As filed with the Securities and Exchange Commission
on November 15, 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. 20 /X/
and/or
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 21 /X/
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 immediately upon
filing pursuant to paragraph (b) of Rule 485.
The Registrant has registered an indefinite number of shares under the
Securities Act of 1933 pursuant to Rule 24f-2 under the Investment Company Act
of 1940. The Rule 24f-2 Notice for the 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.
This Post-Effective Amendment No. 20 to the Registration
Statement of St. Clair Funds, Inc. is being filed for the
purpose of responding to SEC staff comments on Post-Effective
Amendment No. 16.
<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
November 15, 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 November 15, 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.
-2-
<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%
12b-1 Fees 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.
-3-
<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
AND ASSOCIATED RISK FACTORS
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
-4-
<PAGE>
"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 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
-5-
<PAGE>
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. 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
member banks of the Federal Reserve system, any foreign bank or any domestic or
foreign broker/dealer which is recognized as a reporting government securities
dealer. 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
-6-
<PAGE>
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.
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. Certain types of stripped securities, such
as interest only or principal only securities backed by fixed-rate mortgages
will
-7-
<PAGE>
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 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.
-8-
<PAGE>
Foreign Securities. The Fund may invest in the U.S. dollar-denominated
securities of foreign issuers such as foreign commercial paper and obligations
of foreign banks. 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 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
-9-
<PAGE>
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.
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
-10-
<PAGE>
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 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,
-11-
<PAGE>
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.
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
-12-
<PAGE>
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.
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
-13-
<PAGE>
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 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 June 30, 1996, the Advisor and its affiliates had approximately
$34 billion in assets under active management, of which $17 billion were
invested in equity securities, $6 billion were invested in money market or other
short-term instruments, and $11 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,
-14-
<PAGE>
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 5130, Westborough, Massachusetts 01581-5130.
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 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
-15-
<PAGE>
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.
Distribution Services Agreement
The Fund has adopted a Distribution and Service Plan, pursuant to which
the Fund uses its assets to finance activities relating to the distribution of
its shares to investors and the provision of certain shareholder services (the
"Plan"). Under the Plan, the Distributor is paid a service fee at an annual rate
of 0.25% of the value of the average daily net assets of the Fund. The
Distributor is also paid a distribution fee at an annual rate of 0.10%, of the
value of the average daily net assets of the Fund.
Under the Plan, the Distributor uses the service fees primarily to pay
ongoing trail commissions to securities dealers (which may include the
Distributor itself) and other financial institutions and organizations
(collectively, the "Service Organizations") who provide shareholder services for
the Fund. These services include, among other things, processing new shareholder
account applications, preparing and transmitting to the Fund's Transfer Agent
computer processable tapes of all transactions by customers and serving as the
primary source of information to customers in answering questions concerning the
Fund and their transactions with the Fund.
The Plan permits payments to be made by the Fund to the Distributor for
expenditures incurred by it in connection with the distribution of Fund shares
to investors and the provision of certain shareholder services, including but
not limited to the payment of compensation, including incentive compensation, to
Service Organizations to obtain various distribution related services for the
Fund. The Distributor is also authorized to engage in advertising, the
preparation and distribution of sales literature and other promotional
activities on behalf of the Fund. In addition, the Plan authorizes payments by
the Fund of the cost of preparing, printing and distributing Fund prospectuses
and statements of additional information to prospective investors and of
implementing and operating the Plan. Distribution expenses also include an
allocation of overhead of the Distributor and accruals for interest on the
amount of distribution expenses incurred by the Distributor.
The Distributor expects to pay or arrange for payment of
sales commissions to dealers authorized to sell shares, all or
-16-
<PAGE>
a part of which may be paid at the time of sale. The Distributor will use its
own funds (which may be borrowed) to pay such commissions pending reimbursement
pursuant to the Plan. Because the payment of distribution and service fees with
respect to shares of the Fund is subject to the 0.35% limitation described above
and will therefore be spread over a number of years, it may take the Distributor
a number of years to recoup sales commissions paid by it to dealers and other
distribution and service related expenses from the payments received by it from
the Fund pursuant to the Plan.
The Plan may be terminated at any time. The Plan provides that amounts
paid as prescribed by the Plan at any time may not cause the limitation on such
payments established by the Plan to be exceeded. The amount of daily
compensation payable to the Distributor with respect to each day will be accrued
each day as a liability of the Fund and will accordingly reduce the Fund's net
assets upon such accrual.
Payments under the Plans are not tied exclusively to the distribution
and/or shareholder service expenses actually incurred by the Distributor and the
payments may exceed distribution and/or service expenses actually incurred. The
Company's Board of Directors evaluates the appropriateness of the Plan and its
payment terms on a continuous basis and in so doing will consider all relevant
factors, including expenses incurred by the Distributor and the amount received
under the Plan.
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
-17-
<PAGE>
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.
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 St. Clair Liquidity Plus Money Market Fund and the St.
Clair Institutional Index Equity Fund.
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
-18-
<PAGE>
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
"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
-19-
<PAGE>
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, and to St. Clair Funds, Inc. on September
18, 1996.
-20-
<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, Inc. (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 and to St. Clair Funds, Inc. on September
18, 1996.
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 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).
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. 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 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.
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 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.
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. 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.
4. Make investments for the purpose of exercising control or
management.
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.
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:
<PAGE>
- 1 -
Principal Occupation
Name, Positions During
Address and Age with Company Past Five Years
Charles W. Elliott 1/ Chairman of the Senior Advisor to the
3338 Bronson Blvd. Board of Directors President - Western
Kalmazoo, MI 49008 Michigan University
Age: 64 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: 49
Thomas B. Bender Director Investment Advisor,
7 Wood Ridge Road Financial & Investment
Glen Arbor, Management Group
MI 49636 (since April, 1991);
Age: 63 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: 60 Renaissance Assets
Trust.
Dr. Joseph E. Champagne Director Corporate and
319 Snell Road Executive Consultant
Rochester, MI 48306 since September
Age: 58 1995; prior to that
Chancellor, Lamar
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: 49
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: 70 foundation) 1981-1985;
Managing Partner,
Detroit office 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: 69 Registered Investment
Advisor since February
1979; President and
Trustee, Helen L. DeRoy
Foundation, a
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: 51 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: 36 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: 45 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
(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: 38 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: 35 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: 52 of Old MCM, Inc.
(since 1988); Director
of LPM.
Lisa A. Rosen Secretary General Counsel of the
480 Pierce Street Advisor since May,
Suite 300 1996; Formerly Counsel,
Birmingham, First Data Investor
MI 48009 Services Group, Inc.;
Age: 29 Assistant Vice
President and Counsel
with The Boston
Company Advisors, Inc.;
Associate with
Hutchins, Wheeler &
Dittmar.
<PAGE>
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: 51 Marketing Services of
Woodbridge Capital
Management, Inc.
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: 41 since November 1989.
Teresa M.R. Hamlin Assistant Secretary Counsel, First Data
First Data Investor Services
Investor Services Group, Inc.; Formerly
Group, Inc. Paralegal Manager,
One Exchange Place The Boston Company
6th Floor Advisors, Inc.
Boston, MA 02109
Age: 32
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.
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Aggregate
Compensation Pension
from the Retirement Estimated Total
Company, The Benefits Annual from
Munder Funds, Inc., Accrued Benefits the
Name of Person and The Munder as part of Upon Fund
Position Funds Trust Fund Expenses Retirement Complex
Charles W. Elliott $14,000 None None $14,000
Chairman
John Rakolta, Jr. $14,000 None None $14,000
Vice Chairman
Thomas B. Bender $14,000 None None $14,000
David J. Brophy $14,000 None None $14,000
Trustee and Director
Dr. Joseph E. Champagne $14,000 None None $14,000
Trustee and Director
Thomas D. Eckert $14,000 None None $14,000
Trustee and Director
Jack L. Otto $14,000 None None $14,000
Trustee and Director
Arthur DeRoy Rodecker $14,000 None None $14,000
Trustee and Director
</TABLE>
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.
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 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.
Distribution Services Arrangements. The Fund has adopted a Service and
Distribution Plan, pursuant to which it uses its assets to finance activities
relating to the distribution of its shares to investors and the provision of
certain shareholder services. Under the Service and Distribution Plans, the
Distributor is paid an annual service fee of 0.25% of the value of average daily
net assets of the Fund and an annual distribution fee at the rate of 0.10% of
the value of average daily net assets of the Fund.
Under the terms of the Service and Distribution Plan (the "Plan"), the
Plan continues from year to year, provided such continuance is approved annually
by vote of the Board of Directors, including a majority of the Board of
Directors who are not interested persons of the Company, as applicable, and who
have no direct or indirect financial interest in the operation of that Plan (the
"Non-Interested Plan Directors"). The Plan may not be amended to increase the
amount to be spent for the services provided by the Distributor without
shareholder approval, and all amendments of the Plan also must be approved by
the Directors in the manner described above. The Plan may be terminated at any
time, without penalty, by vote of a majority of the Non-Interested Plan
Directors or by a vote of a majority of the outstanding voting securities of the
Fund (as defined in the 1940 Act) upon not more than 30 days' written notice to
any other party to the Plan. Pursuant to the Plan, the Distributor will provide
the Board of Directors periodic reports of amounts expended under the Plan and
the purposes for which such expenditures were made.
The Distributor expects to pay sales commissions to dealers authorized
to sell the Fund's shares at the time of sale. The Distributor will use its own
funds (which may be borrowed) to pay such commissions pending reimbursement
pursuant to the Service and Distribution Plan. In addition, the Advisor may use
its own resources to make payments to the Distributor or dealers authorized to
sell the Fund's shares to support their sales efforts.
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 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 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.
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.
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
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.
<PAGE>
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 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.
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).
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 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.
(b) Articles Supplementary to Registrant's Articles of
Incorporation.
(c) Articles of Amendment to Registrant's Articles of
Incorporation.
(d) Articles Supplementary to Registrant's Articles of
Incorporation.
(e) Certificate of Correction.
(f) Articles Supplementary to Registrant's Articles of
Incorporation.
(g) Certificate of Correction.
(h) Articles of Amendment to Registrant's Articles of
Incorporation.
(i) Articles Supplementary to Registrant's Articles of
Incorporation.
(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.
(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
<PAGE>
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.
(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) Form of Distribution Agreement between Registrant
and Funds Distributor Inc. with respect to the
Liquidity Plus Money Market Fund.
(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.
(d) Form of Notice to Custodian Agreement.
(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,
- 2 -
<PAGE>
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.
(e) Form of Notice to Administration Agreement with
respect to the Liquidity Plus Money Market Fund.
(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.
(i) Form of Notice to Transfer Agency and Registrar
Agreement with respect to the Liquidity Plus Money
Market Fund.
(10) Opinion and consent of counsel.
(11) Powers of Attorney are incorporated herein by reference to Exhibit 11 of
Post-Effective Amendment No. 16 on Form N-1A filed with the Commission on
June 21, 1996.
(12) Not Applicable
- 3 -
<PAGE>
(13) Not Applicable
(14) Not Applicable
(15) Form of Service and Distribution Plan for the Liquidity
Plus Money Market Fund.
(16) Schedules for computation of annualized and effective yields of the
Liquidity Plus Money Market Fund.
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 November 14, 1996
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
- 4 -
<PAGE>
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
Terry H. Gardner Vice President and Chief
Financial Officer
Elyse G. Essick Vice President and Director
of Client Services
Sharon E. Fayolle Vice President and Director
of Money Market Trading
Otto G. Hinzmann Vice President and Director
of Equity Portfolio
Management
Anne K. Kennedy Vice President and Director
of Corporate Bond Trading
Ann F. Putallaz Vice President and Director
of Fiduciary Services
Peter G. Root Vice President and Director
of Government Securities
Trading
Lisa A. Rosen General Counsel and
Director of Mutual Fund
Operations
James C. Robinson Vice President and Chief
Investment Officer/Fixed
Income
Gerald L. Seizert Executive Vice President
- 5 -
<PAGE>
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.
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
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
- 6 -
<PAGE>
Donald R. Robertson Senior Vice President None
Bernard A. Whalen First Vice President None
John W. Gomez Director None
(c) Not Applicable
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 effective date of the Registration Statement with
respect to the Liquidity Plus Money Market Fund.
- 7 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, Registrant certifies that
this Post-Effective Amendment No. 20 to the Registration Statement meets the
requirements for effectiveness pursuant to Rule 485(b) under the Securities Act
of 1933, as amended, and Registrant has duly caused this Post-Effective
Amendment No. 20 to be signed on behalf of the undersigned, thereunto duly
authorized, in this City of Washington, D.C. on the 15th day of November, 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. 20 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 November 15, 1996
Lee P. Munder Executive Officer
*_______________________ Director November 15, 1996
Charles W. Elliott
*_______________________ Director November 15, 1996
Joseph E. Champagne
<PAGE>
*_______________________ Director November 15, 1996
Arthur DeRoy Rodecker
*_______________________ Director November 15, 1996
Jack L. Otto
*_______________________ Director November 15, 1996
Thomas B. Bender
*_______________________ Director November 15, 1996
Thomas D. Eckert
*_______________________ Director November 15, 1996
John Rakolta, Jr.
*_______________________ Director November 15, 1996
David J. Brophy
*_______________________ Vice President, November 15, 1996
Terry H. Gardner Treasurer and
Chief Financial
Officer
* By: /s/ Paul F. Roye
------------------------
Paul F. Roye
as Attorney-in-Fact
- 2 -
<PAGE>
EXHIBIT INDEX
Exhibit Description
- ------ ---------
Exhibit 1(a) Articles of Incorporation
Exhibit 1(b) Articles Supplementary
Exhibit 1(c) Articles of Amendment to Articles of Incorporation
Exhibit 1(d) Articles Supplementary
Exhibit 1(e) Certificate of Correction
Exhibit 1(f) Articles Supplementary
Exhibit 1(g) Certificate of Correction
Exhibit 1(h) Articles of Amendment
Exhibit 1(i) Articles Supplementary
Exhibit 5(c) Form of Investment Advisory Agreement
Exhibit 6(c) Form of Distribution Agreement
Exhibit 8(c) Custody Agreement
Exhibit 8(d) Form of Notice to Custodian Agreement
Exhibit 9(d) Administration Agreement
Exhibit 9(e) Form of Notice to Administration Agreement
Exhibit 9(h) Transfer Agency and Registrar Agreement
Exhibit 9(i) Form of Notice to Transfer Agency and Registrar
Agreement
Exhibit 10 Opinion and Consent of Counsel
Exhibit 15 Form of Service and Distribution Plan
Exhibit 16 Schedule of Computation
<PAGE>
EXHIBIT 1(a)
ARTICLES OF INCORPORATION
OF
ST. CLAIR MONEY MARKET FUND, INC.
* * * *
ARTICLE I
THE UNDERSIGNED, Martin E. Lybecker, whose post office address is Suite
500, 1752 N Street, N.W., Washington, D.C. 20036, being at least eighteen years
of age, does hereby act as incorporator, under and by virtue of the General Laws
of the State of Maryland authorizing the formation of corporations and with the
intention of forming a corporation.
ARTICLE II
The name of the Corporation is:
ST. CLAIR MONEY MARKET FUND, INC.
ARTICLE III
The purpose for which the Corporation is formed is to act as an open-end
diversified management investment company under the Investment Company Act of
1940.
ARTICLE IV
The Corporation is expressly empowered as follows:
(1) To hold, invest and reinvest its assets in securities and other
investments or to hold part or all of its assets in cash.
(2) To issue and sell shares of its capital stock in such amounts and on
such terms and conditions and for such purposes and for such amount or kind of
consideration as may now or hereafter be permitted by law.
(3) To redeem, purchase or otherwise acquire, hold, dispose of, resell,
transfer, reissue or cancel (all without the vote or consent of the stockholders
of the Corporation) shares of its capital stock, in any manner and to the extent
now or hereafter permitted by law and by the Charter of the Corporation.
(4) To enter into a written contract or contracts with any person or
persons providing for a delegation of the management of all or part of the
Corporation's securities portfolio(s) and also for the delegation of the
performance of various administrative or corporate functions, subject to the
direction of the Board of Directors. Any such contract or contracts may be made
with any person even though such person may be an officer, other employee,
director or stockholder of this Corporation or a corporation, partnership, trust
or association in which any such officer, other employee, director or
stockholder may be interested.
(5) To enter into a written contract or contracts appointing one or more
distributors or agents or both for the sale of the shares of the Corporation on
such terms and conditions as the Board of Directors of this Corporation may deem
reasonable and proper, and to allow such person or persons a commission on the
sale of such shares. Any such contract or contracts may be made with any person
even though such person may be an officer, other employee, director or
stockholder of this Corporation or a corporation, partnership, trust or
association in which any such officer, other employee, director or stockholder
may be interested.
(6) To enter into a written contract or contracts employing such custodian
or custodians for the shares, such dividend disbursing agent or agents, and such
transfer agent or agents and registrar or registrars for its shares, on such
terms and conditions as the Board of Directors of this Corporation may deem
reasonable and proper for the conduct of the affairs of the Corporation, and to
pay the fees and disbursements of such custodians, dividend disbursing agents,
transfer agents, and registrars out of the income and/or any other property of
the Corporation. Notwithstanding any other provisions of these Articles of
Incorporation or the By-Laws of the Corporation, the Board of Directors may
cause any or all of the property of the Corporation to be transferred to, or to
be acquired and held in the name of, a custodian so appointed or any nominee or
nominees of this Corporation or nominee or nominees of such custodian
satisfactory to the Board of Directors.
(7) To employ the same person, partnership (general or limited),
association, trust or corporation in any multiple capacity under Sections (4),
(5) and (6) of this Article, who may receive compensation from the Corporation
in as many capacities in which such person, partnership (general or limited),
association, trust or corporation shall serve the Corporation.
(8) To do any and all such further acts or things and to exercise any and
all such further powers or rights as may be necessary, incidental, relative,
conducive, appropriate or desirable for the accomplishment, carrying out or
attainment of the purposes stated in Article III thereof.
The Corporation shall be authorized to exercise and enjoy all of the
powers, rights and privileges granted to, or conferred upon, corporations by the
General Laws of the State of Maryland now or hereafter in force, and the
enumeration of the foregoing shall not be deemed to exclude any powers, rights
or privileges so granted or conferred.
ARTICLE V
The post office address of the principal office of the Corporation in the
State of Maryland is c/o The Corporation Trust Incorporated, 32 South Street,
Baltimore, Maryland, 21202. The name of the resident agent of the Corporation in
this State is The Corporation Trust Incorporated, a corporation of this State,
and the post office address of the resident agent is 32 South Street, Baltimore,
Maryland 21202.
ARTICLE IV
(1) The total number of shares of capital stock which the Corporation
shall have authority to issue is Two Billion (2,000,000,000) shares, of the par
value of One Mill ($0.001) per share and of the aggregate par value of Two
Million Dollars ($2,000,000), all of which Two Billion (2,000,000,000) shares
are designated Common Stock.
(2) The Corporation may issue shares of any class or series in fractional
denominations to the same extent as whole shares. Any fractional share shall
carry proportionately all the rights of a whole share of the same class or
series, excepting any right to receive a certificate evidencing such fractional
share, but including, without limitation, the right to vote and the right to
receive dividends.
(3) All persons who shall acquire stock in the Corporation shall acquire
the same subject to the provisions of the Charter and the By-laws of the
Corporation.
(4) The Board of Directors shall have authority by resolution to classify
and reclassify any authorized but unissued shares of capital stock from time to
time by setting or changing in any one or more respects the preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends, qualifications or terms to the provisions of Sections 5, 6 and 7 of
this Article IV and applicable law. The power of the Board of Directors to
classify or reclassify the shares of capital stock shall include, without
limitation, authority to classify or reclassify any such stock into a class or
classes of capital stock and to divide and classify shares of any class into one
or more series of such class, by determining, fixing or altering one or more of
the following:
(i) The distinctive designation of such class or series; provided
that, unless otherwise prohibited by the terms of such class or series,
the number of shares of any class or series may be decreased by the Board
of Directors in connection with any classification or reclassification of
unissued shares and the number of shares of any class or series which have
been redeemed, purchased or otherwise acquired by the Corporation shall
remain part of the authorized capital stock and be subject to
classification and reclassification as provided herein.
(ii) Whether or not and, if so, the rates, amounts and times at
which, and the conditions under which, dividends shall be payable on
shares of such class or series.
(iii) Whether or not shares of such class or series shall have
voting rights, in addition to any voting rights provided by law and, if
so, the terms of such voting rights.
(iv) The rights of the holders of shares of such class or series
upon the liquidation, dissolution or winding up of the affairs of, or upon
any distribution of the assets of, the Corporation.
(v) Any other rights, restrictions, including restrictions on
transferability, and qualifications of shares of such class or series, not
inconsistent with law and the Charter of the Corporation.
(5) All consideration received by the Corporation for the issue or sale of
stock of any class, together with all income, earnings, profits and proceeds
thereof, including any proceeds derived from the sale, exchange or liquidation
thereof, and any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall irrevocably belong to the class
of shares of stock with respect to which such assets, payments, or funds were
received by the Corporation for all purposes, and shall be subject only to the
rights of creditors, and shall be so handled upon the books of account of the
Corporation. Such assets, income, earnings, profits and proceeds hereof,
including any proceeds derived from the sale, exchange or liquidation thereof,
any assets derived from any reinvestment of such proceeds in whatever form, and
a portion of any general assets of the Corporation not belonging to a particular
class, are herein referred to as "assets belonging to" such class.
(6) In the event of the liquidation or dissolution of the Corporation,
stockholders of each class shall be entitled to receive, as a class, out of the
assets of the Corporation available for distribution to stockholders, but other
than general assets not belonging to any particular class of stock, the assets
belonging to such class, such assets to be distributed among such stockholders
in proportion to the number of shares of such class held by them and recorded on
the books of the Corporation. In the event that there are any general assets not
belonging to any particular class of stock and available for distribution,
distribution of such assets shall be made to the holders of stock of all classes
in proportion to the asset value of the respective classes determined as
hereinafter provided.
(7) The assets belonging to any class of stock shall be charged with the
liabilities in respect of such class, and shall also be charged with such
class's share of the general liabilities of the Corporation, in proportion to
the asset value of the respective classes determined as hereinafter provided.
The determination of the Board of Directors shall be conclusive as to the amount
of such liabilities, including the amount of accrued expenses and reserves; as
to any allocation of the same expenses and reserves; as to any allocation of the
same to a given class; and as to whether the same, or any general assets of the
Corporation, are allocable to one or more classes. The liabilities so allocated
to a class are herein referred to as "liabilities belonging to" such class.
ARTICLE VII
(1) The number of directors of the Corporation shall be five (5), which
number may be increased or decreased pursuant to the By-laws of the Corporation
but shall never be less than three (3), unless there is no stock of the
Corporation outstanding, in which case the number of directors of the
Corporation may be less than three (3) but shall not be less than one (1). The
names of the directors who shall act until the first annual meeting of
stockholders or until their successors are duly elected and qualified are:
Francis J. Bruzda and Richard B. Seidel.
(2) No holder of stock of the Corporation shall, as such holder, have any
right to purchase or subscribe for any shares of the capital stock of the
Corporation or any other security of the Corporation which it may issue or sell
(whether out of the number of shares authorized by the Charter, or out of any
shares of the capital stock of the Corporation acquired by it after the issue
thereof or otherwise) other than such right, if any, as the Board of Directors,
in its discretion, may determine.
(3) Each director and each officer of the Corporation shall be indemnified
by the Corporation to the full extent permitted by the General Laws of the State
of Maryland and the Investment Company Act of 1940, now or hereafter in force,
including advance of related expenses.
