As filed with the Securities and Exchange Commission
on June 21, 1996
Registration Nos. 2-91373
811-4038
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. / /
Post Effective Amendment No. 16 /X/
and/or
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 17 /X/
St. Clair Fixed Income Fund, Inc.
doing business as St. Clair Funds, Inc.
(Exact Name of Registrant as Specified in Charter)
480 Pierce Street
Birmingham, Michigan 48009
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number,
including Area Code: (810) 647-9200
Paul F. Roye, Esq.
Dechert Price & Rhoads
1500 K Street, N.W.
Suite 500
Washington, D.C. 20005
(Name and Address of Agent for Service)
Copies to:
Lisa Ann Rosen, Esq.
Munder Capital Management
480 Pierce Street
Birmingham, Michigan 48009
/X/ It is proposed that this filing will become effective 75 days after filing
pursuant to paragraph (a)(2) of Rule 485.
<PAGE>
Calculation of Registration Fee
Under the Securities Act of 1933
- - --------------------------------------------------------------
Proposed Proposed
Title Of Maximum Maximum Amount
Securities Amount Offering Aggregate of
Being Being Price Offering Registration
Registered Registered Per Share* Price** Fee
- - --------------------------------------------------------------
Common Indefinite*** N/A N/A N/A
Stock
Common 65,914,059 $1.00 $65,914,059 $100
Stock
- - --------------------------------------------------------------
* Computed under Rule 457(d) on the basis of the offering price per share at
the close of business on June 12, 1996.
** Registrant elects to calculate the maximum aggregate
offering price pursuant to Rule 24e-2. $88,560,359 of
shares was redeemed during the fiscal year ended February
29, 1996. $22,936,300 of shares was used for reductions
pursuant to Paragraph (c) of Rule 24f-2 during the
current year. $65,624,059 of shares is the amount of
redeemed shares used for reduction in this amendment.
*** Registrant has registered and continues its election to register an
indefinite number or amount of securities under the Securities Act of 1933
pursuant to Rule 24f-2 under the Investment Company Act of 1940. The Rule
24f-2 Notice for Registrant's fiscal year ended February 29, 1996 was
filed on April 29, 1996.
<PAGE>
CROSS REFERENCE SHEET
Form N-1A Part A Item Prospectus Caption
1. Cover Page Cover Page
2. Synopsis Fund Expenses
3. Condensed Financial Information Not Applicable
4. General Description of Registrant Cover Page; Investment
Objective and
Policies; Investment
Limitations; General
Information
5. Management of the Fund Cover Page;
Management; General
Information
6. Capital Stock and Other Securities Cover Page; Net Asset
Value; Purchase and
Redemption of Shares;
Description of Shares;
Dividends and
Distributions; General
Information
7. Purchase of Securities
Being Offered Net Asset Value;
Purchase and
Redemption of Shares;
Management
8. Redemption or Repurchase Purchase and
Redemption of Shares
9. Pending Legal Proceedings Not Applicable
<PAGE>
Part B Heading in
Statement of
Additional
Item No. Information
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History See Prospectus --
"Management"; General;
Directors and Officers
13. Investment Objectives and Policies Fund Investments;
Additional Investment
Limitations; Portfolio
Transactions
14. Management of the Fund See Prospectus --
"Management";
Directors and
Officers;
Miscellaneous
15. Control Persons and Principal
Holders of Securities See Prospectus --
"Management";
Miscellaneous
16. Investment Advisory
and Other Services Investment Advisory
and Other Service
Arrangements; See
Prospectus --
"Management"
17. Brokerage Allocation
and Other Practices Portfolio Transactions
<PAGE>
Part B Heading in
Statement of
Additional
Item No. Information
18. Capital Stock and Other Securities See Prospectus --
"Description
of Shares"; and
"Management";
Additional Information
Concerning Shares
19. Purchase, Redemption and
Pricing of Securities
Being Offered Purchase and
Redemption
Information; Net Asset
Value; Additional
Information Concerning
Shares
20. Tax Status Taxes
21. Underwriters Purchase and
Redemption Information
22. Calculation of Performance Data Performance
Information
23. Financial Statements Not Applicable
ST. CLAIR FUNDS, INC.
The purpose of this Post-Effective Amendment filing is to add a new
portfolio to the Registrant, namely, the Liquidity Plus Money Market Fund, and
to register shares of the Registrant under the Securities Act of 1933 pursuant
to Section 24(e) of the Investment Company Act of 1940.
<PAGE>
PROSPECTUS
Liquidity Plus Money Market Fund (the "Fund") is a
diversified portfolio of St. Clair Funds, Inc. (the
"Company"), an open-end management investment company.
The Fund's investment objective is to provide current interest income
consistent with liquidity and stability of principal. The Fund intends to
achieve this objective by investing substantially all of its assets in a
diversified portfolio of money market instruments with remaining maturities of
397 days or less.
Munder Capital Management (the "Advisor") serves as investment advisor to
the Fund.
This Prospectus contains information that a prospective investor should
know before investing. Investors are encouraged to read this Prospectus and
retain it for future reference. A Statement of Additional Information dated
_____, 1996, as amended or supplemented from time to time, has been filed with
the Securities and Exchange Commission (the "SEC") and is incorporated by
reference into this Prospectus. It may be obtained free of charge by calling the
Fund at (800) 438- 5789.
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank, and are not insured or guaranteed by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other agency. An
investment in the Fund involves investment risks, including possible loss of
principal.
Although the Fund seeks to maintain a constant net asset value of $1.00
per share, there can be no assurance that the Fund can do so on a continuing
basis.
SECURITIES OFFERED BY THIS PROSPECTUS HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is ________, 1996
<PAGE>
Shares of the Fund ("Shares") are sold only to Comerica Bank, its
affiliate and subsidiary banks, and certain other Institutional Investors
("Institutional Investors"). Shares may be purchased by Institutional Investors
for investment of their own funds, or for funds of their customer accounts
("Customer Accounts") for which they serve in a fiduciary, agency, or custodian
capacity. Shares are sold and redeemed without the imposition of a purchase or
redemption charge by the Fund, although Institutional Investors that are record
owners of Shares for their Customer Accounts may charge their Customers separate
account fees. See "Purchase and Redemption of Shares."
Table of Contents
Page
The Fund
Expense Table ___
Investment Objective and Policies ___
Portfolio Instruments and Practices ___
Investment Limitations ___
Purchase and Redemption of Shares ___
Dividends and Distributions ___
Net Asset Value ___
Management ___
Taxes ___
Description of Shares ___
Performance ___
General Information ___
No person has been authorized to give any information, or to make any
representations not contained in this Prospectus, or in the Fund's Statement of
Additional Information incorporated herein by reference, in connection with the
offering made by this Prospectus, and, if given or made, such information or
representations must not be relied upon as having been authorized by the Fund or
the Distributor. This Prospectus does not constitute an offering by the Fund or
by the Distributor in any jurisdiction in which such offering may not lawfully
be made.
<PAGE>
EXPENSE TABLE
The table below sets forth certain costs and expenses that an investor
will incur either directly or indirectly. Shares of the Fund are sold without an
initial or contingent deferred sales charge to Comerica Bank, its affiliate and
subsidiary banks, and certain other Institutional Investors.
See "Purchase and Redemption of Shares."
Annual Operating Expenses
(as a percentage of average net assets)
Advisory Fees 0.35%
Shareholder Servicing 0.35%
Other Expenses 0.25%
Total Fund Operating Expenses 0.95%
The amount of "Other Expenses" in the table above is based on estimated
expenses and projected assets for the current fiscal year. See "Management" in
this Prospectus for a further description of the Fund's operating expenses. Any
fees charged by institutions directly to customer accounts for services provided
in connection with investments in shares of the Fund are in addition to the
expenses shown in the above Expense Table and the Example shown below.
Example
The following example demonstrates the projected dollar amount of total
cumulative expenses that would be incurred over various periods with respect to
a hypothetical investment in the Fund. These amounts are based on payment by the
Fund of operating expenses at the levels set forth in the above table, and are
also based on the following assumptions:
An investor would pay the following expenses on a $1,000 investment,
assuming (1) a hypothetical 5% annual return and (2) redemption at the end of
the following time periods:
1 year 3 years
$10 $30
The foregoing Expense Table and Example are intended to assist investors
in understanding the various costs and expenses that investors bear, either
directly or indirectly.
THE EXAMPLE SHOWN ABOVE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF FUTURE INVESTMENT RETURN OR OPERATING
EXPENSES. ACTUAL INVESTMENT RETURN AND OPERATING EXPENSES MAY
BE MORE OR LESS THAN THOSE SHOWN.
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is to provide current interest income
consistent with liquidity and stability of principal. There can be no assurance
that the Fund will achieve its investment objective. Purchasing Shares of the
Fund should not be considered a complete investment program, but an important
segment of a well-diversified investment program.
The Fund intends to achieve its stated objective by investing in a
diversified portfolio of U.S. dollar-denominated money market instruments,
including a broad range of government, bank, and commercial paper obligations.
The securities held by the Fund will have remaining maturities of 397 days or
less, although securities subject to repurchase agreements, variable and
floating rate instruments and certain other securities may bear longer
maturities. In addition, the Fund's average weighted portfolio maturity will not
exceed 90 days. The Fund seeks to maintain a net asset value of $1.00 per Share
although there is no assurance that it will be able to do so on a continuous
basis.
The following descriptions illustrate the types of instruments in which
the Fund may invest.
PORTFOLIO INSTRUMENTS AND PRACTICES
U.S. Government Obligations. The Fund may purchase obligations issued or
guaranteed by the U.S. Government or its agencies and instrumentalities.
Obligations of certain agencies and instrumentalities of the U.S. Government are
supported by the full faith and credit of the United States; other instruments,
such as those of the Export-Import Bank of the United States, are supported by
the right of the issuer to borrow from the U.S. Treasury; still others, such as
those of the Student Loan Marketing Association, are supported only by the
credit of the agency or instrumentality issuing the obligation. No assurance can
be given that the U.S. Government would provide financial support to U.S.
Government- sponsored instrumentalities if it is not obligated to do so by law.
Bank Obligations. The Fund may purchase U.S. dollar-denominated bank
obligations, including certificates of deposit, bankers' acceptances, bank
notes, deposit notes and interest-bearing savings and time deposits, issued by
U.S. or foreign banks or savings institutions having total assets at the time of
purchase in excess of $1 billion. For this purpose, the assets of a bank or
savings institution include the assets of both its domestic and foreign
branches. See "Foreign Securities" for a discussion of the risks associated with
investments in obligations of foreign banks and foreign branches of domestic
banks. The Fund will invest in the
<PAGE>
obligations of domestic banks and savings institutions only if their deposits
are federally insured. Investments by the Fund in the obligations of foreign
banks and foreign branches of domestic banks will not exceed 25% of the Fund's
total assets at the time of investment. Foreign bank obligations include
Eurodollar Certificates of Deposit ("ECDs"), Eurodollar Time Deposits ("ETDs"),
Canadian Time Deposits ("CTDs"), Schedule Bs, Yankee Certificates of Deposit
("Yankee CDs") and Yankee Bankers' Acceptances ("Yankee BAs"). A discussion of
these obligations appears in the Statement of Additional Information under
"Additional Information on Portfolio Investments -- Non- Domestic Bank
Obligations."
Commercial Paper. Commercial paper (short-term promissory notes issued by
corporations), including variable amount master demand notes, having short-term
ratings at the time of purchase, must be rated by at least two nationally
recognized statistical rating organizations ("NRSROs"), such as Moody's
Investors Service, Inc. ("Moody's") or Standard & Poor's Corporation ("S&P")
within the highest rating category assigned to short-term debt securities or, if
not rated, or rated by only one agency, are determined to be of comparable
quality pursuant to guidelines approved by the Company's Board of Directors. To
the extent that the ratings accorded by NRSROs may change as a result of changes
in their rating systems, the Fund will attempt to use comparable ratings as
standards for its investments, in accordance with the investment policies
contained herein. Where necessary to ensure that an instrument meets, or is of
comparable quality to, the Fund's rating criteria, the Fund may require that the
issuer's obligation to pay the principal of, and the interest on, the instrument
be backed by insurance or by an unconditional bank letter or line of credit,
guarantee, or commitment to lend.
All obligations, including any underlying guarantees, must be deemed by
the Advisor to present minimal credit risks, pursuant to guidelines approved by
the Board of Directors. See the "Appendix" to the Statement of Additional
Information for a description of applicable ratings.
The Fund may invest in commercial obligations issued in reliance on the
"private placement" exemption from registration afforded by Section 4(2) of the
Securities Act of 1933, as amended ("Section 4(2) paper"). The Fund may also
purchase securities that are not registered under the Securities Act of 1933, as
amended, but which can be sold to qualified institutional buyers in accordance
with Rule 144A under that Act ("Rule 144A securities"). Section 4(2) paper is
restricted as to disposition under the federal securities laws, and generally is
sold to institutional investors, such as the Fund, which agree that they are
purchasing the paper for investment and not with a view to public distribution.
Any resale by the purchaser must be in an exempt transaction.
<PAGE>
Section 4(2) paper normally is resold to other Institutional Investors like the
Fund through or with the assistance of the issuer or investment dealers who make
a market in the Section 4(2) paper, thus providing liquidity. Rule 144A
securities generally must be sold to other qualified institutional buyers. If a
particular investment in Section 4(2) paper or Rule 144A securities is not
determined to be liquid, that investment will be included within the Fund's
limitation on investment in illiquid securities.
Repurchase Agreements. The Fund may purchase securities from financial
institutions subject to the seller's agreement to repurchase them at an
agreed-upon time and price ("repurchase agreements"). The securities held
subject to a repurchase agreement may have stated maturities exceeding 397 days,
provided the repurchase agreement itself matures in 397 days. The financial
institutions with which the Fund may enter into repurchase agreements include
banks and non-bank dealers of U.S. Government securities that are listed on the
Federal Reserve Bank of New York's list of reporting dealers. The Advisor will
continuously monitor the creditworthiness of the seller under a repurchase
agreement, and will require the seller to maintain liquid assets in a segregated
account in an amount that is greater than the repurchase price. Default by or
bankruptcy of the seller would, however, expose the Fund to possible loss
because of adverse market action or delays in connection with the disposition of
the underlying obligations.
