SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the registrant X Filed by a party other than the registrant Check the
appropriate box:
X Preliminary proxy statement Definitive proxy statement Definitive
additional materials
Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
The Munder Funds Trust
(Name of Registrant as Specified in Its Charter)
The Munder Funds Trust
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
X No fee required
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act
Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
__ Fee paid previously with preliminary materials
__ Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identifying the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
<PAGE>
MUNDER ACCELERATING GROWTH FUND
480 Pierce Street
Birmingham, Michigan 48009
November 20, 1998
Dear Shareholder:
The Board of Trustees of The Munder Funds Trust has recently reviewed and
unanimously endorsed a proposal for the reorganization of the Munder
Accelerating Growth Fund (the "Fund") which they judge to be in the best
interests of the Fund's shareholders. This proposal calls for the acquisition of
the assets of the Fund by the Munder Multi-Season Growth Fund ("Munder Growth
Fund"), which has investment objectives and policies similar to those of the
Fund.
We have therefore called a Special Meeting of Shareholders to be held at
480 Pierce Street, Birmingham, Michigan 48009 on November 20, 1998 to consider
this transaction. WE STRONGLY INVITE YOUR PARTICIPATION BY ASKING YOU TO REVIEW,
COMPLETE AND RETURN YOUR PROXY AS SOON AS POSSIBLE.
As a result of this transaction, the Fund would be combined with Munder
Growth Fund and you would become a shareholder of Munder Growth Fund, receiving
shares of Munder Growth Fund having an aggregate net asset value equal to the
aggregate net asset value of your investment in the Fund. No sales charge will
be imposed in the transaction and the closing of the transaction will be
conditioned upon receiving an opinion of counsel to the effect that the proposed
transaction will qualify as a tax-free reorganization for federal income tax
purposes.
Munder Growth Fund, like the Fund, seeks long-term capital appreciation.
The Fund and Munder Growth Fund have a common investment adviser (Munder Capital
Management), a common administrator (State Street Bank and Trust Company) and a
common distributor (Funds Distributor, Inc.).
Additionally, shareholders are being asked to consider a new investment
advisory agreement with Munder Capital Management, the Fund's investment
adviser, and to elect Lee Munder, President of the Fund and Chairman of Munder
Capital Management, to the Board of Trustees of The Munder Funds Trust.
Detailed information about the proposals and the reasons for them are
contained in the enclosed materials. Please exercise your right to vote by
completing, dating and signing the enclosed proxy card. A self-addressed,
postage-paid envelope has been enclosed for your convenience. It is very
important that you vote and that your voting instructions be received no later
than November 20, 1998.
<PAGE>
Sincerely,
Lee P. Munder
President
<PAGE>
THE MUNDER FUNDS TRUST
MUNDER ACCELERATING GROWTH FUND
480 Pierce Street
Birmingham, Michigan 48009
Telephone: (800) _______
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held on November 20, 1998
To the Shareholders of
Munder Accelerating Growth Fund
of The Munder Funds Trust:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of The
Munder Accelerating Growth Fund (the "Fund") of The Munder Funds Trust, will be
held at 480 Pierce Street, Birmingham, Michigan 48009 on November 20, 1998 at
10:00a.m. (Eastern Time) for the following purposes:
1. To consider and vote on approval of an Agreement and Plan of
Reorganization providing for the acquisition of all or substantially all of the
assets of the Fund by the Munder Multi-Season Growth Fund ("Munder Growth
Fund"), a series of The Munder Funds, Inc., in exchange for shares of Munder
Growth Fund and assumption of certain identified liabilities of the Fund by
Munder Growth Fund, and for the distribution of such shares to shareholders of
the Fund in liquidation of the Fund;
2. To consider and vote on approval or disapproval of a new Investment
Advisory Agreement for the Fund on substantially the same terms as the prior
Investment Advisory Agreement in place for the Fund.
3. To transact such other business as may properly come before the
meeting, or any adjournment or adjournments thereof.
<PAGE>
The Board of Trustees has fixed the close of business on September 30,
1998, as the Record Date for determination of shareholders entitled to notice
of, and to vote at, the meeting.
EACH SHAREHOLDER WHO DOES NOT EXPECT TO ATTEND THE MEETING IN PERSON IS
REQUESTED TO DATE, FILL IN, SIGN AND RETURN PROMPTLY THE ENCLOSED FORM OF PROXY
IN THE ENCLOSED ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES.
By Order of the Board of Trustees
Lisa A. Rosen
Secretary
October __, 1998
<PAGE>
PROSPECTUS/PROXY STATEMENT DATED October __, 1998
Acquisition of the Assets of
THE MUNDER ACCELERATING GROWTH FUND
480 Pierce Street
Birmingham, Michigan 48009
(800) ________
By and in Exchange for
Shares of
THE MUNDER MULTI-SEASON GROWTH FUND
480 Pierce Street
Birmingham, Michigan 48009
(800) ________
This Prospectus/Proxy Statement is being furnished to shareholders of the
Munder Accelerating Growth Fund (the "Fund"), a series of The Munder Funds Trust
(the "Trust"), in connection with a proposed Agreement and Plan of
Reorganization (the "Plan"), which includes the termination of the Fund
following the transfer of all or substantially all of the assets of the Fund.
The proxy statement also discusses a proposal for shareholder approval of a new
investment advisory agreement for the Fund which is not part of the Prospectus.
Plan of Reorganization
The Plan is being submitted to shareholders of the Fund for consideration
at a Special Meeting of Shareholders to be held at 480 Pierce Street,
Birmingham, Michigan 48009 on November 20, 1998 (the "Meeting"). The Plan
provides for the acquisition of all or substantially all of the assets of the
Fund by the Munder Multi-Season Growth Fund ("Munder Growth Fund"), a series of
The Munder Funds, Inc., (the "Company") in exchange for shares of Munder Growth
Fund and the assumption by Munder Growth Fund of certain identified liabilities
of the Fund. Following this acquisition, the Fund will be terminated, all
remaining liabilities of the Fund will be satisfied (whether by payment or the
establishment of reasonable reserves for payment) and shares of Munder Growth
Fund will be distributed to shareholders of the Fund (these transactions
collectively referred to as the "Reorganization").
As a result of the proposed Reorganization, each shareholder of the Fund
will receive that number of shares of Munder Growth Fund having an aggregate net
asset value equal to the aggregate net asset value of such shareholder's shares
of the Fund. Holders of Class A shares in the Fund will receive Class A shares
of Munder Growth Fund, and no sales charge will be imposed on the Class A shares
of Munder Growth Fund received by Fund shareholders. Holders of Class B and
Class C Shares in the Fund will receive shares of the corresponding class of
Munder Growth Fund. Subsequent to the transaction, any contingent deferred sales
charge ("CDSC") which is applicable to a shareholder's investment in Class B or
Class C shares of the Fund will continue to apply, and, in calculating the
applicable CDSC, the period during which a Fund shareholder held Class B or
Class C shares of the Fund will be counted. Holders of Class K shares and Class
Y shares of the Fund will receive shares of the corresponding class of Munder
Growth Fund without the imposition of any sales charge.
This transaction is being structured as a tax-free reorganization. See
"Information About the Reorganization - Federal Income Tax Consequences."
Shareholders should consult their tax advisers to determine the actual impact of
the Reorganization in light of their individual tax circumstances.
Munder Growth Fund is a diversified series of the Company, a registered
open-end management investment company. Munder Growth Fund's investment
objective is to provide shareholders with long-term capital appreciation. It
seeks to achieve this objective by investing primarily in a diversified
portfolio of equity securities of companies that have demonstrated superior,
long-term earnings growth, financial stability, attractive valuation, and
relative price momentum. The Fund is a diversified series of the Trust, a
registered open-end management investment company. The Fund's primary investment
objective is to provide long-term capital appreciation; income is a secondary
objective. The Fund seeks to achieve these objectives by investing primarily in
equity securities of companies that have demonstrated the potential for
accelerated earnings growth, the maintenance of a substantial competitive
advantage, a focused management team and a stable balance sheet. While the
investment objectives and policies of the Fund and Munder Growth Fund are
generally similar, there are certain differences in investment policies, which
are described under "Comparison of Investment Objectives and Policies" in this
Prospectus/Proxy Statement.
Munder Capital Management serves as investment adviser for the Munder
Growth Fund and the Fund. Munder Capital Management is described in more detail
under "Information About Management of Munder Growth Fund and the Fund."
Consideration of New Investment Advisory Agreement
The Adviser is organized as a Delaware general partnership. Prior to July
2, 1998, the general partnership interests in the Investment Adviser were owned
by Old MCM, Inc. (44%), WAM Holdings, Inc. (44%), and Munder Group L.L.C. (12%).
WAM Holdings, Inc. is wholly-owned by Comerica Inc. Mr. Lee P. Munder, Chairman
of MCM, owned 83% of Old MCM, Inc. (representing a 36% indirect interest in MCM)
and 68% of Munder Group L.L.C. (representing an 8% indirect interest in MCM).
Mr. Munder through his ownership interest in Old MCM Inc. and Munder Group
L.L.C. owned or controlled approximately 44% of MCM. Employees of MCM owned the
remaining 12% of MCM. On July 2, 1998, wam Holdings II, Inc., a wholly owned
subsidiary of Comerica Inc. purchased 85% of Old MCM, Inc.'s interest in MCM
(representing a 37.4% interest in MCM) and 85% of Mr. Munder's interest in
Munder Group L.L.C. (representing a 6.9% interest in MCM) (the "Transaction").
As a result, Comerica Inc. owns or controls approximately 88% of the partnership
interests in MCM. The Transaction may have constituted an "assignment" of the
investment advisory agreement (as defined in the 1940 Act) and therefore
terminated the investment advisory agreement in accordance with its terms. It is
therefore proposed that shareholders of the Fund approve a new investment
advisory agreement on behalf of the Fund with the Investment Adviser.
This Prospectus/Proxy Statement, which should be retained for future
reference, sets forth concisely the information about Munder Growth Fund that a
prospective investor should know before investing. A Statement of Additional
Information dated ______ __, 1998, relating to this Prospectus/Proxy Statement
and the Reorganization, has been filed with the Securities and Exchange
Commission ("SEC") and is incorporated by reference into this Prospectus/Proxy
Statement. A copy of the Statement of Additional Information is available upon
request and without charge by calling or writing to the Fund at the telephone
number or address listed for the Fund on the cover page of this Prospectus/Proxy
Statement. The Annual Report for Munder Growth Fund accompanies this
Prospectus/Proxy Statement. In addition, the following documents have been filed
with the SEC and are incorporated herein by reference: (i) the Prospectus of
Munder Growth Fund and the Fund (Class A, Class B, and Class C shares) dated
October 29, 1997, the Prospectus for the Munder Growth Fund and the Fund (Class
K Shares) dated October 29, 1997, and the Prospectus for the Munder Growth Fund
and the Fund (Class Y Shares) dated October 29, 1997.
Also accompanying this Prospectus/Proxy Statement as Exhibit A is a copy
of the Agreement and Plan of Reorganization pertaining to the transaction.
THESE SECURITIES 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/PROXY STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
I. APPROVAL OR DISAPPROVAL OF THE AGREEMENT AND PLAN OF REORGANIZATION
COMMON QUESTIONS AND ANSWERS
ABOUT THE PROPOSED REORGANIZATION
Q. How will the Reorganization affect me?
A. The assets of the Fund will be combined with those of Munder Growth Fund
and you will become a shareholder of Munder Growth Fund. You will receive
shares of Munder Growth Fund equal in value at the time of issuance to the
shares of the Fund that you hold immediately prior to the Reorganization.
(Shareholders of Class A shares, Class B shares, Class C shares, Class
K shares, and Class Y shares of the Fund will receive Class A shares,
Class B shares, Class C shares, Class K shares, and Class Y shares,
respectively, of Munder Growth Fund.)
Q. Why is the Reorganization being recommended?
A. The primary purposes of the proposed Reorganization are to seek to achieve
future economies of scale and eliminate certain costs associated with
operating the Fund and Munder Growth Fund separately. These two funds have
similar investment objectives and policies, as described in detail below.
The Reorganization will result in combining the assets of the funds and
consolidating their operations.
Combining the assets of the funds is intended to provide various benefits
to shareholders of the Fund who become shareholders of Munder Growth Fund
(as well as to existing and future investors of Munder Growth Fund). For
example, higher asset levels should enable Munder Growth Fund to spread
fixed and relatively fixed costs, such as accounting, legal, and printing
expenses, over a larger asset base, thereby reducing per-share expense
levels. (See also next question regarding operating expenses of the
funds.) Higher asset levels also should benefit portfolio management by
permitting larger individual portfolio investments that may result in
reduced transaction costs and/or more favorable pricing and by providing
the opportunity for greater portfolio diversity.
Q. How will the fees paid by Munder Growth Fund compare to those payable by
the Fund?
A. The total per share operating expenses of the Munder Growth Fund are
higher than those of the Fund. However, Munder Capital Management has
agreed to waive its fees and/or reimburse the Munder Growth Fund for
expenses until at least June 30, 2000 so that the expense ratio of
Munder Growth Fund will not exceed that of the Fund as of its most
recent fiscal year ended June 30, 1998. In addition, Munder Capital
Management anticipates that the aggregate fees and expenses of Munder
Growth Fund will, over time, be reduced due to increased economies of
scale resulting from the larger aggregate net asset base of the
combined entity.
Q. Will I have to pay any sales load, commission or other transactional fee
in connection with the Reorganization?
A. No. The full value of your shares of the Fund will be exchanged for shares
of the class of Munder Growth Fund without any sales load, commission or
other transactional fee being imposed. Each of the funds will bear its own
expenses in connection with the reorganization.
Q. Who will serve as investment adviser and provide other services to Munder
Growth Fund?
A. Munder Growth Fund has the same adviser (Munder Capital Management) and
the same distributor (Funds Distributor, Inc.) as the Fund. State Street
Bank and Trust Company currently serves as administrator to both the Fund
and Munder Growth Fund.
Q. Will I have to pay any federal income taxes as a result of the
Reorganization?
A. The transaction is intended to qualify as a tax-free reorganization for
federal income tax purposes. Assuming qualification for such
treatment; shareholders would not recognize taxable gain or loss on the
exchange of their Fund shares for shares of Munder Growth Fund. As a
condition to the closing of the Reorganization, the Fund will receive
an opinion of counsel to the effect that the Reorganization will
qualify as a tax-free reorganization for federal income tax purposes.
You should separately consider any state, local and other tax
consequences in consultation with your tax adviser. Opinions of
counsel are not binding on the IRS or the courts.
Q. Would I continue to be able to exchange my shares for shares of other
funds of the Munder family of mutual funds?
A. Yes. Holders of Class A, Class B, Class C, Class K and Class Y shares
of the Munder Growth Fund can exchange their shares for shares of the
same class of other funds of the Company, the Trust and The Munder
Framlington Funds Trust, subject to certain restrictions described in
the prospectus of each fund. Before requesting any such exchange,
shareholders should carefully review the applicable prospectus for the
other fund to ensure that the fund meets their investment objectives
and needs.
SUMMARY
This summary is qualified in its entirety by reference to the additional
information contained elsewhere in this Prospectus/Proxy Statement, the
Prospectus of Munder Growth Fund and the Fund (Class A, B, and C shares) dated
October 29, 1997, the Prospectus of Munder Growth Fund and the Fund (Class K
shares) dated October 29, 1997, the Prospectus of Munder Growth Fund and the
Fund (Class Y shares) dated October 29, 1997 (copies of which accompany this
Prospectus/Proxy Statement), the Statement of Additional Information of the Fund
and Munder Growth Fund, and the Agreement and Plan of Reorganization, a copy of
which is attached to this Prospectus/Proxy Statement as Exhibit A.
Proposed Reorganization
The Plan provides for the transfer of all or substantially all of the
assets of the Fund in exchange for shares of Munder Growth Fund and the
assumption by Munder Growth Fund of certain identified liabilities of the Fund
(as reflected on a balance sheet of the Fund prior to the closing date of the
reorganization). The Plan also calls for the termination of the Fund and the
distribution of shares of Munder Growth Fund to shareholders of the Fund. (The
foregoing proposed transaction is referred to in this Prospectus/Proxy Statement
as the "Reorganization.") As a result of the Reorganization, each shareholder of
the Fund will become the owner of that number of full and fractional shares of
Munder Growth Fund having an aggregate net asset value equal to the aggregate
net asset value of the shareholder's shares of the Fund as of the close of
business on the date that the Fund's assets are exchanged for shares of Munder
Growth Fund. (Shareholders of Class A Shares, Class B Shares, Class C Shares,
Class K Shares, and Class Y Shares of the Fund will receive Class A shares,
Class B shares, Class C shares, Class K shares, and Class Y shares,
respectively, of Munder Growth Fund.) See "Information About the
Reorganization."
For the reasons set forth below under "Reasons for the Reorganization,"
the Trustees of the Trust, including all of the Trustees who are not "interested
persons", as that term is defined in the Investment Company Act of 1940, as
amended (the "1940 Act"), have concluded that the Reorganization would be in the
best interests of the shareholders of the Fund and that the interests of the
Fund's existing shareholders would not be diluted as a result of the
Reorganization, and therefore have submitted the Plan for approval to the Fund's
shareholders. The Trustees of the Trust recommend approval of the Plan effecting
the Reorganization. The Board of Directors of the Company has also approved the
Reorganization on behalf of Munder Growth Fund.
Approval of the Reorganization will require the affirmative vote of the
holders of a majority of the outstanding shares of the Fund with all classes
voting together and not by class. See "Voting Information."