ARTICLE VIII
(1) To the extent that the Corporation has funds or other property legally
available therefor, each holder of shares of capital stock of the Corporation
shall be entitled to require the Corporation to redeem all or any part of the
shares of capital stock of the Corporation standing in the name of such holder
on the books of the Corporation, and all shares of capital stock issued by the
Corporation shall be subject to redemption by the Corporation, at the redemption
price of such shares as in effect from time to time as may be determined by the
Board of Directors of the Corporation in accordance with the provisions hereof,
subject to the right of the Board of Directors of the Corporation to suspend the
right of redemption of shares of capital stock of the Corporation or postpone
the date of payment of such redemption price in accordance with the provisions
of applicable law, and the Corporation shall have the right at any time to
redeem the shares owned by any holder of capital stock of the Corporation (i) if
such redemption is, in the opinion of the Board of Directors of the Corporation,
desirable in order to prevent the Corporation from being deemed a "personal
holding company" within the meaning of the Internal Revenue Code of 1954, as
amended, (ii) if the value of such shares in the account maintained by the
Corporation or its transfer agent for any class of stock is less than $500;
provided, however, that each stockholder shall be notified that the value of his
account is less than such amount and allowed sixty days to make additional
purchases of shares which will increase the value of his account to at least
$1,000 before such redemption is processed by the Corporation, or (iii) if the
net income with respect to any particular class of shares should be negative or
it should otherwise be appropriate to carry out the Corporation's
responsibilities under the Investment Company Act of 1940, in each case subject
to such further terms and conditions as the Board of Directors of the
Corporation may from time to time adopt. The redemption price of shares of
capital stock of the Corporation shall, except as otherwise provided in this
section, be the net asset value thereof as determined be the Board of Directors
of the Corporation from time to time in accordance with the provisions of
applicable law, less such redemption fee or other charge, if any, as may be
fixed by resolution of the Board of Directors of the Corporation. Payment of the
redemption price shall be made in cash by the Corporation at such time and in
such manner as may be determined from time to time by the Board of Directors of
the Corporation unless, in the opinion of the Board of Directors, which shall be
conclusive, conditions exist which make payment wholly in cash unwise or
undesirable; in such event the Corporation may make payment wholly or partly by
securities or other property included in the assets belonging or allocable to
the class of the shares redemption of which is being sought, the value of which
shall be determined as provided herein.
(2) Each holder of any class of stock of the Corporation who surrenders
his certificate in good delivery form to the Corporation or, if the shares in
question are not represented by certificates, who delivers to the Corporation a
written request in good order signed by the stockholder, shall, to the extent
permitted by the By-Laws or by resolution of the Board of Directors, be entitled
to convert the shares in question, on the basis hereinafter set forth, into
shares of stock of any class of the Corporation. The Corporation shall determine
the net asset value, as provided herein, of the shares to be converted and may
deduct therefrom a conversion cost, in an amount determined within the
discretion of the Board of Directors. Within five (5) business days after such
surrender and payment of any conversion cost, the Corporation shall issue to the
stockholder such number of shares of stock of the class desired as, taken at the
net asset value thereof determined as provided herein in the same manner and at
the same time as that of the shares surrendered, shall equal the net asset value
for the shares surrendered, less any conversion cost as aforesaid. Any amount
representing a fraction of a share may be paid in cash at the option of the
Corporation. Any conversion cost may be paid and/or assigned by the Corporation
to the underwriter and/or to any other agency, as it may elect.
ARTICLE IX
Any determination made in good faith, so far as accounting mattes are
involved, in accordance with accepted accounting practices by or pursuant to the
direction of the Board of Directors, as to the amount of assets, obligations or
liabilities of the Corporation, as to the amount of net income of the
Corporation from dividends and interest for any period or amounts at any time
legally available for the payments of dividends, as to the amount of any
reserves or charges set up and the propriety thereof, as to the time of or
purpose for creating reserves or as to the use, alteration or cancellation of
any reserves or charges (whether or not any obligation or liability for which
such reserves or charges shall have been created shall have been paid or
discharged or shall be then or thereafter required to be paid or discharged), as
to the value of any security owned by the Corporation as to any other matters
relating to the issuance, sale, redemption or other acquisition or disposition
of securities or shares of capital stock of the Corporation, and any reasonable
determination made in good faith by the Board of Directors as to whether any
transaction constitutes a purchase of securities on "margin," a sale of
securities "short," or an underwriting of the sale of, or a participation in any
underwriting or selling group in connection with the public distribution of, any
securities, shall be final and conclusive, and shall be binding upon the
Corporation and all holders of its capital stock, past, present and future, and
shares of the capital stock of the Corporation are issued and sold on the
condition and understanding, evidenced by the purchase of shares of capital
stock or acceptance of shares certificates, that any and all such determinations
shall be binding as aforesaid. No provision of the Charter of the Corporation
shall be effective to (i) require a waiver of compliance with any provision of
the Securities Act of 1933, as amended, or the Investment Company Act of 1940,
as amended, or of any valid rule, regulation or order of the Securities and
Exchange Commission thereunder or (ii) protect or purport to protect any
director or officer of the Corporation against any liability to the Corporation
or its security holders to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.
ARTICLE X
The duration of the Corporation shall be perpetual.
ARTICLE XI
(1) The Corporation reserves the right from time to time to make any
amendments to its Charter which may now or hereafter be authorized by law,
including any amendments changing the terms or contract rights, as expressly set
forth in its Charter, of any of its outstanding stock by classification,
reclassification or otherwise, but no such amendment which changes such terms or
contract rights of any of its outstanding stock shall be valid unless such
amendment shall have been authorized by not less than a majority of the
aggregate number of the votes entitled to be cast thereon by a vote at a meeting
of shareholders.
(2) Notwithstanding any provision of the General Laws of the State of
Maryland requiring any action to be taken or authorized by the affirmative vote
of the holders of a designated proportion of the votes of all classes or of any
class of stock of the Corporation, such action shall be effective and valid if
taken or authorized by the affirmative vote of the holders of a majority of the
total number of shares outstanding and entitled to vote thereon, except as
otherwise provided herein.
(3) So long as permitted by Maryland law, the book of the Corporation may
be kept outside of the State of Maryland at such place or places as may be
designated from time to time by the Board of Directors or in the By-Laws of the
Corporation.
(4) In furtherance, and not in limitation, of the Powers conferred by the
laws of the State of Maryland, the Board of Directors is expressly authorized:
(i) To make, alter or repeal the By-Laws of the Corporation, except
where such power is reserved by the By-Laws to the stockholders, and except as
otherwise required by the Investment Company Act of 1940.
(ii) From time to time to determine whether and to what extent and
at what times and places and under what conditions and regulations the books and
accounts of the Corporation, or any of them other than the stock ledger, shall
be open to the inspection of the stockholders, and no stockholder shall have any
right to inspect any account or book or document of the Corporation, except as
conferred by law or authorized by resolution of the Board of Directors or of the
stockholders.
(iii) Without the assent or vote of the stockholders, to authorize
the issuance from time to time of shares of the stock of any class of the
Corporation, whether now or hereafter authorized, and securities convertible
into shares of its stock of any class or classes, whether now or hereafter
authorized, for such consideration as the Board of Directors may deem
advisable."
(iv) Without the assent or vote of the stockholders, to authorize
and issue obligations of the Corporation, secured and unsecured, as the Board of
Directors may determine, and to authorize and cause to be executed mortgages and
liens upon the property of the Corporation, real or personal.
(v) To determine in accordance with generally accepted accounting
principles and practices what constitutes net profits, earnings, surplus or net
assets in excess of capital, and to determine what accounting periods shall be
used by the Corporation for any purpose, whether annual or any other period,
including daily; to set apart out of any funds of the Corporation such reserves
for such purposes as it shall determine and to abolish the same; to declare and
pay any dividends and distributions in cash, securities of other property from
surplus or any funds legally available therefor, at such intervals (which may be
as frequently as daily) or on such other periodic basis, as it shall determine;
to declare such dividends or distributions by means of a formula or other method
of determination, at meetings held less frequently than the frequency of the
effectiveness of such declarations; to establish payment dates for dividends or
any other distributions on any basis, including dates occurring less frequently
than the effectiveness of declarations thereof; and to provide for the payment
of declared dividends on a date earlier or later than the specified payment date
in the case of stockholders of the Corporation redeeming their entire ownership
of shares of any class of the Corporation.
(vi) In addition to the powers and authorities granted herein and by
statute expressly conferred upon it, the Board of Directors is authorized to
exercise all such powers and do all such acts and things as may be exercised or
done by the Corporation, subject, nevertheless, to the provisions of Maryland
law, this Charter and the By-Laws of the Corporation.
IN WITNESS WHEREOF, the undersigned incorporator of ST. CLAIR MONEY MARKET
FUND, INC. hereby executes the foregoing Articles of Incorporation and
acknowledges the same to be his act and further acknowledges that, to the best
of his knowledge, the matters and facts set forth therein are true in all
material respects under the penalties of perjury.
Dated the 22nd day of May, 1984.
/s/ Martin E. Lybecker
Martin E. Lybecker
WITNESS:
/s/ Marsha Gilman
Marsha Gilman
<PAGE>
DISTRICT OF COLUMBIA:
I HEREBY CERTIFY THAT on the 22nd day of May, 1984, before me, a Notary
Public of the District of Columbia, personally appeared Martin E. Lybecker, who
acknowledged the foregoing Articles of Incorporation to be his act.
WITNESS my hand and Notarial Seal.
/s/ Mary E. Higgins
Mary E. Higgins
Notary Public
My Commission Expires:
/s/ Illegible
Illegible
EXHIBIT 1(b)
ST. CLAIR MONEY MARKET FUND, INC.
ARTICLES SUPPLEMENTARY
ST. CLAIR MONEY MARKET FUND, INC. (the "Fund"), a corporation organized
under the laws of the State of Maryland, does hereby file for recording with
the State Department of Assessments and Taxation of Maryland the following
Articles Supplementary to its Articles of Incorporation:
FIRST: Pursuant to the authority contained in Article VI of the Articles
of Incorporation of the Fund, one billion (1,000,000,000) of the two billion
(2,000,000,000) authorized, unissued, and unclassified shares of the Fund of the
par value of one mill ($.001) per share and of the aggregate par value of one
million dollars ($1,000,000) were classified as Class A Common Stock by
unanimous vote of the board of directors of the Fund at a meeting duly called,
at which a quorum was present, on August 22, 1984.
SECOND: Pursuant to the authority contained in Article VI of the Articles
of Incorporation of the Fund, the remaining one billion (1,000,000,000) of the
two billion (2,000,000,000) authorized and unissued shares of the Fund of the
par value of one mill ($.001) per share and of the aggregate par value of one
million dollars ($1,000,000) were classified as Class B Common Stock by
unanimous vote of the board of directors of the Fund at a meeting duly called,
at which a quorum was present, on August 22, 1984.
THIRD: Each share of Class A Common Stock and Class B Common Stock shall
have all the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption that are set forth in the Fund's Articles of
Incorporation with respect to its shares of capital stock.
IN WITNESS WHEREOF, St. Clair Money Market Fund, Inc. has caused these
presents to be signed in its name and on its behalf by its President and its
corporate seal to be hereunder affixed and attested by its Secretary as of
the 27th day of August 1984, and its President acknowledges that these
Articles Supplementary are the act and deed of St. Clair Money Market Fund,
Inc. and, under penalty of perjury, that the matters in fact set forth herein
with respect to authorization and approval are true in all materials respects
to the best of his knowledge, information and belief.
SEAL: ST. CLAIR MONEY MARKET FUND, INC.
Attest:
/s/ Martin E. Lybecker By: /s/ Francis J. Bruzda
Martin E. Lybecker Francis J. Bruzda
Secretary President
EXHIBIT 1(c)
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
ST. CLAIR MONEY MARKET FUND, INC.
ST. CLAIR MONEY MARKET FUND, INC., a corporation organized under the laws
of the State of Maryland, having its principal office in Maryland at c/o The
Corporation Trust Incorporated, 32 South Street, Baltimore, MD 21202
(hereinafter the "Corporation"), does hereby certify to the State Department of
Assessments and Taxation that:
FIRST: Pursuant to Section 2-604 of the Maryland General Corporation Law,
The Articles of Incorporation of the Corporation are hereby amended by striking
in its entirety Article II thereof and by inserting in lieu thereof the
following:
ARTICLE II
The name of the Corporation is:
ST. CLAIR FIXED INCOME FUND, INC.
SECOND: The foregoing amendment was unanimously approved by the board of
directors of the Corporation on November 20, 1986; the outstanding shares
entitled to vote on the matter approved the foregoing amendment at the annual
meeting of shareholders held on December 22, 1986.
<PAGE>
IN WITNESS WHEREOF, ST. CLAIR MONEY MARKET FUND, INC. has caused this
instrument to be signed in its name and on its behalf by its President and
its corporate seal to be hereunto affixed and attested by its Secretary on
this 22nd day of December, 1986.
ST. CLAIR MONEY MARKET FUND, INC.
By: /s/ Francis J. Bruzda
Francis J. Bruzda
President
[SEAL]
ATTEST:
/s/ James W. Jennings
James W. Jennings
Secretary
<PAGE>
CERTIFICATE
THE UNDERSIGNED, President of ST. CLAIR MONEY MARKET FUND, INC., who
executed on behalf of said Corporation the attached Articles of Amendment to
Articles of Incorporation of said Corporation, of which this certificate is made
a part, hereby acknowledges, in the name and on behalf of said Corporation, the
attached Articles of Amendment to be the corporate act of said Corporation, and
certifies that to the best of his knowledge, information and belief the matters
and facts set forth in the attached Articles of Amendment with respect to
authorization and approval are true in all material respects, under the
penalties for perjury.
/s/ Francis J. Bruzda
Francis J. Bruzda
Date: December 22nd, 1986
EXHIBIT 1(d)
ARTICLES SUPPLEMENTARY
TO
ARTICLES OF INCORPORATION
OF
ST. CLAIR FIXED INCOME FUND, INC.
ST. CLAIR FIXED INCOME FUND, INC., a Corporation organized under the laws
of the State of Maryland, formerly named St. Clair Money Market Fund, Inc.,
having its principal office in Maryland at c/o The Corporation Trust
Incorporated, 32 South Street, Baltimore, Maryland 21202 (hereinafter the
"Corporation"), does hereby certify to the State Department of Assessments and
Taxation that:
FIRST: Pursuant to Section 2-208 of the Maryland General Corporation Law,
the Board of Directors of the Corporation, by resolutions unanimously adopted by
such Board on March 6, 1987, has classified Five Hundred Million (500,000,000)
of the One Billion (1,000,000,000) authorized and previously unclassified shares
of capital stock of the Corporation (par value One Mill ($.001) per share) into
one class, designated as Class C Common Stock.
Each share of Class C Common Stock shall have all of the preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption that are set
forth in the Articles of Incorporation of the Corporation with respect to its
shares of capital stock.
SECOND: The shares of Class C Common Stock of the Corporation classified
as described in Article FIRST of these Articles Supplementary have been
classified by the Corporation's Board of Directors under the authority contained
in the charter of the Corporation.
IN WITNESS WHEREOF, ST. CLAIR FIXED INCOME FUND, INC., has caused these
presents to be signed in its name and on its behalf by its President and its
corporate seal to be hereunto affixed and attested by its Secretary on this 13th
day of November, 1987.
ST. CLAIR FIXED INCOME FUND, INC.
By: /s/ Francis J. Bruzda
Francis J. Bruzda
Its President
[SEAL]
Attest:
/s/ James W. Jennings
James W. Jennings
Secretary
<PAGE>
CERTIFICATE
THE UNDERSIGNED, President of ST. CLAIR FIXED INCOME FUND, INC., who
executed on behalf of said Corporation the attached Articles Supplementary to
Articles of Incorporation of said Corporation, of which this certificate is made
a part, hereby acknowledges, in the name and on behalf of said Corporation, the
attached Articles Supplementary to be the corporate act of said Corporation, and
certifies that to the best of his knowledge, information and belief the matters
and facts set forth in the attached Articles Supplementary with respect to
authorization and approval are true in all material respects, under the
penalties for perjury.
/s/ Francis J. Bruzda
Francis J. Bruzda
Dated: November 13, 1987
EXHIBIT 1(e)
CERTIFICATE OF CORRECTION
TO CORRECT AN ERROR
IN
Articles Supplementary to Articles of Incorporation
of St. Clair Fixed Income Fund, Inc.
(Formerly St. Clair Money Market Fund, Inc.)
Pursuant to the provisions of Section 1-206 of Corporations and
Associations Articles, Annotated Code of Maryland, the undersigned execute(s)
the following certificate of correction.
1. The name of the party to the document being corrected is St.
Clair Money Market Fund, Inc.
2. That Articles Supplementary to Articles of Incorporation were filed
with the Department of Assessments and Taxation of the State of Maryland on
December 30, 1986 and that said document requires correction as permitted under
the provisions of Section 1-206 of the Corporations and Associations Article of
Annotated Code of Maryland.
3. The error or defect in said document to be corrected is as
follows:
FIRST: Pursuant to Section 2-208 of the Maryland General Corporation
Law, the Board of Directors of the Corporation, by resolutions unanimously
adopted by such Board on September 11, 1986, has classified all of the One
Billion (1,000,000,000) authorized and previously unclassified shares of
capital stock of the Corporation (par value One Mill ($.001) per share)
into two classes, designated as Class A Common Stock and Class B Common
Stock, each such class of Common Stock having allocated to it Five Hundred
Million (500,000,000) shares of capital stock of the Corporation.
Each share of Class A Common Stock and Class B Common Stock shall
have all of the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms and
conditions of redemption that are set forth in the Articles of
Incorporation of the Corporation with respect to its shares of capital
stock.
4. The foregoing inaccuracy or defect in the documents is corrected
to read as follows:
FIRST: Pursuant to Section 2-208 of the Maryland General Corporation
Law, the Board of Directors of the Corporation, by resolutions unanimously
adopted by such Board on September 11, 1986, has classified One Billion
(l,000,000,000) of the Two Billion (2,000,000,000) authorized and
previously unclassified shares of capital stock of the Corporation (par
value One Mill ($.001) per share) into two classes, designated as Class A
Common Stock and Class B Common Stock, each such class of Common Stock
having allocated to it Five Hundred Million (500,000,000) shares of
capital stock of the corporation.
Each share of Class A Common Stock and Class B Common Stock shall
have all of the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms and
conditions of redemption that are set forth in the Articles of
Incorporation of the Corporation with respect to its shares of capital
stock.
IN WITNESS WHEREOF, the undersigned corporation has caused this
certificate of correction to be signed in its corporate name and on its behalf
by its President and attested by its Secretary on this 13th day of November,
1987.
St. Clair Fixed Income Fund, Inc.
(Formerly St. Clair Money Market Fund,
Inc.)
By: /s/ Francis J. Bruzda
Francis J. Bruzda
Its President
ATTEST:
/s/ James W. Jennings
James W. Jennings
Secretary
<PAGE>
CERTIFICATE
THE UNDERSIGNED, President of ST. CLAIR FIXED INCOME FUND, INC., which
executed on behalf of said Corporation the attached Certificate of Correction to
Articles Supplementary to Articles of Incorporation of said Corporation, of
which this certificate is made a part, hereby acknowledges, in the name and on
behalf of said Corporation, the attached Certificate of Correction to be the
corporate act of said Corporation, and certifies that to the best of his
knowledge, information and belief the matters and facts set forth in the
attached Certificate of Correction with respect to the authorization and
approval are true in all material respects, under the penalties for perjury.
/s/ Francis J. Bruzda
Francis J. Bruzda
Dated: November 13, 1987
EXHIBIT 1(f)
ARTICLES SUPPLEMENTARY
TO
ARTICLES OF INCORPORATION
OF
ST. CLAIR FIXED INCOME FUND, INC.
ST. CLAIR FIXED INCOME FUND, INC., a Corporation organized under the laws
of the State of Maryland, formerly named St. Clair Money Market Fund, Inc.,
having its principal office in Maryland at c/o The Corporation Trust
Incorporated, 32 South Street, Baltimore, Maryland 21202 (hereinafter the
"Corporation"), does hereby certify to the State Department of Assessments and
Taxation that:
FIRST: Pursuant to Section 2-208 of the Maryland General Corporation Law,
the Board of Directors of the Corporation, by resolutions unanimously adopted by
such Board on November 17, 1989, has classified One Hundred Million
(100,000,000) of the Five Hundred Million (500,000,000) authorized and
previously unclassified shares of capital stock of the Corporation (par value
One Mill ($.00l) per share) as additional shares of Class A Common Stock, for a
total of Six Hundred Million (600,000,000) shares of Class A Common Stock.
Each share of Class A Common Stock shall have all of the preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption that are set
forth in the Articles of Incorporation of the Corporation with respect to its
shares of capital stock.
SECOND: The shares of Class A Common Stock of the Corporation classified
as described in Article FIRST of these Articles Supplementary have been
classified by the Corporation's Board of Directors under the authority contained
in the charter of the Corporation.
IN WITNESS WHEREOF, ST. CLAIR FIXED INCOME FUND, INC., has caused these
presents to be signed in its name and on its behalf by its President and its
corporate seal to be hereunto affixed and attested by its Secretary on this lst
day of December, 1989.
ST. CLAIR FIXED INCOME FUND, INC.
By: /s/ Francis J. Bruzda
Francis J. Bruzda
Its President
[SEAL]
Attest:
/s/ James W. Jennings
James W. Jennings
Secretary
<PAGE>
CERTIFICATE
THE UNDERSIGNED, President of ST. CLAIR FIXED INCOME FUND, INC., who
executed behalf of said Corporation the attached Articles Supplementary to
Articles of Incorporation of said Corporation, of which this certificate is made
a part, hereby acknowledges, in the name and on behalf of said Corporation, the
attached Articles Supplementary to be the corporate act of said Corporation, and
certifies that to the best of his knowledge, information and belief the matters
and facts set forth in the attached Articles Supplementary with respect to
authorization and approval are true in all material respects, under the
penalties for perjury.
/s/ Francis J. Bruzda
Francis J. Bruzda
Dated: December 1, 1989
EXHIBIT 1(g)
CERTIFICATE OF CORRECTION
ST. CLAIR FIXED INCOME FUND, INC.
ST. CLAIR FIXED INCOME FUND, INC., a Maryland corporation (formerly
named St. Clair Money Market Fund, Inc.) (the "Corporation'), DOES HEREBY
CERTIFY, pursuant to Section 1-207 of the Maryland General Corporation Law,
as follows:
l. The title of the document being corrected (the "Articles
Supplementary") is:
Articles Supplementary to Articles of Incorporation of St. Clair
Money Market Fund, Inc., dated December 19, l986.
2. The name of the party to the Articles Supplementary is St. Clair
Money Market Fund, Inc.
3. The Articles Supplementary was filed with the Maryland State Department
of Assessments and Taxation (the "SDAT") on December 30, 1986. The Articles
Supplementary was the subject of a Certificate of Correction, dated November 13,
1987 and filed with the SDAT on November 19, 1987 (the "1987 Certificate of
Correction"). The Articles Supplementary requires further correction as
permitted under the provisions of Section 1-207 of the Maryland General
Corporation Law to bring it into conformity with the resolutions of the Board of
Directors of the Corporation duly adopted on September 11, 1986 and to correct
an error in the execution paragraph thereof. The Board of Directors, by
resolutions duly adopted on September 11, 1992, ratified and affirmed the
September 11, 1986 resolutions and authorized and approved the filing of this
Certificate of Correction. The required corrections do not affect the relative
rights of the stockholders of the various classes of common stock of the
Corporation, and this Certificate of Correction has therefore not been submitted
to a vote of the stockholders for their approval.
4. Article FIRST of the Articles Supplementary as previously filed
and as corrected by the 1987 Certificate of Correction provides as
follows:
FIRST: Pursuant to Section 2-208 of the Maryland General Corporation
Law, the Board of Directors of the Corporation, by resolutions unanimously
adopted by such Board on September 11, 1986, has classified One Billion
(1,000,000,000) of the Two Billion (2,000,000,000) authorized and
previously unclassified shares of capital stock of the Corporation (par
value One Mill ($.001) per share) into two classes, designated as Class A
Common Stock and Class B Common Stock, each such class of Common Stock
having allocated to it Five Hundred Million (500,000,000) shares of
capital stock of the Corporation.
Each share of Class A Common Stock and Class B Common Stock shall
have all of the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms and
conditions of redemption that are set forth in the Articles of
Incorporation of the Corporation with respect to its shares of capital
stock.
<PAGE>
Articles FIRST of the Articles Supplementary as filed on December 30, 1986
and amended by the 1987 Certificate of Correction is hereby corrected and
restated in its entirety to read as follows:
FIRST, Pursuant to Section 2-208 of the Maryland General Corporation
Law, the Board of Directors of the Corporation, by resolution unanimously
adopted by such Board on September 11, 1986, has (a) declassified Five
Hundred Million (500,000,000) unissued shares of Class A Common Stock of
the Corporation (par value One Mill ($.001) per share), and (b)
declassified Five Hundred Million (500,000,000) unissued shares of Class B
Common Stock of the Corporation (par value One Mill ($.001) per share).