Reverse Repurchase Agreements. The Fund may borrow funds for temporary
purposes by selling portfolio securities to financial institutions such as banks
and broker/dealers and agreeing to repurchase them at a mutually specified date
and price ("reverse repurchase agreements"). Reverse repurchase agreements
involve the risk that the market value of the securities sold by the Fund may
decline below the repurchase price. The Fund would pay interest on amounts
obtained pursuant to a reverse repurchase agreement.
Investment Company Securities. In connection with the management of daily
cash positions, the Fund may invest in securities issued by other investment
companies which invest in short-term debt securities and which seek to maintain
a $1.00 net asset value per share (i.e., "money market funds"). Securities of
other investment companies will be acquired within limits prescribed by the 1940
Act. These limitations, among other matters, restrict investments in securities
of other investment companies to no more than 10% of the value of the Fund's
total assets, with no more than 5% invested in the securities of any one
investment company. As a shareholder of another investment company, the Fund
would bear, along with other shareholders, its pro rata portion of the other
investment company's expenses, including advisory fees. These expenses would be
in addition to the expenses the Fund bears directly in connection with its own
operations.
<PAGE>
Asset-Backed Securities. Subject to applicable maturity and credit
criteria, the Fund may purchase asset-backed securities (i.e., securities backed
by mortgages, installment sales contracts, credit card receivables or other
assets). The average life of asset-backed securities varies with the maturities
of the underlying instruments which, in the case of mortgages, have maximum
maturities of forty years. The average life of a mortgage-backed instrument, in
particular, is likely to be substantially less than the original maturity of the
mortgage pools underlying the securities as the result of scheduled principal
payments and mortgage prepayments. The rate of such mortgage prepayments, and
hence the life of the certificates, will be primarily a function of current
interest rates and current conditions in the relevant housing markets. The
relationship between mortgage prepayment and interest rates may give some
high-yielding mortgage-related securities less potential for growth in value
than conventional bonds with comparable maturities. In addition, in periods of
falling interest rates, the rate of mortgage prepayment tends to increase.
During such periods, the reinvestment of prepayment proceeds by the Fund will
generally be lower rates than the rates that were carried by the obligations
that have been prepaid. Because of these and other reasons, an asset- backed
security's total return may be difficult to predict precisely. To the extent
that the Fund purchases mortgage-related or mortgage-backed securities at a
premium, mortgage prepayments (which may be made at any time without penalty)
may result in some loss of the Fund's principal investment to the extent of
premium paid.
Stripped Securities. The Fund may purchase participation in trusts that
hold U.S. Treasury and agency securities (such as TIGRs and CATS) and also may
purchase Treasury receipts and other stripped securities, which represent
beneficial ownership interests in either future interest payments or future
principal payments on U.S. Government obligations. These instruments are issued
at a discount to their "face value" and may (particularly in the case of
stripped mortgage-backed securities) exhibit greater price volatility than
ordinary debt securities because of the manner in which their principal and
interest are returned to investors. Stripped securities will normally be
considered illiquid investments and will be acquired subject to the limitation
on illiquid investments unless determined to be liquid under guidelines
established by the Board of Directors.
Variable and Floating Rate Instruments. The Fund may purchase variable and
floating rate instruments which may have stated maturities in excess of the
Fund's maturity limitations but are deemed to have shorter maturities because
the Fund can demand payment of the principal of the instrument at least once
within such periods on not more than thirty days' notice (this demand feature is
not required if the instrument is guaranteed by the U.S. Government or an agency
or
<PAGE>
instrumentality thereof) or are otherwise deemed to have shorter maturities in
accordance with the current regulations of the Securities and Exchange
Commission. These instruments may include variable amount master demand notes
that permit the indebtedness to vary in addition to providing for periodic
adjustments in the interest rate. Unrated variable and floating rate instruments
will be determined by the Advisor to be of comparable quality at the time of
purchase to rated instruments purchasable by the Fund. The absence of an active
secondary market, however, could make it difficult to dispose of the
instruments, and the Fund could suffer a loss if the issuer defaulted or during
periods that the Fund is not entitled to exercise its demand rights. Variable
and floating rate instruments held by the Fund will be subject to the Fund's
limitation on illiquid investments when the Fund may not demand payment of the
principal amount within seven days absent a reliable trading market.
When-Issued Purchases and Forward Commitments. The Fund may purchase
securities on a "when-issued" basis and may purchase or sell securities on a
"forward commitment" basis. These transactions, which involve a commitment by
the Fund to purchase or sell particular securities with payment and delivery
taking place at a future date (perhaps one or two months later), permit the Fund
to lock-in a price or yield on a security, regardless of future changes in
interest rates. When-issued and forward commitment transactions involve the risk
that the price or yield obtained may be less favorable than the price or yield
available when the delivery takes place. The Fund will establish a segregated
account consisting of cash, U.S. Government securities or other high-grade debt
obligations in an amount equal to the amount of its when-issued purchases and
forward commitments. The Fund's when-issued purchases and forward purchase
commitments are not expected to exceed 25% of the value of the Fund's total
assets absent unusual market conditions. The Fund does not intend to engage in
when-issued purchases and forward commitments for speculative purposes but only
in furtherance of its investment objective.
Foreign Securities. The Fund may invest in the U.S. dollar-denominated
securities of foreign issuers. There are certain risks and costs involved in
investing in securities of companies and governments of foreign nations, which
are in addition to the usual risks inherent in U.S. investments. Investments in
foreign securities involve higher costs than investments in U.S. securities,
including higher transaction costs as well as the imposition of additional taxes
by foreign governments. In addition, foreign investments may include additional
risks associated with the level of currency exchange rates, less complete
financial information about the issuers, less market liquidity, and political
instability. Future political and economic developments, the possible imposition
of withholding taxes on interest income, the
<PAGE>
possible seizure or nationalization of foreign holdings, the possible
establishment of exchange controls, or the adoption of other governmental
restrictions might adversely affect the payment of principal and interest on
foreign obligations. Additionally, foreign banks and foreign branches of
domestic banks may be subject to less stringent reserve requirements, and to
different accounting, auditing and record keeping requirements.
Illiquid Securities. The Fund will not invest more than 10% of the value
of its net assets (determined at the time of acquisition) in securities that are
illiquid. If, after the time of acquisition, events cause this limit to be
exceeded, the Fund will take steps to reduce the aggregate amount of illiquid
securities as soon as reasonably practicable in accordance with policies of the
SEC. Subject to this limitation are repurchase agreements and time deposits
which do not provide for payment within seven days, as well as Section 4(2)
paper and Rule 144A securities that have not been determined to be liquid in
accordance with procedures adopted by the Board of Directors.
Portfolio Transactions. All orders for the purchase or sale of securities
on behalf of the Fund are placed by the Advisor with broker/dealers or other
institutions that the Advisor selects. Short-term capital gains realized from
portfolio transactions are taxable to shareholders as ordinary income.
INVESTMENT LIMITATIONS
The Fund's investment objective and certain investment policies of the
Fund may be changed by the Board of Directors without shareholder approval.
However, shareholders will be notified of any such material change. No assurance
can be given that the Fund will achieve its investment objective. The Fund has
also adopted certain fundamental investment limitations that may be changed only
with the approval of a majority (as defined in the 1940 Act) of the outstanding
Shares of the Fund. These investment restrictions are set forth below and in the
Statement of Additional Information.
The Fund may not:
1. 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. 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.
<PAGE>
2. 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.
3. 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 a
separate industry.
4. Make loans, except that the Fund may purchase or hold certain
debts instruments and enter into repurchase agreements, in accordance with
its policies and limitations.
5. 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.
6. 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.
The investment limitations are applied at the time the investment
securities are purchased.
PURCHASE AND REDEMPTION OF SHARES
Shares of the Fund are sold on a continuous basis by the Distributor,
Funds Distributor, Inc. The Distributor is a registered broker/dealer with
principal offices at 60 State Street, Boston, Massachusetts 02109.
Purchase of Shares
Shares of the Fund are sold without an initial or contingent sales charge
to Institutional Investors that have entered into agreements with the Company to
provide shareholder services for Customer Accounts. All share
<PAGE>
purchases on behalf of a Customer Account are effected through procedures
established in connection with the requirements of the account, and
confirmations of share purchases and redemptions will be sent to the institution
involved. Institutional Investors (or their nominees) will normally be the
holders of record of Fund shares acting on behalf of their Customers, and will
reflect their Customers' beneficial ownership of shares in the account
statements provided by them to their Customers. The exercise of voting rights
and the delivery to Customers of shareholder communications from the Fund will
be governed by the Customers' account agreements with the institution. Investors
wishing to purchase shares of the Fund should contact their account
representatives.
Provided their procedures are compatible with the purchase and redemption
operations of the Fund, Institutional Investors may purchase Fund Shares on
behalf of their Customers through automatic "sweeping" and other programs
established by the Institutional Investors, whereby amounts in excess of minimum
balances maintained in their Customer Accounts are invested in Fund Shares.
There is no minimum for initial or subsequent investments.
Shares of the Fund are sold at net asset value per share next determined
on that day after receipt of a purchase order. Purchase orders by an institution
for shares in the Fund must be received, together with payment, by the
Distributor or Transfer Agent by 12:00 noon (Eastern time) on any business day.
A purchase order received by the Distributor or by the Transfer Agent after such
time will not be accepted; notice thereof will be given to the institution
placing the order, and any funds received will be returned promptly to the
sending institution.
It is the responsibility of the institution to transmit orders for
purchases by their customers and to deliver required funds on a timely basis. If
funds are not received within the periods described above, the order will be
canceled, notice thereof will be given, and the institution will be responsible
for any loss to the Fund or its shareholders. Institutions may charge certain
account fees depending on the type of account the investor has established with
the institution. In addition, an institution may receive fees from the Funds
with respect to the investments of its customers as described below under
"Management." Payments for Shares of the Fund may, in the discretion of the
Advisor, be made in the form of securities that are permissible investments for
the Fund. For further information see "In- Kind Purchases" in the Statement of
Additional Information.
Purchases may be effected on days the New York Stock Exchange is open for
business. The Fund reserves the right to reject any purchase order. Payment for
orders which are not received or accepted will be returned after prompt inquiry.
<PAGE>
The issuance of shares is recorded on the books of the Fund, and share
certificates are not issued unless expressly requested in writing. Certificates
are not issued for fractional shares.
Redemption of Shares
Redemption orders are effected at the net asset value per share next
determined after receipt of the order by the Transfer Agent. Shares held by an
institution on behalf of its customers must be redeemed in accordance with
instructions and limitations pertaining to the account at the institution. The
Company intends to pay cash for all Shares redeemed, but in unusual
circumstances may make payment wholly or partly in portfolio securities at their
then market value equal to the redemption price. In such cases, an investor may
incur transaction costs in converting such securities to cash.
Share balances may be redeemed pursuant to arrangements between
institutions and investors. It is the responsibility of an institution to
transmit redemption orders to the Transfer Agent and to credit its Customer
Accounts with the redemption proceeds on a timely basis. If a redemption order
for shares of the Fund is received by the Transfer Agent before 12:00 noon
Eastern time on a business day, payment is normally wired on the same business
day; if a redemption order is received by the Transfer Agent between 12:00 noon
Eastern time and 4:00 p.m. Eastern time on a business day, payment is normally
wired on the next business day. The Company reserves the right to delay the
wiring of redemption proceeds for up to seven days after it receives a
redemption order if, in the judgment of the Advisor, an earlier payment could
adversely affect a Fund.
Neither the Fund, the Company, the Distributor nor the Transfer Agent will
be responsible for any loss, damages, expense or cost arising out of any
telephone redemptions effected upon instructions believed by them to be genuine.
Accordingly, the Institutional Investor will bear the risk of loss. The Fund
will attempt to confirm that telephone instructions are genuine and will use
such procedures as are considered reasonable.
Currently, the Company does not accept purchase and redemption orders on
days the New York Stock Exchange is closed. The New York Stock Exchange is
currently scheduled to be closed on New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Veterans' Day, Thanksgiving
Day and Christmas Day, and on the preceding Friday or subsequent Monday when one
of these holidays falls on a Saturday or Sunday, respectively.
<PAGE>
DIVIDENDS AND DISTRIBUTIONS
The net investment income of the Fund is declared daily as a dividend to
its shareholders. Capital gains distributions, if any, will be made at least
annually. Shareholders of the Fund whose purchase orders are received and
executed by 12:00 noon (Eastern time) receive dividends for that day.
Shareholders whose redemption orders have been received by 12:00 noon (Eastern
time) will not receive dividends for that day, while shareholders whose
redemption orders are received after 12:00 noon (Eastern time) will receive that
day's dividends. See "Purchase and Redemption of Shares." Dividends are
distributable monthly in the form of additional Shares of the Fund, or, if
specifically requested (in writing) by the shareholder from the Fund's Transfer
Agent prior to the distribution date, in cash. Dividends are automatically paid
in cash (along with any redemption proceeds) not later than seven business days
after a shareholder closes his account with the Fund.
NET ASSET VALUE
The net asset value per share of the Fund for the purpose of pricing
purchase and redemption orders is determined as of 12:00 noon (Eastern time) and
as of the close of regular trading on the New York Stock Exchange on each day
the Company's Shares are available for purchase and redemption. In seeking to
maintain a net asset value of $1.00 per Share with respect to the Fund, the
Company values the Fund's portfolio securities according to the amortized cost
method of valuation. Under this method, securities are valued initially at cost
on the date of purchase. Thereafter, absent unusual circumstances, the Fund
assumes a constant proportionate amortization of any discount or premium until
maturity of the security. Net asset value for the Fund is calculated by dividing
the value of all securities and other assets belonging to the Fund, less the
liabilities charged to the Fund, by the number of outstanding shares of the
Fund.
MANAGEMENT
Board of Directors
The Company is managed under the direction of the Board of Directors. The
Statement of Additional Information contains the name and background information
of each Director.
