, Birmingham, Michigan 48009.
VOTING INFORMATION
This Proxy Statement is furnished in connection with a solicitation of
proxies by the Board to be used at the Meeting. This Proxy Statement, along
with a Notice of the Meeting and proxy card, is first being mailed to
shareholders of the Funds on or about February 21, 2003. Only shareholders of
record as of the close of business on the Record Date, February 12, 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 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 Funds at the
address on the cover of this Proxy Statement 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.
Quorum
The presence in person or by proxy of the holders of record of one-third of
the outstanding shares of each of the Funds that are series of the Company, and
a
55
majority of the outstanding shares of each of the Funds that are series of the
St. Clair, Framlington and the Trust, shall constitute a quorum at the Meeting
with respect to those Funds.
Voting Requirement
Nominees for Director/Trustee receiving a plurality of the votes cast in
person or by proxy at the Meeting at which a quorum exists will be elected to
the Boards of Directors/Trustees of St. Clair, Framlington, the Company and the
Trust in Proposal 1. Proposal 2 requires the vote of the majority of the shares
of a Fund outstanding on the Record Date. Proposals 3.A-3.S and Proposal 4 each
require the vote of the majority of a Fund's outstanding voting securities,
which, for these purposes, is the vote of (1) 67% or more of the voting
securities entitled to vote on the proposal that are present at the Meeting, if
the holders of more than 50% of the outstanding shares are present or
represented by proxy, or (2) more than 50% of the outstanding voting securities
entitled to vote on the proposal, whichever is less.
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, 3 and 4 for
which the required vote is a percentage of the shares outstanding and entitled
to vote on the matter.
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 the Funds. The
Funds have retained Proxy Advantage, a division of PFPC Inc. ("Proxy
Advantage") to provide proxy solicitation services in connection with the
Meeting at an estimated cost of $750,000. In addition, the Funds 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 the Funds.
As the meeting date approaches, shareholders of the Funds may receive a call
from a representative of MCM or Proxy Advantage if the Funds have not yet
56
received their vote. Authorization to permit MCM or Proxy Advantage to execute
proxies may be obtained by telephonic or electronically transmitted
instructions from Fund shareholders. Proxies that are obtained telephonically
will be recorded in accordance with the procedures set forth below. Management
of the Funds 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 Proxy Advantage
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 in the mail.
If the shareholder information solicited agrees with the information
provided to MCM or Proxy Advantage by the Funds, the MCM or Proxy Advantage
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 Proxy Advantage 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. MCM or Proxy Advantage will record the shareholder's
instructions on the card. Within 72 hours, MCM or Proxy Advantage will send the
shareholder a letter or mailgram to confirm the shareholder's vote and asking
the shareholder to call MCM or Proxy Advantage immediately if the shareholder's
instructions are not correctly reflected in the confirmation.
ADJOURNMENTS
In the event that sufficient votes to approve one or more of the proposals
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.
57
SHARE INFORMATION
The chart below lists the number of shares of the Funds that are outstanding
as of the close of business on the Record Date:
Number of Shares
Name of Fund Outstanding
------------ -----------------
St. Clair Funds, Inc.
Government Money Market 28,365,648.680
Institutional Money Market 1,210,868,457.370
S&P MidCap Index 7,960,121.620
S&P SmallCap Index 7,091,625.150
Liquidity Plus 139,187,928.900
The Munder Framlington Funds Trust
Emerging Markets 2,366,865.299
Healthcare 13,884,805.643
International Growth 3,981,632.181
The Munder Funds, Inc.
Fund of Funds 5,279,678.078
Future Technology 90,581,449.232
International Bond 3,870,689.691
Micro-Cap Equity 6,362,050.740
MidCap Select 2,462,981.268
Multi-Season Growth 13,441,487.234
NetNet 66,028,679.973
Power Plus 11,207,531.580
Real Estate 4,213,005.040
Small-Cap Value 6,145,187.429
The Munder Funds Trust
Balanced 11,744,893.139
Bond 11,913,313.143
Cash Investment 1,106,865,188.970
Index 500 47,109,719.254
International Equity 8,945,601.934
Intermediate Bond 38,043,621.375
Large-Cap Value 13,043,551.500
Michigan Tax-Free Bond 4,054,814.562
Small Company Growth 4,819,169.768
Tax-Free Bond 9,160,262.607
Tax-Free Money Market 280,927,475.280
Tax-Free Short-Intermediate Bond 16,599,458.201
U.S. Government Income 20,759,745.861
U.S. Treasury Money Market 48,436,539.900
58
FUND SHARES OWNED BY CERTAIN BENEFICIAL OWNERS
For a list of persons or entities that owned beneficially or of record 5% or
more of the outstanding shares of a class of each of the Funds as of
February 12, 2003, please refer to Exhibit F.
The Funds have been advised by MCM, Munder Fund of Funds, a mutual fund for
which MCM serves as investment adviser, and Comerica Bank, an affiliate of MCM,
that each intends to vote the shares of each of the Funds 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 respective Fund, unless there are no other
shareholders or votes cast, in which case each will vote its shares FOR the
proposals. MCM's economic interest in such shares (excluding shares in which
Comerica has an economic interest), which are primarily held for the benefit of
its clients, is less than 1%, except with respect to Real Estate (10.51%),
MidCap Select (9.96%), International Growth (7.22%), Institutional Money Market
(7.14%), Small-Cap Value (4.51%), Balanced (2.94%) and Micro-Cap Equity
(1.96%). Munder Fund of Funds' economic interest in such shares is less than
1%, except with respect to MidCap Select (17.80%), Large-Cap Value (8.20%),
Multi-Season Growth (6.51%), Small-Cap Value (3.64%), Small Company Growth
(2.04%), Real Estate (1.63%) and Power Plus (1.34%). Comerica Bank's economic
interest to the extent greater than 1% in such shares, which are primarily held
for the benefit of its customers, is as follows:
Economic
Fund Name Interest
--------- --------
Government Money Market 100.00%
S&P MidCap Index 99.99%
S&P SmallCap Index 99.89%
Fund of Funds 95.79%
Intermediate Bond 91.27%
International Equity 90.33%
Tax-Free Bond 89.03%
Institutional Money Market 88.03%
Michigan Tax-Free Bond 87.67%
International Bond 87.24%
International Growth 86.32%
Bond 85.32%
Cash Investment 83.31%
Emerging Markets 82.40%
U.S. Government Income 80.31%
Tax-Free Short-Intermediate Bond 79.87%
Large-Cap Value 77.34%
Small Company Growth 73.69%
Tax-Free Money Market 70.19%
59
Economic
Fund Name Interest
--------- --------
U.S. Treasury Money Market 69.89%
Real Estate 68.80%
Multi-Season Growth 63.66%
MidCap Select 47.86%
Index 500 Fund 37.00%
Small-Cap Value 33.82%
Balanced 17.78%
Micro-Cap Equity 6.07%
Healthcare 2.33%
LEGAL MATTERS
Certain legal matters concerning the issuance of shares of the New Trust
will be passed upon by Dechert LLP, 1775 I Street, N.W., Washington, DC 20006.
60
EXHIBIT A
MUNDER SERIES TRUST
[ACQUIRED RIC*]
FORM OF AGREEMENT AND PLAN OF REORGANIZATION AND REDOMICILIATION
THIS AGREEMENT AND PLAN OF REORGANIZATION AND REDOMICILIATION ("Agreement")
is made as of this day of , 2003, by and between Munder Series
Trust, a Delaware statutory trust ("Trust"), with its principal place of
business at 480 Pierce Street, Birmingham, Michigan 48009, on behalf each of
its separate series: [Applicable Series of the Trust] (each an "Acquiring
Fund"), and [the ACQUIRED RIC], a [FORM AND STATE OF ORGANIZATION], with its
principal place of business at 480 Pierce Street, Birmingham, Michigan 48009,
on behalf of each of its separate series: [Applicable Series of the ACQUIRED
RIC] (each an "Acquired Fund").
WHEREAS, each of the Acquired Funds and each of the Acquiring Funds is a
series of an open-end, registered investment company of the management type;
WHEREAS, each Acquiring Fund has been organized to hold the assets of a
corresponding Acquired Fund and each Acquiring Fund has had no assets (other
than the seed capital required by Section 14(a) of the Investment Company Act
of 1940, as amended ("1940 Act")) and has carried on no business activities
prior to the date first shown above and will have had no assets (other than the
required seed capital) and will have carried on no business activities prior to
the consummation of this transaction described herein;
WHEREAS, the following chart shows each Acquiring Fund and its classes of
shares of beneficial interest ("Acquiring Fund Shares") and the corresponding
Acquired Fund with its classes of shares of beneficial interest ($0.001 par
value per share) ("Acquired Fund Shares"):
Acquiring Fund, Corresponding Acquired Fund
each a series of Munder Series Trust each a series of [the ACQUIRED RIC]
(a Delaware statutory trust) [FORM AND STATE OF ORGANIZATION]
------------------------------------ -----------------------------------
[Applicable Series and Classes [Applicable Series and Classes
of the Trust] of the ACQUIRED RIC]
- --------
* For the purposes of this Exhibit A, St. Clair, Framlington, the Company and
the Trust are each referred to as an "ACQUIRED RIC."
A-1
WHEREAS, throughout this Agreement, the term Acquiring Fund Shares should be
read to include each class of shares of the applicable Acquiring Fund and each
reference to Acquiring Fund Shares in connection with an Acquired Fund should
be read to include each class of the particular Acquiring Fund that corresponds
to the Acquired Fund; and
WHEREAS, 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");
WHEREAS, each reorganization, redomiciliation and liquidation will consist
of the transfer of all of the assets of an Acquired Fund to the corresponding
Acquiring Fund in exchange solely for the 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, each Acquired Fund owns securities that generally are assets of the
character in which the corresponding Acquiring Fund is permitted to invest;
WHEREAS, the Trustees of the Trust have determined, with respect to each
Acquiring Fund, that the exchange of all of the assets of the corresponding
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/Trustees] of [the ACQUIRED RIC] have determined,
with respect to each 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 corresponding 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 EACH ACQUIRED FUND TO THE CORRESPONDING 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 each Acquired Fund's shareholders
and the other terms and conditions herein set forth and on the basis of the
representations and warranties contained herein, each Acquired Fund agrees to
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transfer all of its assets, as set forth in paragraph 1.2, to the corresponding
Acquiring Fund, and the Acquiring Fund agrees in exchange therefor: (i) to
deliver to the Acquired Fund the number of full and fractional Acquiring Fund
Shares corresponding to each class of the Acquired Fund as of the time and date
set forth in paragraph 3; and (ii) to assume all liabilities of the Acquired
Fund, as set forth in paragraph 1.2. Such transactions shall take place on the
date of the closing provided for in paragraph 3.1 ("Closing Date").
1.2. The assets of each Acquired Fund to be acquired by the corresponding
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 as defined in paragraph 2.1 (collectively, with
respect to each Acquired Fund separately, "Assets"). Each Acquiring Fund shall
assume all of the liabilities of the corresponding Acquired Fund, whether
accrued or contingent, known or unknown, existing at the Valuation Date
(collectively, with respect to each Acquired Fund separately, "Liabilities").
1.3. Immediately upon delivery to the Acquired Fund of the Acquiring Fund
Shares, each Acquired Fund, as the then sole shareholder of the corresponding
Acquiring Fund, shall (i) elect trustees of the Trust, (ii) approve the
advisory and sub-advisory agreements previously approved by the Acquired Fund
Shareholders (as defined in paragraph 1.4), at the meeting described in
paragraph 5.2, (iii) approve the distribution and service plan pursuant to Rule
12b-1 under the 1940 Act, with respect to each class of shares of the
corresponding Acquiring Fund, previously approved by the Acquired Fund
Shareholders (as defined in paragraph 1.4), at the meeting described in
paragraph 5.2, and (iv) ratify the selection of Ernst & Young LLP as the
independent accountants of the corresponding Acquiring Fund.
1.4. Immediately following the action contemplated by paragraph 1.3, each
Acquired Fund will (a) distribute to its shareholders of record with respect to
each class of Acquired Fund 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 Acquired Fund
Shares, by the transfer of the corresponding 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 each class of
Acquiring Fund Shares to be so credited to each corresponding class of Acquired
Fund Shareholders shall, with respect to each class, be equal to the aggregate
net asset value of the Acquired Fund Shares of that class owned by Acquired Fund
A-3
Shareholders on the Closing Date. All issued and outstanding Acquired Fund
Shares will simultaneously be canceled on the books of the Acquired Fund. An
Acquiring Fund shall not issue certificates representing any class of Acquiring
Fund Shares in connection with such exchange.
1.5. Ownership of Acquiring Fund Shares will be shown on the books of each
Acquiring Fund's Transfer Agent, as defined in paragraph 3.3.
1.6. Any reporting responsibility of an 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
then-current prospectus and statement of additional information with respect to
each Acquired Fund and valuation procedures established by [ACQUIRED RIC's]
Board of [Directors/Trustees].
2.2. All computations of value shall be made by State Street Bank and Trust
Company, in its capacity as administrator for each Acquired Fund, and shall be
subject to confirmation by each Acquiring Fund's record keeping agent and by
each Acquiring Fund's independent accountants.
3. CLOSING AND CLOSING DATE
3.1. The Closing Date shall be April 29, 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 [the
ACQUIRED RIC] or at such other time and/or place as the parties may agree.