Such declassified shares were part of the One Billion (1,000,000,000)
authorized shares of capital stock of the Corporation (par value One Mill
($.001) per share) classified as Class A Common Stock and the One Billion
(l,000,000,000) authorized shares of capital stock of the Corporation (par
value One Mill ($.001) per share) classified as Class B Common Stock,
respectively, by resolution of the Board of Directors on August 22, 1984
and by the Articles Supplementary to the Charter of St. Clair Money Market
Fund, Inc., filed with the Maryland State Department of Assessments and
Taxation on November 15, 1984.
Each share of Class A Common Stock and Class B Common Stock
declassified hereby shall become authorized, unissued and unclassified
shares of capital stock of the Corporation.
5. The execution paragraph of the Articles Supplementary also
contained a typographical error. The execution paragraph as previously filed
reads as follow:
IN WITNESS WHEREOF, ST CLAIR CORPORATE DIVIDEND FUND, INC., has
caused these presents to be signed in its name and on its behalf by its
President and its corporate seal to be hereunto affixed and attested by
its Secretary on this l9th day of December 1986.
The execution paragraph of the Articles Supplementary as previously filed
is hereby corrected and restated in its entirety to read as follows:
IN WITNESS WHEREOF, ST. CLAIR MONEY MARKET FUND, INC. has caused
these presents to be signed in its name and on its behalf by its
President and its corporate seal to be hereunto affixed and attested by
its Secretary on this l9th day of December 1986.
IN WITNESS WHEREOF, ST. CLAIR FIXED INCOME FUND, INC. has caused this
Certificate of Correction to be signed in its corporate name and on its
behalf by its President and attested by its Secretary on this 11th day of
September, 1992.
ST. CLAIR FIXED INCOME FUND, INC.
(Formerly St. Clair Money Market Fund,
Inc.)
By: /s/ Francis J. Bruzda
Francis J. Bruzda
President
ATTEST:
/s/ James W. Jennings
James W. Jennings
Secretary
<PAGE>
CERTIFICATE
THE UNDERSIGNED, President of ST. CLAIR FIXED INCOME FUND, INC., who
executed on behalf of said corporation the foregoing Certificate of Correction,
of which this certificate is made a part, hereby acknowledges, in the name and
on behalf of said corporation, the foregoing Certificate of Correction to be the
corporate act of said corporation, and certifies that to the best of his
knowledge, information and belief the matters and facts set forth in therein
with respect to the authorization and approval thereof are true in all material
respects, under the penalties of perjury.
/s/ Francis J. Bruzda
Francis J. Bruzda
Dated: September 11, 1992
EXHIBIT 1(h)
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
ST. CLAIR FIXED INCOME FUND, INC.
ST. CLAIR FIXED INCOME FUND, INC., a corporation organized under the laws
of the State of Maryland, having its principal office in Maryland at c/o The
Corporation Trust Incorporated, 32 South Street, Baltimore, Maryland 21202
(hereinafter the "Corporation"), does hereby certify to the State
Department of Assessments and Taxation that:
FIRST: Pursuant to Section 2-604 of the Maryland General Corporation Law,
the Articles of Incorporation of the Corporation are hereby amended by striking
in its entirety Article II thereof and by inserting in lieu thereof the
following:
ARTICLE II
The name of the Corporation is:
ST. CLAIR FUNDS, INC.
SECOND: The foregoing amendment was unanimously approved by the board of
directors of the Corporation on January 21, 1994; the outstanding shares
entitled to vote on the matter approved the foregoing amendment at the annual
meeting of shareholders on January 18, 1994.
IN WITNESS WHEREOF, ST. CLAIR FIXED INCOME FUND, INC. has caused this
instrument to be signed in its name and on its behalf by its Vice President
and its corporate seal to be hereunto affixed and attested by its Secretary
on this 13th day of September, 1996.
ST. CLAIR FIXED INCOME
FUND, INC.
[SEAL] By /s/ Terry H. Gardner
Terry H. Gardner,
Vice President
ATTEST:
/s/ Lisa Anne Rosen
Lisa Anne Rosen,
Secretary
EXHIBIT 1(i)
ST. CLAIR FUNDS, INC.
ARTICLES SUPPLEMENTARY
ST. CLAIR FUNDS, INC., a Maryland corporation registered as an open-end
investment company under the Investment Company Act of 1940, as amended, (the
"1940 Act"), and having its principal office in the State of Maryland in
Baltimore City, Maryland (hereinafter called the "Corporation"), hereby
certifies to the State Department of Assessments and Taxation of Maryland that:
FIRST: In accordance with procedures established in the Corporation's
Charter, the Board of Directors of the Corporation, by resolution dated November
7, 1996, changed the name of the following, previously designated series of the
Corporation, pursuant to Section 2-605(a)(4) of Maryland General Corporate Law:
Previously Designated Series New Name
1. Class A-Money Market-Fiduciary Portfolio St. Clair Liquidity
Plus Money Market
Fund
SECOND: The shares of the Corporation classified pursuant to Article First
of these Articles Supplementary have been so classified by the Board of
Directors under the authority contained in the Charter of the Corporation. The
number of Shares of capital stock of the various series that the Corporation has
authority to issue has been established by the Board of Directors in accordance
with Section 2-105(c) of the Maryland General Corporation Law.
THIRD: Immediately prior to the effectiveness of the Articles
Supplementary of the Corporation as herein above set forth, the Corporation had
the authority to issue two billion (2,000,000,000) shares of Common Stock of the
par value of $.001 per share and of the aggregate par value of two million
dollars ($2,000,000), of which the Board of Directors had designated one billion
nine hundred million (1,900,000,000) shares into Series and classified the
shares of each Series as follows:
<PAGE>
Previously Classified Shares
Authorized
Name of Shares Shares (in millions)
St. Clair Class A-Money Market-Fiduciary Portfolio 600
Class B-Money Market-Prime Portfolio 500
Class C-Intermediate Bond Portfolio 500
Class D-Institutional Index Equity Fund 300
As amended hereby, the Corporation's Articles of Incorporation authorize
the issuance of two billion (2,000,000,000) shares of Common Stock of the par
value of $0.001 per share and having an aggregate par value of two million
dollars ($2,000,000), of which the Board of Directors has designated nine
hundred million (900,000,000) shares into Series and classified the shares of
each Series as follows:
Current Classification of Shares
Name of Shares Authorized Shares
(in millions)
St. Clair Liquidity Plus Money Market Fund 600
Institutional Index Equity Fund 300
FOURTH: The preferences, rights, voting powers, restrictions, limitations
as to dividends, qualifications and terms and conditions of redemption of each
share of Liquidity Plus Money Market Fund and Institutional Index Equity Fund
shall be as set forth in the Corporation's Articles of Incorporation and shall
be subject to all provisions of the Articles of Incorporation relating to shares
of the Corporation generally.
<PAGE>
IN WITNESS WHEREOF, St. Clair Funds, Inc. has caused these Articles
Supplementary to be signed in its name on its behalf by its authorized officers
who acknowledge that these Articles Supplementary are the act of the
Corporation, that to the best of their knowledge, information and belief, all
matters and facts set forth herein relating to the authorization and approval of
these Articles Supplementary are true in all material respects and that this
statement is made under the penalties of perjury.
Date: __________, 1996
ST. CLAIR FUNDS, INC.
[CORPORATE SEAL]
By: :
Terry H. Gardner
Vice President
Attest:
Lisa Anne Rosen
Secretary
EXHIBIT 5(c)
FORM OF
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, made this day of , 1996, between St.
Clair Funds, Inc. (St. Clair") on behalf of the St. Clair Liquidity Plus
Money Market Fund (the "Fund") and Munder Capital Management (the "Adviser"),
a Delaware partnership.
WHEREAS, St. Clair is a Maryland corporation authorized to issue shares
in series and is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"), and
the Fund is a series of St. Clair;
WHEREAS, the Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended ("Advisers Act");
WHEREAS, St. Clair wishes to retain the Adviser to render investment
advisory services to the Fund, and the Adviser is willing to furnish such
services to the Fund;
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between St. Clair and the Adviser as follows:
1. Appointment
St. Clair hereby appoints the Adviser to act as investment adviser to the
Fund for the periods and on the terms set forth herein. The Adviser accepts the
appointment and agrees to furnish the services set forth herein for the
compensation provided herein.
2. Services as Investment Adviser
Subject to the general supervision and direction of the Board of Directors
of St. Clair, the Adviser will (a) manage the Fund in accordance with the Fund's
investment objective and policies as stated in the Fund's Prospectus and the
Statement of Additional Information filed with the Securities and Exchange
Commission, as they may be, amended from time to time; (b) make investment
decisions for the Fund; (c) place purchase and sale orders on behalf of the
Fund; and (d) employ professional portfolio managers and securities analysts to
provide research services to the Fund. In providing those services, the Adviser
will provide the Fund with ongoing research, analysis, advice and judgments
regarding individual investments, general economic conditions and trends and
long-range investment policy. In addition, the Adviser will furnish the Fund
with whatever statistical information the Fund may reasonably request with
respect to the securities that the Fund may hold or contemplate purchasing.
The Adviser further agrees that, in performing its duties hereunder, it
will:
(a) comply with the 1940 Act and all rules and regulations thereunder the
Advisers Act, the Internal Revenue Code of 1986, as amended (the "Code") and all
other applicable federal and state laws and regulations, and with any applicable
procedures adopted by the Directors;
(b) use reasonable efforts to manage the Fund so that it will qualify, and
continue to qualify, as a regulated investment company under Subchapter M of the
code and regulations issued thereunder;
(c) maintain books and records with respect to the Fund's securities
transactions, render to the Board of Directors of St. Clair such periodic and
special reports as the Board may reasonably request, and keep the Directors
informed of developments materially affecting the Fund's portfolio;
(d) make available to the Fund's administrator, and St. Clair, promptly
upon their request, such copies of its investment records and ledgers with
respect to the Fund as may be required to assist the administrator and St. Clair
in their compliance with applicable laws and regulations. The Adviser will
furnish the Directors with such periodic and special reports regarding the Fund
as they may reasonably request.
(e) immediately notify the Company in the event that the Adviser or any of
its affiliates: (1) becomes aware that it is subject to a statutory
disqualification that prevents the Adviser from serving as investment adviser
pursuant to this Agreement; or (2) becomes aware that it is the subject of an
administrative proceeding or enforcement action by the Securities and Exchange
Commission or other regulatory authority. The Adviser further agrees to notify
St. Clair immediately of any material fact known to the Adviser respecting or
relating to the Adviser that is not contained in St. Clair's Registration
Statement regarding the Fund, or any amendment or supplement thereto, but that
is required to be disclosed therein, and of any statement contained therein that
becomes untrue in any material respect.
3. Documents
The Fund has delivered properly certified or authenticated copies of each
of the following documents to the Adviser and will deliver to it all future
amendments and supplements thereto, if any:
(a) certified resolution of the Board of Directors of St. Clair
authorizing the appointment of the Adviser and approving the form of this
Agreement;
(b) the Registration Statement as filed with the Securities and
Exchange Commission and any amendments thereto;
(c) exhibits, powers of attorneys, certificates and any and all other
documents relating to or filed in connection with the Registration Statement
described above.
4. Brokerage
In selecting brokers or dealers to execute transactions on behalf of the
Fund, the Adviser will use its best efforts to seek the best overall terms
available. In assessing the best overall terms available for any Fund
transaction, the Adviser will consider all factors it deems relevant, including,
but not limited to, the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker or
dealer and the reasonableness of the commission, if any, for the specific
transaction and on a continuing basis. In selecting brokers or dealers to
execute a particular transaction, and in evaluating the best overall terms
available, the Adviser is authorized to consider the brokerage and research
services (as those terms are defined in Section 28(e) of the Securities Exchange
Act of 1934, as amended (the "1934 Act")) provided to the Fund and/or other
accounts over which the Adviser or its affiliates exercise investment
discretion. In accordance with Section 11(a) of the 1934 Act and Rule 11a2-2(T)
thereunder and subject to any other applicable laws and regulations, the Adviser
and its affiliates are authorized to effect portfolio transactions for the Fund
and to retain brokerage commissions on such transactions.
5. Records
The Adviser agrees to maintain and to preserve for the periods prescribed
under the 1940 Act any such records as are required to be maintained by the
Adviser with respect to the Fund by the 1940 Act. The Adviser further agrees
that all records which is maintains for the Fund are the property of the Fund
and it will promptly surrender any of such records upon request.
6. Standard of Care
The Adviser shall exercise its best judgment in rendering the services
under this Agreement. The Adviser shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Fund or the Fund's
shareholders in connection with the matters to which this Agreement relates,
provided that nothing herein shall be deemed to protect or purport to protect
the Adviser against any liability to the Fund or to its shareholders to which
the Adviser would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or by
reason of the Adviser's reckless disregard o fits obligations an duties under
this Agreement. As used in this Section 6, the term "Adviser" shall include any
officers, directors, employees, or other affiliates of the Adviser performing
services with respect to the Fund.
7. Compensation
In consideration of the services rendered pursuant to this Agreement, the
Fund will pay the Adviser a fee at an annual rate equal to .35% of the average
daily net assets of the Fund. This fee shall be computed and accrued daily and
payable monthly. For the purpose of determining fees payable to the Adviser, the
value of the Fund's average daily net assets shall be computed at the times and
in the manner specified in the Fund's Prospectus or Statement of Additional
Information.
8. Expenses
The Adviser will bear all expenses in connection with the performance of
its services under this Agreement. The Fund will bear certain other expenses to
be incurred in its operation, including: taxes, interest, brokerage fees and
commissions, if any, fees of Directors of St. Clair who are not officers,
directors, or employees of the Adviser; Securities and Exchange Commission fees
and state blue sky qualification fees; charges of custodians and transfer and
dividend disbursing agents; the Fund's proportionate share of insurance
premiums; outside auditing and legal expenses; costs of maintenance of the
Fund's existence; costs attributable to investor services, including, without
limitation, telephone and personal expenses; charges of an independent pricing
service; costs of preparing and printing prospectuses and statements of
additional information for regulatory purposes and for distribution to existing
shareholders; costs of shareholders' reports and meetings of the shareholders of
the Fund and of the officers of Board of Directors of St. Clair; and any
extraordinary expenses.
9. Reduction of Fees or Reimbursement to the Fund
If in any fiscal year the aggregate expenses of the Fund (including fees
pursuant to this Agreement and the Fund's administration agreement, but
excluding distribution fees, interest, taxes, brokerage and extraordinary
expenses) exceed the expense limitation of any state having jurisdiction over
the Fund, the Adviser will reduce its fees or reimburse the Fund for such excess
expense in the same proportion as its advisory fee bears to the Fund's combined
fee for investment advice and administration. The Adviser's obligation to reduce
its fees or reimburse the Fund will be limited to the amount of its fees
received pursuant to this Agreement. Such reduction in fees or reimbursement, if
any, will be estimated, reconciled and, in the case of reimbursement, paid on a
monthly basis.
10. Services to Other Companies or Accounts
The investment advisory services of the Adviser to the Fund under this
Agreement are not to be deemed exclusive, and the Adviser, or any affiliate
thereof, shall be free to render similar services to other investment companies
and the clients (whether or not their investment objectives and policies are
similar to those of the Fund) and to engage in the activities, so long as it
services hereunder are not impaired thereby.
11. Duration and Termination
This Agreement shall become effective on and shall continue in effect,
unless sooner terminated as provided herein, for two years from such date and
shall continue from year to year thereafter, provided each continuance is
specifically approve at least annually by (i) the vote of a majority of the
Board of Directors of St. Clair or (ii) a vote of a "majority" (as defined in
the 1940 Act) of the Fund's outstanding voting securities, provided that in
either event the continuance is also approved by a majority of the Board of
Directors who are not "interested persons" (as defined in the 1940 Act) of any
party to this Agreement, by vote cast in person at a meeting called for the
purpose of voting on such approval. This Agreement is terminable, without
penalty, on sixty (60) days' written notice by the Board of Directors of St.
Clair or by vote of holders of a "majority" (as defined in he 1940 Act) of the
Fund's shares or upon ninety (90) days' written notice by the Adviser. This
Agreement will be terminated automatically in the event of its "assignment" (as
defined in he 1940 Act).
12. Amendment
No provision of this Agreement be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, and no amendment of this Agreement shall be effective until approved by
an affirmative vote of (i) a majority of the outstanding voting securities of
the Fund, and (ii) a majority of the Directors of St. Clair, including a
majority of Directors who are not the Company, including a majority of Directors
who are not interested persons of any party to this Agreement, cast in person at
a meeting called for the purpose of voting on such approval, if such approval is
required by applicable law.
13. Use of Name
It is understood that the name of Munder Capital Management or any
derivative thereof or logo associated with that name is the valuable property of
the Adviser and its affiliates, and that the Fund has the right to use such name
(or derivable or logo) only so long as this Agreement shall continue with
respect to the Fund. Upon termination of this Agreement, the Fund shall
forthwith cease to use such name (or derivative or logo) and shall promptly
amend its Articles of Incorporation to change its name to comply herewith.
<PAGE>
14. Miscellaneous
(a) This Agreement constitutes the full and complete agreement of the
parties hereto with respect to the subject matter hereof.
(b) Titles or captions of sections contained in this Agreement are
inserted only as a matter of convenience and for reference, and in no way
define, limit, extend or describe the scope of this Agreement or the intent of
any provisions thereof.
(c) This Agreement may be executed in several counterparts, all of which
together shall for all purposes constitute one Agreement, binding on all the
parties.
(d) This Agreement and the rights and obligations of the parties hereunder
shall be governed by, and interpreted, construed and enforced in accordance with
the laws of the State of Michigan.
(e) If any provisions of this Agreement or the application thereof to any
party or circumstances shall be determined by any court of competent
jurisdiction to be invalid or unenforceable to any extent, the remainder of this
Agreement or the application of such provision to such person circumstance,
other than these as to which it is so determined to be invalid or unenforceable,
shall not be affected thereby, and each provision hereof shall be valid and
shall be enforced to the fullest extent permitted by law.
(f) Notices of any kind to be given to the Adviser by St. Clair shall be
in writing and shall be duly given if mailed or delivered to the Adviser at 480
Pierce Street, Birmingham, Michigan 48009, or at such other address or to such
individual as shall be specified by the Adviser to St. Clair. Notices of any
kind to be given to St. Clair by the Adviser shall be in writing and shall be
duly given if mailed or delivered to 480 Piece Street, Birmingham, Michigan
48009, or at such the address or to such individual as shall be specified by St.
Clair to the Adviser.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below on the day and year first above
written.
ST. CLAIR FUNDS, INC.
By:
MUNDER CAPITAL MANAGEMENT
By:
EXHIBIT 6(c)
FORM OF
DISTRIBUTION AGREEMENT
This Distribution Agreement is made as of this day of ,
1996 by and between ST. CLAIR FUNDS, INC. a Maryland corporation (the "Fund"),
and FUNDS DISTRIBUTOR, INC., a Massachusetts corporation ("Funds Distributor").
WHEREAS, the Fund is an open-end management investment company and is so
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Fund desires to retain Funds Distributor as Distributor for
the Fund's investment portfolio-- Liquidity Plus Money Market Fund (the
"Portfolio") to provide for the sale and distribution of shares of the Portfolio
(the "Shares"), and Funds Distributor is willing to render such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein and intending to be legally bound hereby, the parties hereto agree
as follows:
I. DELIVERY OF DOCUMENTS
The Fund has delivered to Funds Distributor copies of each of the
following documents and will deliver to it all future amendments and supplements
thereto, if any:
(a) Resolutions of the Fund's Board of Directors authorizin the
execution and delivery of this Agreement;
(b) The Fund's Articles of Incorporation as filed with the Secretary of
the State of Maryland as supplemented from time to time;
(c) The Fund's By-Laws;
(d) The Fund's Notification of Registration on Form N-8A under the 1940
Act as filed with the Securities and Exchange Commission ("SEC");
(e) The Fund's Registration Statement on Form N-1A (the "Registration
Statement") under the Securities Act of 1933 (the "1933 Act") and the
1940 Act, as filed with the SEC, and all amendments thereto; and
(f) The Fund's most recent Prospectus and Statement of Additional
Information and all amendments and supplements thereto (collectively,
the "Prospectus").
<PAGE>
II. DISTRIBUTION
1. Appointment of Distributor. The Fund hereby appoints Funds
Distributor as Distributor of the Portfolio's Shares and Funds Distributor
hereby accepts such appointment and agrees to render the services and duties set
forth in this Section II. In the event that the Fund establishes one or more
additional portfolios or classes of shares other than the Portfolio and the
Shares with respect to which it decides to retain Funds Distributor to act as
distributor hereunder, the Fund shall notify Funds Distributor in writing. If
Funds Distributor is willing to render such services, it shall so notify the
Fund in writing whereupon such portfolio and such shares shall become a
Portfolio and Shares hereunder and shall be subject to the provisions of this
Agreement, except to the extent that said provision is modified with respect to
such portfolio or shares in writing by the Fund and Funds Distributor at the
time.
2. Services and Duties.
(a) The Fund agrees to sell through Funds Distributor, as agent, from
time to time during the term of this Agreement, Shares (whether authorized but
unissued or treasury shares, in the Fund's sole discretion) upon the terms and
at the current offering price as described in the applicable Prospectus. Funds
Distributor will act only in its own behalf as principal in making agreements
with selected dealers or others for the sale and redemption of Shares, and shall
sell Shares only at the offering price thereof as set forth in the applicable
Prospectus. Funds Distributor shall devote appropriate efforts to effect sales
of Shares of the Portfolio, but shall not be obligated to sell any certain
number of Shares.
(b) In all matters relating to the sale and redemption of Shares, Funds
Distributor will act in conformity with the Fund's Articles of Incorporation,
By-Laws and applicable Prospectus and with the instructions and directions of
the Board of Directors of the Fund and will conform to and comply with the
requirements of the 1933 Act, the 1940 Act, the regulations of the National
Association of Securities Dealers, Inc. and all other applicable Federal or
state laws and regulations.
(c) Funds Distributor will bear the cost of printing and distributing
any Prospectus (including any supplement or amendment thereto), provided,
however, that Funds Distributor shall not be obligated to bear the expenses
incurred by the Fund in connection with (i) the preparation and printing of any
supplement or amendment to a Registration Statement or Prospectus necessary for
the continued effective registration of the Shares under the 1933 Act or state
securities laws; and (ii) the printing and distribution of any Prospectus,
supplement or amendment thereto for existing shareholders of the Shares
described therein.
3. Sales and Redemptions.
(a) The Fund shall pay all costs and expenses in connection with the
registration of the Shares under the 1933 Act, and all expenses in connection
with maintaining facilities for the issue and transfer of the Shares and for
supplying information, prices and other data to be furnished by the Fund
hereunder, and all expenses in connection with preparing, printing and
distributing the Prospectus except as set forth in subsection 2(c) of Section II
hereof.
<PAGE>
(b) The Fund shall execute all documents, furnish all information and
otherwise take all actions which may be reasonably necessary in the discretion
of the Fund's officers in connection with the qualification of the Shares for
sale in such states as Funds Distributor may designate to the Fund and the Fund
may approve, and the Fund shall pay all filing fees which may be incurred in
connection with such qualification. Funds Distributor shall pay all other
expenses incurred by Funds Distributor in connection with the sale of the
Shares, except as otherwise specifically provided in this Agreement.
(c) The Fund shall have the right to suspend the sale of Shares at any
time in response to conditions in the securities markets or otherwise, and to
suspend the redemption of Shares of the Portfolio at any time permitted by the
1940 Act or the rules of the SEC ("Rules").
(d) The Fund reserves the right to reject any order for Shares, but
will not do so arbitrarily or without reasonable cause.
III. LIMITATIONS OF LIABILITY
Funds Distributor shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund or the Portfolio in
connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on its part in
the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
IV. CONFIDENTIALITY
Funds Distributor will treat confidentially and as proprietary
information of the Fund all records and other information relative to the Fund,
to the Fund's prior or current shareholders and to those persons or entities who
respond to Funds Distributor's inquiries concerning investment in the Fund, and,
except as provided below, will not use such records and information for any
purpose other than the performance of its responsibilities and duties hereunder.