Investment Advisor
The investment advisor of the Fund is Munder Capital Management, a
Delaware general partnership with its principal offices at 480 Pierce Street,
Birmingham, Michigan 48009. The principal partners of the Advisor are Old MCM,
Inc., Woodbridge Capital Management, Inc., Munder Group LLC, and WAM
<PAGE>
Holdings, Inc. ("WAM"). Woodbridge and WAM are indirect,
wholly-owned subsidiaries of Comerica Incorporated. Mr. Lee
P. Munder, the Advisor's chief executive officer, indirectly
owns or controls a majority of the partnership interests in
the Advisor. As of March 31, 1996, the Advisor and its
affiliates had approximately $31 billion in assets under
active management, of which $15 billion were invested in
equity securities, $7 billion were invested in money market or
other short-term instruments, and $9 billion were invested in
other fixed income securities.
Subject to the supervision of the Board of Directors, the Adviser provides
overall investment management for the Fund, provides research and credit
analysis, is responsible for all purchases and sales of portfolio securities,
maintains books and records with respect to the Fund's securities transactions
and provides periodic and special reports to the Board of Directors as
requested.
For the advisory services provided and expenses assumed by it, the Advisor
has agreed to a fee from the Fund, computed daily and payable monthly, at an
annual rate of .35% of average daily net assets of the Fund.
The Advisor may, from time to time, make payments to banks, broker-dealers
or other financial institutions for certain services to the Fund and/or its
shareholders, including sub-administration, sub-transfer agency and shareholder
servicing. Such payments are made out of the Advisors own resources and do not
involve additional costs to the Fund or its shareholders.
Administrator, Custodian and Transfer Agent
First Data Investor Services Group, Inc. ("First Data"), whose principal
business address is 53 State Street, Boston, Massachusetts 02109 (the
"Administrator"), serves as administrator for the Fund. First Data is a
wholly-owned subsidiary of First Data Corporation. The Administrator generally
assists the Funds in all aspects of its administration and operations, including
the maintenance of financial records and fund accounting.
First Data also serves as the Funds' transfer agent and dividend
disbursing agent ("Transfer Agent"). Shareholder inquiries may be directed to
First Data at P.O. Box 9755, Providence, Rhode Island 02940-9755.
As compensation for these services, the Administrator and Transfer Agent
are entitled to receive fees, based on the aggregate average daily net assets of
the Fund and certain other investment portfolios that are advised by the Advisor
and for which First Data provides services, computed daily and payable monthly
at the rate of .12% of the first $2.8 billion
<PAGE>
of net assets, plus .105% of the next $2.2 billion of net assets, plus .10% of
all net assets in excess of $5 billion with respect to the Administrator and
.02% of the first $2.8 billion of net assets, plus .015% of the next $2.2
billion of net assets, plus .01% of all net assets in excess of $5 billion with
respect to the Transfer Agent. Administration fees payable by the Fund and
certain other investment portfolios advised by the Advisor are subject to a
minimum annual fee of $1.2 million to be allocated among each series and class
thereof. The Administrator and Transfer Agent are also entitled to reimbursement
for out-of-pocket expenses. The Administrator has entered into a
Sub-Administration Agreement with the Distributor under which the Distributor
provides certain administrative services with respect to the Funds. The
Administrator pays the Distributor a fee for these services out of its own
resources at no cost to the Fund.
Comerica Bank (the "Custodian"), whose principal business address is One
Detroit Center, 500 Woodward Avenue, Detroit, Michigan 48226, provides custodial
services to the Funds. As compensation for its services, the Custodian is
entitled to receive fees, based on the aggregate average daily net assets of the
Fund and other funds of the Company, Munder Funds, Inc. and The Munder Funds
Trust, computed daily and payable monthly at an annual rate of .03% of the first
$100 million of average daily net assets, .02% of the next $500 million of net
assets and .01% of net assets in excess of $600 million. The Custodian also
receives certain transaction based fees. For an additional description of the
services performed by the Administrator, Transfer Agent and Custodian, see the
Statement of Additional Information.
Shareholder Servicing Arrangements
The Fund has adopted a Shareholder Servicing Plan (the "Plan") under which
Shares are sold through institutions which enter into shareholder servicing
agreements with the Fund. The agreements require the institutions to provide
shareholder services to their customers ("Customers") who from time to time own
of record or beneficially Fund Shares in return for payment by the Fund at a
rate not exceeding .35% (on an annualized basis) of the average daily net asset
value of the Fund Shares beneficially owned by the Customers. Fund Shares bear
all fees paid to institutions under the Plan.
The services provided by institutions under the Plan may include
processing purchase, exchange and redemption requests from Customers and placing
orders with the Transfer Agent; processing dividend and distribution payments
from the Fund on behalf of Customers; providing information periodically to
Customers showing their positions in Fund Shares; providing sub-accounting with
respect to Shares beneficially owned by Customers or the information necessary
for sub-accounting; responding to inquiries from Customers concerning their
<PAGE>
investment in Fund Shares; arranging for bank wires; and providing such other
similar services as may be reasonably requested.
The Fund understands that institutions may charge fees to their Customers
who are the owners of Fund Shares in connection with their Customer accounts.
These fees would be in addition to any amounts which may be received by an
institution under its agreements with the Fund. The agreements require an
institution to disclose to its Customers any compensation payable to the
institution by the Fund and any other compensation payable by the Customers in
connection with the investment of their assets in Shares of the Fund. Customers
of institutions should read this Prospectus in light of the terms governing
their accounts with their institutions. Conflict of interest restrictions may
apply to the receipt by institutions of compensation from the Distributor with
respect to the investment of fiduciary assets in Fund Shares.
Payments under the Plan are not tied exclusively to the shareholder
expenses actually incurred by the institutions and the payments may exceed
service expenses actually incurred. The Company's Board of Directors evaluates
the appropriateness of the Plan and its payment terms on a periodic basis.
<PAGE>
TAXES
The Fund intends to qualify as a "regulated investment company" under the
Internal Revenue Code of 1986, as amended (the "Code"). This requires, among
other things, that the Fund distribute to its shareholders at least 90% of its
investment company taxable income, but the Fund contemplates declaring as
dividends 100% of its investment company taxable income. Generally, the Fund's
investment company taxable income will be its taxable income (for example, its
interest income and net short-term capital gains), subject to certain
adjustments and excluding the excess of any net long-term capital gain for the
taxable year over the net short-term capital loss, if any, for such year. The
Fund will be taxed on its undistributed investment company taxable income, if
any.
The Fund does not expect to realize any net long-term capital gains and,
therefore, does not currently foresee paying any "capital gain dividends," as
described in the Code.
Whether paid in cash or in the form of additional Shares, income dividends
and capital gains distributions, if any, will generally be taxable to a
shareholder to the extent of the shareholder's share of the Fund's earnings and
profits as determined for tax purposes. Such dividends and distributions may
also be subject to state and local taxes.
Corporate investors should note that dividends from the Fund's net
investment income will generally not qualify for the dividends-received
deduction for corporations.
Dividends declared in October, November or December of any year payable to
shareholders of record on a specified date in such months will be deemed to have
been received by shareholders and paid by the Fund on December 31 of such year
if such dividends are actually paid during January of the following year.
The foregoing is only a brief summary of some of the important tax
considerations generally affecting the Fund and its shareholders. No attempt has
been made to present a detailed explanation of the Federal, state or local
income tax treatment of the Fund or its shareholders, and this discussion is not
intended as a substitute for careful tax planning. Accordingly, potential
investors in the Fund are urged to consult their tax advisers with specific
reference to their own tax situation.
Shareholders will be advised at least annually as to the Federal Income
Tax status of distributions made during the year. See the Statement of
Additional Information for further information regarding taxes.
<PAGE>
DESCRIPTION OF SHARES
The Articles of Incorporation authorize the Board of Directors to issue 2
billion shares of common stock, $.001 par value per share, of the Company. The
Board of Directors has the power to designate one or more classes ("Portfolios")
of shares of common stock and to classify or reclassify any unissued shares with
respect to such Portfolios. Pursuant to such authority, the Board of Directors
has authorized the issuance of shares of common stock representing interests in
the Liquidity Plus Money Market Fund and the St. Clair Money Market Fund
Fiduciary Portfolio.
Each Fund Share represents an equal proportionate interest in the Fund and
is entitled to such dividends and distributions out of the income earned on the
assets belonging to the Fund as are declared in the discretion of the Company's
Board of Directors. The Company's shareholders are entitled to one vote for each
full share held, and fractional votes for fractional shares held. Shareholders
will vote in the aggregate and not by Portfolio, except where otherwise required
by law or when the Board of Directors determines that the matter to be voted
upon effects only the interests of the holders of a particular Portfolio. Voting
rights are not cumulative and, accordingly, the holders of more than 50% of the
aggregate number of shares of the Fund may elect all of the directors if they
choose to do so and, in such event, the holders of the remaining shares would
not be able to elect any person or persons to the Board of Directors.
As used in this Prospectus, "a vote of a majority of the outstanding
Shares" of the Fund means the affirmative vote of the lesser of (a) more than
50% of the outstanding Shares of the Fund, or (b) at least 67% of the Shares of
the Fund present at a meeting at which the holders of more than 50% of the
outstanding Shares of the Fund are represented in person or by proxy.
PERFORMANCE
From time to time, in advertisements or reports to shareholders, the
performance of the Fund may be quoted and compared to that of other mutual funds
with similar investment objectives and to relevant indices.
The Fund may advertise its "yield" and "effective yield." Both yield
figures are based on historical earnings and are not intended to indicate future
performance. The "yield" of the Fund refers to the income generated by an
investment in the Fund over a 7-day period (which period will be stated in the
advertisement). This income is then "annualized." That is, the amount of income
generated by the investment during that week is assumed to be generated each
week over a 52-week period and is shown as a percentage of the investment. The
<PAGE>
"effective yield" is calculated similarly but, when annualized, the income
earned by an investment in the Fund is assumed to be reinvested. The "effective
yield" will be slightly higher than the "yield" because of the compounding
effect of this assumed reinvestment. See "Yield" in the Statement of Additional
Information.
The performance of any investment will generally reflect market
conditions, portfolio quality and maturity, type of investment, and operating
expenses. The Fund's performance will fluctuate and is not necessarily
representative of future results. Any fees charged by Institutional Investors to
their customers in connection with investments in Fund Shares are not reflected
in the Fund's performance, and such fees, if charged, will reduce the actual
return received by customers on their investments.
Shareholders will receive unaudited semi-annual reports describing the
Fund's investment operations and annual financial statements audited by
independent auditors.
GENERAL INFORMATION
In accordance with the Maryland General Corporation Law, the Company is
not required to hold annual meetings of shareholders unless the 1940 Act
requires the shareholders to elect members of the Board of Directors. However, a
meeting of shareholders may be called for any purpose upon the written request
of the holders of at least 10% of the outstanding Shares of the Fund.
The Company was organized as a Maryland corporation on May 23, 1984 under
the name St. Clair Money Market Fund, Inc., which was changed to St. Clair Fixed
Income Fund, Inc. on December 30, 1986. On March 29, 1993 the Company adopted
the name St. Clair Funds for doing business purposes.
<PAGE>
LIQUIDITY PLUS MONEY MARKET FUND
Statement of Additional Information
Liquidity Plus Money Market Fund (the "Fund") is a diversified portfolio
of St. Clair Funds (the "Company"), an open-end management investment company.
The Fund's investment advisor is Munder Capital Management (the "Advisor").
This Statement of Additional Information is intended to supplement the
information provided to investors in the Fund's Prospectus dated ______, 1996
and has been filed with the Securities and Exchange Commission ("SEC") as part
of the Company's Registration Statement. This Statement of Additional
Information is not a prospectus, and should be read only in conjunction with the
Fund's Prospectus dated ______, 1996. The contents of this Statement of
Additional Information are incorporated by reference in the Prospectus in their
entirety. A copy of the Prospectus may be obtained through Funds Distributors,
Inc. (the "Distributor"), or by calling the Fund at (800) 438-5789. This
Statement of Additional Information is dated ______, 1996.
Shares of the Fund are not deposits or obligations of, or guaranteed or endorsed
by any bank, and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency. An investment in
the Fund involves investment risks, including the possible loss of principal.
<PAGE>
TABLE OF CONTENTS
Page
General __
Fund Investments __
Additional Investment Limitations __
Directors and Officers __
Investment Advisory and Other Service Arrangements __
Portfolio Transactions __
Purchase and Redemption Information __
Net Asset Value __
Yield __
Taxes __
Additional Information Concerning Shares __
Miscellaneous __
Financial Statements __
Appendix __
No person has been authorized to give any information or to make any
representations not contained in this Statement of Additional Information or in
the Prospectus in connection with the offering made by the Prospectus and, if
given or made, such information or representations must not be relied upon as
having been authorized by the Fund or the Distributor. The Prospectus does not
constitute an offering by the Fund or by the Distributor in any jurisdiction in
which such offering may not lawfully be made.
GENERAL
The Company was organized as a Maryland corporation on May 23, 1984 under
the name St. Clair Money Market Fund, Inc., which was changed to St. Clair Fixed
Income Fund, Inc. on December 30, 1986. On March 29, 1993 the Company adopted
the name St. Clair Funds for doing business purposes.
As stated in the Prospectus, the investment advisor of the Fund is Munder
Capital Management (the "Advisor"). The principal partners of the Advisor are
Old MCM, Inc., Munder Group LLC, Woodbridge Capital Management, Inc.
("Woodbridge") and WAM Holdings, Inc. ("WAM"). Mr. Lee P. Munder, the Advisor's
Chief Executive Officer, indirectly owns or controls a majority of the
partnership interests of the Advisor. Capitalized terms used herein and not
otherwise defined have the same meanings as are given to them in the Prospectus.