Investment Objectives, Policies and Restrictions
The Fund and Munder Growth Fund have generally similar investment
objectives, policies and restrictions. The primary investment objective of the
Fund is to provide long-term capital appreciation; income is a secondary
objective. The Fund seeks to achieve these objectives by investing primarily in
equity securities of companies that have demonstrated the potential for
accelerated earnings growth, the maintenance of a substantial competitive
advantage, a focused management team and a stable balance sheet. The investment
objective of Munder Growth Fund is to provide long-term capital appreciation. It
seeks to achieve this objective by investing primarily in a diversified
portfolio of equity securities of companies that have demonstrated superior,
long-term earnings growth, financial stability, attractive valuation, and
relative price momentum.
Although the respective investment objectives of the Fund and Munder
Growth Fund are generally similar, shareholders of the Fund should consider
certain differences in the investment policies of, and portfolio securities held
by, each fund. See "Comparison of Investment Objectives and Policies."
Summary Comparison of Fees and Expenses
The following tables compare the fees and expenses of the Fund and the
Munder Growth Fund and show the estimated fees and expenses on a pro forma
basis, giving effect to the proposed Reorganization. Additional information
regarding the performance of the funds is contained in the Annual Report for
Class A, Class B, Class C, and Class Y shares of the Fund and Munder Growth Fund
for the fiscal year ended June 30, 1998, and the Annual Report for Class K
shares of the Fund and Munder Growth Fund for the fiscal year ended June 30,
1998 (previously provided to Fund Shareholders), which are incorporated by
reference into this Prospectus/Proxy Statement.
<TABLE>
<S> <C> <C> <C>
Class A Shares
Munder Growth Fund Pro Forma
Fund
Shareholder Transaction Expenses:
Maximum Initial Sales Charge (as a
percentage of offering price)...... 5.50% 5.50% 5.50%
Maximum contingent deferred sales charge
(as a None(1) None(1)
percentage of redemption proceeds)..... None None None(1)
Exchange Fee............................. None
Annual Fund Operating Expenses:
(as a percentage of average net 0.75%(2) 0.75%
assets) 0.25% 0.25% 0.75%(3)
Advisory fee ...................... .21 (2) .20 0.25%
--------- ------
12b-1 fees............................. .20 (3)
----------
Other expenses (after expense 1.21 (2) 1.20
reimbursement)......................... 1.20 (3)
Total Fund Operating Expenses (after
expense reimbursement).................
</TABLE>
<TABLE>
<S> <C> <C> <C>
Class B Shares
Munder Growth Fund Fund Pro Forma
Shareholder Transaction Expenses:
Maximum Initial Sales Charge (as a
percentage of offering price)...... None None None
Maximum contingent deferred sales charge (as
a 5.00% 5.00% 5.00%
percentage of redemption proceeds)..... None None None
Exchange Fee.............................
Annual Fund Operating Expenses:
(as a percentage of average net assets) 0.75%(2) 0.75% 0.75%(3)
Advisory fee ...................... 1.00% 1.00% 1.00%
12b-1 fees............................. .21 (2) .20(3)
---------- -------
Other expenses (after expense .20
----
reimbursement)......................... 1.96 (2) 1.95(3)
Total Fund Operating Expenses (after 1.95
expense
reimbursement).....................
</TABLE>
<TABLE>
<S> <C> <C> <C>
Class C Shares
Munder Growth Fund Fund Pro Forma
Shareholder Transaction Expenses:
Maximum Initial Sales Charge (as a
percentage of offering price)...... None None None
Maximum contingent deferred sales charge (as
a 1.00%(4) 1.00%(4) 1.00%(4)
percentage of redemption proceeds)..... None None None
Exchange Fee.............................
Annual Fund Operating Expenses:
(as a percentage of average net assets) 0.75%(2) 0.75% 0.75%(3)
Advisory fee ...................... 1.00% 1.00% 1.00%
12b-1 fees............................. .21 (2) .20 .20 (3)
--------- --------- --------
Other expenses (after expense
reimbursement)......................... 1.96 (2) 1.95 1.95 (3)
Total Fund Operating Expenses (after
expense
reimbursement).....................
</TABLE>
<TABLE>
<S> <C> <C> <C>
Class K Shares
Munder Growth Fund Pro Forma
Fund
Shareholder Transaction Expenses:
Maximum Initial Sales Charge (as
a percentage of offering price).... None None None
Maximum contingent deferred sales
charge (as a None None None
percentage of redemption proceeds)..... None None None
Exchange Fee.............................
Annual Fund Operating Expenses:
(as a percentage of average net 0.75%(2) 0.75% 0.75%(3)
assets) None None None
Advisory fee ...................... 0.25% 0.25% 0.25%
12b-1 fees............................. .21(2) .20 .20(3)
------ --- ------
Shareholder servicing fee..............
Other expenses (after expense 1.21(2) 1.20 1.20(3)
reimbursement).........................
Total Fund Operating Expenses (after
expense reimbursement).................
</TABLE>
<TABLE>
<S> <C> <C> <C>
Class Y Shares
Munder Growth Fund Pro Forma
Fund
Shareholder Transaction Expenses:
......Maximum Initial Sales Charge
(as a percentage of offering None None None
price)...................................
Maximum contingent deferred sales
charge
(as a percentage of redemption None None None
proceeds)................................
Exchange Fee............................. None None None
Annual Fund Operating Expenses:
(as a percentage of average net
assets)
Advisory Fee............................. 0.75%(2) 0.75% 0.75%(3)
12b-1 Fees............................... None None None
Other Expenses (after expense .21(2) .20 .20(3)
reimbursement)...........................
Total Fund Operating Expenses
(after expense reimbursement)...... .96(2) .95 .95(3)
. .
- -------------------------------------------------------------------------------------
- ----------------
<FN>
(1) Investments of $1 million or more in Class A shares of the Fund or Munder
Growth Fund are not subject to an initial sales charge; however, a CDSC of
1% is imposed in the event of certain redemption transactions within one
year following such investments. A CDSC on Class A shares of Munder Growth
Fund acquired by holders of Class A Shares of the Fund pursuant to the
Reorganization will only be imposed on redemptions on which a CDSC would
have applied to the Class A Shares of the Fund.
(2) Munder Capital Management expects to voluntarily waive a portion of its
advisory fee for the current fiscal year. Without waivers, the ratio of
advisory fees to average net assets would be .93 and total fund operating
expenses would be 1.39 for Class A, 2.14 for Class B, 2.14 for Class C,
1.39 for Class K and 1.14% for Class Y.
(3) After the Reorganization, Munder Capital Management has agreed to waive
its advisory fee and/or reimburse Munder Growth Fund for expenses until at
least June 30, 2000 so that the expense ratios of each class of Munder
Growth Fund will not exceed the expense ratios of the corresponding
classes of the Fund as of the Fund's most recent fiscal year ended June
30, 1998. In the absence of this waiver, the advisory fee would be .93%
for each class; and, based on the pro forma combined assets of the Fund
and the Munder Growth Fund as of December 31, 1997, pro forma total fund
operating expenses would be 1.38% for Class A shares, 2.13% for Class B
shares, 2.13% for Class C shares, 1.38% for Class K shares, and 1.13% for
Class Y shares.
(4) If redeemed within one year of purchase.
</FN>
</TABLE>
EXAMPLE
This example shows the amount of expenses you would pay (directly or
indirectly) on a $1,000 investment in the Munder Growth Fund and the Fund, and
the pro forma expenses of the Munder Growth Fund following the Reorganization
assuming, in each case, (1) a 5% annual return, (2) redemption at the end of the
time period (including the deduction of the deferred sales charge, if any) and
(3) no redemption at the end of the time period. This example is not a
representation of past or future performance or operating expenses; actual
performance or operating expenses may be larger or smaller than those shown.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Munder Growth Fund Fund Pro Forma
--------------------- --------------------- ---------------------
Class Class Class Class Class Class Class Class Class
A B C A B C A B C
Shares Shares Shares Shares Shares Shares Shares Shares Shares
1 Year
Redemption . 67 71 30 67 71 30 67 71 30
No Redemption 67 20 20 67 20 20 67 20 20
3 Years
Redemption.. 91 95 62 91 94 61 91 94 61
No Redemption 91 62 62 91 61 61 91 61 61
5 Year
Redemption . 118 129 106 118 129 105 118 129 105
No Redemption 118 106 106 118 105 105 118 105 105
10 Years
Redemption.. 194 229 229 193 228 228 193 228 228
No Redemption 194 229 229 193 228 228 193 228 228
</TABLE>
<PAGE>
Munder Growth Fund Pro Forma
Fund
-------------- ---------------- ---------------
Class K Class Y Class K Class Y Class K Class Y
Shares Shares Shares Shares Shares Shares
1 Year
Redemption . 12 10 12 10 12 10
No Redemption 12 10 12 10 12 10
3 Years
Redemption.. 38 31 38 30 38 30
No Redemption 38 31 38 30 38 30
5 Year
Redemption . 67 53 66 53 66 53
No Redemption 67 53 66 53 66 53
10 Years
Redemption.. 147 118 146 117 146 117
No Redemption 147 118 146 117 146 117
Purchase and Redemption Procedures
The following discussion describes differences in the minimum investment
requirements, charges, and waivers of charges applicable to the various classes
of the Fund and the Munder Growth Fund. For details on how to purchase or redeem
shares of either fund, see the Prospectus. Both Munder Growth Fund and the Fund
reserve the right to involuntarily redeem an investor's Class A, Class B or
Class C shares if the net asset value of such shares is less than $500 by reason
of redemption.
Class A Shares. The minimum initial investment for Class A shares of
Munder Growth Fund and the Fund is $250 ($50 for shares purchased through an
Automatic Investment Plan) and subsequent investments must be at least $50.
Class A shares of Munder Growth Fund and the Fund are sold to investors at
net asset value plus an initial sales charge at a maximum rate of 5.5% of the
offering price. No initial sales charge will be imposed on the Class A shares of
Munder Growth Fund received by holders of the Fund's Class A Shares in the
Reorganization.
The following table shows the initial sales charge schedule for Class A
shares of Munder Growth Fund and Class A Shares of the Fund.
<TABLE>
<CAPTION>
Sales Charge as a Percentage of
Discount to Selected
Offering Net Amount Invested Dealers as a
Amount of Purchase Price (Net Asset Percentage
Value) of Offering
Price
<S> <C> <C> <C>
Less than $25,000 5.50% 5.82% 5.00%
$25,000 but less than 5.25% 5.54% 4.75%
$50,000
$50,000 but less than 4.50% 4.71% 4.00%
$100,000
$100,000 but less than 3.50% 3.63% 3.25%
$250,000
$250,000 but less than 2.50% 2.56% 2.25%
$500,000
$500,000 but less than 1.50% 1.52% 1.25%
$1,000,000
$1,000,000 or more None* None* (see below)**
- -----------------
<FN>
* No initial sales charge applies on investments of $1 million or more, but
a contingent deferred sales charge of 1% is imposed on certain redemptions
within one year of purchase.
** A 1% commission will be paid by the distributor to dealers who initiate
and are responsible for purchases of $1 million or more.
</FN>
</TABLE>
Purchases of Class A shares of any non-money market fund of the Company,
the Trust and The Munder Framlington Funds Trust will be aggregated in
determining the initial sales charge, which may result in a reduced initial
sales charge.
The initial sales charge is currently waived on sales of Class A shares to the
following types of purchasers:
(1) individuals with an investment account or
relationship with Munder Capital Management;
(2) full-time employees and retired employees of
Munder Capital Management, employees of the funds'
service providers and immediate family members of
such persons;
(3) registered broker-dealers that have entered into
selling agreements with Funds Distributor, Inc.
(the "Distributor"), for their own accounts or for
retirement plans for their employees or sold to
registered representatives for full-time employees
(and their families) that certify to the
Distributor at the time of purchase that such
purchase is for their own account (or for the
benefit of their families);
(4) certain qualified employee benefit plans as
described in the Prospectus;
(5) individuals who reinvest a distribution from a
qualified retirement plan for which Munder Capital
Management serves as investment adviser;
(6) individuals who reinvest the proceeds of
redemptions from Class Y Shares of the funds of
the Trust, the Company or the Munder Framlington
Funds Trust, within 60 days of redemption;
(7) banks and other financial institutions that have
entered into agreements with the Trust, the
Company or the Munder Framlington Funds Trust to
provide shareholder services for customers
("Customers") (including Customers of such banks
and other financial institutions, and the
immediate family members of such Customers);
(8) fee-based financial planners or employee benefit
plan consultants acting for the accounts of their
clients;
(9) employer sponsored retirement plans which are
administered by Universal Pensions, Inc. ("UPI
Plans"); and
(10) employer sponsored 401(k) plans that are
administered by Merrill Lynch Group Employee
Services ("Merrill Lynch Plans") which meet
certain criteria described in the Prospectus.
The sales charges on Class A shares of Munder Growth Fund and the Fund may
be reduced through a letter of intent, quantity discounts and the right of
accumulation, as described in the Prospectus.
Both Class A Shares of the Fund and Class A shares of Munder Growth Fund
may be redeemed without the imposition of a contingent deferred sales charge
("CDSC"), except where such shares were purchased without an initial sales load
and redeemed under the following circumstances: a CDSC of 1% applies to certain
redemptions of Class A shares of Munder Growth Fund or the Fund that were
purchased without a sales charge by reason of a purchase of $1 million or more,
if such redemptions are made within the first year after investing. For purposes
of determining whether a CDSC applies, the holding period of Class A shares of
Munder Growth Fund acquired by holders of Class A Shares of the Fund through the
Reorganization will be calculated from the date that the Class A Shares of the
Fund were initially acquired. A CDSC on Class A shares of Munder Growth Fund
acquired by holders of Class A Shares of the Fund pursuant to the Reorganization
will only be imposed on redemptions on which a CDSC would have applied to the
Class A Shares of the Fund. The CDSC applicable to Class A shares is waived for
certain redemptions, as described in the Prospectus.
Class B Shares. The minimum initial investment for Class B shares of the
Fund and Munder Growth Fund is $250 ($50 for shares purchased through an
Automatic Investment Plan) and subsequent investments must be at least $50.
Class B shares of Munder Growth Fund and the Fund are sold without an
initial sales charge, but are subject to a CDSC upon certain redemptions and are
subject to higher ongoing expenses than Class A shares. Class B shares
automatically convert to Class A shares approximately six years after issuance
subject to receipt of certain tax rulings or opinions.
Class B shares of Munder Growth Fund and the Fund that are redeemed within
six years of purchase will be subject to a CDSC calculated by multiplying the
lesser of the original purchase price or the net asset value of such shares at
the time of redemption by the applicable percentage shown in the table below:
Contingent Deferred
Sales Charge as
a Percentage of
Year Since Dollar Amount
Purchase Subject to Charge
-------- -----------------
First 5%
Second 4%
Third 3%
Fourth 3%
Fifth 2%
Sixth 1%
Seventh and 0%
Thereafter
The holding period of Class B shares of Munder Growth Fund acquired
through the Reorganization by holders of Class B Shares of the Fund will be
calculated from the date that the Class B Shares of the Fund were initially
acquired.
The CDSC is waived on the following types of redemptions: (1) of shares
purchased after June 27, 1995, (2) redemptions made within one year after the
death of a shareholder or registered joint owner; (3) minimum required
distributions made from an IRA or other retirement plan account after you reach
age 70 1/2; and (4) involuntary redemptions made by the Fund (5) redemptions
limited to 10% of an account's net asset value. Additional CDSC waivers are
described in the prospectus. CDSC Waivers on Class B shares purchased before
June 27, 1995 are described in the Statement of Additional Information.
Class C Shares. The minimum investment for Class C shares of the Fund and
Munder Growth Fund is $250 ($50 for shares purchased through an Automatic
Investment Plan) and subsequent investments must be at least $50. Class C shares
are sold without an initial or a contingent deferred sales charge, except for a
CDSC of 1% for redemptions made within the first year after investing. The CDSC
applicable to Class C Shares is waived for certain redemptions, as described in
the Prospectus.
Class K Shares. Class K Shares of Munder Growth Fund and the Fund are sold
without a sales load to customers of banks and other institutions that have
entered into agreements with the funds providing for shareholder services for
their customers. Customers may include individuals, trusts, partnerships and
corporations. No CDSC is imposed upon redemption of Class K shares.
Class Y Shares. Class Y shares of the Fund and Munder Growth Fund are sold
without a sales load to: (1) fiduciary and discretionary accounts of
institutions; (2) institutional investors (including banks, savings
institutions, credit unions and other financial institutions, pension, profit
sharing and employee benefit plans and trusts, insurance companies, investment
companies, investment advisers and broker-dealers acting either for their own
accounts or for the accounts of institutional investors); (3) directors,
trustees, officers and employees of the Trust, the Company, The Munder
Framlington Funds Trust, Munder Capital Management and the Distributor; (4)
investment advisory clients, and (5) family members of employees of the Munder
Capital Management.
The minimum initial investment by fiduciary and discretionary accounts of
institutions and institutional investors for Class Y shares of the Fund and
Munder Growth Fund is $500,000. Other types of investors are not subject to any
minimum required investment.