Any other use by Funds Distributor of the information and records referred to
above may be made only after prior notification to and approval in writing by
the Fund. Such approval shall not be unreasonably withheld and may not be
withheld where: (i) Funds Distributor may be exposed to civil or criminal
contempt proceedings for failure to divulge such information; (ii) Funds
Distributor is requested to divulge such information by duly constituted
authorities; or (iii) Funds Distributor is so requested by the Fund.
V. INDEMNIFICATION
1. Fund Representation. The Fund represents and warrants to Funds
Distributor that at all times the Registration Statement and Prospectus will in
all material respects conform to the applicable requirements of the 1933 Act and
the Rules thereunder and will not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading, except that no representation or warranty
in this subsection shall apply to statements or omissions made in reliance upon
and in conformity with written information furnished to the Fund by or on behalf
of and with respect to Funds Distributor expressly for use in the Registration
Statement or Prospectus.
2. Funds Distributor Representation. Funds Distributor represents and
warrants to the Fund that it is duly organized as a Massachusetts corporation
and is and at all times will remain duly authorized and licensed to carry out
its services as contemplated herein.
3. Fund Indemnification. The Fund, on behalf of the Portfolio, agrees
that the Portfolio will indemnify, defend and hold harmless Funds Distributor,
its several officers and directors, and any person who controls Funds
Distributor within the meaning of Section 15 of the 1933 Act, from and against
any losses, claims, damages or liabilities, joint or several, to which any of
them may become subject under the 1933 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of, or are based upon, any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the
Prospectus or in any application or other document executed by or on behalf of
the Portfolio, or arise out of or based upon, information furnished by or on
behalf of the Portfolio, filed in any state in order to qualify the Shares under
the securities or blue sky laws thereof ("Blue Sky Application"), or arise out
of, or are based upon, the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse Funds Distributor, its several
officers and directors, and any person who controls Funds Distributor within the
meaning of Section 15 of the 1933 Act, for any legal or other expenses
reasonably incurred by any of them in investigating, defending or preparing to
defend any such action, proceeding or claim; provided, however, that neither the
Fund nor the Portfolio shall be liable in any case to the extent that such loss,
claim, damage or liability arises out of, or is based upon, any untrue
statement, alleged untrue statement, or omission or alleged omission made in the
Registration Statement, the Prospectus, any Blue Sky Application or any
application or other document executed by or on behalf of the Fund in reliance
upon and in conformity with written information furnished to the Fund by or on
behalf of Funds Distributor specifically for inclusion therein.
The Portfolio shall not indemnify any person pursuant to this
subsection 3 unless the court or other body before which the proceeding was
brought has rendered a final decision on the merits that such person was not
liable by reason of his willful misfeasance, bad faith or gross negligence in
the performance of his duties, or his reckless disregard of his obligations and
duties, under this Agreement ("disabling conduct") or, in the absence of such a
decision, a reasonable determination (based upon a review of the facts) that
such person was not liable by reason of disabling conduct has been made by the
vote of a majority of a quorum of directors of the Fund who are neither
"interested parties" of the Fund (as defined in the 1940 Act) nor parties to the
proceeding, or by an independent legal counsel in a written opinion.
The Portfolio shall advance attorneys' fees and other expenses incurred
by any person in defending any claim, demand, action or suit which is the
subject of a claim for indemnification pursuant to this subsection 3, so long
as: (i) such person shall undertake to repay all such advances unless it is
ultimately determined that he or she is entitled to indemnification hereunder;
and (ii) such person shall provide security for such undertaking, or the
Portfolio shall be insured against losses arising by reason of any lawful
advances, or a majority of a quorum of the disinterested, non-party directors of
the Fund (or an independent legal counsel in a written opinion) shall determine
based on a review of readily available facts (as opposed to a full trial-type
inquiry) that there is reason to believe that such person ultimately will be
found entitled to indemnification hereunder.
The obligations of the Portfolio under this subsection 3 shall be the
several (and not joint or joint and several) obligation of the Portfolio.
4. Funds Distributor Indemnification. Funds Distributor will indemnify,
defend and hold harmless the Fund, the Portfolio, the Fund's several officers
and directors and any person who controls the Fund or the Portfolio within the
meaning of Section 15 of the 1933 Act, from and against any losses, claims,
damages or liabilities, joint or several, to which any of them may become
subject under the 1933 Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions or proceedings in respect hereof) arise out of, or
are based upon, any breach of its representations, warranties and agreements
herein, or which arise out of, or are based upon, any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, the Prospectuses, any Blue Sky Application or any application or
other documents executed by or on behalf of the Fund or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, which statement or
omission was made in reliance upon and in conformity with information furnished
in writing to the Fund or any of its several officers and directors by or on
behalf of Funds Distributor specifically for inclusion therein, and will
reimburse the Fund, the Portfolio, the Fund's several officers and directors,
and any person who controls the Fund or any Portfolio within the meaning of
Section 15 of the 1933 Act, for any legal or other expenses reasonably incurred
by any of them in investigating, defending or preparing to defend any such
action, proceeding or claim.
5. General Indemnity Provision. No indemnifying party shall be liable
under its indemnity agreement contained in subsection 3 or 4 hereof with respect
to any claim made against such indemnifying party unless the indemnified party
shall have notified the indemnifying party in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon the indemnified party (or after the
indemnified party shall have received notice of such service on any designated
agent), but failure to notify the indemnifying party of any such claim shall not
relieve it from any liability which it may otherwise have to the indemnified
party. The indemnifying party will be entitled to participate at its own expense
in the defense or, if it so elects, to assume the defense of any suit brought to
enforce any such liability, and if the indemnifying party elects to assume the
defense, such defense shall be conducted by counsel chosen by it and reasonably
satisfactory to the indemnified party. In the event the indemnifying party
elects to assume the defense of any such suit and retain such counsel, the
indemnified party shall bear the fees and expenses of any additional counsel
retained by the indemnified party.
VI. DURATION AND TERMINATION
This Agreement shall become effective as of the date first above
written, and, unless sooner terminated as provided herein, shall continue until
November , 1998. Thereafter, if not terminated, this Agreement shall continue
automatically for successive terms of one year, provided that such continuance
is specifically approved at least annually by a vote of the majority of the
Board of Directors of the Fund, including a majority of the directors who are
not "interested persons" of the Fund and have no direct or indirect financial
interest in the operation of this Agreement, by vote cast in person at a meeting
called for the purpose of voting on such approval; provided, however, that this
Agreement may be terminated with respect to the Portfolio by the Fund at any
time, without the payment of any penalty, by vote of a majority of the Directors
or by a vote of a "majority of the outstanding voting securities" of such
Portfolio on 60 days' written notice to Funds Distributor, or by Funds
Distributor at any time, without the payment of any penalty, on 60 days' written
notice to the Fund. This Agreement will automatically and immediately terminate
in the event of its "assignment." (As used in this Agreement, the terms
"majority of the outstanding voting securities," "interested person" and
"assignment" shall have the same meanings as such terms have in the 1940 Act.)
VII. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived, discharged or
terminated except by an instrument in writing signed by the party against which
an enforcement of the change, waiver, discharge or termination is sought.
VIII. NOTICES
Notices of any kind to be given to the Fund hereunder by Funds
Distributor shall be in writing and shall be duly given if mailed or delivered
to the Fund at One Exchange Place, 8th Floor, Boston, Massachusetts 02109,
Teresa M. R. Hamlin, Assistant Secretary, with a copy to Paul F. Roye, Esq.,
Dechert Price & Rhoads, 1500 K Street N.W., Washington, DC 20005-1208, or at
such other address or to such individual as shall be so specified by the Fund to
Funds Distributor. Notices of any kind to be given to Funds Distributor
hereunder by the Fund shall be in writing and shall be duly given if mailed or
delivered to Funds Distributor at 60 State Street, Suite 1300, Boston,
Massachusetts 02109, Attention: Betsy Connolly or at such other address or to
such individual as shall be so specified by Funds Distributor to the Fund.
IX. MISCELLANEOUS
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby.
Subject to the provisions of Section VI hereof, this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and shall be governed by Massachusetts law; provided, however, that
nothing herein shall be construed in a manner inconsistent with the 1940 Act or
any rule or regulation of the SEC thereunder.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
ST. CLAIR FUNDS, INC.
By: _______________________________
Name: Lee P. Munder
Title: President
Attest: ________________________
FUNDS DISTRIBUTOR, INC.
By: _______________________________
Name: Betsy Connolly
Title: President
Attest: _________________________
EXHIBIT 8(c)
CUSTODY AGREEMENT
AGREEMENT dated as of June 13, 1994 between St. Clair Funds, Inc. (the
"Company"), a Maryland corporation with offices at One Exchange Place, 4th
Floor, Boston, MA 02109, on behalf of the St. Clair Money Market Fund --
Fiduciary Portfolio (the "Fund"), and Comerica Bank (the "Custodian"), a
Michigan banking corporation and a wholly-owned subsidiary of Comerica
Incorporated, with its principal place of business at One Detroit Center, 500
Woodward Avenue, Detroit, Michigan.
W I T N E S S E T H:
That for and in consideration of the mutual promises hereinafter set forth,
the Company and the Custodian agree as follows:
1. Definitions.
Whenever used in this Agreement or in any Schedules to this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
(a) "Authorized Person" shall be deemed to include the Chairman of the
Board of Directors, the President, and any Vice President, the Secretary,
the Treasurer or any other person, whether or not any such person is an
officer or employee of the Company, duly authorized by the Board of
Directors of the Company to give Oral Instructions and Written Instructions
on behalf of the Fund and listed in the certification annexed hereto as
Appendix A or such other certification as may be received by the Custodian
from time to time.
(b) "Book-Entry System" shall mean the Federal Reserve/Treasury book-entry
system for United States and federal agency securities, its successor or
successors and its nominee or nominees.
(c) "Certificate" shall mean any notice, instruction or other instrument in
writing, authorized or required by this Agreement to be given to the
Custodian, which is actually received by the Custodian and signed on behalf
of the Company by any two Authorized Persons or any two officers thereof.
(d) "Articles of Incorporation" shall mean the Articles of Incorporation of
the Company filed with the Secretary of State of the State of Maryland on
May 22, 1984, as now in effect and as the same may be amended from time to
time.
(e) "Depository" shall mean The Depository Trust Company ("DTC"), a
clearing agency registered with the Securities and Exchange Commission
under Section 17(a) of the Securities Exchange Act of 1934, as amended, its
successor or successors and its nominee or nominees, in which the Custodian
is hereby specifically authorized to make deposits. The term "Depository"
shall further mean and include any other person to be named in a
Certificate authorized to act as a depository under the 1940 Act, its
successor or successors and its nominee or nominees.
(f) "Money Market Security" shall be deemed to include, without limitation,
debt obligations issued or guaranteed as to interest and principal by the
Government of the United States or agencies or instrumentalities thereof,
commercial paper, bank certificates of deposit, bankers' acceptances and
short-term corporate obligations, where the purchase or sale of such
securities normally requires settlement in federal funds on the same day as
such purchase or sale, and repurchase and reverse repurchase agreements
with respect to any of the foregoing types of securities.
(g) "Oral Instructions" shall mean verbal instructions actually received by
the Custodian from a person reasonably believed by the Custodian to be an
Authorized Person.
(h) "Prospectus" shall mean the Fund's current prospectus and statement of
additional information relating to the registration of the Fund's Shares
under the Securities Act of 1933, as amended.
(i) "Shares" refers to the shares of common stock, $.001 par value per
share of the Fund, as may be issued by the Fund from time to time.
(j) "Security" or "Securities" shall be deemed to include bonds,
debentures, notes, stocks, shares, evidences of indebtedness, options and
other securities, commodity interests and investments, including currency,
from time to time of the Fund, including futures contracts, forward
contracts and options on futures contracts and forward contracts.
(k) "Transfer Agent" shall mean the person which performs as the transfer
agent, dividend disbursing agent and shareholder servicing agent functions
for the Company.
(l) "Written Instructions" shall mean a written communication actually
received by the Custodian signed by two Authorized Persons or from two
persons reasonably believed by the Custodian to be Authorized Persons by
telex or facsimile machine or any other such system whereby the receiver of
such communication is able to verify through codes or otherwise with a
reasonable degree of certainty the authenticity of the sender of such
communication; however, "Written Instructions" from the Company's
Administrator, The Shareholder Services Group, Inc., to the Custodian shall
mean an electronic communication transmitted by fund accountants and their
managers (who have been provided an access code by the Administrator) and
actually received by the Custodian.
(m) The "1940 Act" refers to the Investment Company Act of 1940, and the
Rules and Regulations thereunder, all as amended from time to time.
<PAGE>
2. Appointment of Custodian.
(a) The Company hereby constitutes and appoints the Custodian as custodian
of all the Securities and monies at the time owned by or in the possession
of the Fund during the period of this Agreement.
(b) The Custodian hereby accepts appointment as such custodian and agrees
to perform the duties thereof as hereinafter set forth.
(c) In the event the Company establishes one or more portfolios other than
the Fund with respect to which the Company wishes to retain the Custodian
to act as custodian, the Company shall so notify the Custodian in writing.
If the Custodian is willing to render such services, the Custodian shall
notify the Company in writing whereupon each such portfolio shall be deemed
to be a Fund hereunder.
3. Compensation.
(a) The Company will compensate the Custodian for its services rendered
under this Agreement in accordance with the fees set forth in the Fee
Schedule annexed hereto as Schedule A and incorporated herein.
(b) Any compensation agreed to hereunder may be adjusted from time to time
by attaching to Schedule A of this Agreement a revised Fee Schedule, dated
and signed by an Authorized Officer or authorized representative of each
party hereto.
(c) The Custodian will bill the Company as soon as practicable after the
end of each calendar month, and said billings will be detailed in
accordance with the Fee Schedule for the Company. The Company will promptly
pay to the Custodian the amount of such billing. The Custodian may charge
against any monies held on behalf of the Fund pursuant to this Agreement
such compensation and any expenses incurred by the Custodian (and
reimbursable by the Fund) in the performance of its duties pursuant to this
Agreement. The Custodian shall also be entitled to charge against any money
held on behalf of the Fund pursuant to this Agreement the amount of any
loss, damage, liability or expense incurred with respect to the Fund,
including reasonable counsel fees, for which it shall be entitled to
reimbursement under the provisions of this Agreement.
The expenses which the Custodian may charge against such account
include, but are not limited to, the expenses of Sub-Custodians and foreign
branches of the Custodian incurred in settling transactions outside of
Detroit, Michigan or New York City, New York involving the purchase and
sale of Securities.
(d) The Fund will use reasonable efforts to avoid cash overdrafts in its
account and will provide offsetting balances with respect to any cash
overdrafts that may occur from time to time.
(e) If in any fiscal year the aggregate expenses of the Fund (as defined
under the securities regulations of any state having jurisdiction over such
Fund) exceed the expense limitations of any such state, the Company may
deduct from the total fees to be paid with respect to such Fund under this
Agreement and under the Administration Agreement and Transfer Agency
Agreement, or the Custodian and the Company's Administrator and Transfer
Agent together will bear, to the extent required by state law, that portion
of the excess as said total fees with respect to such Fund bear to the
total fees otherwise payable for the fiscal year by the Company pursuant to
the aforesaid Agreements and the Company's investment advisory agreement
with respect to such Fund. Such deduction or payment, if any, with respect
to the Custodian will be limited to the amount of the fee paid hereunder
for the applicable period with respect to the Fund involved.
4. Custody of Cash and Securities.
(a) Receipt and Holding of Assets.
The Company will deliver or cause to be delivered to the Custodian all
Securities and monies owned by the Fund, including cash received from the
issuance of Shares, at any time during the period of this Agreement. The
Custodian will not be responsible for such Securities and monies until
actually received by it. The Company shall instruct the Custodian from time
to time in its sole discretion, by means of Written Instructions, or, in
connection with the purchase or sale of Money Market Securities, by means
of Oral Instructions or Written Instructions, as to the manner in which and
in what amounts Securities and monies are to be deposited on behalf of the
Fund in the Book-Entry System or a Depository and specifically allocated on
the books of the Custodian to the Fund; provided, however, that prior to
the initial deposit of Securities of the Funds in the Book-Entry System or
a Depository, including a deposit in connection with the settlement of a
purchase or sale, the Custodian shall have received a Certificate or
Written Instructions specifically approving such deposits by the Custodian
in the Book-Entry System or a Depository. Securities and monies of the Fund
deposited in the Book-Entry System or the Depository will be represented in
accounts which include only assets held by the Custodian for customers,
including but not limited to accounts which the Custodian acts in a
fiduciary or representative capacity.
(b) Accounts and Disbursements. The Custodian shall establish and maintain
a separate account for each Fund and shall credit to the separate account
all monies received by it for the account of the Fund and shall disburse
the same only:
1. In payment for Securities purchased for the Fund, as provided
in Section 5 hereof;
2. Pursuant to Written Instructions, for the payment of any expense
or liability incurred by the Fund, including but not limited to the
following payments for the account of the Fund: interest, taxes,
management, accounting, transfer agent and legal fees and operating
expenses of the Fund whether or not such expenses are, in whole or in
part, to be capitalized or treated as deferred expenses;
3. In payment of dividends or distributions with respect to the
Shares of the Fund, as provided in Section 7 hereof;
4. In payment of origina issue or other taxes with respect to the
Shares of the Fund, as provided in Section 8 hereof;
5. In payment for Shares which have been redeemed by the Fund, as
provided in Section 8 hereof;
6. Pursuant to Written Instructions, setting forth the name and
address of the Fund and the person to whom the payment is to be made,
the amount to be paid and the purpose for which payment is to be
made;
7. In payment of fees and in reimbursement of the expenses and
liabilities of the Custodian attributable to the Fund, as provided in
Section 3(a) and Section 11(h) hereof; or
8. To a sub-custodian pursuant to Section 11(f) hereof.
(c) Confirmation and Statements. Promptly after the close of business on
each day, the Custodian shall furnish the Fund with confirmations and a
summary of all transfers to or from the account of the Fund during said
day. Where securities purchased by the Fund are in a tangible bulk of
securities registered in the name of the Custodian (or its nominee) or
shown on the Custodian's account on the books of a Depository or the
Book-Entry System, the Custodian shall by book entry or otherwise identify
the quantity of those securities belonging to the Fund. At least monthly,
the Custodian shall furnish the Fund with a detailed statement of the
Securities and monies held for the Fund under this Agreement. The Custodian
shall also furnish the Company with such periodic and special reports as
the Company may reasonably request, and such other information as may be
agreed upon from time to time.
(d) Registration of Securities and Physical Separation. All Securities held
for the Fund which are issued or issuable only in bearer form, except such
Securities as are held in the Book-Entry System, shall be held by the
Custodian in that form; all other Securities held for the Fund may be
registered in the name of the Fund, in the name of any duly appointed
registered nominee of the Custodian as the Custodian may from time to time
determine, or in the name of the Book-Entry System or a Depository or their
successor or successors, or their nominee or nominees. The Company reserves
the right to instruct the Custodian as to the method of registration and
safekeeping of the Securities of the Fund. The Company agrees to furnish to
the Custodian appropriate instruments to enable the Custodian to hold or
deliver in proper form for transfer, or to register in the name of its
registered nominee or in the name of the Book-Entry System or a Depository,
any Securities which it may hold for the account of the Fund and which may
from time to time be registered in the name of the Fund. The Custodian
shall hold all such Securities specifically allocated to a Fund which are
not held in the Book-Entry System or a Depository in a separate account for
the Fund in the name of the Fund physically segregated at all times from
those of any other person or persons.
(e) Segregated Accounts. Upon receipt of a Written Instruction the
Custodian will establish segregated accounts on behalf of the Funds to hold
liquid or other assets as it shall be directed by a Written Instruction and
shall increase or decrease the assets in such segregated accounts only as
it shall be directed by subsequent Written Instruction.
(f) Collection of Income and Other Matters Affecting Securities. Unless
otherwise instructed to the contrary by a Written Instruction, the
Custodian by itself, or through the use of the Book-Entry System or a
Depository with respect to Securities therein deposited, shall with respect
to all Securities held for the Fund in accordance with this Agreement:
1. Collect all income due or payable;
2. Present for payment and collect the amount payable upon all
Securities which may mature or be called, redeemed or retired, or
otherwise become payable. Notwithstanding the foregoing, the
Custodian shall have no responsibility to the Fund for monitoring or
ascertaining any call, redemption or retirement dates with respect to
put bonds which are owned by the Fund and held by the Custodian or
its nominees. Nor shall the Custodian have any responsibility or
liability to the Fund for any loss by the Fund for any missed payment
or other defaults resulting therefrom; unless the Custodian received
timely notification from the Fund specifying the time, place and
manner for the presentment of any such put bond owned by a Fund and
held by the Custodian or its nominee. The Custodian shall not be
responsible and assumes no liability to the Fund for the accuracy or
completeness of any notification the Custodian may furnish to the
Fund with respect to put bonds;
3. Surrender Securities in temporary form for definitive
Securities;
4. Execute any necessary declarations or certificates of ownership
under the Federal income tax laws or the laws or regulations of any
other taxing authority now or hereafter in effect;
5. Hold directly, or through the Book-Entry System or the Depository
with respect to Securities therein deposited, for the account of the
Fund all rights and similar Securities issued with respect to any
Securities held by the Custodian hereunder for the Fund;
6. Transmit promptly to the Company any proxy statement, proxy
materials, notice of a call or conversion or similar communication
received by it as Custodian; and
7. Receive and hold for the account of the Fund all securities
received as a distribution on the Fund's portfolio of securities as a
result of a stock dividend, share split-up or reorganization,
recapitalization, readjustment or other rearrangement or distribution
of rights or similar securities issued with respect to any portfolio
securities belonging to the Fund.
(g) Delivery of Securities and Evidence of Authority. Upon receipt of
Written Instructions and not otherwise, except for subparagraphs 5, 6, and
7 of this section 4(g) which may be effected by Oral or Written
Instructions, the Custodian, directly or through the use of the Book-Entry
System or a Depository, shall:
1. Execute and deliver or cause to be executed and delivered to such
persons as may be designated in such Written Instructions, proxies,
consents, authorizations, and any other instruments whereby the
authority of the Fund as owner of any Securities may be exercised;
2. Deliver or cause to be delivered any Securities held for the Fund
in exchange for other Securities or cash issued or paid in connection
with the liquidation, reorganization, refinancing, merger,
consolidation or recapitalization of any corporation, or the exercise
of any conversion privilege;
3. Deliver or cause to be delivered any Securities held for the Fund
to any protective committee, reorganization committee or other person
in connection with the reorganization, refinancing, merger,
consolidation or recapitalization or sale of assets of any
corporation, and receive and hold under the terms of this Agreement
in the separate account for the Fund certificates of deposit, interim
receipts or other instruments or documents as may be issued to it to
evidence such delivery;
4. Make or cause to be made such transfers or exchanges of the
assets specifically allocated to the separate account of the Fund and
take such other steps as shall be stated in Written Instructions to
be for the purpose of effecting any duly authorized plan of
liquidation, reorganization, merger, consolidation or
recapitalization of the Fund;
5. Deliver Securities owned by the Fund upon sale of such
Securities for the account of the Fund pursuant to Section 5;
6. Deliver Securities owned by the Fund upon the receipt of
payment in connection with any repurchase agreement related to such
Securities entered into by the Fund;
7. Deliver Securities owned by the Fund to the issuer thereof, or its
agent, for transfer into the name of the Fund or into the name of any
nominee or nominees of the Custodian or into the name or nominee name
of any agent appointed pursuant to Section 10(f) or into the name or
nominee name of any sub-custodian appointed pursuant to Section
10(e); or for exchange for a different number of bonds, certificates
or other evidence representing the same aggregate face amount or
number of units; provided, however, that in any such case, the new
Securities are to be delivered to the Custodian;
8. Deliver Securities owned by the Fund to the broker for
examination in accordance with "street delivery" custom;
9. Deliver Securities owned by the Fund in accordance with the
provisions of any agreement among the Fund, the Custodian and any
broker-dealer or any similar organization or organizations relating
to compliance with the rules of any options clearing entity or
securities or commodities exchange, regarding escrow or other
arrangements in connection with transactions by the Fund;
10. Deliver Securities owned by the Fund in accordance with the
provisions of any agreement among the Fund, the Custodian, and a
futures commission merchant registered under the Commodity Exchange
Act, relating to compliance with the rules of the Commodity Futures
Trading Commission and/or any Contract Market, or any similar
organization or organizations, regarding account deposits in
connection with transactions by the Fund;
11. Deliver Securities owned by the Fund for delivery in connection
with any loans of securities made by the Fund but only against
receipt of adequate collateral as agreed upon from time to time by
the Custodian and the Fund which may be in the form of cash or
obligations issued by the United States government, its agencies or
instrumentalities;
12. Deliver Securities owned by the Fund for delivery as security
in connection with any borrowings by the Fund requiring a pledge of
Fund assets, but only against receipt of amounts borrowed;
13. Deliver Securities owned by the Fund upon receipt of Written
Instructions from the Fund for delivery to the Transfer Agent or to
the holders of Shares in connection with distributions in kind, as
may be described from time to time in the Fund's Prospectus, in
satisfaction of requests by holders of Shares for repurchase or
redemption;
14. Deliver Securities as collateral in connection with short sales
of securities by a Fund;
15. Deliver Securities for any purpose expressly permitted by and in
accordance with procedures described in the Fund's Prospectus or
resolution adopted by its Board of Directors signed by an Authorized
Person and certified by the Secretary of the Company; and
16. Deliver Securities owned by the Fund for any other proper
business purpose, but only upon receipt of, in addition to Written
Instructions, a certified copy of a resolution of the Board of
Directors signed by an Authorized Person and certified by the
Secretary of the Fund, specifying the Securities to be delivered,
setting forth the purpose for which such delivery is to be made,
declaring such purpose to be a proper business purpose, and naming
the person or persons to whom delivery of such Securities shall be
made.