Shares of the Fund are sold only to Comerica Bank, its affiliate and
subsidiary banks, and certain other Institutional Investors ("Institutional
Investors"). Shares may be purchased by Institutional Investors for investment
of
<PAGE>
their own funds, or for funds of their customer accounts ("Customer Accounts")
for which they serve in a fiduciary, agency or custodial capacity. Shares are
sold and redeemed without the imposition of a purchase or redemption charge by
the Fund, although Institutional Investors that are record owners of Shares for
their Customer Accounts may charge their customers separate account fees.
FUND INVESTMENTS
The following policies supplement the Fund's investment objective and
policies as set forth in the Prospectus. A description of applicable credit
ratings is set forth in the Appendix hereto.
Non-Domestic Bank Obligations. Non-domestic bank obligations include
Eurodollar Certificates of Deposit ("ECDs"), which are U.S. dollar-denominated
certificates of deposit issued by offices of foreign and domestic banks located
outside the United States; Eurodollar Time Deposits ("ETDs"), which are U.S.
dollar-denominated deposits in a foreign branch of a U.S. bank or a foreign
bank; Canadian Time Deposits ("CTDs"), which are essentially the same as ETDs
except they are issued by Canadian offices of major Canadian banks; Schedule Bs,
which are obligations issued by Canadian branches of foreign or domestic banks;
Yankee Certificates of Deposit ("Yankee CDs"), which are U.S. dollar-denominated
certificates of deposit issued by a U.S. branch of a foreign bank and held in
the United States; and Yankee Bankers' Acceptances ("Yankee BAs"), which are
U.S. dollar-denominated bankers' acceptances issued by a U.S. branch of a
foreign bank and held in the United States.
Repurchase Agreements. The Fund may agree to purchase securities from
financial institutions such as banks and non-bank dealers of U.S. Government
securities that are listed on the Federal Reserve Bank of New York's list of
reporting dealers, subject to the seller's agreement to repurchase them at an
agreed-upon time and price ("repurchase agreements"). The Advisor will review
and continuously monitor the creditworthiness of the seller under a repurchase
agreement, and will require the seller to maintain liquid assets in a segregated
account in an amount that is greater than the repurchase price. Default by, or
bankruptcy of the seller would, however, expose the Fund to possible loss
because of adverse market action or delays in connection with the disposition of
underlying obligations except with respect to repurchase agreements secured by
U.S. Government securities.
The repurchase price under the repurchase agreements described in the
Prospectus generally equals the price paid by the Fund plus interest negotiated
on the basis of current short-term rates (which may be more or less than the
rate on the securities underlying the repurchase agreement).
<PAGE>
Securities subject to repurchase agreements will be held by the Fund's
Custodian (or sub-custodian) in the Federal Reserve/Treasury book-entry system
or by another authorized securities depositary. Repurchase agreements are
considered to be loans by the Fund under the Investment Company Act of 1940 (the
"1940 Act").
Repurchase agreements shall be deemed to have a maturity equal to the
period remaining until the date on which the repurchase of the underlying
securities is scheduled to occur, or, where the agreement is subject to demand,
the notice period applicable to a demand for the repurchase of the securities.
Reverse Repurchase Agreements. The Fund may borrow funds for temporary or
emergency purposes by selling portfolio securities to financial institutions
such as banks and broker/dealers and agreeing to repurchase them at a mutually
specified date and price ("reverse repurchase agreements"). Reverse repurchase
agreements involve the risk that the market value of the securities sold by the
Fund may decline below the repurchase price. The Fund will pay interest on
amounts obtained pursuant to a reverse repurchase agreement. While reverse
repurchase agreements are outstanding, the Fund will maintain in a segregated
account cash, U.S. Government securities or other liquid high-grade debt
securities in an amount at least equal to the market value of the securities,
plus accrued interest, subject to the agreement.
Investment Company Securities. The Fund may invest in securities issued by
other investment companies. As a shareholder of another investment company, the
Fund would bear its pro rata portion of the other investment company's expenses,
including advisory fees. These expenses would be in addition to the expenses the
Fund bears directly in connection with its own operations. The Fund currently
intends to limit its investments in securities issued by other investment
companies so that, as determined immediately after a purchase of such securities
is made: (i) not more than 5% of the value of the Fund's total assets will be
invested in the securities of any one investment company; (ii) not more than 10%
of the value of its total assets will be invested in the aggregate in securities
of investment companies as a group; and (iii) not more than 3% of the
outstanding voting stock of any one investment company will be owned by the
Fund. It is the policy not to invest in securities issued by other investment
companies which pay asset-based fees to the Advisor, the Administrator, the
Custodian, the Distributor or their affiliates.
Stripped Securities. The Fund may acquire U.S. Government obligations and
their unmatured interest coupons that have been separated ("stripped") by their
holder, typically a custodian bank or investment brokerage firm.
<PAGE>
Having separated the interest coupons from the underlying principal of the U.S.
Government obligations, the holder will resell the stripped securities in
custodial receipt programs with a number of different names, including "Treasury
Income Growth Receipts" ("TIGRs") and "Certificate of Accrual on Treasury
Securities" ("CATS"). The stripped coupons are sold separately from the
underlying principal, which is usually sold at a deep discount because the buyer
receives only the right to receive a future fixed payment on the security and
does not receive any rights to periodic interest (cash) payments. The underlying
U.S. Treasury bonds and notes themselves are held in book-entry form at the
Federal Reserve Bank or, in the case of bearer securities (i.e., unregistered
securities which are ostensibly owned by the bearer or holder), in trust on
behalf of the owners. Counsel to the underwriters of these certificates or other
evidences of ownership of U.S. Treasury securities have stated that, in their
opinion, purchasers of the stripped securities most likely will be deemed the
beneficial holders of the underlying U.S. Government obligations for federal tax
and securities purposes. The Fund is not aware of any binding legislative,
judicial or administrative authority on this issue.
Only instruments which are stripped by the issuing agency will be
considered U.S. Government obligations. Securities such as CATS and TIGRs which
are stripped by their holder do not qualify as U.S. Government obligations.
Within the past several years the Treasury Department has facilitated
transfers of ownership of zero coupon securities by accounting separately for
the beneficial ownership of particular interest coupon and principal payments or
Treasury securities through the Federal Reserve book-entry record-keeping
system. The Federal Reserve program as established by the Treasury Department is
known as "STRIPS" or "Separate Trading of Registered Interest and Principal of
Securities." Under the STRIPS program, the Fund is able to have its beneficial
ownership of zero coupon securities recorded directly in the book-entry
record-keeping system in lieu of having to hold certificates or other evidences
of ownership of the underlying U.S. Treasury securities.
In addition, the Fund may invest in stripped mortgage-backed securities
("SMBS"), which represent beneficial ownership interests in the principal
distributions and/or the interest distributions on mortgage assets. SMBS are
usually structured with two classes that receive different proportions of the
interest and principal distributions on a pool of mortgage assets. One type of
SMBS will have one class receiving some of the interest and most of the
principal from the mortgage assets, while the other class will receive most of
the interest and the remainder of the principal. In the most common case, one
class of SMBS will receive all of the interest (the interest-only or "IO"
class), while the other
<PAGE>
class will receive all of the principal (the principal-only or
"PO" class). SMBS may be issued by FNMA or FHLMC.
The original principal amount, if any, of each SMBS class represents the
amount payable to the holder thereof over the life of such SMBS class from
principal distributions of the underlying mortgage assets, which will be zero in
the case of an IO class. Interest distributions allocable to a class of SMBS, if
any, consist of interest at a specified rate on its principal amount, if any, or
its notional principal amount in the case of an IO class. The notional principal
amount is used solely for purposes of the determination of interest
distributions and certain other rights of holders of such IO class and does not
represent an interest in principal distributions of the mortgage assets.
Yields on SMBS will be extremely sensitive to the prepayment experience on
the underlying mortgage loans, and there are other associated risks. For IO
classes of SMBS and SMBS that were purchased at prices exceeding their principal
amounts there is a risk that a Fund may not fully recover its initial
investment.
The determination of whether a particular government- issued IO or PO
backed by fixed-rate mortgages is liquid may be made under guidelines and
standards established by the Board of Directors. Such securities may be deemed
liquid if they can be disposed of promptly in the ordinary course of business at
a value reasonably close to that used in the calculation of the Fund's net asset
value per share.
Variable and Floating Rate Instruments. Debt instruments may be structured
to have variable or floating interest rates. Variable and floating rate
obligations purchased by the Fund may have stated maturities in excess of the
Fund's maturity limitation if the Fund can demand payment of the principal of
the instrument at least once during such period on not more than thirty days'
notice (this demand feature is not required if the instrument is guaranteed by
the U.S. Government or an agency thereof) or if the instruments are deemed to
have shorter maturities in accordance with the current regulations of the
Securities and Exchange Commission. These instruments may include variable
amount master demand notes that permit the indebtedness to vary in addition to
providing for periodic adjustments in the interest rates. The Advisor will
consider the earning power, cash flows and other liquidity ratios of the issuers
and guarantors of such instruments and, if the instrument is subject to a demand
feature, will continuously monitor their financial ability to meet payment on
demand. Where necessary to ensure that a variable or floating rate instrument is
equivalent to the quality standards applicable to the Fund, the issuer's
obligation to pay the principal of the instrument will be backed by an
unconditional bank letter or line of credit, guarantee or commitment to lend.
<PAGE>
In determining average weighted portfolio maturity of the Fund, short-term
variable rate securities shall be deemed to have a maturity equal to the earlier
of the period remaining until the next readjustment of the interest rate or the
period remaining until the principal amount can be recovered through demand, and
short-term floating rate securities shall be deemed to have a maturity of one
day. For purposes of this paragraph, "short-term" with respect to a security
means that the principal amount, in accordance with the terms of the security,
must unconditionally be paid in 397 calendar days or less.
In determining average weighted portfolio maturity of the Fund, long-term
variable rate securities shall be deemed to have a maturity equal to the longer
of the period remaining until the next readjustment of the interest rate or the
period remaining until the principal amount can be recovered through demand, and
long-term floating rate securities shall be deemed to have a maturity equal to
the period remaining until the principal amount can be recovered through demand.
For purposes of this paragraph, "long-term" with respect to a security means
that the principal amount of the security is scheduled to be paid in more than
397 days.
Variable rate government securities where the variable rate of interest is
readjusted no less frequently than every 762 days shall be deemed to have a
maturity equal to the period remaining until the next interest rate
readjustment. Floating rate government securities shall be deemed to have a
remaining maturity of one day.
The absence of an active secondary market for certain variable and
floating rate notes could make it difficult to dispose of the instruments, and
the Fund could suffer a loss if the issuer defaulted or during periods that the
Fund is not entitled to exercise its demand rights.
Variable and floating rate instruments held by the Fund will be subject to
the Fund's limitation on illiquid investments when the Fund may not demand
payment of the principal amount within seven days absent a reliable trading
market.
When-Issued Purchases and Forward Commitments (Delayed- Delivery).
When-issued purchases and forward commitments (delayed-delivery) are commitments
by the Fund to purchase or sell particular securities with payment and delivery
to occur at a future date (perhaps one or two months later). These transactions
permit the Fund to lock-in a price or yield on a security, regardless of future
changes in interest rates.
When the Fund agrees to purchase securities on a when- issued or forward
commitment basis, the Custodian will set aside cash or liquid portfolio
securities equal to the amount
<PAGE>
of the commitment in a separate account. Normally, the Custodian will set aside
portfolio securities to satisfy a purchase commitment, and in such a case the
Fund may be required subsequently to place additional assets in the separate
account in order to ensure that the value of the account remains equal to the
amount of the Fund's commitments. It may be expected that the market value of
the Fund's net assets will fluctuate to a greater degree when it sets aside
portfolio securities to cover such purchase commitments than when it sets aside
cash.
The Fund will purchase securities on a when-issued or forward commitment
basis only with the intention of completing the transaction and actually
purchasing the securities. If deemed advisable as a matter of investment
strategy, however, the Fund may dispose of or renegotiate a commitment after it
is entered into, and may sell securities it has committed to purchase before
those securities are delivered to the Fund on the settlement date. In these
cases the Fund may realize a taxable capital gain or loss.
When the Fund engages in when-issued and forward commitment transactions,
it relies on the other party to consummate the trade. Failure of such party to
do so may result in the Fund's incurring a loss or missing an opportunity to
obtain a price considered to be advantageous.
The market value of the securities underlying a when- issued purchase or a
forward commitment to purchase securities, and any subsequent fluctuations in
their market value, are taken into account when determining the market value of
the Fund starting on the day the Fund agrees to purchase the securities. The
Fund does not earn interest on the securities it has committed to purchase until
they are paid for and delivered on the settlement date.
ADDITIONAL INVESTMENT LIMITATIONS
The Fund's Prospectus lists certain investment restrictions that may be
changed only by a vote of a majority of the outstanding Shares of the Fund (as
defined in the Prospectus). The additional investment restrictions and
limitations listed below supplement those contained in the Prospectus and may be
changed only by such a shareholder vote.
The Fund may not:
1. Pledge, mortgage or hypothecate its assets other
than to secure permitted borrowings.
2. Underwrite securities of other issuers, except insofar as the Fund
may be deemed an underwriter under the Securities Act of 1933, as
amended, in selling portfolio securities.
<PAGE>
3. 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.
4. 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.
5. Make investments for the purpose of exercising
control or management.
6. 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.
Additional investment restrictions adopted by the Fund, which may be
changed by the Board of Directors, provide that the Fund may not:
1. Purchase or sell interests in oil, gas or other
mineral exploration or development plans or leases.
2. Invest more than 5% of its total assets in
securities of issuers which together with any
predecessors have a record of less than three years
of continuous operation. This restriction shall not
apply with respect to securities issued by a special
purpose funding vehicle for a company with a record
of at least three years of continuous operation, or
to real estate investment trusts the sponsor of
which has a record of at least three years of
continuous operation.
3. Invest in other investment companies except as
permitted under the 1940 Act.
If a percentage limitation is satisfied at the time of investment, a later
increase or decrease in such percentage resulting from a change in the value of
the Fund's investments will not constitute a violation of such limitation, and
the Fund may continue to hold a security even though it causes the Fund to
exceed a percentage limitation because of fluctuation in the value of the Fund's
assets.