Exchange Privileges
Shareholders of Munder Growth Fund may exchange shares of each class for
shares of the same class in other funds of the Company, the Trust and the Munder
Framlington Funds Trust to the extent the class exists and shares are offered
for sale in the shareholder's state of residence and subject to any applicable
sales charge. No exchange fee will be imposed on any of these exchange
privileges. Any exchange will be a taxable event for which a shareholder may
have to recognize a gain or loss under federal income tax provisions. Munder
Growth Fund reserves the right to amend or terminate the exchange privilege
after providing notice to shareholders. See "Exchanges" in the accompanying
Prospectuses of Munder Growth Fund.
Dividends
Munder Growth Fund intends to distribute at least annually substantially
all of its investment income to shareholders. Net realized capital gains, if
any, will be distributed at least annually to shareholders. All dividends and
distributions will be reinvested automatically in additional shares of Munder
Growth Fund at net asset value, without a sales charge or CDSC, unless the
shareholder elects to be paid in cash. Fund shareholders that have elected to
receive distributions in cash will continue to receive distributions in such
manner from Munder Growth Fund. See "Dividends and Distributions" in the
accompanying Prospectus of Munder Growth Fund.
The Fund declares and pays dividends from net investment income, if any,
quarterly, and distributes net realized capital gains, if any, at least
annually. Distributions are paid in additional shares of the same class of the
Fund, unless a shareholder requests to be paid in cash.
Tax Consequences
Prior to completion of the Reorganization, the Fund will have received
from counsel an opinion to the effect that the Reorganization will qualify as a
tax-free reorganization for Federal income tax purposes. See "Information about
the Reorganization - Federal Income Tax Consequences."
Shareholder Voting Rights
Neither Munder Growth Fund, a series of a Maryland corporation, nor the
Fund, a series of a Massachusetts business trust, holds annual shareholder
meetings. The 1940 Act requires that a shareholder meeting be called for the
purpose of electing Directors/Trustees at such time as fewer than a majority of
Directors/Trustees holding office have been elected by shareholders. Either fund
will hold a shareholder meeting upon the written request of shareholders holding
at least 10% of that fund's outstanding shares. See "Comparative Information on
Shareholders' Rights - Voting Rights."
Appraisal Rights
Under the laws of the State of Maryland, shareholders of Munder Growth
Fund do not have appraisal rights in connection with a combination or
acquisition of the assets of another fund. Under the laws of the Commonwealth of
Massachusetts and the Trust's Declaration of Trust, shareholders of the Fund do
not have appraisal rights in connection with a combination or acquisition of the
assets of the Fund by another entity.
Risk Factors
Because Munder Growth Fund and the Fund have generally similar investment
objectives and investment policies, they are subject to similar investment
risks. These risks include those that are generally associated with investing in
equity securities. See "Comparison of Investment Objectives and Policies" herein
and "Fund Choices - Multi-Season Growth Fund" in the accompanying Prospectus of
Munder Growth Fund.
REASONS FOR THE REORGANIZATION
Currently, the Fund and Munder Growth Fund are investment portfolios of
separate mutual fund companies. Although the funds have substantially similar
investment objectives, policies and restrictions, each must separately bear the
costs of its operations. Consolidating their separate operations should
generally benefit the shareholders of the funds by promoting more efficient
operations on a more cost-effective basis. Also, combining assets of the funds
should create future economies of scale resulting from the larger asset base of
the combined fund after the Reorganization. However, there can be no assurance
that the combination of the funds will produce more efficient operations on a
cost-effective basis or that economies of scale will be realized. Because of the
similarities between the funds, the considerations and risks involved with an
investment in Munder Growth Fund are expected to be comparable to those
associated with an investment in the Fund.
In addition, the funds now have a common investment adviser, Munder
Capital Management, a common distributor, Funds Distributor, Inc. and a common
administrator, State Street Bank and Trust Company. Munder Capital Management
became the investment adviser to the Fund and Munder Growth Fund upon the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. (a subsidiary of Comerica Bank, and the Fund's former
investment adviser), Munder Capital Management, Inc. (Munder Growth Fund's
former investment adviser), and another investment advisory subsidiary of
Comerica Bank. In addition, in connection with that transaction, the
Distributor, which already served as the Fund's distributor, became the
distributor for Munder Growth Fund. Since the two funds have similar investment
objectives, Munder Capital Management also asserted that it would be useful to
combine the assets of the two funds in an effort to better coordinate their
marketing efforts. Munder Capital Management also indicated that certain
investment management efficiencies and other benefits could be realized through
the combination of the funds.
The Reorganization, therefore, would permit each fund's shareholders to
pursue substantially the same investment goals in a larger fund. A larger fund
should enhance the ability of Munder Capital Management to effect portfolio
transactions on more favorable terms and give Munder Capital Management greater
investment flexibility and the ability to select a larger number of portfolio
securities with the attendant benefits of increased diversification. A larger
fund should not be as significantly affected by high levels of shareholder
redemptions. In addition, the larger aggregate net assets should enable the
combined entity to obtain the benefits of economies of scale, permitting the
reduction of certain costs and expenses which may result in lower overall
expense ratios through the spreading of fixed costs of operations over a larger
asset base. As a general rule, economies of scale can be expected to be realized
with respect to fixed expenses, such as costs of printing and fees for
professional services, although expenses that are based on the value of assets
or the number of shareholder accounts, such as custody fees, would be largely
unaffected by the Reorganization. Moreover, there can be no assurance that
economies of scale can be realized. Since the total per share operating expenses
of Munder Growth Fund before fee waivers and reimbursements are higher than
those of the Fund, Munder Capital Management has agreed to waive its fees and/or
reimburse Munder Growth Fund for expenses until at least June 30, 2000, so that
the expense ratio of Munder Growth Fund will not exceed that of the Fund as of
its most recent fiscal year ended June 30, 1998.
In light of the foregoing considerations, the Trustees of the Trust
unanimously concluded that the Reorganization is in the best interests of the
Fund and its shareholders and that the Reorganization would not result in a
dilution of shareholders' interests.
Upon consideration of the factors described above, the Board of Directors
of the Company also approved the Reorganization and determined that it is in the
best interests of Munder Growth Fund and its shareholders to acquire the assets
of the Fund, and that the interests of Munder Growth Fund's shareholders would
not be diluted as a result of the Reorganization.
<PAGE>
INFORMATION ABOUT THE REORGANIZATION
Plan of Reorganization
The following summary of the Plan is qualified in its entirety by
reference to the Plan which is attached as Exhibit A hereto. The Plan provides
that (1) Munder Growth Fund will acquire all or substantially all of the assets
of the Fund in exchange for shares of Munder Growth Fund, (2) Munder Growth Fund
will assume certain identified liabilities of the Fund on the closing date for
the transaction, (3) the Fund will be terminated in accordance with the terms of
the Plan and Declaration of Trust of the Trust, (4) all remaining liabilities of
the Fund will be satisfied whether by payment or the making of reasonable
provision for payment thereof, and (5) Munder Growth Fund shares will be
distributed to shareholders of the Fund. Prior to the Closing Date, the Fund
will endeavor to discharge all of its known liabilities and obligations. Munder
Growth Fund will not assume any liabilities or obligations of the Fund other
than those reflected in an unaudited statement of assets and liabilities of the
Fund prepared as of the close of regular trading on the New York Stock Exchange,
Inc. (the "NYSE"), currently 4:00 p.m. New York time, on the Closing Date. The
number of full and fractional Class A shares, Class B shares, Class C shares,
Class K, and Class Y shares of Munder Growth Fund to be issued to the Fund
shareholders will be determined on the basis of the relative net asset values of
each class of shares of Munder Growth Fund and the Fund, computed as of the
close of regular trading on the NYSE on the Closing Date. The net asset value
per share for each class will be determined by dividing assets attributable to
the class, less liabilities, by the total number of outstanding shares of the
class.
Both the Fund and Munder Growth Fund will utilize State Street Bank and
Trust Company as agent to determine the value of their respective portfolio
securities. The Fund and Munder Growth Fund also will use the same independent
pricing services to determine the value of each security so that State Street
Bank and Trust Company, as agent, can determine the aggregate value of each
fund's portfolio. The method of valuation employed will be as set forth in the
funds' Prospectuses which is consistent with Rule 22c-1 under the 1940 Act and
with the interpretations of such rule by the SEC's Division of Investment
Management.
As soon after the Closing Date as conveniently practicable, the Fund will
liquidate and will distribute pro rata to shareholders of record as of the close
of business on the Closing Date the full and fractional shares of Munder Growth
Fund received by the Fund. Such distribution will be accomplished by the
establishment of accounts in the names of the Fund's shareholders on the share
records of Munder Growth Fund's transfer agent. Each account will represent the
respective pro rata number of full and fractional shares of Munder Growth Fund
due to the Fund's respective shareholders. After such distribution and the
winding up of its affairs, the Fund will be terminated.
The consummation of the Reorganization is subject to the conditions set
forth in the Plan. Notwithstanding approval of the Fund's shareholders, the Plan
may be terminated at any time at or prior to the Closing Date by (1) mutual
agreement of the Fund and Munder Growth Fund or (2) either party to the Plan
upon a material breach by the other party of any representation, warranty or
agreement contained therein or the failure to meet closing conditions.
The Fund and Munder Growth Fund shall each be liable for its respective
expenses incurred in connection with entering into and carrying out the Plan,
whether or not the Reorganization is consummated.
Approval of the Plan will require the affirmative vote of a majority of
the outstanding shares of the Fund with all classes voting together and not by
class. If the Reorganization is not approved by shareholders of the Fund, Munder
Capital Management may recommend to the Trustees of the Trust other possible
courses of action for their consideration.
Description of Munder Growth Fund's Shares
Full and fractional shares of the respective class of shares of common
stock of Munder Growth Fund will be issued to the Fund's shareholders in
accordance with the procedures detailed in the Plan and as described in Munder
Growth Fund's Prospectus. Generally, Munder Growth Fund does not issue share
certificates to shareholders unless a specific request is submitted to Munder
Growth Fund's transfer agent. The shares of Munder Growth Fund to be issued to
Fund shareholders and registered on the shareholder records of the transfer
agent will have no pre-exemptive or conversion rights. However, six years after
the date of purchase, Class B shares of Munder Growth Fund will convert
automatically to Class A shares, based on the relative net asset values of
shares of each class, and will no longer be subject to a distribution fee.
Holders of Class B Shares of the Fund who receive Class B shares of Munder
Growth Fund pursuant to the Reorganization will convert to Class A shares of the
Munder Growth Fund at the end of six years after the original date of purchase
of the Class B shares of the Fund, based on the relative net asset values of
Class A and Class B shares of Munder Growth Fund. See "Comparative Information
on Shareholders' Rights" and Munder Growth Fund's Prospectus for additional
information with respect to the shares of Munder Growth Fund.
Federal Income Tax Consequences
The Reorganization is intended to qualify for federal income tax purposes
as a tax-free reorganization described in Section 368(a) of the Internal Revenue
Code of 1986, as amended ("Code"), with no gain or loss recognized as a
consequence of the Reorganization by Munder Growth Fund, the Fund, or the
shareholders of the Fund. As a condition to the closing of the Reorganization,
Munder Growth Fund and the Fund will receive an opinion from the law firm of
Dechert Price & Rhoads to that effect. That opinion will be based upon certain
assumptions and representations made by the Fund and Munder Growth Fund.
Shareholders of the Fund should consult their tax advisers regarding the
effect, if any, of the proposed Reorganization in light of their individual
circumstances. Since the foregoing discussion only relates to the federal income
tax consequences of the Reorganization, shareholders of the Fund should also
consult their tax advisers as to state and other local tax consequences, if any,
of the Reorganization.
Capitalization
The following table shows the capitalization of Munder Growth Fund and the
Fund as of June 30, 1998, and on a pro forma basis as of that date, giving
effect to the proposed acquisition of assets at net asset value.
As of June 30, 1998
Munder Growth Pro Forma for
CLASS A SHARES The Fund Fund Reorganization
- ----------------------------
Net Assets.............. 14,110,355 32,311,247 46,421,602
- ----------------------------
Net asset value per share 12.22 21.46 21.46
- ----------------------------
Shares outstanding...... 1,154,776 1,505,545 2,163,064
- ----------------------------
- ----------------------------
As of June 30, 1998
- ----------------------------
Munder Growth Pro Forma for
CLASS A SHARES The Fund Fund Reorganization
- ----------------------------
Net Assets.............. 1,197,417 102,699,777 103,897,194
- ----------------------------
Net asset value per share 11.58 20.70 20.70
- ----------------------------
Shares outstanding...... 103,424 4,962,318 5,020,164
- ----------------------------
- ----------------------------
As of June 30, 1998
- ----------------------------
Munder Growth Pro Forma for
CLASS A SHARES The Fund Fund Reorganization
- ----------------------------
Net Assets.............. 110,123 14,411,244 14,521,367
- ----------------------------
Net asset value per share 11.74 20.73 20.73
- ----------------------------
Shares outstanding...... 9,379 695,330 700,642
As of June 30, 1998
- ----------------------------
Munder Growth Pro Forma for
CLASS A SHARES The Fund Fund Reorganization
- ----------------------------
Net Assets.............. 67,694,743 275,378,271 343,073,014
- ----------------------------
Net asset value per share 12.08 21.42 21.42
- ----------------------------
Shares outstanding...... 5,603,077 12,857,426 16,017,778
- ----------------------------
As of June 30, 1998
- ----------------------------
Munder Growth Pro Forma for
CLASS A SHARES The Fund Fund Reorganization
- ----------------------------
Net Assets.............. 72,515,875 332,156,307 404,672,182
- ----------------------------
Net asset value per share 12.26 21.66 21.66
- ----------------------------
Shares outstanding...... 5,912,736 15,332,572 18,680,489
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES
The following discussion comparing investment objectives, policies and
restrictions of the Fund and Munder Growth Fund is based upon and qualified in
its entirety by the respective investment objectives, policies and restrictions
sections of the Prospectuses of the Fund and Munder Growth Fund. For a more
detailed discussion of the investment objectives, policies and restrictions of
the Fund and Munder Growth Fund, refer to the Prospectuses, under the caption
"Fund Choices," and to the Statement of Additional Information for the Fund and
Munder Growth Fund under the captions "Fund Investments" and "Investment
Limitations."
Investment Objectives
The primary investment objective of the Fund is to provide long-term
capital appreciation; income is a secondary objective. The investment objective
of Munder Growth Fund is to provide long-term capital appreciation. The Fund's
investment objectives may be changed by the Trust's Board of Trustees without
shareholder approval; however, shareholders are notified of any such change.
Munder Growth Fund's investment objective is a fundamental policy and may not be
changed without the authorization of the holders of a majority of the
outstanding voting securities (as defined in the 1940 Act) of Munder Growth
Fund.
Primary Investments
The Fund primarily invests in a diversified portfolio of equity securities
of companies that have demonstrated the potential for accelerated earnings
growth, the maintenance of substantial competitive advantage, a focused
management team and a stable balance sheet.
Munder Growth Fund primarily invests in a diversified portfolio of equity
securities of companies that have demonstrated superior long-term earnings
growth, financial stability, attractive valuation and relative price momentum.
Income is not a primary consideration in the selection of investments. This
style, which incorporates both growth investing and value constraints, has been
recognized in the investment management community as GARP (Growth at a
Reasonable Price) and seeks to produce attractive returns during various market
environments.
Under normal market conditions, at least 65% of each fund's total assets
will be invested in equity securities. Equity securities include common and
preferred stocks and securities convertible into or exchangeable for common
stocks, such as convertible preferred stocks, convertible debentures or
warrants. No more than 25% of the total assets of either fund may be invested in
securities of issuers in the same industry. Neither fund may purchase more than
10% of the outstanding voting securities of any issuer, except that up to 25% of
a fund's total assets may be invested without regard to this limitation.
Portfolio Instruments and Practices
Borrowing. Under certain circumstances, each fund may borrow money in an
amount up to 5% of the value of its total assets for temporary purposes and in
an amount equal to one-third of its assets to meet redemptions. This is a
fundamental policy which can only be changed by shareholders. Whenever
borrowings exceed 5% of either fund's total assets, that fund will not make any
additional investments.
Lending. Each fund may lend securities in its portfolio representing up to
25% of total assets, taken at market value, to securities firms and financial
institutions, provided that each loan is secured continuously by collateral in
the form of cash or liquid securities with market value at least equal (on a
daily mark-to-market basis) to the current market value of the securities
loaned.
Foreign Securities. Each fund may invest up to 25% of its total assets in
the equity securities of foreign issuers, including companies domiciled in
developing countries. Munder Growth Fund typically will only purchase foreign
securities that are represented by American Depositary Receipts ("ADRs") listed
on a domestic securities exchange or included in the NASDAQ National Market
System, or foreign securities listed directly on a domestic securities exchange
or included in the NASDAQ National Market System.
Forward Foreign Currency Exchange Contracts. Each fund may enter into
forward foreign currency exchange contracts. A fund may enter into these
contracts in order to protect against uncertainty in the level of future
exchange rates between a particular foreign currency and the U.S. dollar or
between two foreign currencies in which portfolio securities are or may be
denominated.
Futures Contracts and Options. Each fund may purchase and sell futures
contracts on securities, currencies and indices. Neither fund will commit more
than 5% of its total assets to initial margin deposits on futures contracts. In
addition, each fund may write covered call options, purchase put options,
purchase call options and write secured put options on securities, currencies,
indices and futures contracts. The Fund will write call options only if they are
"covered," as described in the Statement of Additional Information; Munder
Growth Fund may write uncovered call options for cross-hedging purposes, as
described in the Statement of Additional Information. Munder Growth Fund will
limit its investment in uncovered put and call options to 5% of its total
assets, and will not purchase put or call options if aggregate premiums paid for
such options would exceed 20% of its total assets.