(h) Endorsement and Collection of Checks, Etc. The Custodian is hereby
authorized to endorse and collect all checks, drafts or other orders for
the payment of money received by the Custodian for the account of the Fund;
provided, however, that the Custodian shall not be liable pursuant to this
Agreement for any money, whether or not represented by check, draft, or
other instrument for the payment of money, received by it on behalf of the
Fund until the Custodian actually receives and collects such money directly
or by the final crediting of the account representing the Fund's interest
in the Book-Entry System or the Depository.
5. Purchase and Sale of Investments of a Fund.
(a) Promptly after each purchase of Securities for the Fund, the Fund shall
deliver to the Custodian (i) with respect to each purchase of Securities
which are not Money Market Securities, Written Instructions and (ii) with
respect to each purchase of Money Market Securities, either Written
Instructions or Oral Instructions, in either case specifying with respect
to each purchase: (1) the name of the issuer and the title of the
Securities; (2) the number of shares or the principal amount purchased and
accrued interest, if any; (3) the date of purchase and settlement; (4) the
purchase price per unit; (5) the total amount payable upon such purchase;
(6) the name of the person from whom or the broker through whom the
purchase was made, if any; (7) whether or not such purchase is to be
settled through the Book-Entry System or a Depository; and (8) whether the
Securities purchased are to be deposited in the Book-Entry System or a
Depository. The Custodian shall receive the Securities purchased by or for
the Fund and upon receipt of Securities or, as appropriate, a copy of the
broker's or dealer's confirmation or payee's invoice, shall pay out of the
monies held for the account of the Fund the total amount payable upon such
purchase, provided that the same conforms to the total amount payable as
set forth in such Written or Oral Instructions.
(b) Promptly after each sale of Securities of the Fund, the Fund shall
deliver to the Custodian (i) with respect to each sale of Securities which
are not Money Market Securities, Written Instructions, and (ii) with
respect to each sale of Money Market Securities, either Written
Instructions or Oral Instructions, in either case specifying with respect
to such sale: (1) the name of the issuer and the title of the Securities;
(2) the number of shares or principal amount sold, and accrued interest, if
any; (3) the date of sale; (4) the sale price per unit; (5) the total
amount payable to the Fund upon such sale; (6) the name of the broker
through whom or the person to whom the sale was made; and (7) whether or
not such sale is to be settled through the Book-Entry System or a
Depository. The Custodian shall deliver or cause to be delivered the
Securities to the broker or other person designated by the Fund upon
receipt of the total amount payable to the Fund upon such sale, provided
that the same conforms to the total amount payable to the Fund as set forth
in such Written or Oral Instructions. Subject to the foregoing, the
Custodian may accept payment in such form as shall be satisfactory to it,
and is customary among dealers in Securities, and may deliver Securities
and arrange for payment in accordance with the customs prevailing among
dealers in Securities.
6. Lending of Securities.
(a) If the Company is permitted by the terms of its Articles of
Incorporation and, as disclosed in its Prospectus to lend Securities,
within 24 hours after each loan of Securities, the Fund, shall deliver to
the Custodian Written Instructions specifying with respect to each such
loan: (i) the name of the issuer and the title of the Securities; (ii) the
number of shares or the principal amount loaned; (iii) the date of loan and
delivery; (iv) the total amount to be delivered to the Custodian and
specifically allocated against the loan of the Securities, including the
amount of cash collateral and the premium, if any, separately identified;
(v) the name of the broker, dealer or financial institution to which the
loan was made; and (vi) whether the Securities loaned are to be delivered
through the Book-Entry System or a Depository.
(b) Promptly after each termination of a loan of Securities, the Fund shall
deliver to the Custodian Written Instructions specifying with respect to
each such loan termination and return of Securities: (i) the name of the
issuer and the title of the Securities to be returned; (ii) the number of
shares or the principal amount to be returned; (iii) the date of
termination; (iv) the total amount to be delivered by the Custodian
(including the cash collateral for such Securities minus any offsetting
credits as described in said Written Instructions); (v) the name of the
broker, dealer or financial institution from which the Securities will be
returned; and (vi) whether such return is to be effected through the
Book-Entry System or a Depository. The Custodian shall receive all
Securities returned from the broker, dealer or financial institution to
which such Securities were loaned and upon receipt thereof shall pay the
total amount payable upon such return of Securities as set forth in the
Written Instructions. Securities returned to the Custodian shall be held as
they were prior to such loan.
7. Payment of Dividends or Distributions.
(a) The Company shall furnish to the Custodian Written Instructions (i)
authorizing the declaration of dividends or distributions with respect to
the Fund on a specified periodic basis and specifying the date of the
declaration of such dividend or distribution, the date of payment thereof,
the record date as of which shareholders entitled to payment shall be
determined, and the total amount payable to the Transfer Agent on the
payment date, or (ii) setting forth the date of declaration of any
distribution by the Fund, the date of payment thereof, the record date as
of which shareholders entitled to payment shall be determined, and the
total amount payable to the Transfer Agent on the payment date.
(b) Upon the payment date specified in such Written Instructions, the
Custodian shall pay to the Transfer Agent out of monies specifically
allocated to and held for the account of the Fund the total amount payable
to the Transfer Agent. In lieu of paying the Transfer Agent cash dividends
and distributions, the Custodian may arrange for the direct payment of cash
dividends and distributions to Shareholders by the Custodian in accordance
with such procedures and controls as are mutually agreed upon from time to
time by and among the Company, the Custodian and the Transfer Agent.
<PAGE>
8. Sale and Redemption of Shares of the Company.
(a) Whenever the Fund shall sell any Shares, the Fund shall deliver or
cause to be delivered to the Custodian Written Instructions duly
specifying:
1. The number of Shares sold, trade date, and price; and
2. The amount of money to be received by the Custodian for the
sale of such Shares.
The Custodian understands and agrees that Written Instructions may be
furnished subsequent to the purchase of Shares of the Fund and that the
information contained therein will be derived from the sales of Shares as
reported to the Fund by the Transfer Agent.
(b) Upon receipt of such money from the Transfer Agent, the Custodian shall
credit such money to the separate account of the Fund.
(c) Upon issuance of any Shares in accordance with the foregoing provisions
of this Section 8, the Custodian shall pay all original issue or other
taxes required to be paid in connection with such issuance upon the receipt
of Written Instructions specifying the amount to be paid.
(d) Except as provided hereafter, whenever any Shares are redeemed, the
Fund shall cause the Transfer Agent to promptly furnish to the Custodian
Written Instructions, specifying:
1. The number of Shares redeemed; and
2. The amount to be paid for the Shares redeemed.
The Custodian further understands that the information contained in
such Written Instructions will be derived from the redemption of Shares as
reported to the Fund by the Transfer Agent.
(e) Upon receipt from the Transfer Agent of advice setting forth the number
of Shares received by the Transfer Agent for redemption and that such
Shares are valid and in good form for redemption, the Custodian shall make
payment to the Transfer Agent of the total amount specified in Written
Instructions issued pursuant to paragraph (d) of this Section 8. In lieu of
paying the Transfer Agent said redemption proceeds as stated, the Custodian
may arrange for the direct payment of said proceeds to Shareholders by the
Custodian in accordance with such procedures and controls as are mutually
agreed upon from time to time by and among the Company, the Custodian and
the Transfer Agent.
(f) Notwithstanding the above provisions regarding the redemption of
Shares, whenever such Shares are redeemed pursuant to any check redemption
privilege which may from time to time be offered by the Fund, the
Custodian, unless otherwise instructed by Written Instructions, shall honor
the check presented as part of such check redemption privilege out of the
monies specifically allocated to the Fund in such advice for such purpose.
9. Indebtedness.
(a) The Company will cause to be delivered to the Custodian by any bank
(excluding the Custodian) from which the Fund borrows money, a notice or
undertaking in the form currently employed by any such bank setting forth
the amount which such bank will loan to the Fund and the amount of
collateral, if any, required for such loan. The Company shall promptly
deliver to the Custodian Written Instructions stating with respect to each
such borrowing: (i) the name of the bank; (ii) the amount and terms of the
borrowing, which may be set forth by incorporating by reference an attached
promissory note, duly endorsed by the Fund, or other loan agreement or
evidence of indebtedness; (iii) the time and date, if known, on which the
loan is to be entered into (the "Borrowing Date"); (iv) the date on which
the loan becomes due and payable; (v) the total amount payable to the Fund
on the Borrowing Date; (vi) the market value of Securities, if any, to be
delivered as collateral for such loan, including the name of the issuer,
the title and the number of shares or the principal or other amount of any
particular Securities; (vii) whether the Custodian is to deliver such
collateral through the Book-Entry System or a Depository; and (viii) a
statement that such loan is in conformance with the 1940 Act and the Fund's
Prospectus.
(b) Upon receipt of the Written Instructions referred to in subparagraph
(a) above, the Custodian shall deliver on the Borrowing Date the specified
collateral (if any) against delivery by the lending bank of the total
amount of the loan payable, provided that the same conforms to the total
amount payable as set forth in the Written Instructions. The Custodian may,
at the option of the lending bank (unless the lending bank has not been
appointed a custodian or sub-custodian of the Fund's assets, in which case
the Custodian must), keep any such collateral in its possession, but such
collateral shall be subject to all rights therein given the lending bank by
virtue of any promissory note or loan agreement. The Custodian shall
deliver as additional collateral in the same manner as directed by the Fund
from time to time such Securities specifically allocated to such Fund as
may be specified in Written Instructions to collateralize further any
transaction described in this Section 9. The Fund shall cause all
Securities released from collateral status to be returned directly to the
Custodian, and the Custodian shall receive from time to time such return of
collateral as may be tendered to it. In the event that the Company fails to
specify in Written Instructions all of the information required by this
Section 9, the Custodian shall not be under any obligation to deliver any
Securities. Collateral returned to the Custodian shall be held hereunder as
it was prior to being used as collateral.
10. Persons Having Access to Assets of the Fund.
(a) No Companyee, officer, employee or agent of the Company, and no
officer, director, employee or agent of the Fund's investment advisers, or
any sub-investment adviser of the Fund, or of the Fund's administrator,
shall have physical access to the assets of the Fund held by the Custodian
or be authorized or permitted to withdraw any investments of the Fund, nor
shall the Custodian deliver any assets of the Fund to any such person. No
officer, director, employee or agent of the Custodian who holds any similar
position with the Fund's investment advisers, with any sub-investment
adviser of the Fund or with the Fund's administrator shall have access to
the assets of the Fund.
(b) The individual employees of the Custodian duly authorized by the Board
of Trustees of the Custodian to have access to the assets of the Fund are
listed in the certification annexed hereto as Appendix C. The Custodian
shall advise the Fund of any change in the individuals authorized to have
access to the assets of the Fund by written notice to the Fund accompanied
by a certified copy of the authorizing resolution of the Custodian's Board
of Trustees approving such change.
(c) Nothing in this Section 10 shall prohibit any officer, employee or
agent of the Company, or any officer, director, employee or agent of the
investment advisers, of any sub-investment adviser of the Fund or of the
Fund's administrator, from giving Oral Instructions or Written Instructions
to the Custodian or executing a Certificate so long as it does not result
in delivery of or access to assets of the Fund prohibited by paragraph (a)
of this Section 10.
11. Concerning the Custodian.
(a) Standard of Conduct. In the performance of its duties hereunder, the
Custodian shall be obligated to exercise care and diligence and to act in
good faith and to use its best efforts within reasonable limits to insure
the accuracy and completeness of all services under this Agreement. Except
as otherwise provided herein, neither the Custodian nor its nominee shall
be liable for any loss or damage, including counsel fees, resulting from
its action or omission to act or otherwise, except for any such loss or
damage arising out of its negligence, misfeasance or willful misconduct or
that of its employees or agents. The Custodian may, with respect to
questions of law, apply for and obtain the advice and opinion of counsel to
the Company or of its own counsel, at the expense of the Company, and shall
be fully protected with respect to anything done or omitted by it in good
faith in conformity with such advice or opinion. The Custodian shall be
liable to the Fund for any loss or damage resulting from the use of the
Book-Entry System or a Depository arising by reason of any negligence,
misfeasance or willful misconduct on the part of the Custodian or any of
its employees or agents.
(b) Limit of Duties. Without limiting the generality of the foregoing, the
Custodian shall be under no duty or obligation to inquire into, and shall
not be liable for:
1. The validity of the issue of any Securities purchased by the
Fund, the legality of the purchase thereof, or the propriety of the
amount paid therefor;
2. The legality of the sale of any Securities by the Fund or the
propriety of the amount for which the same are sold;
3. The legality of the issue or sale of any Shares, or the
sufficiency of the amount to be received therefor;
4. The legality of the redemption of any Shares, or the propriety
of the amount to be paid therefor;
5. The legality of the declaration or payment of any distribution
of the Fund; or
6. The legality of any borrowing.
(c) No Liability Until Receipt. The Custodian shall not be liable for, or
considered to be the Custodian of, any money, whether or not represented by
any check, draft, or other instrument for the payment of money, received by
it on behalf of the Fund until the Custodian actually receives and collects
such money directly or by the final crediting of the account representing
the Fund's interest in the Book-Entry System or a Depository.
(d) Amounts Due from Transfer Agent. The Custodian shall not be under any
duty or obligation to take action to effect collection of any amount due to
the Fund from the Transfer Agent nor to take any action to effect payment
or distribution by the Transfer Agent of any amount paid by the Custodian
to the Transfer Agent in accordance with this Agreement.
(e) Collection Where Payment Refused. The Custodian shall not be under any
duty or obligation to take action to effect collection of any amount, if
the Securities upon which such amount is payable are in default, or if
payment is refused after due demand or presentation, unless and until (i)
it shall be directed to take such action by a Certificate and (ii) it shall
be assured to its satisfaction of reimbursement of its costs and expenses
in connection with any such action. The Custodian shall give the Fund
prompt notice of each such event.
(f) Appointment of Sub-Custodians. In connection with its duties under this
Agreement, the Custodian may, at its own expense, enter into sub-custodian
agreements with other domestic banks or Company companies for the receipt
of certain securities and cash to be held by the Custodian for the accounts
of the Fund pursuant to this Agreement; provided that each such bank or
Company company complies with all relevant provisions of the 1940 Act,
applicable state securities laws and the rules and regulations thereunder.
The Custodian shall remain responsible for the performance of all of its
duties under this Agreement and shall hold the Company harmless from the
acts and omissions, under the standards of care provided for herein, of any
domestic bank or Company company that it might choose pursuant to this
Section.
(g) No Duty to Ascertain Authority. The Custodian shall not be under any
duty or obligation to ascertain whether any Securities at any time
delivered to or held by it for the Fund are such as may properly be held by
the Fund under the provisions of the Articles of Incorporation and the
Prospectus.
(h) Reliance on Certificates and Instructions. The Custodian shall be
entitled to rely upon any Certificate, notice or other instrument in
writing received by the Custodian and reasonably believed by the Custodian
to be genuine and to be signed by two officers of the Company or Authorized
Persons. The Custodian shall be entitled to rely upon any Written or Oral
Instructions actually received by the Custodian pursuant to the applicable
Sections of this Agreement and reasonably believed by the Custodian to be
genuine and to be given by an Authorized Person in the case of Oral
Instructions or two Authorized Persons in the case of Written Instructions.
The Company agrees to forward to the Custodian Written Instructions from
two Authorized Persons confirming such Oral Instructions in such manner so
that such Written Instructions are received by the Custodian, whether by
hand delivery, telex or otherwise, by the close of business on the same day
that such Oral Instructions are given to the Custodian. The Company agrees
that the fact that such confirming instructions are not received by the
Custodian shall in no way affect the validity of the transactions or
enforceability of the transactions hereby authorized by the Company. The
Company agrees that the Custodian shall incur no liability to the Company
in acting upon Oral Instructions given to the Custodian hereunder
concerning such transactions provided such instructions reasonably appear
to have been received from a duly Authorized Person.
(i) Books and Records. The books and records pertaining to the Company
which are now or hereafter in the possession of the Custodian shall be the
property of the Company. Such books and records shall be prepared and
maintained as required by the 1940 Act and other applicable securities laws
and regulations and shall, to the extent practicable, be maintained
separately for each Fund of the Company. The Company, the Company's
authorized representatives and auditors shall have access to such books and
records at all times during the Custodian's normal business hours. Upon the
reasonable request of the Company, copies of any such books and records
shall be provided by the Custodian to the Company or the Company's
authorized representatives at the Company's expense.
The Custodian shall provide the Company with any report obtained by
the Custodian on the system of internal accounting control of the
Book-Entry System or a Depository and with such reports on its own systems
of internal accounting control in accordance with the requirements of the
1940 Act and as the Company may reasonably request from time to time.
(j) Cooperation with Accountants. The Custodian shall cooperate with the
Company's independent public accountants and shall take all reasonable
action in the performance of its obligations under this Agreement to assure
that the necessary information is made available to such accountants for
the expression of their opinions, as such may be required from time to time
by the Company.
(k) Compliance with Governmental Rules and Regulations. The Custodian shall
comply with all applicable requirements of the federal securities and
commodities laws, and any other laws, rules and regulations of governmental
authorities having jurisdiction with respect to the duties to be performed
by the Custodian hereunder. Except as specifically set forth herein, the
Custodian assumes no responsibility for such compliance by the Company.
<PAGE>
12. Term and Termination.
(a) This Agreement shall become effective on the date first set forth above
(the "Effective Date") and shall continue in effect thereafter until
terminated pursuant to paragraph (b) of this Section 12.
(b) Either of the parties hereto may terminate this Agreement at any time
by giving to the other party a notice in writing specifying the date of
such termination, which shall be not less than 60 days after the date of
receipt of such notice. In the event such notice is given by the Company,
it shall be accompanied by a certified resolution of the Board of Directors
of the Company, electing to terminate this Agreement and designating a
successor custodian or custodians, which shall be a person qualified to so
act under the 1940 Act.
In the event such notice is given by the Custodian, the Company
shall, on or before the termination date, deliver to the Custodian a
certified resolution of the Board of Directors of the Company, designating
a successor custodian or custodians. In the absence of such designation by
the Company, the Custodian may designate a successor custodian, which shall
be a person qualified to so act under the 1940 Act. If the Company fails to
designate a successor custodian, the Company shall upon the date specified
in the notice of termination of this Agreement and upon the delivery by the
Custodian of all Securities (other than Securities held in the Book-Entry
System and other securities held in uncertificated form which cannot be
delivered to the Company) and monies then owned by the Company, be deemed
to be its own custodian and the Custodian shall thereby be relieved of all
duties and responsibilities pursuant to this Agreement, other than the duty
with respect to Securities held in the Book-Entry System and other
uncertificated securities which cannot be delivered to the Company.
(c) Upon the date set forth in such notice under paragraph (b) of this
Section 12, this Agreement shall terminate to the extent specified in such
notice, and the Custodian shall upon receipt of a notice of acceptance by
the successor custodian deliver directly to the successor custodian on that
date all Securities and monies then held by the Custodian on behalf of the
Company, after deducting all fees, expenses and other amounts the payment
or reimbursement of which it shall then be entitled.
13. Miscellaneous.
(a) Annexed hereto as Appendix A is a certification signed by two of the
present officers of the Company setting forth the names and the signatures
of the present Authorized Persons. The Company agrees to furnish to the
Custodian a new certification in similar form in the event that any such
present Authorized Person ceases to be such an Authorized Person or in the
event that other or additional Authorized Persons are elected or appointed.
Until such new certification shall be received, the Custodian shall be
fully protected in acting under the provisions of this Agreement upon Oral
Instructions or signatures of the present Authorized Persons as set forth
in the last delivered certification.
(b) Annexed hereto as Appendix B is a certification signed by the present
officers of the Company setting forth the names and the signatures of the
three present officers of the Company. The Company agrees to furnish to the
Custodian a new certification in similar form in the event any such present
officer ceases to be an officer of the Company or in the event that other
or additional officers are elected or appointed. Until such new
certification shall be received, the Custodian shall be fully protected in
acting under the provisions of this Agreement upon the signature of the
officers as set forth in the last delivered certification.
(c) Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Custodian, shall be sufficiently given if
addressed to the Custodian and mailed or delivered to it at its offices at
411 West Lafayette, 2nd Floor MasterCompany Mail Code 3438, Detroit,
Michigan 48226, Attn: Julie Elya or at such other place as the Custodian
may from time to time designate in writing.
(d) Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Company, shall be sufficiently given if
addressed to the Company and mailed or delivered to Robert C. White,
Chairman of the Board of Directors, St. Clair Funds, Inc., 6701 Rockledge
Drive, Bethesda, Maryland 20817, with a copy to 100 Renaissance Center,
Detroit, Michigan 48243-3045, Attn: Ann Putallaz, or to such other place as
the Company may from time to time designate in writing.
(e) This Agreement may not be amended or modified in any manner except by a
written agreement executed by both parties with the same formality as this
Agreement, (i) authorized and approved by a resolution of the Board of
Directors of the Company, including a majority of the members of the Board
of Directors of the Company who are not "interested persons" of the Company
(as defined in the 1940 Act), or (ii) authorized and approved by such other
procedures as may be permitted or required by the 1940 Act.
(f) This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by the Company without the
written consent of the Custodian, or by the Custodian without the written
consent of the Company authorized or approved by a resolution of the Board
of Directors of the Company, and any attempted assignment without such
written consent shall be null and void.
(g) This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts.
(h) The captions of the Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
(i) This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective representatives duly authorized as of the day
and year first above written.
ST. CLAIR FUNDS, INC.
By: /s/ Charles W. Elliott
Name: /s/ Charles W. Elliott
Title:
COMERICA BANK
By: /s/ Julie Elya
Name: Julie Elya
Title: Vice President
<PAGE>
SCHEDULE A
Annual fee
Computed daily and payable monthly based on the aggregate average daily net
assets of the St. Clair Funds and the Ambassador Funds, Inc.
First $100 million of net assets .03%
Next $500 million of net assets .02%
Over $600 million of net assets .01%
Transaction Charges
DTC Trades $2.00 per trade
Fed Book Entry Trade $12.00 per trade
U.S. Physical Trade $25.00 per trade
<PAGE>
APPENDIX A
I, Patricia L. Bickimer, Secretary of St. Clair Funds, Inc., a Maryland
corporation (the "Company") do hereby certify that:
The individuals shown on Exhibit A attached hereto have been duly
authorized as Authorized Persons to give Oral Instructions and Written
Instructions on behalf of the Company and the signatures set forth opposite
their respective names are their true and correct signatures:
St. Clair Funds, Inc.
