<PAGE>
As filed with the Securities and Exchange Commission
on June 11, 1999
Registration Nos. 33-54748
811-7346
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. ___ [_]
Post-Effective Amendment No. 37 [X]
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 38 [X]
(Check appropriate box or boxes)
The Munder Funds, Inc.
(Exact Name of Registrant as Specified in Charter)
480 Pierce Street, Birmingham, Michigan 48009
(Address of Principal Executive Offices) (Zip code)
Registrant's Telephone Number: (248) 647-9200
Cynthia Surprise
Vice President and Associate Counsel
State Street Bank and Trust Company
1776 Heritage Drive, AFB
North Quincy, MA 02171
(Name and Address of Agent for Service)
Copies to:
Terry Gardner Jane Kanter, Esq.
Munder Capital Management Dechert Price & Rhoads
480 Pierce Street 1775 Eye Street, NW
Birmingham, Michigan 48009 Washington, DC 20006
[X] It is proposed that this filing will become effective 75 days after filing
(August 25, 1999) pursuant to paragraph (a)(2) of Rule 485
<PAGE>
THE MUNDER FUNDS, INC.
CROSS-REFERENCE SHEET
Pursuant to Rule 495(a)
Prospectus for The Munder Technology Fund
(Class A, B and C Shares)
<TABLE>
<CAPTION>
Part A
- ------
Item Heading
---- -------
<S> <C>
1. Cover Page Front and Back Cover Pages
2. Synopsis Risk/Return Summary
3. Condensed Financial Information Not Applicable
4. General Description of Registrant Front and Back Cover Pages; Risk/Return
Summary; More About The Fund; Management
5. Management of the Fund Management; Distributions; Federal Tax
Considerations
6. Capital Stock and Other Securities Management; Your Investment; Pricing of
Fund Shares; Distributions; Federal Tax
Considerations
7. Purchase of Securities Being Offered Your Investment; Pricing of Fund Shares
8. Redemption or Repurchase Your Investment
9. Pending Legal Proceedings Not Applicable
</TABLE>
<PAGE>
THE MUNDER FUNDS, INC.
CROSS-REFERENCE SHEET
Pursuant to Rule 495(a)
Prospectus for The Munder Technology Fund
(Class Y Shares)
<TABLE>
<CAPTION>
Part A
- ------
Item Heading
---- -------
<S> <C>
1. Cover Page Front and Back Cover Pages
2. Synopsis Risk/Return Summary
3. Condensed Financial Information Not Applicable
4. General Description of Registrant Front and Back Cover Pages; Risk/Return
Summary; More About The Fund; Management
5. Management of the Fund Management; Distributions; Federal Tax
Considerations
6. Capital Stock and Other Securities Management; Your Investment; Pricing of
Fund Shares; Distributions; Federal Tax
Considerations
7. Purchase of Securities Being Offered Your Investment; Pricing of Fund Shares
8. Redemption or Repurchase Your Investment
9. Pending Legal Proceedings Not Applicable
</TABLE>
<PAGE>
THE MUNDER FUNDS, INC.
CROSS-REFERENCE SHEET
Pursuant to Rule 495(a)
Statement of Additional Information
The Munder Technology Fund
<TABLE>
<CAPTION>
Part B
- ------
Item Heading
---- -------
<S> <C>
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History See Prospectus -- "Management"; General;
Directors and Officers
13. Investment Objectives and Policies Fund Investments; Investment Limitations;
Portfolio Transactions
14. Management of the Fund Directors and Officers; Miscellaneous
15. Control Persons and Principal Holder Miscellaneous; Control Persons and Principal
of Securities Holders of Securities
16. Investment Advisory Services and Investment Advisory and Other Service
Other Services Arrangements; See Prospectus -- "Management"
17. Brokerage Allocation and Other Practices Portfolio Transactions
18. Capital Stock and Other Securities Additional Information Concerning Shares
19. Purchase, Redemption and Pricing of Additional Purchase and Redemption
Securities Being Offered Information; Net Asset Value; Additional
Information Concerning Shares
20. Tax Status Taxes
21. Underwriters Investment Advisory and Other Service
Arrangements
22. Calculation of Performance Data Performance Information
23. Financial Statements Not Applicable
</TABLE>
<PAGE>
THE MUNDER FUNDS, INC.
The purpose of this Post-Effective Amendment filing is to add one new
portfolio to the Company's Registration Statement, namely the Munder Technology
Fund.
The Prospectuses and Statements of Additional Information for the Munder
All-Season Aggressive Fund, Munder All-Season Conservative Fund, Munder All-
Season Moderate Fund, Munder Equity Selection Fund, Munder Growth Opportunities
Fund, Munder International Bond Fund, Munder Micro-Cap Equity Fund, Munder Money
Market Fund, Munder Multi-Season Growth Fund, Munder NetNet Fund, Munder Real
Estate Equity Investment Fund, Munder Short Term Treasury Fund, Munder Small-Cap
Value Fund and Munder Value Fund are not included in this filing.
<PAGE>
CLASS A, B & C SHARES
[LOGO OF MUNDER FUNDS APPEARS HERE]
The Munder Funds
Investments
for all seasons
Prospectus
August 25, 1999
THE MUNDER TECHNOLOGY FUND
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities nor passed upon the accuracy or
adequacy of this prospectus. It is a criminal offense to state otherwise.
<PAGE>
Table Of Contents
<TABLE>
<C> <S>
2 Risk/Return Summary
2 Goal
2 Principal Investment Strategies
2 Principal Risks
2 Who May Want To Invest
3 Performance
3 Fees and Expenses
4 Example
5 More About The Fund
6 Your Investment
6 How To Reach The Fund
6 Purchasing Shares
9 Exchanging Shares
9 Redeeming Shares
11 Additional Policies For Purchases, Exchanges And Redemptions
13 Pricing of Fund Shares
13 Distributions
14 Federal Tax Considerations
14 Taxes On Distributions
14 Taxes On Sales
14 Other Considerations
15 Management
15 Investment Advisor
15 Portfolio Managers
15 Rule 12b-1 Plans
15 Year 2000
</TABLE>
Back Cover For Additional Information
<PAGE>
Risk/Return Summary
- --------------------------------------------------------------------------------
This Risk/Return Summary briefly describes the principal investment strategies
of the Munder Technology Fund and the principal risks of investing in the Fund.
For further information on the Fund's investment strategies and risks, please
read the section entitled More About The Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
Goal
The Fund's goal is to provide long-term capital appreciation.
Principal Investment Strategies
The Fund intends to pursue its goal by investing primarily in common stocks of
technology-related companies. Technology-related companies are companies that
engage in one or more of the following activities:
. development
.manufacturing
.distribution
of technology and telecommunications related products and services. The Fund
may also invest in the stocks of companies that benefit from the
commercialization of technological advances. The products and services provided
by these companies may include: computer hardware and software,
telecommunications hardware and software, semiconductors, business services,
media and information services.
The Fund invests in established companies or in new or unseasoned companies.
The Fund may purchase foreign securities, enter into futures and options
contracts and lend portfolio securities, which are described below under "More
About The Fund."
Principal Risks
The Fund is subject to the following principal investment risks:
. The stock market may decline.
. The Fund will concentrate in the technology industry. Market or economic
factors impacting that industry sector could have a major effect on the value
of the Fund's investments. The value of stocks of technology companies is
particularly vulnerable to rapid changes in technology product cycles,
government regulation and competition. Technology stocks, especially those of
smaller, less-seasoned companies, tend to be more volatile than the overall
market.
. An adverse event, such as an unfavorable earnings report, may depress the
value of a particular stock held by the Fund.
. The share price of the Fund will change daily based on market conditions and
other factors; you may lose money if you invest in the Fund.
. The Fund cannot be certain it will achieve its investment goal.
Who May Want To Invest
The Fund may be appropriate for investors:
. Looking to invest over the long term and willing to ride out market swings in
search of potentially higher returns.
. Looking for an investment that has more return and risk potential than fixed
income investments.
. Looking to invest in a diversified stock portfolio focused on a particular
stock market segment.
The Fund alone cannot provide a balanced investment program.
2
<PAGE>
Performance
The Fund had not commenced operations as of the date of this Prospectus and,
therefore, has no performance information to report.
Fees and Expenses
The table below describes the fees and expenses that you may pay if you buy and
hold shares of the Fund.
<TABLE>
<CAPTION>
Shareholder Fees(1) Class A Class B Class C
(fees paid directly from your investment) Shares Shares Shares
- ----------------------------------------- ------- ------- -------
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases. 5.5%(2) None None
Sales Charge (Load) Imposed on Reinvested Divi-
dends........................................... None None None
Maximum Deferred Sales Charge (Load)............. None (3) 5%(4) None(5)
Redemption Fees.................................. None None None
Exchange Fees.................................... None None None
</TABLE>
- --------
Notes:
(1) Does not include fees which institutions may charge for services they
provide to you.
(2) The sales charge declines as the amount invested increases.
(3) A contingent deferred sales charge (CDSC) is a one-time fee charged at the
time of redemption. A 1% CDSC applies to redemptions of Class A shares
within one year of investment that were purchased with no initial sales
charge as part of an investment of $1,000,000 or more.
(4) The CDSC payable upon redemption of Class B shares declines over time.
(5) A 1% CDSC applies to redemptions of Class C shares within one year of
purchase.
<TABLE>
<CAPTION>
Annual Fund Operating Expenses(1)
(expenses that are paid from Fund assets) Class A Class B Class C
as a % of net assets Shares Shares Shares
- ----------------------------------------- ------- ------- -------
<S> <C> <C> <C>
Management Fees......................................... 1.00% 1.00% 1.00%
Distribution and/or Service (12b-1) Fees................ .25% 1.00% 1.00%
Other Expenses(2)....................................... .50% .50% .50%
----- ----- -----
Total Fund Operating Expenses........................... 1.75% 2.50% 2.50%
===== ===== =====
</TABLE>
- --------
(1) The advisor has voluntarily agreed to reimburse the Fund's operating
expenses to keep the Fund's other expenses at a specified level. The
advisor may eliminate all or part of the reimbursement at any time. Because
of the expense reimbursement, it is estimated that the expenses for the
Fund for the current fiscal year will be:
<TABLE>
<CAPTION>
Annual Fund Operating Expenses
(expenses that are paid from Fund assets) Class A Class B Class C
as a % of net assets Shares Shares Shares
----------------------------------------- ------- ------- -------
<S> <C> <C> <C>
Management Fees.................................. 1.00% 1.00% 1.00%
Distribution and/or Service (12b-1) Fees......... .25% 1.00% 1.00%
Other Expenses (net of reimbursement)............ .35% .35% .35%
----- ----- -----
Total Fund Operating Expenses (net of
reimbursement).................................. 1.60% 2.35% 2.35%
===== ===== =====
</TABLE>
(2) Based on estimated assets for the current fiscal year.
3
<PAGE>
Example
This example is intended to help you compare the cost of investing in the Fund
to the cost of investing in other mutual funds. The example assumes that you
invest $10,000 in the Fund for the time periods indicated. The example also
assumes that your investment has a 5% return each year and that the Fund's
operating expenses remain the same as shown in the table above. Although your
actual costs and the return on your investment may be higher or lower, based on
these assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 3 Years
------ -------
<S> <C> <C>
Class A Shares
- --------------
. Assuming you sold your
shares at the end of the
time period.................................................... $705 $1,029
. Assuming you stayed in
the Fund....................................................... $705 $1,029
Class B Shares
- --------------
. Assuming you sold your
shares at the end of the
time period.................................................... $752 $1,060
. Assuming you stayed in
the Fund....................................................... $239 $ 735
Class C Shares
- --------------
. Assuming you sold your
shares at the end of the
time period.................................................... $341 $ 735
. Assuming you stayed in
the Fund....................................................... $239 $ 735
</TABLE>
4
<PAGE>
More About The Fund
- --------------------------------------------------------------------------------
The Fund's principal strategies and risks are summarized above in the section
entitled Risk/Return Summary. Below is further information about the Fund's
investments and strategies and their associated risks. The Fund may also use
strategies and invest in securities described in the Statement of Additional
Information.
Equity Securities. The Fund invests in equity securities which include common
stocks, preferred stocks and securities convertible into common stocks.
Securities considered for purchase by the Fund may be listed or unlisted. There
is no limit on the market capitalization of the companies in which the Fund may
invest, or in the length of operating history for the companies. The Fund may
invest without limit in initial public offerings.
Foreign Securities. The Fund may invest in securities issued by foreign
companies. The Fund may also invest in American Depositary Receipts, which are
receipts typically issued by a U.S. bank or trust company evidencing ownership
of underlying foreign securities. Investments by the Fund in foreign securities
involve risks in addition to those of U.S. securities. Foreign securities are
generally more volatile and less liquid than U.S. securities, in part because
of higher political and economic risks and because there is less public
information available about foreign companies. Brokerage and other transaction
costs for foreign securities are generally higher than those for U.S.
securities. Also, a decline in the value of foreign currencies relative to the
U.S. dollar will reduce the value of securities denominated in those
currencies.
Derivatives. Derivatives are financial contracts whose value is based on a
security, a currency exchange or interest rate or a market index. The main risk
with derivatives is that some types can amplify a gain or loss, potentially
earning or losing substantially more money than the actual cost of the
derivative. With some derivatives, there is also the risk that the counterparty
may fail to honor its contract obligations, causing a loss for the Fund. The
Fund may use futures and options, but only for the purpose of remaining fully
invested or maintaining liquidity. The Fund will not use derivatives for
speculative purposes.
Securities Lending. The Fund may seek additional income by lending portfolio
securities to qualified institutions. By reinvesting any cash collateral it
receives in these transactions, the Fund could realize additional gains or
losses. If the borrower fails to return the securities and the invested
collateral has declined in value, the Fund could lose money.
Short-Term Trading. The Fund may engage in short-term trading, which could
produce higher trading costs and taxable distributions, which could detract
from the Fund's performance.
5
<PAGE>
Your Investment
- --------------------------------------------------------------------------------
This section describes how to do business with the Fund.
How To Reach The Fund
By telephone:
1-800-438-5789
Call for account information
By mail:The Munder Funds
480 Pierce Street
Birmingham, Michigan 48009
Purchasing Shares
Share Class Selection
The Fund offers Class A, Class B and Class C shares. Each class has its own
cost structure, allowing you to choose the one that best meets your
requirements given the amount of your purchase and the intended length of your
investment. You should consider both ongoing annual expenses and initial sales
charge or CDSC in estimating the costs of investing in a particular class of
shares.
Class A shares
. Front end sales charge. There are several ways to reduce these sale charges.
. Lower annual expenses than Class B and Class C shares.
Class B shares
. No front end sales charge. All your money goes to work for you right away.
. Higher annual expenses than Class A shares.
. A CDSC on shares you sell within six years of purchase.
. Automatic conversion to Class A shares approximately six years after
issuance, thus reducing future annual expenses.
. CDSC is waived for certain redemptions.
Class C shares
. No front end sales charge or CDSC, except for a CDSC for redemptions made
within the first year after investing. All your money goes to work for you
right away.
. Shares do not convert to another class.
. Higher annual expenses than Class A shares.
The Fund also issues Class Y shares, which have different sales charges,
expense levels and performance. Class Y shares are available to limited types
of investors. Call (800) 438-5789 to obtain more information concerning Class Y
shares.
Purchase Price of Shares
Class A shares of the Fund are sold at the net asset value per share (NAV) next
determined after a purchase order is received plus any applicable sales charge.
Class B and Class C shares of the Fund are sold at NAV next determined after a
purchase order is received in proper form.
Applicable Sales Charge
The initial sales charge for purchases of Class A shares is as follows:
<TABLE>
<CAPTION>
Sales Charge Dealer
as a % of Reallowance
----------------------------------------- as a % of the
Your Net Asset Offering
Investment Value Price
---------- --------- -------------
<S> <C> <C> <C>
Up to $24,999 5.50% 5.82% 5.00%
$25,000 to $49,999 5.25% 5.54% 4.75%
$50,000 to $99,999 4.50% 4.71% 4.00%
$100,000 to $249,999 3.50% 3.63% 3.25%
$250,000 to $499,999 2.50% 2.56% 2.25%
$500,000 to $999,999 1.50% 1.52% 1.25%
$1,000,000 or more None* None* (see below)**
</TABLE>
- --------
* No initial sales charge applies on investments of $1 million or more.
However, a CDSC of 1% is imposed on certain redemptions within one year of
purchase.
** The distributor will pay a 1% commission to dealers who initiate and are
responsible for purchases of $1 million or more.
Sales Charge Waivers
We will waive the initial sales charge on Class A shares for the following
types of purchasers:
1. individuals with an investment account or relationship with the advisor;
2. full-time employees and retired employees of the advisor, employees of the
Fund's service providers and immediate family members of such persons;
6
<PAGE>
3. registered broker-dealers that have entered into selling agreements with
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 below;
5. individuals who reinvest a distribution from a qualified retirement plan
for which the advisor serves as investment advisor;
6. individuals who reinvest the proceeds of redemptions from Class Y Shares of
the funds of The Munder Funds, Inc., The Munder Funds Trust or The Munder
Framlington Funds Trust (collectively, The Munder Funds), within 60 days of
redemption;
7. banks and other financial institutions that have entered into agreements
with The Munder Funds to provide shareholder services for customers
(including customers of such banks and other financial institutions, and
the immediate family members of such customers);
8. fee-based financial planners or employee benefit plan consultants acting
for the accounts of their clients;
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 the criteria
described below under "Sales Charge Waivers for Qualified Employer
Sponsored Retirement Plans."
Sales Charge Waiver for Qualified Employer Sponsored Retirement Plans
We will waive the initial sales charge on purchases of Class A shares by
employer sponsored retirement plans that are qualified under Section 401(a) or
Section 403(b) of the Internal Revenue Code (each, a Qualified Employee Benefit
Plan) and that (1) invest $1,000,000 or more in Class A shares offered by The
Munder Funds or (2) have at least 75 eligible plan participants.
In addition, we will waive the CDSC of 1% charged on certain redemptions within
one year of purchase for Qualified Employee Benefit Plan purchases that meet
the above criteria. A 1% commission will be paid by the distributor to dealers
and other entities (as permitted by applicable Federal and state law) who
initiate and are responsible for Qualified Employee Benefit Plan purchases that
meet the above criteria. This sales charge waiver does not apply to Simplified
Employee Pension Plans (SEPs), Individual Retirement Accounts (IRAs), UPI Plans
and Merrill Lynch Plans.
UPI Plans. We also will waive (i) the initial sales charge on Class A shares
purchased by UPI Plans for employees participating in an employer-sponsored or
administered retirement program operating under Section 408A of the Internal
Revenue Code and (ii) the CDSC of 1% imposed on certain redemptions within one
year of purchase for these accounts. The distributor will pay a 1% commission
to dealers and others (as permitted by applicable Federal and state law) who
initiate and are responsible for UPI Plan purchases.
Merrill Lynch Plans. We will waive the initial sales charge for all investments
by Merrill Lynch Plans if
(i) the Plan is recordkept on a daily valuation basis by Merrill Lynch Group
Employee Services (Merrill Lynch) and, on the date the plan sponsor signs
the Merrill Lynch Recordkeeping Service Agreement, the Plan has $3 million
or more in assets invested in broker/dealer funds not advised or managed by
Merrill Lynch Asset Management, L.P. (MLAM) that are made available
pursuant to a Services Agreement between Merrill Lynch and the Fund's
distributor and in funds advised or managed by MLAM (collectively, the
Applicable Investments); or
(ii) the Plan is recordkept on a daily valuation basis by an independent
recordkeeper whose services are provided through a contract or alliance
arrangement with Merrill Lynch, and on the date the plan sponsor signs the
Merrill Lynch Recordkeeping Service Agreement, the Plan has $3 million or
more in assets, excluding money market funds, invested in Applicable
Investments; or
7
<PAGE>
(iii) the Plan has 500 or more eligible employees, as determined by the Merrill
Lynch plan conversion manager, on the date the plan sponsor signs the
Merrill Lynch Recordkeeping Service Agreement.
Sales Charge Reductions
You may qualify for reduced sales charges in the following cases:
. Letter of Intent. If you intend to purchase at least $25,000 of Class A
shares of the Fund you may wish to complete the Letter of Intent Section of
your account application form. By doing so, you agree to invest a certain
amount over a 13-month period. You would pay a sales charge on any Class A
shares you purchase during the 13 months based on the total amount to be
invested under the Letter of Intent. You can apply any investments you made
in any of The Munder Funds during the preceding 90-day period toward
fulfillment of the Letter of Intent (although there will be no refund of
sales charges you paid during the 90-day period). You should inform the
transfer agent that you have a Letter of Intent each time you make an
investment.
You are not obligated to purchase the amount specified in the Letter of
Intent. If you purchase less than the amount specified, however, you must pay
the difference between the sales charge paid and the sales charge applicable
to the purchases actually made. The custodian will hold such amount in escrow.
The custodian will pay the escrowed funds to your account at the end of the 13
months unless you do not complete your intended investment.
. Quantity Discounts. You may combine purchases of Class A shares that are made
by you, your spouse, your children under age 21 and your IRA when calculating
the sales charge. You must notify your broker or the transfer agent to
qualify.
. Right of Accumulation. You may add the value of any shares of non-money
market funds of The Munder Funds you already own to the amount of your next
Class A share investment for purposes of calculating the sales charge at the
time of the current purchase. You must notify your broker or the transfer
agent to qualify.
Certain brokers may not offer these programs or may impose conditions or fees
to use these programs. You should consult with your broker prior to purchasing
the Fund's shares.
For further information on sales charge waivers and reductions, call the Fund
at (800) 438-5789.
Policies for Purchasing Shares
Minimum initial investment
The minimum initial investment for Class A, Class B and Class C shares is $250.
Subsequent investments must be at least $50. Purchases in excess of $250,000
must be for Class A or Class C shares.
Timing of orders
Purchase orders must be received by the distributor or the transfer agent
before the close of regular trading on the New York Stock Exchange (normally,
4:00 p.m. Eastern time).
Investors may pay for shares in federal funds or other funds that are
immediately available to the Fund's custodian by no later than 4:00 p.m.
(Eastern time) on the next business day following receipt of the purchase
order. You should be aware that broker-dealers (other than the Fund's
distributor) may charge investors additional fees if shares are purchased
through them.
Methods for purchasing shares
Investors may purchase shares:
. By Broker. Any broker authorized by the distributor can sell you shares of
the Fund. Please note that brokers may charge you fees for their services.
. By Mail. You may open an account by completing, signing and mailing the
attached account application form and a check or other negotiable bank draft
(payable to The Munder Funds) for $250 or more to: The Munder Funds, c/o
First Data Investor Services Group, P.O. Box 60428, King of Prussia,
Pennsylvania 19406-0428. Be sure to specify on your account application form
the class of shares being purchased. If the class is not specified, your
purchase will automatically be invested in Class A shares. For additional
investments, send a letter stating the Fund and share class you wish to
purchase, your name and your account number with a check for $50 or more to
the address listed above.
8
<PAGE>
. By Wire. To open a new account, you should call the Fund at (800) 438-5789
to obtain an account number and complete wire instructions prior to wiring
any funds. Within seven days of purchase, you must send a completed account
application form containing your certified taxpayer identification number to
the transfer agent at the address provided above. Wire instructions must
state the Fund name, share class, your registered name and your account
number. Your bank wire should be sent through the Federal Reserve Bank Wire
System to:
Boston Safe Deposit and Trust Company
Boston, MA
ABA# 011001234
DDA# 16-798-3
Account No.:
You may make additional investments at any time using the wire procedures
described above. Note that banks may charge fees for transmitting wires.
. Automatic Investment Plan. (AIP) Under the AIP you may arrange for periodic
investments in the Fund through automatic deductions from a checking or
savings account. To enroll in the AIP you should complete the AIP
application form or call the Fund at (800) 438-5789. The minimum pre-
authorized investment amount is $50. You may discontinue the AIP at any
time. We may discontinue the AIP on 30 days' written notice to you.
. Reinvestment Privilege. For 60 days after you sell shares of the Fund, you
may reinvest your redemption proceeds in shares of the same class of the
Fund at NAV. Any CDSC you paid on the amount you are reinvesting will be
credited to your account. You may use this privilege once in any given
twelve-month period with respect to your shares of the Fund. You or your
broker must notify the transfer agent in writing at the time of reinvestment
in order to eliminate the sales charge on your reinvestment.
Exchanging Shares
Policies for Exchanging Shares
. You may exchange shares of the Fund for shares of the same class of other
funds of The Munder Funds based on their relative net asset values. Class A
shares of a money market fund of The Munder Funds that were (1) acquired
through the use of the exchange privilege and (2) can be traced back to a
purchase of shares in one or more funds of The Munder Funds for which a
sales charge was paid, can be exchanged for Class A shares of the Fund.
Class B and Class C shares will continue to age from the date of the
original purchase and will retain the same CDSC rate as they had before the
exchange.
. You must meet the minimum purchase requirements for the fund of The Munder
Funds that you purchase by exchange.
. If you are exchanging into shares of a fund with a higher sales charge, you
must pay the difference at the time of the exchange.
. A share exchange is a taxable event and, accordingly, you may realize a
taxable gain or loss.
. Before making an exchange request, read the prospectus of the fund you wish
to purchase by exchange. You can obtain a prospectus for any fund of The
Munder Funds by contacting your broker or the Fund at (800) 438-5789.
. Brokers may charge a fee for handling exchanges.
. We may modify or terminate the exchange privilege at any time. You will be
given notice of any material modifications except where notice is not
required.
Methods for exchanging shares
. Exchanges By Telephone. You may give exchange instructions by telephone to
the Fund at (800) 438-5789. You may not exchange shares by telephone if you
hold share certificates. We reserve the right to reject any telephone
exchange request and to place restrictions on telephone exchanges.
. Exchanges By Mail. You may send exchange orders to your broker or to the
transfer agent at The Munder Funds, c/o First Data Investor Services Group,
P.O. Box 60428, King of Prussia, Pennsylvania 19406-0428.
Redeeming Shares
Redemption Price
We will redeem shares at the NAV next determined after we receive the
redemption request in proper form. We will reduce the amount you receive by
the amount of any applicable CDSC.
9
<PAGE>
Contingent Deferred Sales Charges
You pay a CDSC when you redeem:
. Class A shares that were bought as part of an investment of at least $1
million within one year of buying them
. Class B shares within six years of buying them
. Class C shares within one year of buying them.
These time periods include the time you held Class B or Class C shares of
another Munder Fund which you may have exchanged for Class B or Class C shares
of the Fund.
The CDSC schedule for Class B shares is set forth below. If you acquired shares
of the Fund through an exchange of shares of another Munder Fund which you
purchased on or before June 27, 1995, consult the Statement of Additional
Information for the CDSC schedule for Class B shares purchased on or before
June 27, 1995. The CDSC is based on the original net asset value at the time of
your investment or the net asset value at the time of redemption, whichever is
lower.
<TABLE>
<CAPTION>
Years Since Purchase CDSC
- -------------------- -----
<S> <C>
First..................................................................... 5.00%
Second.................................................................... 4.00%
Third..................................................................... 3.00%
Fourth.................................................................... 3.00%
Fifth..................................................................... 2.00%
Sixth..................................................................... 1.00%
Seventh and thereafter.................................................... 0.00%
</TABLE>
The distributor pays sales commissions of 4.00% of the purchase price of Class
B shares of the Fund at the time of sale to brokers that initiate and are
responsible for purchases of such Class B shares of the Fund.
You will not pay a CDSC to the extent that the value of the redeemed shares
represents:
. reinvestment of dividends or capital gains distributions;
.capital appreciation of shares redeemed.
When you redeem shares, we will assume that you are redeeming first shares
representing reinvestment of dividends and capital gains distributions, then
any appreciation on shares redeemed, and then remaining shares held by you for
the longest period of time. We will calculate the holding period of Class B
shares of a Fund acquired through an exchange of Class B shares of the Munder
Money Market Fund (which are available only by exchange of Class B shares of a
Munder Fund) from the date that the Class B shares of a Munder Fund were
initially purchased.
CDSC Waivers
We will waive the CDSC payable upon redemption of shares which you purchased
(or acquired through an exchange of shares of another Munder Fund purchased
after June 27, 1995) for:
. redemptions made within one year after the death of a shareholder or
registered joint owner;
. minimum required distributions made from an IRA or other retirement plan
account after you reach age 70 1/2;
. involuntary redemptions made by the Fund;
. redemptions limited to 10% per year of an account's NAV. For example, if you
maintain an annual balance of $10,000 you can redeem up to $1,000 annually
free of charge.
We will waive the CDSC payable upon redemptions of shares which you purchased
(or acquired through an exchange of shares of another Munder Fund purchased
after December 1, 1998) for:
. redemptions made from an IRA or other individual retirement plan account
established through Comerica Securities, Inc. after you reach age 59 1/2 and
after the eighteen month anniversary of the purchase of Fund shares.
Consult the Statement of Additional Information for CDSC waivers which apply
when you redeem shares of a Munder Fund purchased on or before June 27, 1995.
We will waive the CDSC for Class B shares for all redemptions by Merrill Lynch
Plans if:
(i) the Plan is recordkept on a daily valuation basis by Merrill Lynch; or
(ii) the Plan is recordkept on a daily valuation basis by an independent
recordkeeper whose services are provided through a contract or alliance
arrangement with Merrill Lynch; or
10
<PAGE>
(iii) the Plan has less than 500 eligible employees, as determined by the
Merrill Lynch plan conversion manager, on the date the plan sponsor signs
the Merrill Lynch Recordkeeping Service Agreement.
Policies for Redeeming Shares
. Redemption requests are effected at the NAV next determined after the
transfer agent receives the order in proper form.
. A signature guarantee is required for the following redemption requests: (a)
redemption proceeds greater than $50,000; (b) redemption proceeds not being
made payable to the recordowner of the account; (c) redemption proceeds not
being mailed to the address of record on the account or (d) if the redemption
proceeds are being transferred to another Munder Fund account with a
different registration. You can obtain a signature guarantee from a financial
institution such as a commercial bank, trust company, savings association or
from a securities firm having membership on a recognized securities exchange.
Methods for redeeming shares
You may redeem shares of the Fund in several ways:
. By Mail. You may mail your redemption request to: The Munder Funds, c/o First
Data Investor Services Group, P.O. Box 60428, King of Prussia, Pennsylvania
19406-0428. The redemption request should state the name of the Fund, share
class, account number, amount of redemption, account name and where to send
the proceeds. All account owners must sign.
. By Telephone. You can redeem your shares by calling your broker or the Fund
at (800) 438-5789. There is no minimum requirement for telephone redemptions
paid by check. The transfer agent may deduct a wire fee (currently $7.50) for
wire redemptions under $5,000.
If you are redeeming at least $1,000 of shares and you have authorized
expedited redemption on your account application form, simply call the Fund
prior to 4:00 p.m. (Eastern time), and request the funds be mailed to the
commercial bank or registered broker-dealer you designated on your account
application form. We will send your redemption amount to you on the next
business day. We reserve the right at any time to change or impose fees for
this expedited redemption procedure.
During periods of unusual economic or market activity, you may experience
difficulties or delays in effecting telephone redemptions. In such cases you
should consider placing your redemption request by mail.
. Automatic Withdrawal Plan. (AWP) If you have an account value of $2,500 or
more in the Fund, you may redeem shares on a monthly, quarterly, semi-annual
or annual basis. The minimum withdrawal is $50. We usually process
withdrawals on the 20th day of the month and promptly send you your
redemption amount. You may enroll in the AWP by completing the AWP
application form available through the transfer agent. To participate in the
AWP you must have your dividends automatically reinvested and may not hold
share certificates. You may change or cancel the AWP at any time upon notice
to the transfer agent. You should not buy Class A shares (and pay a sales
charge) while you participate in the AWP and you must pay any applicable
CDSCs when you redeem shares.
. Involuntary Redemption. We may redeem your account if its value falls below
$250 as a result of redemptions (but not as a result of a decline in net
asset value). You will be notified in writing and allowed 60 days to increase
the value of your account to the minimum investment level.
Additional Policies For Purchases, Exchanges And Redemptions
. All orders to purchase shares are subject to acceptance by the Fund.
. At any time, the Fund may change any of its order acceptance practices and
may suspend the sale of its shares.
. The Fund may delay sending redemption proceeds for up to seven days, or
longer if permitted by the Securities and Exchange Commission.
. To limit Fund expenses, we do not issue share certificates.
11
<PAGE>
. The Fund may temporarily stop redeeming shares if:
. the New York Stock Exchange is closed;
. trading on the New York Stock Exchange is restricted;
. an emergency exists and the Fund cannot sell its assets or accurately
determine the value of its assets.
. If accepted by the Fund, investors may purchase shares of the Fund with
securities they own. The advisor will determine if the securities are
consistent with the Fund's objectives and policies. If accepted, the
securities will be valued the same way the Fund values portfolio securities
it already owns. Call the Fund at (800) 438-5789 for more information.
. The Fund reserves the right to make payment for redeemed shares wholly or in
part by giving the redeeming shareholder portfolio securities. The
shareholder may pay transaction costs to dispose of these securities.
. We record all telephone calls for your protection and take measures to
identify the caller. As long as the transfer agent takes reasonable measures
to authenticate telephone requests on an investor's account, neither the
Fund, the distributor nor the transfer agent will be held responsible for any
losses resulting from unauthorized transactions.
. The transfer agent will send you confirmations of the opening of an account
and of all subsequent purchases, exchanges or redemptions in the account. If
your account has been set up by a broker or other investment professional,
account activity will be detailed in their statements to you.
12
<PAGE>
Pricing Of Fund Shares
- --------------------------------------------------------------------------------
The Fund's NAV is calculated on each day the New York Stock Exchange is open.
NAV is the value of a single share of the Fund. NAV is calculated by (1) taking
the current value of the Fund's total assets allocated to a particular class of
shares, (2) subtracting the liabilities and expenses charged to that class (3)
dividing that amount by the total number of shares of that class outstanding.
The Fund calculates NAV as of the close of business on the New York Stock
Exchange, normally 4:00 p.m. Eastern time. If the New York Stock Exchange
closes early, the Fund will accelerate its calculation of NAV and transaction
deadlines to that time.
Market or fair values of the Fund's portfolio securities are determined as
follows:
. Equity securities listed on an exchange for which market quotations are
readily available: according to the last quoted sale price of the day.
. In the absence of recorded sales for listed equity securities: according to
the mean between the most recent quoted bid and asked prices.
. Unlisted equity securities for which market quotations are readily available:
mean between the most recent quoted bid and asked prices.
. All other securities: at fair value as determined in good faith by the Board
of Directors of the Fund.
Trading in foreign securities may be completed at times that vary from the
closing of the New York Stock Exchange. The Fund values foreign securities at
the latest closing price on the exchange on which they are traded immediately
prior to the closing of the New York Stock Exchange. Certain foreign currency
exchange rates may also be determined at the latest rate prior to the closing
of the New York Stock Exchange. Foreign securities quoted in foreign currencies
are translated into U.S. dollars at current rates. Occasionally, events that
affect these values and exchange rates may occur between the times at which
they are determined and the closing of the New York Stock Exchange. If the
advisor believes that such events materially affect the value of portfolio
securities, these securities may be valued at their fair market value as
determined in good faith by the Fund's Board of Directors.
Foreign securities may trade in their primary markets on weekends or other days
when the Fund does not price its shares. Therefore, the value of the Fund's
portfolio may change on days when shareholders will not be able to buy or sell
their shares.
Distributions
- --------------------------------------------------------------------------------
As shareholders you are entitled to your share of the Fund's net income and
gains on its investments. The Fund passes substantially all of its earnings
along to its shareholders as distributions. When the Fund earns dividends from
stocks and interest from debt securities and distributes these earnings to
shareholders, it is called a dividend distribution. The Fund realizes capital
gains when it sells securities for a higher price than it paid. When these
gains are distributed to shareholders, it is called a capital gain
distribution.
The Fund pays dividends, if any, annually.
The Fund distributes its net realized capital gains, if any, at least annually.
You will receive distributions from the Fund in additional shares of the Fund
unless you elect (either by (i) requesting on your account application form or
(ii) notifying the Fund at 1-800-438-5789) to receive distributions in cash.
13
<PAGE>
Federal Tax Considerations
- --------------------------------------------------------------------------------
Investments in the Fund will have tax consequences that you should consider.
This section describes some of the more common federal tax consequences, but
you should consult your tax adviser about your own particular situation.
Taxes On Distributions
You will generally have to pay federal income tax on all Fund distributions.
Distributions will be taxed in the same manner whether you receive the
distributions in cash or in additional shares of the Fund. Distributions that
are derived from net long-term capital gains generally will be taxed as long-
term capital gains. Dividend distributions and short-term capital gains
generally will be taxed as ordinary income. The tax you pay on a given capital
gains distribution generally depends on how long the Fund held the portfolio
securities it sold. It does not depend on how long you held the Fund shares.
The Fund expects that its distributions will consist primarily of capital
gains.
Shareholders generally are required to report all Fund distributions on their
federal income tax returns. Each year the Fund will send you information
detailing the amount of ordinary income and capital gains paid to you for the
previous year.
Taxes On Sales
If you sell shares of the Fund, you generally will be subject to tax on any
taxable gain. Taxable gain is computed by subtracting your tax basis in the
shares from the redemption proceeds. Because your tax basis depends on the
original purchase price and on the price at which any dividends may have been
reinvested, you should be sure to keep account statements so that you or your
tax preparer will be able to determine whether a sale will result in a taxable
gain.
Other Considerations
If you buy shares of the Fund just before the Fund makes any distribution, you
will receive some of the purchase price back in the form of a taxable
distribution.
By law, the Fund must withhold a portion of your distributions and redemption
proceeds to pay federal income taxes if you have not provided complete, correct
taxpayer information.
14
<PAGE>
Management
- --------------------------------------------------------------------------------
Investment Advisor
The Fund's investment advisor is Munder Capital Management, 480 Pierce Street,
Birmingham, Michigan 48009. As of December 31, 1998, the advisor and its
affiliates had approximately $50 billion in assets under management, of which
$28 billion were invested in equity securities, $8 billion were invested in
money market or other short-term instruments, $8 billion were invested in other
fixed income securities, and $6 billion in non-discretionary assets.
The advisor provides overall investment management for the Fund, provides
research and credit analysis and is responsible for all purchases and sales of
portfolio securities.
The advisor is entitled to receive an annual fee equal to 1.00% of the average
daily net assets of the Fund.
The advisor may, from time to time, make payments to banks, broker-dealers or
other financial institutions for certain services to the Fund and/or its
shareholders, including sub-administration, sub-transfer agency and shareholder
servicing. The advisor may make such payments out of its own resources and
there are no additional costs to the Fund or its shareholders.
Portfolio Managers
A committee of professional portfolio managers employed by the advisor makes
investment decisions for the Fund.
Rule 12b-1 Plans
The Fund has adopted Rule 12b-1 plans with respect to its Class A, Class B and
Class C shares that allow the Fund to pay distribution and other fees for the
sale of its shares and for services provided to shareholders. Under the Plans,
the Fund may pay up to .25% of the daily net assets of Class A, Class B and
Class C shares to pay for certain shareholder services provided by institutions
that have agreements with the Fund's distributor to provide such services. The
Fund may also pay up to .75% of the daily net assets of the Class B and Class C
shares to finance activities relating to the distribution of its shares.
Because the fees are paid out of the Fund's assets on an on-going basis, over
time these fees will increase the cost of an investment in the Fund and may
cost a shareholder more than paying other types of sales charges.
Year 2000
Like other mutual funds, financial institutions and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the advisor and the Fund's other service providers do
not properly process and calculate date-related information and data from and
after January 1, 2000. The advisor is taking steps that it believes are
reasonably designed to address year 2000 computer-related problems with respect
to the computer systems that it uses and to obtain assurances that comparable
steps are being taken by a Fund's other, major service providers. Although
there can be no assurances, the advisor believes that these steps will be
sufficient to avoid any adverse impact on the Fund. Similarly, the companies
and other issuers in which the Fund invests could be adversely affected by year
2000 computer-related problems, and there can be no assurance that the steps
taken, if any, by these issuers will be sufficient to avoid any adverse impact
on the Fund.
15
<PAGE>
FOR MORE INFORMATION
More information about the Fund is available free upon request, including the
following:
Annual/Semi-Annual Reports
You will receive unaudited semi-annual reports and audited annual reports on a
regular basis from the Fund. In addition, you will also receive updated
Prospectuses or Supplements to this Prospectus. In order to eliminate duplicate
mailings, the Fund will only send one copy of the above communications to (1)
accounts with the same primary record owner, (2) joint tenant accounts, (3)
tenant in common accounts and (4) accounts which have the same address.
Statement of Additional Information
Provides more details about all of the funds and their policies. A current
Statement of Additional Information is on file with the Securities and Exchange
Commission and is incorporated by reference (is legally considered part of this
prospectus).
The Munder Funds, Inc.
SEC file number 811-7346
Investment Advisor Munder Capital Management
Distributed by: Funds Distributor, Inc.
To Obtain Information:
By telephone
Call 1-800-438-5789
By mail Write to:
The Munder Funds
480 Pierce Street
Birmingham, MI 48009
On the Internet Text-only versions of fund documents can be viewed online or
downloaded from:
http://www.munderfunds.com
Securities and Exchange Commission
http://www.sec.gov
You can also obtain copies by visiting the Securities and Exchange Commission's
Public Reference Room in Washington, DC (phone 1-800-SEC-0330) or by sending
your request and a duplicating fee to the Securities and Exchange Commission's
Public Reference Section, Washington, DC 20549-6009.
<PAGE>
Application
FOR NEW ACCOUNTS
[LOGO OF THE MUNDER FUNDS APPEARS HERE]
PLEASE MAIL YOUR COMPLETE APPLICATION (printed or typed)
ALONG WITH YOUR CHECK TO:
The Munder Funds
c/o First Data Investor Services Group, Inc.
P.O. Box 60428
King of Prussia, PA 19406-0428
If you have any questions regarding this application, please telephone the
Transfer Agent at 1.800.438.5789
1. ACCOUNT REGISTRATION
________________________________________________________________________________
Name Social Security Number
________________________________________________________________________________
Joint Owner (if any) (If Joint Tenancy, use Social
Security Number of first joint owner)
OR
Uniform Transfer to Minor:
for:
- --------------------------------------------------------------------------------
Custodian Name (one custodian only) Minor's Name (one minor only)
________________________________________________________________________________
State (Custodian's State of Residence) Minor's Social Security Number
OR
[_] Trust [_] Corporation [_] Other (please specify)______________
________________________________________________________________________________
Trust/Corporation Name
________________________________________________________________________________
Trust Date Trust Identification Number
2. MAILING ADDRESS (address for reports, dividends, statements and
redemption proceeds)
________________________________________________________________________________
Street Apt.
________________________________________________________________________________
City State Zip Code Telephone Number
Non-Resident Alien: [_] Yes [_] No If Yes, Country of Residence____________
<PAGE>
3. INITIAL INVESTMENT
With as little as $250* you can invest in any Munder Fund. Please be sure to
read the prospectus carefully before investing or sending money. You may request
an additional prospectus by calling 1.800.438.5789.
<TABLE>
<CAPTION>
NAME OF FUND CLASS CLASS CLASS INVESTMENT
A B C AMOUNT
<S> <C> <C> <C> <C>
[_] Munder All-Season Aggressive Fund [_] [_] N/A $______________
[_] Munder All-Season Moderate Fund [_] [_] N/A $______________
[_] Munder All-Season Conservative Fund [_] [_] N/A $______________
[_] Munder Balanced Fund [_] [_] [_] $______________
[_] Munder Growth & Income Fund [_] [_] [_] $______________
[_] Munder Index 500 Fund [_] [_] [_] $______________
[_] Munder International Equity Fund [_] [_] [_] $______________
[_] Munder Micro-Cap Equity Fund [_] [_] [_] $______________
[_] Munder Multi-Season Growth Fund [_] [_] [_] $______________
[_] Munder Real Estate Equity Investment Fund [_] [_] [_] $______________
[_] Munder Small-Cap Value Fund [_] [_] [_] $______________
[_] Munder Small Company Growth Fund [_] [_] [_] $______________
[_] Munder Value Fund [_] [_] [_] $______________
[_] Munder Framlington Emerging Markets Fund [_] [_] [_] $______________
[_] Munder Framlington Healthcare Fund [_] [_] [_] $______________
[_] Munder Framlington International Growth Fund [_] [_] [_] $______________
[_] Munder NetNetFund [_] [_] [_] $______________
[_] Munder Bond Fund [_] [_] [_] $______________
[_] Munder Intermediate Bond Fund [_] [_] [_] $______________
[_] Munder International Bond Fund [_] [_] [_] $______________
[_] Munder Michigan Tax-Free Bond Fund [_] [_] [_] $______________
[_] Munder Tax-Free Bond Fund [_] [_] [_] $______________
[_] Munder Tax-Free Short-Intermediate Bond Fund [_] [_] [_] $______________
[_] Munder U.S. Government Income Fund [_] [_] [_] $______________
[_] Munder Cash Investment Fund [_] N/A N/A $______________
[_] Munder Money Market Fund [_] N/A N/A $______________
[_] Munder Tax-Free Money Market Fund [_] N/A N/A $______________
[_] Munder U.S. Treasury Money Market Fund [_] N/A N/A $______________
[_] Munder Technology Fund [_] [_] [_] $______________
[_] Other Munder Fund ____________________________ [_] [_] [_] $______________
Total Amount Invested $______________
</TABLE>
[_] By Check (Payable to The Munder Funds)
[_] By Wire. Account Number: _____________________________ (Account number
assigned by Bank from which assets were wired.)
_________________________
* $50 per Fund if the Automatic Investment Plan Option is being established at
this time (please complete section 5).
<PAGE>
4. DISTRIBUTION OPTION (check one. If none, "A" will be assigned)
[_] A. Reinvest dividends and capital gains in additional Fund shares.
[_] B. Pay dividends in cash; reinvest capital gains in additional Fund
shares.
[_] C. Pay dividends and capital gains in cash.
[_] D. Please send my: [_] Dividends [_] Dividends & Capital Gains (choose
one) directly to my checking/savings account.
Fill out banking information in Section 10
5. AUTOMATIC INVESTMENT PLAN (optional)
YES, I (we) wish to participate in the Automatic Investment Plan (AIP). I (We)
authorize First Data Investor Services Group, Inc. (First Data), The Munder
Funds' transfer agent, to invest automatically $________ ($50 minimum) for me
(us) on a [_] Monthly OR [_] Quarterly basis (please choose either the [_] 5th
or the [_] 20th of the month) and draw a bank draft in payment of each of these
investments against my (our) [_] Checking OR [_] Savings account. For the
purpose of verifying my (our) bank account number, I (we) have enclosed a blank
check or deposit slip marked void and have signed the bank authorization below.