Repurchase Agreements, Reverse Repurchase Agreement, and When-Issued
Transactions. Each fund may enter into repurchase agreements with banks and
broker-dealers that have been approved by the directors of the Company and the
trustees of the Trust. Each fund considers repurchase agreements that mature in
more than seven days to be illiquid. Neither fund may invest more than 15% of
its net assets in illiquid securities.
In order to borrow funds for temporary purposes, each fund may also engage
in reverse repurchase agreements, i.e., selling portfolio securities to
financial institutions such as banks and broker/dealers and agreeing to
repurchase them at a mutually specified date and price. In addition, in order to
secure prices deemed advantageous at the time, each fund may purchase securities
on a when-issued or a delayed-delivery basis. A fund will not enter into a
when-issued or delayed-delivery transaction for speculative purposes but only in
furtherance of its investment objective. Each fund's when-issued or
delayed-delivery purchase transactions will not exceed 25% of the value of the
fund's total assets absent unusual market conditions.
Liquidity Management. In connection with the management of its daily cash
position, each fund may invest in shares of money market funds. Pending
investment, to meet anticipated redemption requests, or as a temporary defensive
measure if Munder Capital Management determines that market conditions warrant,
either fund may also invest without limitation in high-quality, short-term money
market instruments including, among other things, commercial paper, bankers'
acceptances and negotiable certificates of deposit of banks or savings and loan
associations, short-term corporate obligations and short-term securities issued
by, or guaranteed by, the U.S.
Government and its agencies or instrumentalities.
Restricted Securities. Each fund may invest in restricted securities.
Restricted securities are securities subject to legal or contractual
restrictions on their resale.
Portfolio Turnover Rate. Munder Growth Fund intends to purchase and hold
securities for long-term capital appreciation and does not expect to trade for
short-term gain. Accordingly, it is anticipated that Munder Growth Fund's annual
portfolio turnover rate normally will not exceed 50%. The Fund's portfolio
turnover rate for the fiscal year ended June 30, 1998 was 76%. Munder Growth
Fund's portfolio turnover rate for the same period was 34%.
Additional Investment Restrictions. In addition to the restrictions
described above, each fund has adopted certain fundamental investment
restrictions that may be changed only with the approval of a majority of the
outstanding securities (as defined in the 1940 Act) of that fund. These
restrictions are set forth in the Statement of Additional Information for the
funds.
COMPARATIVE INFORMATION ON SHAREHOLDERS' RIGHTS
General
Munder Growth Fund is a diversified series of the Company, a management
investment company registered under the 1940 Act, which continuously offers
shares of its series. The Company is a Maryland corporation and is governed by
its Articles of Incorporation, By-laws and Board of Directors.
The Fund is a diversified series of the Trust, an open-end management
investment company registered under the 1940 Act, which continuously offers
shares of its series The Trust is a Massachusetts business trust and is governed
by its Declaration of Trust, Code of Regulations, and Board of Trustees. Both
the Fund and Munder Growth Fund are also governed by applicable state and
Federal law. Certain differences and similarities between the two funds are
summarized below.
Shareholder Liability
The Munder Growth Fund is organized as a series of a Maryland corporation,
and its shareholders generally have no personal liability for its acts or
obligations.
The Fund is organized as a series of a Massachusetts business trust. Under
Massachusetts law, shareholders of a Massachusetts business trust could, under
certain circumstances, be held personally liable for the obligations of the
trust. However, the Trust's Declaration of Trust states that shareholders shall
not be subject to any personal liability in connection with the assets of the
Trust for the acts or obligations of the Trust. The Declaration of Trust
provides for indemnification out of the assets belonging to the series of the
Trust with respect to which such shareholder's shares are issued, for all losses
and expenses of any shareholder held personally liable for the obligations of
the Trust solely by reason of his or her being or having been a shareholder.
Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is considered remote since it is limited to circumstances
in which a disclaimer is inoperative and the Fund itself would be unable to meet
its obligations.
Voting Rights
Neither the Fund nor Munder Growth Fund holds annual meetings of
shareholders, although each may hold special meetings for purposes of voting on
certain matters as required under the 1940 Act. Special meetings of shareholders
of either fund may be called upon the written request of holders of not less
than 10% of that fund's then outstanding voting securities. On each matter
submitted to a vote of the shareholders of Munder Growth Fund or the Fund, each
shareholder is entitled to one vote for each whole share owned and a
proportionate fractional vote for any fractional share outstanding in the
shareholder's name on the fund's books. Shareholders of all classes of each fund
vote together as a fund, and not by class, except as otherwise required by
applicable law or by that fund's charter documents, or when the matter affects
only the interests of a particular class.
Liquidation or Dissolution
In the event of the liquidation or dissolution of either the Fund or
Munder Growth Fund, the shareholders of that fund are entitled to receive, when
and as declared by the Trustees or Directors, the excess of the assets over the
liabilities belonging to the fund. The assets so distributed to shareholders of
a fund would be distributed among the shareholders in proportion to the number
of shares of that fund held by them and recorded on the books of the fund.
Liability of Directors/Trustees
The By-laws of the Company provide that the Company will indemnify
Directors and officers of the Company to the fullest extent permitted by
Maryland law and the 1940 Act. The Declaration of Trust of the Trust provides
for similar indemnification of Trustees and officers of the Trust. However,
neither the Declaration of Trust of the Trust nor the By-laws of the Company
purport to protect or indemnify a director/trustee or officer against any
liability to which such person would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such person's office.
Rights of Inspection
Except as required by Maryland law, shareholders of the Munder Growth Fund
have only such right to inspect the records, documents, accounts and books of
Munder Growth Fund as may be granted by the Directors of the Company. Maryland
corporate law provides that one or more persons who together have owned at least
5% of the outstanding shares of Munder Growth Fund for at least 6 months may, on
written request, inspect during usual business hours the books of account and
stock ledger of Munder Growth Fund.
Shareholders of the Fund generally have the same rights to inspect the
records, accounts and books of the Trust as are permitted shareholders of a
Massachusetts corporation under Massachusetts corporation law. Currently, each
shareholder of a Massachusetts corporation is permitted to inspect the records,
accounts and books of a corporation for any legitimate business purpose relative
to the affairs of the corporation.
The foregoing is only a summary of certain characteristics of the
operations of Munder Growth Fund and the Fund, the Articles of Incorporation and
By-laws of the Company, the Declaration of Trust of the Trust, and Maryland and
Massachusetts law. The foregoing is not a complete description of the documents
cited. Shareholders should refer to the provisions of such documents and state
laws governing each fund for a more thorough description.
INFORMATION ABOUT MANAGEMENT OF MUNDER GROWTH FUND AND THE FUND
Investment Adviser
The current investment adviser of both the Fund and Munder Growth Fund is
Munder Capital Management. Munder Capital Management is a Delaware general
partnership with principal offices at 480 Pierce Street, Birmingham, Michigan
48009. Munder Capital Management became the investment adviser to the Fund and
Munder Growth Fund upon the consolidation of the investment advisory businesses
of Woodbridge Capital Management, Inc. (a subsidiary of Comerica Bank, and the
Fund's former investment adviser) and Munder Capital Management, Inc. (Munder
Growth Fund's former investment adviser). The principal partners of Munder
Capital Management are Old MCM, Inc., Munder Group L.L.C. and WAM Holdings, Inc.
WAM Holdings, Inc II., a wholly owned subsidiary of Comerica Inc., owns or
controls approximately 88% of the interests in Munder Capital Management.
As of June 30, 1998, Munder Capital Management and its affiliates managed
over $__ billion of assets for various institutional clients, including
investment companies, pension and profit sharing funds, foundations and
insurance companies, as well as for high net worth individuals. Of this amount,
approximately $__ billion was invested in equity securities.
Munder Growth Fund pays Munder Capital Management a monthly advisory fee
computed at an annual rate of 1.0% of Munder Growth Fund's average daily net
assets up to $500 million, reduced to .75% of Munder Growth Fund's average daily
net assets in excess of $500 million. However, Munder Capital Management
currently waives a portion of its advisory fees so that Munder Growth Fund pays
at an annual rate of 0.75% of average daily net assets and will continue to do
so after the reorganization.
The Fund pays Munder Capital Management a monthly advisory fee computed at
an annual rate of 0.75% of the Fund's daily net assets.
Portfolio Managers
Lee P. Munder and Leonard Barr II serve as portfolio managers to Munder
Growth Fund. Lee P. Munder, CFA, began his investment career in 1969 as Chief
Trust Investment Officer for Security Bank and Trust of Southgate, Michigan.
From 1973 to 1985 he served as portfolio manager at Loomis Sayles & Co., Inc.,
serving in later years as Vice President and Senior Partner. In 1985, Mr. Munder
left Loomis Sayles & Co., Inc. and founded Munder, Inc. Mr. Munder served as
President and C.E.O. of Munder Capital Management or Munder, Inc. from Munder
Inc.'s inception until February 1998. Since that time he has served as chairman
of Munder Capital Management.
Leonard Barr II, CFA, began his investment career in 1968 at Manufacturers
National Bank of Detroit. He left Manufacturers in 1985 as First Vice President
and Senior Trust Investment Officer serving as Director of Research for Trust
Investments. Mr. Barr joined Munder, Inc. in 1986 and has been a Director and
Senior Vice President of Munder Capital Management or Munder, Inc. since 1988.
He serves as Munder Capital Management's Director of Research. As Director of
Research, Mr. Barr currently approves all equity investments made on behalf of
clients of Munder Capital Management, including Munder Growth Fund.
The Fund is managed by a committee of professional portfolio managers
employed by Munder Capital Management.
Administrator
State Street Bank and Trust Company ("State Street") currently serves as
administrator to both the Fund and Munder Growth Fund.
State Street generally assists the Company, the Trust and the Munder
Framlington Funds Trust in all aspects of their administration and operations
including the maintenance of financial records and fund accounting. As
compensation for its services, State Street is entitled to receive fees, based
on the aggregate daily net assets of the various series of the Company, the
Trust and the Munder Framlington Funds Trust and certain other investment
portfolios that are advised by Munder Capital Management for which it provides
services, computed daily and payable monthly at the annual rate of 0.113% of the
first $2.8 billion of net assets, plus 0.103% of the next $2.2 billion of net
assets, plus 0.101% of the next $2.5 billion of net assets, plus 0.095% of the
next $2.5 billion of net assets, plus 0.080% of the next $2.5 billion of net
assets, plus 0.070% of net assets over $12.5 billion.
State Street has entered into a Sub-Administration Agreement with the
Distributor under which the Distributor provides certain administrative services
with respect to the Fund and Munder Growth Fund. State Street pays the
Distributor a fee for these services out of its own resources at no cost to the
funds.
ADDITIONAL INFORMATION ABOUT MUNDER GROWTH FUND AND THE FUND
Information about the Fund and Munder Growth Fund is included in the
current Prospectus for the Fund and Munder Growth Fund (Class A, B and C shares)
dated October 29, 1997, Prospectus (Class K shares) dated October 29, 1997,
Prospectus (Class Y shares) dated October 29, 1997, and Statement of Additional
Information dated October 29, 1997, each of which is available upon request, and
which have been filed with the SEC and are incorporated herein by reference.
Copies of the Prospectuses and the Statement of Additional Information are
available upon request and without charge by writing or calling the Fund or
Munder Growth Fund at the address or toll-free number listed on the cover page
of this Prospectus/Proxy Statement.
Both the Fund and Munder Growth Fund are subject to the informational
requirements of the Securities Exchange Act of 1934 and in accordance therewith
file reports and other information including proxy material, reports and charter
documents with the SEC. These reports and other information can be inspected and
copied at the public reference facilities maintained by the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the Midwest Regional Office of the
SEC, 500 West Madison Street, Suite 1400, Chicago, IL 60661. Copies of such
material can also be obtained from the Public Reference Branch, Office of
Consumer Affairs and Information Services, SEC, Washington, D.C. 20549 at
prescribed rates.
FINANCIAL STATEMENTS AND EXPERTS
The audited financial statements of the Fund as of June 30, 1998 and the
audited financial statements for Munder Growth Fund as of June 30, 1998 have
been incorporated by reference into this Prospectus/Proxy Statement in reliance
on the reports of Ernst & Young LLP, independent auditors and independent
accountants for the Fund and Munder Growth Fund, given on the authority of such
firm as expert in accounting and auditing. The unaudited financial statements of
the Fund and of Munder Growth Fund as of December 31, 1997 have also been
incorporated by reference into the Prospectus/Proxy Statement.
LEGAL MATTERS
Certain legal matters concerning the issuance of shares of Munder Growth
Fund will be passed upon by Dechert Price & Rhoads, 1775 Eye Street, N.W.,
Washington, D.C. 20006.
The Trustees of the Trust, including the Independent Trustees, recommend
that the Shareholders of the Fund vote FOR approval of the Plan including the
sale of all or substantially all of the Assets of the Fund to Munder Growth
Fund, the Termination of the Fund and the distribution of Shares of Munder
Growth Fund to Shareholders of the Fund, and any unmarked Proxies without
instructions to the contrary will be voted IN FAVOR of approval of the Plan.
II. APPROVAL OR DISAPPROVAL OF THE NEW INVESTMENT ADVISORY AGREEMENT
Munder Capital Management ("MCM" or the "Investment Adviser") currently
serves as investment adviser of the Fund pursuant to an Investment Advisory
Agreement between the Investment Adviser and the Trust on behalf of the Fund
dated July 2, 1998. MCM is organized as a Delaware general partnership. Prior to
July 2, 1998, the general partnership interests in MCM were owned by Old MCM,
Inc. (44%), WAM Holdings, Inc. (44%), and Munder Group L.L.C. (12%). World
Holdings, Inc. is wholly-owned by Comerica Inc. Mr. Lee P. Munder, Chairman of
MCM, owned 83% of Old MCM Inc. (representing a 36% indirect interest in MCM) and
68% of Munder Group L.L.C. (representing an 8% indirect interest in MCM). Mr.
Munder, through his ownership interest in Old MCM, Inc. and Munder Group L.L.C.,
owned or controlled approximately 44% of MCM. Employees of MCM owned the
remaining 12% of MCM. On July 2, 1998, Comerica Inc. purchased 85% of Old MCM,
Inc.'s interest in MCM (representing a 37.4% interest in MCM) and 85% of Mr.
Munder's interest in Munder Group L.L.C. (representing a 6.9% interest in MCM)
(the "Transaction"). As a result, Comerica Inc. owns or controls approximately
88% of the partnership interests in MCM. The Transaction may have constituted an
assignment (as defined in the 1940 Act) , which therefore terminated the
investment advisory agreement in accordance with its terms. The Investment
Adviser proposed to the Board of Trustees that the Trust enter into a new
investment advisory agreement on behalf of the Fund with the Investment Adviser
to take effect upon the closing of the Transaction.
At meetings held on April 7 and May 5, 1998, the Board met to consider the
Transaction and its anticipated effect on the Investment Adviser's organization
and investment advisory arrangements for the Fund. The Trustees, including the
Trustees who are not parties to the Prior Investment Advisory Agreement or the
New Investment Advisory Agreement (as defined below) or interested persons (as
defined in the 1940 Act) of any such party (the "Independent Directors"),
unanimously approved, subject to the required shareholder approval described
herein, the proposed new investment advisory agreement (the "New Investment
Advisory Agreement") with the Investment Adviser, on behalf of the Fund, and
recommended approval of the New Investment Advisory Agreement by the Fund's
shareholders. A form of the New Investment Advisory Agreement is attached as
Exhibit B.
The Investment Adviser has represented to the Board of Trustees that the
Transaction would not result in any material change to advisory services
provided to the Fund, and that, subject to approval of the New Investment
Advisory Agreement by shareholders, the Transaction was not expected to
materially affect the level or quality of advisory services provided to the
Fund, and that the same personnel who currently render such services to the Fund
would continue to do so after the Transaction.
1940 Act Considerations
Section 15(a) of the 1940 Act prohibits any person from serving as an
investment adviser to a registered investment company except pursuant to a
written contract that has been approved by the shareholders of the company.
Section 15(a) also provides, as did the Prior Investment Advisory Agreement
pursuant to Section 15(a), for the automatic termination of such agreements upon
its assignment. An assignment is deemed to include any change of control of the
investment adviser. In order for the Investment Adviser to continue to provide
investment advisory services to the Fund, therefore, the shareholders of the
Fund must approve the Fund's New Investment Advisory Agreement.
Due to insufficient time to obtain consent of the Fund's shareholders
prior to the closing of the Transaction, the Trust and the Investment Adviser
have obtained an order from the Securities and Exchange Commission exempting
them from compliance with Section 15(a) of the 1940 Act pending approval of the
New Investment Advisory Agreement by the Fund's shareholders. The order permits
the New Investment Advisory Agreement to go into effect without shareholder
approval and allows the Investment Adviser to collect fees with respect to the
Fund at the rates specified in the New Investment Advisory Agreement commencing
on July 2, 1998. Fees paid by the Fund under the New Investment Advisory
Agreement will be held in an interest-bearing escrow account pending shareholder
approval, which, pursuant to the terms of the order, must be obtained no later
than November 30, 1998.
If the shareholders of the Fund do not approve the Fund's New Investment
Advisory Agreement, the amount held in escrow under the New Investment Advisory
Agreement of the Fund will be returned to the Fund.