/s/ Patricia L. Bickimer
Patricia L. Bickimer, Secretary
<PAGE>
APPENDIX B
I, Secretary of St. Clair Funds, Inc., a Maryland corporation (the
"Company"), do hereby certify that:
The following individuals serve in the following positions with the
Company and each individual has been duly elected or appointed to each such
position and qualified therefor in conformity with the Company's Articles of
Incorporation and the signatures set forth opposite their respective names are
their true and correct signatures:
Name Position Signature
Robert C. White Chairman of the Board /s/ Robert C. White
of Directors and President
Richard H. Rose Treasurer /s/ Richard H. Rose
Joseph Viselli Assistant Treasurer /s/ Joseph C. Viselli
Patricia L. Bickimer Secretary /s/ Patricia L. Bickimer
Lisa A. Rosen Assistant Secretary /s/ Lisa Anne Rosen
<PAGE>
APPENDIX C - INDIVIDUALS WITH ACCESS
I, _________________________, Secretary of Comerica Bank, a Michigan
banking corporation (the "Custodian"), do hereby certify that:
The following named individuals have been duly authorized by the Executive
Committee of the Board of Directors of the Custodian to have access to the
assets of St. Clair Funds, Inc., a Massachusetts Business Company, held by the
Custodian in its capacity as such:
COMERICA BANK
-------------------------
Secretary
<PAGE>
Exhibit A
Name Signature
Kristopher Belken ________________________________
Kim Cabot ________________________________
Kristine Cinquegrana ________________________________
Jack Hathaway ________________________________
Kyle Moran ________________________________
Josephine Ortigissen ________________________________
Barbara Panzino ________________________________
Stephen C. Chatain ________________________________
Ann Conrad ________________________________
Phil Dano ________________________________
Patti DePace ________________________________
Cheryl Z. Germeroth ________________________________
Michael Gura ________________________________
Wendy Harries ________________________________
Alan Harris ________________________________
Michael Hill ________________________________
Julie Hollinshead ________________________________
Brian T. Jeffries ________________________________
John Knox ________________________________
Trent May ________________________________
Raghu Ram ________________________________
David Rever ________________________________
D. Gary Richardson ________________________________
Napoleon Rodgers ________________________________
Kurt Stalzer ________________________________
Susan Verdum ________________________________
Brian Wall ________________________________
EXHIBIT 8(d)
FORM OF NOTICE TO CUSTODIAN AGREEMENT
Comerica Bank
One Detroit Center
500 Woodward Avenue
Detroit, Michigan 48226
Gentlemen:
Reference is made to the Custody Agreement between us dated as of June 13,
1994 (the "Agreement").
Pursuant to the Agreement, this letter is to provide notice of the
creation of an additional investment portfolio of the St. Clair Funds, Inc.,
the St. Clair Liquidity Plus Money Market Fund (the "New Portfolio").
We request that you act as Custodian under the Agreement with respect to
the New Portfolio.
If the foregoing is in accordance with your understanding, please so
indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
St Clair Funds, Inc.
By:
Accepted:
Comerica Bank
Date: By:
EXHIBIT 9(d)
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT is made as of May 1, 1995 by and between THE
SHAREHOLDER SERVICES GROUP, INC., a Massachusetts corporation ("TSSG"), and ST.
CLAIR FUNDS, INC., a Maryland Corporation (the "Company").
WHEREAS, the Company is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Company desires to retain TSSG to render certain
administrative services to the St. Clair Money Market Fund--Fiduciary Portfolio
and the St. Clair Institutional Index Equity Fund (each, a "Fund" and
collectively, the "Funds") of the Company and TSSG is willing to render such
services;
WITNESSETH:
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Company hereby appoints TSSG to act as Administrator
of the Company on the terms set forth in this Agreement. TSSG accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided for in the Fee Schedule.
In the event that the Company establishes one or more portfolios other
than the Funds with respect to which the Company decides to retain TSSG to act
as administrator and accounting services provider, the Company shall so notify
TSSG in writing. If TSSG is willing to render such services, TSSG shall notify
the Company in writing whereupon such portfolio shall be deemed to be a Fund
hereunder. Without limiting the foregoing, it is understood that the Company
will from time to time issue separate series or classes of shares and may
classify and reclassify shares of any such series or class. TSSG shall identify
to each such series or class property belonging to such series or class and in
such reports, confirmations and notices to the Company called for under this
Agreement shall identify the series or class to which such report, confirmation
or notice pertains.
2. Delivery f Documents. The Company has furnished TSSG with copies
properly certified or authenticated of each of the following:
(a) Resolutions of the Company's Board of Directors authorizing the
appointment of TSSG to provide administrative services to the Company and
approving this Agreement;
(b) The Company's Articles of Incorporation filed with the Secretary
of State of the state of Maryland on March 29, 1993 and all amendments thereto
(the "Articles of Incorporation");
(c) The Company's By-laws and all amendments thereto (the "By-
laws");
(d) The Investment Advisory Agreements between Munder Capital
Management (the "Adviser") and the Company dated January 31, 1995;
(e) The Custody Agreements between Comerica Bank (the "Custodian")
and the Company dated June 13, 1994, respectively (the "Custody Agreements");
(f) The Transfer Agency and Registrar Agreement between The
Shareholder Services Group, Inc. (the "Transfer Agent") and the Company dated
August 8, 1994;
(g) The Company's Registration Statement on Form N-1A (the
"Registration Statement") under the Securities Act of 1933 and under the 1940
Act (File Nos. 2-91373 and 811-4033), as filed with the Securities and Exchange
Commission ("SEC") on November 27, 1987, relating to the Company's shares of
beneficial interest, and all amendments thereto; and
(h) The Company's most recent prospectuses and statements of
additional information (together, the "Prospectus").
The Company will furnish TSSG from time to time with copies, properly
certified or authenticated, of all amendments of or supplements to the
foregoing. Furthermore, the Company will provide TSSG with any other documents
that TSSG may reasonably request and will notify TSSG as soon as possible of any
matter materially affecting the performance by TSSG of its services under this
Agreement.
3. Duties as Administrator. Subject to the supervision and direction of
the Board of Directors of the Company, TSSG, as Administrator, will use its best
judgment in supervising various aspects of the Company's administrative
operations and undertakes to perform the following specific services:
(a) Maintaining office facilities (which may be in the offices of
TSSG or a corporate affiliate);
(b) Furnishing statistical and research data, data processing
services, clerical services, internal legal, executive and administrative
services and stationery and office supplies in connection with the foregoing;
(c) Furnishing corporate secretarial services including preparation
and distribution of materials for Board of Directors meetings;
(d) Assisting in the preparation of the Company's Registration
Statement and any Pre-Effective and Post-Effective Amendments to the Company's
Registration Statement, Notices of Annual or Special Meetings of Shareholders
and Proxy materials relating to such Meetings;
(e) Assisting in the determination of the jurisdictions in which the
Company's shares will be registered or qualified for sale and, in connection
therewith, shall be responsible for the initial registration or qualification
and the maintenance of such registration or qualification of such shares for
sale under the securities laws of any state. Payment of share registration fees
and any fees for qualifying or continuing the qualification of any Fund as a
dealer or broker shall be made by that Fund;
(f) Providing the services of certain persons who may be appointed
as officers of the Company by the Company's Board of Directors;
(g) Providing legal advice and counsel to the Company with respect
to regulatory matters, including monitoring regulatory and legislative
developments which may affect the Company and assisting in the strategic
response to such developments, counseling and assisting the Company in routine
regulatory examinations or investigations of the Company, and working closely
with outside counsel to the Company in response to any litigation or non-routine
regulatory matters;
(h) Accounting and bookkeeping services (including the maintenance
of such accounts, books and records of the Company as may be required by Section
31(a) of the 1940 Act and the rules thereunder and agrees that all records that
it maintains for the Company are the property of the Company and further agrees
to surrender promptly to the Company any such records at the Company's request);
(i) Internal auditing and treasury services;
(j) Valuing the Company's assets and calculating the net asset
value of the shares of each Fund on each business day;
(k) Accumulating information for and, subject to approval by the
Company's Treasurer, preparing reports to the Company's shareholders of record
and the SEC including, but not necessarily limited to, Annual and Semi-Annual
Reports, Semi-Annual Reports on Form
N-SAR and Notices pursuant to Rule 24f-2;
(l) Reviewing and providing advice and counsel on all sales and
advertising materials prepared on behalf of the Company;
(m) Preparing, signing and filing the Company's tax returns;
(n) Assisting the Adviser, at the Adviser's request, in monitoring
and developing compliance procedures for the Company which will include, among
other matters, procedures to assist the Adviser in monitoring compliance with
each Fund's investment objective, policies, restrictions, tax matters and
applicable laws and regulations and performing certain monthly compliance tests;
and
(o) Preparing and furnishing the Company (at the Company's request)
with performance information (including yield and total return information)
calculated in accordance with applicable U.S. securities laws and reporting to
external databases such information as may reasonably be requested.
Without limiting the foregoing services, it is agreed that TSSG will
perform the following accounting functions on an ongoing basis:
(a) Journalize each Fund's investment, capital share and income
and expense activities;
(b) Maintain individual ledgers for investment securities;
(c) Maintain historical tax lots for each security;
(d) Maintain financial records in accordance with the 1940 Act and
the Rules and Regulations thereunder;
(e) Reconcile on a daily basis cash and on a weekly basi
investment balances of the Company with the custodian;
(f) Post to and prepare each Fund's Statement of Assets and
Liabilities and Statement of Operations;
(g) Calculate various contractual expenses (e.g., advisory and
administration, transfer agency and custody fees):
(h) Monitor the expense accruals and notify Company management of
any proposed adjustments;
(i) Control all disbursements from the Company and authorize such
disbursements upon proper instructions;
(j) Calculate capital gains and losses;
(k) Determine each Fund's net income;
(l) Obtain security market quotes from independent pricing services
approved by the Adviser and the Company's Board of Directors, or if such quotes
are unavailable, then obtain such prices from the Adviser, and in either case
calculate the market value of each Fund's investments;
(m) Transmit or mail a copy of the daily portfolio valuation to the
Adviser, if requested;
(n) Compute the net asset value of each Fund;
(o) Compute the Fund's yields, total return, expense ratios,
portfolio turnover rate, and portfolio average dollar-weighted maturity;
(p) Mark securities to market based upon quotes furnished by the
Adviser, an independent pricing agent approved by the Company's Board of
Directors or based upon values derived from yield data relating to classes of
instruments obtained from reputable sources, provided that any pricing system
based on yield data for selected instruments must be based upon market
quotations for sufficient numbers and types of instruments to be a
representative sample of each class of instrument held by each Fund, as
applicable, both in terms of the types of instruments as well as the differing
quality of instruments;
(q) Assist in monitoring compliance and assist in the development of
compliance procedures for each Fund which will include among other matters,
monitoring compliance with each Fund's investment objectives, policies,
restrictions, tax matters and applicable laws and regulations;
(r) As appropriate, transmit to the Custodian instructions received
from the Adviser;
(s) Prepare semi-annual financial statements for each Fund, which
will include but not be limited to, the following items (the form and content of
such statements shall be in accordance with generally accepted accounting
principles):
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Cash Statement, if applicable
(t) Prepare monthly broker security transactions summaries;
(u) Prepare monthly security transaction listings;
(v) Supply various Company statistical data as reasonably
requested on an ongoing basis;
(w) Keep all books and records with respect to the Company's books
of account;
(x) Keep records of the Company's securities transactions,
portfolio valuations and securities positions; and
(y) Act as liaison with the Company's independent public accountants
and provide account analyses, fiscal year summaries, and other audit related
schedules. TSSG will take all reasonable action in the performance of its
obligations under this Agreement to assure that the necessary information is
made available to such accountants for the expression of their opinions, as such
may be required by the Company from time to time.
In performing its duties as Administrator of the Company, TSSG (a) will
act in accordance with the Articles of Incorporation, By-laws, Prospectus and
with the instructions and directions of the Board of Directors of the Company
and will conform to and comply with the requirements of the 1940 Act and all
other applicable federal or state laws and regulations and (b) will consult with
legal counsel to the Company, as necessary and appropriate.
4. Allocation of Expenses. TSSG shall bear all expenses in connection
with the performance of its services under this Agreement.
(a) TSSG will from time to time employ or associate with itself such
person or persons as TSSG may believe to be particularly suited to assist it in
performing services under this Agreement. Such person or persons may be officers
and employees who are employed by both TSSG and the Company. The compensation of
such person or persons shall be paid by TSSG and no obligation shall be incurred
on behalf of the Company in such respect.
(b) TSSG shall not be required to pay any of the following expenses
incurred by the Company: membership dues in the Investment Company Institute or
any similar organization; investment advisory expenses; costs of printing and
mailing stock certificates, prospectuses, reports and notices; interest on
borrowed money; brokerage commissions; taxes and fees payable to Federal, state
and other governmental agencies; fees of Directors of the Company who are not
affiliated with TSSG; outside auditing expenses; outside legal expenses; or
other expenses not specified in this Section 4 which may be properly payable by
the Company.
(c) For the services to be rendered, the facilities to be furnished
and the payments to be made to TSSG, as provided for in this Agreement, the
Company shall compensate TSSG for its services rendered pursuant to this
Agreement in accordance with the fees set forth in the Fee Schedule, annexed
hereto and incorporated herein. Such fees do not include out-of-pocket
disbursements of TSSG for which TSSG will be entitled to bill separately.
Out-of-pocket disbursements shall include, but shall not be limited to, the
items specified in Schedule A annexed hereto and incorporated herein, which
schedule may be modified by mutual consent of the parties hereto.
(d) TSSG will bill the Company as soon as practicable after the end
of each calendar month, and said billings will be detailed in accordance with
the out-of-pocket schedule. The Company will promptly pay to TSSG the amount of
such billing.
(e) If in any fiscal year the aggregate expenses of any Fund (as
defined under the securities regulations of any state having jurisdiction over
such Fund) exceed the expense limitations of any such state, the Company may
deduct from the total fees to be paid with respect to such Fund under this
Agreement and under the Custody Agreement, or TSSG and the Custodian together
will bear, to the extent required by state law, that portion of the excess which
bears the same relation to the total of such excess as said total fees with
respect to such Fund bear to the total fees otherwise payable for the fiscal
year by the Company pursuant to the aforesaid Agreements with respect to such
Fund. Such deduction or payment, if any, with respect to TSSG will be limited to
the amount of the fee paid hereunder for the applicable period with respect to
the Fund involved.
5. Limitation of Liability. TSSG shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Company in connection
with the performance of its obligations and duties under this Agreement, except
a loss resulting from TSSG's willful misfeasance, bad faith or gross negligence
in the performance of such obligations and duties, or by reason of its reckless
disregard of its obligations and duties under this Agreement. The Company will
indemnify TSSG against and hold it harmless from any and all losses, claims,
damages, liabilities or expenses (including reasonable counsel fees and
expenses) resulting from any claim, demand, action or suit not resulting from
the willful misfeasance, bad faith or gross negligence in the performance of
such obligations and duties or by reason of its reckless disregard thereof. TSSG
will indemnify the Company against and hold it harmless from any and all losses,
claims, damages, liabilities or expenses (including reasonable counsel fees and
expenses) resulting from any claim, demand, action or suit, based on TSSG's
willful misfeasance, bad faith or gross negligence in the performance of such
obligations and duties or by reason of its reckless disregard thereof.
6. Termination of Agreement.
(a) This Agreement shall become effective on the date hereof and
shall remain in force from year to year unless terminated pursuant to the
provision of sub-section (b) of this Section 6.
(b) This Agreement may be terminated with respect to any Fund at any
time without payment of any penalty, upon 60 days' written notice, by vote of
the holders of a majority of the outstanding voting securities of such Fund, or
by vote of a majority of the Board of Directors of the Company, or by TSSG.
(c) Section 9 shall survive the termination of this Agreement.
(d) In the event of equipment failures beyond TSSG's control, TSSG
shall, at no additional expense to the Company, take reasonable steps to
minimize service interruptions but shall have no liability with respect thereto.
The foregoing obligation shall not extend to computer terminals located outside
of premises maintained by TSSG. TSSG shall enter into and shall maintain in
effect with appropriate parties one or more agreements making reasonable
provision for emergency use of electronic data processing equipment to the
extent appropriate equipment is available.
7. Amendment to this Agreement. No provision of this Agreement may be
changed, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, discharge or
termination is sought.
8. Miscellaneous.
(a) Any notice or other instrument authorized or required by this
Agreement to be given in writing to the Company or TSSG shall be sufficiently
given if addressed to the party and received by it at its office set forth below
or at such other place as it may from time to time designate in writing.
To the Company:
Charles W. Elliott
Chairman, St. Clair Funds, Inc.
c/o Kellogg Company
One Kellogg Square
P.O. Box 3599
Battle Creek, Michigan 49016-3125
with a copy to:
Lee P. Munder
Munder Capital Management
480 Pierce Street, Suite 300
Birmingham, MI 48009
To TSSG:
The Shareholder Services Group, Inc.
53 State Street - 025-004B
Boston, Massachusetts 02109
Attention: Patricia L. Bickimer, Esq.
(b) This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns, provided that this
Agreement shall not be assignable without the written consent of the other
party.
(c) This Agreement shall be construed in accordance with the laws
of the Commonwealth of Massachusetts.
(d) This Agreement may be executed in any number of counterparts
each of which shall be deemed to be an original and which collectively shall be
deemed to constitute only one instrument.
(e) The captions of this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
(f) This Agreement and the fee schedule hereto constitute the entire
agreement between the parties hereto with respect to the matters described
herein.
9. Confidentiality. All books, records, information and data pertaining to
the business of the Company that are exchanged or received pursuant to the
performance of TSSG's duties under this Agreement shall remain confidential and
shall not be voluntarily disclosed to any other person, except as specifically
authorized by the Company or as may be required by law, and shall not be used by
TSSG for any purpose other than the performance of its responsibilities and
duties hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed and delivered by their duly authorized officers as of the date,
first written above.
THE SHAREHOLDER SERVICES GROUP, INC.
By: /s/ Vincent J. Fabiani
Name: Vincent J. Fabiani
Title Vice President
ST. CLAIR FUNDS, INC.
By: /s/ Illegible
Name: Illegible
Title:
<PAGE>
FEE SCHEDULE FOR
ADMINISTRATION AND
FUND ACCOUNTING SERVICES
I. FEES FOR ADMINISTRATION SERVICES -- (Fund Administration and Fund Accounting)
A. The following annual Fund Administration fees apply:
.12% of the first $2.8 billion of the average daily net assets of
the Companies (as defined below); and
.105% of the next $2.2 billion of the Companies' average daily net
assets; and
.10% of the Companies' average daily net assets over $5 billion.
"Companies" shall include Ambassador Funds, St. Clair Funds, Inc. and The
Munder Funds, Inc.
B. MINIMUM FEES
For Fund Administration Services, a minimum fee of $1.2 million per
annum will apply for all portfolios in the Ambassador, St. Clair and Munder Fund
Families.
<PAGE>
SCHEDULE A
OUT-OF- POCKET EXPENSES
Out-of-pocket expenses include, but are not limited to, the
following:
- Postage (including overnight courier services) - Telephone -
Telecommunications charges (including FAX) - Duplicating - Pricing
services - Forms and supplies
EXHIBIT 9(e)
FORM OF NOTICE TO ADMINISTRATION AGREEMENT
First Data Investor Services Group, Inc.
One Exchange Place
Boston, Massachusetts 02109
Gentlemen:
Reference is made to the Administration Agreement between us dated as of
May 1, 1995 (the "Agreement").
Pursuant to the Agreement, this letter is to provide notice of the
creation of an additional investment portfolio of the St. Clair Funds, Inc.,
the St. Clair Liquidity Plus Money Market Fund (the "New Portfolio").
We request that you act as Administrator under the Agreement with respect
to the New Portfolio.
If the foregoing is in accordance with your understanding, please so
indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
St. Clair Funds, Inc.
By:
Accepted:
First Data Investor Services Group,
Inc.
Date: By:
EXHIBIT 9(h)
TRANSFER AGENCY AND REGISTRAR AGREEMENT
AGREEMENT, dated as of August 8, 1994, between THE ST. CLAIR FUND, INC.
(the "Fund"), a Maryland Corporation organized under the laws of Maryland and
having its Offices at One Exchange Place, Boston, Massachusetts 02109, and THE
SHAREHOLDER SERVICES GROUP, INC. (MA) (the "Transfer Agent"), a Massachusetts
corporation with principal offices at One Exchange Place, 53 State Street,
Boston, Massachusetts 02109.
W I T N E S S E T H
That for and in consideration of the mutual covenants and promises
hereinafter set forth, the Fund and the Transfer Agent agree as follows:
1. Definitions. Whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires, shall have
the following meanings:
(a) "Articles of Incorporation" shall mean the Articles of
Incorporation, Declaration of Trust, Partnership Agreement, or similar
organizational document as the case may be, of the Fund as the same may
be amended from time to time.
(b) "Authorized Person" shall be deemed to include any person, whether
or not such person is an officer or employee of the Fund, duly authorized to
give Oral Instructions or Written Instructions on behalf of the Fund as
indicated in a certificate furnished to the Transfer Agent pursuant to Section
4(c) hereof as may be received by the Transfer Agent from time to time.
(c) "Board of Directors" shall mean the Board of Directors, Board of
Trustees or, if the Fund is a limited partnership, the General Partner(s) of the
Fund, as the case may be.
(d) "Commission" shall mean the Securities and Exchange
Commission.
(e) "Custodian" refers to any custodian or subcustodian of securities
and other property which the Fund may from time to time deposit, or cause to be
deposited or held under the name or account of such a custodian pursuant to a
Custodian Agreement.
(f) "Fund" shall mean the entity executing this Agreement, and if it is
a series fund, as such term is used in the 1940 Act, such term shall mean each
series of the Fund hereafter created except that appropriate documentation with
respect to each series must be presented to the Transfer Agent before this
Agreement shall become effective with respect to each such series.
(g) "1940 Act" shall mean the Investment Company Act of 1940.
(h) "Oral Instructions" shall mean instructions, other than Written
Instructions, actually received by the Transfer Agent from a person reasonably
believed by the Transfer Agent to be an Authorized Person.
(i) "Prospectus" shall mean the most recently dated Fund Prospectuses
and Statements of Additional Information, including any supplements thereto if
any, which have become effective under the Securities Act of 1933 and the 1940
Act.
(j) "Shares" refers collectively to such shares of capital stock,
beneficial interest or limited partnership interests, as the case may be, of the
Fund as may be issued from time to time and, if the Fund is a closed-end or a
series fund, as such terms are used in the 1940 Act any other classes or series
of stock, shares of beneficial interest or limited partnership interests that
may be issued from time to time.
(k) "Shareholder" shall mean a holder of shares of capital stock,
beneficial interest or any other class or series, and also refers to partners of
limited partnerships.
(l) "Written Instructions" shall mean a written communication signed by
a person reasonably believed by the Transfer Agent to be an Authorized Person
and actually received by the Transfer Agent. Written Instructions shall include
manually executed originals and authorized electronic transmissions, including
telefacsimile of a manually executed original or other process.
2. Appointment of the Transfer Agent. The Fund hereby appoints and
constitutes the Transfer Agent as transfer agent, registrar and dividend
disbursing agent for Shares of the Fund and as shareholder servicing agent for
the Fund. The Transfer Agent accepts such appointments and agrees to perform the
duties hereinafter set forth.
3. Compensation.
(a) The Fund will compensate or cause the Transfer Agent to be
compensated for the performance of its obligations hereunder in accordance with
the fees set forth in the written schedule of fees annexed hereto as Schedule A
and incorporated herein. The Transfer Agent will transmit an invoice to the Fund
as soon as practicable after the end of each calendar month which will be
detailed in accordance with Schedule A, and the Fund will pay to the Transfer
Agent the amount of such invoice within fifteen (15) days after the Fund's
receipt of the invoice.
In addition, the Fund agrees to pay, and will be billed separately for,
out-of-pocket expenses incurred by the Transfer Agent in the performance of its
duties hereunder. Out-of-pocket expenses shall include, but shall not be limited
to, the items specified in the written schedule of out-of-pocket charges annexed
hereto as Schedule B and incorporated herein. Schedule B may be modified by the
Transfer Agent upon mutual consent of the parties hereto. Unspecified
out-of-pocket expenses shall be limited to those out-of-pocket expenses
reasonably incurred by the Transfer Agent in the performance of its obligations
hereunder. Reimbursement by the Fund for expenses incurred by the Transfer Agent
in any month shall be made as soon as practicable but no later than 15 days
after the receipt of an itemized bill from the Transfer Agent.