________________________________________________________________________________
Name of Fund Checking/Savings Account Number ABA Number (Banking Routing
Number)
Fill out banking information in Section 10
6. CHECKWRITING PRIVILEGES (optional)
Income & Money Market Class A shares only
If you are opening an account for any of The Munder Income and/or Money Market
Funds (Class A Shares only), you are entitled to the checkwriting option.
Redemption checks may be written for amounts of $500 or more. To obtain checks,
please complete the signature card below. All persons named in the Account
Registration in Section 1 must sign the signature card. For Corporate, Trust or
Partnership accounts, only authorized signers must sign. By signing this
signature card, you agree to be subject to the customary rules and regulations
governing checking accounts, as well as instructions and rules of the Fund now
in effect, and as amended from time to time, that pertain to the use of
redemption checks.
Please fill out the following Signature Card to be eligible for Checkwriting and
indicate the Fund(s) for which you are requesting this service:
________________________________________________________________________________
Fund(s)
________________________________________________________________________________
Fund(s)
Authorized Signatures (exactly as it appears if Part 1 of the Application):
________________________________________________________________________________
Print Name Signature
________________________________________________________________________________
Print Name Signature
________________________________________________________________________________
Print Name Signature
Check here if more than one signature is required per check: [_] 2 [_] 3 [_]
Other:______________________
<PAGE>
7. AUTOMATIC WITHDRAWAL PLAN (optional)
The minimum account balance must be $2,500 or more.
Fill out banking information in Section 10
YES, I authorize the redemption of shares from my Munder Fund account to meet
withdrawal payments on the 20th of each month.
________________________________________________________________________________
Name of Fund That Shares Will Be Redeemed From Account Number (if applicable)
________________________________________________________________________________
Amount of Monthly Payment ($50 minimum per Fund) Start Date (Payment is to
begin on the next payment
period unless a later date
is indicated)
Payments will be made to: [_] Owner's address of record only OR [_] Other
listed below:
_________________________________________ [_] Checking OR [_] Savings Account
Name (if bank indicate account number)
________________________________________________________________________________
Address
For the purpose of verifying my (our) bank account number, I (we) have enclosed
a blank check or deposit slip marked void and have signed the bank authorization
below.
________________________________________________________________________________
Name of Fund Account Number ABA Number (Bank Routing Number)
8. REDUCED SALES CHARGE (optional)
[_] Rights of Accumulation:
Investors may qualify for reduced sales charges by aggregating the total
purchases of all Munder Class A Shares, excluding Money Market Funds, to
determine the applicable sales charge for current purchases. To determine the
aggregated amount of all non-money market funds, you will need to total the
current purchases as well as shares that are already beneficially owned by the
investor for which a sales charge has already been paid. Please see the
prospectus for additional information regarding Rights of Accumulation.
I apply for the Rights of Accumulation reduced sales charges based on the
following accounts in The Munder Funds.
________________________________________________________________________________
Name of Fund Account Number
________________________________________________________________________________
Name of Fund Account Number
________________________________________________________________________________
Name of Fund Account Number
[_] Letters of Intent:
You may qualify for reduced sales charges if you plan to make additional
investments in The Munder Funds within a 13 month period. By indicating a level
of anticipated investment and by signing this application, you agree to the
terms of the Letter of Intent as set forth in the Prospectus, and as follows:
"Although I am not obligated to do so, I intend to invest over a 13 month period
an aggregate amount of at least" (check one):
[_] $25,000 [_] $50,000 [_] $100,000
[_] $250,000 [_] $500,000 [_] $1,000,000
<PAGE>
9. TELEPHONE REDEMPTION & EXCHANGE AGREEMENT
Please check the box if you want this option.
[_] I (We) authorize First Data to act upon instructions received by telephone
from me (us) to redeem or to exchange shares of The Munder Funds.
1. I (We) relieve the Funds or First Data of any liability for the loss,
cost or expense for acting upon such instructions reasonably believed
to be from me (us).
2. I (We) assume responsibility for notifying the Funds within seven (7)
business days if a confirmation for the transaction is not received or
is incorrect.
3. If an exchange involves an initial investment into a Fund, the account
registration will carry the same registration as set forth above.
4. An exchange deemed to be the initial purchase of a Fund must meet the
minimum initial investment requirement of $250 per Fund unless the
shareholder is establishing an Automatic Investment Plan.
5. Redemption proceeds will be sent only to my account address of record.
________________________________________________________________________________
Name Name
10. BANKING INFORMATION
To be completed with Section 4 (Distribution Option)
I (We) authorize The Munder Funds to deposit distributions into the following
[_] Checking [_] Savings Account
________________________________________________________________________________
Bank Name Address
________________________________________________________________________________
ABA Number (Bank Routing Number) Account Number Banking Account Registration
________________________________________________________________________________
Wiring Instructions
To be completed with Section 5 (Automatic Investment Plan)
Please note that your bank will clear and process each bank draft and will
include it with your regular statements. However, acceptance of this
authorization is conditional upon approval of your authorization by your bank,
which will allow First Data, the transfer agent for The Munder Funds, to act as
your agent with regard to the Automatic Investment Plan (AIP). The AIP will
automatically terminate without notice if any bank draft is not paid upon
presentation by First Data, to your bank. The AIP may be modified or terminated
at any time, upon thirty (30)-days written notice.
________________________________________________________________________________
Signature of Depositor Date Signature of Joint Depositor (if any) Date
To be completed with Section 7 (Automatic Withdrawal Plan)
Please note that your bank will clear and process each bank deposit and will
include it with your regular statements. However, acceptance of this
authorization is conditional upon approval of your authorization by your bank,
which will allow the transfer agent for The Munder Funds to act as your Agent
with regard to the Automatic Withdrawal Plan (AWP). The AWP may be modified or
terminated at any time, upon thirty (30) days written notice.
________________________________________________________________________________
Signature of Depositor Date Signature of Joint Depositor (if any) Date
* Please Staple Void Check or Deposit Slip Here *
<PAGE>
11. AUTHORIZATIONS, CERTIFICATES AND SIGNATURES
By signing the application, I (we) hereby certify under the penalty of perjury
that the information on this application is true, complete and correct and that:
I (We) understand that this order is subject to acceptance by The Munder Funds.
I (We) agree that The Munder Funds, Funds Distributor, Inc., First Data, Munder
Capital Management or any of its affiliates, officers, directors or employees
will not be liable for any loss, expense or cost for acting upon instructions or
inquiries reasonably believed to be genuine. Shares of the Funds are not
insured or guaranteed by the Federal Deposit Insurance Corporation, the Federal
Reserve Board, or any other agency. An investment in the Funds involves
investment risks, including the possible loss of principal.
I (We) represent that I am (we are) of legal age and capacity and have read the
Prospectus(es) for The Munder Funds selected, and agree to its (their) terms.
First Data, is hereby appointed agent to receive dividends and distributions for
automatic reinvestment unless otherwise directed in Section 4.
I (We) understand and acknowledge that a sales charge may be levied against the
dollar that I (we) invest in The Munder Funds. (See the Prospectus(es) for
reduced sales charge information.)
The Internal Revenue Service requires that all taxpayers provide their Taxpayer
Identification Numbers (Social Security Numbers) and sign in the space provided
below. Failure by non-exempt taxpayers to furnish us with the correct Taxpayer
Identification Number will result in withholding of 31% of all taxable dividends
paid and/or withholding on certain other payments (this is referred to as backup
withholding).
________________________________________________________________________________
Taxpayer Identification Number Name of Taxpayer Whose Number Appears Above
Taxpayer Identification:
I (the Investor) certify under penalties of perjury that:
(1) The Social Security Number or taxpayer identification number shown above is
correct and may be used for any custodial or trust account opened for me by
The Munder Funds, and
(2) I (the Investor) am not subject to backup withholding because:
(a) I am exempt from Backup Withholding
(b) I have not been notified by the Internal Revenue Service ("IRS") that
I am, as a result of failure to report all interest or dividends, or
(c) the IRS has notified me that I am no longer subject to backup
withholding.
The certification in this paragraph is required from all non-exempt persons to
prevent backup withholding of 31% of all taxable distributions and gross
redemptions proceeds under the Federal income tax law.
[_] Check here if you are subject to backup withholding or have not received a
notice from the IRS advising you that backup withholding has been
terminated.
Authorization:
____________________________________________________________________
Signature of Owner Date Name
____________________________________________________________________
Signature of Owner Date Name
<PAGE>
- --------------------------------------------------------------------------------
FOR DEALER USE ONLY
We hereby authorize First Data Investor Services Group, Inc., to act as our
agent in connection with transactions authorized by this Application and agree
to notify First Data Investor Services Group, Inc., of any purchase made under a
Letter of Intent or Right of Accumulation.
______________________________________________________________________________
Dealer's Name Main Office Address
______________________________________________________________________________
Representative's Name Branch # Rep #
______________________________________________________________________________
Branch Address Telephone #
______________________________________________________________________________
Authorized Signature of Dealer Title
- -------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Shares of The Munder Funds are not deposits or obligations of, or guaranteed or
endorsed by any bank, and are not federally insured by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other agency. All
mutual fund shares involve certain investment risks, including the possible loss
of principal.
- --------------------------------------------------------------------------------
Distributor: Funds Distributor, Inc.
<PAGE>
CLASS Y SHARES
[LOGO OF MUNDER FUNDS APPEARS HERE]
The Munder Funds
Investments for all seasons
Prospectus
August 25, 1999
T H E M U N D E R T E C H N O L O G Y F U N D
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities nor passed upon the accuracy or
adequacy of this prospectus. It is a criminal offense to state otherwise.
<PAGE>
Table Of Contents
<TABLE>
<C> <S>
2 Risk/Return Summary
2 Goal
2 Principal Investment Strategies
2 Principal Risks
2 Who May Want To Invest
3 Performance
3 Fees and Expenses
3 Example
4 More About The Fund
5 Your Investment
5 How To Reach The Fund
5 Purchasing Shares
6 Exchanging Shares
6 Redeeming Shares
6 Additional Policies For Purchases, Exchanges And Redemptions
8 Pricing of Fund Shares
8 Distributions
9 Federal Tax Considerations
9 Taxes On Distributions
9 Taxes On Sales
9 Other Considerations
10 Management
10 Investment Advisor
10 Portfolio Managers
10 Year 2000
Back Cover For Additional Information
</TABLE>
<PAGE>
Risk/Return Summary
- --------------------------------------------------------------------------------
This Risk/Return Summary briefly describes the principal investment strategies
of the Munder Technology Fund and the principal risks of investing in the Fund.
For further information on the Fund's investment strategies and risks, please
read the section entitled More About The Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
Goal
The Fund's goal is to provide long-term capital appreciation.
Principal Investment Strategies
The Fund intends to pursue its goal by investing primarily in common stocks of
technology-related companies. Technology-related companies are companies that
engage in one or more of the following activities:
. development
. manufacturing
. distribution
of technology and telecommunications related products and services. The Fund
may also invest in the stocks of companies that benefit from the
commercialization of technological advances. The products and services provided
by these companies may include: computer hardware and software,
telecommunications hardware and software, semiconductors, business services,
media and information services.
The Fund invests in established companies or in new or unseasoned companies.
The Fund may purchase foreign securities, enter into futures and options
contracts and lend portfolio securities, which are described below under "More
About The Fund."
Principal Risks
The Fund is subject to the following principal investment risks:
. The stock market may decline.
. The Fund will concentrate in the technology industry. Market or economic
factors impacting that industry sector could have a major effect on the value
of the Fund's investments. The value of stocks of technology companies is
particularly vulnerable to rapid changes in technology product cycles,
government regulation and competition. Technology stocks, especially those of
smaller, less-seasoned companies, tend to be more volatile than the overall
market.
. An adverse event, such as an unfavorable earnings report, may depress the
value of a particular stock held by the Fund.
. The share price of the Fund will change daily based on market conditions and
other factors; you may lose money if you invest in the Fund.
. The Fund cannot be certain it will achieve its investment goal.
Who May Want To Invest
The Fund may be appropriate for investors:
. Looking to invest over the long term and willing to ride out market swings in
search of potentially higher returns.
. Looking for an investment that has more return and risk potential than fixed
income investments.
. Looking to invest in a diversified stock portfolio focused on a particular
stock market segment.
The Fund alone cannot provide a balanced investment program.
2
<PAGE>
Performance
The Fund had not commenced operations as of the date of this Prospectus and,
therefore, has no performance information to report.
Fees and Expenses
The table below describes the fees and expenses that you may pay if you buy and
hold shares of the Fund.
<TABLE>
<CAPTION>
Shareholder Fees(1)
(fees paid directly from your investment)
- -----------------------------------------
<S> <C>
Maximum Sales Charge (Load) Imposed on Purchases........................... None
Sales Charge (Load) Imposed on Reinvested Dividends........................ None
Maximum Deferred Sales Charge (Load)....................................... None
Redemption Fees............................................................ None
Exchange Fees.............................................................. None
</TABLE>
- --------
(1) Does not include fees which institutions may charge for services they
provide to you.
<TABLE>
<CAPTION>
Annual Fund Operating Expenses(1)
(expenses that are paid from Fund assets) Class Y
as a % of net assets Shares
- ----------------------------------------- -------
<S> <C>
Management Fees......................................................... 1.00%
Other Expenses(2)....................................................... .50%
----
Total Fund Operating Expenses........................................... 1.50%
====
</TABLE>
- --------
(1) The advisor has voluntarily agreed to reimburse the Fund's operating
expenses to keep the Fund's other expenses at a specified level. The
advisor may eliminate all or part of the reimbursement at any time. Because
of the expense reimbursement, it is estimated that the expenses for the
Fund for the current fiscal year will be:
<TABLE>
<CAPTION>
Annual Fund Operating Expenses
(expenses that are paid from Fund assets) Class Y
as a % of net assets Shares
----------------------------------------- -------
<S> <C>
Management Fees................................................... 1.00%
Other Expenses (net of reimbursement)............................. .35%
----
Total Fund Operating Expenses (net of reimbursement).............. 1.35%
====
</TABLE>
(2) Based on estimated assets for the current fiscal year.
Example
This example is intended to help you compare the cost of investing in the Fund
to the cost of investing in other mutual funds. The example assumes that you
invest $10,000 in the Fund for the time periods indicated and then sell all of
your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same as shown in the table above. Although your actual costs and the
return on your investment may be higher or lower, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
1 Year 3 Years
------ -------
<S> <C>
$138 $429
</TABLE>
3
<PAGE>
More About The Fund
- --------------------------------------------------------------------------------
The Fund's principal strategies and risks are summarized above in the section
entitled Risk/Return Summary. Below is further information about the Fund's
investments and strategies and their associated risks. The Fund may also use
strategies and invest in securities described in the Statement of Additional
Information.
Equity Securities. The Fund invests in equity securities which include common
stocks, preferred stocks and securities convertible into common stocks.
Securities considered for purchase by the Fund may be listed or unlisted. There
is no limit on the market capitalization of the companies in which the Fund may
invest, or in the length of operating history for the companies. The Fund may
invest without limit in initial public offerings.
Foreign Securities. The Fund may invest in securities issued by foreign
companies. The Fund may also invest in American Depositary Receipts, which are
receipts typically issued by a U.S. bank or trust company evidencing ownership
of underlying foreign securities. Investments by the Fund in foreign securities
involve risks in addition to those of U.S. securities. Foreign securities are
generally more volatile and less liquid than U.S. securities, in part because
of higher political and economic risks and because there is less public
information available about foreign companies. Brokerage and other transaction
costs for foreign securities are generally higher than those for U.S.
securities. Also, a decline in the value of foreign currencies relative to the
U.S. dollar will reduce the value of securities denominated in those
currencies.
Derivatives. Derivatives are financial contracts whose value is based on a
security, a currency exchange or interest rate or a market index. The main risk
with derivatives is that some types can amplify a gain or loss, potentially
earning or losing substantially more money than the actual cost of the
derivative. With some derivatives, there is also the risk that the counterparty
may fail to honor its contract obligations, causing a loss for the Fund. The
Fund may use futures and options, but only for the purpose of remaining fully
invested or maintaining liquidity. The Fund will not use derivatives for
speculative purposes.
Securities Lending. The Fund may seek additional income by lending portfolio
securities to qualified institutions. By reinvesting any cash collateral it
receives in these transactions, the Fund could realize additional gains or
losses. If the borrower fails to return the securities and the invested
collateral has declined in value, the Fund could lose money.
Short-Term Trading. The Fund may engage in short-term trading, which could
produce higher trading costs and taxable distributions, which could detract
from the Fund's performance.
4
<PAGE>
Your Investment
- --------------------------------------------------------------------------------
This section describes how to do business with the Fund.
How To Reach The Funds
By telephone:
1-800-438-5789
Call for account information
By mail: The Munder Funds
480 Pierce Street
Birmingham, MI 48009
Purchasing Shares
Who may purchase shares
The following persons may purchase shares of the Fund:
. fiduciary and discretionary accounts of institutions
. institutional investors (including: banks, savings institutions, credit
unions and other financial institutions, pension and profit sharing, and
employee benefit plans and trusts, insurance companies, investment companies,
investment advisors and broker-dealers acting for their own accounts or for
the accounts of their clients)
. directors, trustees, officers and employees of The Munder Funds, Inc., The
Munder Funds Trust and The Munder Framlington Funds Trust (collectively, The
Munder Funds), the advisor and the distributor
. the advisor's investment advisory clients
. family members of employees of the advisor.
Purchase Price of Shares
Class Y shares of the Fund are sold at the net asset value per share (NAV) next
determined after a purchase order is received in proper form.
Policies for Purchasing Shares
Minimum initial investment
The minimum initial investment by fiduciary and discretionary accounts of
institutions and institutional investors is $500,000. Other investors are not
subject to any minimum.
Timing of orders
Purchase orders must be received by the distributor or the transfer agent
before the close of regular trading on the New York Stock Exchange (normally,
4:00 p.m. Eastern time).
Investors may pay for shares in federal funds or other funds that are
immediately available to the Fund's custodian by no later than 4:00 p.m.
(Eastern time) on the next business day following receipt of the purchase
order. You should be aware that broker-dealers (other than the Fund's
distributor) may charge investors additional fees if shares are purchased
through them.
Methods for purchasing shares
Investors may purchase shares through the transfer agent, distributor or
through arrangements with a financial institution.
. Through a Financial Institution. You may purchase shares through a financial
institution through procedures established with that institution.
. By Mail. You may open an account by completing, signing and mailing an
account application form and a check or other negotiable bank draft (payable
to The Munder Funds) to: The Munder Funds, c/o First Data Investor Services
Group, P.O. Box 60428, King of Prussia, Pennsylvania 19406-0428. You can
obtain an account application form by calling (800) 438-5789. For additional
investments, send a letter stating the Fund and share class you wish to
purchase, your name and your account number with a check for $50 or more to
the address listed above.
. By Wire. To open a new account, you should call the Fund at (800) 438-5789 to
obtain an account number and complete wire instructions prior to wiring any
funds. Within seven days of purchase, you must send a completed account
application form containing your certified taxpayer identification number to
the transfer agent at the address provided above. Wire instructions must
state the Fund name, share class, your registered
5
<PAGE>
name and your account number. Your bank wire should be sent through the
Federal Reserve Bank Wire System to:
Boston Safe Deposit and Trust Company
Boston, MA
ABA# 011001234
DDA# 16-798-3
Account No.:
You may make additional investments at any time using the wire procedures
described above. Note that banks may charge fees for transmitting wires.
. Automatic Investment Plan. (AIP) Under the AIP you may arrange for periodic
investments in the Fund through automatic deductions from a checking or
savings account. To enroll in the AIP you should complete the AIP application
form or call the Fund at (800) 438-5789. The minimum pre-authorized
investment amount is $50. You may discontinue the AIP at any time. We may
discontinue the AIP on 30 days' written notice to you.
Exchanging Shares
Policies for Exchanging Shares
. You may exchange shares of the Fund for shares of the same class of other
funds of The Munder Funds based on their relative net asset values.
. You must meet the minimum purchase requirements for the fund of The Munder
Funds that you purchase by exchange.
. A share exchange is a taxable event and, accordingly, you may realize a
taxable gain or loss.
. Before making an exchange request, read the prospectus of the fund you wish
to purchase by exchange. You can obtain a prospectus for any fund of The
Munder Funds by contacting your broker or the Fund at (800) 438-5789.
. Brokers may charge a fee for handling exchanges.
. We may modify or terminate the exchange privilege at any time. You will be
given notice of any material modifications except where notice is not
required.
Redeeming Shares
Redemption Price
We will redeem shares at the NAV next determined after we receive the
redemption request in proper form.
Policies for Redeeming Shares
. Redemption requests are effected at the NAV next determined after the
transfer agent receives the order in proper form.
. Shares held by an institution on behalf of its customers must be redeemed in
accordance with instructions and limitations pertaining to the account at
that institution.
. The transfer agent may deduct a wire fee (currently $7.50) for wire
redemptions under $5,000.
Additional Policies For Purchases, Exchanges And Redemptions
. All orders to purchase shares are subject to acceptance by the Fund.
. At any time, the Fund may change any of its order acceptance practices, and
may suspend the sale of its shares.
. The Fund may delay sending redemption proceeds for up to seven days, or
longer if permitted by the Securities and Exchange Commission.
. To limit Fund expenses, we do not issue share certificates.
. The Fund may temporarily stop redeeming shares if:
. the New York Stock Exchange is closed;
. trading on the New York Stock Exchange is restricted;
. an emergency exists and the Fund cannot sell its assets or accurately
determine the value of its assets.
. If accepted by the Fund, investors may purchase shares of the Fund with
securities they own. The advisor will determine if the securities are
consistent with the Fund's objectives and policies. If accepted, the
securities will be valued the same way the Fund values portfolio securities
it already owns. Call the Fund at (800) 438-5789 for more information.
6
<PAGE>
. The Fund reserves the right to make payment for redeemed shares wholly or in
part by giving the redeeming shareholder portfolio securities. The
shareholder may pay transaction costs to dispose of these securities.
. We record all telephone calls for your protection and take measures to
identify the caller. As long as the transfer agent takes reasonable measures
to authenticate telephone requests on an investor's account, neither the
Fund, the distributor nor the transfer agent will be held responsible for any
losses resulting from unauthorized transactions.
. We may redeem your account if its value falls below $250 as a result of
redemptions (but not as a result of a decline in net asset value). You will
be notified in writing and allowed 60 days to increase the value of your
account to the minimum investment level.
. The transfer agent will send you confirmations of the opening of an account
and of all subsequent purchases, exchanges or redemptions in the account. If
your account has been set up by a broker or other investment professional,
account activity will be detailed in their statements to you.
7
<PAGE>
Pricing Of Fund Shares
- --------------------------------------------------------------------------------
The Fund's NAV is calculated on each day the New York Stock Exchange is open.
NAV is the value of a single share of the Fund. NAV is calculated by (1) taking
the current value of the Fund's total assets allocated to a particular class of
shares, (2) subtracting the liabilities and expenses charged to that class (3)
dividing that amount by the total number of shares of that class outstanding.
The Fund calculates NAV as of the close of business on the New York Stock
Exchange, normally 4:00 p.m. Eastern time. If the New York Stock Exchange
closes early, the Fund will accelerate its calculation of NAV and transaction
deadlines to that time.
Market or fair values of the Fund's portfolio securities are determined as
follows:
. Equity securities listed on an exchange for which market quotations are
readily available: according to the last quoted sale price of the day.
. In the absence of recorded sales for listed equity securities: according to
the mean between the most recent quoted bid and asked prices.
. Unlisted equity securities for which market quotations are readily available:
mean between the most recent quoted bid and asked prices.
. All other securities: at fair value as determined in good faith by the Board
of Directors of the Fund.
Trading in foreign securities may be completed at times that vary from the
closing of the New York Stock Exchange. The Fund values foreign securities at
the latest closing price on the exchange on which they are traded immediately
prior to the closing of the New York Stock Exchange. Certain foreign currency
exchange rates may also be determined at the latest rate prior to the closing
of the New York Stock Exchange. Foreign securities quoted in foreign currencies
are translated into U.S. dollars at current rates. Occasionally, events that
affect these values and exchange rates may occur between the times at which
they are determined and the closing of the New York Stock Exchange. If the
advisor believes that such events materially affect the value of portfolio
securities, these securities may be valued at their fair market value as
determined in good faith by the Fund's Board of Directors.
Foreign securities may trade in their primary markets on weekends or other days
when the Fund does not price its shares. Therefore, the value of the Fund's
portfolio may change on days when shareholders will not be able to buy or sell
their shares.
Distributions
- --------------------------------------------------------------------------------
As shareholders you are entitled to your share of the Fund's net income and
gains on its investments. The Fund passes substantially all of its earnings
along to its shareholders as distributions. When the Fund earns dividends from
stocks and interest from debt securities and distributes these earnings to
shareholders, it is called a dividend distribution. The Fund realizes capital
gains when it sells securities for a higher price than it paid. When these
gains are distributed to shareholders, it is called a capital gain
distribution.
The Fund pays dividends, if any, annually.
The Fund distributes its net realized capital gains, if any, annually.
You will receive distributions from the Fund in additional shares of the Fund
unless you elect (either by (i) requesting on your account application form or
(ii) notifying the Fund at 1-800-438-5789) to receive distributions in cash.
8
<PAGE>
Federal Tax Considerations
- --------------------------------------------------------------------------------
Investments in the Fund will have tax consequences that you should consider.
This section describes some of the more common federal tax consequences, but
you should consult your tax adviser about your own particular situation.
Taxes On Distributions
You will generally have to pay federal income tax on all Fund distributions.
Distributions will be taxed in the same manner whether you receive the
distributions in cash or in additional shares of the Fund. Distributions that
are derived from net long-term capital gains generally will be taxed as long-
term capital gains. Dividend distributions and short-term capital gains
generally will be taxed as ordinary income. The tax you pay on a given capital
gains distribution generally depends on how long the Fund held the portfolio
securities it sold. It does not depend on how long you held the Fund shares.
The Fund expects that its distributions will consist primarily of capital
gains.
Shareholders generally are required to report all Fund distributions on their
federal income tax returns. Each year the Fund will send you information
detailing the amount of ordinary income and capital gains paid to you for the
previous year.
Taxes On Sales
If you sell shares of the Fund, you generally will be subject to tax on any
taxable gain. Taxable gain is computed by subtracting your tax basis in the
shares from the redemption proceeds. Because your tax basis depends on the
original purchase price and on the price at which any dividends may have been
reinvested, you should be sure to keep account statements so that you or your
tax preparer will be able to determine whether a sale will result in a taxable
gain.
Other Considerations
If you buy shares of the Fund just before the Fund makes any distribution, you
will receive some of the purchase price back in the form of a taxable
distribution.
By law, the Fund must withhold a portion of your distributions and redemption
proceeds to pay federal income taxes if you have not provided complete, correct
taxpayer information.
9
<PAGE>
Management
- --------------------------------------------------------------------------------
Investment Advisor
The Fund's investment advisor is Munder Capital Management, 480 Pierce Street,
Birmingham, Michigan 48009. As of December 31, 1998, the advisor and its
affiliates had approximately $50 billion in assets under management, of which
$28 billion were invested in equity securities, $8 billion were invested in
money market or other short-term instruments, $8 billion were invested in other
fixed income securities, and $6 billion in non-discretionary assets.
The advisor provides overall investment management for the Fund, provides
research and credit analysis and is responsible for all purchases and sales of
portfolio securities.
The advisor is entitled to receive an annual fee equal to 1.00% of the average
daily net assets of the Fund.
The advisor may, from time to time, make payments to banks, broker-dealers or
other financial institutions for certain services to the Fund and/or its
shareholders, including sub-administration, sub-transfer agency and shareholder
servicing. The advisor may make such payments out of its own resources and
there are no additional costs to the Fund or its shareholders.
Portfolio Managers
A committee of professional portfolio managers employed by the advisor makes
investment decisions for the Fund.
Year 2000
Like other mutual funds, financial institutions and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the advisor and the Fund's other service providers do
not properly process and calculate date-related information and data from and
after January 1, 2000. The advisor is taking steps that it believes are
reasonably designed to address year 2000 computer-related problems with respect
to the computer systems that it uses and to obtain assurances that comparable
steps are being taken by a Fund's other, major service providers. Although
there can be no assurances, the advisor believes that these steps will be
sufficient to avoid any adverse impact on the Fund. Similarly, the companies
and other issuers in which the Fund invests could be adversely affected by year
2000 computer-related problems, and there can be no assurance that the steps
taken, if any, by these issuers will be sufficient to avoid any adverse impact
on the Fund.
10
<PAGE>
More information about the Fund is available free upon
request, including the following:
Annual/Semi-Annual Reports
You will receive unaudited semi-annual reports and audited annual reports on a
regular basis from the Fund. In addition, you will also receive updated
Prospectuses or Supplements to this Prospectus. In order to eliminate duplicate
mailings, the Fund will only send one copy of the above communications to (1)
accounts with the same primary record owner, (2) joint tenant accounts, (3)
tenant in common accounts and (4) accounts which have the same address.
Statement of Additional Information
Provides more details about all of the funds and their policies. A current
Statement of Additional Information is on file with the Securities and Exchange
Commission and is incorporated by reference (is legally considered part of this
prospectus).
The Munder Funds, Inc.
SEC file number 811-7346
Investment Advisor Munder Capital Management
Distributed by: Funds Distributor, Inc.
The Munder Funds, Inc.
SEC file number: 811-7346
By telephone
Call 1-800-438-5789
By mail Write to:
The Munder Funds
480 Pierce Street
Birmingham, MI 48009
On the Internet Text-only versions of
fund documents can be viewed online
or downloaded from:
Securities and Exchange Commission
http://www.sec.gov
You can also obtain copies by visiting the Securities and Exchange Commission's
Public Reference Room in Washington, DC (phone 1-800-SEC-0330) or by sending
your request and a duplicating fee to the Securities and Exchange Commission's
Public Reference Section, Washington, DC 20549-6009.
<PAGE>
MUNDER TECHNOLOGY FUND
STATEMENT OF ADDITIONAL INFORMATION
The Munder Funds, Inc. (the "Company") currently offers a selection of
fifteen investment portfolios, one of which is The Munder Technology Fund (the
"Fund") which is discussed in this Statement of Additional Information (the
"SAI"). The Fund's investment advisor is Munder Capital Management (the
"Advisor").
This SAI, which has been filed with the Securities and Exchange Commission
(the "SEC"), provides supplementary information pertaining to all classes of
shares representing interests in the investment portfolio. This SAI is not a
prospectus, and should be read only in conjunction with the Company's
Prospectuses dated August 25, 1999. The contents of this SAI are incorporated by
reference in the Prospectuses in their entirety. A copy of each Prospectus may
be obtained through Funds Distributor, Inc. (the "Distributor"), or by calling
(800) 438-5789. This SAI is dated August 25, 1999.
An investment in the Fund is not a bank deposit and is not insured or guaranteed
by the Federal Deposit Insurance Corporation or any other governmental agency.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
General.................................................................... 3
Fund Investments........................................................... 3
Investment Limitations..................................................... 12
Temporary Defensive Position............................................... 14
Directors and Officers..................................................... 14
Investment Advisory and Other Service Arrangements......................... 17
Portfolio Transactions..................................................... 19
Additional Purchase and Redemption Information............................. 20
Net Asset Value............................................................ 23
Performance Information.................................................... 24
Taxes...................................................................... 25
Additional Information Concerning Shares................................... 30
Miscellaneous.............................................................. 31
Registration Statement..................................................... 32
Appendix A.................................................................A-1
Appendix B.................................................................B-1
</TABLE>
No person has been authorized to give any information or to make any
representations not contained in this SAI or in each Prospectus in connection
with the offering made by each Prospectus and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Fund or the Distributor. The Prospectuses do not constitute an offering
by the Fund or by the Distributor in any jurisdiction in which such offering may
not lawfully be made.
2
<PAGE>
GENERAL
The Company is an open-end management investment company, which is a mutual
fund that sells and redeems shares every day that it is open for business. The
Company was organized as a Maryland corporation on November 18, 1992.
As stated in each Prospectus, the investment advisor of the Fund is Munder
Capital Management (the "Advisor"). The principal partners of the Advisor are
Old MCM, Inc. ("MCM"), Munder Group LLC, WAM Holdings, Inc. ("WAM") and WAM
Holdings II, Inc. ("WAM II"). MCM was founded in April 1985 as a Delaware
corporation and was a registered investment advisor. WAM and WAM II are
indirect, wholly owned subsidiaries of Comerica Incorporated which owns or
controls approximately 88% of the partnership interests in the Advisor.
Capitalized terms used in this SAI and not otherwise defined have the same
meanings as are given to them in each Prospectus.
FUND INVESTMENTS
The following supplements the information contained in each Prospectus
concerning the investment objectives and policies of the Fund.
Borrowing. The Fund is authorized to borrow money in an amount up to 5% of
the value of its total assets at the time of such borrowings for temporary
purposes, and is authorized to borrow money in excess of the 5% limit as
permitted by the Investment Company Act of 1940, as amended (the "1940 Act"), to
meet redemption requests. This borrowing may be unsecured. The 1940 Act requires
the Fund to maintain continuous asset coverage of 300% of the amount borrowed.
If the 300% asset coverage should decline as a result of market fluctuations or
other reasons, the Fund may be required to sell some of their portfolio holdings
within three days to reduce the debt and restore the 300% asset coverage, even
though it may be disadvantageous from an investment standpoint to sell
securities at that time. Borrowed funds are subject to interest costs that may
or may not be offset by amounts earned on the borrowed funds. The Fund may also
be required to maintain minimum average balances in connection with such
borrowing or to pay a commitment or other fees to maintain a line of credit;
either of these requirements would increase the cost of borrowing over the
stated interest rate. The Fund may, in connection with permissible borrowings,
transfer as collateral securities owned by the Fund.
Foreign Securities. The Fund may invest in securities of foreign issuers.
The Fund typically will only purchase foreign securities which 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. ADRs are depositary receipts typically issued by a U.S.
bank or trust company which evidence ownership of underlying foreign securities
issued by a foreign corporation. Certain institutions issuing ADRs may not be
sponsored by the issuer. A non-sponsored depositary may not provide the same
shareholder information that a sponsored depositary is required to provide under
its contractual arrangements with the issuer.
Income and gains on such securities may be subject to foreign withholding
taxes. Investors should consider carefully the substantial risks involved in
securities of companies and governments of foreign nations, which are in
addition to the usual risks inherent in domestic investments. There may be less
publicly available information about foreign companies comparable to the reports
and ratings published about companies in the United States. Foreign companies
are not generally subject to uniform accounting, auditing and financial
reporting standards, and auditing practices and requirements may not be
comparable to those applicable to United States companies. Foreign markets have
substantially less trading volume than the New York Stock Exchange and
securities of some foreign companies are less liquid and more volatile than
securities of comparable United States companies. Commission rates in foreign
countries, which are generally fixed rather than subject to negotiation as in
the United States, are likely to be higher. In many foreign countries there is
less government supervision and less regulation of stock exchanges, brokers, and
listed companies than in the United States. Such concerns are particularly
heightened for emerging markets and Eastern European countries.
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Investments in companies domiciled in developing countries may be subject
to potentially higher risks than investments in developed countries. These risks
include (i) less social, political and economic stability; (ii) the small
current size of the markets for such securities and the currently low or
nonexistent volume of trading, which result in a lack of liquidity and in
greater price volatility; (iii) certain national policies which may restrict a
Fund's investment opportunities, including restrictions on investment in issuers
or industries deemed sensitive to national interest; (iv) foreign taxation; (v)
the absence of developed legal structures governing private or foreign
investment or allowing for judicial redress for injury to private property; (vi)
the absence, until recently in certain Eastern European countries, of a capital
market structure or market-oriented economy; and (vii) the possibility that
recent favorable economic developments in Eastern Europe may be slowed or
reversed by unanticipated political or social events in such countries.
Investments in Eastern European countries may involve risks of
nationalization, expropriation and confiscatory taxation. The Communist
governments of a number of Eastern European countries expropriated large amounts
of private property in the past, in many cases without adequate compensation,
and there can be no assurance that such expropriation will not occur in the
future. In the event of such expropriation, the Fund could lose a substantial
portion of any investments it has made in the affected countries. Further, no
accounting standards exist in Eastern European countries. Finally, even though
certain Eastern European currencies may be convertible into United States
dollars, the conversion rates may be artificial rather than their actual market
values and they may be adverse to a Fund.
The Advisor endeavors to buy and sell foreign currencies on as favorable a
basis as practicable. Some price spread on currency exchange (to cover service
charges) may be incurred, particularly when the Fund changes investments from
one country to another or when proceeds of the sale of Fund shares in U.S.
dollars are used for the purchase of securities in foreign countries. Also, some
countries may adopt policies which would prevent the Fund from transferring cash
out of the country or withhold portions of interest and dividends at the source.
There is the possibility of expropriation, nationalization or confiscatory
taxation, withholding and other foreign taxes on income or other amounts,
foreign exchange controls (which may include suspension of the ability to
transfer currency from a given country), default in foreign government
securities, political or social instability or diplomatic developments that
could affect investments in securities of issuers in foreign nations.
Foreign securities markets have different clearance and settlement
procedures, and in certain markets there have been times when settlements have
been unable to keep pace with the volume of securities transactions, making it
difficult to conduct such transactions. Delays in settlement could result in
temporary periods when assets of the Fund are uninvested and no return is earned
thereon. The inability of the Fund to make intended security purchases due to
settlement problems could cause the Fund to miss attractive investment
opportunities. Inability to dispose of portfolio securities due to settlement
problems could result either in losses to the Fund due to subsequent declines in
value of the portfolio security or, if the fund has entered into a contract to
sell the security, could result in possible liability to the purchaser.
The Fund may be affected either unfavorably or favorably by fluctuations in
the relative rates of exchange between the currencies of different nations, by
exchange control regulations and by indigenous economic and political
developments. Changes in foreign currency exchange rates will influence values
within the Fund from the perspective of U.S. investors, and may also affect the
value of dividends and interest earned, gains and losses realized on the sale of
securities, and net investment income and gains, if any, to be distributed to
shareholders by the Fund. The rate of exchange between the U.S. dollar and other
currencies is determined by the forces of supply and demand in the foreign
exchange markets. These forces are affected by the international balance of
payments and other economic and financial conditions, government intervention,
speculation and other factors. The Advisor will attempt to avoid unfavorable
consequences and to take advantage of favorable developments in particular
nations where, from time to time, it places the Fund's investments.
The exercise of this flexible policy may include decisions to purchase
securities with substantial risk characteristics and other decisions such as
changing the emphasis on investments from one nation to another and
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from one type of security to another. Some of these decisions may later prove
profitable and others may not. No assurance can be given that profits, if any,
will exceed losses.
Forward Foreign Currency Transactions. In order to protect against a
possible loss on investments resulting from a decline or appreciation in the
value of a particular foreign currency against the U.S. dollar or another
foreign currency, the Fund is authorized, but not required, to enter into
forward foreign currency exchange contracts ("forward currency contracts").
These contracts involve an obligation to purchase or sell a specified currency
at a future date at a price set at the time of the contract. Forward currency
contracts do not eliminate fluctuations in the values of portfolio securities
but rather allow the Fund to establish a rate of currency exchange for a future
point in time.
When entering into a contract for the purchase or sale of a security, the
Fund may enter into a forward currency contract for the amount of the purchase
or sale price to protect against variations, between the date the security is
purchased or sold and the date on which payment is made or received, in the
value of the foreign currency relative to the U.S. dollar or other foreign
currency.
When the Advisor anticipates that a particular foreign currency may decline
substantially relative to the U.S. dollar or other leading currencies, in order
to reduce risk, the Fund may enter into a forward contract to sell, for a fixed
amount, the amount of foreign currency approximating the value of some or all of
the Fund's securities denominated in such foreign currency. Similarly, when the
obligations held by the Fund create a short position in a foreign currency, the
Fund may enter into a forward contract to buy, for a fixed amount, an amount of
foreign currency approximating the short position. With respect to any forward
currency contract, it will not generally be possible to match precisely the
amount covered by that contract and the value of the securities involved due to
the changes in the values of such securities resulting from market movements
between the date the forward contract is entered into and the date it matures.
In addition, while forward contracts may offer protection from losses resulting
from declines or appreciation in the value of a particular foreign currency,
they also limit potential gains which might result from changes in the value of
such currency. The Fund will also incur costs in connection with forward
currency contracts and conversions of foreign currencies and U.S. dollars.
Cash or liquid securities equal to the amount of the Fund's assets that
could be required to consummate forward contracts will be designated on the
records of the Fund or on those of the Fund's custodian except to the extent the
contracts are otherwise "covered." For the purpose of determining the adequacy
of the designated securities, the designated securities in the account will be
valued at market or fair value. If the market or fair value of such securities
declines, additional cash or securities will be designated daily so that the
value of the designated securities will equal the amount of such commitments by
the Fund. A forward contract to sell a foreign currency is "covered" if the Fund
owns the currency (or securities denominated in the currency) underlying the
contract, or holds a forward contract (or call option) permitting the Fund to
buy the same currency at a price no higher than the Fund's price to sell the
currency. A forward contract to buy a foreign currency is "covered" if the Fund
holds a forward contract (or put option) permitting the Fund to sell the same
currency at a price as high as or higher than the Fund's price to buy the
currency.
Futures Contracts and Related Options. The Fund may purchase and sell
futures contracts on interest-bearing securities or securities indices, and may
purchase and sell call and put options on futures contracts. For a detailed
description of futures contracts and related options, see Appendix B to this
SAI.
Illiquid Securities. The Fund may invest up to 15% of the value of its net
assets (determined at time of acquisition) in securities which are illiquid.
Illiquid securities would generally include securities for which there is a
limited trading market, repurchase agreements and time deposits with
notice/termination dates in excess of seven days, and certain securities which
are subject to trading restrictions because they are not registered under the
Securities Act of 1933, as amended (the "Act"). If, after the time of
acquisition, events cause this limit to be exceeded, the Fund will take steps to
reduce the aggregate amount of illiquid securities as soon as reasonably
practicable in accordance with the policies of the SEC.
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The Fund may invest in commercial obligations issued in reliance on the
"private placement" exemption from registration afforded by Section 4(2) of the
Act ("Section 4(2) paper"). The Fund may also purchase securities that are not
registered under the Act, but which can be sold to qualified institutional
buyers in accordance with Rule 144A under the Act, ("Rule 144A securities").
Section 4(2) paper is restricted as to disposition under the Federal securities
laws, and generally is sold to institutional investors who agree that they are
purchasing the paper for investment and not with a view to public distribution.
Any resale by the purchaser must be in an exempt transaction. Section 4(2) paper
normally is resold to other institutional investors through or with the
assistance of the issuer or investment dealers which make a market in the
Section 4(2) paper, thus providing liquidity. Rule 144A securities generally
must be sold only to other qualified institutional buyers. If a particular
investment in Section 4(2) paper or Rule 144A securities is not determined to be
liquid, that investment will be included within the Fund's limitation on
investment in illiquid securities. The Advisor will determine the liquidity of
such investments pursuant to guidelines established by the Company's Board of
Directors. It is possible that unregistered securities purchased by the Fund in
reliance upon Rule 144A could have the effect of increasing the level of the
Fund's illiquidity to the extent that qualified institutional buyers become, for
a period, uninterested in purchasing these securities.
Investment Company Securities. The Fund may invest in securities issued by
other investment companies. As a shareholder of another investment company, the
Fund would bear its pro rata portion of the other investment company's expenses,
including advisory fees. These expenses would be in addition to the expenses
each Fund bears directly in connection with its own operations. The Fund
currently intends to limit its investments in securities issued by other
investment companies so that, as determined immediately after a purchase of such
securities is made: (i) not more than 5% of the value of the Fund's total assets
will be invested in the securities of any one investment company; (ii) not more
than 10% of the value of its total assets will be invested in the aggregate in
securities of investment companies as a group; and (iii) not more than 3% of the
outstanding voting stock of any one investment company will be owned by the
Fund.
Lending of Portfolio Securities. To enhance the return on its portfolio,
the Fund may lend securities in its portfolio (subject to a limit of 25% of the
Fund's total assets) to securities firms and financial institutions, provided
that each loan is secured continuously by collateral in the form of cash, high
quality money market instruments or short-term U.S. Government securities
adjusted daily to have a market value at least equal to the current market value
of the securities loaned. These loans are terminable at any time, and the Fund
will receive any interest or dividends paid on the loaned securities. In
addition, it is anticipated that the Fund may share with the borrower some of
the income received on the collateral for the loan or the Fund will be paid a
premium for the loan. The risk in lending portfolio securities, as with other
extensions of credit, consists of possible delay in recovery of the securities
or possible loss of rights in the collateral should the borrower fail
financially. In determining whether the Fund will lend securities, the Advisor
will consider all relevant facts and circumstances. The Fund will only enter
into loan arrangements with broker-dealers, banks or other institutions which
the Advisor has determined are creditworthy under guidelines established by the
Board of Directors.
Money Market Instruments. The Fund may invest from time to time in "money
market instruments," a term that includes, among other things, bank obligations,
commercial paper, variable amount master demand notes and corporate bonds with
remaining maturities of 397 days or less.
Bank obligations include bankers' acceptances, negotiable certificates of
deposit and non-negotiable time deposits, including U.S. dollar-denominated
instruments issued or supported by the credit of U.S. or foreign banks or
savings institutions. Although the Fund will invest in obligations of foreign
banks or foreign branches of U.S. banks only where the Advisor deems the
instrument to present minimal credit risks, such investments may nevertheless
entail risks that are different from those of investments in domestic
obligations of U.S. banks due to differences in political, regulatory and
economic systems and conditions. All investments in bank obligations are limited
to the obligations of financial institutions having more than $1 billion in
total assets at the time of purchase.
Investments by the Fund in commercial paper will consist of issues rated at
the time of purchase A-1 and/or P-1 by Standard & Poor's Rating Service, a
division of McGraw-Hill Companies, Inc.("S&P") or Moody's Investor Services,
Inc. ("Moody's"). In addition, the Fund may acquire unrated commercial paper and
corporate bonds that
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are determined by the Advisor at the time of purchase to be of comparable
quality to rated instruments that may be acquired by such Fund as previously
described.