3.2. [The ACQUIRED RIC] shall direct State Street Bank and Trust Company, as
custodian for each Acquired Fund ("Custodian"), to deliver to the Trust, at the
Closing, a certificate of an authorized officer stating that (i) the Assets of
each Acquired Fund have been delivered in proper form to the corresponding
Acquiring Fund within two business days prior to or on the Closing Date, and
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( ii) all necessary taxes in connection with the delivery of the Assets of each
Acquired Fund, including all applicable Federal and state stock transfer
stamps, if any, have been paid or provision for payment has been made. Each
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 corresponding Acquiring Fund, as the Custodian also serves as the custodian
for each 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 each
Acquired Fund as of the Closing Date for the account of the corresponding
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 each 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 1940 Act, in which the
corresponding Acquired Fund's Assets are deposited, the corresponding Acquired
Fund's Assets deposited with such depositories. The cash to be transferred by
each Acquired Fund shall be delivered by wire transfer of Federal funds on the
Closing Date.
3.3. [The ACQUIRED RIC] shall direct PFPC, Inc., in its capacity as transfer
agent for each Acquired Fund ("Transfer Agent"), to deliver to the Trust at the
Closing a certificate of an authorized officer stating that its records contain
the name and address of each Acquired Fund Shareholder and the number and
percentage ownership of each outstanding class of shares owned by each such
shareholder immediately prior to the Closing. Each Acquiring Fund shall deliver
to the Secretary of the corresponding 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 Acquired Fund shall deliver to the
corresponding Acquiring Fund such bills of sale, checks, assignments, share
certificates, if any, receipts or other documents as the corresponding
Acquiring Fund or its counsel may reasonably request.
3.4. In the event that on the Valuation Date (a) the New York Stock Exchange
or another primary trading market for portfolio securities of an Acquiring Fund
or the corresponding Acquired Fund (each, an "Exchange") shall be closed to
trading or trading thereupon shall be restricted, or (b) trading or the
reporting of trading on such Exchange or elsewhere shall be disrupted so that,
in the judgment of either the Board of Trustees of the Trust or the Board of
[Directors/Trustees] of [the ACQUIRED RIC], accurate appraisal of the value of
the net assets of the Acquired
A-5
Fund 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 applicable corresponding
Acquiring Fund prior to the date of this Agreement in a written instrument
executed by an officer of [the ACQUIRED RIC], [the ACQUIRED RIC] on behalf of
each Acquired Fund, represents and warrants to the Trust as follows:
(a) The Acquired Fund is duly organized as a series of [the ACQUIRED
RIC], which is a business trust duly organized, validly existing and in good
standing under the laws of [State], with power under [the ACQUIRED RIC]'s
[Articles of Incorporation/Declaration of Trust], as amended from time to
time, to own all of its Assets and to carry on its business as it is now
being conducted;
(b) [The ACQUIRED RIC] 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 each class of 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 ACQUIRED RIC], on behalf of the Acquired
Fund, will have good and marketable title to the Assets of the Acquired Fund
and full right, power, and authority to sell, assign, transfer and deliver
such Assets hereunder free of any liens or other encumbrances, and
A-6
upon delivery and payment for such Assets, the Trust, on behalf of the
Acquiring Fund, will acquire good and marketable title thereto, subject to
no restrictions on the full transfer thereof, including such restrictions as
might arise under the 1933 Act;
(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 ACQUIRED RIC]'s [Articles of
Incorporation/Declaration of Trust] or By-Laws or of any agreement,
indenture, instrument, contract, lease or other undertaking to which [the
ACQUIRED RIC], 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 ACQUIRED RIC], 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, material contracts listed on Schedule A 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. Each contract listed on Schedule A is a valid, binding
and enforceable obligation of each party thereto and the assignment by each
Acquired Fund to the corresponding Acquiring Fund of each such contract will
not result in the termination of such contract, any breach or default
thereunder or the imposition of any penalty thereunder;
(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 ACQUIRED RIC], 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 ACQUIRED RIC], 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
[fiscal year end] 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
A-7
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
[end of semi-annual period] (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 December 31, 2002, there has not been any material adverse
change in the Acquired Fund's financial condition, assets, liabilities or
business, other than changes occurring in the ordinary course of business,
or any incurrence by the Acquired Fund of indebtedness maturing more than
one year from the date such indebtedness was incurred. 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
A-8
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 ACQUIRED RIC] 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. 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/Trustees] of [the ACQUIRED RIC], on behalf of the Acquired Fund,
and, subject to the approval of the Acquired Fund Shareholders, this
Agreement constitutes a valid and binding obligation of [the ACQUIRED RIC],
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 Proxy Statement (as defined in paragraph 5.2) insofar as it
relates to the Acquired Fund, will, on the effective date of the Proxy
Statement and at all times prior to the conclusion of the shareholder
meeting to which the Proxy Statement relates (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 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 1934 Act and the 1940 Act
and the rules and regulations thereunder.
A-9
4.2. Except as has been fully disclosed to the applicable corresponding
Acquired Fund prior to the date of this Agreement in a written instrument
executed by an officer of the Trust, the Trust, on behalf of each Acquiring
Fund, represents and warrants to [the ACQUIRED RIC] as follows:
(a) The Acquiring Fund is duly organized as a series of the Trust, which
is a statutory trust duly organized, validly existing, and in good standing
under the laws of the State of Delaware with the power under the Trust's
Declaration of Trust to own all of its properties and assets and to carry on
its business as contemplated by this Agreement;
(b) The Trust is a registered investment company classified as a
management company of the open-end type, and its registration with the
Commission as an investment company under the 1940 Act and the registration
of the Acquiring Fund Shares under the 1933 Act will be in full force and
effect as of the Closing Date;
(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 conforms 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 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) The Acquiring Fund is not engaged currently, and the execution,
delivery and performance of this Agreement will not result, in (i) a
material violation of the Trust's Declaration of Trust or By-Laws or of any
agreement, indenture, instrument, contract, lease or other undertaking to
which the Trust, on behalf of the Acquiring Fund, is a party or by which it
is bound, or (ii) the acceleration of any obligation, or the imposition of
any penalty, under any agreement, indenture, instrument, contract, lease,
judgment or decree to which the Trust, on behalf of the Acquiring Fund, is a
party or by which it is bound;
(f) 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 Trust, 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. The Trust, on behalf of
the Acquiring
A-10
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;
(g) To the best knowledge of the Acquiring Fund, the Acquiring Fund will
meet the requirements of Subchapter M of the Code for qualification as a
regulated investment company from and including the taxable year that
includes the Closing Date and will be eligible to, and will, compute its
Federal income tax under Section 852 of the Code;
(h) Upon consummation of the Reorganization, all issued and outstanding
Acquiring Fund Shares will be duly and validly issued and outstanding, fully
paid and non-assessable by the Trust and will 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;
(i) 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 the Trust, on behalf of the Acquiring Fund, and this Agreement
constitutes a valid and binding obligation of the Acquiring Fund,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws relating
to or affecting creditors' rights and to general equity principles;
(j) 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
(k) Prior to the Closing Date, the Acquiring Fund will have carried on no
business activity and will have had no assets or liabilities other than the
seed capital required by Section 14(a) of the 1940 Act.
5. COVENANTS
5.1. Each Acquired Fund will operate its business in the ordinary course
between the date hereof and the Closing Date, it being understood that such
A-11
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 ACQUIRED RIC] will call a meeting of the shareholders of each
Acquired Fund to consider and act upon this Agreement and to take all other
action necessary to obtain approval of the transactions contemplated herein.
[the ACQUIRED RIC] will, on behalf of each Acquired Fund, prepare, file with
the Commission, and deliver to the Acquired Fund Shareholders in connection
with such meeting, a proxy statement on Schedule 14A ("Proxy Statement") in
compliance in all material respects with the provisions of the 1934 Act and the
rules and regulations thereunder.
5.3. Each Acquired Fund covenants that the Acquiring Fund Shares to be
issued hereunder are not being acquired for the purpose of making any
distribution thereof, other than in accordance with the terms of this Agreement.
5.4. Each Acquired Fund will assist the corresponding 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, each Acquiring Fund and
each corresponding 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. Each Acquiring Fund will provide the corresponding Acquired Fund with
information reasonably necessary for the preparation of the Proxy Statement in
compliance with the 1934 Act and 1940 Act and the rules and regulations
thereunder.
5.7. Each Acquiring Fund and each corresponding Acquired Fund shall 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 ACQUIRED RIC], on behalf of each Acquired Fund, covenants that it
will, from time to time, as and when reasonably requested by the corresponding
Acquiring Fund, execute and deliver or cause to be executed and delivered all
such assignments and other instruments, and will take or cause to be taken such
further action as the Trust, on behalf of the Acquiring Fund, may reasonably
deem necessary or desirable in order to vest in and confirm (a) [the ACQUIRED
RIC]'s title to and possession of the Acquiring Fund Shares to be delivered
hereunder and (b) the Trust's, title to and possession of all the Assets and to
otherwise to carry out the intent and purpose of this Agreement.
A-12
5.9. Each 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 operate
after the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH ACQUIRED FUND
The obligations of [the ACQUIRED RIC], on behalf of an Acquired Fund, to
consummate the transactions provided for herein shall be subject, at [the
ACQUIRED RIC]'s election, to the performance by the Trust, on behalf of the
corresponding Acquiring Fund, of all the obligations to be performed by it
hereunder on or before the Closing Date, and, in addition thereto, the
following further conditions:
6.1. All representations and warranties of the Trust, on behalf of the
Acquiring Fund, contained in this Agreement shall be true and correct in all
material respects as of the date hereof and, except as they may be affected by
the transactions contemplated by this Agreement, as of the Closing Date, with
the same force and effect as if made on and as of the Closing Date;
6.2. The Trust, on behalf of the Acquiring Fund, shall have delivered to the
Acquired Fund a certificate executed in the name of the Acquiring Fund by the
Trust's President or Vice President and its Treasurer or Assistant Treasurer,
in a form reasonably satisfactory to [the ACQUIRED RIC] and dated as of the
Closing Date, to the effect that the representations and warranties of the
Trust, on behalf of the Acquiring Fund, made in this Agreement are true and
correct at and as of the Closing Date, except as they may be affected by the
transactions contemplated by this Agreement, and as to such other matters as
[the ACQUIRED RIC] shall reasonably request;
6.3. The Trust, on behalf of the Acquiring Fund, shall have performed all of
the covenants and complied with all of the provisions required by this
Agreement to be performed or complied with by the Trust, on behalf of the
Acquiring Fund, on or before the Closing Date; and
6.4. The Acquired Fund and the Acquiring Fund shall have agreed on the
number of full and fractional 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 EACH ACQUIRING FUND
The obligations of the Trust, on behalf of an Acquiring Fund, to complete
the transactions provided for herein shall be subject, at the Trust's election,
to the
A-13
performance by [the ACQUIRED RIC], on behalf of the corresponding 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 ACQUIRED RIC], on behalf of
the Acquired Fund, contained in this Agreement shall be true and correct in all
material respects as of the date hereof and, except as they may be affected by
the transactions contemplated by this Agreement, as of the Closing Date, with
the same force and effect as if made on and as of the Closing Date;
7.2. [The ACQUIRED RIC] shall have delivered to the Acquiring Fund a
statement of the Acquired Fund's Assets and Liabilities, as of the Closing
Date, certified by the Treasurer of [the ACQUIRED RIC];
7.3. [The ACQUIRED RIC], on behalf of the Acquired Fund, shall have
delivered to the Acquiring Fund a certificate executed in the name of the
Acquired Fund by [the ACQUIRED RIC]'s President or Vice President and its
Treasurer or Assistant Treasurer, in a form reasonably satisfactory to the
Trust and dated as of the Closing Date, to the effect that the representations
and warranties of [the ACQUIRED RIC], on behalf of the Acquired Fund, made in
this Agreement are true and correct at and as of the Closing Date, except as
they may be affected by the transactions contemplated by this Agreement, and as
to such other matters as the Trust shall reasonably request;
7.4. [The ACQUIRED RIC], on behalf of the Acquired Fund, shall have
performed all of the covenants and complied with all of the provisions required
by this Agreement to be performed or complied with by [the ACQUIRED RIC], on
behalf of the Acquired Fund, on or before the Closing Date; and
7.5. The Acquired Fund and the Acquiring Fund shall have agreed on the
number of full and fractional Acquiring Fund Shares to be issued in connection
with the Reorganization after such number has been calculated in accordance
with paragraph 1.1.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH ACQUIRING FUND AND EACH
CORRESPONDING ACQUIRED FUND
If any of the conditions set forth below have not been satisfied on or
before the Closing Date with respect to [the ACQUIRED RIC], on behalf of an
Acquired Fund, or the Trust, on behalf of the corresponding 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
A-14
Acquired Fund in accordance with the provisions of [the ACQUIRED RIC]'s
[Articles of Incorporation/Declaration of Trust], By-Laws, applicable [State]
law and the 1940 Act, and certified copies of the resolutions evidencing such
approval shall have been delivered to the Acquiring Fund. Notwithstanding
anything herein to the contrary, neither the Trust nor [the ACQUIRED RIC] may
waive the conditions set forth in this paragraph 8.1;
8.2. On the Closing Date no action, suit or other proceeding shall be
pending or, to the Trust's or to [the ACQUIRED RIC]'s knowledge, threatened
before any court or governmental agency in which it is sought to restrain or
prohibit, or obtain damages or other relief in connection with, this Agreement
or the transactions contemplated herein;
8.3. All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities deemed necessary by
the Trust or [the ACQUIRED RIC] 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 with respect to the Acquiring Fund Shares
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 ACQUIRED
RIC] 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
ACQUIRED RIC] of representations it shall request of the Trust and [the
ACQUIRED RIC]. Notwithstanding anything herein to the contrary, neither the
Trust nor [the ACQUIRED RIC] may waive the condition set forth in this
paragraph 8.5.