In addition, the Trust intends to conform with the provisions of Section
15(f) of the 1940 Act, which provides, in pertinent part, that an investment
adviser may receive any amount or benefit in connection with a sale of such
investment adviser which results in an assignment of an investment advisory
contract if (1) for a period of three years after the time of such event, 75% of
the members of the board of directors of the investment company which it advises
are not "interested persons" (as defined in the 1940 Act) of the new or old
investment adviser; and (2) there is no "unfair burden" imposed on the
investment company as a result of the transaction.
The New and the Prior Investment Advisory Agreements
The Prior Investment Advisory Agreement for the Fund was last approved by
the Board of Trustees on May 5, 1998.
If the New Investment Advisory Agreement is approved by shareholders, the
Investment Adviser would continue to serve as investment adviser to the Fund.
The terms and conditions of the New Investment Advisory Agreement are identical
in all material respects to those of the Prior Investment Advisory Agreement,
with the exception of their effective dates and termination dates and the escrow
arrangements described above. The New Investment Advisory Agreement, if approved
by the vote of the holders of a majority of the outstanding shares of the Fund,
as defined in the 1940 Act ("1940 Act Majority"), will continue in effect for a
two-year period from July 2, 1998, and thereafter from year to year, subject to
approval annually by the Board of Trustees the Trust or by the vote of a 1940
Act Majority of the outstanding shares of the Fund, and also, in either event,
approval by a majority of the Trustees who are not parties to the New Investment
Advisory Agreement or interested persons (as defined in the 1940 Act) of any
such party. The New Investment Advisory Agreement may be terminated, without
penalty, on 60 days' written notice by the Board of Trustees or by vote of
holders of a 1940 Act Majority of the Fund's shares or upon 90 days' written
notice by the Investment Adviser. The New Investment Advisory Agreement will
also terminate automatically in the event of its "assignment" (as defined in the
1940 Act).
Under the New Investment Advisory Agreement, as under the Prior Investment
Advisory Agreement, the Investment Adviser will furnish continuing investment
supervision to the Fund and will be responsible for the management of the Fund's
portfolio. The responsibility for making decisions to buy, sell or hold a
particular security will rest with the Investment Adviser, subject to review by
the Board of Trustees. The Investment Adviser will furnish office space,
equipment and personnel in connection with the performance of its investment
management responsibilities.
Like the Prior Investment Advisory Agreement, the New Investment Advisory
Agreement provides that the Investment Adviser shall have no liability to the
Fund or any shareholder of the Fund for any error of judgment, mistake of law,
or any loss arising out of any investment or other act or omission in the
performance by the Investment Adviser of its duties under the agreement, except
for any liability, loss or damage resulting from willful misfeasance, bad faith
or gross negligence on the Investment Adviser's part or reckless disregard of
its duties under the agreement.
Advisory Fee
The fees under the New Investment Advisory Agreement are the same as the
fees under the Prior Investment Advisory Agreement for the Fund. Under the New
Investment Advisory Agreement, as under the Prior Investment Advisory Agreement,
the Fund will pay the Investment Adviser a monthly fee at the annual rate of
0.75% of the Fund's average daily net assets.
During the fiscal year ended June 30, 1998, the Growth Fund paid advisory
fees in the amount of $1,451,332, and the Fund paid advisory fees in the amount
of $1,169,411.
Shareholders should refer to Exhibit B for the complete terms of the New
Investment Advisory Agreement.
In the event that shareholders of the Fund do not approve the New
Investment Advisory Agreement for the Fund, the Board of Trustees of the Trust
could seek to obtain for the Fund interim advisory services from the Investment
Adviser or from another advisory organization. Thereafter, the Board of Trustees
would either negotiate a new investment advisory agreement with an advisory
organization selected by the Board or make other appropriate arrangements, in
either event subject to approval by the shareholders of the Fund.
Information Regarding the Investment Adviser
The Investment Adviser is a Delaware general partnership with principal
offices at 480 Pierce Street, Birmingham, Michigan 48009. The general partners
of the Investment Adviser are WAM, Inc., Old MCM, Inc. and Munder Group, L.L.C.
WAM Holdings, Inc. has offices at 100 Renaissance Center, Detroit, Michigan
48243 and is a wholly-owned subsidiary of Comerica Bank-Ann Arbor which, in
turn, is a wholly-owned subsidiary of Comerica Incorporated, a publicly-held
bank holding company. Employees of the Investment Adviser may acquire
partnership interests in the Investment Adviser from time to time through Munder
Group, L.L.C., which was organized for that purpose.
Banking laws and regulations, including the Glass-Steagall Act as
presently interpreted by the Board of Governors of the Federal Reserve System,
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. However, a holding
company or affiliate, and banks generally, can act as adviser to an investment
company and can purchase shares of an investment company as agent for and upon
the order of customers. The Investment Adviser believes that it may perform the
services contemplated by the New Investment Advisory Agreement without violating
these banking laws or regulations. However, future changes in legal requirements
relating to the permissible activities of banks and their affiliates, as well as
future interpretations of current requirements, could prevent the Investment
Adviser from continuing to perform investment advisory services for the Fund. If
the Investment Adviser were prohibited from performing investment advisory
services for the Fund, it is expected that the Board of Trustees would select
another qualified firm. Any new advisory agreement would be subject to
shareholder approval.
The Evaluation By the Board of Trustees
The Board of Trustees has determined that, by approving the New Investment
Advisory Agreement on behalf of the Fund, the Fund can best assure itself that
services currently provided by the Investment Adviser will continue to be
provided without interruption.
At meetings held on April 7, 1998 and May 5, 1998, the Trustees considered
information with respect to whether the New Investment Advisory Agreement with
the Investment Adviser was in the best interests of the Fund and its
shareholders. The Trustees considered, among other factors, representations by
the Investment Adviser that the Transaction would not materially affect the
investment advisory operations of the Investment Adviser or the level or quality
of advisory services provided to the Fund; that, subject to Board and
shareholder approval, the same personnel at the Investment Adviser who provide
services to the Fund would continue to do so after the Transaction; that the
Fund's advisory fees would not change as a result of the Transaction; and that
the Fund would not be subjected to any unfair burden as a result of the
Transaction. The Trustees also considered the terms of the Transaction, and the
resulting differences in the ownership and control of the Investment Adviser.
The Trustees also considered, as they have in the past, the nature and quality
of services expected to be provided by the Investment Adviser and information
regarding fees, expense rates, performance and profitability. In evaluating the
Investment Adviser's ability to provide services to the Fund, the Trustees
considered information as to the Investment Adviser's business organization,
financial resources and personnel and other matters, including the continuing
interests of Comerica and Mr. Munder and employees in the Investment Adviser.
Based upon its review, the Board of Trustees concluded that the New
Investment Advisory Agreement with the Investment Adviser is reasonable, fair
and in the best interests of the Fund and its shareholders, and that the fees
provided in the New Investment Advisory Agreement are fair and reasonable in
light of the usual and customary charges made by others for services of the same
nature and quality. Accordingly, after consideration of the above factors, and
such other factors and information as it deemed relevant, the Board of Trustees,
including all of the Independent Trustees, unanimously approved the New
Investment Advisory Agreement and voted to recommend its approval by the Fund's
shareholders. The Board of Trustees recommend that the shareholders of the Fund
vote FOR approval of the New Investment Advisory Agreement.
<PAGE>
III. OTHER BUSINESS
The Trustees of the Trust do not intend to present any other business at
the Meeting. If, however, any other matters are properly brought before the
Meeting, the persons named in the accompanying form of proxy will vote thereon
in accordance with their judgment.
VOTING INFORMATION
This Prospectus/Proxy Statement is furnished in connection with a
solicitation of proxies by the Trustees of the Trust to be used at the Meeting.
This Prospectus/Proxy Statement, along with a Notice of the Meeting and a proxy
card, is first being mailed to shareholders of the Fund on or about November 20,
1998. Only shareholders of record as of the close of business on the Record
Date, September 30, 1998, will be entitled to notice of, and to vote at, the
Meeting. The holders of a majority of the shares of the Fund outstanding at the
close of business on the Record Date present in person or represented by proxy
will constitute a quorum for the Meeting. If the enclosed form of proxy is
properly executed and returned in time to be voted at the Meeting, the proxies
named therein will vote the shares represented by the proxy in accordance with
the instructions marked thereon. Unmarked proxies will be voted FOR the proposed
Reorganization, FOR the approval of the New Investment Advisory Agreement, and
FOR any other matters deemed appropriate. For purposes of determining the
presence of a quorum for transacting business at the Meeting, abstentions and
broker "non-votes" (that is, proxies from brokers or nominees indicating that
such persons have not received instructions from the beneficial owner or other
persons entitled to vote shares on a particular matter with respect to which the
brokers or nominees do not have discretionary power) will be treated as shares
that are present but which have not been voted. A proxy may be revoked at any
time on or before the Meeting by written notice to the Secretary of the Trust or
by attending and voting at the Meeting.
As of the Record Date, Comerica Bank, located at One Detroit Center, 500
Woodward Ave., Detroit, Michigan 48226, held of record substantially all of the
outstanding shares of the Fund as agent, custodian or trustee for its customers.
As of that date, there were no other persons known to the Trust to be beneficial
owners of 5% or more of the outstanding shares of the Fund.
In addition, as of the Record Date, Comerica Bank possessed sole or shared
voting or investment power for its customer accounts with respect to _____% of
the Fund's outstanding shares.
The Trust has been advised by Comerica Bank that it intends to pass
through the vote on the shares to the beneficial owners of such shares or retain
an independent fiduciary to vote the shares on behalf of the beneficial owners,
for which it is shareholder of record.
The chart below lists the number of shares of each class of the Fund that
were outstanding as of the close of business on the Record Date:
Class. Shares Outstanding
Class A
Class B
Class C
Class K
Class Y
As of the Record Date, the Directors and officers of The Munder Funds,
Inc., as a group, owned _____ Class C shares of the Munder Growth Fund, which
represented __% of the outstanding Class C shares of that fund. Lee P. Munder
and Terry H. Gardner are administrators of a pension plan for employees of
Munder Capital Management, which as of the record date owned ______ Class C
shares of Munder Growth Fund, which represented __% of the outstanding Class C
shares of the Fund. Munder Capital Management and affiliates of Munder Capital
Management, through common ownership, owned beneficially _____ Class C shares of
Munder Growth Fund, which represented __% of the outstanding Class C shares of
that fund.
As of the Record Date, the following persons or "groups" (as that term is
used in Section 13(d) of the Securities Exchange Act of 1934, as amended the
"Exchange Act") owned beneficially or of record five percent or more of the
outstanding shares of a class of Munder Growth
Fund:_________________________________________________________________, on its
own behalf and on behalf of its clients, owned __ Class A shares (__% of the
outstanding Class A shares, _____ Class B shares (__% of the outstanding Class B
shares), ____ Class C shares (_% of the outstanding Class C shares) and _____
Class Y shares (__% of the outstanding Class Y shares);
__________________________________________ owned _____ _____ Class A shares (__%
of the outstanding Class A shares) __ and Munder Capital Management on its own
behalf and on behalf of its clients owned ____ Class C shares (__% of the
outstanding Class C shares).
As of the Record Date, the officers and Trustees of the Trust beneficially
owned as a group less than 1% of the outstanding shares of the Fund.
Approval of the Plan in Proposal I will require the affirmative vote of a
majority of the outstanding shares of the Fund with all classes voting together
and not by class. Approval of the New Investment Advisory Agreement, as set
forth in Proposal II will require a 1940 Act Majority which means the
affirmative vote of the holders of the lesser of either (A) 67% or more of the
Fund's shares present at the meeting if the holders of more than 50% of the
outstanding shares of the Fund are present or represented by proxy or (B) more
than 50% of the outstanding shares of the Fund. Shareholders of the Fund are
entitled to one vote for each share. Fractional shares are entitled to
proportional voting rights.
Munder Capital Management has retained First Data Investors Services
Group, Inc. ("First Data") to provide proxy solicitation services for the Fund.
the costs of soliciting proxies in the accompanying form, including the fees
paid to First Data, will be borne by Munder Capital Management and not the
Funds. In addition to solicitation by mail, proxies may be solicited by
directors/Trustees, officers and regular employees and agents of the Company,
the Trust Framlington and St. Clair without compensation. Brokerage firms and
others will be reimbursed for their expenses in forwarding proxy materials to
the beneficial owners and soliciting them to execute proxies..
In the event that sufficient votes to approve the proposed items are not
received by 10:00 a.m. on November 20, 1998, the persons named as proxies may
propose one or more adjournments of the Meeting to permit further solicitation
of proxies. In determining whether to adjourn the Meeting, the following factors
may be considered: the percentage of votes actually cast, the percentage of
negative votes actually cast, the nature of any further solicitation and the
information to be provided to shareholders with respect to the reasons for the
solicitation. Any such adjournment will require an affirmative vote by the
holders of a majority of the shares present in person or by proxy and entitled
to vote at the Meeting. The persons named as proxies will vote upon such
adjournment after consideration of the best interests of all shareholders of the
Fund.
In order to reduce the costs of preparing, printing, and mailing the proxy
materials, the notices to shareholders with more than one account with the Funds
at the same address, and listed under the same social security number, have been
combined. The proxy cards have been coded so that each shareholder's votes will
be counted to all such accounts.
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this _____ day of __________, 1998, by and between The Munder Funds, Inc. (the
"Company"), a Maryland corporation, on behalf of The Munder Multi-Season Growth
Fund (the "Acquiring Fund"), a separate investment series of the Company, and
Munder Funds Trust (the "Trust"), a Massachusetts business trust, on behalf of
the Munder Accelerating Growth Fund (the "Acquired Fund") a separate investment
series of the Trust.
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a) of the
United States Internal Revenue Code of 1986, as amended (the "Code"). The
reorganization (the "Reorganization") will consist of the transfer of all or
substantially all of the assets of the Acquired Fund in exchange solely for
Class A, Class B, Class C, Class K and Class Y shares of common stock (the
"Shares") of the Acquiring Fund, the assumption by the Acquiring Fund of certain
identified liabilities of the Acquired Fund, and the distribution of the
Acquiring Fund Shares to the shareholders of the Acquired Fund in liquidation of
the Acquired Fund as provided herein, all upon the terms and conditions
hereinafter set forth in this Agreement.
WHEREAS, the Company and the Trust are registered investment companies of
the management type and the Acquired Fund owns securities that generally are
assets of the character in which the Acquiring Fund is permitted to invest; and
WHEREAS, the Company is authorized to issue its shares of common stock in
separate series, including the Acquiring Fund, each of which maintains a
separate and distinct portfolio of assets; and
WHEREAS, the Trust is authorized to issue its shares of beneficial
interest in separate series, including the Acquired Fund, each of which
maintains a separate and distinct portfolio of assets; and
WHEREAS, the Board of Trustees of the Trust on behalf of the Acquired Fund
has determined that the exchange of all or substantially all of the assets of
the Acquired Fund for Acquiring Fund Shares and the assumption of certain
identified liabilities of the Acquired Fund by the Acquiring Fund is in the best
interests of the Acquired Fund and its shareholders and that the interests of
the existing shareholders of the Acquired Fund would not be diluted as a result
of this transaction; and
WHEREAS, the Board of Directors of the Company on behalf of the Acquiring
Fund has determined that the exchange of all or substantially all of the assets
of the Acquired Fund for Acquiring Fund Shares and the assumption of certain
identified liabilities of the Acquired Fund by the Acquiring Fund is in the best
interests of the Acquiring Fund and its shareholders and that the interests of
the existing shareholders of the Acquiring Fund would not be diluted as a result
of this transaction.
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE ACQUIRED FUND IN
EXCHANGE FOR ACQUIRING FUND SHARES, THE ASSUMPTION OF CERTAIN IDENTIFIED
ACQUIRED FUND LIABILITIES AND THE LIQUIDATION OF THE ACQUIRED FUND
1.1 Subject to the terms and conditions herein set forth and on the basis
of the representations and warranties contained herein, the Acquired Fund agrees
to transfer all or substantially all of the Acquired Fund's assets as set forth
in paragraph 1.2 to the Acquiring Fund, and the Acquiring Fund agrees in
exchange therefor: (i) to deliver to the Acquired Fund the number of Class A
Acquiring Fund Shares, including fractional Class A Acquiring Fund Shares,
determined by dividing the value of the Acquired Fund's net assets attributable
to its Class A shares, computed in the manner and as of the time and date set
forth in paragraph 2.1, by the net asset value of one Acquiring Fund Class A
Share computed in the manner and as of the time and date set forth in paragraph
2.2; (ii) to deliver to the Acquired Fund the number of Class B Acquiring Fund
Shares, including fractional Class B Acquiring Fund Shares, determined by
dividing the value of the Acquired Fund's net assets attributable to its Class B
Shares, computed in the manner and as of the time and date set forth in
paragraph 2.1, by the net asset value of one Acquiring Fund Class B Share,
computed in the manner and as of the time and date set forth in paragraph 2.2;
(iii) to deliver to the Acquired Fund the number of Class C Acquiring Fund
Shares, including fractional Class C Acquiring Fund Shares, determined by
dividing the value of the Acquired Fund's net assets attributable to its Class C
Shares, computed in the manner and as of the time and date set forth in
paragraph 2.1, by the net asset value of one Acquiring Fund Class C Share,
computed in the manner and as of the time and date set forth in paragraph 2.2;
(iv) to deliver to the Acquired Fund the number of Class K Acquiring Fund
shares, including fractional Class K Acquiring Fund shares, determined by
dividing the value of the Acquired Fund's net assets attributable to its Class K
shares, computed in the manner and as of the time and date set forth in
paragraph 2.1, by the net asset value of one Acquiring Fund Class K share,
computed in the manner and as of the time and date set forth in paragraph 2.2;
(v) to deliver to the Acquired Fund the number of Class Y Acquiring Fund shares,
including fractional Class Y Acquiring Fund Shares, determined by dividing the
value of the Acquired Fund's net assets attributable to its Class Y Shares,
computed in the manner and as of the time and date set forth in paragraph 2.1,
by the net asset value of one Acquiring Fund class Y Share, computed in the
manner and as of the time and date set forth in paragraph 2.2; and (vi) to
assume certain liabilities of the Acquired Fund, as set forth in paragraph 1.3.