The Fund may also purchase variable amount master demand notes which are
unsecured instruments that permit the indebtedness thereunder to vary and
provide for periodic adjustments in the interest rate. Although the notes are
not normally traded and there may be no secondary market in the notes, the Fund
may demand payment of the principal of the instrument at any time. The notes are
not typically rated by credit rating agencies, but issuers of variable amount
master demand notes must satisfy the same criteria as set forth above for
issuers of commercial paper. If an issuer of a variable amount master demand
note defaulted on its payment obligation, the Fund might be unable to dispose of
the note because of the absence of a secondary market and might, for this or
other reasons, suffer a loss to the extent of the default. The Fund invests in
variable amount master notes only when the Advisor deems the investment to
involve minimal credit risk.
Non-Domestic Bank Obligations. Non-domestic bank obligations include
Eurodollar Certificates of Deposit ("ECDs"), which are U.S. dollar-denominated
certificates of deposit issued by offices of foreign and domestic banks located
outside the United States; Eurodollar Time Deposits ("ETDs"), which are U.S.
dollar-denominated deposits in a foreign branch of a U.S. bank or a foreign
bank; Canadian Time Deposits ("CTDs"), which are essentially the same as ETDs
except they are issued by Canadian offices of major Canadian banks; Schedule Bs,
which are obligations issued by Canadian branches of foreign or domestic banks;
Yankee Certificates of Deposit ("Yankee CDs"), which are U.S. dollar-denominated
certificates of deposit issued by a U.S. branch of a foreign bank and held in
the United States; and Yankee Bankers' Acceptances ("Yankee BAs"), which are
U.S. dollar denominated bankers' acceptances issued by a U.S. branch of a
foreign bank and held in the United States.
Options. The Fund may write covered call options, buy put options, buy call
options and write secured put options. Such options may relate to particular
securities and may or may not be listed on a national securities exchange and
issued by the Options Clearing Corporation. Options trading is a highly
specialized activity which entails greater than ordinary investment risk.
Options on particular securities may be more volatile than the underlying
securities, and therefore, on a percentage basis, an investment in options may
be subject to greater fluctuation than an investment in the underlying
securities themselves. For risks associated with options on foreign currencies,
see Appendix B of this SAI.
A call option for a particular security gives the purchaser of the option
the right to buy, and the writer of the option the obligation to sell, the
underlying security at the stated exercise price at any time prior to the
expiration of the option, regardless of the market price of the security. The
premium paid to the writer is in consideration for undertaking the obligations
under the option contract. A put option for a particular security gives the
purchaser the right to sell, and the writer of the option the obligation to buy,
the underlying security at the stated exercise price at any time prior to the
expiration date of the option, regardless of the market price of the security.
The writer of an option that wishes to terminate its obligation may effect
a "closing purchase transaction." This is accomplished by buying an option of
the same series as the option previously written. The effect of the purchase is
that the writer's position will be canceled by the clearing corporation.
However, a writer may not effect a closing purchase transaction after being
notified of the exercise of an option. Likewise, an investor who is the holder
of an option may liquidate its position by effecting a "closing sale
transaction." The cost of such a closing purchase plus transaction costs may be
greater than the premium received upon the original option, in which event the
Fund will have incurred a loss in the transaction. There is no guarantee in any
instance that either a closing purchase or a closing sale transaction can be
effected.
Effecting a closing transaction in the case of a written call option will
permit the Fund to write another call option on the underlying security with
either a different exercise price or expiration date or both, or in the case of
a written put option, will permit the Fund to write another put option to the
extent that the exercise price thereof is secured by deposited cash or short-
term securities. Also, effecting a closing transaction will permit the cash or
proceeds from the concurrent sale of any securities subject to the option to be
used for other Fund investments. If the Fund desires to sell a particular
security from its portfolio on which it has written a call option, it will
effect a closing transaction prior to or concurrent with the sale of the
security.
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The Fund may write options in connection with buy-and-write transactions;
that is, the Fund may purchase a security and then write a call option against
that security. The exercise price of the call the Fund determines to write will
depend upon the expected price movement of the underlying security. The exercise
price of a call option may be below ("in-the-money"), equal to ("at-the-money")
or above ("out-of-the-money") the current value of the underlying security at
the time the option is written. Buy-and-write transactions using in-the-money
call options may be used when it is expected that the price of the underlying
security will remain flat or decline moderately during the option period. Buy-
and-write transactions using out-of-the-money call options may be used when it
is expected that the premiums received from writing the call option plus the
appreciation in the market price of the underlying security up to the exercise
price will be greater than the appreciation in the price of the underlying
security alone. If the call options are exercised in such transactions, the
maximum gain to the Fund will be the premium received by it for writing the
option, adjusted upwards or downwards by the difference between the Fund's
purchase price of the security and the exercise price. If the options are not
exercised and the price of the underlying security declines, the amount of such
decline will be offset in part, or entirely, by the premium received.
In the case of writing a call option on a security, the option is "covered"
if the Fund owns the security underlying the call or has an absolute and
immediate right to acquire that security without additional cash consideration
(or, if additional cash consideration is required, cash or liquid securities in
such amount as are earmarked on the books of the Fund or the Fund's custodian)
upon conversion or exchange of other securities held by it. For a call option on
an index, the option is covered if the Fund maintains with its custodian cash or
liquid securities equal to the contract value. A call option is also covered if
the Fund holds a call on the same security or index as the call written where
the exercise price of the call held is (i) equal to or less than the exercise
price of the call written, or (ii) greater than the exercise price of the call
written provided the difference in cash or liquid securities is earmarked on the
books of the Fund or the Fund's custodian. The Fund will limit its investment in
uncovered call options purchased or written by the Fund to 5% of the Fund's
total assets. The Fund will write put options only if they are "secured" by cash
or liquid securities earmarked on the books of the Fund or the Fund's custodian
in an amount not less than the exercise price of the option at all times during
the option period.
The writing of covered put options is similar in terms of risk/return
characteristics to buy-and-write transactions. If the market price of the
underlying security rises or otherwise is above the exercise price, the put
option will expire worthless and the Fund's gain will be limited to the premium
received. If the market price of the underlying security declines or otherwise
is below the exercise price, the Fund may elect to close the position or take
delivery of the security at the exercise price and the Fund's return will be the
premium received from the put option minus the amount by which the market price
of the security is below the exercise price.
The Fund may purchase put options to hedge against a decline in the value
of their portfolios. By using put options in this way, the Fund will reduce any
profit it might otherwise have realized in the underlying security by the amount
of the premium paid for the put option and by transaction costs. The Funds may
purchase call options to hedge against an increase in the price of securities
that they anticipate purchasing in the future. The premium paid for the call
option plus any transaction costs will reduce the benefit, if any, realized by
the Fund upon exercise of the option, and, unless the price of the underlying
security rises sufficiently, the option may expire worthless to the Fund.
When the Fund purchases an option, the premium paid by it is recorded as an
asset of the Fund. When the Fund writes an option, an amount equal to the net
premium (the premium less the commission) received by the Fund is included in
the liability section of the Fund's statement of assets and liabilities as a
deferred credit. The amount of this asset or deferred credit will be
subsequently marked to market to reflect the current value of the option
purchased or written. The current value of the traded option is the last sale
price or, in the absence of a sale, the average of the closing bid and asked
prices. If an option purchased by the Fund expires unexercised the Fund realizes
a loss equal to the premium paid. If the Fund enters into a closing sale
transaction on an option purchased by it, the Fund will realize a gain if the
premium received by the Fund on the closing transaction is more than the premium
paid to purchase the option, or a loss if it is less. If an option written by
the Fund expires on the stipulated expiration date or if the Fund enters into a
closing purchase transaction, it will realize a gain (or loss if the cost of a
closing purchase transaction exceeds the net premium received when the option is
sold) and the deferred credit
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related to such option will be eliminated. If an option written by the Fund is
exercised, the proceeds of the sale will be increased by the net premium
originally received and the Fund will realize a gain or loss.
There are several risks associated with transactions in options on
securities and indices. For example, there are significant differences between
the securities and options markets that could result in an imperfect correlation
between these markets, causing a given transaction not to achieve its
objectives. An option writer unable to effect a closing purchase transaction
will not be able to sell the underlying security (in the case of a covered call
option) or liquidate the earmarked securities (in the case of a secured put
option) until the option expires or the optioned security is delivered upon
exercise with the result that the writer in such circumstances will be subject
to the risk of market decline or appreciation in the security during such
period.
There is no assurance that the Fund will be able to close an unlisted
option position. Furthermore, unlisted options are not subject to the
protections afforded purchasers of listed options by the Options Clearing
Corporation, which performs the obligations of its members who fail to do so in
connection with the purchase or sale of options.
In addition, a liquid secondary market for particular options, whether
traded over-the-counter or on a national securities exchange (an "Exchange"),
may be absent for reasons which include the following: there may be insufficient
trading interest in certain options; restrictions may be imposed by an Exchange
on opening transactions or closing transactions or both; trading halts,
suspensions or other restrictions may be imposed with respect to particular
classes or series of options or underlying securities; unusual or unforeseen
circumstances may interrupt normal operations on an Exchange; the facilities of
an Exchange or the Options Clearing Corporation may not at all times be adequate
to handle current trading volume; or one or more Exchanges could, for economic
or other reasons, decide or be compelled at some future date to discontinue the
trading of options (or a particular class or series of options), in which event
the secondary market on that Exchange (or in that class or series of options)
would cease to exist, although outstanding options that had been issued by the
Options Clearing Corporation as a result of trades on that Exchange would
continue to be exercisable in accordance with their terms.
Currency transactions, including options on currencies and currency
futures, are subject to risks different from those of other portfolio
transactions. Because currency control is of great importance to the issuing
governments and influences economic planning and policy, purchases and sales of
currency and related instruments can be negatively affected by government
exchange controls, blockages, and manipulations or exchange restrictions imposed
by governments. These can result in losses to the Fund if it is unable to
deliver or receive currency or funds in settlement of obligations and could also
cause hedges it has entered into to be rendered useless, resulting in full
currency exposure as well as the incurring of transaction costs. Buyers and
sellers of currency futures are subject to the same risks that apply to the use
of futures generally. Further, settlement of a currency futures contract for the
purchase of most currencies must occur at a bank based in the issuing nation.
Trading options on currency futures is relatively new, and the ability to
establish and close out positions on such options is subject to the maintenance
of a liquid market which may not always be available. Currency exchange rates
may fluctuate based on factors extrinsic to the issuing country's economy.
Repurchase Agreements. The Fund may agree to purchase securities from
financial institutions such as member banks of the Federal Reserve System, any
foreign bank or any domestic or foreign broker/dealer that is recognized as a
reporting government securities dealer, subject to the seller's agreement to
repurchase the securities at an agreed-upon time and price ("repurchase
agreements"). The Advisor will review and continuously monitor the
creditworthiness of the seller under a repurchase agreement, and will require
the seller to maintain collateral in an amount that is greater than the
repurchase price. Default by, or bankruptcy of, the seller would, however,
expose the Fund to possible loss because of adverse market action or delays in
connection with the disposition of underlying obligations except with respect to
repurchase agreements secured by U.S. Government securities.
The repurchase price under repurchase agreements generally equals the price
paid by the Fund plus interest negotiated on the basis of current short-term
rates (which may be more or less than the rate on the securities underlying the
repurchase agreement).
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Securities subject to repurchase agreements will be held, as applicable, by
the Company's custodian in the Federal Reserve/Treasury book-entry system or by
another authorized securities depository. Repurchase agreements are considered
to be loans by the Fund under the 1940 Act.
Reverse Repurchase Agreements. The Fund may borrow funds for temporary or
emergency purposes by selling portfolio securities to financial institutions
such as banks and broker/dealers and agreeing to repurchase them at a mutually
specified date and price ("reverse repurchase agreements"). Reverse repurchase
agreements involve the risk that the market value of the securities sold by the
Fund may decline below the repurchase price. The Fund will pay interest on
amounts obtained pursuant to a reverse repurchase agreement. While reverse
repurchase agreements are outstanding, the Fund will maintain cash, U.S.
Government securities or other liquid securities designated on the books of the
Fund or the Fund's custodian in an amount at least equal to the market value of
the securities, plus accrued interest, subject to the agreement.
Rights and Warrants. The Fund may purchase warrants, which are privileges
issued by corporations enabling the owners to subscribe to and purchase a
specified number of shares of the corporation at a specified price during a
specified period of time. Subscription rights normally have a short life span to
expiration. The purchase of warrants involves the risk that the Fund could lose
the purchase value of a warrant if the right to subscribe to additional shares
is not exercised prior to the warrant's expiration. Also, the purchase of
warrants involves the risk that the effective price paid for the warrant added
to the subscription price of the related security may exceed the value of the
subscribed security's market price such as when there is no movement in the
level of the underlying security.
Stock Index Futures, Options on Stock and Bond Indices and Options on Stock
and Bond Index Futures Contracts. The Fund may purchase and sell stock index
futures, options on stock and bond indices and options on stock and bond index
futures contracts as a hedge against movements in the equity and bond markets.
A stock index futures contract is an agreement in which one party agrees to
deliver to the other an amount of cash equal to a specific dollar amount times
the difference between the value of a specific stock index at the close of the
last trading day of the contract and the price at which the agreement is made.
No physical delivery of securities is made.
Options on stock and bond indices are similar to options on specific
securities, described above, except that, rather than the right to take or make
delivery of the specific security at a specific price, an option on a stock or
bond index gives the holder the right to receive, upon exercise of the option,
an amount of cash if the closing level of that stock or bond index is greater
than, in the case of a call option, or less than, in the case of a put option,
the exercise price of the option. This amount of cash is equal to such
difference between the closing price of the index and the exercise price of the
option expressed in dollars times a specified multiple. The writer of the option
is obligated, in return for the premium received, to make delivery of this
amount. Unlike options on specific securities, all settlements of options on
stock or bond indices are in cash, and gain or loss depends on general movements
in the stocks included in the index rather than price movements in particular
stocks.
If the Advisor expects general stock or bond market prices to rise, it
might purchase a stock index futures contract, or a call option on that index,
as a hedge against an increase in prices of particular securities it ultimately
wants to buy. If in fact the index does rise, the price of the particular
securities intended to be purchased may also increase, but that increase would
be offset in part by the increase in the value of the futures contract or index
option resulting from the increase in the index. If, on the other hand, the
Advisor expects general stock or bond market prices to decline, it might sell a
futures contract, or purchase a put option, on the index. If that index does in
fact decline, the value of some or all of the securities in the Fund's portfolio
may also be expected to decline, but that decrease would be offset in part by
the increase in the value of the Fund's position in such futures contract or put
option.
The Fund may purchase and write call and put options on stock index futures
contracts and may purchase and write call and put options on bond index futures
contracts. The Fund may use such options on futures contracts in connection with
its hedging strategies in lieu of purchasing and selling the underlying futures
or purchasing and
10
<PAGE>
writing options directly on the underlying securities or indices. For example,
the Fund may purchase put options or write call options on stock and bond index
futures, rather than selling futures contracts, in anticipation of a decline in
general stock or bond market prices or purchase call options or write put
options on stock or bond index futures, rather than purchasing such futures, to
hedge against possible increases in the price of securities which the Fund
intends to purchase.
In connection with transactions in stock or bond index futures, stock or
bond index options and options on stock or bond index futures, the Fund will be
required to deposit as "initial margin" an amount of cash or short-term U.S.
Government securities equal to between 5% to 8% of the contract amount.
Thereafter, subsequent payments (referred to as "variation margin") are made to
and from the broker to reflect changes in the value of the option or futures
contract. The Fund may not at any time commit more than 5% of its total assets
to initial margin deposits on futures contracts, index options and options on
futures contracts. For a detailed description of futures contracts and related
options, see Appendix B of this SAI.
U.S. Government Obligations. The Fund may purchase obligations issued or
guaranteed by the U.S. Government and U.S. government agencies and
instrumentalities. Obligations of certain agencies and instrumentalities of the
U.S. Government, such as those of Government National Mortgage Association
("GNMA"), are supported by the full faith and credit of the U.S. Treasury.
Others, such as those of the Export-Import Bank of the United States, are
supported by the right of the issuer to borrow from the U.S. Treasury; and still
others, such as those of the Student Loan Marketing Association, are supported
only by the credit of the agency or instrumentality issuing the obligation. No
assurance can be given that the U.S. Government would provide financial support
to U.S. Government-sponsored instrumentalities if it is not obligated to do so
by law. Examples of the types of U.S. Government obligations that may be
acquired by the Funds include U.S. Treasury Bills, U.S. Treasury Notes and U.S.
Treasury Bonds and the obligations of Federal Home Loan Banks, Federal Farm
Credit Banks, Federal Land Banks, the Federal Housing Administration, Farmers
Home Administration, Export-Import Bank of the United States, Small Business
Administration, Federal National Mortgage Association, GNMA, General Services
Administration, Student Loan Marketing Association, Central Bank for
Cooperatives, Federal Home Loan Mortgage Association, Federal Intermediate
Credit Banks and Maritime Administration.
Variable and Floating Rate Instruments. Debt instruments may be structured
to have variable or floating interest rates. Variable and floating rate
obligations purchased by the Fund may have stated maturities in excess of the
Fund's maturity limitation if the Fund can demand payment of the principal of
the instrument at least once during such period on not more than thirty days'
notice (this demand feature is not required if the instrument is guaranteed by
the U.S. Government or an agency thereof). These instruments may include
variable amount master demand notes that permit the indebtedness to vary in
addition to providing for periodic adjustments in the interest rates. The
Advisor will consider the earning power, cash flows and other liquidity ratios
of the issuers and guarantors of such instruments and, if the instrument is
subject to a demand feature, will continuously monitor their financial ability
to meet payment on demand. Where necessary to ensure that a variable or floating
rate instrument is equivalent to the quality standards applicable to the Fund,
the issuer's obligation to pay the principal of the instrument will be backed by
an unconditional bank letter or line of credit, guarantee or commitment to lend.
In determining average weighted portfolio maturity of the Fund, an
instrument will usually be deemed to have a maturity equal to the longer of the
period remaining until the next interest rate adjustment or the time the Fund
involved can recover payment of principal as specified in the instrument.
Variable rate U.S. Government obligations held by the Fund, however, will be
deemed to have maturities equal to the period remaining until the next interest
rate adjustment.
The absence of an active secondary market for certain variable and floating
rate notes could make it difficult to dispose of the instruments, and the Fund
could suffer a loss if the issuer defaulted or during periods that the Fund is
not entitled to exercise its demand rights.
Variable and floating rate instruments held by the Fund will be subject to
the Fund's limitation on illiquid investments when the Fund may not demand
payment of the principal amount within seven days absent a reliable trading
market.
11
<PAGE>
When-Issued Purchases and Forward Commitments (Delayed-Delivery
Transactions). When-issued purchases and forward commitments (known as delayed-
delivery transactions) are commitments by the Fund to purchase or sell
particular securities with payment and delivery to occur at a future date
(perhaps one or two months later). These transactions permit the Fund to lock-in
a price or yield on a security, regardless of future changes in interest rates.
When the Fund agrees to purchase securities on a when-issued or forward
commitment basis, the custodian will earmark cash or liquid portfolio securities
equal to the amount of the commitment. Normally, the custodian will earmark
portfolio securities to satisfy a purchase commitment, and in such a case the
Fund may be required subsequently to earmark additional assets in order to
ensure that the value of the account remains equal to the amount of the Fund's
commitments. It may be expected that the market value of the Fund's net assets
will fluctuate to a greater degree when it earmarks portfolio securities to
cover such purchase commitments than when it earmarks cash. Because the Fund's
liquidity and ability to manage its portfolio might be affected when it earmarks
cash or portfolio securities to cover such purchase commitments, the Advisor
expects that its commitments to purchase when-issued securities and forward
commitments will not exceed 25% of the value of the Fund's total assets absent
unusual market conditions.
The Fund will purchase securities on a when-issued or forward commitment
basis only with the intention of completing the transaction and actually
purchasing the securities. If deemed advisable as a matter of investment
strategy, however, the Fund may dispose of or renegotiate a commitment after it
is entered into, and may sell securities it has committed to purchase before
those securities are delivered to the Fund on the settlement date. In these
cases the Fund may realize a taxable capital gain or loss.
When the Fund engages in when-issued and forward commitment transactions,
it relies on the other party to consummate the trade. Failure of such party to
do so may result in the Fund's incurring a loss or missing an opportunity to
obtain a price considered to be advantageous.
The market value of the securities underlying a when-issued purchase or a
forward commitment to purchase securities, and any subsequent fluctuations in
their market value, are taken into account when determining the market value of
the Fund starting on the day the Fund agrees to purchase the securities. The
Fund does not earn interest on the securities it has committed to purchase until
they are paid for and delivered on the settlement date.
Yields and Ratings. The yields on certain obligations, including the money
market instruments in which the Fund may invest (such as commercial paper and
bank obligations), are dependent on a variety of factors, including general
money market conditions, conditions in the particular market for the obligation,
the financial condition of the issuer, the size of the offering, the maturity of
the obligation and the ratings of the issue. The ratings of S&P, Moody's, Duff &
Phelps Credit Rating Co., Thomson Bank Watch, Inc., and other nationally
recognized statistical rating organizations represent their respective opinions
as to the quality of the obligations they undertake to rate. Ratings, however,
are general and are not absolute standards of quality. Consequently, obligations
with the same rating, maturity and interest rate may have different market
prices.
Subsequent to its purchase by the Fund, a rated security may cease to be
rated or its rating may be reduced below the minimum rating required for
purchase by the Fund. The Board of Directors or the Advisor, pursuant to
guidelines established by the Board, will consider such an event in determining
whether the Fund involved should continue to hold the security in accordance
with the interests of the Fund and applicable regulations of the SEC.
INVESTMENT LIMITATIONS
The Fund is subject to the investment limitations enumerated in this
section which may be changed with respect to the Fund only by a vote of the
holders of a majority of the Fund's outstanding shares (as defined under
"Miscellaneous Shareholder Approvals").
The Fund may not:
12
<PAGE>
1. Invest more than 25% of its total assets in any one industry (i)
provided that securities issued or guaranteed by the U.S. Government,
its agencies or instrumentalities are not considered to represent
industries; (ii) except that the Fund will invest more than 25% of its
total assets in common stocks of technology-related companies.
Technology-related companies are companies that engage in the
development, manufacturing or distribution of technology and
telecommunications related products and services;
2. With respect to 75% of the Fund's assets, invest more than 5% of the
Fund's assets (taken at a market value at the time of purchase) in the
outstanding securities of any single issuer or own more than 10% of
the outstanding voting securities of any one issuer, in each case
other than securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities;
3. Borrow money or issue senior securities (as defined in the 1940 Act)
except that the Fund may borrow (i) for temporary purposes in amounts
not exceeding 5% of its total assets and (ii) to meet redemption
requests, in amounts (when aggregated with amounts borrowed under
clause (i)) not exceeding 33 1/3% of its total assets;
4. Pledge, mortgage or hypothecate its assets other than to secure
borrowings permitted by investment limitation 3 above (collateral
arrangements with respect to margin requirements for options and
futures transactions are not deemed to be pledges or hypothecations
for this purpose);
5. Make loans of securities to other persons in excess of 25% of the
Fund's total assets; provided the Fund may invest without limitation
in short-term debt obligations (including repurchase agreements) and
publicly distributed debt obligations;
6. Underwrite securities of other issuers, except insofar as the Fund may
be deemed an underwriter under the Securities Act of 1933, as amended,
in selling portfolio securities;
7. Purchase or sell real estate or any interest therein, including
interests in real estate limited partnerships, except securities
issued by companies (including real estate investment trusts) that
invest in real estate or interests therein;
8. Purchase securities on margin, or make short sales of securities,
except for the use of short-term credit necessary for the clearance of
purchases and sales of portfolio securities, but the Fund may make
margin deposits in connection with transactions in options, futures
and options on futures;
9. Make investments for the purpose of exercising control or management;
or
10. Invest in commodities or commodity futures contracts, provided that
this limitation shall not prohibit the purchase or sale by the Fund of
forward currency contracts, financial futures contracts and options on
financial futures contracts, and options on securities and on
securities, foreign currencies and on securities indices, as permitted
by the Fund's prospectus.
Additional investment restrictions adopted by the Fund, which may be
changed by the Board of Directors, provide that the Fund may not:
1. Invest more than 15% of its net assets (taken at market value at the
time of purchase) in securities which cannot be readily resold because
of legal or contractual restrictions;
2. Own more than 10% (taken at market value at the time of purchase) of
the outstanding voting securities of any single issuer;
13
<PAGE>
3. Purchase or sell interests in oil, gas or other mineral exploration or
development plans or leases; or
4. Invest in other investment companies except as permitted under the
1940 Act.
If a percentage limitation is satisfied at the time of investment, a later
increase or decrease in such percentage resulting from a change in the value of
the Fund's investments will not constitute a violation of such limitation,
except that any borrowing by the Fund that exceeds the fundamental investment
limitations stated above must be reduced to meet such limitations within the
period required by the 1940 Act (currently three days). Otherwise, the Fund may
continue to hold a security even though it causes the Fund to exceed a
percentage limitation because of fluctuation in the value of the Fund's assets.
TEMPORARY DEFENSIVE POSITION
During periods of unusual economic or market conditions or for temporary
defensive purposes or liquidity, the Fund may invest without limit in cash and
in U.S. dollar-denominated high quality money market and other short-term
instruments. These investments may result in a lower yield than would be
available from investments with a lower quality or longer term.
DIRECTORS AND OFFICERS
The directors and executive officers of the Company, and their business
addresses and principal occupations during the past five years, are:
<TABLE>
<CAPTION>
Principal Occupation
Name, Address and Age Positions with Company+ During Past Five Years
- --------------------- ----------------------- ----------------------
<S> <C> <C>
Charles W. Elliott Director and Chairman of the Board Senior Advisor to the President,
1024 Essex Circle of Directors Western Michigan University (July
Kalamazoo, MI 49008 1995 through December 1998);
Age: 67 Executive Vice President,
Administration & Chief Financial
Officer, Kellogg Company (January
1987 through June 1995). Board of
Directors, Steelcase Financial
Corporation; Board of Directors,
Enesco Group.
John Rakolta, Jr. Director and Vice Chairman of the Chairman and Chief Executive
1876 Rathmor Board of Directors Officer, Walbridge Aldinger Company
Bloomfield Hills, MI 48304 (construction company).
Age: 51
Thomas B. Bender Director Partner, Financial & Investment
5033 Wood Ridge Road Management Group.
Glen Arbor, MI 49636
Age: 65
David J. Brophy Director Professor, University of Michigan.
1025 Martin Place Director, River Place Financial
Ann Arbor, MI 48104 Corporation.
Age: 62
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Dr. Joseph E. Champagne Director Dean, University Center, Macomb
319 East Snell Road College (since September 1997);
Rochester, MI 48306 Corporate and Executive Consultant
Age: 60 (since September 1995); Chancellor,
Lamar University (September 1994 to
September 1995). Chairman of Board
of Directors, Ross Operating Valve
of Troy, Michigan.
Thomas D. Eckert Director President and Chief Executive
10726 Falls Pointe Drive Officer, Capital Automotive REIT
Great Falls, VA 22066 (real estate investment trust
Age: 51 specializing in retail automotive
properties) (since November 1997);
President and Chief Operating
Officer, Mid-Atlantic Group of
Pulte Home Corporation (developer
of residential land and
construction of housing units)
(1983 to 1997).
Lee P. Munder* Director and President Chairman of the Advisor (since
1029 N. Ocean Blvd. February 1998); Chief Executive
Palm Beach, FL 33480 Officer of the Advisor (1995 to
Age: 53 1998); Chief Executive Officer,
World Asset Management (1995 to
1998); Chief Executive Officer, MCM
(predecessor of Advisor) (since
1985); Director, LPM Investment
Services, Inc. ("LPM"); Director,
Capital Automotive REIT.
Terry H. Gardner Vice President, Vice President and Chief Financial
480 Pierce Street Chief Financial Officer Officer of the Advisor (since
Suite 300 and Treasurer 1993), Vice President and Chief
Birmingham, MI 48009 Financial Officer, MCM (since
Age: 38 1993); Secretary, LPM.
Paul Tobias Vice President Chief Executive Officer of the
480 Pierce Street Advisor (since February 1998);
Suite 300 Chief Operating Officer of the
Birmingham, MI 48009 Advisor (since April 1995);
Age: 48 Executive Vice President of the
Advisor (April 1995 to February
1998); Executive Vice President,
Comerica, Inc. (October 1990
through April 1995).
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Gerald Seizert Vice President Chief Executive Officer of the
480 Pierce Street Advisor (since February 1998);
Suite 300 Chief Investment Officer/Equities
Birmingham, MI 48009 of the Advisor (since April 1995);
Age: 47 Executive Vice President of the
Advisor (April 1995 to February
1998); Managing Director (1991 to
1995), Director (1992 to 1995), and
Vice President (1984 to 1991) of
Loomis, Sayles and Company, L.P.
Elyse G. Essick Vice President Vice President and Director of
480 Pierce Street Marketing of the Advisor (since
Suite 300 January 1995).
Birmingham, MI 48009
Age: 41
James C. Robinson Vice President Vice President and Chief Investment
480 Pierce Street Officer/Fixed Income of the Advisor
Suite 300 (since January 1995).
Birmingham, MI 48009
Age: 38
Leonard J. Barr Vice President Vice President and Director of Core
480 Pierce Street Equity Research of the Advisor
Suite 300 (since January 1995); Director and
Birmingham, MI 48009 Senior Vice President, MCM (since
Age: 54 1988); Director of LPM.
Ann F. Putallaz Vice President Vice President and Director of
480 Pierce Street Fiduciary Services of the Advisor
Suite 300 (since January 1995).
Birmingham, MI 48009
Age: 53
Therese Hogan Assistant Secretary Director, State Regulation
53 State Street Department, First Data Investor
Boston, MA 02109 Services Group (since June 1994).
Age: 37
</TABLE>
- --------------------
+ Individual holds same position with The Munder Funds Trust (the "Trust"),
Munder Framlington Funds Trust ("Munder Framlington") and St. Clair Funds, Inc.
("St. Clair") each a registered investment company.
* "Interested person" of the Company, as defined in the 1940 Act.
Directors who are not interested persons of the Company and St. Clair, and
Trustees who are not interested persons of the Trust and Munder Framlington,
receive an aggregate fee from the Company, the Trust, St. Clair and Munder
Framlington for service on those organizations' respective Boards, comprised of
an annual retainer fee of $30,000 and a fee of $2,500 for each Board meeting
attended; and are reimbursed for all out-of-pocket expenses relating to
attendance at such meetings.
The following table summarizes the compensation paid by the Trust, Munder
Framlington, the Company and St. Clair to their respective Trustees/Directors
for the year ended June 30, 1998.
16
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Charles W. Elliot John Rakolta, Jr. Thomas B. David J. Dr. Joseph E. Thomas D.
Chairman, Vice Chairman, Bender Brophy Champagne Eckert
Trustee and Trustee and Trustee and Trustee and Trustee and Trustee and
Director Director Director Director Director Director
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aggregate Compensation
from the Company $ 5,785 $ 5,785 $ 5,785 $ 5,276 $ 5,785 $ 5,785
- --------------------------------------------------------------------------------------------------------------------------------
Aggregate Compensation
from the Trust $22,997 $22,997 $22,997 $21,096 $22,997 $22,997
- --------------------------------------------------------------------------------------------------------------------------------
Aggregate Compensation
from Munder Framlington $ 398 $ 398 $ 398 $ 360 $ 398 $ 398
- --------------------------------------------------------------------------------------------------------------------------------
Aggregate Compensation
from St. Clair $ 319 $ 319 $ 319 $ 268 $ 319 $ 319
- --------------------------------------------------------------------------------------------------------------------------------
Pension Retirement
Benefits Accrued as
Part of Fund Expenses None None None None None None
- --------------------------------------------------------------------------------------------------------------------------------
Estimated Annual
Benefits upon Retirement None None None None None None
- --------------------------------------------------------------------------------------------------------------------------------
Total from the Fund
Complex $29,500 $29,500 $29,500 $27,000 $29,500 $29,500
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
No officer, director or employee of the Advisor, Comerica Incorporated
("Comerica"), the Sub-Custodian, the Distributor, the Administrator or the
Transfer Agent currently receives any compensation from the Trust, Framlington
or the Company. As of June 11, 1999, the Directors and officers of the Company,
as a group, owned less than 1% of all classes of outstanding shares of the Fund.
INVESTMENT ADVISORY AND OTHER SERVICE ARRANGEMENTS
Investment Advisor. The Advisor of the Fund is Munder Capital Management, a
Delaware general partnership. The general partners of the Advisor are WAM, WAM
II, MCM and Munder Group LLC. WAM and WAM II are wholly owned subsidiaries of
Comerica Bank-Ann Arbor, which in turn is a wholly owned subsidiary of Comerica
Incorporated, a publicly held bank holding company.
The Investment Advisory Agreement (the "Advisory Agreement") between the
Company on behalf of the Fund and the Advisor has been approved by the Board of
Directors and by the shareholders of the Fund.
Under the terms of the Advisory Agreement, the Advisor furnishes continuing
investment supervision to the Fund and is responsible for the management of the
Fund. The responsibility for making decisions to buy, sell or hold a particular
security rests with the Advisor, subject to review by the Company's Board of
Directors.
The Advisory Agreement will continue in effect for a period of two years
from its effective date. If not sooner terminated, the Advisory Agreement will
continue in effect for successive one year periods thereafter, provided that
each continuance is specifically approved annually by (a) the vote of a majority
of the Board of Directors who are not parties to the Advisory Agreement or
interested persons (as defined in the 1940 Act), cast in person at a meeting
called for the purpose of voting on such approval, and (b) either (i) the vote
of a majority of the outstanding voting securities of the affected Fund, or (ii)
the vote of a majority of the Board of Directors. The Advisory Agreement is
terminable with respect to the Fund by vote of the Board of Directors, or by the
holders of a majority of the outstanding voting securities of the Fund, at any
time without penalty, on 60 days' written notice to the Advisor. The Advisor may
also terminate its advisory relationship with respect to the Fund without
penalty on 90 days' written notice to the Company, as applicable. The Advisory
Agreement terminates automatically in the event of its assignment (as defined in
the 1940 Act).
17
<PAGE>
For the advisory services provided and expenses assumed by with regard to
the Fund, the Advisor has agreed to a fee from the Fund computed daily and
payable monthly at the annual rate of 1.00% of the average daily net assets of
the Fund.
Distribution Agreement. The Company has entered into a distribution
agreement, under which the Distributor, as agent, sells shares of the Fund on a
continuous basis. The Distributor has agreed to use appropriate efforts to
solicit orders for the purchase of shares of the Fund, although it is not
obligated to sell any particular amount of shares. The Distributor pays the cost
of printing and distributing prospectuses to persons who are not holders of fund
shares (excluding preparation and printing expenses necessary for the continued
registration of the shares) and of printing and distributing all sales
literature. The Distributor's principal offices are located at 60 State Street,
Boston, Suite 1300, Massachusetts 02109.
Distribution Services Arrangements - Class A, Class B and Class C Shares.
The Fund has adopted a Service Plan with respect to its Class A Shares pursuant
to which it uses its assets to finance activities relating to the provision of
certain shareholder services. Under the Service Plan for Class A Shares, the
Distributor is paid an annual service fee at the rate of up to 0.25% of the
value of average daily net assets of the Class A Shares of the Fund. The Fund
has also adopted Service and Distribution Plans with respect to its Class B and
Class C Shares, pursuant to which it uses its assets to finance activities
relating to the distribution of its shares to investors and provision of certain
shareholder services. Under the Service and Distribution Plans for Class B and
Class C Shares, the Distributor is paid an annual service fee of up to 0.25% of
the value of average daily net assets of the Class B and Class C Shares of the
Fund and an annual distribution fee at the rate of up to 0.75% of the value of
average daily net assets of the Class B and Class C Shares of the Fund.
Under the terms of the Service Plan and Service and Distribution Plans
(collectively, the "Plans"), each Plan continues from year to year, provided
such continuance is approved annually by vote of the Board of Directors,
including a majority of the Directors who are not interested persons of the
Company, as applicable, and who have no direct or indirect financial interest in
the operation of that Plan (the "Non-Interested Plan Directors"). The Plans may
not be amended to increase the amount to be spent for the services provided by
the Distributor without shareholder approval, and all amendments of the Plans
also must be approved by the Directors in the manner described above. Each Plan
may be terminated at any time, without penalty, by vote of a majority of the
Non-Interested Plan Directors or by a vote of a majority of the outstanding
voting securities (as defined in the 1940 Act) of the relevant class of the Fund
on not more than 30 days' written notice to any other party to the Plan.
Pursuant to each Plan, the Distributor will provide the Board of Directors
periodic reports of amounts expended under the Plan and the purpose for which
such expenditures were made.
The Directors have determined that the Plans will benefit the Company and
its respective shareholders by (i) providing an incentive for broker or bank
personnel to provide continuous shareholder servicing after the time of sale;
(ii) retaining existing accounts; (iii) facilitating portfolio management
flexibility through continued cash flow into the Fund; and (iv) maintaining a
competitive sales structure in the mutual fund industry.
With respect to Class B and Class C Shares of the Fund, the Distributor
expects to pay sales commissions to dealers authorized to sell the Fund's Class
B and Class C Shares at the time of sale. The Distributor will use its own funds
(which may be borrowed) to pay such commissions pending reimbursement by the
relevant Plan. In addition, the Advisor may use its own resources to make
payments to the Distributor or dealers authorized to sell the Fund's shares to
support their sales efforts.
Administration Agreement. State Street Bank and Trust Company ("State
Street" or the "Administrator") located at 225 Franklin Street, Boston,
Massachusetts, 02110, serves as administrator for the Company pursuant to an
administration agreement (the "Administration Agreement"). State Street has
agreed to maintain office facilities for the Company; oversee the computation of
the Fund's net asset value, net income and realized capital gains, if any;
furnish statistical and research data, clerical services, and stationery and
office supplies; prepare and file various reports with the appropriate
regulatory agencies; and prepare various materials required by the SEC. State
Street may enter into an agreement with one or more third parties pursuant to
which such third parties will provide administrative services on behalf of the
Fund.
18
<PAGE>
The Administration Agreement provides that the Administrator performing
services thereunder shall not be liable under the Agreement except for its bad
faith, negligence or willful misconduct in the performance of its duties and
obligations thereunder.
Custodian and Transfer Agency Agreements. State Street Bank and Trust
Company (the "Custodian") serves as the custodian to the Fund pursuant to a
custodian agreement (the "Custodian Contract") among the Custodian and the
Company. State Street is also the custodian with respect to the custody of
foreign securities held by the Fund. State Street has in turn entered into
additional agreements with financial institutions and depositaries located in
foreign countries with respect to the custody of such securities. Under the
Custodian Contract, State Street (i) maintains a separate account in the name of
each Fund, (ii) holds and transfers portfolio securities on account of the Fund,
(iii) accepts receipts and makes disbursements of money on behalf of the Fund,
(iv) collects and receives all income and other payments and distributions on
account of the Fund's securities and (v) makes periodic reports to the Board of
Directors concerning the Fund's operations.
First Data Investor Services Group, Inc. ("Investor Services Group" or the
"Transfer Agent") located at 4400 Computer Drive, Westborough, Massachusetts
01581 serves as the transfer and dividend disbursing agent for the Fund pursuant
to the transfer agency agreement with the Company, under which Investor Services
Group (i) issues and redeems shares of the Fund, (ii) addresses and mails all
communications by each Fund to its record owners, including reports to
shareholders, dividend and distribution notices and proxy materials for its
meetings of shareholders, (iii) maintains shareholder accounts, (iv) responds to
correspondence by shareholders of the Fund and (v) makes periodic reports to the
Board of Directors concerning the operations of the Fund.
Other Information Pertaining to Administration, Custodian and Transfer
Agency Agreements. Except as noted in this SAI the Fund's service contractors
bear all expenses in connection with the performance of their services and the
Fund bears the expenses incurred in their operations. These expenses include,
but are not limited to, fees paid to the Advisor, Administrator, Custodian, and
Transfer Agent; fees and expenses of officers and Board of Directors; taxes;
interest; legal and auditing fees; brokerage fees and commissions; certain fees
and expenses in registering and qualifying the Fund and its shares for
distribution under Federal and state securities laws; expenses of preparing
prospectuses and statements of additional information and of printing and
distributing prospectuses and statements of additional information to existing
shareholders; the expense of reports to shareholders, shareholders' meetings and
proxy solicitations; fidelity bond and directors' and officers' liability
insurance premiums; and the expense of using independent pricing services. Any
general expenses of the Company that are not readily identifiable as belonging
to a particular investment portfolio of the Company are allocated among all
investment portfolios of the Company by or under the direction of the Board of
Directors in a manner that the Board determines to be fair and equitable. The
Advisor, Administrator, Custodian and Transfer Agent may voluntarily waive all
or a portion of their respective fees from time to time.
PORTFOLIO TRANSACTIONS
Subject to the general supervision of the Board of Directors, the Advisor,
as the case may be, makes decisions with respect to and places orders for all
purchases and sales of portfolio securities for the Fund.
Transactions on U.S. stock exchanges involve the payment of negotiated
brokerage commissions. On exchanges on which commissions are negotiated, the
cost of transactions may vary among different brokers. Transactions on foreign
stock exchanges involve payment for brokerage commissions which are generally
fixed.
Over-the-counter issues, including corporate debt and government
securities, are normally traded through dealers on a "net" basis (i.e., without
commission), or directly with the issuer. With respect to over-the-counter
transactions, the Advisor, as the case may be, will normally deal directly with
dealers who make a market in the instruments except in those circumstances where
more favorable prices and execution are available elsewhere. The cost of foreign
and domestic securities purchased from underwriters includes an underwriting
commission or concession, and the prices at which securities are purchased from
and sold to dealers include a dealer's mark-up or mark-down.
19
<PAGE>
The Fund may participate, if and when practicable, in bidding for the
purchase of portfolio securities directly from an issuer in order to take
advantage of the lower purchase price available to members of a bidding group.
The Fund will engage in this practice, however, only when the Advisor, as the
case may be, believes such practice to be in the Fund's interests.
In the Advisory Agreement, the Advisor agrees to select broker-dealers in
accordance with guidelines established by the Board of Directors from time to
time and in accordance with applicable law. In assessing the terms available for
any transaction, the Advisor shall consider all factors it deems relevant,
including the breadth of the market in the security, the price of the security,
the financial condition and execution capability of the broker-dealer, and the
reasonableness of the commission, if any, both for the specific transaction and
on a continuing basis. In addition, the Advisory Agreement authorizes the
Advisor subject to the prior approval of the Board of Directors, to 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 to 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. Such brokerage and research services might consist of
reports and statistics on specific companies or industries, general summaries of
groups of bonds and their comparative earnings and yields, or broad overviews of
the securities markets and the economy.
Supplementary research information so received is in addition to, and not
in lieu of, services required to be performed by the Advisor and does not reduce
the advisory fees payable to the Advisor by the Fund. It is possible that
certain of the supplementary research or other services received will primarily
benefit one or more other investment companies or other accounts for which
investment discretion is exercised. Conversely, the Fund may be the primary
beneficiary of the research or services received as a result of portfolio
transactions effected for such other account or investment company.
Portfolio securities will not be purchased from or sold to the Advisor,
Distributor or any affiliated person (as defined in the 1940 Act) of the
foregoing entities except to the extent permitted by SEC exemptive order or by
applicable law.
Investment decisions for the Fund and for other investment accounts managed
by the Advisor are made independently of each other in the light of differing
conditions. However, the same investment decision may be made for two or more of
such accounts. In such cases, simultaneous transactions are inevitable.
Purchases or sales are then averaged as to price and allocated as to amount in a
manner deemed equitable to each such account. While in some cases this practice
could have a detrimental effect on the price or value of the security as far as
the Fund is concerned, in other cases it is believed to be beneficial to the
Fund. To the extent permitted by law, the Advisor may aggregate the securities
to be sold or purchased for the Fund with those to be sold or purchased for
other investment companies or accounts in executing transactions.
The Fund will not purchase any securities while the Advisor or any
affiliated person (as defined in the 1940 Act) is a member of any underwriting
or selling group for such securities except pursuant to procedures adopted by
the Company's Board of Directors in accordance with Rule 10f-3 under the 1940
Act.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Purchases. As described in the Prospectuses, shares of the Fund may be
purchased in a number of different ways. Such alternative sales arrangements
permit an investor to choose the method of purchasing shares that is most
beneficial depending on the amount of the purchase, the length of time the
investor expects to hold shares and other relevant circumstances. An investor
may place orders directly through the Transfer Agent or the Distributor or
through arrangements with his/her authorized broker.
Retirement Plans. Shares of the Fund may be purchased in connection with
various types of tax deferred retirement plans, including individual retirement
accounts ("IRAs"), qualified plans, deferred compensation for
20
<PAGE>
public schools and charitable organizations (403(b) plans) and simplified
employee pension IRAs. An individual or organization considering the
establishment of a retirement plan should consult with an attorney and/or an
accountant with respect to the terms and tax aspects of the plan. A $10.00
annual custodial fee is also charged on IRAs. This custodial fee is due by
December 15 of each year and may be paid by check or shares liquidated from a
shareholder's account.
Redemptions. As described in the Fund's Prospectuses, shares of the Fund
may be redeemed in a number of different ways:
. By Mail
. By Telephone
. Automatic Withdrawal Plan
The redemption price for Fund shares is the net asset value next determined
after receipt of the redemption request in proper order. The redemption proceeds
will be reduced by the amount of any applicable contingent deferred sales charge
("CDSC").
Contingent Deferred Sales Charge - Class B Shares. Class B Shares redeemed
within six years of purchase are subject to a CDSC. The CDSC is based on the
original net asset value at the time of investment or the net asset value at the
time of redemption, whichever is lower.
The CDSC Schedule for Class B Shares of the Trust Funds purchased before
June 27, 1995 is set forth below. The Prospectuses describe the CDSC Schedule
for Class B Shares of Funds of the Trust, the Company and Framlington purchased
after June 27, 1995.
Class B Shares of the Trust Funds
Purchased on or before June 27, 1995
<TABLE>
<CAPTION>
Redemption During CDSC
- ------------------------------------------------------------------------------------
<S> <C>
1st Year Since Purchase........................................................4.00%
2nd Year Since Purchase........................................................4.00%
3rd Year Since Purchase........................................................3.00%
4th Year Since Purchase........................................................3.00%
5th Year Since Purchase........................................................2.00%
6th Year Since Purchase........................................................1.00%
</TABLE>
CDSC Waivers - Class B Shares of the Trust Funds Purchased on or before
June 27, 1995. The CDSC will be waived with respect to Class B Shares of the
Trust Funds purchased on or before June 27, 1995 in the following circumstances:
(1) total or partial redemptions made within one year following the death
or disability of a shareholder or registered joint owner;
(2) minimum required distributions made in connection with an IRA or other
retirement plan following attainment of age 59 1/2; and
(3) redemptions pursuant to a Fund's right to liquidate a shareholder's
account involuntarily.