9. INDEMNIFICATION
9.1. The Trust, out of each Acquiring Fund's assets and property, agrees to
indemnify and hold harmless the corresponding 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.
A-15
9.2 [The ACQUIRED RIC], out of each Acquired Fund's assets and property,
agrees to indemnify and hold harmless the corresponding Acquiring Fund from and
against any and all losses, claims, damages, liabilities or expenses
(including, without limitation, the payment of reasonable legal fees and
reasonable costs of investigation) to which the Acquiring Fund may become
subject, insofar as such loss, claim, damage, liability or expense (or actions
with respect thereto) arises out of or is based on any breach by the Acquired
Fund of any of its representations, warranties, covenants or agreements set
forth in this Agreement.
10. BROKERAGE FEES AND EXPENSES
10.1. The Trust, on behalf of each Acquiring Fund, and [the ACQUIRED RIC],
on behalf of each corresponding 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 the Acquired Funds pro rata on the basis of relative net assets. 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 Proxy 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 Trust and [the ACQUIRED RIC] agree that neither party has made any
representation, warranty or covenant, on behalf of either an Acquiring Fund or
an Acquired Fund, respectively, not set forth herein and that this Agreement
constitutes the entire agreement between the parties.
11.2. The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection
herewith shall survive the consummation of the transactions contemplated
hereunder. The covenants to be performed after the Closing and the obligations
of each of the Acquired Fund and Acquiring Fund in Section 9 shall survive the
Closing.
12. TERMINATION
This Agreement may be terminated and the transactions contemplated hereby
may be abandoned by resolution of the either the Board of Trustees of the Trust
or
A-16
the Board of [Directors/Trustees] of [the ACQUIRED RIC], 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 with respect to any
Acquiring Fund or any Acquired Fund, respectively.
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
ACQUIRED RIC] and the Trust; provided, however, that following the meeting of
the shareholders of each Acquired Fund called by [the ACQUIRED RIC] pursuant to
paragraph 5.2 of this Agreement, no such amendment may have the effect of
changing the provisions for determining the number of Acquiring Fund Shares to
be issued to each corresponding class of Acquired Fund Shareholders, under this
Agreement to the detriment of such shareholders without their further approval.
14. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by
facsimile, electronic delivery (i.e., e-mail) personal service or prepaid or
certified mail addressed to the Trust and [the ACQUIRED RIC], 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.
15. HEADINGS; GOVERNING LAW; SEVERABILITY; 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 State of Delaware without regard to its principles of conflicts
of laws.
15.3. The warranties, representations, and agreements contained in this
Agreement made by [the ACQUIRED RIC], on behalf of each of the Acquired Funds,
are made on a several (and not joint, or joint and several) basis. Similarly,
the warranties, representations, and agreements contained in this Agreement
made by the Trust, on behalf of each of the Acquiring Funds, are made on a
several (and not joint, or joint and several) basis. In the event that
shareholders of a particular Acquired Fund do not approve the Reorganization
with respect to that Acquired Fund and the corresponding Acquiring Fund, the
Agreement will continue to remain in full force and effect with respect to the
reorganizations, redomiciliations and liquidations for the other Acquired Funds
and their corresponding Acquiring
A-17
Funds referenced in this Agreement. The benefits and obligations attendant to
the Reorganization are severable with respect to each Acquired Fund and its
corresponding Acquiring Fund and the other Acquired Funds and their
corresponding Acquiring Funds participating in the Reorganization. Shareholders
of the Acquired Funds have no rights under this Agreement with respect to the
reorganization, redomiciliation, and liquidation of any other Acquired Fund in
which they do not hold shares.
15.4. This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its President or Vice President.
MUNDER SERIES TRUST, on behalfof its [the ACQUIRED RIC] on behalfof its
series: series:
[Applicable Series ofthe Trust] [Applicable Series ofACQUIRED RIC]
By: -------------------------- By: --------------------------
Name: Name:
Title: Title:
A-18
Schedule A
Acquired Fund Contracts to be Assigned to Acquiring Funds
[to be inserted]
A-19
Exhibit B
Current Executive Officers of St. Clair, Framlington, the Company and the Trust
Position(s) with
St. Clair,
Framlington, Term of Office and
the Company Length of Time
Name, Address and Age and the Trust Served Principal Occupation(s) During Past 5 Years
- --------------------- ---------------- -------------------- ---------------------------------------------
James C. Robinson President and through 2/04 Chairman and Chief Executive Officer of
480 Pierce Street Principal St. Clair since 5/00 Munder Capital Management (investment
Suite 300 Executive Framlington since advisor) (1/00 to present); Chief Investment
Birmingham, MI 48009 Officer 5/00 Officer/Fixed Income of Munder Capital
Age 41 Company since 5/00 Management (1/90 to 1/00); President of
Trust since 5/00 @Vantage (since 8/00) and Munder Series
Trust (since 2/03).
Stephen J. Shenkenberg Vice President through 2/04 General Counsel of Munder Capital
480 Pierce Street and Secretary St. Clair since 8/00 Management (investment advisor) (7/00 to
Suite 300 Framlington since present); Deputy General Counsel of Strong
Birmingham, MI 48009 8/00 Capital Management, Inc. (investment advisor)
Age 44 Company since 8/00 (12/92 to 7/00); Vice President and Secretary
Trust since 8/00 of @Vantage (since 8/00) and Munder Series
Trust (since 2/03).
Elyse G. Essick Vice President through 2/04 Chief Marketing Officer of Munder Capital
480 Pierce Street St. Clair since 4/95 Management (investment advisor) (9/88 to
Suite 300 Framlington since present); Vice President of @Vantage (since
Birmingham, MI 48009 11/96 2/01) and Munder Series Trust (since 2/03).
Age 44 Company since 4/95
Trust since 4/95
Peter K. Hoglund Vice President through 2/04 Chief Administration Officer of Munder
480 Pierce Street and Principal St. Clair since 2/01 Capital Management (investment advisor)
Suite 300 Financial Framlington since (5/00 to present); Associate of Heartland
Birmingham, MI 48009 Officer 2/01 Industrial Partners (a private equity group)
Age 36 Company since 2/01 (10/99 to 5/00); Sr. Portfolio Manager of
Trust since 2/01 Munder Capital Management (1/98 to 10/99);
Vice President of @Vantage (since 2/01) and
Munder Series Trust (since 2/03).
Cherie Ugorowski Treasurer and through 2/04 Controller of Munder Capital Management
480 Pierce Street Principal St. Clair since 8/01 (investment advisor) (5/01 to present);
Suite 300 Accounting Framlington since Corporate Accounting Manager,
Birmingham, MI 48009 Officer 8/01 DaimlerChrysler Corporation (automotive
Age 34 Company since 8/01 manufacturer) (9/99 to 5/01); Manager, Audit
Trust since 8/01 and Business Advisory Practice, Arthur
Andersen LLP (9/90 to 9/99); Treasurer of
@Vantage (since 8/01) and Munder Series
Trust (since 2/03).
B-1
EXHIBIT C
Fees Payable to the Advisor and Sub-Advisor under the Current Advisory
Agreements and Current Sub-Advisory Agreement and to the Distributor under the
Current Plans
The following table provides the annual fee rate of each Fund under the
relevant Current Advisory Agreements, as well as the amounts paid by each Fund
to the Advisor under that agreement during the Fund's most recent fiscal year.
Advisory Fees
Received for
Fiscal year ended
June 30, 2002
(December 31,
2002
in the case of the
St. Clair Funds) Applicable Fee Rate
------------------ -------------------------------------
St. Clair Funds, Inc.
Institutional S&P MidCap Index $ 68,625 0.15% of average daily net assets
Equity Fund
Institutional S&P SmallCap Index $ 119,935 0.15% of average daily net assets
Equity Fund
Institutional Money Market Fund $ 1,779,937 0.20% of average daily net assets
Institutional Government Money $ 50,898 0.20% of average daily net assets
Market Fund
Liquidity Plus Money Market Fund $ 525,115 0.35% of average daily net assets
The Munder Framlington Funds Trust
Emerging Markets Fund $ 397,052 1.25% of average daily net assets
Healthcare Fund $ 3,563,750 1.00% of the first $250 million of
average daily net assets and 0.75%
of average daily net assets in excess
of $250 million
International Growth Fund $ 474,634 1.00% of the first $250 million of
average daily net assets and 0.75%
of average daily net assets in excess
of $250 million
The Munder Funds, Inc.
Future Technology Fund $ 5,263,983 1.00% of the first $4 billion of
average daily net assets; 0.95% of
average daily net assets from $4
billion to $5 billion; and 0.90% of
average daily net assets in excess of
$5 billion
International Bond Fund $ 170,262 0.50% of average daily net assets
Micro-Cap Equity Fund $ 1,211,248 1.00% of average daily net assets
MidCap Select Fund $ 236,107 0.75% of average daily net assets
Multi-Season Growth Fund $ 2,727,808 0.75% of average daily net assets
NetNet Fund $13,357,216 1.00% of the first $4 billion of
average daily net assets; 0.95% of
average daily net assets from $4
billion to $5 billion; and 0.90% of
average daily net assets in excess of
$5 billion
C-1
Advisory Fees
Received for
Fiscal year ended
June 30, 2002
(December 31,
2002
in the case of the
St. Clair Funds) Applicable Fee Rate
------------------ -------------------------------------
Power Plus Fund $ 995,733 0.75% of average daily net assets
Real Estate Equity Investment Fund $ 422,244 0.74% of average daily net assets
Small-Cap Value Fund $ 682,408 0.75% of average daily net assets
The Munder Funds Trust
Balanced Fund $ 775,066 0.65% of average daily net assets
Bond Fund $ 781,032 0.50% of average daily net assets
Cash Investment Fund $3,986,802 0.35% of average daily net assets
Index 500 Fund $1,175,053 0.20% of the first $250 million of
average daily net assets; 0.12% of
the next $250 million of average
daily net assets and 0.07% of
average daily net assets in excess of
$500 million
Intermediate Bond Fund $1,904,392 0.50% of average daily net assets
International Equity Fund $ 895,179 0.75% of average daily net assets
Large-Cap Value Fund $1,264,588 0.75% of average daily net assets
Michigan Tax-Free Bond Fund $ 245,639 0.50% of average daily net assets
Small Company Growth Fund $ 598,665 0.75% of average daily net assets
Tax-Free Bond Fund $ 603,752 0.50% of average daily net assets
Tax-Free Money Market Fund $1,114,133 0.35% of average daily net assets
Tax-Free Short-Intermediate Bond Fund $ 866,458 0.50% of average daily net assets
U.S. Government Income Fund $1,113,045 0.50% of average daily net assets
U.S. Treasury Money Market Fund $ 341,708 0.35% of average daily net assets
For the fiscal year ended June 30, 2002, the Advisor reimbursed expenses for
the Healthcare Fund in the amount of $309,938 and the International Growth Fund
in the amount of $81,963. For the fiscal year ended December 31, 2002, the
Advisor waived fees in the amount of $41,974 for the Institutional S&P MidCap
Index Equity Fund, $85,430 for the Institutional S&P SmallCap Index Equity
Fund, $711,975 for the Institutional Money Market Fund and $20,359 for the
Institutional Government Money Market Fund.
The Advisor pays to the Sub-Advisor with respect to each Sub-Advised Fund an
amount equal to 40% of the net revenues earned by the Adviser with respect to
that Fund. For purposes of this calculation, "net revenues" with respect to a
Sub-Advised Fund is equal to the amount of advisory fees charged by the Advisor
for that Fund, above, less the sum of (i) any advisory fee waivers and expense
reimbursements made by the Adviser for that Fund, and (ii) any payments made by
the Advisor to broker/dealers, wirehouses, or other third party intermediaries
based on sales of the Fund made by, and/or assets of the Fund held through,
such entities.
The following table provides the amounts paid by each Fund to the
Distributor under the Current Plan during the Fund's most recent fiscal year.