Such transactions shall take place at the closing provided for in paragraph 3.1
(the "Closing").
1.2 (a)...The assets of the Acquired Fund to be acquired by the Acquiring
Fund shall consist of all or substantially all of the property including,
without limitation, such cash, securities, and dividend or interest receivables
which are owned by the Acquired Fund and any deferred or prepaid expenses shown
as an asset on the books of the Acquired Fund on the closing date provided in
paragraph 3.1 (the "Closing Date").
(b)...The Acquired Fund has provided the Acquiring Fund with a list
of all of the Acquired Fund's assets as of the date of execution of this
Agreement. The Acquired Fund reserves the right to sell any of these securities
but will not, without the prior approval of the Acquiring Fund, acquire any
additional securities other than securities of the type in which the Acquiring
Fund is permitted to invest. The Acquiring Fund will, within a reasonable time
prior to the Closing Date, furnish the Acquired Fund with a statement of the
Acquiring Fund's investment objectives, policies and restrictions and a list of
the securities, if any, on the Acquired Fund's list referred to in the first
sentence of this paragraph which do not conform to the Acquiring Fund's
investment objectives, policies and restrictions. In the event that the Acquired
Fund holds any investments which the Acquiring Fund may not hold, the Acquired
Fund will dispose of such securities prior to the Closing Date. In addition, if
it is determined that the portfolios of the Acquired Fund and the Acquiring
Fund, when aggregated, would contain investments exceeding certain percentage
limitations imposed upon the Acquiring Fund with respect to such investments,
the Acquired Fund, if requested by the Acquiring Fund, will dispose of and/or
reinvest a sufficient amount of such investments as may be necessary to avoid
violating such limitations as of the Closing Date.
1.3 The Acquired Fund will endeavor to discharge all the Acquired Fund's
known liabilities and obligations prior to the Closing Date. The Acquiring Fund
shall assume all liabilities, expenses, costs, charges and reserves reflected on
an unaudited statement of assets and liabilities of the Acquired Fund prepared
by State Street Bank and Trust Company, as administrator of the Acquiring Fund
and the Acquired Fund, as of the Valuation Date (as defined in paragraph 2.1),
in accordance with generally accepted accounting principles consistently applied
from the prior audited period. The Acquiring Fund shall assume only those
liabilities of the Acquired Fund reflected in that unaudited statement of assets
and liabilities and shall not assume any other liabilities not reflected
thereon.
1.4 As provided in paragraph 3.4, as soon after the Closing Date as is
conveniently practicable (the "Liquidation Date"), the Acquired Fund will
liquidate and distribute pro rata to the Acquired Fund's shareholders of record
determined as of the close of business on the Closing Date (the "Acquired Fund
Shareholders") the Acquiring Fund Shares it receives pursuant to paragraph 1.1.
Such liquidation and distribution will be accomplished by the transfer of the
Acquiring Fund Shares then credited to the account of the Acquired Fund on the
books of the Acquiring Fund to open accounts on the share records of the
Acquiring Fund in the name of the Acquired Fund's shareholders and representing
the respective pro rata number of the Acquiring Fund Shares due such
shareholders. All issued and outstanding shares of the Acquired Fund will
simultaneously be canceled on the books of the Acquired Fund. The Acquiring Fund
shall not issue certificates representing the Acquiring Fund Shares in
connection with such exchange.
1.5 Ownership of Acquiring Fund Shares will be shown on the books of the
Acquiring Fund's transfer agent. Shares of the Acquiring Fund will be issued in
the manner described in the Acquiring Fund's current prospectus and statement of
additional information.
1.6 Any reporting responsibility of the Acquired Fund is and shall remain
the responsibility of the Acquired Fund up to and including the Closing Date and
such later dates on which the Acquired Fund is terminated.
2. VALUATION
2.1 The value of the Acquired Fund's assets to be acquired by the
Acquiring Fund hereunder shall be the value of such assets computed as of the
close of regular trading on the New York Stock Exchange, Inc. (the "NYSE") on
the Closing Date (such time and date being hereinafter called the "Valuation
Date"), using the valuation procedures set forth in the Acquiring Fund's then
current prospectus or statement of additional information.
2.2 The net asset value of an Acquiring Fund Share shall be the net asset
value per share computed as of the close of regular trading on the NYSE on the
Valuation Date, using the valuation procedures set forth in the Acquiring Fund's
then current prospectus or statement of additional information.
2.3 The number of the Acquiring Fund Shares to be issued (including
fractional shares, if any) in exchange for the Acquired Fund's net assets shall
be determined by dividing the value of the net assets of the Acquired Fund
determined using the same valuation procedures referred to in paragraph 2.1 by
the net asset value per share of an Acquiring Fund share determined in
accordance with paragraph 2.2.
2.4 All computations of value shall be made by Munder Capital Management
or the administrator in accordance with their regular practice as pricing agents
for the Acquiring Fund.
2.5 In carrying out the valuations and calculations required in this
section, Class A shares of the Acquiring Fund shall be issued only to the extent
of the value of the assets of the Acquired Fund representing the pro rata
interest of Class A shares of the Acquired Fund. Class B shares of the Acquiring
Fund shall be issued only to the extent of the value of the assets of the
Acquired Fund representing the pro rata interest of Class B shares of the
Acquired Fund. Class C shares of the Acquiring Fund shall be issued only to the
extent of the value of the assets of the Acquired Fund representing the pro rata
interest of Class C shares of the Acquired Fund. Class K shares of the Acquiring
Fund shall be issued only to the extent of the value of the assets of the
Acquired Fund representing the pro rata interest of Class K shares of the
Acquired Fund. Class Y shares of the Acquiring Fund shall be issued only to the
extent of the value of the assets of the Acquired Fund representing the pro rata
interest of Class Y shares of the Acquired Fund.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be May _, 1998, or such later date as the
parties may agree to in writing. All acts taking place at the Closing shall be
deemed to take place simultaneously as of the close of business on the Closing
Date unless otherwise provided. The Closing shall be held as of 5:00 p.m., at
the offices of Munder Capital Management, 480 Pierce Street, Birmingham,
Michigan 48009, or at such other time and/or place as the parties may agree.
3.2 State Street Bank and Trust, as sub-custodian for the Acquiring Fund
(the "Custodian"), shall deliver at the Closing a certificate of an authorized
officer stating that the Acquired Fund's portfolio securities, cash and any
other assets shall have been delivered in proper form to the Acquiring Fund
within two business days prior to or on the Closing Date.
3.3 In the event that on the Valuation Date (a) the NYSE or another
primary trading market for portfolio securities of the Acquiring Fund or the
Acquired Fund shall be closed to trading or trading thereon shall be restricted
or (b) trading or the reporting of trading on the NYSE or elsewhere shall be
disrupted so that accurate appraisal of the value of the net assets of the
Acquiring Fund or the Acquired Fund is impracticable, the Closing Date shall be
postponed until the first business day after the day when trading shall have
been fully resumed and reporting shall have been restored.
3.4 The Acquired Fund shall deliver at the Closing a list of the names and
addresses of the Acquired Fund's shareholders and the number and percentage
ownership of outstanding Shares owned by each such shareholder immediately prior
to the Closing, certified on behalf of the Company by its President. The
Acquiring Fund shall issue and deliver a confirmation evidencing the Acquiring
Fund Shares to be credited on the Closing Date to the Secretary of the Acquired
Fund or provide evidence satisfactory to the Acquired Fund that such Acquiring
Fund Shares have been credited to the Acquired Fund's account on the books of
the Acquiring Fund. At the Closing, each party shall deliver to the other such
bills of sale, checks, assignments, share certificates, if any, receipts or
other documents as such other party or its counsel may reasonably request.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Trust and the Acquired Fund represent and warrant to the Company
and the Acquiring Fund as follows:
(a) The Trust is a Massachusetts business trust, duly organized,
validly existing and in good standing under the laws of the Commonwealth
of Massachusetts;
(b) The Trust is a registered investment company classified as a
management company of the open-end type and its registration with the
Securities and Exchange Commission (the "Commission") as an investment
company under the Investment Company Act of 1940 (the "1940 Act") is in
full force and effect;
(c) The Trust is not, and the execution, delivery and performance of
this Agreement will not result, in a material violation of its Declaration
of Trust or Code of Regulations or of any agreement, indenture,
instrument, contract, lease or other undertaking to which the Trust or the
Acquired Fund is a party or by which it is bound;
(d) The Trust and the Acquired Fund have no material contracts or
other commitments (other than this Agreement) which will be terminated
with liability prior to the Closing Date;
(e) Except as otherwise disclosed in writing to and accepted by the
Company and the Acquiring Fund, no litigation or administrative proceeding
or investigation of or before any court or governmental body is presently
pending or to its knowledge threatened against the Trust, the Acquired
Fund or any of their properties or assets (other than that previously
disclosed to the other party to the Agreement) which, if adversely
determined, would materially and adversely affect their financial
condition or the conduct of their business. The Trust and the Acquired
Fund know of no facts which might form the basis for the institution of
such proceedings and are not parties to or subject to the provisions of
any order, decree or judgment of any court or governmental body which
materially and adversely affects their business or their ability to
consummate the transactions herein contemplated;
(f) The statements of assets and liabilities of the Acquired Fund
for the period ended February 28, 1993, for the fiscal years ended
February 28, 1994 and 1995, for the period ended June 30, 1995, and for
the fiscal years ended June 30, 1996 and 1997, have been audited by Ernst
& Young LLP, certified public accountants, and are in accordance with
generally accepted accounting principles consistently applied, and such
statements (copies of which have been furnished to the Acquiring Fund)
fairly reflect the financial condition of the Acquired Fund as of such
dates, and there are no known contingent liabilities of the Acquired Fund
as of such dates not disclosed therein;
(g) Since June 30, 1997, there has not been any material adverse
change in the Acquired Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business,
or any incurrence by the Acquired Fund of indebtedness maturing more than
one year from the date that such indebtedness was incurred, except as
otherwise disclosed to and accepted by the Acquiring Fund. For the
purposes of this subparagraph (g), a decline in net asset value per share
of the Acquired Fund Shares shall not constitute a material adverse
change;
(h) At the Closing Date, all federal and other tax returns and
reports of the Acquired Fund required by law to have been filed by such
date shall have been filed, and all federal and other taxes shall have
been paid so far as due, or provision shall have been made for the payment
thereof and, to the best of the Acquired Fund's knowledge, no such return
or report is currently under audit and no assessment has been asserted
with respect to such returns or reports;
(i) For each taxable year of its operation, the Acquired Fund has
met the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company and has elected to be treated
as such;
(j) All issued and outstanding Shares of the Acquired Fund are, and
at the Closing Date will be, duly and validly issued and outstanding,
fully paid and non-assessable. All of the issued and outstanding Shares of
the Acquired Fund will, at the time of Closing, be held by the persons and
in the amounts set forth in the records of the transfer agent as provided
in paragraph 3.4. The Acquired Fund does not have outstanding any options,
warrants or other rights to subscribe for or purchase any of the Acquired
Fund's Shares, nor is there outstanding any security other than Class B
Shares, convertible into any of the Acquired Fund's Shares;
(k) At the Closing Date, the Acquired Fund will have good and
marketable title to its assets to be transferred to the Acquiring Fund
pursuant to paragraph 1.2 and full right, power and authority to sell,
assign, transfer and deliver such assets hereunder and, upon delivery and
payment for such assets, the Acquiring Fund will acquire good and
marketable title thereto, subject to no restrictions on the full transfer
thereof, including such restrictions as might arise under the Securities
Act of 1933, as amended (the "1933 Act"), other than as disclosed to the
Acquiring Fund;
(l) The execution, delivery and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
actions on the part of the Trust's Board of Trustees, and subject to the
approval of the Acquired Fund's shareholders, this Agreement will
constitute a valid and binding obligation of the Trust and the Acquired
Fund, enforceable in accordance with its terms, subject as to enforcement,
to bankruptcy, insolvency, reorganization, moratorium and other laws
relating to or affecting creditors' rights and to general equity
principles;
(m) The information to be furnished by the Trust and the Acquired
Fund for use in no-action letters, applications for exemptive orders,
registration statements, proxy materials and other documents which may be
necessary in connection with the transactions contemplated hereby shall be
accurate and complete in all material respects and shall comply in all
material respects with federal securities and other laws and regulations
thereunder applicable thereto;
(n) The proxy statement of the Acquired Fund (the "Proxy Statement")
to be included in the registration statement (the "Registration
Statement") referred to in paragraph 5.7 (other than information therein
that relates to the Acquiring Fund) will, on the effective date of the
Registration Statement and on the Closing Date, not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which such statements were made, not materially
misleading.
4.2 The Company and the Acquiring Fund represent and warrant to the Trust
and the Acquired Fund as follows:
(a) The Company is a Maryland corporation, duly organized, validly
existing and in good standing under the laws of the State of Maryland;
(b) The Company is a registered investment company classified as a
management company of the open-end type and its registration with the
Commission as an investment company under the 1940 Act is in full force
and effect;
(c) The current prospectus and statement of additional information
of the Acquiring Fund conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and
regulations of the Commission thereunder and do not include any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not materially
misleading;
(d) At the Closing Date, the Acquiring Fund will have good and
marketable title to the Acquiring Fund's assets;
(e) The Company is not, and the execution, delivery and performance
of this Agreement will not result, in a material violation of its Articles
of Incorporation or By-Laws or of any agreement, indenture, instrument,
contract, lease or other undertaking to which the Company or the Acquiring
Fund is a party or by which it is bound;
(f) No material litigation or administrative proceeding or
investigation of or before any court or governmental body is presently
pending or threatened against the Company or the Acquiring Fund or any of
its properties or assets, except as previously disclosed in writing to the
Acquired Fund. The Company and the Acquiring Fund know of no facts which
might form the basis for the institution of such proceedings and neither
is a party to or subject to the provisions of any order, decree or
judgment of any court or governmental body which materially and adversely
affects its business or its ability to consummate the transactions
contemplated herein;
(g) The statement of assets and liabilities of the Acquiring Fund
for the fiscal year ended December 31, 1993 and 1994 have been audited by
Arthur Andersen & Co. LLP, certified public accountants. The statement of
assets and liabilities of the Acquiring Fund for the period ended June 30,
1995 and for the fiscal years ended June 30, 1996 and 1997 have been
audited by Ernst & Young LLP, certified public accountants. All such
statements are in accordance with generally accepted accounting
principles, and such statements (copies of which have been furnished to
the Acquired Fund) fairly reflect the financial condition of the Acquiring
Fund as of such date, and there are no known contingent liabilities of the
Acquiring Fund as of such dates not disclosed therein;
(h) Since June 30, 1997, there has not been any material adverse
change in the Acquiring Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business,
or any incurrence by the Acquiring Fund of indebtedness maturing more than
one year from the date that such indebtedness was incurred. For the
purposes of this subparagraph (h), a decline in net asset value per share
of the Acquiring Fund Shares shall not constitute a material adverse
change;
(i) At the Closing Date, all federal and other tax returns and
reports of the Acquiring Fund required by law to have been filed by such
date shall have been filed, and all federal and other taxes shall have
been paid so far as due, or provision shall have been made for the payment
thereof and, to the best of the Acquiring Fund's knowledge, no such return
or report is currently under audit and no assessment has been asserted
with respect to such returns or reports;
(j) For each taxable year of its operation, the Acquiring Fund has
met the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company and has elected to be treated
as such and the Acquiring Fund intends to do so in the future;
(k) At the date hereof, all issued and outstanding Acquiring Fund
Shares are, and at the Closing Date will be, duly and validly issued and
outstanding, fully paid and non-assessable, with no personal liability
attaching to the ownership thereof. The Acquiring Fund does not have
outstanding any options, warrants or other rights to subscribe for or
purchase any Acquiring Fund Shares, nor is there outstanding any security
other than Class B shares, convertible into any Acquiring Fund Shares;
(l) The execution, delivery and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
actions, if any, on the part of the Company's Board of Directors, and this
Agreement will constitute a valid and binding obligation of the Company
and the Acquiring Fund enforceable in accordance with its terms, subject
as to enforcement, to bankruptcy, insolvency, reorganization, moratorium
and other laws relating to or affecting creditors' rights and to general
equity principles;
(m) The Acquiring Fund Shares to be issued and delivered to the
Acquired Fund, for the account of the Acquired Fund's shareholders,
pursuant to the terms of this Agreement, will at the Closing Date have
been duly authorized and, when so issued and delivered, will be duly and
validly issued Acquiring Fund Shares, and will be fully paid and
nonassessable with no personal liability attaching to the ownership
thereof;
(n) The information to be furnished by the Acquiring Fund for use in
no-action letters, applications for exemptive orders, registration
statements, proxy materials and other documents which may be necessary in
connection with the transactions contemplated hereby shall be accurate and
complete in all material respects and shall comply in all material
respects with federal securities and other laws and regulations applicable
thereto;
(o) The Proxy Statement to be included in the Registration Statement
(only insofar as it relates to the Acquiring Fund) will, on the effective
date of the Registration Statement and on the Closing Date, not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which such statements were made, not
materially misleading; and
(p) The Acquiring Fund agrees to use all reasonable efforts to
obtain the approvals and authorizations required by the 1933 Act, the 1940
Act and such of the state Blue Sky or securities laws as it may deem
appropriate in order to continue its operations after the Closing Date.