CDSC Waivers - Class B Shares of the Company Funds Purchased on or before
June 27, 1995. The CDSC will be waived on the following types of redemptions
with respect to Class B Shares of the Company Funds purchased on or before
June 27, 1995:
(1) redemptions by investors who have invested a lump sum amount of $1
million or more in the Fund;
21
<PAGE>
(2) redemptions by the officers, directors, and employees of the Advisor
or the Distributor and such persons' immediate families;
(3) dealers or brokers who have a sales agreement with the Distributor,
for their own accounts, or for retirement plans for their employees or
sold to registered representatives or 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) involuntary redemptions effected pursuant to the Fund's right to
liquidate shareholder accounts having an aggregate net asset value of
less than $250; and
(5) redemptions the proceeds of which are reinvested in the Fund within 90
days of the redemption.
Contingent Deferred Sales Charge - Class A and Class C Shares. The
Prospectuses describe the CDSC for Class A or C Shares of the Funds of the
Trust, the Company and Framlington purchased after June 27, 1995.
Class A Shares of the Trust Funds purchased on or before June 27, 1995
without a sales charge by reason of a purchase of $500,000 or more are subject
to a CDSC of 1.00% of the lower of the original purchase price or the net asset
value at the time of redemption if such shares are redeemed within two years of
the date of purchase. Class A Shares of the Trust Funds purchased on or before
June 27, 1995 that are redeemed will not be subject to the CDSC to the extent
that the value of such shares represents: (1) reinvestment of dividends or other
distributions; (2) Class A Shares redeemed more than two years after their
purchase; (3) a minimum required distribution made in connection with IRA or
other retirement plans following attainment of age 59 1/2; or (4) total or
partial redemptions made within one year following the death or disability of a
shareholder or registered joint owner.
No CDSC is imposed to the extent that the current net asset value of the
shares redeemed does not exceed (a) the current net asset value of shares
purchased through reinvestment of dividends or capital gain distributions plus
(b) the current net asset value of shares purchased more than one year prior to
the redemption, plus (c) increases in the net asset value of the shareholder's
shares above the purchase payments made during the preceding one year.
The holding period of Class A or Class C Shares of a Fund acquired through
an exchange of the corresponding class of shares of the Munder Money Market Fund
(which are available only by exchange of Class A or Class C Shares of the Fund,
as the case may be) and the Company Funds, the Framlington Funds and the non-
money market funds of the Trust will be calculated from the date that the Class
A or Class C Shares of the Fund were initially purchased.
In determining whether a CDSC is applicable to a redemption, the
calculation will be made in a manner that results in the lowest possible rate.
It will be assumed that the redemption is made first of amounts representing all
Class A Shares on which a front-end sales charge has been assessed; then of
shares acquired pursuant to the reinvestment of dividends and distributions; and
then of amounts representing the cost of shares purchased one year or more prior
to the redemption.
Other Redemption Information. Redemption proceeds are normally paid in
cash; however, the Fund may pay the redemption price in whole or part by a
distribution in kind of securities from the portfolio of the Fund, in lieu of
cash, in conformity with applicable rules of the SEC. If shares are redeemed in
kind, the redeeming shareholder might incur transaction costs in converting the
assets into cash. The Fund is obligated to redeem shares solely in cash up to
the lesser of $250,000 or 1% of its net assets during any 90-day period for any
one shareholder.
The Fund reserves the right to suspend or postpone redemptions during any
period when: (i) trading on the New York Stock Exchange (the "NYSE") is
restricted by applicable rules and regulations of the SEC; (ii) the NYSE is
closed other than for customary weekend and holiday closings; (iii) the SEC has
by order permitted such suspension or postponement for the protection of the
shareholders; or (iv) an emergency, as determined by the SEC, exists, making
disposal of portfolio securities or valuation of net assets of the Fund not
reasonably practicable.
The Fund may involuntarily redeem an investor's shares if the net asset
value of such shares is less than $250; provided that involuntary redemptions
will not result from fluctuations in the value of an investor's shares. A
22
<PAGE>
notice of redemption, sent by first-class mail to the investor's address of
record, will fix a date not less than 30 days after the mailing date, and shares
will be redeemed at the net asset value at the close of business on that date
unless sufficient additional shares are purchased to bring the aggregate account
value up to $250 or more. A check for the redemption proceeds payable to the
investor will be mailed to the investor at the address of record.
Exchanges. In addition to the method of exchanging shares described in the
Fund's Prospectuses, a shareholder exchanging at least $1,000 of shares (for
which certificates have not been issued) and who has authorized expedited
exchanges on the application form filed with the Transfer Agent may exchange
shares by telephoning the Fund at (800) 438-5789. Telephone exchange
instructions must be received by the Transfer Agent by 4:00 p.m., Eastern time.
The Fund, Distributor and Transfer Agent reserve the right at any time to
suspend or terminate the expedited exchange procedure or to impose a fee for
this service. During periods of unusual economic or market changes, shareholders
may experience difficulties or delays in effecting telephone exchanges. Neither
the Fund nor the Transfer Agent will be responsible for any loss, damages,
expense or cost arising out of any telephone exchanges effected upon
instructions believed by them to be genuine. The Transfer Agent has instituted
procedures that it believes are reasonably designed to insure that exchange
instructions communicated by telephone are genuine, and could be liable for
losses caused by unauthorized or fraudulent instructions in the absence of such
procedures. The procedures currently include a recorded verification of the
shareholder's name, social security number and account number, followed by the
mailing of a statement confirming the transaction, which is sent to the address
of record.
NET ASSET VALUE
The net asset value per share of the Fund for the purpose of pricing
purchase and redemption orders is determined as of the close of regular trading
hours on the NYSE (currently 4:00 p.m., Eastern time) on each business day.
Securities traded on a national securities exchange or on NASDAQ for which there
were no sales on the date of valuation and securities traded on other over-the-
counter markets, including listed securities for which the primary market is
believed to be over-the-counter, are valued at the mean between the most
recently quoted bid and asked prices. Options will be valued at market value or
fair value if no market exists. Futures contracts will be valued in like manner,
except that open futures contract sales will be valued using the closing
settlement price or, in the absence of such a price, the most recently quoted
asked price. Restricted securities and securities and assets for which market
quotations are not readily available are valued at fair value by the Advisor
under the supervision of the Board of Directors. Debt securities with remaining
maturities of 60 days or less are valued at amortized cost, unless the Board of
Directors determines that such valuation does not constitute fair value at that
time. Under this method, such securities are valued initially at cost on the
date of purchase (or the 61st day before maturity).
In determining the approximate market value of portfolio investments, the
Company may employ outside organizations, which may use matrix or formula
methods that take into consideration market indices, matrices, yield curves and
other specific adjustments. This may result in the securities being valued at a
price different from the price that would have been determined had the matrix or
formula methods not been used. All cash, receivables and current payables are
carried on the Company's books at their face value. Other assets, if any, are
valued at fair value as determined in good faith under the supervision of the
Board members.
In-Kind Purchases. Payment for shares may, in the discretion of the
Advisor, be made in the form of securities that are permissible investments for
the Fund as described in the Prospectuses. For further information about this
form of payment please contact the Transfer Agent. In connection with an in-kind
securities payment, the Fund will require, among other things, that the
securities (a) meet the investment objectives and policies of the Fund; (b) are
acquired for investment and not for resale; (c) are liquid securities that are
not restricted as to transfer either by law or liquidity of markets; (d) have a
value that is readily ascertainable by a listing on a nationally recognized
securities exchange; and (e) are valued on the day of purchase in accordance
with the pricing methods used by the Fund and that the Fund receive satisfactory
assurances that (i) it will have good and marketable title to the securities
received by it; (ii) that the securities are in proper form for transfer to the
Fund; and (iii) adequate information will be provided concerning the basis and
other tax matters relating to the securities.
23
<PAGE>
PERFORMANCE INFORMATION
Yield. The Fund's 30-day (or one month) standard yield is calculated for
the Fund in accordance with the method prescribed by the SEC for mutual funds:
YIELD = 2 [( a-b + 1)/6/ - 1]
---
cd
Where:
a = dividends and interest earned by a Fund during the period;
b = expenses accrued for the period (net of reimbursements and waivers);
c = average daily number of shares outstanding during the period entitled
to receive dividends;
d = maximum offering price per share on the last day of the period.
For the purpose of determining interest earned on debt obligations
purchased by the Fund at a discount or premium (variable "a" in the formula),
the Fund computes the yield to maturity of such instrument based on the market
value of the obligation (including actual accrued interest) at the close of
business on the last business day of each month, or, with respect to obligations
purchased during the month, the purchase price (plus actual accrued interest).
Such yield is then divided by 360 and the quotient is multiplied by the market
value of the obligation (including actual accrued interest) in order to
determine the interest income on the obligation for each day of the subsequent
month that the obligation is in the portfolio. It is assumed in the above
calculation that each month contains 30 days. The maturity of a debt obligation
with a call provision is deemed to be the next call date on which the obligation
reasonably may be expected to be called or, if none, the maturity date. For the
purpose of computing yield on equity securities held by the Fund, dividend
income is recognized by accruing 1/360 of the stated dividend rate of the
security for each day that the security is held by the Fund.
Interest earned on tax-exempt obligations that are issued without original
issue discount and have a current market discount is calculated by using the
coupon rate of interest instead of the yield to maturity. In the case of tax-
exempt obligations that are issued with original issue discount but which have
discounts based on current market value that exceed the then-remaining portion
of the original issue discount (market discount), the yield to maturity is the
imputed rate based on the original issue discount calculation. On the other
hand, in the case of tax-exempt obligations that are issued with original issue
discount but which have the discounts based on current market value that are
less than the then-remaining portion of the original issue discount (market
premium), the yield to maturity is based on the market value.
With respect to mortgage or other receivables-backed debt obligations
purchased at a discount or premium, the formula generally calls for amortization
of the discount or premium. The amortization schedule will be adjusted monthly
to reflect changes in the market value of such debt obligations. Expenses
accrued for the period (variable "b" in the formula) include all recurring fees
charged by the Fund to all shareholder accounts in proportion to the length of
the base period and the Fund's mean (or median) account size. Undeclared earned
income will be subtracted from the offering price per share (variable "d" in the
formula). The Fund's maximum offering price per share for purposes of the
formula includes the maximum sales charge imposed -- currently 5.50% of the per
share offering price for Class A Shares of the Fund.
Total Return. The Fund that advertises its "average annual total return"
computes such return by determining the average annual compounded rate of return
during specified periods that equates the initial amount invested to the ending
redeemable value of such investment according to the following formula:
P (1 + T)/n/ = ERV
Where:
P = hypothetical initial payment of $1,000;
T = average annual total return;
24
<PAGE>
n = period covered by the computation, expressed in years; and
ERV = ending redeemable value of a hypothetical $1,000 payment made at the
beginning of the 1, 5 or 10 year (or other) periods at the end of the
applicable period (or a fractional portion thereof).
The Fund that advertises its "aggregate total return" computes such returns
by determining the aggregate compounded rates of return during specified periods
that likewise equate the initial amount invested to the ending redeemable value
of such investment. The formula for calculating aggregate total return is as
follows:
(ERV) - 1
-----
Aggregate Total Return = P
The calculations are made assuming that (1) all dividends and capital gain
distributions are reinvested on the reinvestment dates at the price per share
existing on the reinvestment date, (2) all recurring fees charged to all
shareholder accounts are included, and (3) for any account fees that vary with
the size of the account, a mean (or median) account size in the Fund during the
periods is reflected. The ending redeemable value (variable "ERV" in the
formula) is determined by assuming complete redemption of the hypothetical
investment after deduction of all non-recurring charges at the end of the
measuring period. The Fund's average annual total return and load adjusted
aggregate total return quotations for Class A Shares will reflect the deduction
of the maximum sales charge charged in connection with the purchase of such
shares currently 5.50% of the per share offering price for Class A Shares of the
Fund; and the Fund's load adjusted average annual total return and load adjusted
aggregate total return quotations for Class B Shares will reflect any applicable
CDSC; provided that the Fund may also advertise total return data without
reflecting any applicable CDSC sales charge imposed on the purchase of Class A
Shares or Class B Shares in accordance with the views of the SEC. Quotations
which do not reflect the sales charge will, of course, be higher than quotations
which do.
The performance of any investment is generally a function of portfolio
quality and maturity, type of investment and operating expenses.
From time to time, in advertisements or in reports to shareholders, a
Fund's yields or total returns may be quoted and compared to those of other
mutual funds with similar investment objectives or compared to stock or other
relevant indices.
TAXES
The following summarizes certain additional Federal and state income tax
considerations generally affecting the Fund and its shareholders that are not
described in the Fund's Prospectuses. No attempt is made to present a detailed
explanation of the tax treatment of the Funds or their shareholders, and the
discussion here and in the applicable Prospectus is not intended as a substitute
for careful tax planning. This discussion is based upon present provisions of
the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), the
regulations promulgated thereunder, and judicial and administrative ruling
authorities, all of which are subject to change, which change may be
retroactive. Prospective investors should consult their own tax advisors with
regard to the federal tax consequences of the purchase, ownership and
disposition of Fund shares, as well as the tax consequences arising under the
laws of any state, foreign country, or other taxing jurisdiction.
General. The Fund intends to elect and qualify to be taxed separately as a
regulated investment company under SubChapter M, of the Internal Revenue Code.
As a regulated investment company, the Fund generally is exempt from Federal
income tax on its net investment income and realized capital gains which it
distributes to shareholders, provided that it distributes an amount equal to the
sum of (a) at least 90% of its investment company taxable income (net investment
income and the excess of net short-term capital gain over net long-term capital
loss), if any, for the year and (b) at least 90% of its net tax-exempt interest
income, if any, for the year (the "Distribution Requirement") and satisfies
certain other requirements of the Internal Revenue Code that are described
below. Distributions of investment company taxable income and net tax-exempt
interest income made during the taxable
25
<PAGE>
year or, under specified circumstances, within twelve months after the close of
the taxable year will satisfy the Distribution Requirement.
In addition to satisfying the Distribution Requirement, the Fund must
derive with respect to a taxable year at least 90% of its gross income from
dividends, interest, certain payments with respect to securities loans and gains
from the sale or other disposition of stock or securities or foreign currencies,
or from other income derived with respect to its business of investing in such
stock, securities, or currencies (the "Income Requirement"). Interest (including
"original issue discount" and "accrued market discount") received by the Fund at
maturity or on disposition of a security held for less than three months will
not be treated (in contrast to other income which is attributable to realized
market appreciation) as gross income from the sale or other disposition of
securities held for less than three months for this purpose.
In addition to the foregoing requirements, at the close of each quarter of
its taxable year, at least 50% of the value of the Fund's assets must consist of
cash and cash items, U.S. Government securities, securities of other regulated
investment companies, and securities of other issuers (as to which the Fund has
not invested more than 5% of the value of its total assets in securities of such
issuer and as to which the Fund does not hold more than 10% of the outstanding
voting securities of such issuer) and no more than 25% of the value of the
Fund's total assets may be invested in the securities of any one issuer (other
than U.S. Government securities and securities of other regulated investment
companies), or in two or more issuers which the Fund controls and which are
engaged in the same or similar trades or businesses.
Distributions of net investment income received by the Fund from
investments in debt securities and any net realized short-term capital gains
distributed by a Fund will be taxable to shareholders as ordinary income and
will not be eligible for the dividends-received deduction for corporations.
The Fund intends to distribute to shareholders any excess of net long-term
capital gain over net short-term capital loss ("net capital gain") for each
taxable year. Such gain is distributed as a capital gain dividend and is taxable
to shareholders as gain from the sale or exchange of a capital asset held for
more than one year, regardless of the length of time a shareholder has held his
or her Fund shares and regardless of whether the distribution is paid in cash or
reinvested in shares. The Fund expects that capital gain dividends will be
taxable to shareholders as long-term gain. Capital gain dividends are not
eligible for the dividends-received deduction.
In the case of corporate shareholders, distributions of the Fund for any
taxable year generally qualify for the dividends-received deduction to the
extent of the gross amount of "qualifying dividends" received by such Fund for
the year and if certain holding period requirements are met. Generally, a
dividend will be treated as a "qualifying dividend" if it has been received from
a domestic corporation.
If for any taxable year the Fund does not qualify as a regulated investment
company, all of its taxable income will be subject to tax at regular corporate
rates without any deduction for distributions to shareholders. In such event,
all distributions (whether or not derived from exempt-interest income) would be
taxable as ordinary income and would be eligible for the dividends-received
deduction in the case of corporate shareholders to the extent of the Fund's
current and accumulated earnings and profits.
Shareholders will be advised annually as to the Federal income tax
consequences of distributions made by the Fund each year.
Amounts not distributed on a timely basis in accordance with a calendar
year distribution requirement are subject to a nondeductible 4% excise tax. To
prevent imposition of the excise tax, the Fund must distribute during each
calendar year an amount equal to the sum of (1) at least 98% of its ordinary
income (not taking into account any capital gains or losses) for the calendar
year, (2) at least 98% of its capital gains in excess of its capital losses
(adjusted for certain ordinary losses, as prescribed by the Internal Revenue
Code) for the one-year period ending on October 31 of the calendar year, and (3)
any ordinary income and capital gains for previous years that was not
distributed during those years. A distribution will be treated as paid on
December 31 of the current calendar year if it is declared by the Fund in
October, November or December with a record date in such a month and paid by the
26
<PAGE>
Fund during January of the following calendar year. Such distributions will be
taxable to shareholders in the calendar year in which the distributions are
declared, rather than the calendar year in which the distributions are made. To
prevent application of the excise tax, the Fund intends to make its
distributions in accordance with the calendar year distribution requirement.
Although the Fund expects to qualify as a "regulated investment company"
and to be relieved of all or substantially all Federal income taxes, depending
upon the extent of its activities in states and localities in which its offices
are maintained, in which its agents or independent contractors are located or in
which it is otherwise deemed to be conducting business, the Fund may be subject
to the tax laws of such states or localities.
The Company will be required in certain cases to withhold and remit to the
United States Treasury 31% of taxable distributions, including gross proceeds
realized upon sale or other dispositions paid to any shareholder (i) who has
provided an incorrect tax identification number or no number at all, (ii) who is
subject to backup withholding by the Internal Revenue Service for failure to
report the receipt of taxable interest or dividend income properly, or (iii) who
has failed to certify that he is not subject to backup withholding or that he is
an "exempt recipient."
Disposition of Shares. Upon a redemption, sale or exchange of his or her
shares, a shareholder will realize a taxable gain or loss depending upon his or
her basis in the shares. Such gain or loss will be treated as capital gain or
loss if the shares are capital assets in the shareholder's hands and will be
long-term or short-term, generally, depending upon the shareholder's holding
period for the shares. Any loss realized on a redemption, sale or exchange will
be disallowed to the extent the shares disposed of are replaced (including
through reinvestment of dividends) within a period of 61 days beginning 30 days
before and ending 30 days after the shares are disposed of. In such a case, the
basis of the shares acquired will be adjusted to reflect the disallowed loss.
Any loss realized by a shareholder on the sale of Fund shares held by the
shareholder for six months or less will be treated as a long-term capital loss
to the extent of any distributions of net capital gains received or treated as
having been received by the shareholder with respect to such shares and treated
as long-term capital gains. Furthermore, a loss realized by a shareholder on the
redemption, sale or exchange of shares of the Fund with respect to which exempt-
interest dividends have been paid will, to the extent of such exempt-interest
dividends, be disallowed if such shares have been held by the shareholder for
six months or less.
In some cases, shareholders will not be permitted to take sales charges
into account for purposes of determining the amount of gain or loss realized on
the disposition of their stock. This prohibition generally applies where (1) the
shareholder incurs a sales charge in acquiring the stock of the Fund, (2) the
stock is disposed of before the 91st day after the date on which it was
acquired, and (3) the shareholder subsequently acquires the stock of the same or
another fund and the otherwise applicable sales charge is reduced under a
"reinvestment right" received upon the initial purchase of regulated investment
company shares. The term "reinvestment right" means any right to acquire stock
of one or more funds without the payment of a sales charge or with the payment
of a reduced sales charge. Sales charges affected by this rule are treated as if
they were incurred with respect to the stock acquired under the reinvestment
right. This provision may be applied to successive acquisitions of Fund shares.
Taxation of Certain Financial Instruments. Special rules govern the Federal
income tax treatment of financial instruments that may be held by some of the
Fund. These rules may have a particular impact on the amount of income or gain
that the Fund must distribute to their respective shareholders to comply with
the Distribution Requirement, on the income or gain qualifying under the Income
Requirement, all described above.
Market Discount. If the Fund purchases a debt security at a price lower
than the stated redemption price of such debt security, the excess of the stated
redemption price over the purchase price is "market discount". If the amount of
market discount is more than a de minimis amount, a portion of such market
discount must be included as ordinary income (not capital gain) by the Fund in
each taxable year in which the Fund owns an interest in such debt security and
receives a principal payment on it. In particular, the Fund will be required to
allocate that principal payment first to the portion of the market discount on
the debt security that has accrued but has not previously been includable in
income. In general, the amount of market discount that must be included for each
period is equal to the lesser of (i) the amount of market discount accruing
during such period (plus any accrued
27
<PAGE>
market discount for prior periods not previously taken into account) or (ii) the
amount of the principal payment with respect to such period. Generally, market
discount accrues on a daily basis for each day the debt security is held by the
Fund at a constant rate over the time remaining to the debt security's maturity
or, at the election of the Fund, at a constant yield to maturity which takes
into account the semi-annual compounding of interest. Gain realized on the
disposition of a market discount obligations must be recognized as ordinary
interest income (not capital gain) to the extent of the "accrued market
discount."
Original Issue Discount. Certain debt securities acquired by the Fund may
be treated as debt securities that were originally issued at a discount. Very
generally, original issue discount is defined as the difference between the
price at which a security was issued and its stated redemption price at
maturity. Although no cash income on account of such discount is actually
received by the Fund, original issue discount that accrues on a debt security in
a given year generally is treated for federal income tax purposes as interest
and, therefore, such income would be subject to the distribution requirements
applicable to regulated investment companies.
Some debt securities may be purchased by the Fund, at a discount that
exceeds the original issue discount on such debt securities, if any. This
additional discount represents market discount for federal income tax purposes
(see above).
Hedging Transactions. The taxation of equity options and over-the-counter
options on debt securities is governed by Internal Revenue Code Section 1234.
Pursuant to Internal Revenue Code Section 1234, the premium received by the Fund
for selling a put or call option is not included in income at the time of
receipt. If the option expires, the premium is short-term capital gain to the
Fund. If the Fund enters into a closing transaction, the difference between the
amount paid to close out its position and the premium received is short-term
capital gain or loss. If a call option written by the Fund is exercised, thereby
requiring the Fund to sell the underlying security, the premium will increase
the amount realized upon the sale of such security and any resulting gain or
loss will be a capital gain or loss, and will be long-term or short-term
depending upon the holding period of the security. With respect to a put or call
option that is purchased by the Fund, if the option is sold, any resulting gain
or loss will be a capital gain or loss, and will be long-term or short-term,
depending upon the holding period of the option. If the option expires, the
resulting loss is a capital loss and is long-term or short-term, depending upon
the holding period of the option. If the option is exercised, the cost of the
option, in the case of a call option, is added to the basis of the purchased
security and, in the case of a put option, reduces the amount realized on the
underlying security in determining gain or loss.
Any regulated futures and foreign currency contracts and certain options
(namely, nonequity options and dealer equity options) in which the Fund may
invest are "Section 1256 contracts." Gains or losses on Section 1256 contracts
generally are considered 60% long-term and 40% short-term capital gains or
losses; however, foreign currency gains or losses arising from certain Section
1256 contracts may be treated as ordinary income or loss. Also, Section, 1256
contracts held by the Fund at the end of each taxable year (and generally for
purposes of the 4% excise tax, on October 31 of each year) are "marked to
market" (that is, treated as sold at fair market value) with the result that
unrealized gains or losses are treated as though they were realized.
Generally, hedging transactions, if any, undertaken by the Fund may result
in "straddles" for U.S. Federal income tax purposes. The straddle rules may
affect the character of gains (or losses) realized by the Fund. In addition,
losses realized by the Fund on positions that are part of a straddle may be
deferred under the straddle rules, rather than being taken into account in
calculating the taxable income for the taxable year in which such losses are
realized. Because only a few regulations implementing the straddle rules have
been promulgated, the tax consequences of hedging transactions to the Funds are
not entirely clear. The hedging transactions may increase the amount of short-
term capital gain realized by the Fund which is taxed as ordinary income when
distributed to shareholders.
The Fund may make one or more of the elections available under the Internal
Revenue Code which are applicable to straddles. If the Fund makes any of the
elections, the amount, character and timing of the recognition of gains or
losses from the affected straddle positions will be determined under rules that
vary according to the
28
<PAGE>
election made. The rules applicable under certain of the elections may operate
to accelerate the recognition of gains or losses from the affected straddle
positions.
Because application of the straddle rules may affect the character of gains
or losses, and may defer losses and/or accelerate the recognition of gains or
losses from the affected straddle positions, the amount which must be
distributed to shareholders, and which will be taxed to shareholders as ordinary
income or long-term capital gain, may be more than or less than the distribution
of a fund that did not engage in such hedging transactions.
The diversification requirements applicable to the Fund's assets may limit
the extent to which the Fund will be able to engage in transactions in options,
futures or forward contracts.
Constructive Sales. Recently enacted rules may affect the timing and
character of gain if the Fund engages in transactions that reduce or eliminate
its risk of loss with respect to appreciated financial positions. If the Fund
enters into certain transactions in property while holding substantially
identical property, the Fund would be treated as if it had sold and immediately
repurchased the property and would be taxed on any gain (but not loss) from the
constructive sale. The character of gain from a constructive sale would depend
upon the Fund's holding period in the property. Loss from a constructive sale
would be recognized when the property was subsequently disposed of, and its
character would depend on the Fund's holding period and the application of
various loss deferral provisions of the Internal Revenue Code.
Currency Fluctuations - "Section 988" Gains or Losses. Under the Internal
Revenue Code, gains or losses attributable to fluctuations in exchange rates
which occur between the time the Fund accrues receivables or liabilities
denominated in a foreign currency and the time the Fund actually collects such
receivables or pays such liabilities generally are treated as ordinary income
and loss. Similarly, on disposition of debt securities denominated in a foreign
currency and on disposition of certain futures, forward contracts and options,
gains or losses attributable to fluctuations in the value of the foreign
currency between the date of acquisition of the security or contract and the
date of disposition also are treated as ordinary gain or loss. These gains or
losses, referred to under the Internal Revenue Code as "Section 988" gains or
losses, may increase or decrease the amount of the Fund's investment company
taxable income to be distributed to its shareholders as ordinary income.
Passive Foreign Investment Companies. The Fund may invest in shares of
foreign corporations that may be classified under the Internal Revenue Code as
passive foreign investment companies ("PFICs"). In general, a foreign
corporation is classified as a PFIC if at least one-half of its assets
constitute investment-type assets, or 75% or more of its gross income
investment-type income. If the Fund receives a so-called "excess distribution"
with respect to PFIC shares, the Fund itself may be subject to a tax on a
portion of the excess distribution, whether or not the corresponding income is
distributed by the Fund to shareholders. In general, under the PFIC rules, an
excess distribution is treated as having been realized ratably over the period
during which the Fund held the PFIC shares. Each Fund will itself be subject to
tax on the portion, if any, of an excess distribution that is so allocated to
prior Fund taxable years and an interest factor will be added to the tax, as if
the tax had been payable in such prior taxable years. Certain distributions from
a PFIC as well as gain from the sale of PFIC shares are treated as excess
distributions. Excess distributions are characterized as ordinary income even
though, absent application of the PFIC rules, certain excess distributions might
have been classified as capital gain.
The Fund may be eligible to elect alternative tax treatment with respect to
PFIC shares. Under an election that currently is available in some
circumstances, the Fund generally would be required to include in its gross
income its share of the earnings of a PFIC on a current basis, regardless of
whether distributions were received from the PFIC in a given year. If this
election were made, the special rules, discussed above, relating to the taxation
of excess distributions, would not apply. In addition, another election would
involve marking to market the Fund's PFIC shares at the end of each taxable
year, with the result that unrealized gains would be treated as though they were
realized and reported as ordinary income. Any marked to market losses and any
loss from an actual disposition of Fund shares would be deductible as ordinary
losses to the extent of any net mark-to-market gains included in income in prior
years.
29
<PAGE>
Income received by the Fund from sources within foreign countries may be
subject to withholding and other taxes imposed by such countries.
Fund shareholders may be subject to state, local and foreign taxes on their
Fund distributions. In many states, Fund distributions which are derived from
interest on certain U.S. Government obligations are exempt from taxation. The
tax consequences to a foreign shareholder of an investment in the Fund may be
different from those described herein. Foreign shareholders are advised to
consult their own tax advisers with respect to the particular tax consequences
to them of an investment in the Fund. Shareholders are advised to consult their
own tax advisers with respect to the particular tax consequences to them of an
investment in the Fund.
Other Taxation. The foregoing discussion relates only to U.S. federal
income tax law and certain state taxes as applicable to U.S. persons (i.e., U.S.
citizens and residents and domestic corporations, partnerships, trusts and
estates). Distributions by the Fund, and dispositions of Fund shares also may be
subject to other state and local taxes, and their treatment under state and
local income tax laws may differ from the U.S. federal income tax treatment.
Shareholders should consult their tax advisers with respect to particular
questions of U.S. federal, state and local taxation. Shareholders who are not
U.S. persons should consult their tax advisers regarding U.S. and foreign tax
consequences of ownership of shares of the Fund, including the likelihood that
distributions to them would be subject to withholding of U.S. federal income tax
at a rate of 30% (or at a lower rate under a tax treaty). Future legislative or
administrative changes or court decisions may significantly change the
conclusions expressed herein, and any such changes or decisions may have a
retroactive effect with respect to the transactions contemplated herein.
ADDITIONAL INFORMATION CONCERNING SHARES
The Company is a Maryland corporation. The Company's Articles of
Incorporation authorize the Board of Directors to classify or reclassify any
unissued shares of the Company into one or more classes by setting or changing,
in any one or more respects, their respective designations, preferences,
conversion or other rights, voting powers, restrictions, limitations,
qualifications and terms and conditions of redemption. Pursuant to the authority
of the Company's Articles of Incorporation, the Directors have authorized the
issuance of shares of common stock representing interests in fifteen series of
shares. The Fund is currently offered in four separate classes: Class A, Class
B, Class C and Class Y shares.
The Board of the Company has adopted plans pursuant to Rule 18f-3 under
the 1940 Act ("Multi-Class Plan") on behalf of the Fund. The Multi-Class Plan
provides that shares of each class of the Fund are identical, except for one or
more expense variables, certain related rights, exchange privileges, class
designation and sales loads assessed due to differing distribution methods.
In the event of a liquidation or dissolution of the Company or the Fund,
shareholders of the Fund would be entitled to receive the assets available for
distribution belonging to the Fund, and a proportionate distribution, based upon
the relative net asset values of the Company or the Fund, of any general assets
not belonging to the Fund which are available for distribution. Shareholders of
the Fund are entitled to participate in the net distributable assets of the Fund
involved on liquidation, based on the number of shares of the Fund that are held
by each shareholder.
Holders of all outstanding shares of the Fund will vote together in the
aggregate and not by class on all matters, except that only Class A Shares of
the Fund will be entitled to vote on matters submitted to a vote of shareholders
pertaining to the Fund's Class A Plan, only Class B Shares will be entitled to
vote on matters submitted to a vote of shareholders pertaining to the Fund's
Class B Plan, only Class C Shares of the Fund will be entitled to vote on
matters submitted to a vote of shareholders pertaining to the Fund's Class C
Plan. Further, shareholders of the Fund, as well as those of any other
investment portfolio now or hereafter offered by the Company, will vote together
in the aggregate and not separately on a Fund-by-Fund basis, except as otherwise
required by law or when permitted by the Board of Directors. Rule 18f-2 under
the 1940 Act provides that any matter required to be submitted to the holders of
the outstanding voting securities of an investment company such as the Company
shall not be deemed to have been effectively acted upon unless approved by the
holders of a majority of the outstanding
30
<PAGE>
shares of the Fund affected by the matter. The Fund is affected by a matter, (i)
unless it is clear that the interests of the Fund in the matter are
substantially identical or (ii) that the matter does not affect any interest of
the Fund. Under the Rule, the approval of an investment advisory agreement or
any change in a fundamental investment policy would be effectively acted upon
with respect to the Fund only if approved by a majority of the outstanding
shares of the Fund. However, the Rule also provides that the ratification of the
appointment of independent auditors, the approval of principal underwriting
contracts and the election of trustees may be effectively acted upon by
shareholders of the Company voting together in the aggregate without regard to
the Fund.
Shares of the Company have noncumulative voting rights and, accordingly,
the holders of more than 50% of the Company's outstanding shares (irrespective
of class) may elect all of the directors. Shares have no preemptive rights and
only such conversion and exchange rights as the Board may grant in its
discretion. When issued for payment as described in the applicable Prospectus,
shares will be fully paid and non-assessable by the Company.
Annual shareholder meetings to elect directors will not be held unless and
until such time as required by law. At that time, the directors then in office
will call a shareholders' meeting to elect directors. Except as set forth above,
the directors will continue to hold office and may appoint successor directors.
Meetings of the shareholders of the Company shall be called by the directors
upon the written request of shareholders owning at least 10% of the outstanding
shares entitled to vote.
MISCELLANEOUS
Counsel. The law firm of Dechert Price & Rhoads, 1775 Eye Street, N.W.,
Washington, D.C. 20006, has passed upon certain legal matters in connection with
the shares offered by the Fund and serves as counsel to the Company.
Independent Auditors. Ernst & Young LLP, 200 Clarendon Street, Boston,
Massachusetts 02116, serves as the Company's independent auditors.
Banking Laws. Banking laws and regulations currently prohibit a bank
holding company registered under the Federal Bank Holding Company Act of 1956 or
any bank or non-bank affiliate thereof from sponsoring, organizing, controlling
or distributing the shares of a registered, open-end investment company
continuously engaged in the issuance of its shares, and prohibit banks generally
from underwriting securities, but such banking laws and regulations do not
prohibit such a holding company or affiliate or banks generally from acting as
investment advisor, administrator, transfer agent or custodian to such an
investment company, or from purchasing shares of such a company as agent for and
upon the order of customers. The Advisor and the Custodian are subject to such
banking laws and regulations.
The Advisor and the Custodian believe they may perform the services for the
Company contemplated by their respective agreements with each of them without
violation of applicable banking laws and regulations. It should be noted,
however, that there have been no cases deciding whether bank and non-bank
subsidiaries of a registered bank holding company may perform services
comparable to those that are to be performed by these companies, and future
changes in either Federal or state statutes and regulations relating to
permissible activities of banks and their subsidiaries or affiliates, as well as
future judicial or administrative decisions or interpretations of current and
future statutes and regulations, could prevent these companies from continuing
to perform certain services for the Fund.
Should future legislative, judicial or administrative action prohibit or
restrict the activities of such companies in connection with the provision of
services on behalf of the Company, the Company might be required to alter
materially or discontinue the arrangements with the institutions and change the
method of operations. It is not anticipated, however, that any change in the
Fund's method of operations would affect the net asset value per share of the
Fund or result in a financial loss to any shareholder of the Fund.
31
<PAGE>
Shareholder Approvals. As used in this SAI and in each Prospectus, a
"majority of the outstanding shares" of the Fund or investment portfolio means
the lesser of (a) 67% of the shares of the Fund or portfolio represented at a
meeting at which the holders of more than 50% of the outstanding shares of the
Fund or portfolio are present in person or by proxy, or (b) more than 50% of the
outstanding shares of the Fund or portfolio.
REGISTRATION STATEMENT
This SAI and the Fund's Prospectuses do not contain all the information
included in the Fund's registration statement filed with the SEC under the 1933
Act with respect to the securities offered hereby, certain portions of which
have been omitted pursuant to the rules and regulations of the SEC. The
registration statement, including the exhibits filed therewith, may be examined
at the offices of the SEC in Washington, D.C. Text-only versions of fund
documents can be viewed online or downloaded from the SEC at http://www.sec.gov.
Statements contained herein and in the Fund's Prospectuses as to the
contents of any contract or other documents referred to are not necessarily
complete, and, in such instance, reference is made to the copy of such contract
or other documents filed as an exhibit to the Fund's registration statement,
each such statement being qualified in all respects by such reference.
32
<PAGE>
APPENDIX A
----------
Rated Investments
Corporate Bonds
- ---------------
From Moody's Investors Services, Inc. ("Moody's") description of its bond
ratings:
"Aaa":
Bonds that are rated "Aaa" are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally
referred to as "gilt edged." Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure.
While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
"Aa":
Bonds that are rated "Aa" are judged to be of high-quality by all
standards. Together with the "Aaa" group they comprise what are
generally known as "high-grade" bonds. They are rated lower than the
best bonds because margins of protection may not be as large as in
"Aaa" securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in "Aaa" securities.
"A":
Bonds that are rated "A" possess many favorable investment
attributes and are to be considered as upper-medium-grade obligations.
Factors giving security to principal and interest are considered
adequate, but elements may be present which suggest a susceptibility
to impairment sometime in the future.
"Baa":
Bonds that are rated "Baa" are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear adequate for
the present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
"Ba":
Bonds that are rated "Ba" are judged to have speculative
elements; their future cannot be considered well assured. Often the
protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the
future. Uncertainty of position characterizes bonds in this class.
"B":
Bonds that are rated "B" generally lack characteristics of
desirable investments. Assurance of interest and principal payments or
of maintenance of other terms of the contract over any long period of
time may be small.
"Caa":
Bonds that are rated "Caa" are of poor standing. These issues may
be in default or present elements of danger may exist with respect to
principal or interest.
Moody's applies numerical modifiers (1, 2 and 3) with respect to bonds
rated "Aa" through "B". The modifier 1 indicates that the bond being rated ranks
in the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the bond ranks in the lower
end of its generic rating category.
A-1
<PAGE>
From Standard & Poor's Corporation ("S&P") description of its bond ratings:
"AAA":
Debt rated "AAA" has the highest rating assigned by S&P. Capacity
to pay interest and repay principal is extremely strong.
"AA":
Debt rated "AA" has a very strong capacity to pay interest and
repay principal and differs from "AAA" issues by a small degree.
"A":
Debt rated "A" has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than debt
in higher rated categories.
"BBB":
Bonds rated "BBB" are regarded as having an adequate capacity to
pay interest and principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for bonds in this category than for bonds
in higher rated categories.
"BB," "B" and "CCC":
Bonds rated "BB" and "B" are regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and
principal in accordance with the terms of the obligations. "BB"
represents a lower degree of speculation than "B" and "CCC" the
highest degree of speculation. While such bonds will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
To provide more detailed indications of credit quality, the "AA" or "A"
ratings may be modified by the addition of a plus or minus sign to show relative
standing within these major rating categories.
Commercial Paper
- ----------------
The rating "Prime-1" is the highest commercial paper rating assigned by
Moody's. These issuers (or related supporting institutions) are considered to
have a superior capacity for repayment of short-term promissory obligations.
Instruments rated "Prime-2" are offered by issuers (or related supporting
institutions) which have a strong capacity for repayment of short-term
promissory obligations. This will normally be evidenced by many of the
characteristics of "Prime-1" rated issues, but to a lesser degree. Earnings
trends and coverage ratios, while sound, will be more susceptible to variation.
Capitalization characteristics, while still appropriate, may be more affected by
external conditions. Ample alternate liquidity is maintained.
Commercial paper ratings of S&P are current assessments of the likelihood
of timely payment of debt having original maturities of no more than 365 days.
Commercial paper rated "A-1" by S&P indicates that the degree of safety
regarding timely payment is either overwhelming or very strong. Those issues
determined to possess overwhelming safety characteristics are denoted "A-1+."
Commercial paper rated "A-2" by S&P indicates that capacity for timely payment
is strong. However, the relative degree of safety is not as high as for issues
designated "A-1."
Rated commercial paper purchased by the Fund must have (at the time of
purchase) the highest quality rating assigned to short-term debt securities or,
if not rated, or rated by only one agency, are determined to be of comparative
quality pursuant to guidelines approved by the Fund's Board of Directors.
A-2
<PAGE>
APPENDIX B
The Fund may enter into certain futures transactions and options for
hedging purposes. Such transactions are described in this Appendix.
I. Index Futures Contracts
-----------------------
General. A bond index assigns relative values of the bonds included in the
index and the index fluctuates with changes in the market values of the bonds
included. The Chicago Board of Trade has designed a futures contract based on
the Bond Buyer Municipal Bond Index. This Index is composed of 40 term revenue
and general obligation bonds and its composition is updated regularly as new
bonds meeting the criteria of the Index are issued and existing bonds mature.
The Index is intended to provide an accurate indicator of trends and changes in
the municipal bond market. Each bond in the Index is independently priced by six
dealer-to-dealer municipal bond brokers daily. The 40 prices then are averaged
and multiplied by a coefficient. The coefficient is used to maintain the
continuity of the Index when its composition changes.
A stock index assigns relative values to the stocks included in the index
and the index fluctuates with changes in the market values of the stocks
included. Some stock index futures contracts are based on broad market indices,
such as the Standard & Poor's 500 or the New York Stock Exchange Composite
Index. In contrast, certain exchanges offer futures contracts on narrower market
indices, such as the Standard & Poor's 100 or indices based on an industry or
market segment, such as oil and gas stocks.
Futures contracts are traded on organized exchanges regulated by the
Commodity Futures Trading Commission. Transactions on such exchanges are cleared
through a clearing corporation, which guarantees the performance of the parties
to each contract.
The Fund will sell index futures contracts in order to offset a decrease in
market value of its portfolio securities that might otherwise result from a
market decline. The Fund will purchase index futures contracts in anticipation
of purchases of securities. In a substantial majority of these transactions, the
Fund will purchase such securities upon termination of the long futures
position, but a long futures position may be terminated without a corresponding
purchase of securities.
In addition, the Fund may utilize index futures contracts in anticipation
of changes in the composition of its portfolio holdings. For example, in the
event that the Fund expects to narrow the range of industry groups represented
in its holdings it may, prior to making purchases of the actual securities,
establish a long futures position based on a more restricted index, such as an
index comprised of securities of a particular industry group. The Fund may also
sell futures contracts in connection with this strategy, in order to protect
against the possibility that the value of the securities to be sold as part of
the restructuring of the portfolio will decline prior to the time of sale.
Examples of Stock Index Futures Transactions. The following are examples of
transactions in stock index futures (net of commissions and premiums, if any).
ANTICIPATORY PURCHASE HEDGE: Buy the Future
Hedge Objective: Protect Against Increasing Price
<TABLE>
<CAPTION>
Portfolio Futures
<S> <C>
Anticipate buying $62,500 in Equity Securities -Day Hedge is Placed-
Buying 1 Index Futures at 125
Value of Futures = $62,500/Contract
Buy Equity Securities with Actual Cost = $65,000 Day Hedge is Lifted-
Increase in Purchase Price = $2,500 Sell 1 Index Futures at 130
Value of Futures = $65,000/Contract
Gain on Futures = $2,500
</TABLE>
B-1
<PAGE>
HEDGING A STOCK PORTFOLIO: Sell the Future
Hedge Objective: Protect Against Declining
Value of the Portfolio
Factors:
Value of Stock Portfolio = $1,000,000
Value of Futures Contract - 125 X $500 =
$62,500 Portfolio Beta Relative to the Index = 1.0
<TABLE>
<CAPTION>
Portfolio Futures
<S> <C>
Anticipate Selling $1,000,000 in Equity Securities - Day Hedge is Placed-
Sell 16 Index Futures at 125
Value of Futures = $1,000,000
Equity Securities - Own Stock Day Hedge is Lifted-
with Value = $960,000 Buy 16 Index Futures at 120
Loss in Portfolio Value = $40,000 Value of Futures = $960,000
Gain on Futures = $40,000
</TABLE>
II. Margin Payments
---------------
Unlike the purchase or sale of portfolio securities, no price is paid or
received by the Fund upon the purchase or sale of a futures contract. Initially,
the Fund will be required to deposit with the broker or in a segregated account
with the Fund's custodian in an amount of cash or cash equivalents, known as
initial margin, based on the value of the contract. The nature of initial margin
in futures transactions is different from that of margin in securities
transactions in that futures contract margin does not involve the borrowing of
funds by the customer to finance the transactions. Rather, the initial margin is
in the nature of a performance bond or good faith deposit on the contract which
is returned to the Fund upon termination of the futures contract assuming all
contractual obligations have been satisfied. Subsequent payments, called
variation margin, to and from the broker, will be made on a daily basis as the
price of the underlying instruments fluctuates making the long and short
positions in the futures contract more or less valuable, a process known as
marking to the market. For example, when the Fund purchases a futures contract
and the price of the contract has risen in response to a rise in the underlying
instruments, that position will have increased in value and the Fund will be
entitled to receive from the broker a variation margin payment equal to that
increase in value. Conversely, where the Fund has purchased a futures contract
and the price of the futures contract has declined in response to a decrease in
the underlying instruments, the position would be less valuable and the Fund
would be required to make a variation margin payment to the broker. At any time
prior to expiration of the futures contract, the Advisor may elect to close the
position by taking an opposite position, subject to the availability of a
secondary market, which will operate to terminate the Fund's position in the
futures contract. A final determination of variation margin is then made,
additional cash is required to be paid by or released to the Fund, and the Fund
realizes a loss or gain.