C-2
Class A Shares Class B Shares Class C Shares
Fiscal year ended Fiscal year ended Fiscal year ended
June 30, 2002 June 30, 2002 June 30, 2002
--------------------- ----------------------- -----------------------
Contingent Contingent Contingent
Deferred Distribution Deferred Distribution Deferred
Service Sales and Service Sales and Service Sales
Fees Charges Fees Charges Fees Charges
---------- ---------- ------------ ---------- ------------ ----------
Balanced Fund $ 60,204 $ 258 $ 484,620 $ 225,076 $ 217,465 $14,275
Bond Fund $ 17,150 $ 4,844 $ 75,680 $ 55,735 $ 9,341 $ 827
Cash Investment Fund $ 312,880 $ 2,231 -- -- -- --
Emerging Markets Fund $ 5,040 $ 1,520 $ 14,492 $ 10,566 $ 3,645 $ 1,425
Future Technology Fund $ 445,246 $ 2,067 $2,164,755 $1,573,613 -- --
Healthcare Fund $ 307,629 $ 561 $1,693,542 $1,219,975 $ 909,927 $71,020
Index 500 Fund $ 954,213 $12,302 $3,319,282 $ 749,520 -- --
Intermediate Bond Fund $ 24,922 $11,199 $ 97,468 $ 55,734 $ 12,197 $ 1,328
International Bond Fund $ 3,469 $ 9,405 $ 1,637 $ 54 $ 340 $ 0
International Equity Fund $ 16,152 $30,181 $ 16,804 $ 16,882 $ 21,706 $ 1,286
International Growth Fund $ 3,180 -- $ 7,732 $ 7,688 $ 5,176 $ 703
Large-Cap Value Fund $ 16,673 $ 4 $ 117,614 $ 73,204 $ 38,237 $ 1,830
Michigan Tax-Free Bond Fund $ 5,054 $ 46 $ 10,366 $ 442 $ 1,126 $ 15
Micro-Cap Equity Fund $ 107,480 $ 3,981 $ 399,631 $ 163,770 $ 203,160 $ 6,412
MidCap Select Fund $ 6,014 $ 78 $ 18,982 $ 16,926 -- --
Multi-Season Growth Fund $ 101,962 $ 1 $ 189,732 $ 102,188 $ 60,120 $ 3,440
NetNet Fund $1,215,992 $13,543 $5,813,403 $4,012,086 $2,646,895 $73,330
Power Plus Fund $ 111,797 -- $ 617,103 $ 470,888 -- --
Real Estate Equity Investment
Fund $ 7,902 $ 14 $ 34,210 $ 12,077 $ 9,933 $ 325
Small Company Growth Fund $ 20,820 -- $ 52,315 $ 28,225 $ 20,879 $ 435
Small-Cap Value Fund $ 26,883 $ 4,764 $ 237,291 $ 105,967 $ 72,938 $ 3,740
Tax-Free Bond Fund $ 9,574 -- $ 31,028 $ 11,946 $ 7,384 $ 437
Tax-Free Money Market Fund $ 213,150 -- -- -- -- --
Tax-Free Short-Intermediate
Bond Fund $ 17,001 -- $ 26,252 $ 8,206 $ 8,895 $ 576
U.S. Government Income Fund $ 26,055 $ 4,555 $ 138,090 $ 75,101 $ 24,120 $ 1,285
U.S. Treasury Money Market
Fund $ 73,860 -- -- -- -- --
Class II Shares Class L Shares
Fiscal year ended Fiscal year ended
June 30, 2002 December 31, 2002
----------------------- -----------------------
Contingent Contingent
Distribution Deferred Distribution Deferred
and Service Sales and Service Sales
Fees Charges Fees Charges
------------ ---------- ------------ ----------
Future Technology Fund $1,213,675 $87,509 -- --
MidCap Select Fund $ 9,521 $ 783 -- --
Power Plus Fund $ 245,872 $32,297 -- --
Liquidity Plus Money Market Fund -- -- $526,689 --
C-3
Exhibit D
Fundamental Investment Restrictions of the Funds to be Amended or Eliminated
Fundamental Investment Restrictions of the Series of St. Clair:
Munder Institutional S&P MidCap Index Equity Fund
Munder Institutional S&P SmallCap Index Equity Fund
Munder Institutional Money Market Fund
Munder Institutional Government Money Market Fund
The Funds may not:
1. With respect to 75% of the Fund's assets, invest more than 5% of the
Fund's assets (taken at market value at the time of purchase) in the
outstanding securities of any single issuer or own more than 10% of the
outstanding voting securities of any one issuer, in each case other than
securities issued or guaranteed by the United States Government, its agencies
or instrumentalities. However, as an operating policy the Money Market Funds
intend to adhere to the 5% limitation (with respect to the Fund's investment in
the outstanding securities of any one issuer) with regard to 100% of its Fund
to the extent required under applicable regulations under the Investment
Company Act of 1940, as amended ("1940 Act"). (Proposal 3.A).
2. Borrow money or enter into reverse repurchase agreements except that a
Fund may (i) borrow money or enter into reverse repurchase agreements for
temporary purposes in amounts not exceeding 5% of its total assets and (ii)
borrow money for the purpose of meeting redemption requests, in amounts (when
aggregated with amounts borrowed under clause (i)) not exceeding 33-1/3% of its
total assets. (Proposal 3.B & 3.P).
3. Issue any senior securities (as such term is defined in Section 18(f) of
the 1940 Act) except to the extent the activities permitted by other enumerated
investment limitations may be deemed to give rise to a senior security and as
consistent with interpretations under the 1940 Act. (Proposal 3.C).
4. Underwrite securities of other issuers, except insofar as a Fund may be
deemed an underwriter under the 1933 Act in selling portfolio securities.
(Proposal 3.D)
5. Purchase or sell real estate or any interest therein, but not including
securities issued by companies (including real estate investment trusts) that
invest in real estate or interests therein. (Proposal 3.E).
6. Make loans of securities to other persons in excess of 25% of a Fund's
total assets, provided a Fund may invest without limitation in short-term debt
obligations (including repurchase agreements) and publicly distributed debt
obligations. (Proposal 3.F).
D-1
7. Purchase securities if more than 25% of the value of the Fund's total
assets would be invested in the securities of issuers conducting their
principal business activities in the same industry; provided that: (i) there is
no limit on investments in U.S. Government Securities or, with respect to the
Money Market Funds, obligations of domestic commercial banks (including U.S.
branches of foreign banks subject to regulations under U.S. laws applicable to
domestic banks and, to the extent that its parent is unconditionally liable for
the obligation, foreign branches of U.S. banks); (ii) there is no limit on
investments in issuers domiciled in a single country; (iii) financial service
companies are classified according to the end users of their services (for
example, automobile finance, bank finance and diversified finance are each
considered to be a separate industry); and (iv) utility companies are
classified according to their services (for example, gas, gas transmission,
electric, and telephone are each considered to be a separate industry).
(Proposal 3.G).
8. Invest in commodities or commodity futures contracts, provided that this
limitation shall not prohibit the purchase or sale by a Fund of financial
futures and stock index futures contracts, options on futures contracts,
options on securities and securities indices, as permitted by the Fund's
Prospectus. (Proposal 3.H).
9. Pledge, mortgage or hypothecate its assets other than to secure
borrowings permitted by its fundamental investment limitation on borrowing
(collateral arrangements with respect to margin requirements for options and
futures transactions are not deemed to be pledges or hypothecations for this
purpose). (Proposal 3.I).
10. Make investments for the purpose of exercising control or management.
(Proposal 3.K).
Fundamental Investment Restrictions of St. Clair (Liquidity Plus):
Liquidity Plus Money Market Fund
The Fund may not:
1. (a) Purchase securities (other than obligations of the U.S. Government,
its agencies or instrumentalities) if more than 5% of the value of the Fund's
total assets would be invested in the securities of any one issuer, except that
up to 25% of the value of the Fund's total assets may be invested without
regard to this 5% limitation; and (b) purchase more than 10% of the outstanding
voting securities of any issuer, except that up to 25% of the value of the
Fund's total assets may be invested without regard to this 10% limitation.
However, as an operating policy, the Fund intends to adhere to this 5%
limitation with regard to 100% of its portfolio to the extent required under
applicable regulations under the 1940 Act. (Proposal 3.A).
D-2
2. Borrow money, except for temporary purposes in amounts up to one-third of
the value of the Fund's total assets at the time of such borrowing. Whenever
borrowings exceed 5% of the Fund's total assets, the Fund will not make any
additional investments. (Proposal 3.B).
3. Underwrite securities of other issuers, except insofar as a Fund may be
deemed an underwriter under the 1933 Act in selling portfolio securities.
(Proposal 3.D).
4. Purchase or sell real estate or any interest therein, including interests
in real estate limited partnerships, except securities issued by companies
(including real estate investment trusts) that invest in real estate or
interests therein. (Proposal 3.E).
5. Make loans, except that the Fund may purchase or hold certain debt
instruments and enter into repurchase agreements, in accordance with its
policies and limitations. (Proposal 3.F).
6. Invest 25% or more of the Fund's total assets in one or more issuers
conducting their principal business activities in the same industry, provided
that: (a) there is no limitation with respect to obligations issued or
guaranteed by the U.S. Government or its agencies or instrumentalities,
domestic bank certificates of deposit, bankers' acceptances, and repurchase
agreements secured by such obligations; (b) wholly owned finance companies will
be considered to be in the industries of their parents if their activities are
primarily related to financing the activities of their parents; and (c)
utilities will be divided according to their services--for example, gas, gas
transmission, electric and gas, electric, and telephone will each be considered
separate industry. (Proposal 3.G).
7. Invest in commodities or commodity futures contracts, provided that this
limitation shall not prohibit the purchase or sale by the Fund of financial
futures contracts and options on financial futures contracts, options on
securities and securities indices, as permitted by the Fund's Prospectus.
(Proposal 3.H).
8. Pledge, mortgage or hypothecate its assets other than to secure
borrowings permitted by its fundamental investment limitation on borrowing
(Proposal 3.I).
9. Knowingly invest more than 10% of its total assets in illiquid securities
including time deposits with maturities longer than seven days and repurchase
agreements providing for settlement more than seven days after notice.
(Proposal 3.J).
10. Purchase securities on margin, or make short sales of securities, except
for the use of short-term credit necessary for the clearance of purchases and
sales of portfolio securities. (Proposal 3.O).
D-3
Fundamental Investment Restrictions of the Series of Framlington:
Munder Emerging Markets Fund
Munder Healthcare Fund
Munder International Growth Fund
The Funds may not:
1. Purchase securities (except U.S. Government securities) if more than 5%
of its total assets will be invested in the securities of any one issuer,
except that up to 25% of the assets of a Fund may be invested without regard to
this 5% limitation. (Proposal 3.A).
2. Borrow money or enter into reverse repurchase agreements except that a
Fund may (i) borrow money or enter into reverse repurchase agreements for
temporary purposes in amounts not exceeding 5% of its total assets and (ii)
borrow money for the purpose of meeting redemption requests, in amounts (when
aggregated with amounts borrowed under clause (i)) not exceeding 33 1/3% of its
total assets. (Proposal 3.B & 3.P).
3. Issue any senior security (as defined in Section 18(f) of the 1940 Act)
except as permitted under the 1940 Act. (Proposal 3.C).
4. Underwrite securities of other issuers, except insofar as a Fund may be
deemed an underwriter under the 1933 Act in selling portfolio securities.
(Proposal 3.D).
5. Purchase or sell real estate or any interest therein, including interests
in real estate limited partnerships, except securities issued by companies
(including real estate investment trusts) that invest in real estate or
interests therein. (Proposal 3.E).
6. Make loans of securities to other persons in excess of 25% of a Fund's
total assets, provided a Fund may invest without limitation in short-term debt
obligations (including repurchase agreements) and publicly distributed debt
obligations. (Proposal 3.F).
7. Invest 25% or more of its total assets in securities issued by one or
more issuers conducting their principal business activities in the same
industry (except that the Healthcare Fund will invest more than 25% of its
total assets in securities of issuers conducting their principal business
activities in healthcare industries). (Proposal 3.G).
8. Invest in commodities or commodity futures contracts, provided that this
limitation shall not prohibit the purchase or sale by a Fund of forward foreign
currency exchange contracts, financial futures contracts and options on
financial
D-4
futures contracts, foreign currency futures contracts, and options on
securities, foreign currencies and securities indices, as permitted by a Fund's
Prospectus. (Proposal 3.H).
9. Pledge, mortgage or hypothecate its assets other than to secure
borrowings permitted by its fundamental investment limitation on borrowing
(collateral arrangements with respect to margin requirements for options and
futures transactions are not deemed to be pledges or hypothecations for this
purpose). (Proposal 3.I).
10. Make investments for the purpose of exercising control or management.
(Proposal 3.K).
11. Purchase securities on margin, or make short sales of securities, except
for the use of short-term credit necessary for the clearance of purchases and
sales of portfolio securities, but a Fund may make margin deposits in
connection with transactions in options, futures and options of futures.
(Proposal 3.O).
Fundamental Investment Restrictions of Series of the Company:
Munder Future Technology Fund
Munder International Bond Fund
Munder Micro-Cap Equity Fund
Munder MidCap Select Fund
Munder Multi-Season Growth Fund
Munder NetNet Fund
Munder Power Plus Fund
Munder Real Estate Equity Investment Fund
Munder Small-Cap Value Fund
The Funds may not:
1. (For each Fund except the International Bond Fund and the Future
Technology Fund) with respect to 75% of a Fund's assets, invest more than 5% of
a Fund's assets (taken at market value at the time of purchase) in the
outstanding securities of any single issuer or own more than 10% of the
outstanding voting securities of any one issuer, in each case other than
securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. (Proposal 3.A).
2. Borrow money or issue senior securities (as defined in the 1940 Act)
except that the Funds may borrow (i) for temporary purposes in amounts not
exceeding 5% of its total assets and (ii) to meet redemption requests, in
amounts (when aggregated with amounts borrowed under clause (i)) not exceeding
33 1/3% of its total assets. (Proposals 3.B & 3.C).