5. COVENANTS OF THE ACQUIRING FUND, THE COMPANY, THE ACQUIRED FUND AND THE
TRUST
5.1 The Acquiring Fund and the Acquired Fund each will operate its
business in the ordinary course between the date hereof and the Closing Date. It
is understood that such ordinary course of business will include the declaration
and payment of customary dividends and distributions and any other dividends and
distributions deemed advisable.
5.2 The Trust will call a meeting of the Acquired Fund's shareholders to
consider and act upon this Agreement and to take all other actions necessary to
obtain approval of the transactions contemplated herein.
5.3 The Acquired Fund covenants that the Acquiring Fund Shares to be
issued hereunder are not being acquired for the purpose of making any
distribution thereof other than in accordance with the terms of this Agreement.
5.4 The Trust and the Acquired Fund will assist the Acquiring Fund in
obtaining such information as the Acquiring Fund reasonably requests concerning
the beneficial ownership of the Acquired Fund's Shares.
5.5 Subject to the provisions of this Agreement, the Company, the
Acquiring Fund, the Trust and the Acquired Fund each will take, or cause to be
taken, all action, and do or cause to be done, all things reasonably necessary,
proper or advisable to consummate and make effective the transactions
contemplated by this Agreement.
5.6 As promptly as practicable, but in any case within sixty days after
the Closing Date, the Acquired Fund shall furnish the Acquiring Fund, in such
form as is reasonably satisfactory to the Acquiring Fund, a statement of the
earnings and profits of the Acquired Fund for federal income tax purposes which
will be carried over to the Acquiring Fund as a result of Section 381 of the
Code, and which will be certified by the Trust's President or Vice President and
its Treasurer.
5.7 The Acquired Fund will provide the Acquiring Fund with information
reasonably necessary for the preparation of a prospectus (the "Prospectus")
which will include the Proxy Statement referred to in paragraph 4.l(n), all to
be included in a registration statement on Form N-14 of the Acquiring Fund (the
"Registration Statement"), in compliance with the 1933 Act, the Securities
Exchange Act of 1934 (the "1934 Act") and the 1940 Act in connection with the
meeting of the Acquired Fund's shareholders to consider approval of this
Agreement and the transactions contemplated herein.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRUST AND THE ACQUIRED FUND
The obligations of the Trust and the Acquired Fund to consummate the
transactions provided for herein shall be subject, at its election, to the
performance by the Company and the Acquiring Fund of all of the obligations to
be performed by them hereunder on or before the Closing Date and, in addition
thereto, the following further conditions:
6.1 All representations and warranties of the Company and the Acquiring
Fund contained in this Agreement shall be true and correct in all material
respects as of the date hereof and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Closing Date with the
same force and effect as if made on and as of the Closing Date;
6.2 The Company shall have delivered to the Acquired Fund a certificate
executed in its name by its President or Vice President and its Treasurer or
Assistant Treasurer, in a form reasonably satisfactory to the Acquired Fund and
dated as of the Closing Date, to the effect that the representations and
warranties of the Company and the Acquiring Fund made in this Agreement are true
and correct at and as of the Closing Date, except as they may be affected by the
transactions contemplated by this Agreement and as to such other matters as the
Acquired Fund shall reasonably request; and
6.3 The Trust shall have received on the Closing Date a favorable opinion
from Dechert Price & Rhoads, counsel to the Company and the Acquiring Fund,
dated as of the Closing Date, covering the following points:
That (a) the Acquiring Fund is a series of the Company which is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Maryland and has the corporate power to own all
of its properties and assets and to carry on its business as presently
conducted; (b) the Agreement has been duly authorized, executed and
delivered by the Company on behalf of the Acquiring Fund and, assuming
that the Prospectus, Registration Statement and Proxy Statement comply
with the 1933 Act, the 1934 Act and the 1940 Act and the rules and
regulations thereunder and, assuming due authorization, execution and
delivery of the Agreement by the Company on behalf of the Acquiring Fund,
is a valid and binding obligation of the Company enforceable against the
Company and the Acquiring Fund in accordance with its terms, subject as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights generally and to
general equity principles; (c) the Acquiring Fund Shares to be issued to
the Acquired Fund's shareholders as provided by this Agreement are duly
authorized and upon such delivery will be validly issued and outstanding
and are fully paid and non-assessable, and no shareholder of the Acquiring
Fund has any preemptive rights to subscription or purchase in respect
thereof; (d) the execution and delivery of this Agreement did not, and the
consummation of the transactions contemplated hereby will not, result in a
material violation of the Company's Articles of Incorporation or By-Laws
or any provision of any agreement (known to such counsel) to which the
Company or the Acquiring Fund is a party or by which it is bound or, to
the knowledge of such counsel, result in the acceleration of any
obligation or the imposition of any penalty, under any agreement, judgment
or decree to which the Acquiring Fund is a party or by which it is bound;
(e) to the knowledge of such counsel, no consent, approval, authorization
or order of any court or governmental authority of the United States, the
State of Maryland or Commonwealth of Massachusetts is required for the
consummation by the Company and the Acquiring Fund of the transactions
contemplated herein, except such as have been obtained under the 1933 Act,
the 1934 Act and the 1940 Act, and such as may be required under state
securities law; (f) only insofar as they relate to the Acquiring Fund, the
descriptions in the Proxy Statement of statutes, legal and governmental
proceedings and contracts and other documents, if any, are accurate and
fairly present the information required to be shown; (g) such counsel does
not know of any legal or governmental proceedings, only insofar as they
relate to the Acquiring Fund, existing on or before the effective date of
the Registration Statement or the Closing Date required to be described in
the Registration Statement or to be filed as exhibits to the Registration
Statement which are not described or filed as required; (h) the Company is
registered as an investment company under the 1940 Act and its
registration with the Commission as an investment company under the 1940
Act is in full force and effect; and (i) to the best knowledge of such
counsel, no litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or threatened
as to the Company or the Acquiring Fund or any of their properties or
assets and neither the Company nor the Acquiring Fund is a party to or
subject to the provisions of any order, decree or judgment of any court or
governmental body, which materially and adversely affects its business,
other than as previously disclosed in the Registration Statement. In
addition, such counsel also shall state that they have participated in
conferences with officers and other representatives of the Company and the
Acquiring Fund at which the contents of the Proxy Statement and related
matters were discussed and, although they are not passing upon and do not
assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Proxy Statement (except to the extent
indicated in paragraph (f) of their above opinion), on the basis of the
foregoing (relying as to materiality to a large extent upon the opinions
of officers and other representatives of the Company and the Acquiring
Fund), no facts have come to their attention that lead them to believe
that the Proxy Statement as of its date, as of the date of the Acquired
Fund shareholders' meeting and as of the Closing Date, contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein regarding the Acquiring Fund or necessary to make the
statements therein regarding the Acquiring Fund, in light of the
circumstances under which they were made, not misleading. Such opinion may
state that such counsel does not express any opinion or belief as to the
financial statements or other financial data or as to the information
relating to the Trust and the Acquired Fund, contained in the Proxy
Statement or Registration Statement, and that such opinion is solely for
the benefit of the Trust, the Acquired Fund, its Trustees and its
officers. (Such counsel may rely as to matters governed by the laws of the
State of Maryland on an opinion of Maryland counsel.) Such opinion also
shall include such other matters incident to the transaction contemplated
hereby as the Acquired Fund may reasonably request. Finally, such opinion
need not opine with respect to the applicability of Section 17(a) under
the 1940 Act and Rule 17a-8 thereunder.
In this paragraph 6.3, references to the Proxy Statement include and
relate only to the text of such Proxy Statement and not to any exhibits or
attachments thereto or to any documents incorporated by reference therein.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND THE ACQUIRING
FUND
The obligations of the Company and the Acquiring Fund to complete the
transactions provided for herein shall be subject, at their election, to the
performance by the Trust and the Acquired Fund of all the obligations to be
performed by them hereunder on or before the Closing Date and, in addition
thereto, the following conditions:
7.1 All representations and warranties of the Trust and the Acquired Fund
contained in this Agreement shall be true and correct in all material respects
as of the date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Closing Date with the same force and
effect as if made on and as of the Closing Date;
7.2 The Acquired Fund shall have delivered to the Acquiring Fund a
statement of the Acquired Fund's assets and liabilities, together with a list of
the Acquired Fund's portfolio securities showing the tax costs of such
securities by lot and the holding periods of such securities, as of the Closing
Date, certified by the Treasurer or Assistant Treasurer of the Trust;
7.3 The Trust shall have delivered to the Acquiring Fund on the Closing
Date a certificate executed in its name and on behalf of the Acquired Fund by
its President or Executive Vice President and its Treasurer or Assistant
Treasurer, in form and substance satisfactory to the Company and the Acquiring
Fund and dated as of the Closing Date, to the effect that the representations
and warranties of the Trust and the Acquired Fund made in this Agreement are
true and correct at and as of the Closing Date, except as they may be affected
by the transactions contemplated by this Agreement, and as to such other matters
as the Acquiring Fund shall reasonably request; and
7.4 The Company shall have received on the Closing Date a favorable
opinion of Dechert Price & Rhoads, counsel to the Acquired Fund, covering the
following points:
That (a) the Acquired Fund is a series of the Trust which is a
Massachusetts business trust, validly existing and in good standing under
the laws of the Commonwealth of Massachusetts and has the statutory power
to own all of its properties and assets and to carry on its business as
presently conducted; (b) the Agreement has been duly authorized, executed
and delivered by the Trust on behalf of the Acquired Fund and, assuming
that the Prospectus, the Registration Statement and the Proxy Statement
comply with the 1933 Act, the 1934 Act and the 1940 Act and the rules and
regulations thereunder and, assuming due authorization, execution and
delivery of the Agreement by the Trust, is a valid and binding obligation
of the Trust and the Acquired Fund enforceable against the Trust and the
Acquired Fund in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, reorganization, moratorium and other laws relating
to or affecting creditors' rights generally and to general equity
principles; (c) the execution and delivery of the Agreement did not, and
the consummation of the transactions contemplated hereby will not, result
in a material violation of the Trust's Declaration of Trust or Code of
Regulations or any provision of any agreement (known to such counsel) to
which the Trust or the Acquired Fund is a party or by which it is bound
or, to the knowledge of such counsel, result in the acceleration of any
obligation or the imposition of any penalty, under any agreement, judgment
or decree to which the Trust or the Acquired Fund is a party or by which
it is bound; (d) to the knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental authority of the
United States or the Commonwealth of Massachusetts or State of Maryland is
required for the consummation by the Trust and the Acquired Fund of the
transactions contemplated herein, except such as have been obtained under
the 1933 Act, the 1934 Act and the 1940 Act, and such as may be required
under state securities laws; (e) only insofar as they relate to the Trust
and the Acquired Fund, the descriptions in the Proxy Statement of
statutes, legal and governmental proceedings and contracts and other
documents, if any, are accurate and fairly present the information
required to be shown; (f) such counsel does not know of any legal or
governmental proceedings, only insofar as they relate to the Trust and the
Acquired Fund existing on or before the effective date of the Registration
Statement or the Closing Date, required to be described in the Proxy
Statement or to be filed as exhibits to the Registration Statement which
are not described and filed as required; (g) the Trust is registered as an
investment company under the 1940 Act and its registration with the
Commission as an investment company under the 1940 Act is in full force
and effect; and (h) to the best knowledge of such counsel, no litigation
or administrative proceeding or investigation of or before any court or
governmental body is presently pending or threatened as to the Trust or
the Acquired Fund or any of its respective properties or assets and
neither the Trust nor the Acquired Fund is a party to or subject to the
provisions of any order, decree or judgment of any court or governmental
body, which materially and adversely affects its business other than as
previously disclosed in the Proxy Statement. Such counsel also shall state
that they have participated in conferences with officers and other
representatives of the Trust and the Acquired Fund at which the contents
of the Proxy Statement and related matters were discussed and, although
they are not passing upon and do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Proxy Statement (except to the extent indicated in paragraph (e) of their
above opinion), on the basis of the foregoing (relying as to materiality
to a large extent upon the opinions of officers and other representatives
of the Trust and the Acquired Fund), no facts have come to their attention
that lead them to believe that the Proxy Statement as of its date, as of
the date of the Acquired Fund's shareholder meeting, and as of the Closing
Date, contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein regarding the Trust or the
Acquired Fund or necessary in the light of the circumstances under which
they were made, to make the statements therein regarding the Trust or the
Acquired Fund not misleading. Such counsel may rely as to matters governed
by the Commonwealth of Massachusetts, on an opinion of Massachusetts
counsel. Such opinion may state that such counsel does not express any
opinion or belief as to the financial statements or other financial data,
or as to the information relating to the Acquiring Fund, contained in the
Proxy Statement or Registration Statement, and that such opinion is solely
for the benefit of the Company, its Directors and its officers. Such
opinion also shall include such other matters incident to the transaction
contemplated hereby as the Company or the Acquiring Fund may reasonably
request. Finally, the opinion need not opine upon any issues arising from
the applicability of Section 17(a) under the 1940 Act and Rule 17a-8
thereunder.
In this paragraph 7.4, references to the Proxy Statement include and
relate to only the text of such Proxy Statement and not to any exhibits or
attachments thereto or to any documents incorporated by reference therein.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY, THE
ACQUIRING FUND, THE TRUST AND THE ACQUIRED FUND
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to the Acquired Fund or the Acquiring Fund, the other
party to this Agreement shall, at its option, not be required to consummate the
transactions contemplated by this Agreement:
8.1 The Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the holders of the outstanding Shares of the
Acquired Fund in accordance with the provisions of the Trust's Declaration of
Trust and Code of Regulations and certified copies of the votes evidencing such
approval shall have been delivered to the Company and the Acquiring Fund.
Notwithstanding anything herein to the contrary, neither the Acquiring Fund nor
the Acquired Fund may waive the conditions set forth in this paragraph 8.1;
8.2 On the Closing Date, no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein;
8.3 All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities (including those of
the Commission and of state Blue Sky and securities authorities, including
"no-action" positions of and exemptive orders from such federal and state
authorities) deemed necessary by the Acquiring Fund or the Acquired Fund to
permit consummation, in all material respects, of the transactions contemplated
hereby shall have been obtained, except where failure to obtain any such
consent, order or permit would not involve a risk of a material adverse effect
on the assets or properties of the Acquiring Fund or the Acquired Fund, provided
that either party hereto may for itself waive any of such conditions.
8.4 The Registration Statement shall have become effective under the 1933
Act and no stop orders suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending, threatened
or contemplated under the 1933 Act;
8.5 The Acquired Fund and the Acquiring Fund shall have declared a
dividend or dividends which, together with all previous such dividends, shall
have the effect of distributing to the Acquired Fund and the Acquiring Fund's
shareholders all of each of the fund's investment company taxable income for all
taxable years ending on or prior to the Closing Date (computed without regard to
any deduction for dividends paid) and all of its net capital gain realized in
all taxable years ending on or prior to the Closing Date (after reduction for
any capital loss carryforward);
8.6 The parties shall have received an opinion of Dechert Price & Rhoads,
addressed to the Company and the Trust, substantially to the effect that the
transaction contemplated by this Agreement constitutes a tax-free reorganization
for federal income tax purposes. The delivery of such opinion is conditioned
upon receipt by Dechert Price & Rhoads of representations it shall request of
the Company and the Trust. Notwithstanding anything herein to the contrary,
neither the Acquiring Fund nor the Acquired Fund may waive the conditions set
forth in this paragraph 8.6.
9. BROKERAGE FEES AND EXPENSES
9.1 The Acquiring Fund and the Acquired Fund each represents and warrants
to the other that there are no brokers or finders entitled to receive any
payments in connection with the transactions provided for herein.
9.2 (a)...Except as may be otherwise provided herein, the Acquired Fund
and the Acquiring Fund shall each be liable for its expenses incurred in
connection with entering into and carrying out the provisions of this Agreement,
whether or not the transactions contemplated hereby are consummated. The
expenses payable by the Acquired Fund hereunder shall include the expenses of:
(i) its counsel and independent accountants associated with Reorganization; (ii)
printing and mailing the Prospectus/Proxy Statement and soliciting proxies in
connection with the meeting of shareholders of the Acquired Fund referred to in
paragraph 5.2 hereof; (iii) all fees and expenses related to the liquidation of
the Acquired Fund; (iv) fees and expenses of the Acquired Fund's custodian and
transfer agent incurred in connection with the Reorganization; and (v) any
special pricing fees associated with the valuation of the Acquired Fund's
portfolio on the Closing Date. The expenses payable by the Acquiring Fund
hereunder shall include: (i) fees and expenses of its counsel and independent
accountants associated with the Reorganization; (ii) expenses associated with
preparing this Agreement and preparing and filing the Registration Statement
under the 1933 Act covering the Acquiring Fund Shares to be issued in the
Reorganization; (iii) registration or qualification fees and expenses of
preparing and filing such forms, if any, necessary under applicable state
securities laws to qualify the Acquiring Fund Shares to be issued in connection
with the Reorganization; (iv) any fees and expenses of the Acquiring Fund's
custodian and transfer agent incurred in connection with the Reorganization; and
(v) any special pricing fees associated with the valuation of the Acquiring
Fund's portfolio on the Closing Date.