III. Risks of Transactions in Futures Contracts
------------------------------------------
There are several risks in connection with the use of futures by the Fund
as hedging devices. One risk arises because of the imperfect correlation between
movements in the price of futures and movements in the price of the instruments
which are the subject of the hedge. The price of futures may move more than or
less than the price of the instruments being hedged. If the price of futures
moves less than the price of the instruments which are the subject of the hedge,
the hedge will not be fully effective but, if the price of the instruments being
hedged has moved in an unfavorable direction, the Fund would be in a better
position than if it had not hedged at all. If the price of the instruments being
hedged has moved in a favorable direction, this advantage will be partially
offset by the loss on the futures. If the price of the futures moves more than
the price of the hedged instruments, the Fund involved will experience either a
loss or gain on the futures which will not be completely offset by movements in
the price of the instruments which are the subject of the hedge. To compensate
for the imperfect correlation of
B-2
<PAGE>
movements in the price of instruments being hedged and movements in the price of
futures contracts, the Fund may buy or sell futures contracts in a greater
dollar amount than the dollar amount of instruments being hedged if the
volatility over a particular time period of the prices of such instruments has
been greater than the volatility over such time period of the futures, or if
otherwise deemed to be appropriate by the Advisor. Conversely, the Fund may buy
or sell fewer futures contracts if the volatility over a particular time period
of the prices of the instruments being hedged is less than the volatility over
such time period of the futures contract being used, or if otherwise deemed to
be appropriate by the Advisor. It is also possible that, when the Fund sells
futures to hedge its portfolio against a decline in the market, the market may
advance and the value of instruments held in the Fund may decline. If this
occurs, the Fund would lose money on the futures and also experience a decline
in value in its portfolio securities.
Where futures are purchased to hedge against a possible increase in the
price of securities before the Fund is able to invest its cash (or cash
equivalents) in an orderly fashion, it is possible that the market may decline
instead; if the Fund then concludes not to invest its cash at that time because
of concern as to possible further market decline or for other reasons, the Fund
will realize a loss on the futures contract that is not offset by a reduction in
the price of the securities that were to be purchased.
In instances involving the purchase of futures contracts by the Fund, an
amount of cash and cash equivalents, equal to the market value of the futures
contracts, will be deposited in a segregated account with the Fund's custodian
and/or in a margin account with a broker to collateralize the position and
thereby insure that the use of such futures is unleveraged.
In addition to the possibility that there may be an imperfect correlation,
or no correlation at all, between movements in the futures and the instruments
being hedged, the price of futures may not correlate perfectly with movement in
the cash market due to certain market distortions. Rather than meeting
additional margin deposit requirements, investors may close futures contracts
through off-setting transactions which could distort the normal relationship
between the cash and futures markets. Second, with respect to financial futures
contracts, the liquidity of the futures market depends on participants entering
into off-setting transactions rather than making or taking delivery. To the
extent participants decide to make or take delivery, liquidity in the futures
market could be reduced, thus producing distortions. Third, from the point of
view of speculators, the deposit requirements in the futures market are less
onerous than margin requirements in the securities market. Therefore, increased
participation by speculators in the futures market may also cause temporary
price distortions. Due to the possibility of price distortion in the futures
market, and because of the imperfect correlation between the movements in the
cash market and movements in the price of futures, a correct forecast of general
market trends or interest rate movements by the Advisor may still not result in
a successful hedging transaction over a short time frame.
Positions in futures may be closed out only on an exchange or board of
trade which provides a secondary market for such futures. Although the Fund
intends to purchase or sell futures only on exchanges or boards of trade where
there appear to be active secondary markets, there is no assurance that a liquid
secondary market on any exchange or board of trade will exist for any particular
contract or at any particular time. When there is no liquid market, it may not
be possible to close a futures investment position, and in the event of adverse
price movements, the Fund would continue to be required to make daily cash
payments of variation margin. However, in the event futures contracts have been
used to hedge portfolio securities, such securities will not be sold until the
futures contract can be terminated. In such circumstances, an increase in the
price of the securities, if any, may partially or completely offset losses on
the futures contract. However, as described above, there is no guarantee that
the price of the securities will in fact correlate with the price movements in
the futures contract and thus provide an offset on a futures contract.
Further, it should be noted that the liquidity of a secondary market in a
futures contract may be adversely affected by "daily price fluctuation limits"
established by commodities exchanges which limit the amount of fluctuation in a
futures contract price during a single trading day. Once the daily limit has
been reached in the contract, no trades may be entered into at a price beyond
the limit, thus preventing the liquidation of open futures positions. The
trading of futures contracts is also subject to the risk of trading halts,
suspensions, exchange or clearing house equipment failures, government
intervention, insolvency of a brokerage firm or clearing house or
B-3
<PAGE>
other disruptions of normal activity, which could at times make it difficult or
impossible to liquidate existing positions or to recover excess variation margin
payments.
Successful use of futures by the Fund is also subject to the Advisor's
ability to predict correctly movements in the direction of the market. For
example, if the Fund has hedged against the possibility of a decline in the
market adversely affecting securities held by it and securities prices increase
instead, the Fund will lose part or all of the benefit to the increased value of
its securities which it has hedged because it will have offsetting losses in its
futures positions. In addition, in such situations, if the Fund has insufficient
cash, it may have to sell securities to meet daily variation margin
requirements. Such sales of securities may be, but will not necessarily be, at
increased prices which reflect the rising market. The Fund may have to sell
securities at a time when it may be disadvantageous to do so.
V. Options on Futures Contracts
----------------------------
The Fund may purchase and write options on the futures contracts described
above. A futures option gives the holder, in return for the premium paid, the
right to buy from (call) or sell to (put) the writer of the option a futures
contract at a specified price at any time during the period of the option. Upon
exercise, the writer of, the option is obligated to pay the difference between
the cash value of the futures contract and the exercise price. Like the buyer or
seller of a futures contract, the holder, or writer, of an option has the right
to terminate its position prior to the scheduled expiration of the option by
selling, or purchasing an option of the same series, at which time the person
entering into the closing transaction will realize a gain or loss. The Fund will
be required to deposit initial margin and variation margin with respect to put
and call options on futures contracts written by it pursuant to brokers'
requirements similar to those described above. Net option premiums received will
be included as initial margin deposits.
Investments in futures options involve some of the same considerations that
are involved in connection with investments in future contracts (for example,
the existence of a liquid secondary market). In addition, the purchase or sale
of an option also entails the risk that changes in the value of the underlying
futures contract will not correspond to changes in the value of the option
purchased. Depending on the pricing of the option compared to either the futures
contract upon which it is based, or upon the price of the securities being
hedged, an option may or may not be less risky than ownership of the futures
contract or such securities. In general, the market prices of options can be
expected to be more volatile than the market prices on underlying futures
contract. Compared to the purchase or sale of futures contracts, however, the
purchase of call or put options on futures contracts may frequently involve less
potential risk to the Fund because the maximum amount at risk is the premium
paid for the options (plus transaction costs). The writing of an option on a
futures contract involves risks similar to those risks relating to the sale of
futures contracts.
VI. Currency Transactions
---------------------
The Fund may engage in currency transactions in order to hedge the value of
portfolio holdings denominated in particular currencies against fluctuations in
relative value. Currency transactions include forward currency contracts,
currency futures, options on currencies, and currency swaps. A forward currency
contract involves a privately negotiated obligation to purchase or sell (with
delivery generally required) a specific currency at a future date, which may be
any fixed number of days from the date of the contract agreed upon by the
parties, at a price set at the time of the contract. A currency swap is an
agreement to exchange cash flows based on the notional difference among two or
more currencies and operates similarly to an interest rate swap as described in
the SAI. The Fund may enter into currency transactions with counterparties which
have received (or the guarantors of the obligations which have received) a
credit rating of A-1 or P-1 by S&P or Moody's, respectively, or that have an
equivalent rating from a NRSRO or are determined to be of equivalent credit
quality by the Advisor.
<PAGE>
therefrom. Position hedging is entering into a currency transaction with respect
to portfolio security positions denominated or generally quoted in that
currency.
The Fund will not enter into a transaction to hedge currency exposure to an
extent greater after netting all transactions intended wholly or partially to
offset other transactions, than the aggregate market value (at the time of
entering into the transaction) of the securities held in its portfolio that are
denominated or generally quoted in or currently convertible into such currency,
other than with respect to proxy hedging as described below.
The Fund may also cross-hedge currencies by entering into transactions to
purchase or sell one or more currencies that are expected to decline in value
relative to other currencies to which the Fund has or in which the Fund expects
to have portfolio exposure.
To reduce the effect of currency fluctuations on the value of existing or
anticipated holdings of portfolio securities, the Fund may also engage proxy
hedging. Proxy hedging is often used when the currency to which the Fund's
portfolio is exposed is difficult to hedge or to hedge against the dollar. Proxy
hedging entails entering into a commitment or option to sell a currency whose
changes in value are generally considered to be correlated to a currency or
currencies in which some or all of the Fund's portfolio securities are or are
expected to be denominated, in exchange for U.S. dollars. The amount of the
commitment or option would not exceed the value of the Fund's securities
denominated in correlated currencies. For example, if the Advisor considers that
the Austrian schilling is correlated to the German mark (the "D-mark"), the Fund
holds securities denominated in shillings and the Advisor believes that the
value of the schillings will decline against the U.S. dollar, the Advisor may
enter into a commitment or option to sell D-marks and buy dollars. Currency
hedging involves some of the same risks and considerations as other transactions
with similar instruments. Currency transactions can result in losses to the Fund
if the currency being hedged fluctuates in value to a degree or in a direction
that is not anticipated. Further, there is the risk that the perceived
correlation between various currencies may not be present or may not be present
during the particular time that the Fund is engaging in proxy hedging. If a Fund
enters into a currency hedging transaction, the Fund will earmark liquid, high
grade assets on the books of the Fund or the Fund's custodian to the extent the
Fund's obligations are not otherwise "covered" through ownership of the
underlying currency.
Currency transactions are subject to risks different from those of other
portfolio transactions. Because currency control is of great importance to the
issuing governments and influences economic planning and policy, purchases and
sales of currency and related instruments can be negatively affected by
government exchange controls, blockages, and manipulations or exchange
restrictions imposed by governments. These can result in losses to the Fund if
it is unable to deliver or receive currency or funds in settlement of
obligations and could also cause hedges it has entered into to be rendered
useless, resulting in full currency exposure as well as incurring transaction
costs. Buyers and sellers of currency futures are subject to the same risks that
apply to the use of futures generally. Further, settlement of a currency futures
contract for the purchase of most currencies must occur at a bank based in the
issuing nation. Trading options on currency futures is relatively new, and the
ability to establish and close to positions on such options is subject to the
maintenance of a liquid market which may not always be available. Currency
exchange rates may fluctuate based on factors extrinsic to that country's
economy.
VII. Other Matters
-------------
Accounting for futures contracts will be in accordance with generally
accepted accounting principles.
B-5
<PAGE>
PART C
OTHER INFORMATION
Item 23. Exhibits
----------
(a) (1) Articles of Incorporation, dated November 18, 1992, are
incorporated herein by reference to Post-Effective Amendment No.
18 to Registrant's Registration Statement on Form N-1A filed with
the Commission on August 14, 1996.
(2) Articles of Amendment, dated February 12, 1993, are incorporated
herein by reference to Post-Effective Amendment No. 18 to
Registrant's Registration Statement on Form N-1A filed with the
Commission on August 14, 1996.
(3) Articles Supplementary, dated July 20, 1993, August 9, 1994,
April 26, 1995, June 27, 1995 and May 6, 1996, are incorporated
herein by reference to Post-Effective Amendment No. 18 to
Registrant's Registration Statement on Form N-1A filed with the
Commission on August 14, 1996.
(4) Articles Supplementary, dated August 6, 1996, are incorporated
herein by reference to Post-Effective Amendment No. 20 to
Registrant's Registration Statement on Form N-1A filed with the
Commission on October 28, 1996 relating to the Munder Small-Cap
Value Fund, the Munder Equity Selection Fund, the Munder Micro-
Cap Equity Fund, and the NetNet Fund.
(5) Articles Supplementary, dated November 6, 1996, are incorporated
herein by reference to Post-Effective Amendment No. 21 to
Registrant's Registration Statement on Form N-1A filed with the
Commission on December 13, 1996 relating to the Munder Short Term
Treasury Fund.
(6) Articles Supplementary, dated February 4, 1997, are incorporated
herein by reference to Post-Effective Amendment No. 23 to
Registrant's Registration Statement on Form N-1A filed with the
Commission on February 18, 1997 relating to the Munder All-Season
Conservative Fund, the Munder All-Season Moderate Fund and the
Munder All-Season Aggressive Fund.
(7) Articles Supplementary, dated March 12, 1997, are incorporated
herein by reference to Post-Effective Amendment No. 25 to
Registrant's Registration Statement on Form N-1A filed with the
Commission on May 14, 1997 relating to the name changes of the
Munder All-Season Conservative Fund, the Munder All-Season
Moderate Fund and the Munder All-Season Aggressive Fund to the
Munder All-Season Maintenance Fund, the Munder All-Season
Development Fund and the Munder All-Season Accumulation Fund.
(8) Articles Supplementary, dated May 6, 1997, are incorporated
herein by reference to Post-Effective Amendment No. 28 to
Registrant's Registration Statement on Form N-1A filed with the
Commission on July 28, 1997 relating to the Munder Financial
Services Fund.
<PAGE>
(9) Articles Supplementary, dated February 24, 1998, are incorporated
herein by reference to Post-Effective Amendment No. 32 to
Registrant's Registration Statement on Form N-1A filed with the
Commission on March 20, 1998 relating to the Munder Growth
Opportunities Fund.
(10) Articles Supplementary, dated June 1, 1998, are incorporated
herein by reference to Post-Effective Amendment No. 35 to
Registrant's Registration Statement on Form N-1A filed with the
Commission on August 28, 1998 relating to the Munder Convertible
Securities Fund, Munder NetNet Fund and the Munder Short-Term
Treasury Fund.
(11) Articles Supplementary, dated July 1, 1998, are incorporated
herein by reference to Post-Effective Amendment No. 35 to
Registrant's Registration Statement on Form N-1A filed with the
Commission on August 28, 1998 relating to the name changes of the
Munder All-Season Maintenance Fund, the Munder All-Season
Development Fund and the Munder All-Season Accumulation Fund to
the Munder All-Season Conservative Fund, the Munder All-Season
Moderate Fund and the Munder All-Season Aggressive Fund.
(12) Articles Supplementary, dated December 1, 1998, relating to the
Munder Mid-Cap Growth Fund and Munder NetNet Fund is filed
herein.
(13) Articles Supplementary, dated April 16, 1999, relating to the
Munder NetNet Fund and Munder Money Market Fund is filed herein.
(14) Articles Supplementary relating to the Munder Technology Fund to
be filed by amendment.
(b) By-Laws are incorporated herein by reference to Registrant's initial
Registration Statement on Form N-1A, filed on November 18, 1992.
(c) Not Applicable.
(d) (1) Investment Advisory Agreement, dated July 2, 1998, between
Registrant and Munder Capital Management with respect to the
Munder Emerging Growth Fund, Munder Equity Selection Fund, Munder
Financial Services Fund, Munder Micro-Cap Equity Fund, Munder
Multi-Season Growth Fund, Munder Growth Opportunities Fund,
NetNet Fund, Munder Real Estate Equity Investment Fund, Munder
Small-Cap Value Fund, Munder Value Fund, Munder International
Bond Fund, Munder Short Term Treasury Fund, Munder Money Market
Fund, Munder All-Season Conservative Fund, Munder All-Season
Moderate Fund and Munder All-Season Aggressive Fund is
incorporated herein by reference to Post-Effective Amendment No.
35 to Registrant's Registration Statement on Form N-1A filed with
the Commission on August 28, 1998.
(2) Form of Notice to Investment Advisory Agreement between
Registrant and Munder Capital Management with respect to the
Munder Technology Fund is filed herein.
<PAGE>
(e) (1) Underwriting Agreement, dated January 13, 1995, is incorporated
herein by reference to Post-Effective Amendment No. 16 to
Registrant's Registration Statement on Form N-1A filed with the
Commission on June 25, 1996.
(2) Notice to Underwriting Agreement between Registrant and Funds
Distributor, Inc. with respect to the Munder Value Fund is
incorporated herein by reference to Post-Effective Amendment No.
16 to Registrant's Registration Statement on Form N-1A filed with
the Commission on June 25, 1996.
(3) Notice to Underwriting Agreement between Registrant and Funds
Distributor, Inc. with respect to the Munder International Bond
Fund is incorporated herein by reference to Post-Effective
Amendment No. 16 to Registrant's Registration Statement on Form
N-1A filed with the Commission on June 25, 1996.
(4) Notice to Underwriting Agreement between Registrant and Funds
Distributor, Inc. with respect to the Munder Small-Cap Value
Fund, the Munder Equity Selection Fund, the Munder Micro-Cap
Equity Fund, and the NetNet Fund is incorporated herein by
reference to Post-Effective Amendment No. 18 to Registrant's
Registration Statement on Form N-1A filed with the Commission on
August 14, 1996.
(5) Notice, dated November 7, 1996, to Underwriting Agreement,
between Registrant and Funds Distributor, Inc. with respect to
the Munder Short Term Treasury Fund is incorporated herein by
reference to Post-Effective Amendment No. 36 to Registrant's
Registration Statement on Form N-1A filed with the Commission on
October 27, 1998.
(6) Distribution Agreement, dated February 4, 1997, between
Registrant and Funds Distributor, Inc. with respect to the Munder
All-Season Conservative Fund, the Munder All-Season Moderate Fund
and the Munder All-Season Aggressive Fund is incorporated herein
by reference to Post-Effective Amendment No. 35 to Registrant's
Registration Statement on Form N-1A filed with the Commission on
August 28, 1998.
(7) Distribution Agreement, dated May 6, 1997, between Registrant and
Funds Distributor, Inc. with respect to the Munder Financial
Services Fund is incorporated herein by reference to Post-
Effective Amendment No. 36 to Registrant's Registration Statement
on Form N-1A filed with the Commission on October 27, 1998.
(8) Distribution Agreement between Registrant and Funds Distributor,
Inc. with respect to the Munder Growth Opportunities Fund is
filed herein.
(9) Form of Distribution Agreement between Registrant and Funds
Distributor, Inc. with respect to the Munder Technology Fund is
filed herein.
(f) Not Applicable.
<PAGE>
(g) (1) Form of Custodian Contract between Registrant and Comerica Bank
is incorporated herein by reference to Post-Effective Amendment
No. 16 to Registrant's Registration Statement on Form N-1A filed
with the Commission on June 25, 1996.
(2) Notice, dated May 1, 1995, to Custodian Contract between
Registrant and Comerica Bank with respect to the Munder Value
Fund is incorporated herein by reference to Post-Effective
Amendment No. 16 to Registrant's Registration Statement on Form
N-1A filed with the Commission on June 25, 1996.
(3) Notice, dated May 1, 1995, to Custodian Contract between
Registrant and Comerica Bank with respect to the Munder
International Bond Fund is incorporated herein by reference to
Post-Effective Amendment No. 16 to Registrant's Registration
Statement on Form N-1A filed with the Commission on June 25,
1996.
(4) Notice, dated May 1, 1995, to Custodian Contract between
Registrant and Comerica Bank with respect to the Munder Small-Cap
Value Fund, the Munder Equity Selection Fund, the Munder Micro-
Cap Equity Fund and the NetNet Fund is incorporated herein by
reference to Post-Effective Amendment No. 18 to Registrant's
Registration Statement on Form N-1A filed with the Commission on
August 14, 1996.
(5) Notice, dated November 7, 1996, to the Custodian Contract between
Registrant and Comerica Bank with respect to the Munder Short
Term Treasury Fund is incorporated herein by reference to Post-
Effective Amendment No. 35 to Registrant's Registration Statement
on Form N-1A filed with the Commission on August 28, 1998.
(6) Notice, dated February 4, 1997, to the Custody Agreement between
Registrant and Comerica Bank with respect to the Munder All-
Season Conservative Fund, the Munder All-Season Moderate Fund and
the Munder All-Season Aggressive Fund is incorporated herein by
reference to Post-Effective Amendment No. 35 to Registrant's
Registration Statement on Form N-1A filed with the Commission on
August 28, 1998.
(7) Form of Notice to the Custodian Agreement between Registrant and
Comerica Bank with respect to the Munder Financial Services Fund
is incorporated herein by reference to Post-Effective Amendment
No. 28 to Registrant's Registration Statement on Form N-1A filed
with the Commission on July 28, 1997.
(8) Notice, dated February 24, 1998, to the Custodian Agreement
between Registrant and Comerica Bank with respect to the Munder
Growth Opportunities Fund is incorporated herein by reference to
Post-Effective Amendment No. 35 to Registrant's Registration
Statement on Form N-1A filed with the Commission on August 28,
1998.
(9) Form of Notice to the Custodian Agreement between Registrant and
Comerica Bank with respect to the Munder Technology Fund is filed
herein.
<PAGE>
(10) Form of Sub-Custodian Agreement among Registrant, Comerica Bank
and State Street Bank and Trust Company with respect to the
Munder All-Season Aggressive Fund, Munder All-Season Conservative
Fund, Munder All-Season Moderate Fund, Munder International Bond
Fund, Munder Micro-Cap Equity Fund, Munder Money Market Fund,
Munder Multi-Season Growth Fund, Munder Real Estate Equity
Investment Fund, Munder Small-Cap Value Fund, Munder Short Term
Treasury Fund, Munder Value Fund and NetNet Fund is incorporated
herein by reference to Post-Effective Amendment No. 32 to
Registrant's Registration Statement on Form N-1A filed with the
Commission on March 20, 1998.
(11) Notice, dated February 24, 1998, to Sub-Custodian Agreement among
Registrant, Comerica Bank and State Street Bank and Trust Company
with respect to the Munder Growth Opportunities Fund is
incorporated herein by reference to Post-Effective Amendment No.
35 to Registrant's Registration Statement on Form N-1A filed with
the Commission on August 28, 1998.
(12) Form of Amendment to Sub-Custodian Agreement among Registrant,
Comerica Bank and State Street Bank and Trust Company is
incorporated herein by reference to Post-Effective Amendment No.
33 to the Registrant's Registration Statement on Form N-1A filed
with the Commission on May 22, 1998.
(13) Notice to Sub-Custodian Agreement among Registrant and State
Street Bank and Trust Company with respect to the Munder Equity
Selection Fund is filed herein.
(14) Form of Notice to Sub-Custodian Agreement among Registrant and
State Street Bank and Trust Company with respect to the Munder
Technology Fund is filed herein.
(h) (1) Administration Agreement, dated October 31, 1997, between
Registrant and State Street Bank and Trust Company with respect
to the Munder All-Season Aggressive Fund, Munder All-Season
Conservative Fund, Munder All-Season Moderate Fund, Munder
International Bond Fund, Munder Micro-Cap Equity Fund, Munder
Money Market Fund, Munder Multi-Season Growth Fund, Munder Real
Estate Equity Investment Fund, Munder Small-Cap Value Fund,
Munder Short Term Treasury Fund, Munder Value Fund and NetNet
Fund is incorporated herein by reference to Post-Effective
Amendment No. 32 to Registrant's Registration Statement on Form
N-1A filed with the Commission on March 20, 1998.
(2) Notice, dated October 31, 1997, to Administration Agreement
between Registrant and State Street Bank and Trust Company with
respect to the Munder Equity Selection Fund is filed herein.
(3) Notice, dated February 24, 1998, to Administration Agreement
between Registrant and State Street Bank and Trust Company with
respect to the Munder Growth Opportunities Fund is incorporated
herein by reference to Post-Effective
<PAGE>
Amendment No. 35 to Registrant's Registration Statement on Form
N-1A filed with the Commission on August 28, 1998.
(4) Form of Notice to Administration Agreement between Registrant and
State Street Bank and Trust Company with respect to the Munder
Technology Fund is filed herein.
(5) Transfer Agency and Registrar Agreement, dated June 19, 1995,
between Registrant and First Data Investor Services Group, Inc.
is incorporated herein by reference to Post-Effective Amendment
No. 16 to Registrant's Registration Statement on Form N-1A filed
with the Commission on June 25, 1996.
(6) Notice, dated July 20, 1995, to Transfer Agency and Registrar
Agreement between Registrant and First Data Investor Services
Group, Inc. with respect to the Munder Value Fund is incorporated
herein by reference to Post-Effective Amendment No. 16 to
Registrant's Registration Statement on Form N-1A filed with the
Commission on June 25, 1996.
(7) Notice, dated May 6, 1996, to Transfer Agency and Registrar
Agreement between Registrant and First Data Investor Services
Group, Inc. with respect to the Munder International Bond Fund is
incorporated herein by reference to Post-Effective Amendment No.
16 to Registrant's Registration Statement on Form N-1A filed with
the Commission on June 25, 1996.
(8) Notice to Transfer Agency and Registrar Agreement between
Registrant and First Data Investor Services Group, Inc. with
respect to the Munder Small-Cap Value Fund, the Munder Equity
Selection Fund, the Munder Micro-Cap Equity Fund and the NetNet
Fund is incorporated herein by reference to Post-Effective
Amendment No. 18 to Registrant's Registration Statement on Form
N-1A filed with the Commission on August 14, 1996.
(9) Notice to Transfer Agency and Registrar Agreement between
Registrant and First Data Investor Services Group, Inc. with
respect to the Munder Short Term Treasury Fund is incorporated
herein by reference to Post-Effective Amendment No. 21 to
Registrant's Registration Statement on Form N-1A filed with the
Commission on December 13, 1996.
(10) Form of Amendment to the Transfer Agency and Registrar Agreement
between Registrant and First Data Investor Services Group, Inc.
with respect to the Munder All-Season Conservative Fund, the
Munder All-Season Moderate Fund and the Munder All-Season
Aggressive Fund is incorporated herein by reference to Post-
Effective Amendment No. 23 to Registrant's Registration Statement
on Form N-1A filed with the Commission on February 18, 1997.
(11) Form of Notice to the Transfer Agency and Registrar Agreement
between Registrant and First Data Investor Services Group, Inc.
with respect to the Munder Financial Services Fund is
incorporated herein by reference to Post-Effective Amendment No.
28 to Registrant's Registration Statement on Form N-1A filed with
the Commission on July 28, 1997.
<PAGE>
(12) Form of Amendment to the Transfer Agency and Registrar Agreement
between Registrant and First Data Investor Services Group, Inc.
with respect to the Munder Financial Services Fund is
incorporated herein by reference to Post-Effective Amendment No.
28 to Registrant's Registration Statement on Form N-1A filed with
the Commission on July 28, 1997.
(13) Form of Notice to the Transfer Agency and Registrar Agreement
between Registrant and First Data Investor Services Group, Inc.
with respect to the Munder Growth Opportunities Fund is
incorporated herein by reference to Post-Effective Amendment No.
32 to Registrant's Registration Statement on Form N-1A filed with
the Commission on March 20, 1998.
(14) Amendment, dated June 1, 1998, to the Transfer Agency and
Registrar Agreement between Registrant and First Data Investor
Services Group, Inc. is incorporated herein by reference to Post-
Effective Amendment No. 35 to Registrant's Registration Statement
on Form N-1A filed with the Commission on August 28, 1998.
(15) Amendment, dated June 1, 1998, to the Transfer Agency and
Registrar Agreement between Registrant and First Data Investor
Services Group, Inc. is incorporated herein by reference to Post-
Effective Amendment No. 35 to Registrant's Registration Statement
on Form N-1A filed with the Commission on August 28, 1998.
(16) Amendment, dated June 1, 1998, to the Transfer Agency and
Registrar Agreement between Registrant and First Data Investor
Services Group, Inc. is incorporated herein by reference to Post-
Effective Amendment No. 35 to Registrant's Registration Statement
on Form N-1A filed with the Commission on August 28, 1998.
(17) Amendment, dated January 2, 1997, to the Transfer Agency and
Registrar Agreement between the Registrant and First Data
Investor Services Group, Inc. is incorporated herein by reference
to Post-Effective Amendment No. 36 to Registrant's Registration
Statement on Form N-1A filed with the Commission on October 27,
1998.
(18) Amendment, dated March 16, 1999, to the Transfer Agency and
Registrar Agreement between the Registrant and First Data
Investor Services Group, Inc. is filed herein.
(19) Amendment, dated March 26, 1999, to the Transfer Agency and
Registrar Agreement between the Registrant and First Data
Investor Services Group, Inc. is filed herein.
(20) Form of Notice to Transfer Agency and Registrar Agreement between
Registrant and First Data Investor Services Group, Inc. with
respect to the Munder Technology Fund is filed herein.
(i) (1) Opinion and Consent of Counsel is incorporated by reference to
the Rule 24f-2 Notice filed on August 28, 1997, Accession Number
0000927405-97-000309.
(2) Opinion and Consent of Counsel with respect to the Munder Growth
Opportunities Fund is incorporated herein by reference to Post-
Effective
<PAGE>
Amendment No. 36 to Registrant's Registration Statement
on Form N-1A filed with the Commission on October 27, 1998.
(3) Opinion and Consent of Counsel with respect to the Munder
Technology Fund to be filed by amendment.
(j) (1) Consent of Arthur Andersen LLP is incorporated herein by
reference to Post-Effective Amendment No. 12 to Registrant's
Registration Statement on Form N-1A filed with the Commission on
August 29, 1995.
(2) Letter of Arthur Andersen LLP regarding change in independent
auditor required by Item 304 of Regulation S-K is incorporated
herein by reference to Post-Effective Amendment No. 12 to
Registrant's Registration Statement on Form N-1A filed with the
Commission on August 29, 1995.
(3) Powers of Attorney, dated February 24, 1998, are incorporated
herein by reference to Post-Effective Amendment No. 32 to
Registrant's Registration Statement on Form N-1A filed with the
Commission on March 20, 1998.
(4) Certified Resolution of Board, dated February 24, 1998,
authorizing signature on behalf of Registrant pursuant to power
of attorney is incorporated herein by reference to Post-Effective
Amendment No. 32 to Registrant's Registration Statement on Form
N-1A filed with the Commission on March 20, 1998.
(k) Not Applicable.
(l) Initial Capital Agreement is incorporated herein by reference to Pre-
Effective Amendment No. 2 to Registrant's Registration Statement on
Form N-1A filed with the Commission on February 26, 1993.
(m) (1) Service Plan, dated January 13, 1995, for the Munder Multi-Season
Growth Fund Class A Shares is incorporated herein by reference to
Post-Effective Amendment No. 8 to Registrant's Registration
Statement on Form N-1A filed with the Commission on February 28,
1995.
(2) Service and Distribution Plan, dated January 13, 1995, for the
Munder Multi-Season Growth Fund Class B Shares is incorporated
herein by reference to Post-Effective Amendment No. 8 to
Registrant's Registration Statement on Form N-1A filed with the
Commission on February 28, 1995.
(3) Amended and Restated Service and Distribution Plan, dated May 6,
1997, for the Munder Multi-Season Growth Fund Class C Shares is
incorporated herein by reference to Post-Effective Amendment No.
35 to Registrant's Registration Statement on Form N-1A filed with
the Commission on August 28, 1998.
(4) Service Plan dated January 13, 1995, for the Munder Money Market
Fund Class A Shares is incorporated herein by reference to Post-
Effective Amendment No. 8 to Registrant's Registration Statement
on Form N-1A filed with the Commission on February 28, 1995.
<PAGE>
(5) Service and Distribution Plan, dated January 13, 1995, for the
Munder Money Market Fund Class B Shares is incorporated herein by
reference to Post-Effective Amendment No. 8 to Registrant's
Registration Statement on Form N-1A filed with the Commission on
February 28, 1995.
(6) Amended and Restated Service and Distribution Plan, dated May 6,
1997, for the Munder Money Market Fund Class C Shares is
incorporated herein by reference to Post-Effective Amendment No.
35 to Registrant's Registration Statement on Form N-1A filed with
the Commission on August 28, 1998.
(7) Service Plan, dated January 13, 1995, for the Munder Real Estate
Equity Investment Fund Class A Shares is incorporated herein by
reference to Post-Effective Amendment No. 8 to Registrant's
Registration Statement on Form N-1A filed with the Commission on
February 28, 1995.
(8) Service and Distribution Plan, dated January 13, 1995, for the
Munder Real Estate Equity Investment Fund Class B Shares is
incorporated herein by reference Post-Effective Amendment No. 8
to Registrant's Registration Statement on Form N-1A filed with
the Commission on February 28, 1995.
(9) Amended and Restated Service and Distribution Plan, dated May 6,
1997, for the Munder Real Estate Equity Investment Fund Class C
Shares is incorporated herein by reference to Post-Effective
Amendment No. 35 to Registrant's Registration Statement on Form
N-1A filed with the Commission on August 28, 1998.
(10) Service Plan, dated August 6, 1996, for the Munder Equity
Selection Fund Class A Shares is incorporated herein by reference
to Post-Effective Amendment No. 35 to Registrant's Registration
Statement on Form N-1A filed with the Commission on August 28,
1998.
(11) Service and Distribution Plan, dated August 6, 1996, for the
Munder Equity Selection Fund Class B Shares is incorporated
herein by reference to Post-Effective Amendment No. 35 to
Registrant's Registration Statement on Form N-1A filed with the
Commission on August 28, 1998.
(12) Service and Distribution Plan, dated August 6, 1996, for the
Munder Equity Selection Fund Class C Shares is incorporated
herein by reference to Post-Effective Amendment No. 35 to
Registrant's Registration Statement on Form N-1A filed with the
Commission on August 28, 1998.
(13) Service Plan, dated May 6, 1996, for the Munder International
Bond Fund Class A Shares is incorporated herein by reference to
Post-Effective Amendment No. 35 to Registrant's Registration
Statement on Form N-1A filed with the Commission on August 28,
1998.
(14) Service and Distribution Plan, dated May 6, 1996, for the Munder
International Bond Fund Class B Shares is incorporated herein by
reference to Post-Effective
<PAGE>
Amendment No. 35 to Registrant's Registration Statement on Form
N-1A filed with the Commission on August 28, 1998.
(15) Service and Distribution Plan, dated May 6, 1996, for the Munder
International Bond Fund Class C Shares is incorporated herein by
reference to Post-Effective Amendment No. 35 to Registrant's
Registration Statement on Form N-1A filed with the Commission on
August 28, 1998.
(16) Service Plan, dated August 6, 1996, for the Munder Micro-Cap
Equity Fund Class A Shares is incorporated herein by reference to
Post-Effective Amendment No. 35 to Registrant's Registration
Statement on Form N-1A filed with the Commission on August 28,
1998.
(17) Service and Distribution Plan, dated August 6, 1996, for the
Munder Micro-Cap Equity Fund Class B Shares is incorporated
herein by reference to Post-Effective Amendment No. 35 to
Registrant's Registration Statement on Form N-1A filed with the
Commission on August 28, 1998.
(18) Service and Distribution Plan, dated August 6, 1996, for the
Munder Micro-Cap Equity Fund Class C Shares is incorporated
herein by reference to Post-Effective Amendment No. 35 to
Registrant's Registration Statement on Form N-1A filed with the
Commission on August 28, 1998.
(19) Service Plan, dated November 7, 1996, for the Munder Short Term
Treasury Fund Class A Shares is incorporated herein by reference
to Post-Effective Amendment No. 35 to Registrant's Registration
Statement on Form N-1A filed with the Commission on August 28,
1998.
(20) Service and Distribution Plan, dated November 7, 1996, for the
Munder Short Term Treasury Fund Class B Shares is incorporated
herein by reference to Post-Effective Amendment No. 35 to
Registrant's Registration Statement on Form N-1A filed with the
Commission on August 28, 1998.
(21) Service and Distribution Plan, dated November 7, 1996, for the
Munder Short Term Treasury Fund Class C Shares is incorporated
herein by reference to Post-Effective Amendment No. 35 to
Registrant's Registration Statement on Form N-1A filed with the
Commission on August 28, 1998.
(22) Service and Distribution Plan, dated February 4, 1997, for the
Munder All-Season Aggressive Fund (formerly the Munder All-Season
Accumulation Fund) Class A Shares is incorporated herein by
reference to Post-Effective Amendment No. 35 to Registrant's
Registration Statement on Form N-1A filed with the Commission on
August 28, 1998.
(23) Service and Distribution Plan, dated February 4, 1997, for the
Munder All-Season Aggressive Fund (formerly the Munder All-Season
Accumulation Fund) Class B Shares is incorporated herein by
reference to Post-Effective Amendment No. 35 to Registrant's
Registration Statement on Form N-1A filed with the Commission on
August 28, 1998.
<PAGE>
(24) Service and Distribution Plan, dated February 4, 1997, for the
Munder All-Season Conservative Fund (formerly the Munder All-
Season Maintenance Fund) Class A Shares is incorporated herein by
reference to Post-Effective Amendment No. 35 to Registrant's
Registration Statement on Form N-1A filed with the Commission on
August 28, 1998.
(25) Service and Distribution Plan, dated February 4, 1997, for the
Munder All-Season Conservative Fund (formerly the Munder All-
Season Maintenance Fund) Class B Shares is incorporated herein by
reference to Post-Effective Amendment No. 35 to Registrant's
Registration Statement on Form N-1A filed with the Commission on
August 28, 1998.
(26) Service and Distribution Plan, dated February 4, 1997, for the
Munder All-Season Moderate Fund (formerly the Munder All-Season
Development Fund) Class A Shares is incorporated herein by
reference to Post-Effective Amendment No. 35 to Registrant's
Registration Statement on Form N-1A filed with the Commission on
August 28, 1998.
(27) Service and Distribution Plan, dated February 4, 1997, for the
Munder All-Season Moderate Fund (formerly the Munder All-Season
Development Fund) Class B Shares is incorporated herein by
reference to Post-Effective Amendment No. 35 to Registrant's
Registration Statement on Form N-1A filed with the Commission on
August 28, 1998.
(28) Service Plan, dated August 6, 1996, for the Munder Small-Cap
Value Fund Class A Shares is incorporated herein by reference to
Post-Effective Amendment No. 35 to Registrant's Registration
Statement on Form N-1A filed with the Commission on August 28,
1998.
(29) Service and Distribution Plan, dated August 6, 1996, for the
Munder Small-Cap Value Fund Class B Shares is incorporated herein
by reference to Post-Effective Amendment No. 35 to Registrant's
Registration Statement on Form N-1A filed with the Commission on
August 28, 1998.
(30) Service and Distribution Plan, dated August 6, 1996, for the
Munder Small-Cap Value Fund Class C Shares is incorporated herein
by reference to Post-Effective Amendment No. 35 to Registrant's
Registration Statement on Form N-1A filed with the Commission on
August 28, 1998.
(31) Service and Distribution Plan dated August 6, 1996 for the NetNet
Fund is incorporated herein by reference to Post-Effective
Amendment No. 35 to Registrant's Registration Statement on Form
N-1A filed with the Commission on August 28, 1998.
(32) Service Plan for Class A Shares with respect to the Munder Growth
Opportunities Fund is filed herein.
<PAGE>
(33) Service and Distribution Plan for Class B Shares with respect to
the Munder Growth Opportunities Fund is filed herein.
(34) Service and Distribution Plan for Class C Shares with respect to
the Munder Growth Opportunities Fund is filed herein.
(35) Service Plan for Class K Shares with respect to the Munder Growth
Opportunities Fund is incorporated herein by reference to Post-
Effective Amendment No. 35 to Registrant's Registration Statement
on Form N-1A filed with the Commission on August 28, 1998.
(36) Amendment to Service and Distribution Plan with respect to the
NetNet Fund is filed herein.
(37) Service and Distribution Plan for Class B Shares with respect to
the NetNet Fund is filed herein.
(38) Service and Distribution Plan for Class C Shares with respect to
the NetNet Fund is filed herein.
(39) Service Plan, dated July 31, 1995, for the Munder Value Fund
Class A Shares is incorporated herein by reference to Post-
Effective Amendment No. 35 to Registrant's Registration Statement
on Form N-1A filed with the Commission on August 28, 1998.
(40) Service and Distribution Plan, dated July 31, 1995, for the
Munder Value Fund Class B Shares is incorporated herein by
reference to Post-Effective Amendment No. 35 to Registrant's
Registration Statement on Form N-1A filed with the Commission on
August 28, 1998.
(41) Service and Distribution Plan, dated July 31, 1995, for the
Munder Value Fund Class C Shares is incorporated herein by
reference to Post-Effective Amendment No. 35 to Registrant's
Registration Statement on Form N-1A filed with the Commission on
August 28, 1998.
(42) Form of Service Plan for the Munder Technology Fund Class A
Shares is filed herein.
(43) Form of Service and Distribution Plan for the Munder Technology
Fund Class B Shares is filed herein.
(44) Form of Service and Distribution Plan for the Munder Technology
Fund Class C Shares is filed herein.
(n) Not Applicable.
(o) Fourth Amended and Restated Multi-Class Plan with respect to the
Registrant is filed herein.
<PAGE>
Item 24. Persons Controlled by or under Common Control with Registrant.
--------------------------------------------------------------
Not Applicable.
Item 25. Indemnification
---------------
Article VII, Section 7.6 of the Registrant's Articles of Incorporation
("Section 7.6") provides that the Registrant, including its successors
and assigns, shall indemnify its directors and officers and make
advance payment of related expenses to the fullest extent permitted,
and in accordance with the procedures required, by the General Laws of
the State of Maryland and the Investment Company Act of 1940. Such
indemnification shall be in addition to any other right or claim to
which any director, officer, employee or agent may otherwise be
entitled. In addition, Article VI of the Registrant's By-laws
provides that the Registrant shall indemnify its employees and/or
agents in any manner as shall be authorized by the Board of Directors
and within such limits as permitted by applicable law. The Board of
Directors may take such action as is necessary to carry out these
indemnification provisions and is expressly empowered to adopt,
approve and amend from time to time such resolutions or contracts
implementing such provisions or such further indemnification
arrangements as permitted by law. The Registrant may purchase and
maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the Registrant or is serving at the
request of the Registrant as a director, officer, partner, trustee,
employee or agent of another foreign or domestic corporation,
partnership, joint venture, trust or other enterprise or employee
benefit plan, against any liability asserted against and incurred by
such person in any such capacity or arising out of such person's
position, whether or not the Registrant would have had the power to
indemnify against such liability. The rights provided by Section 7.6
shall be enforceable against the Registrant by such person who shall
be presumed to have relied upon such rights in serving or continuing
to serve in the capacities indicated therein.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors,
officers and controlling persons of the Registrant by the Registrant
pursuant to the Fund's Articles of Incorporation, its By-Laws or
otherwise, the Registrant is aware that in the opinion of the
Securities and Exchange Commission, such indemnification is against
public policy as expressed in the Act and, therefore, is
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses
incurred or paid by directors, officers or controlling persons of the
Registrant in connection with the successful defense of any act, suit
or proceeding) is asserted by such directors, officers or controlling
persons in connection with shares being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by
the final adjudication of such issues.
<PAGE>
Item 26. Business and Other Connections of Investment Advisor
----------------------------------------------------
Munder Capital Management
<TABLE>
<CAPTION>
Name Position with Advisor
---- ---------------------
<S> <C>
Old MCM, Inc. Partner
Munder Group LLC Partner
WAM Holdings, Inc. Partner
WAM Holdings II, Inc. Partner
Lee P. Munder Chairman
Leonard J. Barr, II Senior Vice President and Director of Research
Clark Durant Vice President and Co-Director of The Private Management Group
Terry H. Gardner Vice President and Chief Financial Officer
Elyse G. Essick Vice President and Director of Client Services
Sharon E. Fayolle Vice President and Director of Money Market Trading
Otto G. Hinzmann Vice President and Director of Equity Portfolio Management
Anne K. Kennedy Vice President and Director of Corporate Bond Trading
Richard R. Mullaney Vice President and Director of The Private Management Group
Ann F. Putallaz Vice President and Director of Fiduciary Services
Peter G. Root Vice President and Director of Government Securities Trading
James C. Robinson Vice President and Chief Investment Officer/Fixed Income
Gerald L. Seizert Chief Executive Officer and Chief Investment Officer/Equity
Paul D. Tobias Chief Executive Officer and Chief Operating Officer
</TABLE>
For further information relating to the Investment Advisor's officers,
reference is made to Form ADV filed under the Investment Advisers Act of
1940 by Munder Capital Management. See File No. 801-32415.
Item 27. Principal Underwriters.
-----------------------
(a) Funds Distributor, Inc. ("FDI"), located at 60 State Street,
Suite 1300, Boston, Massachusetts 02109. FDI is an indirectly
wholly-owned subsidiary of Boston Institutional Group, Inc. a
holding company, all of whose outstanding shares are owned by
key employees. FDI is a broker dealer registered under the
Securities Exchange Act of 1934, as amended and is a member of
the National Association of Securities Dealers. FDI acts as
principal underwriter of the following investment companies
other than the Registrant:
American Century California Tax-Free and Municipal Funds
American Century Capital Portfolios, Inc.
American Century Government Income Trust
American Century International Bond Funds
American Century Investment Trust
American Century Municipal Trust
American Century Mutual Funds, Inc.
American Century Premium Reserves, Inc.
<PAGE>
American Century Quantitative Equity Funds
American Century Strategic Asset Allocations, Inc.
American Century Target Maturities Trust
American Century Variable Portfolios, Inc.
American Century World Mutual Funds, Inc.
The Brinson Funds
Dresdner RCM Capital Funds, Inc.
Dresdner RCM Equity Funds, Inc.
Harris Insight Funds Trust
HT Insight Funds, Inc. d/b/a Harris Insight Funds
JP Morgan Institutional Funds
JP Morgan Funds
JPM Series Trust
JPM Series Trust II
Kobrick Investment Trust
LaSalle Partners Funds, Inc.
Merrimac Series
Monetta Fund, Inc.
Monetta Trust
The Montgomery Funds I
The Montgomery Funds II
The Munder Framlington Funds Trust
The Munder Funds Trust
National Investors Cash Management Fund, Inc.
Orbitex Group of Funds
SG Cowen Funds, Inc.
SG Cowen Income & Growth Fund, Inc.
SG Cowen Standby Reserve Fund, Inc.
SG Cowen Standby Tax-Exempt Reserve Fund, Inc.
SG Cowen Series Fund, Inc.
St. Clair Funds, Inc.
The Skyline Funds
Waterhouse Investors Family of Funds, Inc.
WEBS Index Fund, Inc.
(b) The following is a list of the executive officers, directors and partners
of Funds Distributor, Inc.
Director, President and Chief Executive Officer -Marie E. Connolly
Executive Vice President -George A. Rio
Executive Vice President -Donald R. Roberson
Executive Vice President -William S. Nichols
Senior Vice President -Michael S. Petrucelli
Senior Vice President, General Counsel, Chief -Margaret W. Chambers
Compliance Officer, Secretary and Clerk
Director, Senior Vice President, Treasurer and Chief -Joseph F. Tower, III
Financial Officer
Senior Vice President -Paula R. David
Senior Vice President -Gary S. MacDonald
<PAGE>
Senior Vice President -Judith K. Benson
Chairman and Director -William J. Nutt
(c) Not Applicable.