<PAGE>
In order to permit the sale of shares in certain states, the Fund may make
commitments more restrictive than the investment policies and limitations
described above.
DIRECTORS AND OFFICERS
The directors and executive officers of the Company, and their business
addresses and principal occupations during the past five years, are:
Principal Occupation
Name, Positions During
Address and Age with Company Past Five Years
Charles W. Chairman of the Senior Advisor to the
Elliott 1/ Board of Directors President and Interim
3338 Bronson Blvd. Director of Athletics
Kalmazoo, MI 49008 - Western Michigan
Age: 62 University since July
1995; prior to that Executive
Vice President Administration &
Chief Financial Officer, Kellogg
Company from January 1987
through June 1995; before that
Price Waterhouse. Board of
Directors, Steelcase Financial
Corporation.
John Rakolta, Jr. Director and Vice Chairman, Walbridge
1876 Rathmor Chairman of the Aldinger Company
Bloomfield Hills, Board of Directors
MI 48304
Age: 47
Thomas B. Bender Director Investment Advisor,
7 Wood Ridge Road Financial & Investment
Glen Arbor, Management Group
MI 49636 (since April, 1991);
Age: 61 Vice President
Institutional Sales,
Kidder, Peabody & Co.
(Retired April, 1991).
David J. Brophy Director Professor, University
1025 Martin Place of Michigan; Director,
Ann Arbor, River Place Financial
MI 48104 Corp.; Trustee,
Age: 58 Renaissance Assets
Trust.
<PAGE>
Dr. Joseph E. Director Corporate and
Champagne Executive Consultant
319 Snell Road since September
Rochester, 1995; prior to that
MI 48306 Chancellor, Lamar
Age: 56 University from
September 1994 until September
1995; before that Consultant to
Management, Lamar University;
President and Chief Executive
Officer, Crittenton Corporation,
Crittenton Development
Corporation until August 1993;
before that President, Oakland
University of Rochester, MI,
until August 1991; Member, Board
of Directors, Ross Operating
Valve of Troy, MI
Thomas D. Eckert Director President and COO,
10726 Falls Mid-Atlantic Group
Pointe Drive of Pulte Home
Great Falls, Corporation
VA 22066
Age: 47
Jack L. Otto Director Retired; Director of
6532 W. Beech Standard Federal Bank;
Tree Road Executive Director,
Glen Arbor, McGregor Fund (a
MI 49636 private philanthropic
Age: 67 foundation) 1981-1985;
Managing Partner, Detroit
officer of Ernst & Young, until
1981.
Arthur DeRoy Director President, Rodecker &
Rodecker Company, Investment
4000 Town Center Brokers, Inc. since
Suite 101 November 1976;
Southfield, President, RAC
MI 48075 Advisors, Inc.,
Age: 68 Registered Investment
Advisor since February
1979; President and
Trustee, Helen L.
DeRoy Foundation, a
<PAGE>
charitable foundation;
Vice President and
Trustee, DeRoy
Testamentary
Foundation, a
charitable foundation;
Trustee, Providence
Hospital Foundation.
Lee P. Munder President President and CEO
480 Pierce Street of the Advisor;
Suite 300 Chief Executive
Birmingham, Officer and President
MI 48009 of Old MCM, Inc.;
Age: 50 Chief Executive
Officer of World
Asset Management;
Director, LPM
Investment Services,
Inc. ("LPM").
Terry H. Gardner Vice President, Vice President and
480 Pierce Street Chief Financial Chief Financial
Suite 300 Officer and Officer of the
Birmingham, Treasurer Advisor and World
MI 48009 Asset Management;
Age: 35 Vice President and
Chief Financial
Officer of Old MCM,
Inc. (February 1993 to
present); Audit
Manager Arthur
Andersen & Co. (1991
to February 1993);
Secretary of LPM.
Paul Tobias Vice President Executive Vice
480 Pierce Street President and
Suite 300 Chief Operating
Birmingham, Officer of the
MI 48009 Advisor (since
Age: 43 April 1995) and
Executive Vice
President of Comerica,
Inc.
Gerald Seizert Vice President Executive Vice
480 Pierce Street President and
Suite 300 Chief Investment
Birmingham, Officer/Equities
MI 48009 of the Advisor
Age: 44 (since April 1995);
Managing Director
(1991- 1995), Director
<PAGE>
(1992-1995) and Vice
President (1984-1991)
of Loomis, Sayles and
Company, L.P.
Elyse G. Essick Vice President Vice President and
480 Pierce Street Director of Marketing
Suite 300 for the Advisor; Vice
Birmingham, President and Director
MI 48009 of Client Services of
Age: 37 Old MCM, Inc. (August
1988 to December
1994).
James C. Robinson Vice President Vice President and
480 Pierce Street Chief Investment
Suite 300 Officer/Fixed Income
Birmingham, for the Advisor; Vice
MI 48009 President and Director
Age: 34 of Fixed Income of Old
MCM, Inc. (1987-1994).
Leonard J. Barr, II Vice President Vice President and
480 Pierce Street Director of Core
Suite 300 Equity Research of the
Birmingham, Advisor; Director and
MI 48009 Senior Vice President
Age: 51 of Old MCM, Inc.
(since 1988); Director
of LPM.
Lisa A. Rosen Secretary General Counsel of
480 Pierce Street the Advisor since May,
Suite 300 1996; Formerly
Birmingham, Counsel, First Data
MI 48009 Investor Services
Age: 28 Group, Inc.; Assistant
Vice President and Counsel with
The Boston Company Advisors,
Inc.; Associate with Hutchins,
Wheeler & Dittmar.
Ann F. Putallaz Vice President Vice President and
480 Pierce Street Director of Fiduciary
Suite 300 Services (since
Birmingham, January 1995);
MI 48009 Director of Client and
Age: 50 Marketing Services of
Woodbridge Capital
Management, Inc.
<PAGE>
Richard H. Rose Assistant Treasurer Senior Vice President,
First Data First Data Investor
Investor Services Services Group, Inc.
Group, Inc. (since May 6, 1994).
One Exchange Place Formerly, Senior Vice
6th Floor President, The Boston
Boston, MA 02109 Company Advisors, Inc.
Age: 39 since November 1989.
1/ Director is an "interested person" of the Company as
defined in the 1940 Act.
Directors of the Company receive an aggregate fee from the Company, The
Munder Funds Trust (the "Trust") and the Munder Funds, Inc. ("MFI") comprised of
an annual retainer fee, and a fee for each Board meeting attended, and are
reimbursed for all out-of-pocket expenses relating to attendance at meetings.
The following table summarizes the compensation paid to the Directors for
the fiscal year ended June 30, 1995.
Pension
Retirement Estimated Total
Aggregate Benefits Annual from
Compensation Accrued Benefits the
Name of Person from the as part of Upon Fund
Position Company Fund Expenses Retirement Complex
Charles W. Elliott None None None $4,500.00
Chairman
John Rakolta, Jr. None None None $7,000.00
Vice Chairman
Thomas B. Bender None None None $4,500.00
David J. Brophy None None None $7,000.00
Trustee and Director
Dr. Joseph E. Champagne None None None $4,500.00
Trustee and Director
Thomas D. Eckert None None None $7,000.00
Trustee and Director
Jack L. Otto None None None $4,500.00
Trustee and Director
Arthur DeRoy Rodecker None None None $4,500.00
Trustee and Director
<PAGE>
No officer, director or employee of the Advisor, Comerica, the
Distributor, the Administrator or Transfer Agent currently receives any
compensation from the Company.
INVESTMENT ADVISORY AND OTHER SERVICE ARRANGEMENTS
Investment Advisor. The Advisor of the Fund is Munder Capital Management,
a Delaware general partnership. The general partners of the Advisor are
Woodbridge, WAM, Old MCM, and Munder Group, LLC. Woodbridge and WAM are
wholly-owned subsidiaries of Comerica Bank -- Ann Arbor, which in turn is a
wholly-owned subsidiary of Comerica Incorporated, a publicly-held bank holding
company.
Under the terms of the Advisory Agreement, the Advisor furnishes
continuing investment supervision to the Fund and is responsible for the
management of the 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 Company's Board of Directors.
For the advisory services provided and expenses assumed by it, the Advisor
has agreed to a fee from the Fund, computed daily and payable monthly, at an
annual rate of .35% of average daily net assets of the Fund.
If the total expenses borne by the Fund in any fiscal year exceed the
expense limitations imposed by applicable state securities regulations, the
Advisor, Administrator, Custodian and Transfer Agent will bear the amount of
such excess to the extent required by such regulations in proportion to the fees
otherwise payable to them for such year. Such amount borne will be limited to
the amount of the fees paid to them for the applicable period. As of the date of
this Statement of Additional Information, the most restrictive expense
limitation applicable to the Fund limits its aggregate annual expenses,
including management and advisory fees but excluding interest, taxes, brokerage
commissions, and certain other expenses to 2-1/2% of the first $30 million of
its average net assets, 2% of the next $70 million, and 1-1/2% of its remaining
average net assets.
The Advisory Agreement will continue in effect for a period of two years
from its effective date. If not sooner terminated, the Advisory Agreement will
continue in effect for successive one year periods thereafter, provided that
each continuance is specifically approved annually by (a) the vote of a majority
of the Board of Directors who are not parties to the Advisory Agreement or
interested persons (as defined in the 1940 Act), cast in person at a meeting
called for the purpose of voting on approval, and (b) either (i) the vote of a
majority of the outstanding voting securities of the Fund, or (ii) the vote of a
majority of the Board of Directors. The Advisory Agreement is terminable with
respect to the Fund by a
<PAGE>
vote of the Board of Directors, 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. The Advisor may also terminate its advisory
relationship with respect to the Fund on 60 days' written notice to the Company,
and the Advisory Agreement terminates automatically in the event of its
assignment.
Distribution Agreement. The Company has entered into a distribution
agreement, under which the Distributor, as agent, sells shares of the Fund on a
continuous basis. The distributor has agreed to use appropriate efforts to
solicit orders for the purchase of shares of the Fund, although it is not
obligated to sell any particular amount of shares. The Distributor pays the cost
of printing and distributing prospectuses to persons who are not holders of Fund
Shares (excluding preparation and printing expenses necessary for the continued
registration of the shares) and of printing and distributing all sales
literature.
Shareholder Servicing Arrangements. As stated in the Fund's Prospectus,
Fund Shares are sold to investors through institutions which enter into
Shareholder Servicing Agreements with the Company to provide support services to
their Customers who beneficially own Fund Shares in consideration of the Fund's
payment of not more than .35% (on a annualized basis) of the average daily net
asset value of the Fund Shares beneficially owned by the Customers.
Services provided by institutions under their service agreements may
include (i) aggregating and processing purchase and redemption requests for Fund
Shares from Customers and placing net purchase and redemption orders with the
Distributor; (ii) providing Customers with a service that invests the assets of
their accounts in Fund Shares pursuant to specific or pre-authorized
instructions; (iii) processing dividend payments on behalf of Customers; (iv)
providing information periodically to Customers showing their positions in Fund
Shares; (v) arranging for bank wires; (vi) responding to Customer inquiries
relating to the services performed by the institutions; (vii) providing
subaccounting with respect to Fund Shares beneficially owned by Customers or the
information necessary for subaccounting; (viii) if required by law, forwarding
shareholder communications from the Company (such as proxies, shareholder
reports, annual and semi-annual financial statements and dividend, distribution
and tax notices) to Customers; (ix) forwarding to Customers proxy statements and
proxies containing any proposals regarding the Company's arrangements with
institutions; and (x) providing such other similar services as the Company may
reasonably request to the extent the institutions are permitted to do so under
applicable statutes, rules and regulations. The Fund's Shareholder Servicing
Plan was approved by the Board of Directors on _____.
<PAGE>
Pursuant to the Company's agreements with such institutions, the Board of
Directors will review, at least quarterly, a written report of the amounts
expended under the Company's agreements with Institutions and the purposes for
which the expenditures were made. In addition, the arrangements with
Institutions must be approved annually by a majority of the Board of Directors,
including a majority of the Directors who are not "interested persons" as
defined in the 1940 Act, and have no direct or indirect financial interest in
such arrangements.
The Board of Directors has approved the arrangements with the Institutions
based on information provided by the service contractors that there is a
reasonable likelihood that the arrangements will benefit the Fund and its
shareholders by affording the Fund greater flexibility in connection with the
servicing of the accounts of the beneficial owners of their shares in an
efficient manner.
Administration Agreement. First Data Investor Services Group, Inc. ("First
Data" or the Administrator") located at 53 State Street, Boston, Massachusetts
02109 serves as the Company's administrator pursuant to an administration
agreement (the "Administration Agreement"). First Data has agreed to provide
accounting and bookkeeping services for the Fund, including the computation of
the Fund's net asset value, net income and realized capital gains, if any, to
maintain office facilities for the Company; furnish statistical and research
data, clerical services, and stationery and office supplies; prepare and file
various reports with the appropriate regulatory agencies; and prepare various
materials required by the SEC or any state securities commission having
jurisdiction over the Company.
The Administration Agreement provides that the Administrator performing
services thereunder shall not be liable under the Agreement except for its
willful misfeasance, bad faith or gross negligence in the performance of its
duties or from the reckless disregard by it of its duties and obligations
thereunder.
Custodian, Sub-Administration and Transfer Agency Agreements. Comerica
Bank, the Company's Custodian (the "Custodian"), whose principal business
address is One Detroit Center, 500 Woodward Avenue, Detroit, Michigan 46226,
maintains custody of the Company's assets pursuant to a custodian agreement (the
"Custodian Agreement"). Under the Custodian Agreement, the Custodian (i)
maintains a separate account in the name of the Fund, (ii) holds and transfers
portfolio securities on account of the Fund, (iii) accepts receipts and makes
disbursements of money on behalf of the Fund, (iv) collects and receives all
income and other payments and distributions on account of the Fund's securities
and (v) makes periodic reports to the Company's Board of Directors
<PAGE>
concerning the Fund's operations. The Custodian is authorized to select one or
more domestic or foreign banks or trust companies to serve as sub-custodian on
behalf of the Company.