(b) Any compensation agreed to hereunder may be adjusted from time to
time by attaching to Schedule A, a revised fee schedule executed and dated by
the parties hereto.
4. Documents. In connection with the appointment of the Transfer Agent the
Fund shall deliver or caused to be delivered to the Transfer Agent the following
documents on or before the date this Agreement goes into effect, but in any case
within a reasonable period of time for the Transfer Agent to prepare to perform
its duties hereunder:
(a) If applicable, specimens of the certificates for Shares of
the Fund;
(b) All account application forms and other documents relating to
Shareholder accounts or to any plan, program or service offered by the Fund;
(c) A signature card bearing the signatures of any officer of the Fund
or other Authorized Person who will sign Written Instructions or is authorized
to give Oral Instructions;
(d) A certified copy of the Articles of Incorporation, as
amended;
(e) A certified copy of the By-laws of the Fund, as amended;
(f) A copy of the resolution of the Board of Directors
authorizing the execution and delivery of this Agreement;
(g) A certified list of Shareholders of the Fund with the name, address
and taxpayer identification number of each Shareholder, and the number of Shares
of the Fund held by each, certificate numbers and denominations (if any
certificates have been issued), lists of any accounts against which stop
transfer orders have been placed, together with the reasons therefor, and the
number of Shares redeemed by the Fund; and
(h) An opinion of counsel for the Fund with respect to the validity of
the Shares and the status of such Shares under the Securities Act of 1933, as
amended.
5. Further Documentation. The Fund will also furnish the Transfer
Agent with copies of the following documents promptly after the same
shall become available:
(a) each resolution of the Board of Directors authorizing the
issuance of Shares;
(b) any registration statements filed on behalf of the Fund
and all pre-effective and post-effective amendments thereto filed with
the Commission;
(c) a certified copy of each amendment to the Articles of
Incorporation or the By-laws of the Fund;
(d) certified copies of each resolution of the Board of
Directors or other authorization designating Authorized Persons; and
(e) such other certificates, documents or opinions as the Transfer
Agent may reasonably request in connection with the performance of its duties
hereunder.
6. Representations of the Fund. The Fund represents to the Transfer Agent
that all outstanding Shares are validly issued, fully paid and non-assessable.
When Shares are hereafter issued in accordance with the terms of the Fund's
Articles of Incorporation and its Prospectus, such Shares shall be validly
issued, fully paid and non-assessable.
7. Distributions Payable in Shares. In the event that the Board of
Directors of the Fund shall declare a distribution payable in Shares, the Fund
shall deliver or cause to be delivered to the Transfer Agent written notice of
such declaration signed on behalf of the Fund by an officer thereof, upon which
the Transfer Agent shall be entitled to rely for all purposes, certifying (i)
the identity of the Shares involved, (ii) the number of Shares involved, and
(iii) that all appropriate action has been taken.
8. Duties of the Transfer Agent. The Transfer Agent shall be responsible
for administering and/or performing those functions typically performed by a
transfer agent; for acting as service agent in connection with dividend and
distribution functions; and for performing shareholder account and
administrative agent functions in connection with the issuance, transfer and
redemption or repurchase (including coordination with the Custodian) of Shares
in accordance with the terms of the Prospectus, applicable law and this
Agreement including without limitation, those duties specified in Schedule C
attached hereto. In addition, the Fund shall deliver to the Transfer Agent all
notices issued by the Fund with respect to the Shares in accordance with and
pursuant to the Articles of Incorporation or By-laws of the Fund or as required
by law and shall perform such other specific duties as are set forth in the
Articles of Incorporation including the giving of notice of any special or
annual meetings of shareholders and any other notices required thereby.
9. Record Keeping and Other Information. The Transfer Agent shall create
and maintain all records required of it pursuant to its duties hereunder and as
set forth in Schedule C in accordance with all applicable laws, rules and
regulations, including records required by Section 31(a) of the 1940 Act. All
such records shall be the property of the Fund and shall be available during
regular business hours for inspection, copying and use by the Fund. Where
applicable, such records shall be maintained by the Transfer Agent for the
periods and in the places required by Rule 31a-2 under the 1940 Act. Upon
termination of this Agreement, the Transfer Agent shall deliver all such records
to the Company or such person as the Company may designate.
Upon reasonable notice by the Fund, the Transfer Agent shall make
available during regular business hours such of its facilities and premises
employed in connection with the performance of its duties under this Agreement
for reasonable visitation by the Fund, or any person retained by the Fund as may
be necessary for the Fund to evaluate the quality of the services performed by
the Transfer Agent pursuant hereto.
10. Other Duties. In addition to the duties set forth in Schedule C, the
Transfer Agent shall perform such other duties and functions, and shall be paid
such amounts therefor, as may from time to time be agreed upon in writing
between the Fund and the Transfer Agent. The compensation for such other duties
and functions shall be reflected in a written amendment to Schedule A or B and
the duties and functions shall be reflected in an amendment to Schedule C, both
dated and signed by authorized persons of the parties hereto.
11. Reliance by Transfer Agent; Instructions
(a) Provided the standard of care in Section 13 has been met, the
Transfer Agent will have no liability when acting upon Written or Oral
Instructions believed to have been executed or orally communicated by an
Authorized Person and will not be held to have any notice of any change of
authority of any person until receipt of a Written Instruction thereof from the
Fund pursuant to Section 4(c). Provided the standard of care in Section 13 has
been met, The Transfer Agent will also have no liability when processing Share
certificates which it reasonably believes to bear the proper manual or facsimile
signatures of the officers of the Fund and the proper countersignature of the
Transfer Agent.
(b) At any time, the Transfer Agent may apply to any Authorized Person
of the Fund for Written Instructions and may seek advice from legal counsel for
the Fund, or its own legal counsel, with respect to any matter arising in
connection with this Agreement, and provided the standard of care in Section 13
has been met, it shall not be liable for any action taken or not taken or
suffered by it in good faith in accordance with such Written Instructions or in
accordance with the opinion of counsel for the Fund or for the Transfer Agent.
Written Instructions requested by the Transfer Agent will be provided by the
Fund within a reasonable period of time. In addition, the Transfer Agent, its
officers, agents or employees, shall accept Oral Instructions or Written
Instructions given to them by any person representing or acting on behalf of the
Fund only if said representative is an Authorized Person. The Fund agrees that
all Oral Instructions shall be followed within one business day by confirming
Written Instructions, and that the Fund's failure to so confirm shall not impair
in any respect the Transfer Agent's right to rely on Oral Instructions. The
Transfer Agent shall have no duty or obligation to inquire into, nor shall the
Transfer Agent be responsible for, the legality of any act done by it upon the
request or direction of a person reasonably believed by the Transfer Agent to be
an Authorized Person.
(c) Notwithstanding any of the foregoing provisions of this Agreement,
the Transfer Agent shall be under no duty or obligation to inquire into, and
shall not be liable for: (i) the legality of the issuance or sale of any Shares
or the sufficiency of the amount to be received therefor; (ii) the legality of
the redemption of any Shares, or the propriety of the amount to be paid
therefor; (iii) the legality of the declaration of any dividend by the Board of
Directors, or the legality of the issuance of any Shares in payment of any
dividend; or (iv) the legality of any recapitalization or readjustment of the
Shares.
12. Acts of God, etc. The Transfer Agent will not be liable or responsible
for delays or errors by acts of God or by reason of circumstances beyond its
control, including acts of civil or military authority, national emergencies,
labor difficulties, mechanical breakdown, insurrection, war, riots, or failure
or unavailability of transportation, communication or power supply, fire, flood
or other catastrophe.
In the event of equipment failures beyond the Transfer Agent's control,
the Transfer Agent shall, at no additional expense to the Fund, take reasonable
steps to minimize service interruptions but shall have no liability with respect
thereto. The foregoing obligation shall not extend to computer terminals located
outside of premises maintained by the Transfer Agent. The Transfer Agent shall
enter into and shall maintain in effect with appropriate parties one or more
agreements making reasonable provision for emergency use of electronic data
processing equipment to the extent appropriate equipment is available.
13. Duty of Care and Indemnification. The Transfer Agent shall be
obligated to exercise care and diligence and to act in good faith and to use its
best efforts within commercially reasonable limits to insure the accuracy and
completeness of all services performed under this Agreement. The Fund will
indemnify the Transfer Agent against and hold it harmless from any and all
losses, claims, damages, liabilities or expenses of any sort or kind (including
reasonable counsel fees and expenses) resulting from any claim, demand, action
or suit or other proceeding (a "Claim") arising directly or indirectly from any
action or thing which the Transfer Agent takes or does or omits to take or do
(i) at the request or on the direction of or in reliance on the advice of the
Fund; (ii) upon Oral or Written Instructions; (iii) in reliance on any records
or documents received from the Fund or any Agent of the Fund, including the
prior transfer agent; (iv) under the terms of this Agreement; and (v) the offer
or sale of Shares in violation of any requirement under Federal or State
Securities Laws, provided that neither the Transfer Agent nor any of its
nominees or sub-contractors shall be indemnified against any liability to the
Fund or to its Shareholders (or any expenses incident to such liability )
arising out of the Transfer Agent's or such nominee's or such sub-contractor's
own willful misfeasance, bad faith or negligence or reckless disregard of its
duties in connection with the performance of its duties and obligations
specifically described in this Agreement.
In any case in which the Fund may be asked to indemnify or hold the
Transfer Agent harmless, the Fund shall be advised of all pertinent facts
concerning the situation in question. The Transfer Agent will notify the Fund
promptly after identifying any situation which it believes presents or appears
likely to present a claim for indemnification against the Fund although the
failure to do so shall not prevent recovery by the Transfer Agent except and to
the extent the Fund has been prejudiced thereby. The Fund shall have the option
to defend the Transfer Agent against any Claim which may be the subject of this
indemnification, and, in the event that the Fund so elects, such defense shall
be conducted by counsel chosen by the Fund and reasonably satisfactory to the
Transfer Agent, and thereupon the Fund shall take over complete defense of the
Claim and the Transfer Agent shall sustain no further legal or other expenses in
respect of such Claim. The Transfer Agent will not confess any Claim or make any
compromise in any case in which the Fund will be asked to provide
indemnification, except with the Fund's prior written consent. The obligations
of the parties hereto under this Section shall survive the termination of this
Agreement.
14. Consequential Damages. In no event and under no circumstances shall
either party under this Agreement be liable to the other party for consequential
or indirect loss of profits, reputation or business or any other special damages
under any provision of this Agreement or for any act or failure to act
hereunder.
15. Term and Termination.
(a) This Agreement shall be effective as of the dates first written
above with respect to the Fund's respective series and shall continue until July
31, 1995 except as provided in subparagraph (b) of this Section and except that
the Fund may terminate this Agreement if the Transfer Agent breaches its duty of
care set forth in Section 13 and such breach is not cured within ninety (90)
days after written notice of the breach has been received by the Transfer Agent
from the Fund. After July 31, 1995, this Agreement shall continue indefinitely
until terminated by either party, with or without cause, upon written notice to
the other party given at least ninety (90) days prior to such date, except that
the Agreement may be terminated at any time as provided in subparagraph (b) of
this Section.
(b) The Transfer Agent represents that it is currently registered with
the appropriate Federal agency for the registration of Transfer Agents, and that
it will remain so registered for the duration of this Agreement. The Transfer
Agent agrees that it will promptly notify the Fund in the event of any material
change in its status as a registered Transfer Agent. Should the Transfer Agent
fail to be registered with the appropriate Federal agency as a Transfer Agent at
any time during this Agreement, the Fund may, on written notice to the Transfer
Agent, immediately terminate this Agreement.
(c) Upon termination of this Agreement and (unless this Agreement is
terminated pursuant to subparagraph (b) of this Section 15, or unless the
Transfer Agent has breached the standard of care in Section 13 and such breach
is uncured on the date notice of termination is given) at the expense of the
Fund, the Transfer Agent will deliver to such successor a certified list of
shareholders of the Fund (with names and addresses), and all other relevant
books, records, correspondence and other Fund records or data in the possession
of the Transfer Agent, and the Transfer Agent will cooperate with the Fund and
any successor transfer agent or agents in the substitution process.
16. Confidentiality. Both parties hereto agree that any non public
information obtained hereunder concerning the other party is confidential and
may not be disclosed to any other person without the consent of the other party,
except as may be required by applicable law or at the request of the Commission
or other governmental agency. The Transfer Agent agrees that it shall not use
any non-public information for any purpose other than performance of its duties
or obligations hereunder. The obligations of the parties under this Section
shall survive the termination of this Agreement. The parties further agree that
a breach of this Section would irreparably damage the other party and
accordingly agree that each of them is entitled, without bond or other security,
to an injunction or injunctions to prevent breaches of this provision. Without
limiting the foregoing, the Transfer Agent agrees on behalf of itself and its
nominees, sub-contractors and employees to treat confidentially all records and
other information relative to the Fund and its prior, present or potential
Shareholders.
17. Amendment. This Agreement may only be amended or modified by
a written instrument executed by both parties.
18. Subcontracting. On thirty (30) days prior written notice to the Fund,
the Transfer Agent may assign its rights and delegate its duties hereunder to
any wholly-owned direct or indirect subsidiary of First Data Corporation
provided that (i) the delegate agrees with the Transfer Agent to comply with all
relevant provisions of the 1940 Act; (ii) the Transfer Agent and such delegate
shall promptly provide such information as the Fund may request, and respond to
such question as the Company may ask, relative to the delegation, including
(without limitation) the capabilities of the delegate; (iii) the delegation of
such duties shall not relieve the Transfer Agent of any of its duties hereunder;
19. Miscellaneous.
(a) Notices. Any notice or other instrument authorized or required by
this Agreement to be given in writing to the Fund or the Transfer Agent, shall
be sufficiently given if addressed to that party and received by it at its
office set forth below or at such other place as it may from time to time
designate in writing.
<PAGE>
To the Fund:
Charles W. Elliott
President, Ambassador Funds
c/o Kellogg Company
One Kellogg Square
P.O. Box 3599
Battle Creek, MI 49016-3125
with copy to:
Ann F. Putallaz
Comerica Bank
100 Renaissance Centre
Detroit, Michigan 48243-3045
To the Transfer Agent:
The Shareholder Services Group
One Exchange Place
53 State Street
Boston, Massachusetts 02109
Attention: Robert F. Radin, President
with a copy to:
TSSG Counsel
(b) Successors. This Agreement shall extend to and shall be
binding upon the parties hereto, and their respective successors
(c) Governing Law. This Agreement shall be governed
exclusively by the laws of the Commonwealth of Massachusetts without
reference to the choice of law provisions thereof.
(d) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original; but such
counterparts shall, together, constitute only one instrument.
(e) Calculations. The captions of this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
(f) Use of Transfer Agent's Name. The Fund shall not use the name of
the Transfer Agent in any Prospectus, Statement of Additional Information,
shareholders' report, sales literature or other material relating to the Fund in
a manner not approved prior thereto in writing; provided, that the Transfer
Agent need only receive notice of all reasonable uses of its name which merely
refer in accurate terms to its appointment and services hereunder or which are
required by any government agency or applicable law or rule.
(g) Use of Fund's Name. The Transfer Agent shall not use the name of
the Fund or material relating to the Fund on any documents or forms for other
than internal use in a manner not approved prior thereto in writing; provided,
that the Fund need only receive notice of all reasonable uses of its name which
merely refer in accurate terms to the appointment of the Transfer Agent or which
are required by any government agency or applicable law or rule.
(h) Independent Contractors. The parties agree that they are
independent contractors and not partners or co-venturers.
(i) Entire Agreement; Severability. This Agreement and the Schedules
attached hereto constitute the entire agreement of the parties hereto relating
to the matters covered hereby and supersede any previous agreements. If any
provision is held to be illegal, unenforceable or invalid for any reason, the
remaining provisions shall not be affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their duly authorized officers, as of the day
and year first above written.
THE ST. CLAIR FUND
By: /s/
Illegible
Illegible
Title: President
THE SHAREHOLDER SERVICES GROUP,
INC.
By: /s/ Jack P.
Kutner
Jack P. Kutner
Title: Executive
Vice President and Chief
Operating Officer
<PAGE>
Transfer Agent Fee
Schedule A
The Fund shall pay the Transfer Agent an annualized fee based on the
schedule listed below. Such fee shall be billed by the Transfer Agent monthly in
arrears on a prorated basis of 1/12 of the annualized fee for the total average
net assets that are in the funds during such month.
I. Asset Based Charges
Based on the total net assets in all funds.
First $2.8 billion of net assets 2.0 basis
points
Next $2.2 billion of aggregate net assets 1.5 basis
points
Over $5 billion of aggregate net assets 1.0 basis
points
II. Minimum Fee
A minimum fee of $9,000 per annum will apply to the existing St. Clair
fund.
<PAGE>
Schedule B
OUT-OF-POCKET EXPENSES
The Fund shall reimburse the Transfer Agent monthly for applicable
out-of-pocket expenses, including, but not limited to the following items:
- Microfiche/microfilm production
- Magnetic media tapes and freight
- Printing costs, including certificates, envelopes,
checks and stationery
- Postage (bulk, pre-sort, ZIP+4, barcoding, first
class) direct pass through to the Fund
- Due diligence mailings
- Telephone and telecommunication costs, including
all lease, maintenance and line costs
- Ad hoc reports
- Proxy solicitations, mailings and tabulations - Daily &
Distribution advice mailings - Shipping, Certified and
Overnight mail and
insurance
- Year-end form production and mailings
- Terminals, communication lines, printers and
other equipment specifically required by the Fund -
Duplicating services - Courier services - Incoming and
outgoing wire charges - Overtime, as approved by the Fund -
Temporary staff, as approved by the Fund - Travel and
entertainment, as approved by the Fund - Federal Reserve
charges for check clearance - Record retention, retrieval and
destruction costs - Third party audit reviews - Customized
systems development after the
conversion
at the rate of $100.00 per hour
- Insurance
- Such other miscellaneous expenses reasonably
incurred
by the Transfer Agent in performing its duties and
responsibilities under this Agreement as approved
by the Fund
<PAGE>
The Fund agrees that postage and mailing expenses will be paid on the
day of or prior to mailing as agreed with the Transfer Agent. In addition, the
Fund will promptly reimburse the Transfer Agent for any other unscheduled
expenses incurred by the Transfer Agent whenever the Fund and the Transfer Agent
mutually agree that such expenses are not otherwise properly borne by the
Transfer Agent as part of its duties and obligations under the Agreement.
<PAGE>
Schedule C
1. Shareholder Information. The Transfer Agent or its agent shall
maintain a record of the number of Shares held by each holder of record which
shall include name, address, taxpayer identification and which shall indicate
whether such Shares are held in certificates or uncertificated form, and if in
certificated form shall include certificate numbers and denominations;
historical information regarding the account of each Shareholder, including
dividends and distributions paid and the date and price for all transactions on
a Shareholder's account; any stop or restraining order placed against
Shareholder's account; any correspondence relating to the current maintenance of
a Shareholder's account; information with respect to withholdings; and, any
information required in order for the Transfer Agent to perform any calculations
contemplated or required by its Agreement with the Fund. The Transfer Agent
shall keep a record of all redemption checks and dividend checks returned by
postal authorities, and shall maintain such records as are required for the Fund
to comply with the escheat laws of any State or other authority; shall keep a
record of all redemption checks and dividend checks returned by the postal
authorities for the period of time they are the Transfer Agent of record and for
any records provided by and receipt acknowledged by both parties from any prior
Transfer Agent by means of a records certification letter; otherwise the
Transfer Agent is not responsible for the said records. The Transfer Agent shall
maintain such records as are required for The Fund to comply with the escheat
laws of any state or other authority for the period they are Transfer Agent. The
Fund will be responsible for notifying and instructing the Transfer Agent to
commence the escheatment process on their behalf, for any or all states.
2. Shareholder Services. The Transfer Agent or its agent will
investigate all inquiries from Shareholders of the Fund relating to Shareholder
accounts and will respond to all communications from Shareholders and others
relating to its duties hereunder and such other correspondence as may from time
to time be mutually agreed upon between the Transfer Agent and the Fund.
3. Share Certificates.
(a) At the expense of the Fund, it shall supply the Transfer Agent or its agent
with an adequate supply of blank share certificates to meet the Transfer Agent
or its agent's requirements therefor. Such Share certificates shall be properly
signed by facsimile. The Fund agrees that, notwithstanding the death,
resignation, or removal of any officer of the Fund whose signature appears on
such certificates, the Transfer Agent or its agent may continue to countersign
certificates which bear such signatures until otherwise directed by Written
Instructions.
(b) The Transfer Agent or its agent shall issue replacement Share
certificates in lieu of certificates which have been lost, stolen or destroyed,
upon receipt by the Transfer Agent or its agent of properly executed affidavits
and lost certificate bonds, in form satisfactory to the Transfer Agent or its
agent, with the Fund and the Transfer Agent or its agent as obligees under the
bond.
(c) The Transfer Agent or its agent shall also maintain a record of
each certificate issued and/or cancelled the number of Shares represented
thereby and the holder of record. With respect to Shares held in open accounts
or uncertificated form, i.e., no certificate being issued with respect thereto,
the Transfer Agent or its agent shall maintain comparable records of the record
holders thereof, including their names, addresses and taxpayer identification.
The Transfer Agent or its agent shall further maintain a stop transfer record on
lost and/or replaced certificates.
4. Mailing Communications to Shareholders: Proxy Materials. The Transfer
Agent or its agent will address and mail to Shareholders of the Fund, all
communicators by the Fund to such Shareholders, including without limitation,
confirmations of purchases and sales of Company shares, monthly statements, all
reports to Shareholders, dividend and distribution notices and proxy material
for the Fund's meetings of Shareholders. In connection with meetings of
Shareholders, the Transfer Agent or its Agent will prepare Shareholder lists,
mail and certify as to the mailing of proxy materials, process and tabulate
returned proxy cards, report on proxies voted prior to meetings, act as
inspector of election at meetings and certify Shares voted at meetings.
5. Sales of Shares.
(a) Issuance of Shares. Upon receipt of a purchase order from or on
behalf of an investor for the purchase of Shares and sufficient information to
enable the Transfer Agent to establish a Shareholder account (if it is a new
account) and to determine which class of Shares the investor wishes to purchase,
and after confirmation of receipt of payment in the form described in the
Prospectus for the class of Shares involved, the Transfer Agent shall issue and
credit the account of the investor or other record holder with Shares in the
manner described in the Prospectus relating to such Shares and shall prepare and
mail the appropriate confirmation in accordance with legal requirements.
(b) Suspension of Sale of Shares. The Transfer Agent or its agent shall
not be required to issue any Shares of the Fund where it has received a Written
Instruction from the Fund or official notice from any appropriate authority that
the sale of the Shares of the Fund has been suspended or discontinued. The
existence of such Written Instructions or such official notice shall be
conclusive evidence of the right of the Transfer Agent or its agent to rely on
such Written Instructions or official notice.
(c) Returned Checks. In the event that any check or other order for the
payment of money is returned unpaid for any reason, the Transfer Agent or its
agent will: (i) give prompt notice of such return to the Fund or its designee;
(ii) place a stop transfer order against all Shares issued as a result of such
check or order; and (iii) take such actions as the Transfer Agent may from time
to time deem appropriate.
6. Transfer and Redemption.
(a) Requirements for Transfer or Redemption of Shares. The Transfer
Agent or its agent shall process all requests to transfer or repurchase Shares
in accordance with the transfer or redemption procedures set forth in the Fund's
Prospectus.
The Transfer Agent or its agent will transfer or redeem Shares upon
receipt of Oral or Written Instructions or otherwise pursuant to the Prospectus
and Share certificates, if any, properly endorsed for transfer or redemption,
accompanied by such documents as the Transfer Agent or its agent reasonably may
deem necessary.
The Transfer Agent or its agent reserves the right to refuse to transfer
or redeem Shares until it is satisfied that the endorsement on the instructions
is valid and genuine. The Transfer Agent or its agent also reserves the right to
refuse to transfer or redeem Shares until it is satisfied that the requested
transfer or redemption is legally authorized, and it shall incur no liability
for the refusal, in good faith, to make transfers or redemptions which the
Transfer Agent or its agent, in its good judgment, deems improper or
unauthorized, or until it is reasonably satisfied that there is no basis to any
claims adverse to such transfer or redemption.