Item 28. Location of Accounts and Records
--------------------------------
The account books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act of
1940 and the Rules thereunder will be maintained at the offices of:
(1) Munder Capital Management, 480 Pierce Street or 255 East Brown
Street, Birmingham, Michigan 48009 (records relating to its
function as investment advisor);
(2) First Data Investor Services Group, Inc., 53 State Street,
Exchange Place, Boston, Massachusetts 02109 or 4400 Computer
Drive, Westborough, Massachusetts 01581 (records relating to its
functions transfer agent);
(3) State Street Bank and Trust Company, 225 Franklin Street, Boston,
MA 02110 or 150 Newport Avenue, North Quincy, Massachusetts 02171
(records relating to its function as administrator and sub-
custodian);
(4) Funds Distributor, Inc., 60 State Street, Boston, Massachusetts
02109 (records relating to its function as distributor); and
(5) Comerica Bank, 1 Detroit Center, 500 Woodward Avenue, Detroit,
Michigan 48226 (records relating to its function as custodian).
Item 29. Management Services
--------------------------
None.
Item 30. Undertakings
----------------
Not Applicable.
16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, as amended, the Registrant certifies that this
Post-Effective Amendment No. 37 to the Registration Statement meets the
requirements for effectiveness pursuant to Rule 485(a) of the Securities Act of
1933, as amended, and the Registrant has duly caused this Post-Effective
Amendment No. 37 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Quincy and The Commonwealth of Massachusetts, on the
11th day of June, 1999.
THE MUNDER FUNDS, INC.
By: *
----------------
Lee P. Munder
* By: /s/ Cynthia Surprise
--------------------
Cynthia Surprise
as Attorney-in-Fact
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signatures Title Date
- ---------- ----- ----
*
-------------------- Director and June 11, 1999
Lee P. Munder President
* Director June 11, 1999
--------------------
Charles W. Elliott
*
-------------------- Director June 11, 1999
Joseph E. Champagne
*
-------------------- Director June 11, 1999
Thomas B. Bender
*
-------------------- Director June 11, 1999
Thomas D. Eckert
*
-------------------- Director June 11, 1999
John Rakolta, Jr.
*
-------------------- Director June 11, 1999
David J. Brophy
17
<PAGE>
* Vice President, June 11, 1999
- -------------------- Treasurer and
Terry H. Gardner Chief Financial Officer
*By: /s/ Cynthia Surprise
--------------------
Cynthia Surprise
as Attorney-in-Fact
18
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
99(a)(12) Articles Supplementary dated December 1, 1998 for the Registrant
99(a)(13) Articles Supplementary dated April 16, 1999 for the Registrant
99(d)(2) Form of Notice to Investment Advisory Agreement between Registrant
and Munder Capital Management with respect to the Munder
Technology Fund
99(e)(8) Distribution Agreement between Registrant and Funds Distributor,
Inc. with respect to the Munder Growth Opportunities Fund
99(e)(9) Form of Distribution Agreement between Registrant and Funds
Distributor, Inc. with respect to the Munder Technology Fund
99(g)(9) Form of Notice to the Custodian Agreement between Registrant and
Comerica Bank with respect to the Munder Technology Fund
99(g)(13) Notice to Sub-Custodian Agreement among Registrant and State
Street Bank and Trust Company with respect to the Munder Equity
Selection Fund
99(g)(14) Form of Notice to Sub-Custodian Agreement among Registrant and
State Street Bank and Trust Company with respect to the Munder
Technology Fund
99(h)(2) Notice to Administration Agreement between Registrant and State
Street Bank and Trust Company with respect to the Munder Equity
Selection Fund
99(h)(4) Form of Notice to Administration Agreement between Registrant and
State Street Bank and Trust Company with respect to the Munder
Technology Fund
99(h)(18) Amendment, dated March 16, 1999, to the Transfer Agency and
Registrar Agreement between the Registrant and First Data Investor
Services Group, Inc.
99(h)(19) Amendment, dated March 26, 1999, to the Transfer Agency and
Registrar Agreement between the Registrant and First Data Investor
Services Group, Inc.
99(h)(20) Form of Notice to Transfer Agency and Registrar Agreement between
Registrant and First Data Investor Services Group, Inc. with
respect to the Munder Technology Fund
99(m)(32) Service Plan for Class A Shares with respect to the Munder Growth
Opportunities Fund
99(m)(33) Service and Distribution Plan for Class B Shares with respect to
the Munder Growth Opportunities Fund
99(m)(34) Service and Distribution Plan for Class C Shares with respect to
the Munder Growth Opportunities Fund
99(m)(36) Amendment to Service and Distribution Plan with respect to the
NetNet Fund
99(m)(37) Service and Distribution Plan for Class B Shares with respect to
the NetNet Fund
99(m)(38) Service and Distribution Plan for Class C Shares with respect to
the NetNet Fund
99(m)(42) Form of Service Plan for the Munder Technology Fund Class A Shares
99(m)(43) Form of Service and Distribution Plan for the Munder Technology
Fund Class B Shares
99(m)(44) Form of Service and Distribution Plan for the Munder Technology
Fund Class C Shares
99(o) Fourth Amended and Restated Multi-Class Plan with respect to the
Registrant
<PAGE>
Exhibit 99(a)(12)
THE MUNDER FUNDS, INC.
ARTICLES SUPPLEMENTARY
THE MUNDER FUNDS, INC., a Maryland corporation registered as an open-end
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and having its principal office in the State of Maryland in
Baltimore City, Maryland (hereinafter called the "Corporation"), hereby
certifies to the State Department of Assessments and Taxation of Maryland that:
FIRST: In accordance with procedures established in the Corporation's
Charter, the Board of Directors of the Corporation, by resolution dated August
4, 1998 pursuant to Section 2-208 of Maryland General Corporate Law,
reclassified twenty million (20,000,000) shares previously classified as The
Munder NetNet Fund, Class B Shares, as follows:
Reclassified Shares
-------------------
Name of Series Shares Allocated by Class (in millions)
- -------------- ---------------------------------------
B C
- -
Munder NetNet Fund 15 5
and; reclassified five million (5,000,000) shares, ten million (10,000,000)
shares, five million (5,000,000) shares, ten million (10,000,000) shares and ten
million (10,000,000) shares previously classified as The Munder Mid-Cap Growth
Fund Class A Shares, Class B Shares, Class C Shares, Class K Shares and Class Y
Shares, respectively, as follows:
Name of Series Shares Allocated by Class (in millions)
- -------------- ---------------------------------------
A B Y C K
- - - - -
Munder Mid-Cap Growth Fund 0 0 0 0 0
SECOND: The shares of the Corporation reclassified pursuant to Article
First of these Articles Supplementary have been so reclassified by the Board of
Directors under the authority contained in the Charter of the Corporation. The
number of shares of capital stock of the various classes that the Corporation
has authority to issue has been established by the Board of Directors in
accordance with Section 2-105(c) of the Maryland General Corporation Law.
THIRD: Immediately prior to the effectiveness of the Articles Supplementary
of the Corporation as hereinabove set forth, the Corporation had the authority
to issue two billion, three-hundred million (2,300,000,000) shares of Common
Stock of the par value of $0.01 per share and of the aggregate par value of
twenty-three million dollars ($23,000,000), of which the Board of Directors had
designated one billion, nine hundred and five million (1,905,000,000) shares
into Series and classified the shares of each Series as follows:
Previously Classified Shares
----------------------------
Authorized Shares
Name of Series (in millions)
- -------------- -------------
Munder Financial Services Fund 50
<PAGE>
<TABLE>
<CAPTION>
Authorized
Shares by Class (in millions)
-----------------------------
A B Y C K
- - - - -
<S> <C> <C> <C> <C> <C>
Munder Multi-Season Growth Fund 10 60 50 10 50
Munder Money Market Fund 55 20 500 20 200
Munder Real Estate Equity Investment Fund 10 50 10 10 10
Munder Equity Selection Fund 10 20 40 20 10
Munder International Bond Fund 20 40 20 10 10
Munder Mid-Cap Growth Fund 5 10 10 5 10
Munder Value Fund 5 10 10 5 10
Munder Micro-Cap Equity Fund 10 15 10 10 10
Munder Small-Cap Value Fund 10 15 10 10 10
Munder All-Season Conservative Fund 12.5 12.5 25 N/A N/A
Munder All-Season Moderate Fund 12.5 12.5 25 N/A N/A
Munder All-Season Aggressive Fund 12.5 12.5 25 N/A N/A
Munder Growth Opportunities Fund 3.4 3.3 20 3.3 20
Munder Convertible Securities Fund 5 5 30 N/A 10
Munder NetNet Fund 15 20 15 N/A N/A
</TABLE>
<TABLE>
<CAPTION>
Authorized
Shares by Class (in millions)
-----------------------------
A B Y C Michigan Municipal
- - - - League (formerly "K")
---------------------
<S> <C> <C> <C> <C> <C>
Munder Short Term Treasury Fund 0 0 90 0 10
</TABLE>
As amended hereby, the Corporation's Articles of Incorporation authorize
the issuance of two billion, three-hundred million (2,300,000,000) shares of
Common Stock of the par value of $0.01 per share and having an aggregate par
value of twenty-three million dollars ($23,000,000), of which the Board of
Directors has designated one billion, eight hundred sixty five million,
(1,865,000,000) shares into Series and classified the shares of each Series as
follows:
Current Classification of Shares
--------------------------------
<TABLE>
<CAPTION>
Authorized Shares
Name of Series (in millions)
- -------------- -------------
<S> <C>
Munder Financial Services Fund 50
</TABLE>
<TABLE>
<CAPTION>
Authorized
Shares by Class (in millions)
-----------------------------
A B Y C K
- - - - -
<S> <C> <C> <C> <C> <C>
Munder Multi-Season Growth Fund 10 60 50 10 50
Munder Money Market Fund 55 20 500 20 200
Munder Real Estate Equity Investment Fund 10 50 10 10 10
Munder Equity Selection Fund 10 20 40 20 10
Munder International Bond Fund 20 40 20 10 10
Munder Value Fund 5 10 10 5 10
Munder Micro-Cap Equity Fund 10 15 10 10 10
Munder Small-Cap Value Fund 10 15 10 10 10
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Authorized
Shares by Class (in millions)
------------------------------------------------
<S> <C> <C> <C> <C> <C>
Munder All-Season Conservative Fund 12.5 12.5 25 N/A N/A
Munder All-Season Moderate Fund 12.5 12.5 25 N/A N/A
Munder All-Season Aggressive Fund 12.5 12.5 25 N/A N/A
Munder Growth Opportunities Fund 3.4 3.3 20 3.3 20
Munder Convertible Securities Fund 5 5 30 0 10
Munder NetNet Fund 15 15 15 5 N/A
</TABLE>
<TABLE>
<CAPTION>
Authorized
Shares by Class (in millions)
-----------------------------
A B Y C Michigan Municipal
- - - - League (formerly "K")
---------------------
<S> <C> <C> <C> <C> <C>
Munder Short Term Treasury Fund 0 0 90 0 10
</TABLE>
FOURTH: The preferences, rights, voting powers, restrictions, limitations
as to dividends, qualifications and terms and conditions of redemption of the
various classes of shares shall be as set forth in the Corporation's Articles of
Incorporation and shall be subject to all provisions of the Articles of
Incorporation relating to shares of the Corporation generally, and those set
forth as follows:
(a) The assets of each Class of a Series shall be invested in the same
investment portfolio of the Corporation.
(b) The dividends and distributions of investment income and capital gains
with respect to each class of shares shall be in such amount as may be
declared from time to time by the Board of Directors, and the dividends and
distributions of each class of shares may vary from the dividends and
distributions of the other classes of shares to reflect differing
allocations of the expenses of the Corporation among the holders of each
class and any resultant differences between the net asset value per share
of each class, to such extent and for such purposes as the Board of
Directors may deem appropriate. The allocation of investment income or
capital gains and expenses and liabilities of the Corporation among the
classes shall be determined by the Board of Directors in a manner it deems
appropriate.
(c) Class A shares of each Series (including fractional shares) may be
subject to an initial sales charge pursuant to the terms of the issuance of
such shares.
(d) The proceeds of the redemption of Class B shares of each Series
(including fractional shares) may be reduced by the amount of any
contingent deferred sales charge payable on such redemption pursuant to the
terms of the issuance of such shares.
(e) The holders of Class A shares, Class B shares and Class Y shares of
each Series shall have (i) exclusive voting rights with respect to
provisions of any service plan or service and distribution plan adopted by
the Corporation pursuant to Rule 12b-1 under the Investment Company Act of
1940 (a "Plan") applicable to the respective class of the respective Series
and (ii) no voting rights with respect to the provisions of any Plan
applicable to any other class or Series of shares or with regard to any
other matter submitted to a vote of shareholders which does not affect
holders of that respective class of the respective Series of shares.
(f)(1) Each Class B share of each Series, other than a share purchased
through the automatic reinvestment of a dividend or a distribution with
respect to Class B shares, shall be converted automatically, and without
any action or choice on the part of the holder thereof, into Class A shares
of that Series on the date that is the first business day of the month in
which the sixth anniversary of the issuance of the Class B shares occurs
(the "Conversion Date"). With respect to Class B shares issued in an
exchange or series of exchanges for shares of capital stock of another
investment company or class or series thereof registered under the
Investment Company Act of 1940 pursuant to
3
<PAGE>
an exchange privilege granted by the Corporation, the date of issuance of
the Class B shares for purposes of the immediately preceding sentence shall
be the date of issuance of the original shares of capital stock.
(2) Each Class B share of a Series purchased through the automatic
reinvestment of a dividend or a distribution with respect to Class B shares
shall be segregated in a separate sub-account. Each time any Class B shares
in a shareholder's Fund account (other than those in the sub-account)
convert to Class A shares, an equal pro rata portion of the Class B shares
then in the sub-account shall also convert automatically to Class A shares
without any action or choice on the part of the holder thereof. The portion
shall be determined by the ratio that the shareholder's Class B shares of a
Series converting to Class A shares bears to the shareholder's total Class
B shares of that Series not acquired through dividends and distributions.
(3) The conversion of Class B shares to Class A shares is subject to
the continuing availability of an opinion of counsel or a ruling of the
Internal Revenue Service that payment of different dividends on Class A and
Class B shares does not result in the Corporation's dividends or
distributions constituting "preferential dividends" under the Internal
Revenue Code of 1986, as amended, and that the conversion of shares does
not constitute a taxable event under federal income tax law.
(4) The number of Class A shares of a Series into which a share of
Class B shares is converted pursuant to paragraphs (f)(1) and (f)(2) hereof
shall equal the number (including for this purpose fractions of shares)
obtained by dividing the net asset value per share of the Class B shares of
the Series (for purposes of sales and redemptions thereof on the Conversion
Date) by the net asset value per share of the Class A shares of the Series
(for purposes of sales and redemptions thereof on the Conversion Date).
(5) On the Conversion Date, the Class B shares of a Series converted
into Class A shares will cease to accrue dividends and will no longer be
deemed outstanding and the rights of the holders thereof (except the right
to receive (i) the number of Class A shares into which the Class B shares
have been converted and (ii) declared but unpaid dividends to the
Conversion Date) will cease. Certificates representing Class A shares
resulting from the conversion need not be issued until certificates
representing Class B shares converted, if issued, have been received by the
Corporation or its agent duly endorsed for transfer.
4
<PAGE>
IN WITNESS WHEREOF, The Munder Funds, Inc. has caused these Articles
Supplementary to be signed in its name on its behalf by its authorized officers
who acknowledge that these Articles Supplementary are the act of the
Corporation, that to the best of their knowledge, information and belief, all
matters and facts set forth herein relating to the authorization and approval of
these Articles Supplementary are true in all material respects and that this
statement is made under the penalties of perjury.
Date: December 1, 1998
THE MUNDER FUNDS, INC.
[CORPORATE SEAL]
By: /s/ Terry H. Gardner
--------------------
Terry H. Gardner
Vice President
Attest:
/s/ Lisa A. Rosen
- -----------------
Lisa A. Rosen
Secretary
5
<PAGE>
Exhibit 99(a)(13)
THE MUNDER FUNDS, INC.
ARTICLES SUPPLEMENTARY
THE MUNDER FUNDS, INC., a Maryland corporation registered as an open-end
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and having its principal office in the State of Maryland in
Baltimore City, Maryland (hereinafter called the "Corporation"), hereby
certifies to the State Department of Assessments and Taxation of Maryland that:
FIRST: In accordance with procedures established in the Corporation's
Charter, the Board of Directors of the Corporation, by resolution dated April
16, 1999 pursuant to Section 2-208 of Maryland General Corporate Law, duly
increased the total number of shares which the Corporation shall have the
authority to issue to three billion, three hundred million (3,300,000,000)
shares of Common Stock of the par value of $0.01 per share and of the aggregate
par value of thirty three million dollars ($33,000,000); and duly classified six
hundred and fifty million (650,000,000) shares of the unissued, authorized
capital stock of the Corporation as shares of the Munder NetNet Fund and the
Munder Money Market Fund, designated as follows:
<TABLE>
<CAPTION>
Name of Series Shares Allocated by Class (in millions)
-------------- ---------------------------------------------------
A B Y C K
- - - - -
<S> <C> <C> <C> <C> <C>
Munder NetNet Fund 100 100 50 75 N/A
Munder Money Market Fund 50 50 100 25 100
</TABLE>
; and further
SECOND: The shares of the Corporation authorized and classified pursuant to
Article First of these Articles Supplementary have been so authorized and
classified by the Board of Directors under the authority contained in the
Charter of the Corporation. The number of shares of capital stock of the various
classes that the Corporation has authority to issue has been established by the
Board of Directors in accordance with Section 2-105(c) of the Maryland General
Corporation Law.
THIRD: Immediately prior to the effectiveness of the Articles Supplementary
of the Corporation as hereinabove set forth, the Corporation had the authority
to issue two billion, three-hundred million (2,300,000,000) shares of Common
Stock of the par value of $0.01 per share and of the aggregate par value of
twenty three million dollars ($23,000,000), of which the Board of Directors had
designated one billion, eight hundred and sixty five million (1,865,000,000)
shares into Series and classified the shares of each Series as follows:
Previously Classified Shares
----------------------------
<TABLE>
<CAPTION>
Authorized Shares
Name of Series (in millions)
- -------------- -----------------
<S> <C>
Munder Financial Services Fund 50
</TABLE>
<TABLE>
<CAPTION>
Authorized
Shares by Class (in millions)
-----------------------------------------------
A B Y C K
- - - - --
<S> <C> <C> <C> <C> <C>
Munder Multi-Season Growth Fund 10 60 50 10 50
Munder Money Market Fund 55 20 500 20 200
Munder Real Estate Equity Investment Fund 10 50 10 10 10
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Authorized
Shares by Class (in millions)
-----------------------------
A B Y C K
- - - - -
<S> <C> <C> <C> <C> <C>
Munder Equity Selection Fund 10 20 40 20 10
Munder International Bond Fund 20 40 20 10 10
Munder Value Fund 5 10 10 5 10
Munder Micro-Cap Equity Fund 10 15 10 10 10
Munder Small-Cap Value Fund 10 15 10 10 10
Munder All-Season Conservative Fund 12.5 12.5 25 N/A N/A
Munder All-Season Moderate Fund 12.5 12.5 25 N/A N/A
Munder All-Season Aggressive Fund 12.5 12.5 25 N/A N/A
Munder Growth Opportunities Fund 3.4 3.3 20 3.3 20
Munder Convertible Securities Fund 5 5 30 0 10
Munder NetNet Fund 15 15 15 5 N/A
</TABLE>
<TABLE>
<CAPTION>
Authorized
Shares by Class (in millions)
---------------------------------------------------
A B Y C Michigan Municipal
- - - - League (formerly "K")
---------------------
<S> <C> <C> <C> <C> <C>
Munder Short Term Treasury Fund 0 0 90 0 10
</TABLE>
As amended hereby, the Corporation's Articles of Incorporation authorize
the issuance of three billion, three hundred million (3,300,000,000) shares of
Common Stock of the par value of $0.01 per share and having an aggregate par
value of thirty three million dollars ($33,000,000), of which the Board of
Directors has designated two billion, five hundred and fifteen million,
(2,515,000,000) (including 1,865,000,000 shares previously designated) shares
into Series and classified the shares of each Series as follows:
Current Classification of Shares
--------------------------------
<TABLE>
<CAPTION>
Authorized Shares
Name of Series (in millions)
- -------------- -------------
<S> <C>
Munder Financial Services Fund 50
</TABLE>
<TABLE>
<CAPTION>
Authorized
Shares by Class (in millions)
-----------------------------
A B Y C K
- - - - -
<S> <C> <C> <C> <C> <C>
Munder Multi-Season Growth Fund 10 60 50 10 50
Munder Money Market Fund 105 70 600 45 300
Munder Real Estate Equity Investment Fund 10 50 10 10 10
Munder Equity Selection Fund 10 20 40 20 10
Munder International Bond Fund 20 40 20 10 10
Munder Value Fund 5 10 10 5 10
Munder Micro-Cap Equity Fund 10 15 10 10 10
Munder Small-Cap Value Fund 10 15 10 10 10
Munder All-Season Conservative Fund 12.5 12.5 25 N/A N/A
Munder All-Season Moderate Fund 12.5 12.5 25 N/A N/A
Munder All-Season Aggressive Fund 12.5 12.5 25 N/A N/A
Munder Growth Opportunities Fund 3.4 3.3 20 3.3 20
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Authorized
Shares by Class (in millions)
-----------------------------
A B Y C K
- - - - -
<S> <C> <C> <C> <C> <C>
Munder Convertible Securities Fund 5 5 30 0 10
Munder NetNet Fund 115 115 65 80 N/A
</TABLE>
<TABLE>
<CAPTION>
Authorized
Shares by Class (in millions)
-----------------------------
A B Y C Michigan Municipal
- - - - League (formerly "K")
---------------------
<S> <C> <C> <C> <C> <C>
Munder Short Term Treasury Fund 0 0 90 0 10
</TABLE>
FOURTH: The preferences, rights, voting powers, restrictions, limitations
as to dividends, qualifications and terms and conditions of redemption of the
various classes of shares shall be as set forth in the Corporation's Articles of
Incorporation and shall be subject to all provisions of the Articles of
Incorporation relating to shares of the Corporation generally, and those set
forth as follows:
(a) The assets of each Class of a Series shall be invested in the same
investment portfolio of the Corporation.
(b) The dividends and distributions of investment income and capital gains
with respect to each class of shares shall be in such amount as may be
declared from time to time by the Board of Directors, and the dividends and
distributions of each class of shares may vary from the dividends and
distributions of the other classes of shares to reflect differing
allocations of the expenses of the Corporation among the holders of each
class and any resultant differences between the net asset value per share
of each class, to such extent and for such purposes as the Board of
Directors may deem appropriate. The allocation of investment income or
capital gains and expenses and liabilities of the Corporation among the
classes shall be determined by the Board of Directors in a manner it deems
appropriate.
(c) Class A shares of each Series (including fractional shares) may be
subject to an initial sales charge pursuant to the terms of the issuance of
such shares.
(d) The proceeds of the redemption of Class B shares of each Series
(including fractional shares) may be reduced by the amount of any
contingent deferred sales charge payable on such redemption pursuant to the
terms of the issuance of such shares.
(e) The holders of Class A shares, Class B shares and Class Y shares of
each Series shall have (i) exclusive voting rights with respect to
provisions of any service plan or service and distribution plan adopted by
the Corporation pursuant to Rule 12b-1 under the Investment Company Act of
1940 (a "Plan") applicable to the respective class of the respective Series
and (ii) no voting rights with respect to the provisions of any Plan
applicable to any other class or Series of shares or with regard to any
other matter submitted to a vote of shareholders which does not affect
holders of that respective class of the respective Series of shares.
(f)(1) Each Class B share of each Series, other than a share purchased
through the automatic reinvestment of a dividend or a distribution with
respect to Class B shares, shall be converted automatically, and without
any action or choice on the part of the holder thereof, into Class A shares
of that Series on the date that is the first business day of the month in
which the sixth anniversary of the issuance of the Class B shares occurs
(the "Conversion Date"). With respect to Class B shares issued in an
exchange or series of exchanges for shares of capital stock of another
investment company or class or series thereof registered under the
Investment Company Act of 1940 pursuant to an exchange privilege granted by
the Corporation, the date of issuance of the Class B shares for purposes of
the immediately preceding sentence shall be the date of issuance of the
original shares of capital stock.
3
<PAGE>
(2) Each Class B share of a Series purchased through the automatic
reinvestment of a dividend or a distribution with respect to Class B shares
shall be segregated in a separate sub-account. Each time any Class B shares in a
shareholder's Fund account (other than those in the sub-account) convert to
Class A shares, an equal pro rata portion of the Class B shares then in the sub-
account shall also convert automatically to Class A shares without any action or
choice on the part of the holder thereof. The portion shall be determined by the
ratio that the shareholder's Class B shares of a Series converting to Class A
shares bears to the shareholder's total Class B shares of that Series not
acquired through dividends and distributions.
(3) The conversion of Class B shares to Class A shares is subject to the
continuing availability of an opinion of counsel or a ruling of the Internal
Revenue Service that payment of different dividends on Class A and Class B
shares does not result in the Corporation's dividends or distributions
constituting "preferential dividends" under the Internal Revenue Code of 1986,
as amended, and that the conversion of shares does not constitute a taxable
event under federal income tax law.
(4) The number of Class A shares of a Series into which a share of Class B
shares is converted pursuant to paragraphs (f)(1) and (f)(2) hereof shall equal
the number (including for this purpose fractions of shares) obtained by dividing
the net asset value per share of the Class B shares of the Series (for purposes
of sales and redemptions thereof on the Conversion Date) by the net asset value
per share of the Class A shares of the Series (for purposes of sales and
redemptions thereof on the Conversion Date).
(5) On the Conversion Date, the Class B shares of a Series converted into
Class A shares will cease to accrue dividends and will no longer be deemed
outstanding and the rights of the holders thereof (except the right to receive
(i) the number of Class A shares into which the Class B shares have been
converted and (ii) declared but unpaid dividends to the Conversion Date) will
cease. Certificates representing Class A shares resulting from the conversion
need not be issued until certificates representing Class B shares converted, if
issued, have been received by the Corporation or its agent duly endorsed for
transfer.
4
<PAGE>
IN WITNESS WHEREOF, The Munder Funds, Inc. has caused these Articles
Supplementary to be signed in its name on its behalf by its authorized officers
who acknowledge that these Articles Supplementary are the act of the
Corporation, that to the best of their knowledge, information and belief, all
matters and facts set forth herein relating to the authorization and approval of
these Articles Supplementary are true in all material respects and that this
statement is made under the penalties of perjury.
Date: April 16, 1999
THE MUNDER FUNDS, INC.
[CORPORATE SEAL]
By: /s/ Terry H. Gardner
--------------------
Terry H. Gardner
Vice President
Attest:
/s/ Lisa Anne Rosen
- -------------------
Lisa A. Rosen
Secretary
5
<PAGE>
Exhibit 99(d)(2)
Munder Capital Management
480 Pierce Street
Birmingham, Michigan 48009
Ladies and Gentlemen:
Reference is made to the Investment Advisory Agreement between us dated as
of July 2, 1998 (the "Agreement").
This letter is to provide notice of the creation of an additional
investment portfolio of The Munder Funds, Inc., namely the Munder Technology
Fund (the "New Portfolio").
In accordance with the Additional Portfolios provision of Section 1(b) of
the Agreement, we request that you act as Investment Advisor under the Agreement
with respect to the New Portfolio.
Please indicate your acceptance of the foregoing by executing two copies of
this Agreement, returning one to the Fund and retaining one copy for your
records.
Very truly yours,
The Munder Funds, Inc.
By:
--------------------------------
Accepted:
Munder Capital Management
By:
--------------------------------
Date: May 4, 1999
<PAGE>
Exhibit 99(e)(8)
----------------
DISTRIBUTION AGREEMENT
----------------------
This Distribution Agreement is made as of this 24th day of February, 1998
by and between THE MUNDER FUNDS, INC., a Maryland Corporation (the "Fund"), and
FUNDS DISTRIBUTOR, INC., a Massachusetts corporation ("Funds Distributor").
WHEREAS, the Fund is an open-end management investment company and is so
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Fund desires to retain Funds Distributor as Distributor for
the Fund's shares of common stock in Class A, Class B, Class C, Class K and
Class Y Shares representing interests in the Fund's portfolio, Munder Growth
Opportunities Fund (the "Portfolio"), to provide for the sale and distribution
of shares of the Portfolio (the "Shares"), and Funds Distributor is willing to
render such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein and intending to be legally bound hereby, the parties hereto agree
as follows:
I. DELIVERY OF DOCUMENTS
---------------------
The Fund has delivered to Funds Distributor copies of each of the following
documents and will deliver to it all future amendments and supplements thereto,
if any:
(a) Resolutions of the Fund's Board of Directors authorizing the execution
and delivery of this Agreement;
(b) The Fund's Articles of Incorporation as filed with the State of
Maryland - Department of Assessments and Taxation on November 18,
1992;
(c) The Fund's By-Laws;
(d) The Fund's Notification of Registration on Form N-8A under the 1940
Act as filed with the Securities and Exchange Commission ("SEC");
(e) The Fund's Registration Statement on Form N-1A (the "Registration
Statement") under the Securities Act of 1933 (the "1933 Act") and the
1940 Act, as filed with the SEC on November 18, 1992, and all
amendments thereto; and
(f) The Fund's most recent Prospectuses and Statement of Additional
Information and all amendments and supplements thereto (collectively,
the "Prospectuses").
<PAGE>
II. DISTRIBUTION
------------
1. Appointment of Distributor. The Fund hereby appoints Funds Distributor
as Distributor of the Portfolio's Shares and Funds Distributor hereby accepts
such appointment and agrees to render the services and duties set forth in this
Section II. In the event that the Fund establishes one or more additional
portfolios or classes of shares other than the Portfolio and the Shares with
respect to which it decides to retain Funds Distributor to act as distributor
hereunder, the Fund shall notify Funds Distributor in writing. If Funds
Distributor is willing to render such services, it shall so notify the Fund in
writing whereupon such portfolio and such shares shall become a Portfolio and
Shares hereunder and shall be subject to the provisions of this Agreement,
except to the extent that said provision is modified with respect to such
portfolio or shares in writing by the Fund and Funds Distributor at the time.
2. Services and Duties.
(a) The Fund agrees to sell through Funds Distributor, as agent, from time
to time during the term of this Agreement, Shares (whether authorized but
unissued or treasury shares, in the Fund's sole discretion) upon the terms and
at the current offering price as described in the applicable Prospectus. Funds
Distributor will act only in its own behalf as principal in making agreements
with selected dealers or others for the sale and redemption of Shares, and shall
sell Shares only at the offering price thereof as set forth in the applicable
Prospectus. Funds Distributor shall devote appropriate efforts to effect sales
of Shares of the Portfolio, but shall not be obligated to sell any certain
number of Shares.
(b) In all matters relating to the sale and redemption of Shares, Funds
Distributor will act in conformity with the Fund's Articles of Incorporation,
By-Laws and applicable Prospectuses and with the instructions and directions of
the Board of Directors of the Fund and will conform to and comply with the
requirements of the 1933 Act, the 1940 Act, the regulations of the National
Association of Securities Dealers, Inc. and all other applicable Federal or
state laws and regulations.
(c) Funds Distributor will bear the cost of printing and distributing any
Prospectus (including any supplement or amendment thereto), provided, however,
that Funds Distributor shall not be obligated to bear the expenses incurred by
the Fund in connection with (i) the preparation and printing of any supplement
or amendment to a Registration Statement or Prospectus necessary for the
continued effective registration of the Shares under the 1933 Act or state
securities laws; and (ii) the printing and distribution of any Prospectus,
supplement or amendment thereto for existing shareholders of the class ("Class")
of Shares described therein.
(d) All Shares of the Portfolio offered for sale by Funds Distributor
shall be offered for sale to the public at a price per share (the "offering
price") equal to (i) their net asset value (determined in the manner set forth
in the applicable Prospectuses) plus, except to those classes of persons set
forth in the applicable Prospectuses, (ii) a sales charge which shall be the
percentage of the offering price of such Shares as set forth in the applicable
Prospectuses. The
2
<PAGE>
offering price, if not an exact multiple of one cent, shall be adjusted to the
nearest cent. Concessions paid by Funds Distributor to broker-dealers and other
persons shall be set forth in either the selling agreements between Funds
Distributor and such broker-dealers and persons or, if such concessions are
described in the applicable Prospectuses, shall be as so set forth. No broker-
dealer or other person who enters into a selling or distribution and servicing
agreement with Funds Distributor shall be authorized to act as agent for the
Fund in connection with the offering or sale of Shares to the public or
otherwise.
(e) If any shares sold by Funds Distributor under the terms of this
Agreement are redeemed or repurchased by the Fund or by Funds Distributor as
agent or are tendered for redemption within seven business days after the date
of confirmation of the original purchase of said Shares, Funds Distributor shall
forfeit the amount above the net asset value received by it with respect to such
Shares, provided that the portion, if any, of such amount re-allowed by Funds
Distributor to broker-dealers or other persons shall be repayable to the Fund
only to the extent recovered by Funds Distributor from the broker-dealer or
other persons concerned. Funds Distributor shall include in the form of
agreement with such broker-dealers and other persons a corresponding provision
for the forfeiture by them of their concession with respect to Shares sold by
them or their principals and redeemed or repurchased by the Fund or by Funds
Distributor as agent (or tendered for redemption) within seven business days
after the date of confirmation of such initial purchases.
(f) Funds Distributor may be reimbursed for all or a portion of the
expenses described above to the extent permitted by one or more distribution
plans adopted by the Fund on behalf of a Portfolio pursuant to Rule 12b-1 under
the 1940 Act. No provision of this Agreement may be deemed to prohibit any
payments by a Portfolio to Funds Distributor or by a Portfolio or Funds
Distributor to investment dealers, banks or other financial institutions through
whom shares of the Fund are sold where such payments are made under a
distribution plan adopted by the Fund on behalf of such Portfolio pursuant to
Rule 12b-1 under the Act (the "Plan"). The Fund agrees that it shall provide
notice to Funds Distributor at least 30 days prior to the effective date of the
elimination of or the decrease in the amount of expenses reimbursable under such
a distribution plan.
(g) With respect to such classes of shares, if any, that are sold with a
contingent deferred sales charge ("CDSC"), Funds Distributor shall impose a CDSC
in connection with the redemption of the Shares of such classes, not to exceed a
specified percentage of the original purchase price of the Shares, as from time
to time set forth in the applicable Prospectuses. Funds Distributor may retain
(or receive from the Fund, as the case may be) all of any CDSC. Funds
Distributor may pay to broker-dealers or other persons through whom such Shares
are sold a commission or other payment to the extent consistent with the current
Prospectuses and applicable rules and regulations.
3. Sales and Redemptions.
(a) The Fund shall pay all costs and expenses in connection with the
registration of the Shares under the 1933 Act, and all expenses in connection
with maintaining facilities for the
3
<PAGE>
issue and transfer of the Shares and for supplying information, prices and other
data to be furnished by the Fund hereunder, and all expenses in connection with
preparing, printing and distributing the Prospectuses except as set forth in
subsection 2(c) of Section II hereof.
(b) The Fund shall execute all documents, furnish all information and
otherwise take all actions which may be reasonably necessary in the discretion
of the Fund's officers in connection with the sale of the Shares in such states
as Funds Distributor may designate to the Fund and the Fund may approve, and the
Fund shall pay all filing fees which may be incurred in connection with such
sale. Funds Distributor shall pay all other expenses incurred by Funds
Distributor in connection with the sale of the Shares, except as otherwise
specifically provided in this Agreement.
(c) The Fund shall have the right to suspend the sale of Shares at any
time in response to conditions in the securities markets or otherwise, and to
suspend the redemption of Shares of any Portfolio at any time permitted by the
1940 Act or the rules of the SEC ("Rules").
(d) The Fund reserves the right to reject any order for Shares, but will
not do so arbitrarily or without reasonable cause.
III. LIMITATIONS OF LIABILITY
------------------------
Funds Distributor shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Fund or any Portfolio in connection with
the matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
IV. CONFIDENTIALITY
---------------
Funds Distributor will treat confidentially and as proprietary information
of the Fund all records and other information relative to the Fund, to the
Fund's prior or current shareholders and to those persons or entities who
respond to Funds Distributor's inquiries concerning investment in the Fund, and,
except as provided below, will not use such records and information for any
purpose other than the performance of its responsibilities and duties hereunder.
Any other use by Funds Distributor of the information and records referred to
above may be made only after prior notification to and approval in writing by
the Fund. Such approval shall not be unreasonably withheld and may not be
withheld where: (i) Funds Distributor may be exposed to civil or criminal
contempt proceedings for failure to divulge such information; (ii) Funds
Distributor is requested to divulge such information by duly constituted
authorities; or (iii) Funds Distributor is so requested by the Fund.
V. INDEMNIFICATION
---------------
1. Fund Representation. The Fund represents and warrants to Funds
Distributor that at all times the Registration Statement and Prospectuses will
in all material respects conform to
4
<PAGE>
the applicable requirements of the 1933 Act and the Rules thereunder and will
not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading, except that no representation or warranty in this subsection shall
apply to statements or omissions made in reliance upon and in conformity with
written information furnished to the Fund by or on behalf of and with respect to
Funds Distributor expressly for use in the Registration Statement or
Prospectuses.
2. Funds Distributor Representation. Funds Distributor represents and
warrants to the Fund that it is duly organized as a Massachusetts corporation
and is and at all times will remain duly authorized and licensed to carry out
its services as contemplated herein.
3. Fund Indemnification. The Fund, on behalf of the Portfolio, agrees
that the Portfolio will indemnify, defend and hold harmless Funds Distributor,
its several officers and directors, and any person who controls Funds
Distributor within the meaning of Section 15 of the 1933 Act, from and against
any losses, claims, damages or liabilities, joint or several, to which any of
them may become subject under the 1933 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of, or are based upon, any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the
Prospectuses or in any application or other document executed by or on behalf of
the Portfolio, or arise out of or based upon, information furnished by or on
behalf of the Portfolio, filed in any state in order to sell the Shares under
the securities or blue sky laws thereof ("Blue Sky Application"), or arise out
of, or are based upon, the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse Funds Distributor, its several
officers and directors, and any person who controls Funds Distributor within the
meaning of Section 15 of the 1933 Act, for any legal or other expenses
reasonably incurred by any of them in investigating, defending or preparing to
defend any such action, proceeding or claim; provided, however, that neither the
Fund nor the Portfolio shall be liable in any case to the extent that such loss,
claim, damage or liability arises out of, or is based upon, any untrue
statement, alleged untrue statement, or omission or alleged omission made in the
Registration Statement, the Prospectuses, any Blue Sky Application or any
application or other document executed by or on behalf of the Fund in reliance
upon and in conformity with written information furnished to the Fund by or on
behalf of Funds Distributor specifically for inclusion therein.
The Portfolio shall not indemnify any person pursuant to this subsection 3
unless the court or other body before which the proceeding was brought has
rendered a final decision on the merits that such person was not liable by
reason of his willful misfeasance, bad faith or gross negligence in the
performance of his duties, or his reckless disregard of his obligations and
duties, under this Agreement ("disabling conduct") or, in the absence of such a
decision, a reasonable determination (based upon a review of the facts) that
such person was not liable by reason of disabling conduct has been made by the
vote of a majority of a quorum of Directors of the Fund who are neither
"interested parties" of the Fund (as defined in the 1940 Act) nor parties to the
proceeding, or by an independent legal counsel in a written opinion.
5
<PAGE>
The Portfolio shall advance attorneys' fees and other expenses incurred by
any person in defending any claim, demand, action or suit which is the subject
of a claim for indemnification pursuant to this subsection 3, so long as: (i)
such person shall undertake to repay all such advances unless it is ultimately
determined that he or she is entitled to indemnification hereunder; and (ii)
such person shall provide security for such undertaking, or the Portfolio shall
be insured against losses arising by reason of any lawful advances, or a
majority of a quorum of the disinterested, non-party directors of the Fund (or
an independent legal counsel in written opinion) shall determine based on a
review of readily available facts (as opposed to a full trial-type inquiry) that
there is reason to believe that such person ultimately will be found entitled to
indemnification hereunder.
The obligations of the Portfolio under this subsection 3 shall be the
several (and not joint or joint and several) obligation of the Portfolio.
4. Funds Distributor Indemnification. Funds Distributor will indemnify,
defend and hold harmless the Fund, the Portfolio, the Fund's several officers
and Directors and any person who controls the Fund or the Portfolio within the
meaning of Section 15 of the 1933 Act, from and against any losses, claims,
damages or liabilities, joint or several, to which any of them may become
subject under the 1933 Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions or proceedings in respect hereof) arise out of, or
are based upon, any breach of its representations, warranties and agreements
herein, or which arise out of, or are based upon, any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, the Prospectuses, any Blue Sky Application or any application or
other documents executed by or on behalf of the Fund or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, which statement or
omission was made in reliance upon and in conformity with information furnished
in writing to the Fund or any of its several officers and Directors by or on
behalf of Funds Distributor specifically for inclusion therein, and will
reimburse the Fund, the Portfolio, the Fund's several officers and trustees, and
any person who controls the Fund or the Portfolio within the meaning of Section
15 of the 1933 Act, for any legal or other expenses reasonably incurred by any
of them in investigating, defending or preparing to defend any such action,
proceeding or claim.
5. General Indemnity Provision. No indemnifying party shall be liable
under its indemnity agreement contained in subsection 3 or 4 hereof with respect
to any claim made against such indemnifying party unless the indemnified party
shall have notified the indemnifying party in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon the indemnified party (or after the
indemnified party shall have received notice of such service on any designated
agent), but failure to notify the indemnifying party of any such claim shall not
relieve it from any liability which it may otherwise have to the indemnified
party. The indemnifying party will be entitled to participate at its own expense
in the defense or, if it so elects, to assume the defense of any suit brought to
enforce any such liability, and if the indemnifying party elects to assume the
defense, such defense shall be conducted by counsel chosen by it and reasonably
satisfactory to the indemnified party. In the event the indemnifying
6
<PAGE>
party elects to assume the defense of any such suit and retain such counsel, the
indemnified party shall bear the fees and expenses of any additional counsel
retained by the indemnified party.
VI. DURATION AND TERMINATION
------------------------
This Agreement shall become effective as of the date first above written,
and, unless sooner terminated as provided herein, shall continue until February
24, 2000. Thereafter, if not terminated, this Agreement shall continue
automatically for successive terms of one year, provided that such continuance
is specifically approved at least annually by a vote of the majority of the
Board of Directors of the Fund, including a majority of the Directors who are
not "interested persons" of the Fund and have no direct or indirect financial
interest in the operation of the Plan, this Agreement, or in any agreement
relating to the Plan (the "Plan Directors"), by vote cast in person at a meeting
called for the purpose of voting on such approval; provided, however, that this
Agreement may be terminated with respect to any Portfolio by the Fund at any
time, without the payment of any penalty, by vote of a majority of the Directors
or by a vote of a "majority of the outstanding voting securities" of such
Portfolio on 60 days' written notice to Funds Distributor, or by Funds
Distributor at any time, without the payment of any penalty, on 60 days' written
notice to the Fund. This Agreement will automatically and immediately terminate
in the event of its "assignment." (As used in this Agreement, the terms
"majority of the outstanding voting securities," "interested person" and
"assignment" shall have the same meanings as such terms have in the 1940 Act.)
VII. AMENDMENT OF THIS AGREEMENT
---------------------------
No provision of this Agreement may be changed, waived, discharged or
terminated except by an instrument in writing signed by the party against which
an enforcement of the change, waiver, discharge or termination is sought.
VIII. NOTICES
-------
Notices of any kind to be given to the Fund hereunder by Funds Distributor
shall be in writing and shall be duly given if mailed or delivered to the Fund
at 480 Pierce Street, Suite 300, Birmingham, Michigan 48009, Attention: Lee
Munder, with a copy to Paul F. Roye, Esq., Dechert Price & Rhoads, 1775 Eye
Street, Washington, D.C. 20006, or at such other address or to such individual
as shall be so specified by the Fund to Funds Distributor. Notices of any kind
to be given to Funds Distributor hereunder by the Fund shall be in writing and
shall be duly given if mailed or delivered to Funds Distributor at 60 State
Street, Suite 1300, Boston, Massachusetts 02109, Attention: Marie Connolly or at
such other address or to such individual as shall be so specified by Funds
Distributor to the Fund.
IX. MISCELLANEOUS
-------------
The captions in this Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule
7
<PAGE>
or otherwise, the remainder of this Agreement shall not be affected thereby.
Subject to the provisions of Section VI hereof, this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and shall be governed by Maryland law; provided, however, that
nothing herein shall be construed in a manner inconsistent with the 1940 Act or
any rule or regulation of the SEC thereunder.
8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
THE MUNDER FUNDS, INC.
By: /s/ Lisa Anne Rosen
----------------------------------------
Name: Lisa Anne Rosen
--------------------------------------
Title: Secretary
-------------------------------------
Attest:
----------------------
FUNDS DISTRIBUTOR, INC.
By: /s/ Marie Connolly
-----------------------------------------
Name: Marie Connolly
--------------------------------------
Title: President and Chief Executive Officer
-------------------------------------
Attest:
----------------------
9
<PAGE>
Exhibit 99(e)(9)
DISTRIBUTION AGREEMENT
----------------------
This Distribution Agreement is made as of this 4th day of May, 1999 by and
between THE MUNDER FUNDS, INC., a Maryland Corporation (the "Fund"), and FUNDS
DISTRIBUTOR, INC., a Massachusetts corporation ("Funds Distributor").
WHEREAS, the Fund is an open-end management investment company and is so
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Fund desires to retain Funds Distributor as Distributor for
the Fund's shares of common stock in Class A, Class B, Class C and Class Y
Shares representing interests in the Fund's portfolio, Munder Technology Fund
(the "Portfolio"), to provide for the sale and distribution of shares of the
Portfolio (the "Shares"), and Funds Distributor is willing to render such
services;
NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein and intending to be legally bound hereby, the parties hereto agree
as follows:
I. DELIVERY OF DOCUMENTS
---------------------
The Fund has delivered to Funds Distributor copies of each of the following
documents and will deliver to it all future amendments and supplements thereto,
if any:
(a) Resolutions of the Fund's Board of Directors authorizing the execution
and delivery of this Agreement;
(b) The Fund's Articles of Incorporation as filed with the State of
Maryland - Department of Assessments and Taxation on November 18,
1992;
(c) The Fund's By-Laws;
(d) The Fund's Notification of Registration on Form N-8A under the 1940
Act as filed with the Securities and Exchange Commission ("SEC");
(e) The Fund's Registration Statement on Form N-1A (the "Registration
Statement") under the Securities Act of 1933 (the "1933 Act") and the
1940 Act, as filed with the SEC on November 18, 1992, and all
amendments thereto; and
(f) The Fund's most recent Prospectuses and Statement of Additional
Information and all amendments and supplements thereto (collectively,
the "Prospectuses").