(b) Consistent with the provisions of paragraph 1.3, the Acquired Fund,
prior to the Closing, shall pay for or include in the unaudited statement of
assets and liabilities prepared pursuant to paragraph 1.3 all of its known and
reasonably estimated expenses associated with the transactions contemplated by
this Agreement.
10. ENTIRE AGREEMENT, SURVIVAL OF WARRANTIES
10.1 The Company, the Acquiring Fund, the Trust and the Acquired Fund
agree that no party has made any representation, warranty or covenant not set
forth herein and that this Agreement constitutes the entire agreement between
the parties.
10.2 The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated hereunder.
11. TERMINATION
11.1 This Agreement may be terminated at any time at or prior to the
Closing Date: (1) by mutual agreement of the Acquired Fund and the Acquiring
Fund; (2) by the Acquired Fund in the event the Acquiring Fund or the Company
shall, or by the Acquiring Fund in the event the Acquired Fund or the Trust
shall, materially breach any representation, warranty or agreement contained
herein to be performed at or prior to the Closing Date; or (3) if a condition
herein expressed to be precedent to the obligations of the terminating party has
not been met and it reasonably appears that it will not or cannot be met.
11.2 In the event of any such termination, there shall be no liability for
damages on the part of either the Trust or the Company, or their respective
Trustees or Directors, or officers, to the other party, but each shall bear the
expenses incurred by it incidental to the preparation and carrying out of this
Agreement as provided in paragraph 9.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the authorized officers of the Company
and the Trust; provided, however, that following the meeting of the Acquired
Fund's shareholders called by the Trust pursuant to paragraph 5.2 of this
Agreement, no such amendment may have the effect of changing the provisions for
determining the number of the Acquiring Fund Shares to be issued to the Acquired
Fund's shareholders under this Agreement to the detriment of such shareholders
without their further approval.
13. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy or certified mail addressed to the Acquiring Fund, 480
Pierce Street, Birmingham, Michigan 48009, Attention: Lisa A. Rosen; or to the
Acquired Fund, 480 Pierce Street, Birmingham, Michigan 48009, Attention: Lisa A.
Rosen.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW, ASSIGNMENT, LIMITATION OF
LIABILITY
14.1 The article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in accordance with
the laws of the State of Maryland.
14.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other parties. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
14.5 The name of the Munder Funds Trust and the Trustees of the Munder
Funds Trust refer respectively to the Trust created and the Trustees, as
trustees but not individually or personally, acting from time to time under a
Declaration of Trust dated August 30, 1989, as amended, which is hereby referred
to and a copy of which is on file at the office of the State Secretary of The
Commonwealth of Massachusetts and at the principal office of the Trust. The
obligations of the Trust entered into in the name or on behalf thereof by any of
the Trustees, officers, representatives or agents are made not individually, but
in such capacities, and are not binding upon any of the Trustees, shareholders,
officers, representatives or agents of the Trust personally, but bind only the
Trust Property (as defined in the Trust's Declaration of Trust), and all persons
dealing with any class of shares of the Trust must look solely to the Trust
Property belonging to such class for the enforcement of any claims against the
Trust.
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by its Chairman of the Board, President or Vice President and its
seal to be affixed hereto and attested by its Secretary.
...... THE MUNDER FUNDS, INC.
on behalf of Munder
Multi-Season Growth Fund
Attest:
By:___________________________
Name:
- ------------------------------
Lisa A. Rosen Title:
Secretary
MUNDER FUNDS TRUST
on behalf of Munder
Accelerating Growth Fund
Attest:
By:___________________________
Name:
- ------------------------------
Lisa A. Rosen Title:
Secretary
<PAGE>
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, made this 2nd day of July, 1998, between The Munder Funds Trust
(the "Trust") on behalf of each Fund (collectively, the "Funds") set forth on
Schedule A attached hereto, and Munder Capital Management (the "Advisor"), a
Delaware partnership.
WHEREAS, the Trust is a Massachusetts business trust 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 each
Fund is a series of the Trust;
WHEREAS, the Advisor is registered as an investment advisor under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Trust wishes to retain the Advisor to render investment
advisory services to the Funds, and the Advisor is willing to furnish such
services to the Funds;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the Trust and the Advisor as follows:
1. Appointment
(a) The Trust hereby appoints the Advisor to act as investment advisor to
the Funds for the periods and on the terms set forth herein. The Advisor accepts
the appointment and agrees to furnish the services set forth herein for the
compensation provided herein.
(b) In the event that the Trust establishes one or more portfolios other
than the Funds listed on Schedule A attached hereto, with respect to which it
desires to retain the Investment Advisor to act as investment advisor hereunder,
it shall notify the Investment Advisor in writing. If the Investment Advisor is
willing to render such services under this Agreement it shall notify the Trust
in writing whereupon such portfolio shall become a Fund hereunder and shall be
subject to the provisions of this Agreement to the same extent as the Fund named
above except to the extent that said provisions (including those relating to the
compensation payable by the Fund to the Investment Advisor) are modified with
respect to such Fund in writing by the Trust and the Investment Advisor at the
that time.
2. Services as Investment Advisor
Subject to the general supervision and direction of the Board of Trustees
of the Trust, the Advisor will (a) provide overall management to the Funds in
accordance with each 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 Funds; (c) oversee the placement of
purchase and sale orders on behalf of the Funds; (d) employ professional
portfolio managers and securities analysts to provide research services to the
Funds; (e) maintain books and records with respect to each Fund's securities
transactions; and (f) provide periodic and special reports to the Board of
Trustees of the Trust, as requested. In providing those services, the Advisor
will provide the Funds with ongoing research, analysis, advice and judgments
regarding individual investments, general economic conditions and trends and
long-range investment policy. In addition, the Advisor will furnish the Funds
with whatever statistical information the Funds may reasonably request with
respect to the securities that the Funds may hold or contemplate purchasing.
The Advisor further agrees that, in performing its duties hereunder, it
will:
(a) comply with the 1940 Act and all rules and regulations thereunder and
under the Advisers Act, the Internal Revenue Code of 1986, as amended (the
"Code"), and all other applicable federal and state law and regulations, and
with any applicable procedures adopted by the Trustees;
(b) use reasonable efforts to manage each 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 each Fund's securities
transactions, render to the Board of Trustees of the Trust such periodic and
special reports as the Board may reasonably request, and keep the Trustees
informed of developments materially affecting each Fund's portfolio;
(d) make available to the Funds' administrator and the Trust, promptly
upon their request, such copies of its investment records and ledgers with
respect to the Funds as may be required to assist the administrator and the
Trust in their compliance with applicable laws and regulations. The Advisor will
furnish the Trustees with such periodic and special reports regarding the Funds
as they may reasonably request; and
(e) immediately notify the Trust in the event that the Advisor or any of
its affiliates: (1) becomes aware that it is subject to a statutory
disqualification that prevents the Advisor from serving as investment advisor
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 Advisor further agrees to notify
the Trust immediately of any material fact known to the Advisor respecting or
relating to the Advisor that is not contained in the Trust's Registration
Statement regarding the Funds, 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 Trust has delivered properly certified or authenticated copies of each
of the following documents to the Advisor and will deliver to it all future
amendments and supplements thereto, if any:
(a) certified resolution of the Board of Trustees of the Trust authorizing
the appointment of the Advisor and approving the form of this Agreement;
(b) the Registration Statement describing the Fund as filed with the
Securities and Exchange Commission and any amendments thereto; and
(c) exhibits, powers of attorneys, certificates and any and all other
documents relating to or filed in connection with the Registration Statement
described above.
<PAGE>
4. Brokerage
In selecting brokers or dealers to execute transactions on behalf of the
Funds, the Advisor will use its best efforts to seek the best overall terms
available. In assessing the best overall terms available for any Fund
transaction, the Advisor 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-dealers to execute a
particular transaction, and in evaluating the best overall terms available, the
Advisor 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 Funds and/or other accounts over which
the Advisor or its affiliates exercise investment discretion. The parties hereto
acknowledge that it is desirable for the Trust that the Advisor have access to
supplemental investment and market research and security and economic analysis
provided by brokers-dealers who may execute brokerage transactions at a higher
cost to the Trust than may result when allocating brokerage to other brokers on
the basis of seeking the most favorable price and efficient execution.
Therefore, the Advisor may cause the Fund to pay a broker-dealer which furnishes
brokerage and research services a higher commission than that which might be
charged by another broker-dealer for effecting the same transaction, provided
that the Advisor determines in good faith that such commission is reasonable in
relation the value of the brokerage and research services provided by such
broker-dealer, viewed in terms of either the particular transaction or the
overall responsibilities of the Advisor to the Fund. It is understood that the
services provided by such brokers may be useful to the Advisor in connection
with the Advisor's services to other clients. 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 Advisor and its affiliates are authorized
to effect portfolio transactions for the Funds and to retain brokerage
commissions on such transactions.
5. Records
The Advisor 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
Advisor with respect to the Funds by the 1940 Act. The Advisor further agrees
that all records which it maintains for the Funds are the property of the Funds
and it will promptly surrender any of such records upon request.
6. Standard of Care
The Advisor shall exercise its best judgment in rendering the services
under this Agreement. The Advisor shall not be liable for any error of judgment
or mistake of law or for any loss suffered by a Fund or the Funds' 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 Advisor
against any liability to a Fund or to its shareholders to which the Advisor
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
Advisor's reckless disregard of its obligations and duties under this Agreement.
As used in this Section 6, the term "Advisor" shall include any officers,
Trustees, employees, or other affiliates of the Advisor performing services with
respect to a Fund.
<PAGE>
7. Compensation
In consideration of the services rendered pursuant to this Agreement, each
Fund will pay the Advisor a fee as set forth on Schedule B attached hereto. This
fee shall be computed and accrued daily and payable monthly; however, with
respect to any Fund for which the effective date of this Agreement is prior to
November 30, 1998, the fee shall be maintained in an interest-bearing escrow
account until such time as shareholders of the Fund approve the payment of fees
pursuant to this agreement. If shareholders do not approve such payment of fees
on or before November 30, 1998, the balance in the escrow account shall be paid
to the Fund. For the purpose of determining fees payable to the Advisor, the
value of a 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 Advisor will bear all expenses in connection with the performance of
its services under this Agreement and will bear the costs and expenses payable
to Sub-Advisors under the Sub-Advisory Agreements. Each Fund will bear certain
other expenses to be incurred in its operation, including: taxes, interest,
brokerage fees and commissions, if any, fees of Trustees of the Trust who are
not officers, Trustees or employees of the Advisor or any Sub-Advisor;
Securities and Exchange Commission fees and state blue sky 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
Trustees of the Trust; and any extraordinary expenses.
9. Services to Other Companies or Accounts
The investment advisory services of the Advisor to the Funds under this
Agreement are not to be deemed exclusive, and the Advisor, or any affiliate
thereof, shall be free to render similar services to other investment companies
and clients (whether or not their investment objective and policies are similar
to those of a Fund) and to engage in activities so long as its services
hereunder are not impaired thereby.
10. Duration and Termination
This Agreement shall become effective on the date of this Agreement
provided that with respect to any Fund, this Agreement shall not take effect
unless it has been approved (a) by a vote of a majority of the Board of Trustees
of the Trust, including a majority of those Trustees who are not "interested
persons" (as defined in the 1940 Act) of any party to this Agreement cast in
person at a meeting called for the purpose of voting on such approval and (b) by
vote of a majority of that Fund's outstanding voting securities and shall
continue in effect with respect to the Fund, 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 approved at least
annually by (i) the vote of a majority of the Board of Trustees of the Trust 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 Trustees 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 with respect to the Funds, or any Fund, without
penalty, on sixty (60) days' written notice by the Board of Trustees of the
Trust or by vote of the holders of a "majority" (as defined in the 1940 Act) of
the shares of the affected Funds or upon ninety (90) days' written notice by the
Advisor. Termination of this Agreement with respect to any given Fund, shall in
no way affect the continued validity of this Agreement or the performance
thereunder with respect to any other Fund. This Agreement will be terminated
automatically in the event of its "assignment" (as defined in the 1940 Act).
11. Amendment
No provision of this Agreement may be changed, waived or 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 with respect to any Fund shall be
effective until approved by an affirmative vote of (i) a majority of the
outstanding voting securities of that Fund, and (ii) a majority of the Trustees
of the Trust, including a majority of Trustees who are not "interested persons"
(as defined in the 1940 Act) 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.
12. 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 Advisor and its affiliates, and that the Trust and each Fund have the right
to use such name (or derivable or logo) only so long as this Agreement shall
continue with respect to a given Fund. Upon termination of this Agreement, or
upon termination of this Agreement with respect to a given Fund, the Trust and
any affected Fund shall forthwith cease to use such name (or derivable or logo)
and the Trust shall promptly amend its Articles of Incorporation to change the
Fund name to comply herewith.
The words "The Munder Funds Trust" and "Trustees" or "Board of Trustees"
used herein refer respectively to the Trust created and the Trustees, as
trustees of the Trust but not individually or personally acting from time to
time under a Declaration of Trust dated August 30, 1989 which is hereby referred
to and a copy of which is on file at the office of the Secretary of The
Commonwealth of Massachusetts and at the principal office of the Trust. The
obligations of "The Munder Framlington Funds Trust" entered into the name or on
behalf thereof by any of the Trustees, officers, representatives or agents of
the Trust are made not individually, but in such capacities, and are not binding
upon any of the Trustees, shareholders, officers, representatives or agents of
the Trust personally, but bind only the Trust Property, and all persons dealing
with any class of shares of the Trust must look solely to the Trust Property
belonging to such class for the enforcement of any claims against the Trust.
13. 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 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 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 Advisor by the Trust shall be
in writing and shall be duly given if mailed or delivered to the Advisor at 480
Pierce Street, Birmingham, Michigan 48009, or at such other address or to such
individual as shall be specified by the Advisor to the Trust. Notices of any
kind to be given to the Trust by the Advisor shall be in writing and shall be
duly given if mailed or delivered to 480 Pierce Street, Birmingham, Michigan
48009, or at such the address to such individual as shall be specified by the
Trust to the Advisor.
<PAGE>
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.
THE MUNDER FUNDS TRUST
By:
MUNDER CAPITAL MANAGEMENT
By:
<PAGE>
SCHEDULE A
Munder Accelerating Growth Fund Munder Balanced Fund Munder Bond Fund Munder
Cash Investment Fund Munder Growth & Income Fund Munder Index 500 Fund Munder
Intermediate Bond Fund Munder International Equity Fund
Munder Michigan Triple Tax-Free Bond Fund
Munder Small Company Growth Fund
Munder Tax-Free Bond Fund
Munder Tax-Free Intermediate Bond Fund
Munder Tax-Free Money Market Fund
Munder U.S. Government Income Fund
Munder U.S. Treasury Money Market Fund
<PAGE>
SCHEDULE B
Fund Annual Fees (as a Percentage of
Average Daily Net Assets)
Munder Accelerating Growth Fund 0.75%
Munder Balanced Fund 0.65%
Munder Bond Fund 0.50%
Munder Cash Investment Fund 0.35%
Munder Growth & Income Fund 0.75%
Munder Index 500 Fund 0.20% of the first $250 million;
0.12% of the next $250 million;
0.07% of net assets in excess of
$500 million
Munder International Equity Fund 0.75%
Munder Intermediate Bond Fund 0.50%
Munder Michigan Triple Tax-Free Bond 0.50%
Fund
Munder Small Company Growth Fund 0.75%
Munder Tax-Free Bond Fund 0.50%
Munder Tax-Free Intermediate Bond Fund 0.50%
Munder Tax-Free Money Market Fund 0.35%
Munder U.S. Government Income Fund 0.50%
Munder U.S. Treasury Money Market Fund 0.35%
<PAGE>
RELIMINARY PROXY MATERIALS -- FOR SEC USE ONLY
PROXY
MUNDER ACCELERATING GROWTH FUND
SPECIAL MEETING OF SHAREHOLDERS
November 20, 1998
The undersigned hereby appoints his attorneys and proxies with full power
of substitution to vote and act with respect to all shares of the Munder
Accelerating Growth Fund ("the Fund') held by the undersigned, at the Special
Meeting of Shareholders of the Fund at 10:00 a.m., Eastern Time, on Friday,
November 20, 1998, at the offices of the Fund, 480 Pierce Street, Birmingham,
Michigan 48009, and at any adjournment thereof (the "Meeting"), and instructs
them to vote as indicated on the matters referred to in the Proxy Statement for
the Meeting, receipt of which is hereby acknowledged, with discretionary power
to vote upon such other business as may properly come before the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE TRUST. The Board
of Trustees recommends that you vote FOR the following proposals:
I. To approve an agreement and Plan of Reorganization.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
II. To approve a new Investment Management Agreement for the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy will be voted as specified. IF NO SPECIFICATION IS MADE, THIS
PROXY WILL BE VOTED FOR ALL OF THE NOMINEES AND FOR ALL OF THE PROPOSALS
Receipt of the Notice of Special Meeting and Proxy Statement is hereby
acknowledged.
Dated , 1998
Name of Shareholder(s) -- Please print or
type
Signature(s) of Shareholder(s)
Signature(s) of Shareholder(s)
This proxy must be signed by the beneficial owner of Fund shares. If signing as
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please, add title as such.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN
THE ENCLOSED POSTAGE-PAID ENVELOPE