3. Underwrite securities of other issuers, except insofar as a Fund may be
deemed an underwriter under the 1933 Act in selling portfolio securities.
(Proposal 3.D).
D-5
4. (For each Fund except the Real Estate Equity Investment Fund) purchase or
sell real estate or any interest therein, including interests in real estate
limited partnerships, except securities issued by companies (including real
estate investment trusts) that invest in real estate or interests therein. The
Real Estate Equity Investment Fund may not buy or sell real estate; however,
this prohibition does not apply to the purchase or sale of (i) securities which
are secured by real estate, (ii) securities representing interests in real
estate, (iii) securities of companies operating in the real estate industry
including real estate investment trusts, and (iv) the holding and sale of real
estate acquired as a result of the ownership of securities. (Proposal 3.E).
5. Make loans of securities to other persons in excess of 25% of a Fund's
total assets; provided the Funds may invest without limitation in short-term
debt obligations (including repurchase agreements) and publicly distributed
debt obligations. (Proposal 3.F).
6. Invest more than 25% of its total assets in any one industry (i) provided
that securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities are not considered to represent industries; (ii) except that
the Real Estate Equity Investment Fund will invest more than 25% of its assets
in securities of issuers in the real estate industry; (iii) except that the
NetNet Fund will invest more than 25% of its assets in securities of companies
engaged in the research, design, development, manufacturing or distribution of
products, processes or services for use with the Internet or Intranet related
businesses; (iv) except that the Future Technology Fund will invest more than
25% of its total assets in the technology industry; and (v) except that the
Power Plus Fund will invest more than 25% of its assets in securities of
companies that are primarily engaged in non-regulated energy and power
activities. (Proposal 3.G).
7. Invest in commodities or commodity futures contracts, provided that this
limitation shall not prohibit the purchase or sale by the Future Technology,
MidCap Select, Multi-Season, NetNet, Real Estate, and International Bond Funds
of forward currency contracts, financial futures contracts and options on
financial futures contracts, and options on securities and on securities,
foreign currencies and on securities indices, as permitted by each Fund's
prospectus. (Proposal 3.H).
8. Pledge, mortgage or hypothecate its assets other than to secure
borrowings permitted by its fundamental investment limitation on borrowing
(collateral arrangements with respect to margin requirements for options and
futures transactions are not deemed to be pledges or hypothecations for this
purpose). (Proposal 3.I).
9. Make investments for the purpose of exercising control or management.
(Proposal 3.K).
D-6
10. Purchase securities on margin, or make short sales of securities, except
for the use of short-term credit necessary for the clearance of purchases and
sales of portfolio securities, but the Funds may make margin deposits in
connection with transactions in options, futures and options on futures.
(Proposal 3.O).
Fundamental Investment Restrictions of the Series of the Trust:
Munder Balanced Fund
Munder Large-Cap Value Fund
Munder Index 500 Fund
Munder International Equity Fund
Munder Small Company Growth Fund
Munder Bond Fund
Munder Intermediate Bond Fund
Munder U.S. Government Income Fund
Munder Michigan Tax-Free Bond Fund
Munder Tax-Free Bond Fund
Munder Tax-Free Short-Intermediate Bond Fund
Munder Cash Investment Fund
Munder Tax-Free Money Market Fund
Munder U.S. Treasury Money Market Fund
These Funds may not:
1. Purchase securities of any one issuer (other than securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities or
certificates of deposit for any such securities) if more than 5% of the value
of a Fund's total assets (taken at current value) would be invested in the
securities of such issuer, or more than 10% of the issuer's outstanding voting
securities would be owned by the Fund or the Trust, except that (a) with
respect to each Fund, other than the Michigan Tax-Free Bond Fund and the
Tax-Free Short-Intermediate Bond Fund, up to 25% of the value of the Fund's
total assets (taken at current value) may be invested without regard to these
limitations and (b) with respect to the Michigan Tax-Free Bond Fund and the
Tax-Free Short-Intermediate Bond Fund, up to 50% of the value of the Fund's
total assets may be invested without regard to these limitations so long as no
more than 25% of the value of the Fund's total assets are invested in the
securities of any one issuer. For purposes of this limitation, a security is
considered to be issued by the entity (or entities) whose assets and revenues
back the security. A guarantee of a security is not deemed to be a security
issued by the guarantor when the value of all securities issued and guaranteed
by the guarantor, and owned by a Fund, does not exceed 10% of the value of a
Fund's total assets. (Proposal 3.A).
2. Borrow money or issue senior securities except that each Fund may borrow
from banks and enter into reverse repurchase agreements for temporary purposes
in amounts up to one-third of the value of its total assets at the time of such
D-7
borrowing; or mortgage, pledge or hypothecate any assets, except in connection
with any such borrowing and then in amounts not in excess of one-third of the
value of a Fund's total assets at the time of such borrowing. No Fund will
purchase securities while its aggregate borrowings (including reverse
repurchase agreements and borrowing from banks) in excess of 5% of its total
assets are outstanding. Securities held in escrow or separate accounts in
connection with a Fund's investment practices are not deemed to be pledged for
purposes of this limitation. (Proposals 3.B & 3.C).
3. Act as an underwriter of securities within the meaning of the Securities
Act of 1933, as amended ("1933 Act"), except to the extent that the purchase of
obligations directly from the issuer thereof, or the disposition of securities,
in accordance with a Fund's investment objective, policies and limitations may
be deemed to be underwriting. (Proposal 3.D).
4. Purchase or sell real estate, except that each Fund may purchase
securities of issuers which deal in real estate and may purchase securities
which are secured by interests in real estate. (Proposal 3.E).
5. Make loans, except that each Fund may purchase and hold debt instruments
(whether such instruments are part of a public offering or privately
negotiated), may enter into repurchase agreements and may lend portfolio
securities in accordance with its investment objective and policies. (Proposal
3.F).
6. Purchase any securities which would cause 25% or more of the value of a
Fund's total assets at the time of purchase to be invested in the securities of
one or more issuers conducting their principal business activities in the same
industry, provided that (a) there is no limitation with respect to (i)
instruments that are issued or guaranteed by the United States, any state,
territory or possession of the United States, the District of Columbia or any
of their authorities, agencies, instrumentalities or political subdivisions,
(ii) with respect to the Money Market Funds only, instruments issued by
domestic branches of U.S. banks and (iii) repurchase agreements secured by the
instruments described in clause (i) and, with respect to the Money Market
Funds, clause (ii); (b) wholly-owned finance companies will be considered to be
in the industries of their parents if their activities are primarily related to
financing the activities of the parents; and (c) utilities will be divided
according to their services, for example, gas, gas transmission, electric and
gas, electric and telephone will each be considered a separate industry. For
purposes of this limitation, a security is considered to be issued by the
entity (or entities) whose assets and revenues back the security. A guarantee
of a security is not deemed to be a security issued by the guarantor when the
value of all securities issued and guaranteed by the guarantor, and owned by a
Fund, does not exceed 10% of the value of a Fund's total assets. (Proposal 3.G).
D-8
7. Purchase or sell commodity contracts, or invest in oil, gas or mineral
exploration or development programs, except that each Fund may, to the extent
appropriate to its investment policies, purchase publicly traded securities of
companies engaging in whole or in part in such activities, may enter into
futures contracts and related options, and may engage in transactions in
securities on a when-issued or forward commitment basis, and except that each
Equity Fund and Bond Fund may enter into forward currency contracts in
accordance with its investment objectives and policies. (Proposal 3.H & 3.N).
8. Mortgage, pledge or hypothecate any assets, except in connection with
borrowing and then in amounts not in excess of one-third of the value of a
Fund's total assets at the time of such borrowing. (Proposal 3.I).
9. Purchase securities of companies for the purpose of exercising control.
(Proposal 3.K).
10. Acquire any other investment company or investment company security
except in connection with a merger, consolidation, reorganization or
acquisition of assets or where otherwise permitted by the 1940 Act. (Proposal
3.L).
11. Write or sell put options, call options, straddles, spreads, or any
combination thereof except for transactions in options on securities,
securities indices, futures contracts, options on futures contracts and
transactions in securities on a when-issued or forward commitment basis, and
except that each Equity and Bond Fund may enter into forward currency contracts
in accordance with its investment objectives and policies. Notwithstanding the
above, the Tax-Free Short-Intermediate Bond Fund may not write or purchase
options, including puts, calls, straddles, spreads, or any combination thereof.
(Proposal 3.M).
12. Purchase securities on margin, make short sales of securities or
maintain a short position, except that (a) this investment limitation shall not
apply to a Fund's transactions in futures contracts and related options, a
Fund's sale of securities short against the box or a Fund's transactions in
securities on a when-issued or forward commitment basis, and (b) a Fund may
obtain short-term credit as may be necessary for the clearance of purchases and
sales of portfolio securities. (Proposal 3.O).
The Tax-Free Short-Intermediate Bond Fund also may not:
1. Participate on a joint or joint and several basis in any securities
trading account. (Proposal 3.Q).
2. Purchase or retain securities of any issuer if the officers or Trustees
of the Trust or its Advisor who own beneficially more than one-half of 1% of
the securities of such issuer together own beneficially more than 5% of such
securities. (Proposal 3.R).
3. Invest more than 10% of its total assets in the securities of issuers
that together with any predecessors have a record of less than three years
continuous operation. (Proposal 3.S).
D-9
Exhibit E
Executive Officers and Directors of the Advisor and the Sub-Advisor
Munder Capital Management
Name and Address* Principal Occupation
----------------- ----------------------------------------------
Munder Group LLC Partner
WAM Holdings, Inc. Partner
WAM Holdings II, Inc. Partner Partner
James C. Robinson Chairman and Chief Executive Officer
Enrique Chang President and Chief Investment Officer
Elyse G. Essick Vice President and Chief Marketing Officer
Peter K. Hoglund Chief Administrative Officer
Anne K. Kennedy Vice President and Director of Portfolio
Management
Stephen J. Shenkenberg Executive Vice President, General Counsel,
Chief Compliance Officer and Secretary
Sharon E. Fayolle Vice President and Director of Cash Management
Peter G. Root Vice President and Chief Investment Officer,
Fixed Income
Todd B. Johnson Chief Executive Officer of World Asset
Management, a division of Munder Capital
Management
Paul T. Cook Director, Technology Investing
Beth Obear Director of Human Resources
- --------
.. The address for each officer and director is 480 Pierce Street, Birmingham,
Michigan 48009.
Framlington Overseas Investment Management Limited
Name and Address* Principal Occupation
----------------- -----------------------
Jean-Luc Schilling Managing Director
Neil Birrell Director
Warren J. Colman Operations Director
Michael A. Vogel Group Managing Director
- --------
.. The address for each officer and director is 155 Bishopsgate, London, England
EC2M 3XJ.
E-1
Exhibit F
Principal Shareholders of the Funds
Control Persons and Principal Holders of Securities. As of February 12, 2003
the following person(s) owned of record or were known by the Funds to own
beneficially 5% or more of any class of the Funds' shares.