<PAGE>
II. DISTRIBUTION
------------
1. Appointment of Distributor. The Fund hereby appoints Funds Distributor
as Distributor of the Portfolio's Shares and Funds Distributor hereby accepts
such appointment and agrees to render the services and duties set forth in this
Section II. In the event that the Fund establishes one or more additional
portfolios or classes of shares other than the Portfolio and the Shares with
respect to which it decides to retain Funds Distributor to act as distributor
hereunder, the Fund shall notify Funds Distributor in writing. If Funds
Distributor is willing to render such services, it shall so notify the Fund in
writing whereupon such portfolio and such shares shall become a Portfolio and
Shares hereunder and shall be subject to the provisions of this Agreement,
except to the extent that said provision is modified with respect to such
portfolio or shares in writing by the Fund and Funds Distributor at the time.
2. Services and Duties.
(a) The Fund agrees to sell through Funds Distributor, as agent, from time
to time during the term of this Agreement, Shares (whether authorized but
unissued or treasury shares, in the Fund's sole discretion) upon the terms and
at the current offering price as described in the applicable Prospectus. Funds
Distributor will act only in its own behalf as principal in making agreements
with selected dealers or others for the sale and redemption of Shares, and shall
sell Shares only at the offering price thereof as set forth in the applicable
Prospectus. Funds Distributor shall devote appropriate efforts to effect sales
of Shares of the Portfolio, but shall not be obligated to sell any certain
number of Shares.
(b) In all matters relating to the sale and redemption of Shares, Funds
Distributor will act in conformity with the Fund's Articles of Incorporation,
By-Laws and applicable Prospectuses and with the instructions and directions of
the Board of Directors of the Fund and will conform to and comply with the
requirements of the 1933 Act, the 1940 Act, the regulations of the National
Association of Securities Dealers, Inc. and all other applicable Federal or
state laws and regulations.
(c) Funds Distributor will bear the cost of printing and distributing any
Prospectus (including any supplement or amendment thereto), provided, however,
that Funds Distributor shall not be obligated to bear the expenses incurred by
the Fund in connection with (i) the preparation and printing of any supplement
or amendment to a Registration Statement or Prospectus necessary for the
continued effective registration of the Shares under the 1933 Act or state
securities laws; and (ii) the printing and distribution of any Prospectus,
supplement or amendment thereto for existing shareholders of the class ("Class")
of Shares described therein.
(d) All Shares of the Portfolio offered for sale by Funds Distributor
shall be offered for sale to the public at a price per share (the "offering
price") equal to (i) their net asset value (determined in the manner set forth
in the applicable Prospectuses) plus, except to those classes of persons set
forth in the applicable Prospectuses, (ii) a sales charge which shall be the
percentage of the offering price of such Shares as set forth in the applicable
Prospectuses. The
2
<PAGE>
offering price, if not an exact multiple of one cent, shall be adjusted to the
nearest cent. Concessions paid by Funds Distributor to broker-dealers and other
persons shall be set forth in either the selling agreements between Funds
Distributor and such broker-dealers and persons or, if such concessions are
described in the applicable Prospectuses, shall be as so set forth. No broker-
dealer or other person who enters into a selling or distribution and servicing
agreement with Funds Distributor shall be authorized to act as agent for the
Fund in connection with the offering or sale of Shares to the public or
otherwise.
(e) If any shares sold by Funds Distributor under the terms of this
Agreement are redeemed or repurchased by the Fund or by Funds Distributor as
agent or are tendered for redemption within seven business days after the date
of confirmation of the original purchase of said Shares, Funds Distributor shall
forfeit the amount above the net asset value received by it with respect to such
Shares, provided that the portion, if any, of such amount re-allowed by Funds
Distributor to broker-dealers or other persons shall be repayable to the Fund
only to the extent recovered by Funds Distributor from the broker-dealer or
other persons concerned. Funds Distributor shall include in the form of
agreement with such broker-dealers and other persons a corresponding provision
for the forfeiture by them of their concession with respect to Shares sold by
them or their principals and redeemed or repurchased by the Fund or by Funds
Distributor as agent (or tendered for redemption) within seven business days
after the date of confirmation of such initial purchases.
(f) Funds Distributor may be reimbursed for all or a portion of the
expenses described above to the extent permitted by one or more distribution
plans adopted by the Fund on behalf of a Portfolio pursuant to Rule 12b-1 under
the 1940 Act. No provision of this Agreement may be deemed to prohibit any
payments by a Portfolio to Funds Distributor or by a Portfolio or Funds
Distributor to investment dealers, banks or other financial institutions through
whom shares of the Fund are sold where such payments are made under a
distribution plan adopted by the Fund on behalf of such Portfolio pursuant to
Rule 12b-1 under the Act (the "Plan"). The Fund agrees that it shall provide
notice to Funds Distributor at least 30 days prior to the effective date of the
elimination of or the decrease in the amount of expenses reimbursable under such
a distribution plan.
(g) With respect to such classes of shares, if any, that are sold with a
contingent deferred sales charge ("CDSC"), Funds Distributor shall impose a CDSC
in connection with the redemption of the Shares of such classes, not to exceed a
specified percentage of the original purchase price of the Shares, as from time
to time set forth in the applicable Prospectuses. Funds Distributor may retain
(or receive from the Fund, as the case may be) all of any CDSC. Funds
Distributor may pay to broker-dealers or other persons through whom such Shares
are sold a commission or other payment to the extent consistent with the current
Prospectuses and applicable rules and regulations.
3. Sales and Redemptions.
(a) The Fund shall pay all costs and expenses in connection with the
registration of the Shares under the 1933 Act, and all expenses in connection
with maintaining facilities for the
3
<PAGE>
issue and transfer of the Shares and for supplying information, prices and other
data to be furnished by the Fund hereunder, and all expenses in connection with
preparing, printing and distributing the Prospectuses except as set forth in
subsection 2(c) of Section II hereof.
(b) The Fund shall execute all documents, furnish all information and
otherwise take all actions which may be reasonably necessary in the discretion
of the Fund's officers in connection with the sale of the Shares in such states
as Funds Distributor may designate to the Fund and the Fund may approve, and the
Fund shall pay all filing fees which may be incurred in connection with such
sale. Funds Distributor shall pay all other expenses incurred by Funds
Distributor in connection with the sale of the Shares, except as otherwise
specifically provided in this Agreement.
(c) The Fund shall have the right to suspend the sale of Shares at any
time in response to conditions in the securities markets or otherwise, and to
suspend the redemption of Shares of any Portfolio at any time permitted by the
1940 Act or the rules of the SEC ("Rules").
(d) The Fund reserves the right to reject any order for Shares, but will
not do so arbitrarily or without reasonable cause.
III. LIMITATIONS OF LIABILITY
------------------------
Funds Distributor shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Fund or any Portfolio in connection with
the matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
IV. CONFIDENTIALITY
---------------
Funds Distributor will treat confidentially and as proprietary information
of the Fund all records and other information relative to the Fund, to the
Fund's prior or current shareholders and to those persons or entities who
respond to Funds Distributor's inquiries concerning investment in the Fund, and,
except as provided below, will not use such records and information for any
purpose other than the performance of its responsibilities and duties hereunder.
Any other use by Funds Distributor of the information and records referred to
above may be made only after prior notification to and approval in writing by
the Fund. Such approval shall not be unreasonably withheld and may not be
withheld where: (i) Funds Distributor may be exposed to civil or criminal
contempt proceedings for failure to divulge such information; (ii) Funds
Distributor is requested to divulge such information by duly constituted
authorities; or (iii) Funds Distributor is so requested by the Fund.
V. INDEMNIFICATION
---------------
1. Fund Representation. The Fund represents and warrants to Funds
Distributor that at all times the Registration Statement and Prospectuses will
in all material respects conform to
4
<PAGE>
the applicable requirements of the 1933 Act and the Rules thereunder and will
not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading, except that no representation or warranty in this subsection shall
apply to statements or omissions made in reliance upon and in conformity with
written information furnished to the Fund by or on behalf of and with respect to
Funds Distributor expressly for use in the Registration Statement or
Prospectuses.
2. Funds Distributor Representation. Funds Distributor represents and
warrants to the Fund that it is duly organized as a Massachusetts corporation
and is and at all times will remain duly authorized and licensed to carry out
its services as contemplated herein.
3. Fund Indemnification. The Fund, on behalf of the Portfolio, agrees
that the Portfolio will indemnify, defend and hold harmless Funds Distributor,
its several officers and directors, and any person who controls Funds
Distributor within the meaning of Section 15 of the 1933 Act, from and against
any losses, claims, damages or liabilities, joint or several, to which any of
them may become subject under the 1933 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of, or are based upon, any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the
Prospectuses or in any application or other document executed by or on behalf of
a Portfolio, or arise out of or based upon, information furnished by or on
behalf of a Portfolio, filed in any state in order to sell the Shares under the
securities or blue sky laws thereof ("Blue Sky Application"), or arise out of,
or are based upon, the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse Funds Distributor, its several officers and
directors, and any person who controls Funds Distributor within the meaning of
Section 15 of the 1933 Act, for any legal or other expenses reasonably incurred
by any of them in investigating, defending or preparing to defend any such
action, proceeding or claim; provided, however, that neither the Fund nor any
Portfolio shall be liable in any case to the extent that such loss, claim,
damage or liability arises out of, or is based upon, any untrue statement,
alleged untrue statement, or omission or alleged omission made in the
Registration Statement, the Prospectuses, any Blue Sky Application or any
application or other document executed by or on behalf of the Fund in reliance
upon and in conformity with written information furnished to the Fund by or on
behalf of Funds Distributor specifically for inclusion therein.
A Portfolio shall not indemnify any person pursuant to this subsection 3
unless the court or other body before which the proceeding was brought has
rendered a final decision on the merits that such person was not liable by
reason of his willful misfeasance, bad faith or gross negligence in the
performance of his duties, or his reckless disregard of his obligations and
duties, under this Agreement ("disabling conduct") or, in the absence of such a
decision, a reasonable determination (based upon a review of the facts) that
such person was not liable by reason of disabling conduct has been made by the
vote of a majority of a quorum of Directors of the Fund who are neither
"interested parties" of the Fund (as defined in the 1940 Act) nor parties to the
proceeding, or by an independent legal counsel in a written opinion.
5
<PAGE>
The Portfolio shall advance attorneys' fees and other expenses incurred by
any person in defending any claim, demand, action or suit which is the subject
of a claim for indemnification pursuant to this subsection 3, so long as: (i)
such person shall undertake to repay all such advances unless it is ultimately
determined that he or she is entitled to indemnification hereunder; and (ii)
such person shall provide security for such undertaking, or the Portfolio shall
be insured against losses arising by reason of any lawful advances, or a
majority of a quorum of the disinterested, non-party Directors of the Fund (or
an independent legal counsel in written opinion) shall determine based on a
review of readily available facts (as opposed to a full trial-type inquiry) that
there is reason to believe that such person ultimately will be found entitled to
indemnification hereunder.
The obligations of the Portfolio under this subsection 3 shall be the
several (and not joint or joint and several) obligation of the Portfolio.
4. Funds Distributor Indemnification. Funds Distributor will indemnify,
defend and hold harmless the Fund, the Portfolio, the Fund's several officers
and Directors and any person who controls the Fund or the Portfolio within the
meaning of Section 15 of the 1933 Act, from and against any losses, claims,
damages or liabilities, joint or several, to which any of them may become
subject under the 1933 Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions or proceedings in respect hereof) arise out of, or
are based upon, any breach of its representations, warranties and agreements
herein, or which arise out of, or are based upon, any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, the Prospectuses, any Blue Sky Application or any application or
other documents executed by or on behalf of the Fund or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, which statement or
omission was made in reliance upon and in conformity with information furnished
in writing to the Fund or any of its several officers and Directors by or on
behalf of Funds Distributor specifically for inclusion therein, and will
reimburse the Fund, the Portfolio, the Fund's several officers and trustees, and
any person who controls the Fund or the Portfolio within the meaning of Section
15 of the 1933 Act, for any legal or other expenses reasonably incurred by any
of them in investigating, defending or preparing to defend any such action,
proceeding or claim.
5. General Indemnity Provision. No indemnifying party shall be liable
under its indemnity agreement contained in subsection 3 or 4 hereof with respect
to any claim made against such indemnifying party unless the indemnified party
shall have notified the indemnifying party in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon the indemnified party (or after the
indemnified party shall have received notice of such service on any designated
agent), but failure to notify the indemnifying party of any such claim shall not
relieve it from any liability which it may otherwise have to the indemnified
party. The indemnifying party will be entitled to participate at its own expense
in the defense or, if it so elects, to assume the defense of any suit brought to
enforce any such liability, and if the indemnifying party elects to assume the
defense, such defense shall be conducted by counsel chosen by it and reasonably
satisfactory to the indemnified party. In the event the indemnifying
6
<PAGE>
party elects to assume the defense of any such suit and retain such counsel, the
indemnified party shall bear the fees and expenses of any additional counsel
retained by the indemnified party.
VI. DURATION AND TERMINATION
------------------------
This Agreement shall become effective as of the date first above written,
and, unless sooner terminated as provided herein, shall continue until May 5,
2000. Thereafter, if not terminated, this Agreement shall continue automatically
for successive terms of one year, provided that such continuance is specifically
approved at least annually by a vote of the majority of the Board of Directors
of the Fund, including a majority of the Directors who are not "interested
persons" of the Fund and have no direct or indirect financial interest in the
operation of the Plan, this Agreement, or in any agreement relating to the Plan
(the "Plan Directors"), by vote cast in person at a meeting called for the
purpose of voting on such approval; provided, however, that this Agreement may
be terminated with respect to any Portfolio by the Fund at any time, without the
payment of any penalty, by vote of a majority of the Directors or by a vote of a
"majority of the outstanding voting securities" of such Portfolio on 60 days'
written notice to Funds Distributor, or by Funds Distributor at any time,
without the payment of any penalty, on 60 days' written notice to the Fund. This
Agreement will automatically and immediately terminate in the event of its
"assignment." (As used in this Agreement, the terms "majority of the outstanding
voting securities," "interested person" and "assignment" shall have the same
meanings as such terms have in the 1940 Act.)
VII. AMENDMENT OF THIS AGREEMENT
---------------------------
No provision of this Agreement may be changed, waived, discharged or
terminated except by an instrument in writing signed by the party against which
an enforcement of the change, waiver, discharge or termination is sought.
VIII. NOTICE
------
Notices of any kind to be given to the Fund hereunder by Funds Distributor
shall be in writing and shall be duly given if mailed or delivered to the Fund
at 480 Pierce Street, Suite 300, Birmingham, Michigan 48009, Attention: Lee
Munder, with a copy to Jane Kanter, Esq., Dechert Price & Rhoads, 1775 Eye
Street, Washington, D.C. 20006, or at such other address or to such individual
as shall be so specified by the Fund to Funds Distributor. Notices of any kind
to be given to Funds Distributor hereunder by the Fund shall be in writing and
shall be duly given if mailed or delivered to Funds Distributor at 60 State
Street, Suite 1300, Boston, Massachusetts 02109, Attention: Marie Connolly or at
such other address or to such individual as shall be so specified by Funds
Distributor to the Fund.
IX. MISCELLANEOUS
-------------
The captions in this Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule
7
<PAGE>
or otherwise, the remainder of this Agreement shall not be affected thereby.
Subject to the provisions of Section VI hereof, this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and shall be governed by Maryland law; provided, however, that
nothing herein shall be construed in a manner inconsistent with the 1940 Act or
any rule or regulation of the SEC thereunder.
8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
THE MUNDER FUNDS, INC.
By: /s/ Lisa Anne Rosen
--------------------------
Name: Lisa Anne Rosen
------------------------
Title: Secretary
-----------------------
Attest:
-----------------------------
FUNDS DISTRIBUTOR, INC.
By: /s/ Marie Connolly
--------------------------
Name: Marie Connolly
-----------------------
Title: President and Chief
Executive Officer
-----------------------
Attest:
-----------------------------
<PAGE>
Exhibit 99(g)(9)
Comerica Bank
One Detroit Center
500 Woodward Avenue
Detroit, Michigan 48226
Ladies and Gentlemen:
Reference is made to the Custody Agreement between us dated as of May 1,
1995 (the "Agreement").
Pursuant to the Agreement, this letter is to provide notice of the creation
of an additional investment portfolio of The Munder Funds, Inc., namely the
Munder Technology Fund (the "New Portfolio").
We request that you act as Custodian under the Agreement with respect to
the New Portfolio.
Please indicate your acceptance of the foregoing by executing two copies of
this Agreement, returning one to the Fund and retaining one copy for your
records.
Very truly yours,
The Munder Funds, Inc.
By:__________________________
Accepted:
Comerica Bank
By:__________________________
Date: May 4, 1999
<PAGE>
Exhibit 99(g)(13)
State Street Bank and Trust Company
1776 Heritage Drive, AFB
North Quincy, MA 02171
Ladies and Gentlemen:
Reference is made to the Sub-Custodian Contract between us dated as of
October 1, 1997 (the "Agreement").
Pursuant to the Agreement, this letter is to provide notice of the creation
of an additional investment portfolio of The Munder Funds, Inc., namely the
Munder Equity Selection Fund (the "New Portfolio").
In accordance with the Additional Portfolios provision of Section 16 of the
Agreement, we request that you act as Sub-Custodian with respect to the New
Portfolio.
Please indicate your acceptance of the foregoing by executing two copies of
this Agreement, returning one to the Fund and retaining one copy for your
records.
Very truly yours,
The Munder Funds, Inc.
By:/s/ Lisa Rosen
--------------
Accepted:
State Street Bank and Trust Company
By:/s/ Nick Bonos
--------------
Accepted:
Comerica Bank
By:/s/ Scott D. Seibert
--------------------
Date: October 1, 1997
<PAGE>
Exhibit 99(g)(14)
State Street Bank and Trust Company
1776 Heritage Drive, AFB
North Quincy, MA 02171
Ladies and Gentlemen:
Reference is made to the Sub-Custodian Contract between us dated as of
October 1, 1997 (the "Agreement").
Pursuant to the Agreement, this letter is to provide notice of the creation
of an additional investment portfolio of The Munder Funds, Inc., namely the
Munder Technology Fund (the "New Portfolio").
In accordance with the Additional Portfolios provision of Section 17 of the
Agreement, we request that you act as Sub-Custodian with respect to the New
Portfolio.
Please indicate your acceptance of the foregoing by executing two copies of
this Agreement, returning one to the Fund and retaining one copy for your
records.
Very truly yours,
The Munder Funds, Inc.
By:
--------------------------------
Accepted:
State Street Bank and Trust Company
By:
--------------------------------
Accepted:
Comerica Bank
By:
--------------------------------
Date: May 4, 1999
<PAGE>
Exhibit 99(h)(2)
State Street Bank and Trust Company
1776 Heritage Drive, AFB
North Quincy, MA 02171
Ladies and Gentlemen:
Reference is made to the Administration Agreement between us dated as of
October 31, 1997 (the "Agreement").
Pursuant to the Agreement, this letter is to provide notice of the creation
of an additional investment portfolio of The Munder Funds, Inc., namely the
Munder Equity Selection Fund (the "New Portfolio").
In accordance with the Additional Portfolios provision of Section 1 of the
Agreement, we request that you act as Administrator with respect to the New
Portfolio.
Please indicate your acceptance of the foregoing by executing two copies of
this Agreement, returning one to the Fund and retaining one copy for your
records.
Very truly yours,
The Munder Funds, Inc.
By: /s/ Lisa Rosen
---------------
Accepted:
State Street Bank and Trust Company
By: /s/ Richard Enfield
--------------------
Date: October 1, 1997
<PAGE>
Exhibit 99(h)(4)
State Street Bank and Trust Company
1776 Heritage Drive, AFB
North Quincy, MA 02171
Ladies and Gentlemen:
Reference is made to the Administration Agreement between us dated as of
October 31, 1997 (the "Agreement").
Pursuant to the Agreement, this letter is to provide notice of the creation
of an additional investment portfolio of The Munder Funds, Inc., namely the
Munder Technology Fund (the "New Portfolio").
In accordance with the Additional Portfolios provision of Section 1 of the
Agreement, we request that you act as Administrator with respect to the New
Portfolio.
Please indicate your acceptance of the foregoing by executing two copies of
this Agreement, returning one to the Fund and retaining one copy for your
records.
Very truly yours,
The Munder Funds, Inc.
By:
-------------------------------------
Accepted:
State Street Bank and Trust Company
By:
-------------------------------------
Date: May 4, 1999
<PAGE>
Exhibit 99h(18)
AMENDMENT TO THE
TRANSFER AGENCY AND REGISTRAR AGREEMENT
THIS AMENDMENT, dated as of March 16, 1999 is made to the Transfer Agency
Agreement[s] (the "Agreement[s]") between each of the Funds executing this
Amendment and listed on Exhibit 1 of this Amendment attached hereto and
incorporated herein (hereinafter individually and collectively referred to as
the "Fund") and FIRST DATA INVESTOR SERVICES GROUP, INC. ("Investor Services
Group").
1. Schedule A "Transfer Agent Fees" is deleted in its entirety and the
following new Schedule A is inserted in its place
2. Schedule B "Out-Of-Pocket Expenses" is deleted in its entirety and the
following new Schedule B is inserted in its place.
3. Schedule C "Duties of the Transfer Agent" is deleted in its entirety and
the following new Schedule C is inserted in its place.
This Amendment contains the entire understanding among the parties with respect
to the transactions contemplated hereby. To the extent that any provision of
this Amendment modifies or is otherwise inconsistent with any provision of the
prior agreements and related agreements, this Amendment shall control, but the
prior agreements and all related documents shall otherwise remain in full force
and effect.
IN WITNESS WHEREOF, each party has caused this Amendment to be executed by
its duly authorized representative on the date first stated above.
FIRST DATA INVESTOR SERVICES ST. CLAIR FUNDS, INC.
GROUP, INC.
By: /s/ Debelee Goldberg By: /s/ Lisa Anne Rosen
------------------------------------ ---------------------------------
Name: Debelee Goldberg Name: Lisa Anne Rosen
---------------------------------- -------------------------------
Title: SVP Title: Secretary and Assistant
--------------------------------- Treasurer
------------------------------
THE MUNDER FRAMLINGTON THE MUNDER FUNDS TRUST
FUNDS TRUST
By: /s/ Lisa Anne Rosen By: /s/ Lisa Anne Rosen
------------------------------------ ---------------------------------
Name: Lisa Anne Rosen Name: Lisa Anne Rosen
---------------------------------- -------------------------------
Title: Secretary and Assistant Treasurer Title: Secretary and Assistant
--------------------------------- Treasurer
------------------------------
THE MUNDER FUNDS, INC.
By: Lisa Anne Rosen
------------------------------------
Name: Lisa Anne Rosen
----------------------------------
Title: Secretary and Assistant Treasurer
---------------------------------
<PAGE>
SCHEDULE A
TRANSFER AGENT'S FEES
---------------------
EFFECTIVE AS OF: MARCH 1, 1999
<TABLE>
<CAPTION>
I NET NET FUND FEES:
<S> <C>
Per Account Fee: $21.50 per open account per year
$2.00 per closed account per year
Other Fees: IRA accounts will be charged $10.00 per global
account per annum (excluding Consumer's Energy
Group)
NSCC Transaction Charge is $.15 per financial
transaction
II ALL OTHER FUNDS' FEES:
Fund Complex Minimum* $90,000 per month
Asset Based Fees 2.00 Basis Points for assets less than 5 billion
1.50 Basis Points for assets 5 billion - 9 billion
1.51 Basis Points for assets greater than 9 billion
Other Fees: IRA accounts will be charged $10.00 per global
account per annum (excluding Consumer's Energy
Group)
NSCC Transaction Charge is $.15 per financial
transaction
III SYSTEM ENHANCEMENTS:
Client defined system enhancements will be agreed
upon by the Transfer Agent and Munder Capital and
billed at a rate of $150.00 per hour. All
programming rates are subject to an annual 5%
increase after the one year anniversary of the
effective date of this Agreement.
</TABLE>
* The Fund Complex minimum under Section II of Schedule A will apply to all
existing and any future funds offered by Munder Capital Management which are
services by the Transfer Agent with the exception of the Net Net Funds which
will be subject to the fees under Section I of Schedule A. The fees specified
herein may be adjusted at any time upon written agreement between the parties.
After March 1, 2000 the parties agree to review the fees charged for services
under this Agreement.
<TABLE>
<CAPTION>
<S> <C>
IV LOST SHAREHOLDER SEARCH/
REPORTING: $2.75 per account search*
The per account search fee shall be waived until
June 2000 so long as the Fund retains Keane
Tracers, Inc. ("KTI") to provide the Fund with
KTI's "in-Depth Research Program" services.
</TABLE>
<PAGE>
V PRINT MAIL PRICING SCHEDULE FOR SPECIAL MAILINGS FOR MUNDER GROUP OF FUNDS
This pricing is based on appropriate notification (standard of 30 day
notification) and scheduling for special mailings. Scheduling requirements
include having collateral arrive at agreed upon times in advance of deadlines.
Mailings which arise with shorter time frames and turns will be billed at a
maximum premium of 50% based on turn around requirements.
Work Order:
- -----------
$30.00 per Workorder
Technical Support/Data Processing:
- ----------------------------------
$135.00 to create an admark tape
$10.00/K to zip +4 data enhance with $125.00 minimum
$80.00/hr for any data manipulation
$6.00/K combo charge
Admark & Machine Insert
- -----------------------
#10, #11, 6x9
$62/K to admark envelope and machine insert 1 piece, with $125.00
min
$2.50/K for each additional insert
$38/K to admark only with $75.00 minimum
$25.00/K hand sort
9x12
$100/K to admark envelope and machine insert 1 piece, with $125.00
min
$5.00/K for each additional insert
$38/K to admark only with $75.00 minimum
$0.08/K for each hand insert
Admark & Hand Insert
- --------------------
#10, #11, 6x9
$0.08 for each hand insert
$25.00/K hand sort
9x12
$0.09 for each hand insert
$25.00/K hand sort
Pressure/Sensitive Labels:
- --------------------------
$0.32 each to create, affix and hand insert 1 piece, with a $75.00
minimum
$0.08 for each hand insert
$0.10 to affix labels only
$0.10 to create labels only
Legal Drop (Semi/Annual Reports; mailing ten plus pieces)
- ---------------------------------------------------------
$150.00 / compliant legal drop per job and processing fees
Create Mailing List:
- --------------------
$0.40 per entry with $75.00 minimum
Presort Fee:
- ------------
$0.035 per piece
<PAGE>
B. PRINT MAIL Pricing Schedule For Munder Group of Funds
Daily Work (Confirms):
- ----------------------
Hand: $71/K with $50.00 minimum (includes 1 insert)
$0.07/each additional insert
Machine: 42/K with $50.00 minimum daily (includes 1 insert)
$0.01/each additional insert
Daily Checks:
- -------------
Hand: $71/K with $50.00 minimum (includes 1 insert)
$0.07/each additional insert
Machine: 42/K with $50.00 minimum daily (includes 1 insert)
$0.01/each additional insert
* There is a $3.00 charge for each 3606 Form sent.
Quarterly/Monthly Statements:
- -----------------------------
Hand: $78/K with $50.00 minimum (includes 1 insert)
$0.08/each additional insert
$125/K for intelligent inserting
Machine: 52/K with $50.00 minimum daily (includes 1 insert)
$0.01/each additional insert
$58/K for intelligent inserting
Periodic Checks (i.e. dividend, ACW):
- -------------------------------------
Hand: $91/K with $75.00 minimum (includes 1 insert)
$0.08/each additional insert
Machine: 52/K with $75.00 minimum daily (includes 1 insert)
$0.01/each additional insert
12B1/Dealer Commission Checks/Statements:
- -----------------------------------------
$0.78/each envelope with $100.00 minimum
Printing Charges: (price ranges dependent on volumes)
- -----------------------------------------------------
$0.08/per confirm/statement/page
$0.10/per check
Folding (Machine):
- ------------------
$18K
Folding (Hand):
- ---------------
$.12 each
<PAGE>
Presort Charge:
- ---------------
$0.035 per piece
Courier Charge:
- ---------------
$15.00 for each on call courier trip/or actual cost for on demand
Overnight Charge:
- -----------------
$3.50 per package service charge plus Federal Express/Airborne charge
Inventory Storage:
- ------------------
$20.00 for each inventory location as of the 15th of the month
Inventory Receipt:
- ------------------
$20.00 for each SKU / Shipment
Hourly work; special projects, opening envelopes, etc...
$24.00 per hour
Special Pulls
- -------------
$2.50 per account pull
Boxes/Envelopes:
- ----------------
Shipping boxes $0.85 each
Oversized Envelopes $0.45 each
Forms Development/Programming Fee:
- ----------------------------------
$150.00/hour
Systems Testing:
- ----------------
$85.00/hour
Cutting Charges:
- ----------------
$10.00/K
<PAGE>
VI Miscellaneous Charges. The Fund shall be charged for the following products
and services as applicable:
. Ad hoc reports
. ad hoc SQL time
. COLD Storage
. Digital Recording
. Microfiche/microfilm production
. Magnetic media tapes and freight
Pre-Printed Stock, including business forms, certificates, envelopes,
checks and stationary
<PAGE>
SCHEDULE B
----------
OUT-OF-POCKET EXPENSES
EFFECTIVE AS OF: MARCH 1, 1999
1. Out of Pocket Expenses. The Fund shall reimburse the Transfer Agent monthly
for applicable out-of-pocket expenses, including, but not limited to the
following items:
. Postage - direct pass through to the Fund
. Telephone and telecommunication costs, including all lease, maintenance
and line costs
. proxy solicitations, mailings and tabulations
. Shipping, Certified and Overnight mail and insurance
. Terminals, communication lines, printers and other equipment and any
expenses incurred in connection with such terminals and lines
. Duplication services
. Banking Services
. Distribution and Redemption Check Issuance ($0.07 per item for PAR
System Clients)
. Courier services
. Federal Reserve charges for check clearance
. Overtime, as approved by the Fund
. Temporary staff, as approved by the Fund
. Travel and entertainment, as approved by the Fund
. Record retention, retrieval and destruction costs, including, but not
limited to exit fees charged by third party record keeping vendors
. Third party audit reviews
. Insurance
The Fund agrees that postage and mailing expenses will be paid on the day
of or prior to mailing as agreed with the Transfer Agent. In addition, the Fund
will promptly reimburse the Transfer Agent for any other unscheduled expenses
incurred by the Transfer Agent whenever the Fund and the Transfer Agent mutually
agree that such expenses are not otherwise properly borne by the Transfer Agent
as part of its duties and obligations under the Agreement.
<PAGE>
SCHEDULE C
DUTIES OF THE TRANSFER AGENT
EFFECTIVE AS OF: MARCH 1, 1999
1. Shareholder Information. The Transfer Agent or its agent shall
maintain a record of the number of Shares held by each holder of record which
shall include name, address, taxpayer identification and which shall indicate
whether such Shares are held in certificates or uncertificated form, and if in
certificated form shall include certificate numbers and denominations;
historical information regarding the account of each Shareholder, including
dividends and distributions paid and the date and price for all transactions on
a Shareholder's account; any stop or restraining order placed against
Shareholder's account; any correspondence relation to the current maintenance of
a Shareholder's account; information with respect to withholdings; and, any
information required in order for the Transfer Agent to perform any calculations
contemplated or required by its Agreement with the Fund. The Transfer Agent
shall keep a record of all redemption checks and dividend checks returned by
postal authorities, and shall maintain such records as are required for the Fund
to comply with the escheat laws of any State or other authority; shall keep a
record of all redemption checks and dividend checks returned by the postal
authorities for the period of time they are the Transfer Agent of record and for
any records provided by and receipt acknowledged by both parties form any prior
Transfer Agent by means of a records certification letter; otherwise the
Transfer Agent is not responsible for the said records. The Transfer Agent shall
maintain such records as are required for The Fund to comply with the escheat
laws of any state or other authority for the period they are Transfer Agent. The
Fund will be responsible for notifying and instructing the Transfer Agent to
commence the escheatment process on their behalf, for any or all states.
2. Shareholder Services. The Transfer Agent or its agent will investigate
all inquiries from Shareholders of the Fund relating to Shareholder accounts and
will respond to all communications from Shareholders and others relating to its
duties hereunder and such other correspondence as may from time to time be
mutually agreed upon between the Transfer Agent and the Fund.
3. Share Certificates.
(a) At the expense of the Fund, it shall supply the Transfer Agent or
its agent with an adequate supply of blank share certificates to meet the
Transfer Agent or its agent's requirements therefor. Such Share certificates
shall be properly signed by facsimile. The Fund agrees that, notwithstanding the
death, resignation, or removal of any officer of the Fund whose signature
appears on such certificates, the Transfer Agent or its agent may continue to
countersign certificates which bear such signatures until otherwise directed by
Written Instructions.
(b) The Transfer Agent or its agent shall issue replacement Share
certificates in lieu of certificates which have been lost, stolen or destroyed,
upon receipt by the Transfer Agent or its agent of properly executed affidavits
and lost certificate bonds, in form satisfactory to the Transfer Agent or its
agent, with the Fund and the Transfer Agent or its agent as obligees under the
bond.
(c) The Transfer Agent or its agent shall also maintain a record of
each certificate issued and/or canceled the number of Shares represented thereby
and the holder of record. With respect to Shares held in open accounts or
uncertificated form, i.e., no certificate being issued with respect thereto, the
Transfer Agent or its agent shall maintain comparable records of the record
holders thereof, including their names addresses and taxpayer identification.
The Transfer Agent or its agent shall further maintain a stop transfer record on
lost and/or replaced certificates.
4. Mailing Communications to Shareholders; Proxy Materials. The Transfer
Agent or its agent will address and mail to Shareholders of the Fund, all
communicators by the Fund to such Shareholders, including without limitation,
confirmations of purchases and sales of Company shares, monthly statements, all
reports to Shareholders, dividend and distribution notices and proxy material
for the Fund's meetings of Shareholders. In
<PAGE>
connection with meetings of Shareholders, the Transfer Agent or its Agent will
prepare Shareholder lists, mail and certify as to the mailing of proxy
materials, process and tabulate returned proxy cards, report on proxies voted
prior to meetings, act as inspector of election at meetings and certify Shares
voted at meetings.
5. Sales of Shares.
(a) Issuance of Shares. Upon receipt of a purchase order from or on
behalf of an investor for the purchase of Shares and sufficient information to
enable the Transfer Agent to establish a Shareholder account (if it is a new
account) and to determine which class of Shares the investor wishes to purchase,
and after confirmation of receipt of payment in the form described in the
Prospectus relating to such Shares and shall prepare and mail the appropriate
confirmation in accordance with legal requirements.
(b) Suspension of Sale of Shares. The Transfer Agent or its agent
shall not be required to issue any Shares of the Fund where it has received a
Written Instruction from the Fund or official notice from any appropriate
authority that the sale of the Shares of the Fund has been suspended or
discontinued. The existence of such Written Instructions or such official notice
shall be conclusive evidence of the right of the Transfer Agent or its agent to
rely on such Written Instructions or official notice.
(c) Payment of Redemption Proceeds. The Transfer Agent shall, upon
receipt of the moneys paid to it by the Custodian for the redemption of Shares,
pay such moneys as are received form the Custodian, all in accordance with the
procedures described in the Written Instruction received by the Transfer Agent
from the Fund. It is understood that the Transfer Agent may arrange for the
direct payment of redemption proceeds to Shareholders by the Fund's Custodian in
accordance with such procedures and controls as are mutually agreed upon from
time to time by the Fund, the Transfer Agent and the Fund's Custodian.
The Transfer Agent shall not process or effect any redemption with
respect to Shares of the Fund after receipt by the Transfer Agent of
notification of the suspension of the determination of the net asset value of
the Fund, provided the Transfer Agent has had a reasonable time to act on such
notification.
7. Dividends.
(a) Notice to Agent and Custodian. Upon the declaration of each
dividend and each capital gains distribution by the Board of Directors of the
Fund with respect to Shares of the Fund, the Fund shall furnish or cause to be
furnished to the Transfer Agent or its agent a copy of a resolution of the
Fund's Board of Directors certified by the Secretary of the Fund setting forth
the date of the declaration of such dividend or distribution, the ex-dividend
date, the date of payment thereof, the record date as of which shareholders
entitled to payment shall be determined, the amount payable per Share to the
shareholders of record as of that date, the total amount payable to the Transfer
Agent or its agent on the payment date and whether such dividend or distribution
is to be paid in Shares of such class at net asset value.
On or before the payment date specified in such resolution of the
Board of Directors, the Custodian of the Fund will pay to the Transfer Agent
sufficient cash to make payment to the shareholders of record as of such payment
date.
After deducting any amount required to be withheld by any applicable
tax laws, rules and/or regulations and/or other applicable laws, the Transfer
Agent shall in accordance with the instructions in proper form from a
Shareholder and the provisions of the applicable dividend resolutions and
Prospectus issue and credit the Account of the Shareholder with Shares, or, if
the Shareholder so elects, pay such dividends or distributions in cash.
In lieu of receiving from the Fund's Custodian and paying to
Shareholders cash dividends or distributions, the Transfer Agent may arrange for
the direct payment of cash dividends and distributions to Shareholders by the
Fund's Custodian, in accordance with such procedures and controls as are
mutually agreed upon from time to time by and among the Fund, the Transfer Agent
and the Fund's Custodian.
<PAGE>
The Transfer Agent shall prepare, file with the Internal Revenue
Services and other appropriate taxing authorities, and address and mail to
Shareholders such returns, forms and information relating to dividends and
distributions paid by the fund as are required to be so prepared, filed and
mailed by applicable laws, rules and/or resolutions. On behalf of the Fund, the
Transfer Agent shall mail certain requests for Shareholders' certifications
under penalties of perjury and pay on a timely basis to the appropriate Federal
authorities any taxes to be withheld on dividends and distributions paid by the
Fund, all as required by applicable Federal tax laws and regulations.
(b) Insufficient Funds for Payments. If the Transfer Agent or its
agent does not receive sufficient cash from the Custodian to make total dividend
and/or distribution payments to all shareholders of the Fund as of the record
date, the Transfer Agent or its agent will, upon notifying the Fund, withhold
payment to all Shareholders of record as of the record date until sufficient
cash is provided to the Transfer Agent or its agent.
8. Cash Management Services. Funds received by the Transfer Agent in
the course of performing its services hereunder will be held in bank accounts
and/or fixed income investment accounts. With respect to funds maintained in
fixed income investment accounts, the Transfer Agent shall retain any interest
generated or earned. With respect to funds maintained in bank accounts, the
Transfer Agent shall retain any excess balance credits or excess benefits earned
or generated by or associated with such bank accounts or made available by the
institution at which such bank accounts are maintained after such balance
credits or benefits are first applied towards banking service fees charged by
such institution in connection with banking services provided on behalf of the
Fund.
9. Lost Shareholders. The Transfer Agent shall perform such services
as are required in order to comply with Rules 17a-24 and 17Ad-17 of the 34 Act
(the Lost Shareholder Rules"), including, but not limited to those set forth
below. The Transfer Agent may, in its sole discretion, use the services of a
third party to perform the some or all such services.
(a) documentation of electronic search policies and procedures;
(b) execution of required searches;
(c) creation and mailing of confirmation letters;
(d) taking receipt of returned verification forms;
(e) providing confirmed address corrections in batch via electronic
media;
(f) tracking results and maintaining data sufficient to comply with
the Lost Shareholder Rules; and
(g) preparation and submission of data required under the Lost
Shareholder Rules.
10. Cooperation with Accountants. The Transfer Agent shall cooperate
with the Fund's independent public accountants and shall take all reasonable
action in the performance of its obligations under its agreement with the Fund
to assure that the necessary information is made available to such accountants
for the expression of their opinions as such as may be required by the Fund from
time to time.
11. Other Services. In accordance with the Prospectus and such
procedures and controls as are mutually agreed upon from time to time by and
among the Fund, the Transfer Agent and the Fund's Custodian, the Transfer Agent
shall (a) arrange for issuance of Shares obtained through (i) transfers of funds
from Shareholder's accounts at financial institutions, (ii) a pre-authorized
check plan, if any and (iii) a right of accumulation, if any; (b) arrange for
the exchange of Shares for shares of such other funds designated by the Fund
from time to time; and (c) arrange for systematic withdrawals from the account
of a Shareholder participating in a systematic withdrawal plan, if any.
<PAGE>
Exhibit 1
Lists of Funds and Portfolios
THE MUNDER FUNDS TRUST
- ----------------------
Munder Balanced Fund
Munder Bond Fund
Munder Cash Investment Fund
Equity Fund
Munder Growth & Income Fund
Munder Index 500 Fund
Munder Intermediate Bond Fund
Munder Michigan Tax-Free Bond Fund
Munder Small Company Growth Fund
Munder Tax-Free Bond Fund
Munder Tax-Free Short-Intermediate Bond Fund
Munder Tax-Free Money Market Fund
Munder U.S. Government Income Fund
Munder U.S. Treasury Money Market Fund
THE MUNDER FUNDS, INC.
- ----------------------
Munder All-Season Aggressive Fund
Munder All-Season Conservative Fund
Munder All-Season Moderate Fund
Munder Equity Selection Fund
Munder Financial Services Fund
Munder Growth Opportunities Fund
Munder International Bond Fund
Munder Micro-Cap Equity Fund
Munder Money Market Fund
Munder Multi-Season Growth Fund
Munder NetNet Fund
Munder Real Estate Equity Investment Fund
Munder Short Term Treasury Fund
Munder Small-Cap Value Fund
Munder Value Fund
THE MUNDER FRAMLINGTON FUNDS TRUST
- ----------------------------------
Munder Framlington Emerging Markets Fund
Munder Framlington Healthcare Fund
Munder Framlington International Growth Fund
Munder Framlington Global Financial Services Fund
ST. CLAIR FUNDS, INC.
- ---------------------
Munder Institutional S&P 500 Index Equity Fund
Munder Institutional S&P MidCap Index Equity
Munder Institutional S&P SmallCap Index Equity
Munder Institutional Short Term Treasury Fund
Munder Institutional Money Market Fund
Liquidity Plus Money Market Fund
Munder S&P 500 Index Equity Fund
Munder S&P MidCap Index Equity Fund
Munder S&P SmallCap Index Equity Fund
Munder Foreign Equity Fund
Munder Aggregate Bond Index Fund
<PAGE>
Exhibit 99h(19)
AMENDMENT TO THE
TRANSFER AGENCY AND SERVICES AGREEMENT
for DAZL Services
THIS AMENDMENT, dated as of March 26, 1999 is made to the Transfer Agency
Agreement[s] (the "Agreement[s]") between each of the Funds executing this
Amendment and listed on Exhibit 1 of this Amendment attached hereto and
incorporated herein (hereinafter individually and collectively referred to as
the "Fund") and FIRST DATA INVESTOR SERVICES GROUP, INC. ("Investor Services
Group").
WITNESSETH
WHEREAS, the Fund desires to utilize Investor Services Group's proprietary
Data Access Zip Link ("DAZL") product and services and the parties desire to
document such use and the related fees with respect thereto.
NOW THEREFORE, the Fund and Investor Services Group agree that as of the
date first referenced above, the Agreement shall be amended as follows:
1. In accordance with the following terms, Investor Services Group shall,
through is proprietary DAZL product, provide the Fund and such financial
planners and investment advisors (the "FP's") which, pursuant to agreements with
the Fund, distribute shares of such funds, with online access to the Fund
(including Portfolios) and shareholder account information for the shareholders
of the Funds or such financial planners of investment advisors.
(a) Investor Services Group Responsibility. Investor Services Group shall
provide the Fund with the appropriate documentation and procedures (the
"DAZL Documentation") to enable the Fund to properly use DAZL. In addition
to and as more fully described in the DAZL Documentation, Investor Services
Group shall to run & complete data extracts after the transfer agent
nightly cycles in order to provide files to the end user i.e., financial
planner, or direct to firms based upon the profiles that the onlines
designate.
(b) Fund Responsibilities. In addition to and as may be more fully
described in the DAZL Documentation, the fund has responsibility (i) for
setting the FSR on-lines with the appropriate data in order to feed into
the DAZL extract; (ii) with respect to those FP's utilizing a 3rd party
software vendor to access information through DAZL, ensuring the vendor
provides the translation of the DAZL file to the appropriate software
package formats; (iii) for the Fund's errors and mistakes in the use of
DAZL; (iv) for the Fund's failure to use and employ DAZL in accordance with
the procedures and documentation made available by Investor Services Group;
(v) for the Fund's utilization of the control procedures set forth and
described in such user documentation; and (vi) the Fund's failure to verify
promptly or output received through use of DAZL.
<PAGE>
(c) Fees. In consideration of the DAZL services provided by Investor
Services Group hereunder, the fund shall pay to Investor Services Group the
Fees set forth in Schedule A attached hereto.
This Amendment contains the entire understanding between the parties with
respect to the transactions contemplated hereby. To the extent that any
provision of this Amendment modifies or is otherwise inconsistent with any
provision of the Transfer Agent Agreement and related agreements, this Amendment
shall control, but the Transfer Agent Agreement and all related documents shall
otherwise remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers, as of the day and year first above
written.
FIRST DATA INVESTOR SERVICES ST. CLAIR FUNDS, INC.
GROUP, INC.
By: /s/ Debelee Goldberg By: /s/ Lisa Anne Rosen
--------------------------- ---------------------------------
Name: Debelee Goldberg Name: Lisa Anne Rosen
------------------------- -------------------------------
Title: SVP Title: Secretary and Assistant Treasurer
------------------------ ---------------------------------
THE MUNDER FRAMLINGTON THE MUNDER FUNDS TRUST
FUNDS TRUST
By: /s/ Lisa Anne Rosen By: /s/ Lisa Anne Rosen
--------------------------- ---------------------------------
Name: Lisa Anne Rosen Name: Lisa Anne Rosen
------------------------- -------------------------------
Title: Secretary and Assistant Title: Secretary and Assistant Treasurer
----------------------- ---------------------------------
Treasurer
---------
THE MUNDER FUNDS, INC.