First Data also serves as the transfer and dividend disbursing agent for
the Company pursuant to a transfer agency agreement (the "Transfer Agency
Agreement"), under which First Data (i) issues and redeems shares of the Fund,
(ii) addresses and mails all communications by the Fund to its record owners,
including reports to shareholders, dividend and distribution notices and proxy
materials for its meetings of shareholders, (iii) maintains shareholder
accounts, (iv) responds to correspondence by shareholders of the Fund and (v)
makes periodic reports to the Company's Board of Directors concerning the
operations of the Fund.
Other Information Pertaining to Administration, Custodian and Transfer
Agency Agreements. As stated in the Prospectus, the Company's Administrator and
Transfer Agent receive, as compensation for their services, a fee from the
Company based on the aggregate average daily net assets of the Fund and other
investment portfolios advised by the Adviser and administered by First Data. The
Custodian receives a separate fee for its services. In approving the
Administration and Transfer Agency Agreements, the Board of Directors of the
Company considered the services that are to be provided under the several
agreements, the experience and qualifications of the respective service
contractors, the reasonableness of the fee payable by the Company in comparison
to the charges of competing vendors, the impact of the fee on the operating
expense ratio of the Fund and the fact that neither the Administrator nor the
Transfer Agent is affiliated with either the Company or the Adviser. The Board
of Directors also considered their responsibilities under federal and state law
in approving these agreements.
PORTFOLIO TRANSACTIONS
Pursuant to the Advisory Agreement, the Advisor determines which
securities are to be sold and purchased by the Fund and which brokers are to be
eligible to execute its portfolio transactions. Portfolio securities are
normally purchased directly from the issuer or from an underwriter or market
maker for the securities. Purchases from underwriters of portfolio securities
include a commission or concession paid by the issuer to the underwriter and
purchases from dealers serving as market makers may include the spread between
the bid and asked price. While the Advisor generally seeks competitive spreads
or commissions, the Fund may not necessarily pay the lowest spread or commission
available on each transaction for reasons discussed below.
Allocation of transactions, including their frequency, to
various dealers is determined by the Advisor in its best
<PAGE>
judgment and in a manner deemed fair and reasonable to shareholders. The primary
consideration is the prompt execution of orders in an effective manner at the
most favorable price. Subject to this consideration, dealers who provide
supplemental investment research to the Advisor may receive orders for
transactions by the Fund. Information so received is in addition to and not in
lieu of services required to be performed by the Advisor, nor would the receipt
of such information reduce the Advisor's fees. Such information may be useful to
the Advisor in serving both the Fund and other clients, and conversely,
supplemental information obtained by the placement of business of other clients
may be useful to the Advisor in carrying out its obligations to the Fund.
The Fund will not execute portfolio transactions through, acquire
portfolio securities issued by, make savings deposits in, or enter into
repurchase or reverse repurchase agreements with the Advisor, First Data, or
their affiliates.
Investment decisions for the Fund are made independently from those for
any other investment portfolios or accounts ("accounts") managed by the Adviser.
Such accounts may also invest in the same securities as the Fund. When a
purchase or sale of the same security is made at substantially the same time on
behalf of the Fund and another account, the transaction will be averaged as to
price, and available investments allocated as to amount, in a manner which the
Adviser believes to be equitable to the Fund and such other account. In some
instances, this investment procedure may adversely affect the price paid or
received by the Fund or the size of the position obtained or sold by the Fund.
To the extent permitted by law, the Adviser may aggregate the securities to be
sold or purchased for the Fund with those to be sold or purchased for other
accounts in order to obtain the best execution.
The Fund does not intend to seek profits through short-term trading. The
Fund's annual portfolio turnover rate will be relatively high, but portfolio
turnover is not expected to have a material effect on the net income of the
Fund. The Fund's portfolio turnover rate is expected to be zero for regulatory
reporting purposes.
PURCHASE AND REDEMPTION INFORMATION
Differing types of Customer Accounts over which Institutional Investors
exercise substantial investment discretion may be used to purchase Fund Shares,
including trust accounts. Investors purchasing Fund Shares may include officers,
directors, or employees of Comerica Bank or its affiliated banks.
<PAGE>
The Fund may suspend the right of redemption or postpone the date of
payment for Shares during any period when: (a) trading on the New York Stock
Exchange (the "Exchange") is restricted by applicable rules and regulations of
the Securities and Exchange Commission (the "SEC"); (b) the Exchange is closed
for other than customary weekend and holiday closings; (c) the SEC has by order
permitted such suspension; or (d) an emergency exists as determined by the SEC.
Upon the occurrence of any of the foregoing conditions, the Fund may also
suspend or postpone the recordation of the transfer of its Shares.
In addition, the Fund may compel the redemption of, reject any order for,
or refuse to give effect on the Fund's books to the transfer of, its Shares
where the relevant investor or investors have not furnished the Fund with valid,
certified taxpayer identification numbers and such other tax- related
certifications as the Fund may request. The Fund may also redeem Shares
involuntarily if it otherwise appears appropriate to do so in light of the
Fund's responsibilities under the 1940 Act or in connection with a failure of
the appropriate person(s) to furnish certified taxpayer identification numbers
and other tax-related certifications.
(See "Net Asset Value.")
Payment for shares may, in the discretion of the Advisor, be made in the
form of securities that are permissible investments for the Fund as described in
the Prospectus. For further information about this form of payment please
contact the Transfer Agent. In connection with an in-kind securities payment,
the Fund will require, among other things, that the securities be valued on the
day of purchase in accordance with the pricing methods used by the Fund and that
the Fund receive satisfactory assurances that (1) it will have good and
marketable title to the securities received by it; (2) that the securities are
in proper form for transfer to the Fund; and (3) adequate information will be
provided concerning the basis and other tax matters relating to the securities.
NET ASSET VALUE
The Fund has elected to use the amortized cost method of valuation
pursuant to Rule 2a-7 under the 1940 Act. This involves valuing an instrument at
its cost initially and thereafter assuming a constant amortization to maturity
of any discount or premium, regardless of the impact of fluctuating interest
rates on the market value of the instrument. This method may result in periods
during which value, as determined by amortized cost, is higher or lower than the
price the Fund would receive if it sold the instrument. The value of securities
in the Fund can be expected to vary inversely with changes in prevailing
interest rates.
<PAGE>
Pursuant to Rule 2a-7, as amended, the Fund will maintain a
dollar-weighted average portfolio maturity appropriate to its objective of
maintaining a stable net asset value per Share, provided that the Fund will
neither purchase any security with a remaining maturity of more than 397 days
(securities subject to repurchase agreements, variable and floating rate
instruments, and certain other securities may bear longer maturities) nor
maintain a dollar-weighted average portfolio maturity which exceeds 90 days.
In addition, the Fund may acquire only U.S. dollar-denominated obligations
that present minimal credit risks and that are "First Tier Securities" at the
time of investment. First Tier Securities are those that are rated in the
highest rating category by at least two nationally recognized security rating
organizations ("NRSROs") or by one if it is the only NRSRO rating such
obligation or, if unrated, determined to be of comparable quality. A security is
deemed to be rated if the issuer has any security outstanding of comparable
priority and security which has received a short-term rating by an NRSRO. The
Adviser will determine that an obligation presents minimal credit risks or that
unrated investments are of comparable quality, in accordance with guidelines
established by the Board of Directors.
The Company's Board of Directors has also undertaken to establish
procedures reasonably designed, taking into account current market conditions
and the Fund's investment objective, to stabilize the Fund's net asset value per
Share for purposes of sales and redemptions at $1.00. These procedures include
review by the Board of Directors, at such intervals as it deems appropriate, to
determine the extent, if any, to which the Fund's net asset value per Share
calculated by using available market quotations deviates from $1.00 per Share.
In the event such deviation exceeds one-half of one percent, the Rule requires
that the Board promptly consider what action, if any, should be initiated. If
the Board believes that the extent of any deviation from the Fund's $1.00
amortized cost price per Share may result in material dilution or other unfair
results to new or existing investors, it will take such steps as it considers
appropriate to eliminate or reduce to the extent reasonably practicable any such
dilution or unfair results. These steps may include: selling portfolio
instruments prior to maturity; shortening the average portfolio maturity;
withholding or reducing dividends; or redeeming Shares in kind.
YIELD
The Fund's standardized 7-day yield is computed by determining the net
change, exclusive of capital changes, in the value of a hypothetical
pre-existing account in the Fund having a balance of one Share at the beginning
of the period, dividing the net change in account value by the value of the
<PAGE>
account at the beginning of the base period to obtain the base period return,
and multiplying the base period return by 365/7. The net change in the value of
an account in the Fund includes the value of additional Shares purchased with
dividends from the original Share and any such additional Shares, and all fees,
other than non-recurring account or sales charges, that are charged to all
shareholder accounts in proportion to the length of the base period and the
Fund's average account size. The capital changes to be excluded from the
calculation of the net change in account value are realized gains and losses
from the sale of securities and unrealized appreciation and depreciation. The
Fund's effective annualized yield is computed by compounding the unannualized
base period return (calculated as above) by adding 1 to the base period return,
raising the sum to a power equal to 365 divided by 7, and subtracting 1 from the
result.
TAXES
In General
The Fund is treated as a separate corporation for Federal Income Tax
purposes and intends to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code. This requires the Fund to meet
numerous tests regarding distributions, derivation of gross income, and
diversification of assets.
The Fund's policy is to distribute as dividends substantially all of its
investment company taxable income and any net realized long-term capital gains
to shareholders each year.
Information as to the tax status of distributions to shareholders will be
furnished at least annually by the Fund. Investors considering purchasing Shares
of the Fund should consult competent tax counsel regarding the state and local,
as well as Federal, tax consequences before investing.
While the Fund does not expect to realize any net capital gains (the
excess of net long-term capital gains over net short-term capital losses), such
gains, if any, will be distributed at least annually. Such distributions, if
any, will be taxable to Fund shareholders as long-term capital gains, regardless
of how long a shareholder has held Fund Shares. The Fund intends to designate
such distributions as capital gains dividends in a written notice mailed by the
Fund to shareholders not later than sixty days after the close of the Fund's
taxable year.
A non-deductible, 4% Federal Excise Tax is imposed on any regulated
investment company that does not distribute to investors in each calendar year
an amount equal to (i) 98% of its calendar year ordinary income, (ii) 98% of its
capital
<PAGE>
gain net income (the excess of short- and long-term capital gain over short- and
long-term capital loss) for the one-year period ending October 31, and (iii)
100% of any undistributed ordinary income or capital gain net income from the
prior year.
The Fund intends to declare and pay dividends and any capital gains
distributions so as to avoid imposition of the Federal Excise Tax. Dividends
declared during October, November or December and payable to shareholders of
record on a specified date in one of such months will be deemed to have been
paid by the Fund and received by shareholders on December 31 of the calendar
year declared, provided that such dividends and distributions are paid during
January of the following year.
Backup Withholding
Generally, the Fund is required to withhold 31% of ordinary income
dividends, capital gains distributions, and redemptions paid to shareholders who
have not complied with IRS taxpayer identification regulations and in certain
other circumstances. Shareholders who are not otherwise subject to backup
withholding may avoid this withholding requirement by certifying on the Account
Application Form their proper Social Security or Taxpayer Identification Number
and certifying that they are not subject to backup withholding.
Other
The foregoing describes some of the tax consequences of investing in the
Fund but is not an exhaustive presentation of all matters that may bear upon a
particular situation. Non- U.S. shareholders in particular should note that they
generally will be subject to U.S. withholding taxes on Fund dividends at a
maximum rate of 30%.
ADDITIONAL INFORMATION CONCERNING SHARES
The Company's Articles of Incorporation authorize the Board of Directors
to issue up to 2 billion full and fractional shares of Common Stock. The Board
has allocated shares in two series ("Portfolios"), although currently only
shares of the Fund are offered by the Company.
The Board of Directors may classify or reclassify any authorized but
unissued shares of the Company into one or more additional Portfolios (or
classes of shares within a Portfolio) by setting or changing in any one or more
respects their respective preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption.
<PAGE>
Shares have no subscription or pre-emptive rights and only such conversion
or exchange rights as the Board may grant in its discretion. When issued for
payment as described in the Fund's Prospectus and this Statement of Additional
Information, the Fund's Shares will be fully paid and non-assessable. In the
event of a liquidation or dissolution of the Company, Shares of the Fund are
entitled to receive the assets available for distribution belonging to the Fund,
and a proportionate distribution, based upon the relative asset values of the
Fund and the Company's other Portfolios, of any general assets not belonging to
any particular Portfolio which are available for distribution.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted to the holders of the outstanding voting securities of an investment
company such as the Company shall not be deemed to have been effectively acted
upon unless approved by the holders of a majority of the outstanding shares of a
Portfolio affected by the matter. A Portfolio is affected by a matter unless it
is clear that the interests of the Portfolio in the matter are identical to the
interests of the Company's other Portfolios or that the matter does not affect
any interest of the Portfolio. Under Rule 18f-2, the approval of an investment
advisory agreement or any change in a fundamental investment policy would be
effectively acted upon with respect to a Portfolio only if approved by a
majority of the outstanding shares of the Portfolio. However, Rule 18f-2 also
provides that the ratification of independent auditors, the approval of
principal underwriting contracts, and the election of directors may be
effectively acted upon by shareholders of the Company voting together without
regard to class.
Notwithstanding any provision of Maryland law requiring a greater vote of
the Company's shares (or of any class voting as a class) in connection with any
corporate action, unless otherwise provided by law (for example, by Rule 18f-2)
or by the Company's Articles of Incorporation, the Company may take or authorize
such action upon the favorable vote of the holders of more than 50% of the
outstanding Common Stock of the Fund and the Company's other Portfolios, if any,
(voting together without regard to class).
<PAGE>
MISCELLANEOUS
Counsel. The law firm of Dechert Price & Rhoads, 1500 K
Street, N.W., Washington, D.C. 20005, serves as counsel to
the Company.
Independent Auditors. Ernst & Young LLP, 200 Clarendon
Street, Boston, MA 02116, serves as the Company's independent
auditors.