(b) Notice to Custodian and Fund. When Shares are redeemed, the
Transfer Agent shall, upon receipt of the instructions and documents in proper
form, deliver to the Fund's Custodian and to the Fund or its designee a
notification setting forth the number of Shares to be redeemed. Such redeemed
Shares shall be reflected on appropriate accounts maintained by the Transfer
Agent reflecting outstanding Shares of the Fund involved and Shares attributed
to individual accounts.
(c) Payment of Redemption Proceeds. The Transfer Agent shall, upon
receipt of the moneys paid to it by the Custodian for the redemption of Shares,
pay such moneys as are received from the Custodian all in accordance with the
procedures described in the Written Instruction received by the Transfer Agent
from the Fund. It is understood that the Transfer Agent may arrange for the
direct payment of redemption proceeds to Shareholders by the Fund's Custodian in
accordance with such procedures and controls as are mutually agreed upon from
time to time by the Fund, the Transfer Agent and the Fund's Custodian.
The Transfer Agent shall not process or effect any redemption with
respect to Shares of the Fund after receipt by the Transfer Agent of
notification of the suspension of the determination of the net asset value of
the Fund, provided the Transfer Agent has had a reasonable time to act on such
notification.
7. Dividends.
(a) Notice to Agent and Custodian. Upon the declaration of each
dividend and each capital gains distribution by the Board of Directors of the
Fund with respect to Shares of the Fund, the Fund shall furnish or cause to be
furnished to the Transfer Agent or its agent a copy of a resolution of the
Fund's Board of Directors certified by the Secretary of the Fund setting forth
the date of the declaration of such dividend or distribution, the ex-dividend
date, the date of payment thereof, the record date as of which shareholders
entitled to payment shall be determined, the amount payable per Share to the
shareholders of record as of that date, the total amount payable to the Transfer
Agent or its agent on the payment date and whether such dividend or distribution
is to be paid in Shares of such class at net asset value.
On or before the payment date specified in such resolution of the Board of
Directors, the Custodian of the Fund will pay to the Transfer Agent sufficient
cash to make payment to the shareholders of record as of such payment date.
After deducting any amount required to be withheld by any applicable tax
laws, rules and/or regulations and/or other applicable laws, the Transfer Agent
shall in accordance with the instructions in proper form from a Shareholder and
the provisions of the applicable dividend resolutions and Prospectus issue and
credit the Account of the Shareholder with Shares, or, if the Shareholder so
elects, pay such dividends or distributions in cash.
In lieu of receiving from the Fund's Custodian and paying to Shareholders
cash dividends or distributions, the Transfer Agent may arrange for the direct
payment of cash dividends and distributions to Shareholders by the Fund's
Custodian, in accordance with such procedures and controls as are mutually
agreed upon from time to time by and among the Fund, the Transfer Agent and the
Fund's Custodian.
The Transfer Agent shall prepare, file with the Internal Revenue Services
and other appropriate taxing authorities, and address and mail to Shareholders
such returns, forms and information relating to dividends and distributions paid
by the Fund as are required to be so prepared, filed and mailed by applicable
laws, rules and/or resolutions. On behalf of the Fund, the Transfer Agent shall
mail certain requests for Shareholders' certifications under penalties of
perjury and pay on a timely basis to the appropriate Federal authorities any
taxes to be withheld on dividends and distributions paid by the Fund, all as
required by applicable Federal tax laws and regulations.
(b) Insufficient Funds for Payments. If the Transfer Agent or its agent
does not receive sufficient cash from the Custodian to make total dividend
and/or distribution payments to all shareholders of the Fund as of the record
date, the Transfer Agent or its agent will, upon notifying the Fund, withhold
payment to all Shareholders of record as of the record date until sufficient
cash is provided to the Transfer Agent or its agent.
8. Cooperation with Accountants. The Transfer Agent shall cooperate with
the Fund's independent public accountants and shall take all reasonable action
in the performance of its obligations under its agreement with the Fund to
assure that the necessary information is made available to such accountants for
the expression of their opinions as such as may be required by the Fund from
time to time.
9. Other Services. In accordance with the Prospectus and such procedures
and controls as are mutually agreed upon from time to time by and among the
Fund, the Transfer Agent and the Fund's Custodian, the Transfer Agent shall (a)
arrange for issuance of Shares obtained through (i) transfers of funds from
Shareholders's accounts at financial institutions, (ii) a preauthorized check
plan, if any and (iii) a right of accumulation, if any; (b) arrange for the
exchange of Shares for shares of such other funds designated by the Fund from
time to time; and (c) arrange for systematic withdrawals from the account of a
Shareholder participating in a systematic withdrawal plan, if any.
<PAGE>
Exhibit 1 to Schedule C
Summary of Services
The services to be performed by the Transfer Agent or its agent shall
include the following:
A. DAILY RECORDS
Maintain daily the following information with respect to each
Shareholder account as received:
o Name and Address (Zip Code)
o Class of Shares
o Taxpayer Identification Number
o Balance of Shares held by Agent
o Beneficial owner code: i.e., male, female, joint
tenant, etc.
o Dividend code (reinvestment)
o Number of Shares held in certificate form
B. OTHER DAILY ACTIVITY
o Answer written inquiries relating to Shareholder accounts (matters
relating to portfolio management, distribution of Shares and other
management policy questions will be referred to the Fund).
o Process additional payments into established Shareholder accounts in
accordance with Written Instruction.
o Upon receipt of proper instructions and all required documentation,
process requests for repurchase of Shares.
o Identify redemption requests made with respect to accounts in which
Shares have been purchased within an agreed-upon period of time for
determining whether good funds have been collected with respect to
such purchase and process as agreed by the Transfer Agent in
accordance with Written Instructions set forth by the Fund.
o Examine and process all transfers of Shares, ensuring that all
transfer requirements and legal documents have been supplied.
o Issue and mail replacement checks.
o Open new accounts and maintain records of exchanges between
accounts.
o Furnish daily requests of transactions in Shares.
o Calculate sales load or compensation payment (front-end and
deferred) and provide such information to the Fund, if any.
o Calculate dealer commissions for the Fund, if any.
o Provide toll-free lines for direct Shareholder use, plus customer
liaison staff with on-line inquiry capacity.
o Mail duplicate confirmations to dealers of their client's activity,
whether executed through the dealer or directly with the Transfer
Agent, if any.
o Identify to each series or class of Shares property belonging to
such series or class, and in such reports, confirmations and notices
to the Fund called for under this Agreement identify the series or
class to which such report, confirmation or notice pertains.
C. DIVIDEND ACTIVITY
o Calculate and process Share dividends and distributions as
instructed by the Fund.
o Compute, prepare and mail all necessary reports to Shareholders or
various authorities as requested by the Fund. Report to the Fund
reinvestment plan share purchases and determination of the
reinvestment price.
D. MEETINGS OF SHAREHOLDERS
o Cause to be mailed proxy and related material for all meetings of
Shareholders. Tabulate returned proxies (proxies must be adaptable
to mechanical equipment of the Transfer Agent or its agents) and
supply daily reports when sufficient proxies have been received.
o Prepare and submit to the Fund an Affidavit of Mailing.
o At the time of the meeting, furnish a certified list of
Shareholders, hard copy, microfilm or microfiche and, if requested
by the Fund, Inspection of Election.
E. PERIODIC ACTIVITIES
o Cause to be mailed reports, Prospectuses, and any other enclosures
requested by the Fund (material must be adaptable to mechanical
equipment of Transfer Agent or its agents).
o Receive all notices issued by the Fund with respect to the
Shares in accordance with and pursuant to the Articles of
Incorporation and ByLaws and perform such other specific
duties as are set forth in the Articles of Incorporation
and ByLaws including a giving of notice of a special
meeting and notice of redemption in the circumstances and
otherwise in accordance with all relevant provisions of the
Articles of Incorporation and By-Laws.
o Furnish monthly reports of transactions in shares by type
(custodial, trust, Keogh, IRA, other) including numbers of accounts.
o Furnish state-by-state registration and sales reports to
the Administrator.
o Provide detail for underwriter or broker confirmations and other
participating dealer Shareholder accounting, in accordance with such
procedures as may be agreed upon between the Fund and the Transfer
Agent, if any.
o Provide Shareholder lists and statistical information
concerning accounts to the Fund.
o Provide timely notification of Company activity and such other
information as may be agreed upon from time to time between the
Transfer Agent and the Custodian, to the Fund or the Custodian.
EXHIBIT 9(i)
FORM OF NOTICE TO TRANSFER AGENCY AND REGISTRAR AGREEMENT
First Data Investor Services Group, Inc.
One Exchange Place
Boston, Massachusetts, 02109
Gentlemen:
Reference is made to the Transfer Agency and Registrar Agreement between
us dated as of August 8, 1994 (the "Agreement").
Pursuant to the Agreement, this letter is to provide notice
of the creation of an additional investment portfolio of the St.
Clair Funds, Inc., the St. Clair Liquiditiy Plus Money Market
Fund (the "New Portfolio").
We request that you act as Transfer Agent under the Agreement with respect
to the New Portfolio.
If the foregoing is in accordance with your understanding, please so
indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
St. Clair Funds, Inc.
By:
Accepted:
First Data Investor
Services Group, Inc.
Date: By:
EXHIBIT 10
DECHERT PRICE & RHOADS
1500 K STREET, N.W.
WASHINGTON, D.C. 20005
November 15, 1996
St. Clair Funds, Inc.
480 Pierce Street
Birmingham, MI 48009
Dear Sirs:
In connection with the registration under the Securities Act of 1933 of an
indefinite number of shares (the "Shares") of common stock of the St. Clair
Liquidity Plus Money Market Fund (the "Fund"), a series of St. Clair Funds, Inc.
(the "Company"), we have examined such matters as we have deemed necessary, and
we are of the opinion that, as permitted by its Articles of Incorporation, and
assuming that the Company or its agent receives consideration for such Shares in
accordance with the provisions of its Articles of Incorporation, the Shares will
be legally and validly issued, will be fully paid, and will be non-assessable by
the Company.
We hereby consent to the use of this opinion as an exhibit to the
Company's Registration Statement on Form N-1A filed with the Securities and
Exchange Commission (File No. 2- 91373) for the registration under the
Securities Act of 1933 of an indefinite number of the Fund's Shares, and to the
use of our name in the prospectus and statement of additional information
contained therein, and any amendments thereto.
Very truly yours,
Dechert Price & Rhoads
<PAGE>
EXHIBIT 15
FORM OF
SERVICE AND DISTRIBUTION PLAN
WHEREAS, St. Clair Funds, Inc. (the "Company") engages in business as
an open-end management investment company and is registered as such under the
Investment Company Act of 1940, as amended (the "Act");
WHEREAS, shares of common stock of the Company are currently divided into
series of shares, one of which is designated as Liquidity Plus Money Market Fund
(the "Fund");
WHEREAS, the Company employs Funds Distributor, Inc. (the
"Distributor") as distributor of the securities of which it is the issuer; and
WHEREAS, the Company and the Distributor have entered into a Distribution
Agreement pursuant to which the Company has employed the Distributor in such
capacity during the continuous offering of shares of the Company.
NOW, THEREFORE, the Company hereby adopts on behalf of the Fund with
respect to its shares, and the Distributor hereby agrees to the terms of this
Service and Distribution Plan (the "Plan"), in accordance with Rule 12b-l under
the Act on the following terms and conditions:
1. A. The Fund shall pay to the Distributor, as the distributor of the
shares of the Fund, a fee for distribution of the shares at the rate of .10% on
an annualized basis of the average daily net assets of the Fund's shares,
provided that, at any time such payment is made, whether or not this Plan
continues in effect, the making thereof will not cause the limitation upon such
payments established by this Plan to be exceeded. Such fee shall be calculated
and accrued daily and paid at such intervals as the Board of Directors shall
determine, subject to any applicable restriction imposed by rules of the
National Association of Securities Dealers, Inc.
B. The Fund shall pay to the Distributor, as the distributor of the
shares of the Fund, a service fee at the rate of up to .25% on an annualized
basis of the average daily net assets of the Fund's shares, provided that, at
any time such payment is made, whether or not this Plan continues in effect, the
making thereof will not cause the limitation upon such payments established by
this Plan to be exceeded. Such fee shall be calculated and accrued daily and
paid at such intervals as the Board of Directors shall determine, subject to any
applicable restriction imposed by rules of the National Association of
Securities Dealers, Inc.
2. The amount set forth in paragraph 1.A. of this Plan shall be paid for
the Distributor's services as distributor of the shares of the Fund in
connection with any activities or expenses primarily intended to result in the
sale of the shares of the Fund, including, but not limited to, payment of
compensation, including incentive compensation, to securities dealers (which may
include the Distributor itself) and other financial institutions and
organizations (collectively, the "Service Organizations") to obtain various
distribution related and/or administrative services for the Fund. These services
include, among other things, processing new shareholder account applications,
preparing and transmitting to the Fund's Transfer Agent computer processable
tapes of all transactions by customers and serving as the primary source of
information to customers in answering questions concerning the Fund and their
transactions with the Fund. The Distributor is also authorized to engage in
advertising, the preparation and distribution of sales literature and other
promotional activities on behalf of the Fund. In addition, this Plan hereby
authorizes payment by the Fund of the cost of preparing, printing and
distributing Fund Prospectuses and Statements of Additional Information to
prospective investors and of implementing and operating the Plan. Distribution
expenses also include an allocation of overhead of the Distributor and accruals
for interest on the amount of distribution expenses that exceed distribution
fees and contingent deferred sales charges received by the Distributor. Payments
under the Plan are not tied exclusively to actual distribution and service
expenses, and the payments may exceed distribution and service expenses actually
incurred.
3.A. The amount set forth in paragraph 1.B. of this Plan may be used by
the Distributor to pay securities dealers (which may include the Distributor
itself) and other financial institutions or institutional investors
("Shareholder Organizations") for servicing shareholder accounts, including a
continuing fee which may accrue immediately after the sale of shares.
3.B. Any officer of the Company is authorized to acknowledge, in the name
and on behalf of the Company, written agreements based on the form attached
hereto as Appendix A or any other form duly approved by the Company's Board of
Directors ("Agreements") with Shareholder Organizations. Pursuant to such
Agreements, Shareholder Organizations shall provide support services set forth
therein to their clients who beneficially own shares of the Fund in
consideration of a fee, as set forth in the Agreement. Comerica Bank and its
affiliates are eligible to become Shareholder Organizations and to receive fees
under this Plan.
4. The Plan shall not take effect with respect to the shares of the Fund
until it has been approved by a vote of the then sole shareholder of the shares
of the Fund.
5. This Plan shall not take effect until it, together with any related
agreements, has been approved by votes of a majority of both (a) the Directors
of the Company and (b) those Directors of the Company who are not "interested
persons" of the Company (as defined in the Act) and who have no direct or
indirect financial interest in the operation of this Plan or any agreements
related to it (the "Rule 12b-l Directors"), cast in person at a meeting (or
meetings) called for the purpose of voting on this Plan and such related
agreements.
6. After approval as set forth in paragraphs 4 and 5, this Plan shall take
effect. The Plan of Distribution shall continue in full force and effect as to
the shares of the Fund for so long as such continuance is specifically approved
at least annually in the manner provided for approval of this Plan in paragraph
5.
7. The Distributor shall provide to the Directors of the Company, and the
Directors shall review, at least quarterly, a written report of the amounts so
expended and the purposes for which such expenditures were made.
8. This Plan may be terminated as to the Fund at any time, without payment
of any penalty, by vote of the Directors of the Company, by vote of a majority
of the Rule 12b-l Directors, or by a vote of a majority of the outstanding
voting securities of the shares of the Fund on not more than 30 days' written
notice to any other party to the Plan.
9. This Plan may not be amended to increase materially the amount of
distribution fee (including any service fee) provided for in paragraph 1 hereof
unless such amendment is approved in the manner provided for initial approval in
paragraph 4 hereof, and no material amendment to the Plan shall be made unless
approved in the manner provided for approval and annual renewal in paragraph 5
hereof.
10. While this Plan is in effect, the selection and nomination of
Directors who are not interested persons (as defined in the Act) of the Company
shall be committed to the discretion of the Directors who are not such
interested persons.
11. The Company shall preserve copies of this Plan and any related
agreements and all reports made pursuant to paragraph 7 hereof, for a period of
not less than six years from the date of this Plan, any such agreement or any
such report, as the case may be, the first two years in an easily accessible
place.
IN WITNESS WHEREOF, the Company, on behalf of the Fund, and the
Distributor have executed this Service and Distribution Plan as of the ____ day
of ___________, 199_.
ST. CLAIR FUNDS, INC.
By:
FUNDS DISTRIBUTOR, INC.
By:
<PAGE>
4
SHARED/BANKGRP/STCLAIR/AGREEMENTS/DIST\SERVIN.DOC
Appendix A
ST. CLAIR FUNDS, INC.
SERVICING AGREEMENT
To: [ ]
We wish to enter into this Servicing Agreement with you concerning the
provision of support services to your clients ("Clients") who may from time to
time beneficially own shares ("Shares") of the Liquidity Plus Money Market Fund
(the "Fund") of St. Clair Funds, Inc. (the "Company") offered by us.
The terms and conditions of this Servicing Agreement are as follows:
1. You agree to provide the following support services to Clients who may
from time to time beneficially own Shares:1 (i) establishing and maintaining
accounts and records relating to Clients that invest in Shares; (ii) processing
dividend and distribution payments from us on behalf of Clients; (iii) providing
information periodically to Clients showing their positions in Shares and
integrating such statements with those of other transactions and balances in
Client's other accounts serviced by you; (iv) arranging for bank wires; (v)
responding to Client inquiries relating to the services performed by you; (vi)
responding to routine inquiries from Clients concerning their investments in
Shares; (vii) providing subaccounting with respect to Shares beneficially owned
by Clients or the information to us necessary for subaccounting; (viii) if
required by law, forwarding shareholder communications from us (such proxies,
shareholder reports, annual and semi-annual financial statements and dividend,
distribution and tax notices) to clients; (ix) assisting in processing purchase,
exchange and redemption requests from Clients and in placing such orders with
our service contractors; (x) assisting Clients in changing dividend options,
account designations and addresses; (xi) providing Clients with a service that
invests the assets of their accounts in Shares pursuant to specific or
pre-authorized instructions; and (xii) providing such other similar services as
we may reasonably request to the extent you are permitted to do so under
applicable statutes, rules and regulations.
Section 2. You will provide such office space and equipment, telephone
facilities and personnel (which may be any part of the space, equipment and
facilities currently used in your business, or any personnel employed by you) as
may be reasonably necessary or beneficial in order to provide the aforementioned
services and assistance to Clients.
Section 3. Neither you nor any of your officers, employees or agents are
authorized to make any representations concerning us or the Shares except those
contained in our then current prospectuses and statement of additional
information for Shares, copies of which will be supplied by us to you, or in
such supplemental literature or advertising as may be authorized by us in
writing.
Section 4. For all purposes of this Agreement you will be deemed to be an
independent contractor, and will have no authority to act as agent for us in any
matter or in any respect. By your written acceptance of this Agreement, you
agree to and do release, indemnify and hold us harmless from and against any and
all direct or indirect liabilities or losses resulting from requests,
directions, actions or inactions of or by you or your officers, employees or
agents regarding your responsibilities hereunder or the purchase, redemption,
transfer or registration of Shares (or orders relating to the same) by or on
behalf of Clients. You and your employees will, upon request, be available
during normal business hours to consult with us or our designees concerning the
performance of your responsibilities under this Agreement.
Section 5. In consideration of the services and facilities provided by you
hereunder, we will pay to you, and you will accept as full payment therefor, a
fee at the annual rate of .25 of 1% of the average daily net asset value of the
Shares beneficially owned by your Clients for whom you are the dealer of record
or holder of record or with whom you have a servicing relationship (the
"Clients' Shares"), which fee will be computed daily and payable monthly. For
purposes of determining the fees payable under this Section 5, the average daily
net asset value of the Clients' Shares will be computed in the manner specified
in our Registration Statement (as the same is in effect from time to time) in
connection with the computation of the net asset value of Shares for purposes of
purchases and redemptions. By your written acceptance of this Agreement, you
agree to and do waive such portion of any fee payable to you hereunder to the
extent necessary to assure that such fee and other expenses required to be
accrued by us on any day with respect to the Client's Shares in any Fund that
declares its net investment income as a dividend to shareholders on a daily
basis does not exceed the income to be accrued by us to such Shares on that day.
The fee rate stated above may be prospectively increased or decreased by us, in
our sole discretion, at any time upon notice to you. Further, we may, in our
discretion and without notice, suspend or withdraw the sale of Shares, including
the sale of Shares to you for the account of any Client or Clients.
Section 6. Any person authorized to direct the disposition of monies paid
or payable by us pursuant to this Agreement will provide to the Company's Board
of Directors, and the Company's Directors will review, at least quarterly, a
written report of the amounts so expended and the purposes for which such
expenditures were made. In addition, you will furnish us or our designees with
such information as we or they may reasonably request (including, without
limitation, periodic certifications confirming the provision to Clients of the
services described herein), and will otherwise cooperate with us and our
designees (including, without limitation, any auditors designated by us), in
connection with the preparation of reports to the Company's Board of Directors
concerning this Agreement and the monies paid or payable by us pursuant hereto,
as well as any other reports or filings that may be required by law.
Section 7. We may enter into other similar Servicing Agreements with any
other persons without your consent.
Section 8. By your written acceptance of this Agreement, you represent,
warrant and agree that: (i) the compensation payable to you in connection with
the investment of your Clients' assets in Shares will be disclosed by you to
your Clients, will be authorized by your Clients and will not be excessive; (ii)
the services provided by you under this Agreement will in no event be primarily
intended to result in the sale of Shares; and (iii) in the event an issue
pertaining to our Shareholder Servicing Plan is submitted for shareholder
approval, you will vote any shares held for your own account in the same
proportion as the vote of those shares held for your Client's accounts.
Section 9. This agreement will become effective on the date a fully
executed copy of this Agreement is received by us or our designee. Unless sooner
terminated, this Agreement will continue until __________, 1998, and thereafter
will continue automatically for successive annual periods provided such
continuance is specifically approved at least annually by us in the manner
described in Section 12. This Agreement is terminable with respect to the
Shares, without penalty, at any time by us (which termination may be by vote or
a majority of the Disinterested Directors as defined in Section 12) or by you
upon written notice to the other party hereto.
Section 10. All notices and other communications to either you or us will
be duly given if mailed, telegraphed, telexed or transmitted by similar
telecommunications device to the appropriate address stated herein, or to such
other address as either party shall so provide the other.
Section 11. This Agreement will be construed in accordance with the laws
of the State of Massachusetts and is non-assignable by the parties hereto.
Section 12. This Agreement has been approved by vote of a majority of (i)
the Company's Board of Directors and (ii) those Directors who are not
"interested persons" as defined in the Investment Company Act of 1940 and have
no direct or indirect financial interest in the operation of the Shareholder
Servicing Plan adopted by us regarding the provision of support services to the
beneficial owners of Shares or in any agreement related thereto ("Disinterested
Directors").
<PAGE>
If you agree to be legally bound by the provisions of this Agreement,
please sign a copy of this letter where indicated below and promptly return it
to us, 60 State Street, Suite 1300, Boston, Massachusetts 02109, Attention:
President (with a copy to the same address, Attention: General Counsel).
Very truly yours,
FUNDS DISTRIBUTOR, INC.
Date: _____________________ By:
(Authorized Officer)
Accepted and Agreed to:
[ ]
Date: _____________________ By
(Authorized Officer)
Address of Shareholder Organization:
Acknowledged
St. CLAIR FUNDS, INC.
Date: _____________________ By:
(Authorized Officer)
1. Services may be modified or omitted in the particular case and items
renumbered.
EXHIBIT 16
ST. CLAIR FUNDS, INC.
Schedule of Computation
(Exhibit 16)
1. Yield for the seven-day period ended June 30, 1996:
Formula: (Base period return/1) x 365/7 = Yield
2. Effective yield for the seven-day period ended June 30, 1996:
Formula: (1 + base period return)365/7 - 1 = Effective Yield