Percentage of Class
Name of Fund and Class Name and Address Outstanding (%)
- ---------------------- ---------------- -------------------
Cash Investment Fund--Class Y Calhoun & Co 97.150
C/O Comerica Bank Detroit
Attn Vicky Froehlich
P O Box 75000
Detroit MI 48275-3455
Tax-Free Money Market Fund--Class Y Calhoun & Co 94.835
C/O Comerica Bank Detroit
Attn Vicky Froehlich
P O Box 75000
Detroit MI 48275-3455
U.S. Treasury Money Market Fund--Class Y Calhoun & Co 100.000
C/O Comerica Bank Detroit
Attn Vicky Froehlich
P O Box 75000
Detroit MI 48275-3455
Small Company Growth Fund--Class Y Calhoun & Co 90.317
C/O Comerica Bank Detroit
Attn Vicky Froehlich
P O Box 75000
Detroit MI 48275-3455
Index 500 Fund--Class Y Calhoun & Co 92.496
C/O Comerica Bank Detroit
Attn Vicky Froehlich
P O Box 75000
Detroit MI 48275-3455
International Equity Fund--Class Y Calhoun & Co 92.425
C/O Comerica Bank Detroit
Attn Vicky Froehlich
P O Box 75000
Detroit MI 48275-3455
Intermediate Bond Fund--Class Y Calhoun & Co 97.224
C/O Comerica Bank Detroit
Attn Vicky Froehlich
P O Box 75000
Detroit MI 48275-3455
Bond Fund--Class Y Calhoun & Co 99.431
C/O Comerica Bank Detroit
Attn Vicky Froehlich
P O Box 75000
Detroit MI 48275-3455
F-1
Percentage of Class
Name of Fund and Class Name and Address Outstanding (%)
- ---------------------- ---------------- -------------------
Tax-Free Short-Intermediate Bond--Class Y Calhoun & Co 76.406
C/O Comerica Bank Detroit
Attn Vicky Froehlich
P O Box 75000
Detroit MI 48275-3455
Tax-Free Short-Intermediate Bond--Class Y Marc Feldman 11.498
Virginia Feldman Jtwros
P O Box G
Philmont, NY 12565
Tax-Free Short-Intermediate Bond--Class Y Joan M Linville Ttee 11.223
Joan M Linville Living Trust
U/A Dtd 03/22/2001
7896 Winfield Dr Sw
Brighton MI 48116
Balanced Fund--Class Y Calhoun & CO 33.866
C/O Comerica Bank Detroit
Attn Mutual Fund Funds Unit Mc 3446
Po Box 75000
Detroit MI 48275-3446
Balanced Fund--Class Y Charter Township Of Clinton 24.617
Public Employee Health Care Fund
40700 Romeo Plank
Clinton Township MI 48038
Balanced Fund--Class Y Dingle & CO 19.286
C/O Comerica Bank
Attn: Mutual Fund Unit / Mc3446
P.O. Box 75000 / Mc3446
Detroit, MI 48275
Balanced Fund--Class Y Comerica Bank Fbo 11.822
Henry Ford Hlth Sys Retire Svgs
Attn: Mutual Fund Unit / Mc3446
P.O. Box 75000 / Mc3446
Detroit, MI 48275
Michigan Tax-Free Bond Fund--Class Y Calhoun & CO 63.765
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
Po Box 75000
Detroit MI48275-3446
Michigan Tax-Free Bond Fund--Class Y Kiki Nick 29.628
591 Renaud
Grosse Pointe Woods MI 48236
Tax-Free Bond Fund--Class Y Calhoun & Co 86.438
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
P.O. Box 75000
Detroit MI 48275-3446
Tax-Free Bond Fund--Class Y Maxine M Marshke 13.045
11387 Spens Lane
Lachine MI 49753-0000
F-2
Percentage of Class
Name of Fund and Class Name and Address Outstanding (%)
- ---------------------- ---------------- -------------------
Large-Cap Value Fund--Class Y Calhoun & Co 81.051
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Large-Cap Value Fund--Class Y Munder Fund Of Funds 15.973
Attn Dawn Mckendrick
Munder Capital Management
480 Pierce Street
Birmingham MI 48009
U.S. Government Income Fund--Class Y Calhoun & Co 99.174
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Multi-Season Growth Fund--Class Y Calhoun & Co 80.508
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Multi-Season Growth Fund--Class Y Munder Fund Of Funds 14.880
Attn Dawn Mckendrick
Munder Capital Management
480 Pierce Street
Birmingham MI 48009
Real Estate Equity Investment--Class Y Calhoun & Co 79.822
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
Po Box 75000
Detroit MI 48275-3446
Real Estate Equity Investment--Class Y Fifth Third Bank Ttee Fbo 7.711
Shape Corp Ret Trust 32
16-2-8627895
PO Box 630074
Cincinnati OH 45263
International Bond Fund--Class Y Calhoun & Co 98.631
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Net Net Fund--Class Y Calhoun & Co 31.410
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Net Net Fund--Class Y Sterling Trust Co Ttee 16.151
Fbo Munder Capital Management
1380 Lawrence St Ste 1400
Denver Co 80204
F-3
Percentage of Class
Name of Fund and Class Name and Address Outstanding (%)
- ---------------------- ---------------- -------------------
Net Net Fund--Class Y Highlands Company Of Delaware 9.421
2301 Mitchell Park Dr
Petoskey MI 49770
Net Net Fund--Class Y Mac & Co A/C Vhsf3001102 7.102
Mutual Fund Ops--Tc
PO Box 3198
Pittsburgh Pa 15230
Micro-Cap Equity Fund--Class Y Calhoun & Co 41.695
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Micro-Cap Equity Fund--Class Y Fifth Third Bank Ttee Fbo 16.414
Shape Corp Ret Trust 32
16-2-8627895
PO Box 630074
Cincinnati OH 45263
Micro-Cap Equity Fund--Class Y Munder Fund Of Funds 9.416
Attn Dawn Mckendrick
Munder Capital Management
480 Pierce Street
Birmingham MI 48009
Micro-Cap Equity Fund--Class Y John P Richardson Gen Prtnr 7.591
Richardson Family Limited Prtnrshp
3452 Balfour Dr
Troy MI 48084
Micro-Cap Equity Fund--Class Y Sterling Trust Co Ttee 5.579
Fbo Munder Capital Management
1380 Lawrence St Ste 1400
Denver CO 80204
Small-Cap Value Fund--Class Y Calhoun & Co 68.507
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Small-Cap Value Fund--Class Y Munder Fund Of Funds 8.977
Attn Dawn Mckendrick
Munder Capital Management
480 Pierce Street
Birmingham MI 48009
Small-Cap Value Fund--Class Y Fifth Third Bank Ttee Fbo 7.880
Shape Corp Ret Trust 32
16-2-8627895
PO Box 630074
Cincinnati OH 45263
Small-Cap Value Fund--Class Y John P Richardson Gen Prtnr 6.376
Richardson Family Limited Prtnrshp
3452 Balfour Dr
Troy MI 48084
F-4
Percentage of Class
Name of Fund and Class Name and Address Outstanding (%)
- ---------------------- ---------------- -------------------
MidCap Select Fund--Class Y Calhoun & Co 60.500
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
MidCap Select Fund--Class Y Munder Fund Of Funds 22.600
Attn Dawn Mckendrick
Munder Capital Management
480 Pierce Street
Birmingham MI 48009
MidCap Select Fund--Class Y Fifth Third Bank Ttee Fbo 6.995
Shape Corp Ret Trust 32
16-2-8627895
PO Box 630074
Cincinnati OH 45263
Future Technology Fund--Class Y Calhoun & Co 40.226
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Future Technology Fund--Class Y Munder Fund Of Funds 33.120
Attn Dawn Mckendrick
Munder Capital Management
480 Pierce Street
Birmingham MI 48009
Future Technology Fund--Class Y Fifth Third Bank Ttee Fbo 9.028
Shape Corp Ret Trust 32
16-2-8627895
PO Box 630074
Cincinnati OH 45263
Future Technology Fund--Class Y Sterling Trust Co Ttee 5.454
Fbo Munder Capital Management
1380 Lawrence St Ste 1400
Denver CO 80204
Power Plus Fund--Class Y Munder Fund Of Funds 71.245
Attn Dawn Mckendrick
Munder Capital Management
480 Pierce Street
Birmingham MI 48009
Power Plus Fund--Class Y Richard A Giesen 9.619
1070 N Elm Tree Rd
Lake Forest IL 60045-0000
Power Plus Fund--Class Y Sterling Trust Co Ttee 5.271
Fbo Munder Capital Management
1380 Lawrence St Ste 1400
Denver CO 80204
F-5
Percentage of Class
Name of Fund and Class Name and Address Outstanding (%)
- ---------------------- ---------------- -------------------
Fund Of Funds--Class Y Calhoun & Co 98.962
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
International Growth Fund--Class Y Calhoun & Co 90.529
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
International Growth Fund--Class Y Fifth Third Bank Ttee Fbo 5.334
Shape Corp Ret Trust 32
16-2-8627895
PO Box 630074
Cincinnati OH 45263
Emerging Markets Fund--Class Y Calhoun & Co 90.200
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Healthcare Fund--Class Y Calhoun & Co 81.588
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Healthcare Fund--Class Y Sterling Trust Co Ttee 5.946
Fbo Munder Capital Management
1380 Lawrence St Ste 1400
Denver CO 80204
Cash Investment Fund--Class K Calhoun & Co 99.945
C/O Comerica Bank Detroit
Attn Vicky Froehlich
P O Box 75000
Detroit MI 48275-3455
Tax-Free Money Market Fund--Class K Calhoun & Co 99.903
C/O Comerica Bank Detroit
Attn Vicky Froehlich
P O Box 75000
Detroit MI 48275-3455
U.S. Treasury Money Market Fund--K Calhoun & Co 100.000
C/O Comerica Bank Detroit
Attn Vicky Froehlich
P O Box 75000
Detroit MI 48275-3455
Small Company Growth Fund--Class K Calhoun & Co 99.155
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
Po Box 75000
Detroit MI 48275-3446
F-6
Percentage of Class
Name of Fund and Class Name and Address Outstanding (%)
- ---------------------- ---------------- -------------------
Index 500 Fund--Class K Calhoun & Co 99.847
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
International Equity Fund--Class K Calhoun & Co 99.815
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Intermediate Bond Fund--Class K Calhoun & Co 99.697
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Bond Fund--Class K Calhoun & Co 99.810
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Tax-Free Short-Intermediate Bond--Class K Calhoun & Co 99.608
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Balanced Fund--Class K Calhoun & Co 99.219
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Michigan Tax-Free Bond Fund--Class K Calhoun & Co 99.986
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Tax-Free Bond Fund--Class K Calhoun & Co 98.863
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Large-Cap Value Fund--Class K Calhoun & Co 99.879
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
U.S. Government Income Fund--Class K Calhoun & Co 99.802
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
F-7
Percentage of Class
Name of Fund and Class Name and Address Outstanding (%)
- ---------------------- ---------------- -------------------
Multi-Season Growth Fund--Class K Calhoun & Co 97.729
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Real Estate Equity Investment--Class K Calhoun & Co 100.000
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
International Bond Fund--Class K Calhoun & Co 99.965
C/O Comerica Bank
Attn: Mutual Fund Unit / Mc3446
PO Box 75000 / Mc3446
Detroit, MI 48275
Net Net Fund--Class K Calhoun & Co 99.044
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Liquidity Plus Money Market Fund National Financial Services Corp 99.893
For The Exclusive Benefit Of
Our Customers
Attn: Mutual Funds 5th Fl
PO Box 3908 Church Street Station
New York NY 10008-3908
Micro-Cap Equity Fund--Class K Calhoun & Co 97.216
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Small-Cap Value Fund--Class K Calhoun & Co 100.000
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
MidCap Select Fund--Class K Calhoun & Co 100.000
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Future Technology Fund--Class K Calhoun & Co 100.000
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Power Plus Fund--Class K Calhoun & Co 90.990
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
F-8
Percentage of Class
Name of Fund and Class Name and Address Outstanding (%)
- ---------------------- ---------------- -------------------
Power Plus Fund--Class K Munder Capital Mgmt 8.992
Attn Kim Winek
480 Pierce St
Birmingham MI 48103
Institutional S&P MidCap Index--Class K Calhoun & Co 100.000
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Institutional S&P SmallCap Index--Class K Calhoun & Co 99.880
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Institutional Govt Money Market--Class K Funds Distributor Inc 100.000
Attn Accounting Dept
60 State Street Suite 1300
Boston MA 02109
International Growth Fund--Class K Calhoun & Co 100.000
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Emerging Markets Fund--Class K Calhoun & Co 99.996
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Healthcare Fund--Class K Calhoun & Co 65.776
C/O Comerica Bank
Attn: Mutual Fund Unit / Mc3446
PO Box 75000 / Mc3446
Detroit, MI 48275
Healthcare Fund--Class K Sema and Co 18.347
93002521
12 E 49st 41fl
New York, NY 10017
Healthcare Fund--Class K Calhoun & Co 10.271
C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Cash Investment Fund--Class A National Financial Services Corp 83.568
For The Exclusive Benefit Of
Our Customers
Attn: Mutual Funds 5th Fl
P O Box 3908 Church Street Station
New York NY 10008-3908
F-9
Percentage of Class
Name of Fund and Class Name and Address Outstanding (%)
- ---------------------- ---------------- -------------------
Tax-Free Money Market Fund--Class A National Financial Services Corp 97.545
For The Exclusive Benefit Of
Our Customers
Attn: Mutual Funds 5th Fl
P O Box 3908 Church Street Station
New York NY 10008-3908
U.S. Treasury Money Market Fund--A National Financial Services Corp 91.301
For The Exclusive Benefit Of
Our Customers
Attn: Mutual Funds 5th Fl
PO Box 3908 Church Street Station
New York NY 10008-3908
Small Company Growth Fund--Class A Merrill Lynch Pierce Fenner & Smith Fbo 18.805
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Small Company Growth Fund--Class A Nfsc Febo # 0xa-624764 7.132
Nfsc/Fmtc Ira
Fbo Martin E Laker
2120 Bloomfield Woods Ct
West Bloomfield MI 48323
Index 500 Fund--Class A Merrill Lynch Pierce Fenner & Smith Fbo 18.399
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
International Equity Fund--Class A Lasalle Bank National Association 14.300
Omnibus 76
PO Box 1443
Chicago IL 60690-1443
International Equity Fund--Class A Merrill Lynch Pierce Fenner & Smith Fbo 7.871
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Intermediate Bond Fund--Class A Merrill Lynch Pierce Fenner & Smith Fbo 7.971
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Bond Fund--Class A Circle Trust Company Co Cust Fbo 29.617
Goldk Omnibus Account
Metro Center
One Station Place
Stamford CT 06902
Bond Fund--Class A Merrill Lynch Pierce Fenner & Smith Fbo 19.700
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
F-10
Percentage of Class
Name of Fund and Class Name and Address Outstanding (%)
- ---------------------- ---------------- -------------------
Bond Fund--Class A Painewebber For The Benefit Of 6.156
Comerica Bank,Ttee Emory Ford
Residuary T/U/W Dtd 7/31/70
(Mutual Fund Acct)
500 Woodward Ave Mc 3300
Detroit MI 48226-3416
Tax-Free Short-Intermediate Bond--Class A Merrill Lynch Pierce Fenner & Smith Fbo 57.391
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Tax-Free Short-Intermediate Bond--Class A David M Lietzke & 9.314
Nancy K Lietzke Ttees
The Lietzke Family Trust
U/A Dtd 05/26/1993
21847 Villa Oaks Ln
Saratoga CA 95070
Balanced Fund--Class A Merrill Lynch Pierce Fenner & Smith Fbo 20.955
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Balanced Fund--Class A Community Bank Na Cust 15.710