Banking Laws. Banking laws and regulations currently prohibit a bank
holding company registered under the Federal Bank Holding Company Act of 1956 or
any bank or non-bank affiliate thereof from sponsoring, organizing, controlling
or distributing the shares of a registered, open-end investment company
continuously engaged in the issuance of its shares, and prohibit banks generally
from underwriting securities, but such banking laws and regulations do not
prohibit such a holding company or affiliate or banks generally from acting as
investment advisor, administrator, transfer agent or custodian to such an
investment company, or from purchasing shares of such a company as agent for and
upon the order of customers. The Advisor and the Custodian are subject to such
banking laws and regulations.
The Advisor and the Custodian believe they may perform the services for
the Company contemplated by their respective agreements with the Company without
violation of applicable banking laws or regulations. It should be noted,
however, that there have been no cases deciding whether bank and non-bank
subsidiaries of a registered bank holding company may perform services
comparable to those that are to be performed by these companies, and future
changes in either Federal or state statutes and regulations relating to
permissible activities or banks and their subsidiaries or affiliates, as well as
future judicial or administrative decisions or interpretations of current and
future statutes and regulations, could prevent these companies from continuing
to perform such service for the Company.
Should future legislative, judicial or administrative action prohibit or
restrict the activities of such companies in connection with the provision of
services on behalf of the Company, the Company might be required to alter
materially or discontinue its arrangements with such companies and change its
method of operations. It is not anticipated, however, that any change in the
Company's method of operations would affect the net asset value per share of any
Fund or result in a financial loss to any Customer.
Shareholder Approvals. As used in this Statement of
Additional Information and in the Prospectus, a "majority of
the outstanding shares" of a Fund or investment portfolio
means the lesser of (a) 67% of the shares of the particular
<PAGE>
Fund portfolio represented at a meeting at which the holders of more than 50% of
the outstanding shares of such Fund or portfolio are present in person or by
proxy, or (b) more than 50% of the outstanding shares of such Fund or portfolio.
REGISTRATION STATEMENT
This Statement of Additional Information and the Fund's Prospectus do not
contain all the information included in the Fund's registration statement filed
with the SEC under the 1933 Act with respect to the securities offered hereby,
certain portions of which have been omitted pursuant to the rules and
regulations of the SEC. The registration statement, including the exhibits filed
therewith, may be examined at the offices of the SEC in Washington, D.C.
Statements contained herein and in the Fund's Prospectus as to the
contents of any contract of other documents referred to are not necessarily
complete, and, in such instance, reference is made to the copy of such contract
or other documents filed as an exhibit to the Fund's registration statement,
each such statement being qualified in all respect by such reference.
<PAGE>
APPENDIX
- - - Rated Investments -
Commercial Paper
Rated commercial paper purchased by the Fund must have (at the time of
purchase) the highest quality rating assigned to short-term debt securities or,
if not rated, or rated by only one agency, are determined to be of comparative
quality pursuant to guidelines approved by the Fund's Board of Directors.
Highest quality ratings for commercial paper for Moody's and S & P are as
follows:
Moody's: The rating "Prime-1" is the highest commercial paper rating
category assigned by Moody's. These issues (or related supporting institutions)
are considered to have a superior capacity for repayment of short-term
promissory obligations.
S&P: Commercial paper ratings of S&P are current assessments of the
likelihood of timely payment of debts having original maturities of no more than
365 days. Commercial paper rated in the "A-1" category by S&P indicates that the
degree of safety regarding timely payment is either overwhelming or very strong.
Those issues determined to possess overwhelming safety characteristics are
denoted "A- 1+".
<PAGE>
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
Not applicable.
(b) Exhibits:
(1) (a) Articles of Incorporation dated May 22, 1984, are incorporated
herein by reference to Exhibit 1 of Registrant's Registration
Statement on Form N-1A, filed on May 25, 1984.
(b) Articles Supplementary to Registrant's Articles of
Incorporation are incorporated herein by reference
to Exhibit 1(b) of Post-Effective Amendment No. 1 to
Registrant's Registration Statement on Form N-1A
filed on March 4, 1985.
(c) Articles Supplementary filed November 19, 1987 are
incorporated herein by reference to Exhibit 3(a) of
Post-Effective Amendment No. 6 to Registrant's
Registration Statement on Form N-1A filed on
November 27, 1987.
(d) Certificate of Correction filed November 19, 1987 is
incorporated herein by reference to Exhibit 3(b) of
Post-Effective Amendment No. 6 to Registrant's
Registration Statement on Form N-1A, filed on
November 27, 1987.
(e) Articles Supplementary to Registrant's Articles of Incorporation
filed on December 7, 1989 are incorporated herein by reference to
Exhibit 1(e) of Post-Effective Amendment No. 9 to Registrant's
Registration Statement on Form N-1A, filed on
November 29, 1990.
(f) Articles Supplementary with respect to the Liquidity
Plus Money Market Fund. (To be filed by amendment)
(2) (a) By-laws as amended, restated and adopted by Registrant's Board
of Directors on March 2, 1990 are incorporated herein by reference
to Exhibit 2(a) of Post-Effective Amendment No. 9 to Registrant's
Registration Statement on Form N-1A, filed on
November 29, 1990.
(3) Not Applicable.
(4) (a) Specimen copy of share certificate for Common Shares
is incorporated herein by reference to Exhibit 4 of
Pre-Effective Amendment No. 1 to Registrant's
Registration Statement on Form N-1A filed on August
28, 1984.
<PAGE>
(5) (a) Investment Advisory Agreement between Registrant and
Woodbridge Capital Management, Inc. incorporated
herein by reference to Post-Effective Amendment No.
11 on Form N-1A filed on September 20, 1992.
(b) Investment Advisory Agreement between Registrant and Woodbridge
Capital Management, Inc., dated April 15, 1993, with respect to the
Institutional Index Equity Fund is incorporated herein by reference
to Exhibit 5(b) of Post-Effective Amendment No. 14 on Form N-1A
filed with the Commission on June 29, 1993.
(c) Investment Advisory Agreement between Registrant and
Munder Capital Management with respect to the
Liquidity Plus Money Market Fund. (To be filed by
Amendment)
(6) (a) Distribution Agreement between Registrant and Funds Distributor,
Inc., dated November 20, 1992 with respect to Registrant's Fiduciary
Portfolio is incorporated herein by reference to Exhibit 6(a) of
Post-Effective Amendment No. 14 on Form N-1A filed with the
Commission on June 29, 1993.
(b) Addendum No. 1 to Distribution Agreement between Registrant and
Funds Distributor Inc., dated April 15, 1993 with respect to the
Institutional Index Equity Fund is incorporated herein by reference
to Exhibit 6(b) of Post-Effective Amendment No. 14 on Form N-1A
filed with the Commission on June 29, 1993.
(c) Addendum No. 2 to Distribution Agreement between
Registrant and Funds Distributor Inc. with respect
to the Liquidity Plus Money Market Fund. (To be
filed by Amendment)
(7) Not Applicable.
(8) (a) Custodian Agreement between Registrant and Provident National
Bank, dated November 20, 1992 with respect to Registrant's Fiduciary
Portfolio is incorporated herein by reference to Exhibit 8 (a) of
Post- Effective Amendment No. 14 on Form N-1A filed with the
Commission on June 29, 1993.
(b) Custodian Agreement between Registrant and Comerica Bank with
respect to the Institutional Index Equity Fund is incorporated
herein by reference to Exhibit 8(b) of Post-Effective Amendment No.
14 on Form N-1A filed with the Commission on June 29, 1993.
(c) Form of Custody Agreement between Registrant and
Comerica Bank is incorporated herein by reference to
Exhibit 8(c) of Post-Effective Amendment No. 15 on
Form N-1A filed with the Commission on June 28,
1994.
<PAGE>
(d) Addendum to Custodian Agreement with respect to the
Liquidity Plus Money Market Fund. (To be filed by
Amendment)
(9) (a) Administration Agreement between Registrant and The
Boston Company Advisors, Inc., dated November 20,
1992 with respect to the Registrant's Fiduciary
Portfolio is incorporated herein by reference to
Exhibit 9(a) of Post-Effective Amendment No. 14 on
Form N-1A filed with the Commission on June 29,
1993.
(b) Administration Agreement between Registrant and The
Boston Company Advisors, Inc. with respect to the
Institutional Index Equity Fund is incorporated
herein by reference to Exhibit 9(b) of Post-
Effective Amendment No. 14 on Form N-1A filed with
the Commission on June 29, 1993.
(c) Administration and Accounting Agreement between Registrant and
Provident Financial Processing Corporation ("PFPC") with respect to
the Registrant's Fiduciary Portfolio is incorporated herein by
reference to Post-Effective Amendment No. 11 on Form N-1A, filed on
September 20, 1992.
(d) Form of Administration Agreement between Registrant
and First Data Investor Services Group, Inc. is
incorporated herein by reference to Exhibit 9(c) of
Post-Effective Amendment No. 15 on Form N-1A, filed
on June 28, 1994.
(e) Addendum to Administration Agreement with respect to
the Liquidity Plus Money Market Fund. (To be filed
by Amendment)
(f) Transfer Agency Agreement between Registrant and Provident Financial
Processing Corporation, dated November 20, 1992 with respect to the
Registrant's Fiduciary Portfolio is incorporated herein by reference
to Exhibit 9(d) of Post-Effective Amendment No. 14 on Form N-1A
filed with the Commission on June 29, 1993.
(g) Transfer Agency Agreement between Registrant and The
Shareholder Services Group, Inc. with respect to the
Institutional Index Equity Fund is incorporated
herein by reference to Exhibit 9(e) of Post-
Effective Amendment No. 14 on Form N-1A filed with
the Commission on June 29, 1993.
(h) Form of Transfer Agency and Registrar Agreement
between Registrant and First Data Investor Services
Group, Inc. is incorporated herein by reference to
Exhibit 9(g) of Post-Effective Amendment No. 15 on
Form N-1A, filed with the Commission on June 28, 1994.
<PAGE>
(i) Addendum to Transfer Agency and Registrar Agreement
with respect to the Liquidity Plus Money Market
Fund. (To be filed by Amendment)
(10) Opinion and consent of counsel filed under Rule 24f-2 as part of
Registrant's Rule 24f-2 Notice filed with the Commission on April 29,
1996.
(11) (a) Consent of Independent Auditors. (To be filed by
Amendment)
(b) Consent of Dechert Price & Rhoads. (To be filed by
Amendment)
(c) Powers of Attorney
(12) Not Applicable
(13) Not Applicable
(14) Not Applicable
(15) Form of Shareholder Service Plan for the Liquidity Plus
Money Market Fund. (To be filed by amendment)
(16) (a) Schedules for computation of annualized and
effective yields of the Fiduciary Portfolio of the
St. Clair Money Market Fund provided in the
Registration Statement in response to Item 22 of
Form N-1A is incorporated herein by reference to
Exhibit (16)(a) of Post-Effective Amendment No. 12
to Registrant's Registration Statement on Form N-1A
filed with the Commission on November 18, 1992.
(b) Schedules for computation of annualized and effective yields of the
Institutional Index Equity Fund is incorporated herein by reference
to Exhibit 16 (b) of Post-Effective Amendment No. 14 filed with the
Commission on June 29, 1993.
(c) Schedules for computation of annualized and
effective yields of the Liquidity Plus Money Market
Fund. (To be filed by amendment)
Item 25. Persons Controlled by or under Common Control with
Registrant
Not Applicable
Item 26. Number of Holders of Securities
No record holders as of June 20, 1996
<PAGE>
Item 27. Indemnification
Reference is made to Article VII, Section 3 of the Registrant's
Articles of Incorporation, incorporated by reference as Exhibit (1)
hereto, and Article VI, Section 2 of Registrant's By-Laws,
incorporated by
reference as Exhibit (2) hereto.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of Registrant pursuant to the foregoing
provisions, or otherwise, Registrant has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
Registrant of expenses incurred or paid by a director, officer or
controlling person of Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser
Munder Capital Management
Position
Name with Adviser
Old MCM, Inc. Partner
Munder Group LLC Partner
WAM Holdings, Inc. Partner
Woodbridge Capital
Management, Inc. Partner
Lee P. Munder President and Chief
Executive Officer
Leonard J. Barr, II Senior Vice President and
Director of Research
Ann J. Conrad Vice President and Director
of Special Equity Products
<PAGE>
David W. Cornwell Vice President and Director
of Real Estate
Terry H. Gardner Vice President and Chief
Financial Officer
Elyse G. Essick Vice President and Director
of Client Services
Otto G. Hinzmann Vice President and Director
of Equity Portfolio
Management
Ann F. Putallaz Vice President and Director
of Fiduciary Services
John P. Richardson Vice President and Director
of Equity Portfolio
Management
James C. Robinson Vice President and Chief
Investment Officer/Fixed
Income
Gerald L. Seizert Executive Vice President
and Chief Investment
Officer/Equity
Paul D. Tobias Executive Vice President
and Chief Operating Officer
For further information relating to the Investment Adviser's officers,
reference is made to Form ADV filed under the Investment Advisers Act of
1940 by Munder Capital Management.
Item 29. Principal Underwriter
(a) Funds Distributor, Inc. ("FDI") serves as
Distributor of shares of the Registrant. FDI also
serves as principal underwriter of the following
investment companies other than the Registrant:
HT Insight Funds, Waterhouse Investors Cash
d/b/a Harris Insight Funds Management Mutual Funds
Harris Insight Funds Trust Skyline Funds
The Munder Funds Trust Foreign Fund, Inc.
Panagora Funds PanAgora Funds
BJB Investment Funds BEA Investment Funds, Inc.
The Munder Funds, Inc.
(b) The directors and officers of FDI are set forth below. Unless
otherwise indicated, their address is One Exchange Place, Boston,
Massachusetts 02109.
<PAGE>
Positions and Positions and
Offices with Offices with
Name FDI Registrant
William J. Nutt Chairman None
Marie E. Connolly President, Chief None
Executive Officer
John E. Pelletier Senior Vice None
President General Counsel
Richard W. Healey Senior Vice President None
Rui M. Moura First Vice None
President
Joseph F. Tower, III Senior Vice None
President, Treasurer,
Chief Financial Officer
Richard W. Ingram Senior Vice President None
Frederick C. Dey Vice President None
Hannah Shaw Grove Vice President None
Richard S. Joseph Vice President None
Donald R. Robertson Senior Vice President None
Bernard A. Whalen Senior Vice President None
Maureen F. Walsh Vice President None
Jean M. O'Leary Assistant Secretary None
and Clerk
Eric B. Fischman Vice President and None
Assistant General
Counsel
Dale F. Lampe Vice President None
Joseph A. Vignone Vice President None
Paul M. Prescott Vice President None
Dennis J. Gallant Vice President None
Linda C. Raftery Vice President None
Mary A. Nelson Assistant Treasurer None
John J. Pylaum Assistant Treasurer None
(c) Not Applicable
<PAGE>
Item 30. Location of Accounts and Records
The account books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and
the Rules thereunder will be maintained at the offices of Munder Capital
Management at 480 Pierce Street, Birmingham, MI 48009, at State Street Bank and
Trust Company, c/o National Financial Data Services, 1004 Baltimore, Kansas
City, Missouri 64105-1807 or at First Data Investor Services Group, Inc. (f/k/a
The Shareholder Services Group, Inc.), One Exchange Place, Boston, Massachusetts
02109.
Item 31. Management Services
None.
Item 32. Undertakings
(1) Registrant hereby undertakes to call a meeting of its shareholders
for the purpose of voting upon the question of removal of a director
or directors of Registrant when requested in writing to do so by the
holders of at least 10% of Registrant's outstanding shares.
Registrant undertakes further, in connection with the meeting, to
comply with the provisions of Section 16(c) of the Investment
Company Act of 1940, as amended, relating to communications with the
shareholders of certain common-law trusts.
(2) Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered a copy of the Registrant's most recent
annual report to shareholders, upon request without charge.
(3) Registrant undertakes to file a Post-Effective Amendment relating to
the Liquidity Plus Money Market Fund, using reasonably current
financial statements which need not be certified, within four to six
months from the date the Fund commences investment operations.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, Registrant has duly caused
this Post-Effective Amendment No. 16 to be signed on behalf of the undersigned,
thereunto duly authorized, in this City of Washington, D.C. on the 20th day of
June, 1996.
ST. CLAIR FUNDS, INC.
By: *_______________________
Lee P. Munder
* By: /s/ Paul F. Roye
------------------------
Paul F. Roye
as Attorney-in-Fact
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, as amended, this Post-Effective Amendment No. 16 to the
Registration Statement on Form N-1A has been signed below by
the following persons on behalf of St. Clair Funds, Inc. in
the capacities and on the date indicated:
Signatures Title Date
*_______________________ President and Chief June 20, 1996
Lee P. Munder Executive Officer
*_______________________ Director June 20, 1996
Charles W. Elliott
*_______________________ Director June 20, 1996
Joseph E. Champagne
*_______________________ Director June 20, 1996
Arthur DeRoy Rodecker
*_______________________ Director June 20, 1996
<PAGE>
Jack L. Otto
*_______________________ Director June 20, 1996
Thomas B. Bender
*_______________________ Director June 20, 1996
Thomas D. Eckert
*_______________________ Director June 20, 1996
John Rakolta, Jr.
*_______________________ Director June 20, 1996
David J. Brophy
*_______________________ Vice President, June 20, 1996
Terry H. Gardner Treasurer and
Chief Financial
Officer
* By: /s/ Paul F. Roye
------------------------
Paul F. Roye
as Attorney-in-Fact
EXHIBIT 11(c)
ST. CLAIR FUNDS, INC.
POWER OF ATTORNEY
The undersigned, Charles W. Elliott, whose signature appears below, does
hereby constitute and appoint Paul F. Roye, Teresa M. R. Hamlin and Lisa Anne
Rosen his true and lawful attorneys and agents to execute in his name, place and
stead, in his capacity as trustee or officer, or both, of St. Clair Funds, Inc.
(the "Company"), the Registration Statement of the Company on Form N-1A, any
amendments thereto, and all instruments necessary or incidental in connection
therewith, and to file the same with the Securities and Exchange Commission; and
said attorneys shall have full power of substitution and re-substitution; and
said attorneys shall have full power and authority to do and perform in the name
and on the behalf of the undersigned trustee and/or officer of the Company, in
any and all capacities, every act whatsoever requisite or necessary to be done
in the premises, as fully and to all intents and purposes as the undersigned
trustee and/or officer of the Company might or could do in person, said acts of
said attorney being hereby ratified and approved.
/s/
Charles W. Elliott
Dated: May 6, 1996
<PAGE>
ST. CLAIR FUNDS, INC.
POWER OF ATTORNEY
The undersigned, Joseph E. Champagne, whose signature appears below, does
hereby constitute and appoint Paul F. Roye, Teresa M. R. Hamlin and Lisa Anne
Rosen his true and lawful attorneys and agents to execute in his name, place and
stead, in his capacity as trustee or officer, or both, of St. Clair Funds, Inc.
(the "Company"), the Registration Statement of the Company on Form N-1A, any
amendments thereto, and all instruments necessary or incidental in connection
therewith, and to file the same with the Securities and Exchange Commission; and
said attorneys shall have full power of substitution and re-substitution; and
said attorneys shall have full power and authority to do and perform in the name
and on the behalf of the undersigned trustee and/or officer of the Company, in
any and all capacities, every act whatsoever requisite or necessary to be done
in the premises, as fully and to all intents and purposes as the undersigned
trustee and/or officer of the Company might or could do in person, said acts of
said attorney being hereby ratified and approved.
/s/
Joseph E. Champagne
Dated: May 6, 1996
<PAGE>
ST. CLAIR FUNDS, INC.
POWER OF ATTORNEY
The undersigned, Arthur D. Rodecker, whose signature appears below, does
hereby constitute and appoint Paul F. Roye, Teresa M. R. Hamlin and Lisa Anne
Rosen his true and lawful attorneys and agents to execute in his name, place and
stead, in his capacity as trustee or officer, or both, of St. Clair Funds, Inc.
(the "Company"), the Registration Statement of the Company on Form N-1A, any
amendments thereto, and all instruments necessary or incidental in connection
therewith, and to file the same with the Securities and Exchange Commission; and
said attorneys shall have full power of substitution and re-substitution; and
said attorneys shall have full power and authority to do and perform in the name
and on the behalf of the undersigned trustee and/or officer of the Company, in
any and all capacities, every act whatsoever requisite or necessary to be done
in the premises, as fully and to all intents and purposes as the undersigned
trustee and/or officer of the Company might or could do in person, said acts of
said attorney being hereby ratified and approved.
/s/
Arthur D. Rodecker
Dated: May 6, 1996
<PAGE>
ST. CLAIR FUNDS, INC.
POWER OF ATTORNEY
The undersigned, Thomas B. Bender, whose signature appears below, does
hereby constitute and appoint Paul F. Roye, Teresa M. R. Hamlin and Lisa Anne
Rosen his true and lawful attorneys and agents to execute in his name, place and
stead, in his capacity as trustee or officer, or both, of St. Clair Funds, Inc.
(the "Company"), the Registration Statement of the Company on Form N-1A, any
amendments thereto, and all instruments necessary or incidental in connection
therewith, and to file the same with the Securities and Exchange Commission; and
said attorneys shall have full power of substitution and re-substitution; and
said attorneys shall have full power and authority to do and perform in the name
and on the behalf of the undersigned trustee and/or officer of the Company, in
any and all capacities, every act whatsoever requisite or necessary to be done
in the premises, as fully and to all intents and purposes as the undersigned
trustee and/or officer of the Company might or could do in person, said acts of
said attorney being hereby ratified and approved.
/s/
Thomas B. Bender
Dated: May 6, 1996
<PAGE>
ST. CLAIR FUNDS, INC.
POWER OF ATTORNEY
The undersigned, Jack L. Otto, whose signature appears below, does hereby
constitute and appoint Paul F. Roye, Teresa M. R. Hamlin and Lisa Anne Rosen his
true and lawful attorneys and agents to execute in his name, place and stead, in
his capacity as trustee or officer, or both, of St. Clair Funds, Inc. (the
"Company"), the Registration Statement of the Company on Form N-1A, any
amendments thereto, and all instruments necessary or incidental in connection
therewith, and to file the same with the Securities and Exchange Commission; and
said attorneys shall have full power of substitution and re-substitution; and
said attorneys shall have full power and authority to do and perform in the name
and on the behalf of the undersigned trustee and/or officer of the Company, in
any and all capacities, every act whatsoever requisite or necessary to be done
in the premises, as fully and to all intents and purposes as the undersigned
trustee and/or officer of the Company might or could do in person, said acts of
said attorney being hereby ratified and approved.
/s/
Jack L. Otto
Dated: May 6, 1996
<PAGE>
ST. CLAIR FUNDS, INC.
POWER OF ATTORNEY
The undersigned, Thomas D. Eckert, whose signature appears below, does
hereby constitute and appoint Paul F. Roye, Teresa M. R. Hamlin and Lisa Anne
Rosen his true and lawful attorneys and agents to execute in his name, place and
stead, in his capacity as trustee or officer, or both, of St. Clair Funds, Inc.
(the "Company"), the Registration Statement of the Company on Form N-1A, any
amendments thereto, and all instruments necessary or incidental in connection
therewith, and to file the same with the Securities and Exchange Commission; and
said attorneys shall have full power of substitution and re-substitution; and
said attorneys shall have full power and authority to do and perform in the name
and on the behalf of the undersigned trustee and/or officer of the Company, in
any and all capacities, every act whatsoever requisite or necessary to be done
in the premises, as fully and to all intents and purposes as the undersigned
trustee and/or officer of the Company might or could do in person, said acts of
said attorney being hereby ratified and approved.
/s/
Thomas D. Eckert
Dated: May 6, 1996
<PAGE>
ST. CLAIR FUNDS, INC.
POWER OF ATTORNEY
The undersigned, David J. Brophy, whose signature appears below, does
hereby constitute and appoint Paul F. Roye, Teresa M. R. Hamlin and Lisa Anne
Rosen his true and lawful attorneys and agents to execute in his name, place and
stead, in his capacity as trustee or officer, or both, of St. Clair Funds, Inc.
(the "Company"), the Registration Statement of the Company on Form N-1A, any
amendments thereto, and all instruments necessary or incidental in connection
therewith, and to file the same with the Securities and Exchange Commission; and
said attorneys shall have full power of substitution and re-substitution; and
said attorneys shall have full power and authority to do and perform in the name
and on the behalf of the undersigned trustee and/or officer of the Company, in
any and all capacities, every act whatsoever requisite or necessary to be done
in the premises, as fully and to all intents and purposes as the undersigned
trustee and/or officer of the Company might or could do in person, said acts of
said attorney being hereby ratified and approved.
/s/
David J. Brophy
Dated: May 6, 1996
<PAGE>
ST. CLAIR FUNDS, INC.
POWER OF ATTORNEY
The undersigned, John Rakolta, Jr., whose signature appears below, does
hereby constitute and appoint Paul F. Roye, Teresa M. R. Hamlin and Lisa Anne
Rosen his true and lawful attorneys and agents to execute in his name, place and
stead, in his capacity as trustee or officer, or both, of St. Clair Funds, Inc.
(the "Company"), the Registration Statement of the Company on Form N-1A, any
amendments thereto, and all instruments necessary or incidental in connection
therewith, and to file the same with the Securities and Exchange Commission; and
said attorneys shall have full power of substitution and re-substitution; and
said attorneys shall have full power and authority to do and perform in the name
and on the behalf of the undersigned trustee and/or officer of the Company, in
any and all capacities, every act whatsoever requisite or necessary to be done
in the premises, as fully and to all intents and purposes as the undersigned
trustee and/or officer of the Company might or could do in person, said acts of
said attorney being hereby ratified and approved.
/s/
John Rakolta, Jr.
Dated: May 6, 1996
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ST. CLAIR FUNDS, INC.
POWER OF ATTORNEY
The undersigned, Lee P. Munder, whose signature appears below, does hereby
constitute and appoint Paul F. Roye, Teresa M. R. Hamlin and Lisa Anne Rosen his
true and lawful attorneys and agents to execute in his name, place and stead, in
his capacity as trustee or officer, or both, of St. Clair Funds, Inc. (the
"Company"), the Registration Statement of the Company on Form N-1A, any
amendments thereto, and all instruments necessary or incidental in connection
therewith, and to file the same with the Securities and Exchange Commission; and
said attorneys shall have full power of substitution and re-substitution; and
said attorneys shall have full power and authority to do and perform in the name
and on the behalf of the undersigned trustee and/or officer of the Company, in
any and all capacities, every act whatsoever requisite or necessary to be done
in the premises, as fully and to all intents and purposes as the undersigned
trustee and/or officer of the Company might or could do in person, said acts of
said attorney being hereby ratified and approved.
/s/
Lee P. Munder
Dated: May 6, 1996
<PAGE>
ST. CLAIR FUNDS, INC.
POWER OF ATTORNEY
The undersigned, Terry H. Gardner, whose signature appears below, does
hereby constitute and appoint Paul F. Roye, Teresa M. R. Hamlin and Lisa Anne
Rosen his true and lawful attorneys and agents to execute in his name, place and
stead, in his capacity as trustee or officer, or both, of St. Clair Funds, Inc.
(the "Company"), the Registration Statement of the Company on Form N-1A, any
amendments thereto, and all instruments necessary or incidental in connection
therewith, and to file the same with the Securities and Exchange Commission; and
said attorneys shall have full power of substitution and re-substitution; and
said attorneys shall have full power and authority to do and perform in the name
and on the behalf of the undersigned trustee and/or officer of the Company, in
any and all capacities, every act whatsoever requisite or necessary to be done
in the premises, as fully and to all intents and purposes as the undersigned
trustee and/or officer of the Company might or could do in person, said acts of
said attorney being hereby ratified and approved.
/s/
Terry H. Gardner
Dated: May 6, 1996
<PAGE>