Fbo Hanys 401k Plan
1500 Genesee St
Utica NY 13502
Balanced Fund--Class A Wells Fargo Bank West Na Cust 5.044
Fbo County Of Tulare
Deferred Compensation Plan
C/O Great-West
8515 E Orchard Rd Apt 2t2
Englewood CO 80111-5037
Michigan Tax-Free Bond Fund--Class A Robert W Baird & Co. Inc. 17.655
A/C 1998-2472
777 East Wisconsin Avenue
Milwaukee WI 53202-5391
Michigan Tax-Free Bond Fund--Class A Suzanne Mckeown 5.334
9669 Steep Hollow Dr
White Lake MI 48386
Michigan Tax-Free Bond Fund--Class A Nfsc Febo # 0rj-333751 5.268
Timothy Lowell Westbay Ttee
Timothy Lowell Westbay Rev
Living Tr, U/A 3/8/83
46502 Darwood Ct.
Plymouth MI 48170
Tax-Free Bond Fund--Class A Merrill Lynch Pierce Fenner & Smith Fbo 24.030
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
F-11
Percentage of Class
Name of Fund and Class Name and Address Outstanding (%)
- ---------------------- ---------------- -------------------
Tax-Free Bond Fund--Class A Ftc & Co 15.941
Attn: Datalynx # 00540
PO Box 173736
Denver, CO 80217-3736
Large-Cap Value Fund--Class A Merrill Lynch Pierce Fenner & Smith Fbo 9.275
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
U.S. Government Income Fund--Class A Merrill Lynch Pierce Fenner & Smith Fbo 7.352
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Multi-Season Growth Fund--Class A Merrill Lynch Pierce Fenner & Smith Fbo 31.165
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Real Estate Equity Investment--Class A Merrill Lynch Pierce Fenner & Smith Fbo 26.365
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Real Estate Equity Investment--Class A Nfsc Febo # Cht-048763 6.738
Gordon B & Hilda B Lowell Ttee
Lowell-Kangas & Assoc Of St
Louis P/S Tr, U/A 12/6/72
2055 North Ballas Road
St Louis MO 63131
Real Estate Equity Investment--Class A Industricorp & Co 5.242
Fbo 1333354006
312 Central Ave Se Ste 508
Minneapolis MN 55414
International Bond Fund--Class A H&R Block Financial Advisors 43.148
A/C 8534-1024
The Dime Building
719 Griswold Street, Ste 1700
Detroit, MI 48226
International Bond Fund--Class A Wexford Clearing Services Corp Fbo 9.925
Strategic Alliance Ptrns, Llc
30 S Wacker Dr Ste 1920
Chicago IL 60606-7400
International Bond Fund--Class A Wexford Clearing Services Corp Fbo 8.746
Caffyn Family Ltd. E
Custom House
25 Eden Quay
Dublin 1
Ireland
F-12
Percentage of Class
Name of Fund and Class Name and Address Outstanding (%)
- ---------------------- ---------------- -------------------
International Bond Fund--Class A Wexford Clearing Services Corp Fbo 7.300
Reynolds Family Ltd. E
Custom House
25 Eden Quay
Dublin 1
Ireland
International Bond Fund--Class A Bny Clearing Services Llc 5.241
A/C 2131-8790
Cusco 401 Ltd Iv
111 East Kilbourn Avenue
Milwaukee WI 53202
Net Net Fund--Class A Merrill Lynch Pierce Fenner & Smith Fbo 17.163
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Micro-Cap Equity Fund--Class A Merrill Lynch Pierce Fenner & Smith Fbo 12.278
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Micro-Cap Equity Fund--Class A Charles Schwab & Co Inc 11.052
Special Custody Acct For The
Benefit Of Customers
Attn Mutual Funds
101 Montgomery Street
San Francisco CA 94104
Small-Cap Value Fund--Class A Merrill Lynch Pierce Fenner & Smith Fbo 12.477
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Small-Cap Value Fund--Class A Circle Trust Company Co Cust Fbo 7.533
Goldk Omnibus Account
Metro Center
One Station Place
Stamford CT 06902
Small-Cap Value Fund--Class A Carn & Co #02133201 5.310
Fbo Kasle Steel Corp Svgs Plan
Attn: Mutual Funds-Star
PO Box 96211
Washington, DC 20090-6211
MidCap Select Fund--Class A Sterling Trust Co Cust 8.988
Fbo Dynamicsoft Inc
1380 Lawrence St Ste 1400
Denver CO 80204
MidCap Select Fund--Class A Security Trust Co Ttee Fbo 7.056
Golden State Foods Corp Salaried
401 K Savings & Retirement Plan
2390 East Camelback Rd Ste 240
Phoenix AZ 85016
F-13
Percentage of Class
Name of Fund and Class Name and Address Outstanding (%)
- ---------------------- ---------------- -------------------
MidCap Select Fund--Class A Merrill Lynch Pierce Fenner & Smith Fbo 6.541
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Future Technology Fund--Class A Merrill Lynch Pierce Fenner & Smith Fbo 9.465
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Power Plus Fund--Class A Merrill Lynch Pierce Fenner & Smith Fbo 21.080
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Fund Of Funds--Class A Merrill Lynch Pierce Fenner & Smith Fbo 14.814
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Fund Of Funds--Class A Bradley D Host 9.300
Laura W Host Jtwros
639 Puritan
Birmingham MI 48009-4635
Fund Of Funds--Class A Sterling Trust Co Cust 7.065
Fbo Ohio State Home Svcs Inc
1380 Lawrence St Ste 1400
Denver CO 80204
International Growth--Class A Sarah M Repel 10.199
543 Sheridan Rd
Evanston IL 60202-0000
International Growth--Class A E Curtis Matthews Jr 9.476
1420 Davis St
Evanston IL 60201
International Growth--Class A Linda H Matthews Cust 7.188
E Curtis Matthews Iii Utma/Il
1420 Davis St
Evanston IL 60201-4008
International Growth--Class A Linda H Matthews Cust 5.219
Clark W Matthews Utma/Il
1420 Davis St
Evanston IL 60201-4008
Emerging Markets Fund--Class A Merrill Lynch Pierce Fenner & Smith Fbo 18.043
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
F-14
Percentage of Class
Name of Fund and Class Name and Address Outstanding (%)
- ---------------------- ---------------- -------------------
Emerging Markets Fund--Class A Charles Schwab & Co Inc 7.076
Special Custody Acct For The
Benefit Of Customers
Attn Mutual Funds
101 Montgomery Street
San Francisco CA 94104
Healthcare Fund--Class A Merrill Lynch Pierce Fenner & Smith Fbo 18.321
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Small Company Growth Fund--Class B Merrill Lynch Pierce Fenner & Smith Fbo 52.931
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Index 500 Fund--Class B Merrill Lynch Pierce Fenner & Smith Fbo 30.327
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
International Equity Fund--Class B Merrill Lynch Pierce Fenner & Smith Fbo 30.192
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Intermediate Bond Fund--Class B Merrill Lynch Pierce Fenner & Smith Fbo 46.536
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Bond Fund--Class B Merrill Lynch Pierce Fenner & Smith Fbo 38.186
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Tax-Free Short-Intermediate Bond Fund-- Merrill Lynch Pierce Fenner & Smith Fbo 57.010
Class B The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Balanced Fund--Class B Merrill Lynch Pierce Fenner & Smith Fbo 25.187
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Michigan Tax-Free Bond Fund--Class B Merrill Lynch Pierce Fenner & Smith Fbo 26.412
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
F-15
Percentage of Class
Name of Fund and Class Name and Address Outstanding (%)
- ---------------------- ---------------- -------------------
Michigan Tax-Free Bond Fund--Class B Pershing Llc 12.558
P.O. Box 2052
Jersey City NJ 07303-9998
Michigan Tax-Free Bond Fund--Class B Salomon Smith Barney Inc. 8.727
122308144
333 West 34th St--3rd Floor
New York NY 10001
Tax-Free Bond Fund--Class B Merrill Lynch Pierce Fenner & Smith Fbo 35.110
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Tax-Free Bond Fund--Class B Prudential Securities Inc. Fbo 10.994
Helen C Cannon Ttee
Parker Family Trust
Ua Dtd 04/22/85
605 Lacy Ln
Las Vegas NV 89107-4453
Tax-Free Bond Fund--Class B First Clearing Corporation 7.224
A/C 8956-9080
Dorothy A Zahn
547 Sylvan Road
River Vale NJ 07675
Large-Cap Value Fund--Class B Merrill Lynch Pierce Fenner & Smith Fbo 44.094
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
U.S. Government Income Fund--Class B Merrill Lynch Pierce Fenner & Smith Fbo 41.343
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Multi-Season Growth Fund--Class B Merrill Lynch Pierce Fenner & Smith Fbo 30.521
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Real Estate Equity Investment--Class B Merrill Lynch Pierce Fenner & Smith Fbo 32.048
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
International Bond Fund--Class B Merrill Lynch Pierce Fenner & Smith Fbo 12.109
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
F-16
Percentage of Class
Name of Fund and Class Name and Address Outstanding (%)
- ---------------------- ---------------- -------------------
International Bond Fund--Class B Rbc Dain Rauscher Fbo 6.570
Boog-Scott Family Ltd Partnership
John Boog-Scott Gen'l Partner
4232 Danmire
Richardson TX 75082
International Bond Fund--Class B First Clearing Corporation 6.560
A/C 8195-2582
Roy Wedge
4016 Champions Drive
Lufkin TX 75901-7755
International Bond Fund--Class B Morgan Keegan & Company, Inc. 5.305
Fbo Morgan Keegan C/F
William Michael Cox Ira
4487 Old Country Way
Snellville GA 30039
Net Net Fund--Class B Merrill Lynch Pierce Fenner & Smith Fbo 24.271
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Micro-Cap Equity Fund--Class B Merrill Lynch Pierce Fenner & Smith Fbo 25.675
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Small-Cap Value Fund--Class B Merrill Lynch Pierce Fenner & Smith Fbo 38.836
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Midcap Select Fund--Class B Merrill Lynch Pierce Fenner & Smith Fbo 26.095
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Future Technology Fund--Class B Merrill Lynch Pierce Fenner & Smith Fbo 19.708
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Power Plus Fund--Class B Merrill Lynch Pierce Fenner & Smith Fbo 33.267
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Fund Of Funds--Class B Merrill Lynch Pierce Fenner & Smith Fbo 34.895
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
F-17
Percentage of Class
Name of Fund and Class Name and Address Outstanding (%)
- ---------------------- ---------------- -------------------
Fund Of Funds--Class B Sterling Trust Company Ttee Fbo 7.335
Dennis L Pesek Acct# 019320
PO Box 2526
Waco TX 76702-2526
International Growth--Class B Merrill Lynch Pierce Fenner & Smith Fbo 22.034
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
International Growth--Class B First Clearing Corporation 5.541
A/C 7504-0828
Martha Sewell (Ira)
Fcc As Custodian
2857 Plaza Rojo
Santa Fe NM 87507-6521
Emerging Markets Fund--Class B Merrill Lynch Pierce Fenner & Smith Fbo 29.222
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Healthcare Fund--Class B Merrill Lynch Pierce Fenner & Smith Fbo 29.374
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Small Company Growth Fund--Class C Merrill Lynch Pierce Fenner & Smith Fbo 38.627
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
International Equity Fund--Class C Merrill Lynch Pierce Fenner & Smith Fbo 65.479
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
International Equity Fund--Class C Pfpc Trust Company As Custodian 5.669
Fbo Thomas F Casey
R/O Ira
19 W Emerson Street
Melrose MA 02176
Intermediate Bond Fund--Class C Merrill Lynch Pierce Fenner & Smith Fbo 35.274
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Intermediate Bond Fund--Class C Nfsc Febo # Apw-019216 10.930
Nfs/Fmtc Ira
Fbo Perry A Hildebrand
10506 Rosemont Court
Fort Myers FL 33908
F-18
Percentage of Class
Name of Fund and Class Name and Address Outstanding (%)
- ---------------------- ---------------- -------------------
Intermediate Bond Fund--Class C Wexford Clearing Services Corp Fbo 5.174
Edith Wolpert
202 Wyoming Ave
Maplewood NJ 07040-2034
Intermediate Bond Fund--Class C Salomon Smith Barney Inc. 5.145
00114a00002
333 West 34th St--3rd Floor
New York, New York 10001
Bond Fund--Class C Merrill Lynch Pierce Fenner & Smith Fbo 40.217
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Bond Fund--Class C Prudential Securities Inc. Fbo 8.348
Mrs Marcia D Burke &
Mr Philip Burke Jt Ten
40 Gregory St
Marblehead MA 01945-3242
Bond Fund--Class C Prudential Securities Inc. Fbo 8.328
Mrs Marcia D Burke &
Mr Philip Burke Jt Ten
40 Gregory St
Marblehead MA 01945-3242
Tax-Free Short-Intermediate Bond Fund-- Merrill Lynch Pierce Fenner & Smith Fbo 62.087
Class C The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Tax-Free Short-Intermediate Bond Fund-- Gregory J Schwartz & Co In Fbo 10.549
Class C Donald L Gundle
Marie J Gundle
Jt Ten/Wros
34411 Quaker Valley
Farmington Hls MI 48331
Tax-Free Short-Intermediate Bond Fund-- Lpl Financial Services 9.741
Class C A/C 3320-3200
9785 Towne Centre Drive
San Diego CA 92121-1968
Balanced Fund--Class C Merrill Lynch Pierce Fenner & Smith Fbo 27.789
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Michigan Tax-Free Bond Fund--Class C Merrill Lynch Pierce Fenner & Smith Fbo 94.933
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
F-19
Percentage of Class
Name of Fund and Class Name and Address Outstanding (%)
- ---------------------- ---------------- -------------------
Tax-Free Bond Fund--Class C Merrill Lynch Pierce Fenner & Smith Fbo 46.431
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Tax-Free Bond Fund--Class C Prudential Securities Inc. Fbo 17.074
Global Analytical
Van Engelen Weg 27
Willemstad Curacao
Netherlands Antilles
Tax-Free Bond Fund--Class C Prudential Securities Inc. Fbo 8.925
Mrs Asako Shibata Ttee
Asako Shibata, Trustee Of The
Asako Shibata Trust Ua Dtd
35068
Gardena CA 90247-5617
Large-Cap Value Fund--Class C Merrill Lynch Pierce Fenner & Smith Fbo 31.023
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
U.S. Government Income Fund--Class C Merrill Lynch Pierce Fenner & Smith Fbo 42.111
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Multi-Season Growth Fund--Class C Merrill Lynch Pierce Fenner & Smith Fbo 52.448
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Real Estate Equity Investment--Class C Merrill Lynch Pierce Fenner & Smith Fbo 22.495
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Real Estate Equity Investment--Class C Prudential Securities Inc. Fbo 6.811
Mr Peter M Oram
Ira Dtd 03/13/00
2728 Baltic Cir
Las Vegas NV 89121-1107
Real Estate Equity Investment--Class C A G Edwards & Sons Inc Fbo 5.022
Dick Rice Ttee
Evelyn E Claxton
A/C 0154-309314
One North Jefferson
St Louis MO 63103-2287
F-20
Percentage of Class
Name of Fund and Class Name and Address Outstanding (%)
- ---------------------- ---------------- -------------------
International Bond Fund--Class C Merrill Lynch Pierce Fenner & Smith Fbo 24.442
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
International Bond Fund--Class C Lehman Brothers, Inc. 7.403
834-68987-14
101 Hudson Street, 31st Floor
Jersey City, NJ 07302
International Bond Fund--Class C Prudential Securities Inc. Fbo 7.152
Mr Stuart B Hirsch
11 East Pkwy
Clifton NJ 07014-1201
International Bond Fund--Class C Prudential Securities Inc. Fbo 5.661
Gail Sullinger Ps Plan Dtd
37008
Fbo Mrs Gail Sullinger
27 Glen Dr
Bardonia NY 10954-1507
International Bond Fund--Class C Prudential Securities Inc. Fbo 5.077
Mr Thurlow C Morgan
Ira Rollover Dtd 03/15/02
5 Thornwood Dr
New City NY 10956-3411
International Bond Fund--Class C Prudential Securities Inc. Fbo 5.018
Mrs Louise Cuomo
Ira Dtd 06/20/01
4 Burd St
Nyack NY 10960-3230
Net Net Fund--Class C Merrill Lynch Pierce Fenner & Smith Fbo 30.371
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Micro-Cap Equity Fund--Class C Merrill Lynch Pierce Fenner & Smith Fbo 37.464
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Small-Cap Value Fund--Class C Merrill Lynch Pierce Fenner & Smith Fbo 46.462
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
International Growth--Class C Painewebber For The Benefit Of 22.981
Ambrose Hamm Trustee
U/A/D 3/26/1982
Fbo: Keith Hamm Sr Trust
PO Box 955
Branchville NJ 07826-0955
F-21
Percentage of Class
Name of Fund and Class Name and Address Outstanding (%)
- ---------------------- ---------------- -------------------
International Growth--Class C Merrill Lynch Pierce Fenner & Smith Fbo 11.117
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
International Growth--Class C Pershing LLC 7.777
P.O. Box 2052
Jersey City NJ 07303-9998
International Growth--Class C Pershing LLC 7.142
PO Box 2052
Jersey City NJ 07303-9998
International Growth--Class C Painewebber For The Benefit Of 5.689
Richard Beyrer
Cathleen Beyrer Jtwros
14 Cheryl Ct
Mahopac NY 10541-2813
Emerging Markets Fund--Class C Pfpc Trust Company As Custodian 8.541
Fbo Thomas F Casey
R/O Ira
19 W Emerson Street
Melrose MA 02176
Emerging Markets Fund--Class C Merrill Lynch Pierce Fenner & Smith Fbo 8.102
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Emerging Markets Fund--Class C Pershing LLC 8.071
P.O. Box 2052
Jersey City NJ 07303-9998
Emerging Markets Fund--Class C Nfsc Febo # 0s3-024430 6.383
Ernest E Elliott
Cathy Elliott
35 Woodside Drive
Bolton MA 01740
Emerging Markets Fund--Class C Ferris, Baker Watts, Inc 5.598
Fbw C/F Kiernan Frances B
A/C 3202-1313
3801 Canterbury Road #1002
Baltimore MD 21218-2379
Healthcare Fund--Class C Merrill Lynch Pierce Fenner & Smith Fbo 27.544
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Institutional S&P MidCap Index Equity Calhoun & Co 99.929
Fund--Class Y C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
Po Box 75000
Detroit MI 48275-3446
F-22
Percentage of Class
Name of Fund and Class Name and Address Outstanding (%)
- ---------------------- ---------------- -------------------
Institutional S&P SmallCap Index Equity Calhoun & Co 100.000
Fund--Class Y C/O Comerica Bank
Attn Mutual Funds Unit Mc 3446
PO Box 75000
Detroit MI 48275-3446
Institutional Money Market Fund--Class Y Calhoun & Co 88.030
C/O Comerica Bank Detroit
Attn Vicky Froehlich
PO Box 75000
Detroit MI 48275-3455
Institutional Money Market Fund--Class Y Northern Trust Company Cust 7.137
Fbo Michigan Catastrophic Claims
Association A/C#26-40961/4-595114
PO Box 92956
Chicago IL 60675-2956
Institutional Govt Money Market--Class Y Calhoun & Co 100.000
C/O Comerica Bank Detroit
Attn Vicky Froehlich
PO Box 75000
Detroit MI 48275-3455
MidCap Select Fund--Class II Merrill Lynch Pierce Fenner & Smith Fbo 20.745
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Future Technology Fund--Class II Merrill Lynch Pierce Fenner & Smith Fbo 15.122
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
Power Plus Fund--Class II Merrill Lynch Pierce Fenner & Smith Fbo 21.638
The Sole Benefit Of Its Customers
Attn Fund Administration (97xxx)
4800 Deer Lake Dr E 2nd Fl
Jacksonville FL 32246-6484
F-23
- --------------------------------------------------------------------------------
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 telephonic
instructions
.. Do not return this paper ballot
- --------------------------------------------------------------------------------
PROXY CARD PROXY CARD
The Munder Framlington Funds Trust SPECIAL MEETING OF SHAREHOLDERS
Munder Emerging Markets Fund APRIL 28, 2003
This Proxy is Solicited on Behalf
of the Board of Trustees.
The undersigned revoke(s) all previous proxies and appoint(s) Stephen J.
Shenkenberg, Melanie Mayo West or Mary Ann Shumaker or either one of them,
attorneys, with full power of substitution to vote all shares of the above
referenced fund (Fund) of The Munder Framlington Funds Trust that the
undersigned is entitled to vote at the Special Meeting of Shareholders of the
Fund to be held at The Community House, Adams Room, 380 South Bates Street,
Birmingham, MI 48009 on Monday, April 28, 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 an
entity such as 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 TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSAL.
---
1. ELECTIONS OF TRUSTEE NOMINEES:
FOR WITHHOLD
all nominees all nominees
[_] [_]
01) David J. Brophy 05) John Engler
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(s) write
the number(s) on the line below.)
- --------------------------------------------
FOR AGAINST ABSTAIN
2. To approve the Agreement and Plan of Reorganization [_] [_] [_]
and Redomiciliation that provides for the
Reorganization of the Fund from a series of The
Munder Framlington Funds Trust, a Massachusetts
business trust, to a series of Munder Series Trust,
a Delaware statutory trust.
FOR AGAINST ABSTAIN
ALL ALL ALL
3. To approve the elimination or amendment of the [_] [_] [_]
following fundamental investment restrictions
of the Fund:
a. Diversification g. Industry Concentration
b. Borrowing Money h. Investments in Commodities
c. Issuing Senior Securities i. Pledging, Mortgaging, and Hypothecating Assets
d. Underwriting Securities k. Investments for Control Over Issuer
e. Investments in Real Estate o. Margin Activities and Short Selling
f. Making Loans p. Investments in Reverse Repurchase Agreements
If you do not wish to approve a particular investment restriction amendment
write the letter(s) of the sub-proposal on the line below.
- -----------------------------------------------------------
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 telephonic
instructions
.. Do not return this paper ballot
- --------------------------------------------------------------------------------
PROXY CARD PROXY CARD
The Munder Framlington Funds Trust SPECIAL MEETING OF SHAREHOLDERS
Munder Healthcare Fund APRIL 28, 2003
This Proxy is Solicited on Behalf of the
Board of Trustees.
The undersigned revoke(s) all previous proxies and appoint(s) Stephen J.
Shenkenberg, Melanie Mayo West or Mary Ann Shumaker or either one of them,
attorneys, with full power of substitution to vote all shares of the above
referenced fund (Fund) of The Munder Framlington Funds Trust that the
undersigned is entitled to vote at the Special Meeting of Shareholders of the
Fund to be held at The Community House, Adams Room, 380 South Bates Street,
Birmingham, MI 48009, April 28, 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 an entity such as
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 TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSAL.
---
1. ELECTIONS OF TRUSTEE NOMINEES:
FOR WITHHOLD
all nominees all nominees
[_] [_]
01) David J. Brophy 05) John Engler
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(s) write
the number(s) on the line below.)
- --------------------------------------------
FOR AGAINST ABSTAIN
2. To approve the Agreement and Plan of Reorganization [_] [_] [_]
and Redomiciliation that provides for the
Reorganization of the Fund from a series of The
Munder Framlington Funds Trust, a Massachusetts
business trust, to a series of Munder Series Trust,
a Delaware statutory trust.
FOR AGAINST ABSTAIN
ALL ALL ALL
3. To approve the elimination or amendment of the [_] [_] [_]
following fundamental investment restrictions of
the Fund:
a. Diversification g. Industry Concentration
b. Borrowing Money h. Investments in Commodities
c. Issuing Senior Securities i. Pledging, Mortgaging, and Hypothecating Assets
d. Underwriting Securities k. Investments for Control Over Issuer
e. Investments in Real Estate o. Margin Activities and Short Selling
f. Making Loans p. Investments in Reverse Repurchase Agreements
If you do not wish to approve a particular investment restriction amendment
write the letter(s) of the sub-proposal on the line below.
- -----------------------------------------------------------
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 telephonic
instructions
.. Do not return this paper ballot
- --------------------------------------------------------------------------------
PROXY CARD PROXY CARD
The Munder Framlington Funds Trust SPECIAL MEETING OF SHAREHOLDERS
Munder International Growth Fund APRIL 28, 2003
This Proxy is Solicited on
Behalf of the Board of Trustees.
The undersigned revoke(s) all previous proxies and appoint(s) Stephen J.
Shenkenberg, Melanie Mayo West or Mary Ann Shumaker or either one of them,
attorneys, with full power of substitution to vote all shares of the above
referenced fund (Fund) of The Munder Framlington Funds Trust that the
undersigned is entitled to vote at the Special Meeting of Shareholders of the
Fund to be held at The Community House, Adams Room, 380 South Bates Street,
Birmingham, MI 48009, on Monday, April 28, 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 an entity such as 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 TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSAL.
---
1. ELECTIONS OF TRUSTEE NOMINEES:
FOR WITHHOLD
all nominees all nominees
[_] [_]
01) David J. Brophy 05) John Engler
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(s) write
the number(s) on the line below.)
- --------------------------------------------
FOR AGAINST ABSTAIN
2. To approve the Agreement and Plan of Reorganization [_] [_] [_]
and Redomiciliation that provides for the
Reorganization of the Fund from a series of The
Munder Framlington Funds Trust, a Massachusetts
business trust, to a series of Munder Series Trust,
a Delaware statutory trust.
FOR AGAINST ABSTAIN
ALL ALL ALL
3. To approve the elimination or amendment of the [_] [_] [_]
following fundamental investment restrictions
of the Fund:
a. Diversification g. Industry Concentration
b. Borrowing Money h. Investments in Commodities
c. Issuing Senior Securities i. Pledging, Mortgaging, and Hypothecating Assets
d. Underwriting Securities k. Investments for Control Over Issuer
e. Investments in Real Estate o. Margin Activities and Short Selling
f. Making Loans p. Investments in Reverse Repurchase Agreements
If you do not wish to approve a particular investment restriction amendment
write the letter(s) of the sub-proposal on the line below.
- -----------------------------------------------------------