By: Lisa Anne Rosen
---------------------------
Name: Lisa Anne Rosen
-------------------------
Title: Secretary and Assistant Treasurer
---------------------------------
<PAGE>
Schedule A
DAZL Fees
Set-up Fee: $5,000.00 (waived)
$1,000.00 per month plus $0.25 per record transmitted ($0.15/price
record)
<PAGE>
Exhibit 1
List of Funds and Portfolios
THE MUNDER FUNDS TRUST
- ----------------------
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 Tax-Free Bond Fund
Munder Small Company Growth Fund
Munder Tax-Free Bond Fund
Munder Tax-Free Short-Intermediate Bond Fund
Munder Tax-Free Money Market Fund
Munder U.S. Government Income Fund
Munder U.S. Treasury Money Market Fund
THE MUNDER FUNDS, INC.
- ----------------------
Munder All-Season Aggressive Fund
Munder All-Season Conservative Fund
Munder All-Season Moderate Fund
Munder Equity Selection Fund
Munder Financial Services Fund
Munder Growth Opportunities fund
Munder International Bond Fund
Munder Micro-Cap Equity fund
Munder Money Market Fund
Munder Multi-Season Growth Fund
Munder NetNet Fund
Munder Real Estate Equity Investment Fund
Munder Short Term Treasury Fund
Munder Small-Cap Value Fund
Munder Value Fund
THE MUNDER FRAMLINGTON FUNDS TRUST
- ----------------------------------
Munder Framlington Emerging Markets Fund
Munder Framlington Healthcare Fund
Munder Framlington International Growth Fund
Munder Framlington Global Financial Services Fund
ST. CLAIR FUNDS, INC.
- ---------------------
Munder Institutional S&P 500 Index Equity Fund
Munder Institutional S&P MidCap Index Equity Fund
Munder Institutional S&P SmallCap Index Equity Fund
Munder Institutional Short Term Treasury Fund
Munder Institutional Money Market Fund
Liquidity Plus Money Market Fund
Munder S&P 500 Index Equity Fund
Munder S&P MidCap Index Equity Fund
Munder S&P SmallCap Index Equity Fund
Munder Foreign Equity Fund
Munder Aggregate Bond Index Fund
<PAGE>
Exhibit 99(h)(20)
First Data Investor Services Group, Inc.
One Exchange Place
Boston, MA 02109
Ladies and Gentlemen:
Reference is made to the Transfer Agent and Registrar Agreement between us
dated as of June 19, 1995, as amended (the "Agreement").
Pursuant to the Agreement, this letter is to provide notice of the creation
of an additional investment portfolio of The Munder Funds, Inc., namely the
Munder Technology Fund (the "New Portfolio").
We request that you act as Transfer Agent under the Agreement with respect
to the New Portfolio.
Please indicate your acceptance of the foregoing by executing two copies of
this Agreement, returning one to the Fund and retaining one copy for your
records.
Very truly yours,
The Munder Funds, Inc.
By:
-------------------------------------
Accepted:
First Data Investor Services Group, Inc.
By:
-------------------------------------
Date: May 4, 1999
<PAGE>
Exhibit 99(m)(32)
Service Plan
Class A Shares of
Munder Growth Opportunities Fund
<PAGE>
SERVICE PLAN
WHEREAS, The Munder Funds, Inc. (the "Company") engages in business as an
open-end investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "Act");
WHEREAS, shares of common stock of the Company are currently divided into
series of shares, one of which is designated as Munder Growth Opportunities Fund
(the "Fund");
WHEREAS, shares of common stock of the Fund are divided into classes of
shares, one of which is designated Class A;
WHEREAS, the Company employs Funds Distributor, Inc. (the "Distributor") as
distributor of the securities of which it is the issuer;
WHEREAS, the Company and the Distributor have entered into a Distribution
Agreement pursuant to which the Company has employed the Distributor in such
capacity during the continuous offering of shares of the Company; and
WHEREAS, this Service Plan (the "Plan") was adopted and approved by the
Company on February 24, 1998;
NOW, THEREFORE, the Company hereby adopts on behalf of the Fund with
respect to its Class A shares, and the Distributor hereby agrees to the terms
of, the Plan, in accordance with Rule 12b-1 under the Act on the following terms
and conditions:
1. The Fund shall pay to the Distributor, as the distributor of the Class
A shares of the Fund, a service fee at the rate of .25% on an annualized basis
of the average daily net assets of the Fund's Class A shares, provided that, at
any time such payments is made, whether or not this Plan continues in effect,
the making thereof will not cause the limitation upon such payments established
by this Plan to be exceeded. Such fee shall be calculated and accrued daily and
paid at such intervals as the Board of Directors shall determine, subject to any
applicable restriction imposed by rules of the National Association of
Securities Dealers, Inc.
2. The amount set forth in paragraph 1 of this Plan may be used by the
Distributor to pay securities dealers (which may include the Distributor itself)
and other financial institutions and organizations for servicing shareholder
accounts, including a continuing fee which may accrue immediately after the sale
of shares.
3. The Plan shall not take effect with respect to the Class A Shares of
the Fund until is has been approved by a vote of the then sole shareholder of
the Class A Shares of the Fund.
4. This Plan shall not take effect until it, with any related agreements,
has been approved by votes of a majority of both (a) the Directors of the
Company and (b) those Directors of the Company who are not "interested persons"
of the Company (as defined in the Act) and
1
<PAGE>
who have no direct or indirect financial interest in the operation of this Plan
or any agreements related to it (the "Rule 12b-1 Directors"), cast in person at
a meeting (or meetings) called for the purpose of voting on this Plan and such
related agreements.
5. After approval as set forth in paragraphs 3 and 4, this Plan shall
take effect. The Plan shall continue in full force and effect as to the Class A
shares of the Fund for so long as such continuance is specifically approved at
least annually in the manner provided for approval of this Plan in paragraph 4.
6. The Distributor shall provide to the Directors of the Company, and the
Directors shall review, at least quarterly, a written report of the amounts so
expended and the purposes for which such expenditures were made.
7. This Plan may be terminated as to the Fund at any time, without
payment of any penalty, by vote of the Directors of the Company, by vote of a
majority of the Rule 12b-1 Directors, or by a vote of a majority of the
outstanding voting securities of Class A shares of the Fund on not more than 30
days' written notice to any other party to the Plan.
8. This Plan may not be amended to increase materially the amount of
service fee provided for in paragraph 1 hereof unless such amendment is approved
in the manner provided for initial approval in paragraph 3 hereof, and no
material amendment to the Plan shall be made unless approved in the manner
provided for approval and annual renewal in paragraph 4 hereof.
9. While this Plan is in effect, the selection and nomination of
Directors who are not interested persons (as defined in the Act) of the Company
shall be committed to the discretion of the Directors who are not such
interested persons.
10. The Company shall preserve copies of this Plan and any related
agreements and all reports made to paragraph 6 hereof, for a period of not less
than six years from the date of this Plan, any such agreement or any such
report, as the case may be, the first two years in an easily accessible place.
IN WITNESS WHEREOF, the Company, on behalf of the Fund, and the Distributor
have executed this Service Plan as of the 24th day of February, 1998.
THE MUNDER FUNDS, INC.
By: /s/ Lisa Anne Rosen
-------------------------------
FUNDS DISTRIBUTOR, INC.
By: /s/ Marie Connolly
-------------------------------
2
<PAGE>
Exhibit 99(m)(33)
Service and Distribution Plan
Class B Shares of
Munder Growth Opportunities Fund
<PAGE>
SERVICE AND DISTRIBUTION PLAN
WHEREAS, The Munder Funds, Inc. (the "Company") engages in business as an
open-end investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "Act");
WHEREAS, shares of common stock of the Company are currently divided into
series of shares, one of which is designated as Munder Growth Opportunities Fund
(the "Fund");
WHEREAS, shares of common stock of the Fund are divided into classes of
shares, one of which is designated Class B;
WHEREAS, the Company employs Funds Distributor, Inc. (the "Distributor") as
distributor of the securities of which it is the issuer;
WHEREAS, the Company and the Distributor have entered into a Distribution
Agreement pursuant to which the Company has employed the Distributor in such
capacity during the continuous offering of shares of the Company; and
WHEREAS, this Service and Distribution Plan (the "Plan") was adopted and
approved by the Company on February 24, 1998;
NOW, THEREFORE, the Company hereby adopts on behalf of the Fund with
respect to its Class B shares, and the Distributor hereby agrees to the terms
of, the Plan, in accordance with Rule 12b-1 under the Act on the following terms
and conditions:
1. A. The Fund shall pay to the Distributor, as the distributor of the
Class B shares of the Fund, a fee for distribution of the shares at the rate of
0.75% on an annualized basis of the average daily net assets of the Fund's Class
B shares, provided that, at any time such payments is made, whether or not this
Plan continues in effect, the making thereof will not cause the limitation upon
such payments established by this Plan to be exceeded. Such fee shall be
calculated and accrued daily and paid at such intervals as the Board of
Directors shall determine, subject to any applicable restriction imposed by
rules of the National Association of Securities Dealers, Inc.
B. In addition to the distribution fee distributed above, the Fund shall
pay to the Distributor, as the distributor of the Class B shares of the Fund, a
service fee at the rate of .25% on an annualized basis of the average daily net
asset of the Fund's Class B shares, provided that, at any time such payment is
made, whether or not this Plan continues in effect, the making thereof will not
cause the limitation upon such payments established by this Plan to be exceeded.
Such fee shall be calculated and accrued daily and paid at such intervals as the
Board of Directors shall determine, subject to any applicable restriction
imposed by rules of the National Securities Association of Dealers, Inc.
1
<PAGE>
2. The amount set forth in paragraph 1.A. of this Plan shall be paid for
the Distributor's services as distributor of the shares of the Funds in
connection with any activities or expenses primarily intended to result in the
sale of the Class B shares of the Fund, including, but not limited to, payment
of compensation, including incentive compensation, to securities dealers (which
may include the Distributor itself) and other financial institutions and
organizations to obtain various distribution related and/or administrative
services for the Fund. These services include, among other things, processing
new shareholder account applications, preparing and transmitting to the Fund's
Transfer Agent computer processable tapes of all transactions by customers and
serving as the primary source of information to customers in answering questions
concerning the Fund and their transactions with the Fund. The Distributor is
also authorized to engage in advertising, the preparation and distribution of
sales literature and other promotional activities on behalf of the Fund. In
addition, this Plan hereby authorizes payment by the Fund of the cost of
preparing, printing and distributing the Fund's Prospectuses and Statements of
Additional Information to prospective investors and of implementing and
operating the Plan. Distribution expenses also include an allocation of
overhead of the Distributor and accruals for interest on the amount of
distribution expenses that exceed distribution fees and contingent deferred
sales charges received by the Distributor. Payments under the Plan are not tied
exclusively to actual distribution and service expenses, and the payments may
exceed distribution and service expenses actually incurred.
The amount set forth in paragraph 1.B. of this Plan may be used by the
Distributor to pay securities dealers (which may include the Distributor itself)
and other financial institutions and organizations for servicing shareholder
accounts, including a continuing fee which may accrue immediately after the sale
of shares.
3. This Plan shall not take effect with respect to the Class B Shares of
the Fund until it has been approved by a vote of the then sole shareholder of
the Class B Shares of the Fund.
4. This Plan shall not take effect until it, with any related agreements,
has been approved by votes of a majority of both (a) the Directors of the
Company and (b) those Directors of the Company who are not "interested persons"
of the Company (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan or any agreements related to it
(the "Rule 12b-1 Directors"), cast in person at a meeting (or meetings) called
for the purpose of voting on this Plan and such related agreements.
5. After approval as set forth in paragraphs 3 and 4, this Plan shall take
effect. The Plan shall continue in full force and effect as to the Class B
shares of the Fund for so long as such continuance is specifically approved at
least annually in the manner provided for approval of this Plan in paragraph 4.
6. The Distributor shall provide to the Directors of the Company, and the
Directors shall review, at least quarterly, a written report of the amounts so
expended and the purposes for which such expenditures were made.
2
<PAGE>
7. This Plan may be terminated as to the Fund at any time, without payment
of any penalty, by vote of the Directors of the Company, by vote of a majority
of the Rule 12b-1 Directors, or by a vote of a majority of the outstanding
voting securities of Class B shares of the Fund on not more than 30 days'
written notice to any other party to the Plan.
8. This Plan may not be amended to increase materially the amount of
distribution fee (including any service fee) provided for in paragraph 1 hereof
unless amendment is approved in the manner provided for initial approval in
paragraph 3 hereof, and no material amendment to the Plan shall be made unless
approved in the manner provided for approval and annual renewal in paragraph 4
hereof.
9. While this Plan is in effect, the selection and nomination of Directors
who are not interested persons (as defined in the Act) of the Company shall be
committed to the discretion of the Directors who are not such interested
persons.
10. The Company shall preserve copies of this Plan and any related
agreements and all reports made to paragraph 6 hereof, for a period of not less
than six years from the date of this Plan, any such agreement or any such
report, as the case may be, the first two years in an easily accessible place.
IN WITNESS WHEREOF, the Company, on behalf of the Fund, and the Distributor
have executed this Service and Distribution Plan as of the 24th day of February,
1998.
THE MUNDER FUNDS, INC.
By: /s/ Lisa Anne Rosen
-------------------
FUNDS DISTRIBUTOR, INC.
By: /s/ Marie Connolly
------------------
3
<PAGE>
Exhibit 99(m)(34)
Service and Distribution Plan
Class C Shares of
Munder Growth Opportunities Fund
<PAGE>
SERVICE AND DISTRIBUTION PLAN
WHEREAS, The Munder Funds, Inc. (the "Company") engages in business as an
open-end investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "Act");
WHEREAS, shares of common stock of the Company are currently divided into
series of shares, one of which is designated as Munder Growth Opportunities Fund
(the "Fund");
WHEREAS, shares of common stock of the Fund are divided into classes of
shares, one of which is designated Class C;
WHEREAS, the Company employs Funds Distributor, Inc. (the "Distributor") as
distributor of the securities of which it is the issuer;
WHEREAS, the Company and the Distributor have entered into a Distribution
Agreement pursuant to which the Company has employed the Distributor in such
capacity during the continuous offering of shares of the Company; and
WHEREAS, this Service and Distribution Plan (the "Plan") was adopted and
approved by the Company on February 24, 1998;
NOW, THEREFORE, the Company hereby adopts on behalf of the Fund with
respect to its Class C shares, and the Distributor hereby agrees to the terms
of, the Plan, in accordance with Rule 12b-1 under the Act on the following terms
and conditions:
1. A. The Fund shall pay to the Distributor, as the distributor of the
Class C shares of the Fund, a fee for distribution of the shares at the rate of
0.75% on an annualized basis of the average daily net assets of the Fund's Class
C shares, provided that, at any time such payments is made, whether or not this
Plan continues in effect, the making thereof will not cause the limitation upon
such payments established by this Plan to be exceeded. Such fee shall be
calculated and accrued daily and paid at such intervals as the Board of
Directors shall determine, subject to any applicable restriction imposed by
rules of the National Association of Securities Dealers, Inc.
B. In addition to the distribution fee distributed above, the Fund shall
pay to the Distributor, as the distributor of the Class C shares of the Fund, a
service fee at the rate of .25% on an annualized basis of the average daily net
asset of the Fund's Class C shares, provided that, at any time such payment is
made, whether or not this Plan continues in effect, the making thereof will not
cause the limitation upon such payments established by this Plan to be exceeded.
Such fee shall be calculated and accrued daily and paid at such intervals as the
Board of Directors shall determine, subject to any applicable restriction
imposed by rules of the National Securities Association of Dealers, Inc.
1
<PAGE>
2. The amount set forth in paragraph 1.A. of this Plan shall be paid for
the Distributor's services as distributor of the shares of the Funds in
connection with any activities or expenses primarily intended to result in the
sale of the Class C shares of the Fund, including, but not limited to, payment
of compensation, including incentive compensation, to securities dealers (which
may include the Distributor itself) and other financial institutions and
organizations to obtain various distribution related and/or administrative
services for the Fund. These services include, among other things, processing
new shareholder account applications, preparing and transmitting to the Fund's
Transfer Agent computer processable tapes of all transactions by customers and
serving as the primary source of information to customers in answering questions
concerning the Fund and their transactions with the Fund. The Distributor is
also authorized to engage in advertising, the preparation and distribution of
sales literature and other promotional activities on behalf of the Fund. In
addition, this Plan hereby authorizes payment by the Fund of the cost of
preparing, printing and distributing the Fund's Prospectuses and Statements of
Additional Information to prospective investors and of implementing and
operating the Plan. Distribution expenses also include an allocation of overhead
of the Distributor and accruals for interest on the amount of distribution
expenses that exceed distribution fees and contingent deferred sales charges
received by the Distributor. Payments under the Plan are not tied exclusively to
actual distribution and service expenses, and the payments may exceed
distribution and service expenses actually incurred.
The amount set forth in paragraph 1.B. of this Plan may be used by the
Distributor to pay securities dealers (which may include the Distributor itself)
and other financial institutions and organizations for servicing shareholder
accounts, including a continuing fee which may accrue immediately after the sale
of shares.
3. This Plan shall not take effect with respect to the Class C Shares of
the Fund until it has been approved by a vote of the then sole shareholder of
the Class C Shares of the Fund.
4. This Plan shall not take effect until it, with any related agreements,
has been approved by votes of a majority of both (a) the Directors of the
Company and (b) those Directors of the Company who are not "interested persons"
of the Company (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan or any agreements related to it
(the "Rule 12b-1 Directors"), cast in person at a meeting (or meetings) called
for the purpose of voting on this Plan and such related agreements.
5. After approval as set forth in paragraphs 3 and 4, this Plan shall
take effect. The Plan shall continue in full force and effect as to the Class C
shares of the Fund for so long as such continuance is specifically approved at
least annually in the manner provided for approval of this Plan in paragraph 4.
6. The Distributor shall provide to the Directors of the Company, and the
Directors shall review, at least quarterly, a written report of the amounts so
expended and the purposes for which such expenditures were made.
2
<PAGE>
7. This Plan may be terminated as to the Fund at any time, without
payment of any penalty, by vote of the Directors of the Company, by vote of a
majority of the Rule 12b-1 Directors, or by a vote of a majority of the
outstanding voting securities of Class C shares of the Fund on not more than 30
days' written notice to any other party to the Plan.
8. This Plan may not be amended to increase materially the amount of
distribution fee (including any service fee) provided for in paragraph 1 hereof
unless amendment is approved in the manner provided for initial approval in
paragraph 3 hereof, and no material amendment to the Plan shall be made unless
approved in the manner provided for approval and annual renewal in paragraph 4
hereof.
9. While this Plan is in effect, the selection and nomination of
Directors who are not interested persons (as defined in the Act) of the Company
shall be committed to the discretion of the Directors who are not such
interested persons.
10. The Company shall preserve copies of this Plan and any related
agreements and all reports made to paragraph 6 hereof, for a period of not less
than six years from the date of this Plan, any such agreement or any such
report, as the case may be, the first two years in an easily accessible place.
IN WITNESS WHEREOF, the Company, on behalf of the Fund, and the Distributor
have executed this Service and Distribution Plan as of the 24th day of February,
1998.
THE MUNDER FUNDS, INC.
By: /s/ Lisa Anne Rosen
------------------------------
FUNDS DISTRIBUTOR, INC.
By: /s/ Marie Connolly
------------------------------
3
<PAGE>
Exhibit 99(m)(36)
Amendment to Service and Distribution Plan
Class A Shares of
Munder NetNet Fund
<PAGE>
AMENDMENT TO SERVICE AND DISTRIBUTION PLAN
OF
THE NET NET FUND
The Service and Distribution Plan of the NetNet Fund is hereby amended as
follows:
The second "WHEREAS" clause is amended to read in its entirety: WHEREAS, shares
of common stock of the Company are currently divided into series of shares, one
of which is designated as the Net Net Fund (the "Fund"); and shares of the Fund
are divided into classes of shares, one of which is designated Class A shares.
The fifth paragraph is amended to read in its entirety: NOW, THEREFORE, the
Company hereby adopts on behalf of the Class A shares of the Fund and the
Distributor hereby agrees to the terms of, the Plan, in accordance with
Rule 12b-1 under the Act on the following terms and conditions.
Paragraph 1 is amended to read in its entirety: l. The Fund shall pay to the
Distributor, as the distributor of the Class A shares of the Fund a service and
distribution fee at the rate of .25% on an annualized basis of the average daily
net assets of the Fund's Class A shares, provided that, at any time such payment
is made, whether or not this Plan continues in effect, the making thereof will
not cause the limitation upon such payments established by this Plan to be
exceeded. Such fee shall be calculated and accrued daily and paid at such
intervals as the Board of Directors shall determine, subject to any applicable
restriction imposed by rules of the National Association of Securities Dealers,
Inc.
The first sentence of Paragraph 2 is amended to read in its entirety: The amount
set forth in paragraph 1 of this Plan shall be paid for the Distributor's
services as distributor of the shares of the Fund in connection with any
activities or expenses primarily intended to result in the sale of the Class A
shares of the Fund, including, but not limited to, payment of compensation,
including incentive compensation, to securities dealers (which may include the
Distributor itself) and other financial institutions and organizations
(collectively, the "Service Organizations") to obtain various distribution
related and/or administrative services for the Fund and for servicing
shareholder account, including a continuing fee which may accrue immediately
after the sale of shares.
Paragraph 5 is amended to read in its entirety: After approval as set forth in
paragraphs 3 and 4, this Plan shall take effect. The Plan of Distribution shall
continue in full force and effect as to the Class A shares of the Fund for so
long as such continuance is specifically approved at least annually in the
manner provided for approval of this Plan in paragraph 4.
<PAGE>
Paragraph 7 is amended by deleting the words "Class B shares of the Fund" and
substituting the words "Class A shares of the Fund" in lieu thereof.
Except as set forth above, the Amendment does not alter or amend the Plan, which
remains in full force and effect. The Amendment is not intended to, and does
not, amend to increase materially the amounts to be paid by the Class A shares
of the Fund under the Plan as originally adopted.
IN WITNESS WHEREOF, the Company on behalf of the Fund, and the Distributor
have executed this Amendment to Service and Distribution Plan of the NetNet Fund
as of the 5th day of May, 1998.
THE MUNDER FUNDS, INC.
By: /s/ Lisa Anne Rosen
--------------------------------
FUNDS DISTRIBUTOR, INC.
By: /s/ Marie Connolly
--------------------------------
<PAGE>
Exhibit 99(m)(37)
Service and Distribution Plan
Class B Shares of
Munder NetNet Fund
<PAGE>
SERVICE AND DISTRIBUTION PLAN
WHEREAS, The Munder Funds, Inc. (the "Company") engages in business as an
open-end investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "Act");
WHEREAS, shares of common stock of the Company are currently divided into
series of shares, one of which is designated as the NetNet Fund (the "Fund");
WHEREAS, shares of common stock of the Fund are divided into classes of
shares, one of which is designated Class B;
WHEREAS, the Company employs Funds Distributor, Inc. (the "Distributor") as
distributor of the securities of which it is the issuer;
WHEREAS, the Company and the Distributor have entered into a Distribution
Agreement pursuant to which the Company has employed the Distributor in such
capacity during the continuous offering of shares of the Company; and
WHEREAS, this Service and Distribution Plan (the "Plan") was adopted and
approved by the Company on May 5, 1998;
NOW, THEREFORE, the Company hereby adopts on behalf of the Fund with
respect to its Class B shares, and the Distributor hereby agrees to the terms
of, the Plan, in accordance with Rule 12b-1 under the Act on the following
terms and conditions:
1. A. The Fund shall pay to the Distributor, as the distributor of the
Class 13 shares of the Fund, a fee for distribution of the shares at the rate of
0.75% on an annualized basis of the average daily not assets of the Fund's Class
B shares, provided that, at any time such payments is made, whether or not this
Plan continues in effect; the making thereof will not cause the limitation upon
such payments established by this Plan to be exceeded. Such fee shall be
calculated and accrued daily and paid at such intervals as the Board of
Directors shall determine, subject to any applicable restriction imposed by
rules of the National Association of Securities Dealers, Inc.
B. In addition to the distribution fee distributed above, the Fund
shall pay to the Distributor, as the distributor of the Class B shares of the
Fund, a service fee at the rate of .25% on an annualized basis of the average
daily net asset of the Fund's Class B shares, provided that, at any time such
payment is made, whether or not this Plan continues in effect, the making
thereof will not cause the limitation upon such payments established by this
Plan to be exceeded. Such fee shall be calculated and accrued daily and paid at
such intervals as the Board of Directors shall determine, subject to any
applicable restriction imposed by rules of the National Securities Association
of Dealers, Inc.
1
<PAGE>
2. The amount set forth in paragraph 1.A. of this Plan shall be paid for
the Distributor's services as distributor of the shares of the Funds in
connection with any activities or expenses primarily intended to result in the
sale of the Class B shares of the Fund, including, but not limited to, payment
of compensation, including incentive compensation, to securities dealers (which
may include the Distributor itself) and other financial institutions and
organizations to obtain various distribution related and/or administrative
services for the Fund. These services include, among other things, processing
new shareholder account applications, preparing and transmitting to the Fund's
Transfer Agent computer processable tapes of all transactions by customers and
serving as the primary source of information to customers in answering questions
concerning the Fund and their transactions with the Fund. The Distributor is
also authorized to engage in advertising, the preparation and distribution of
sales literature and other promotional activities on behalf of the Fund. In
addition, this Plan hereby authorizes payment by the Fund of the cost of
preparing, printing and distributing the Fund's Prospectuses and Statements of
Additional Information to prospective investors and of implementing and
operating the Plan. Distribution expenses also include an allocation of overhead
of the Distributor and accruals for interest on the amount of distribution
expenses that exceed distribution fees and contingent deferred sales charges
received by the Distributor. Payments under the Plan are not tied exclusively
to actual distribution and service expenses, and the payments may exceed
distribution and service expenses actually incurred.
The amount set forth in paragraph 1.B. of this Plan may be used by the
Distributor to pay securities dealers (which may include the Distributor itself)
and other financial institutions and organizations for servicing shareholder
accounts, including a continuing fee which may accrue immediately after the sale
of shares.
3. This Plan shall not take effect with respect to the Class B Shares of
the Fund until it has been approved by a vote of the then sole shareholder of
the Class B Shares of the Fund.
4. This Plan shall not take effect until it, with any related
agreements, has been approved by votes of a majority of both (a) the Directors
of the Company and (b) those Directors of the Company who are not "interested
persons" of the Company (as defined in the Act) and who have no direct or
indirect financial interest in the operation of this Plan or any agreements
related to it (the "Rule 12b-1 Directors"), cast in person at a meeting (or
meetings) called for the purpose of voting on this Plan and such related
agreements.
5. After approval as set forth in paragraphs 3 and 4, this Plan shall
take effect. The Plan shall continue in full force and effect as to the Class B
shares of the Fund for so long as such continuance is specifically approved at
least annually in the manner provided for approval of this Plan in paragraph 4.
6. The Distributor shall provide to the Directors of the Company, and
the Directors shall review, at least quarterly, a written report of the amounts
so expended and the purposes for which such expenditures were made.
2
<PAGE>
7. This Plan may be terminated as to the Fund at any time, without
payment of any penalty, by vote of the Directors of the Company, by vote of a
majority of the Rule 12b-1 Directors, or by a vote of a majority of the
outstanding voting securities of Class B shares of the Fund on not more than 30
days' written notice to any other party to the Plan.
8. This Plan may not be amended to increase materially the amount of
distribution fee (including any service fee) provided for in paragraph 1 hereof
unless amendment is approved in the manner provided for initial approval in
paragraph 3 hereof, and no material amendment to the Plan shall be made unless
approved in the manner provided for approval and annual renewal in paragraph 4
hereof.
9. While this Plan is in effect, the selection and nomination of
Directors who are not interested persons (as defined in the Act) of the Company
shall be committed to the discretion of the Directors who are not such
interested persons.
10. The Company shall preserve copies of this Plan and any related
agreements and all reports made to paragraph 6 hereof, for a period of not less
than six years from the date of this Plan, any such agreement or any such
report, as the case may be, the first two yew in an easily accessible place.
IN WITNESS WHEREOF, the Company, on behalf of the Fund, and the Distributor
have executed this Service and Distribution Plan as of the 5th day of May, 1998.
THE MUNDER FUNDS, INC.
By: /s/ Lisa Anne Rosen
------------------------------------
FUNDS DISTRIBUTOR, INC.
BY: /s/ Marie Connolly
------------------------------------
3
<PAGE>
Exhibit 99(m)(38)
Service and Distribution Plan
Class C Shares of
Munder NetNet Fund
<PAGE>
SERVICE AND DISTRIBUTION PLAN
WHEREAS, The Munder Funds, Inc. (the "Company") engages in business as an
open-end investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "Act");
WHEREAS, shares of common stock of the Company are currently divided into
series of shares, one of which is designated as Munder NetNet Fund (the "Fund");
WHEREAS, shares of common stock of the Fund are divided into classes of
shares, one of which is designated Class C;
WHEREAS, the Company employs Funds Distributor, Inc. (the "Distributor") as
distributor of the securities of which it is the issuer;
WHEREAS, the Company and the Distributor have entered into a Distribution
Agreement pursuant to which the Company has employed the Distributor in such
capacity during the continuous offering of shares of the Company; and
WHEREAS, this Service and Distribution Plan (the "Plan") was adopted and
approved by the Company on August 4, 1998;
NOW, THEREFORE, the Company hereby adopts on behalf of the Fund with
respect to its Class C shares, and the Distributor hereby agrees to the terms
of, the Plan, in accordance with Rule 12b-1 under the Act on the following terms
and conditions:
1. A. The Fund shall pay to the Distributor, as the distributor of the
Class C shares of the Fund, a fee for distribution of the shares at the rate of
0.75% on an annualized basis of the average daily net assets of the Fund's Class
C shares, provided that, at any time such payments is made, whether or not this
Plan continues in effect, the making thereof will not cause the limitation upon
such payments established by this Plan to be exceeded. Such fee shall be
calculated and accrued daily and paid at such intervals as the Board of
Directors shall determine, subject to any applicable restriction imposed by
rules of the National Association of Securities Dealers, Inc.
B. In addition to the distribution fee distributed above, the Fund shall
pay to the Distributor, as the distributor of the Class C shares of the Fund, a
service fee at the rate of .25% on an annualized basis of the average daily net
asset of the Fund's Class C shares, provided that, at any time such payment is
made, whether or not this Plan continues in effect, the making thereof will not
cause the limitation upon such payments established by this Plan to be exceeded.
Such fee shall be calculated and accrued daily and paid at such intervals as the
Board of Directors shall determine, subject to any applicable restriction
imposed by rules of the National Securities Association of Dealers, Inc.
1
<PAGE>
2. The amount set forth in paragraph 1.A. of this Plan shall be paid for
the Distributor's services as distributor of the shares of the Funds in
connection with any activities or expenses primarily intended to result in the
sale of the Class C shares of the Fund, including, but not limited to, payment
of compensation, including incentive compensation, to securities dealers (which
may include the Distributor itself) and other financial institutions and
organizations to obtain various distribution related and/or administrative
services for the Fund. These services include, among other things, processing
new shareholder account applications, preparing and transmitting to the Fund's
Transfer Agent computer processable tapes of all transactions by customers and
serving as the primary source of information to customers in answering questions
concerning the Fund and their transactions with the Fund. The Distributor is
also authorized to engage in advertising, the preparation and distribution of
sales literature and other promotional activities on behalf of the Fund. In
addition, this Plan hereby authorizes payment by the Fund of the cost of
preparing, printing and distributing the Fund's Prospectuses and Statements of
Additional Information to prospective investors and of implementing and
operating the Plan. Distribution expenses also include an allocation of overhead
of the Distributor and accruals for interest on the amount of distribution
expenses that exceed distribution fees and contingent deferred sales charges
received by the Distributor. Payments under the Plan are not tied exclusively to
actual distribution and service expenses, and the payments may exceed
distribution and service expenses actually incurred.
The amount set forth in paragraph 1.B. of this Plan may be used by the
Distributor to pay securities dealers (which may include the Distributor itself)
and other financial institutions and organizations for servicing shareholder
accounts, including a continuing fee which may accrue immediately after the sale
of shares.
3. This Plan shall not take effect with respect to the Class C Shares of
the Fund until it has been approved by a vote of the then sole shareholder of
the Class C Shares of the Fund.
4. This Plan shall not take effect until it, with any related agreements,
has been approved by votes of a majority of both (a) the Directors of the
Company and (b) those Directors of the Company who are not "interested persons"
of the Company (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan or any agreements related to it
(the "Rule 12b-1 Directors"), cast in person at a meeting (or meetings) called
for the purpose of voting on this Plan and such related agreements.
5. After approval as set forth in paragraphs 3 and 4, this Plan shall
take effect. The Plan shall continue in full force and effect as to the Class C
shares of the Fund for so long as such continuance is specifically approved at
least annually in the manner provided for approval of this Plan in paragraph 4.
6. The Distributor shall provide to the Directors of the Company, and the
Directors shall review, at least quarterly, a written report of the amounts so
expended and the purposes for which such expenditures were made.
2
<PAGE>
7. This Plan may be terminated as to the Fund at any time, without
payment of any penalty, by vote of the Directors of the Company, by vote of a
majority of the Rule 12b-1 Directors, or by a vote of a majority of the
outstanding voting securities of Class C shares of the Fund on not more than 30
days' written notice to any other party to the Plan.
8. This Plan may not be amended to increase materially the amount of
distribution fee (including any service fee) provided for in paragraph 1 hereof
unless amendment is approved in the manner provided for initial approval in
paragraph 3 hereof, and no material amendment to the Plan shall be made unless
approved in the manner provided for approval and annual renewal in paragraph 4
hereof.
9. While this Plan is in effect, the selection and nomination of
Directors who are not interested persons (as defined in the Act) of the Company
shall be committed to the discretion of the Directors who are not such
interested persons.
10. The Company shall preserve copies of this Plan and any related
agreements and all reports made to paragraph 6 hereof, for a period of not less
than six years from the date of this Plan, any such agreement or any such
report, as the case may be, the first two years in an easily accessible place.
IN WITNESS WHEREOF, the Company, on behalf of the Fund, and the Distributor
have executed this Service and Distribution Plan as of the 4th day of August,
1998.
THE MUNDER FUNDS, INC.
By: /s/ Lisa Anne Rosen
----------------------------
FUNDS DISTRIBUTOR, INC.
By: /s/ Marie Connolly
----------------------------
3
<PAGE>
Exhibit 99(m)(42)
Service Plan
Class A Shares of
Munder Technology Fund
<PAGE>
SERVICE PLAN
WHEREAS, The Munder Funds, Inc. (the "Company") engages in business as an
open-end investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "Act");
WHEREAS, shares of common stock of the Company are currently divided into
series of shares, one of which is designated as Munder Technology Fund (the
"Fund");
WHEREAS, shares of common stock of the Fund are divided into classes of
shares, one of which is designated Class A;
WHEREAS, the Company employs Funds Distributor, Inc. (the "Distributor") as
distributor of the securities of which it is the issuer;
WHEREAS, the Company and the Distributor have entered into a Distribution
Agreement pursuant to which the Company has employed the Distributor in such
capacity during the continuous offering of shares of the Company; and
WHEREAS, this Service Plan (the "Plan") was adopted and approved by the
Company on May 4, 1999;
NOW, THEREFORE, the Company hereby adopts on behalf of the Fund with
respect to its Class A shares, and the Distributor hereby agrees to the terms
of, the Plan, in accordance with Rule 12b-1 under the Act on the following terms
and conditions:
1. The Fund shall pay to the Distributor, as the distributor of the Class
A shares of the Fund, a service fee at the rate of .25% on an annualized basis
of the average daily net assets of the Fund's Class A shares, provided that, at
any time such payments is made, whether or not this Plan continues in effect,
the making thereof will not cause the limitation upon such payments established
by this Plan to be exceeded. Such fee shall be calculated and accrued daily and
paid at such intervals as the Board of Directors shall determine, subject to any
applicable restriction imposed by rules of the National Association of
Securities Dealers, Inc.
2. The amount set forth in paragraph 1 of this Plan may be used by the
Distributor to pay securities dealers (which may include the Distributor itself)
and other financial institutions and organizations for servicing shareholder
accounts, including a continuing fee which may accrue immediately after the sale
of shares.
3. The Plan shall not take effect with respect to the Class A Shares of
the Fund until is has been approved by a vote of the then sole shareholder of
the Class A Shares of the Fund.
4. This Plan shall not take effect until it, with any related agreements,
has been approved by votes of a majority of both (a) the Directors of the
Company and (b) those Directors of the Company who are not "interested persons"
of the Company (as defined in the Act) and
1
<PAGE>
who have no direct or indirect financial interest in the operation of this Plan
or any agreements related to it (the "Rule 12b-1 Directors"), cast in person at
a meeting (or meetings) called for the purpose of voting on this Plan and such
related agreements.
5. After approval as set forth in paragraphs 3 and 4, this Plan shall take
effect. The Plan shall continue in full force and effect as to the Class A
shares of the Fund for so long as such continuance is specifically approved at
least annually in the manner provided for approval of this Plan in paragraph 4.
6. The Distributor shall provide to the Directors of the Company, and the
Directors shall review, at least quarterly, a written report of the amounts so
expended and the purposes for which such expenditures were made.
7. This Plan may be terminated as to the Fund at any time, without payment
of any penalty, by vote of the Directors of the Company, by vote of a majority
of the Rule 12b-1 Directors, or by a vote of a majority of the outstanding
voting securities of Class A shares of the Fund on not more than 30 days'
written notice to any other party to the Plan.
8. This Plan may not be amended to increase materially the amount of
service fee provided for in paragraph 1 hereof unless such amendment is approved
in the manner provided for initial approval in paragraph 3 hereof, and no
material amendment to the Plan shall be made unless approved in the manner
provided for approval and annual renewal in paragraph 4 hereof.
9. While this Plan is in effect, the selection and nomination of Directors
who are not interested persons (as defined in the Act) of the Company shall be
committed to the discretion of the Directors who are not such interested
persons.
10. The Company shall preserve copies of this Plan and any related
agreements and all reports made to paragraph 6 hereof, for a period of not less
than six years from the date of this Plan, any such agreement or any such
report, as the case may be, the first two years in an easily accessible place.
IN WITNESS WHEREOF, the Company, on behalf of the Fund, and the Distributor
have executed this Service Plan as of the 4th day of May, 1999.
THE MUNDER FUNDS, INC.
By:___________________________________
FUNDS DISTRIBUTOR, INC.
By:___________________________________
2
<PAGE>
Exhibit 99(m)(43)
Service and Distribution Plan
Class B Shares of
Munder Technology Fund
<PAGE>
SERVICE AND DISTRIBUTION PLAN
WHEREAS, The Munder Funds, Inc. (the "Company") engages in business as an
open-end investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "Act");
WHEREAS, shares of common stock of the Company are currently divided into
series of shares, one of which is designated as Munder Technology Fund (the
"Fund");
WHEREAS, shares of common stock of the Fund are divided into classes of
shares, one of which is designated Class B;
WHEREAS, the Company employs Funds Distributor, Inc. (the "Distributor") as
distributor of the securities of which it is the issuer;
WHEREAS, the Company and the Distributor have entered into a Distribution
Agreement pursuant to which the Company has employed the Distributor in such
capacity during the continuous offering of shares of the Company; and
WHEREAS, this Service and Distribution Plan (the "Plan") was adopted and
approved by the Company on May 4, 1999;
NOW, THEREFORE, the Company hereby adopts on behalf of the Fund with
respect to its Class B shares, and the Distributor hereby agrees to the terms
of, the Plan, in accordance with Rule 12b-1 under the Act on the following terms
and conditions:
1. A. The Fund shall pay to the Distributor, as the distributor of the
Class B shares of the Fund, a fee for distribution of the shares at the rate of
0.75% on an annualized basis of the average daily net assets of the Fund's Class
B shares, provided that, at any time such payments is made, whether or not this
Plan continues in effect, the making thereof will not cause the limitation upon
such payments established by this Plan to be exceeded. Such fee shall be
calculated and accrued daily and paid at such intervals as the Board of
Directors shall determine, subject to any applicable restriction imposed by
rules of the National Association of Securities Dealers, Inc.
B. In addition to the distribution fee distributed above, the Fund shall
pay to the Distributor, as the distributor of the Class B shares of the Fund, a
service fee at the rate of .25% on an annualized basis of the average daily net
asset of the Fund's Class B shares, provided that, at any time such payment is
made, whether or not this Plan continues in effect, the making thereof will not
cause the limitation upon such payments established by this Plan to be exceeded.
Such fee shall be calculated and accrued daily and paid at such intervals as the
Board of Directors shall determine, subject to any applicable restriction
imposed by rules of the National Securities Association of Dealers, Inc.
1
<PAGE>
2. The amount set forth in paragraph 1.A. of this Plan shall be paid for
the Distributor's services as distributor of the shares of the Funds in
connection with any activities or expenses primarily intended to result in the
sale of the Class B shares of the Fund, including, but not limited to, payment
of compensation, including incentive compensation, to securities dealers (which
may include the Distributor itself) and other financial institutions and
organizations to obtain various distribution related and/or administrative
services for the Fund. These services include, among other things, processing
new shareholder account applications, preparing and transmitting to the Fund's
Transfer Agent computer processable tapes of all transactions by customers and
serving as the primary source of information to customers in answering questions
concerning the Fund and their transactions with the Fund. The Distributor is
also authorized to engage in advertising, the preparation and distribution of
sales literature and other promotional activities on behalf of the Fund. In
addition, this Plan hereby authorizes payment by the Fund of the cost of
preparing, printing and distributing the Fund's Prospectuses and Statements of
Additional Information to prospective investors and of implementing and
operating the Plan. Distribution expenses also include an allocation of overhead
of the Distributor and accruals for interest on the amount of distribution
expenses that exceed distribution fees and contingent deferred sales charges
received by the Distributor. Payments under the Plan are not tied exclusively to
actual distribution and service expenses, and the payments may exceed
distribution and service expenses actually incurred.
The amount set forth in paragraph 1.B. of this Plan may be used by the
Distributor to pay securities dealers (which may include the Distributor itself)
and other financial institutions and organizations for servicing shareholder
accounts, including a continuing fee which may accrue immediately after the sale
of shares.
3. This Plan shall not take effect with respect to the Class B Shares of
the Fund until it has been approved by a vote of the then sole shareholder of
the Class B Shares of the Fund.
4. This Plan shall not take effect until it, with any related agreements,
has been approved by votes of a majority of both (a) the Directors of the
Company and (b) those Directors of the Company who are not "interested persons"
of the Company (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan or any agreements related to it
(the "Rule 12b-1 Directors"), cast in person at a meeting (or meetings) called
for the purpose of voting on this Plan and such related agreements.
5. After approval as set forth in paragraphs 3 and 4, this Plan shall
take effect. The Plan shall continue in full force and effect as to the Class B
shares of the Fund for so long as such continuance is specifically approved at
least annually in the manner provided for approval of this Plan in paragraph 4.
6. The Distributor shall provide to the Directors of the Company, and the
Directors shall review, at least quarterly, a written report of the amounts so
expended and the purposes for which such expenditures were made.
2
<PAGE>
7. This Plan may be terminated as to the Fund at any time, without
payment of any penalty, by vote of the Directors of the Company, by vote of a
majority of the Rule 12b-1 Directors, or by a vote of a majority of the
outstanding voting securities of Class B shares of the Fund on not more than 30
days' written notice to any other party to the Plan.
8. This Plan may not be amended to increase materially the amount of
distribution fee (including any service fee) provided for in paragraph 1 hereof
unless amendment is approved in the manner provided for initial approval in
paragraph 3 hereof, and no material amendment to the Plan shall be made unless
approved in the manner provided for approval and annual renewal in paragraph 4
hereof.
9. While this Plan is in effect, the selection and nomination of
Directors who are not interested persons (as defined in the Act) of the Company
shall be committed to the discretion of the Directors who are not such
interested persons.
10. The Company shall preserve copies of this Plan and any related
agreements and all reports made to paragraph 6 hereof, for a period of not less
than six years from the date of this Plan, any such agreement or any such
report, as the case may be, the first two years in an easily accessible place.
IN WITNESS WHEREOF, the Company, on behalf of the Fund, and the Distributor
have executed this Service and Distribution Plan as of the 4th day of May, 1999.
THE MUNDER FUNDS, INC.
By:
---------------------------------
FUNDS DISTRIBUTOR, INC.
By:
---------------------------------
3
<PAGE>
Exhibit 99(m)(44)
Service and Distribution Plan
Class C Shares of
Munder Technology Fund
<PAGE>
SERVICE AND DISTRIBUTION PLAN
WHEREAS, The Munder Funds, Inc. (the "Company") engages in business as an
open-end investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "Act");
WHEREAS, shares of common stock of the Company are currently divided into
series of shares, one of which is designated as Munder Technology Fund (the
"Fund");
WHEREAS, shares of common stock of the Fund are divided into classes of
shares, one of which is designated Class C;
WHEREAS, the Company employs Funds Distributor, Inc. (the "Distributor") as
distributor of the securities of which it is the issuer;
WHEREAS, the Company and the Distributor have entered into a Distribution
Agreement pursuant to which the Company has employed the Distributor in such
capacity during the continuous offering of shares of the Company; and
WHEREAS, this Service and Distribution Plan (the "Plan") was adopted and
approved by the Company on May 4, 1999;
NOW, THEREFORE, the Company hereby adopts on behalf of the Fund with
respect to its Class C shares, and the Distributor hereby agrees to the terms
of, the Plan, in accordance with Rule 12b-1 under the Act on the following terms
and conditions:
1. A. The Fund shall pay to the Distributor, as the distributor of the
Class C shares of the Fund, a fee for distribution of the shares at the rate of
0.75% on an annualized basis of the average daily net assets of the Fund's Class
C shares, provided that, at any time such payments is made, whether or not this
Plan continues in effect, the making thereof will not cause the limitation upon
such payments established by this Plan to be exceeded. Such fee shall be
calculated and accrued daily and paid at such intervals as the Board of
Directors shall determine, subject to any applicable restriction imposed by
rules of the National Association of Securities Dealers, Inc.
B. In addition to the distribution fee distributed above, the Fund
shall pay to the Distributor, as the distributor of the Class C shares of the
Fund, a service fee at the rate of .25% on an annualized basis of the average
daily net asset of the Fund's Class C shares, provided that, at any time such
payment is made, whether or not this Plan continues in effect, the making
thereof will not cause the limitation upon such payments established by this
Plan to be exceeded. Such fee shall be calculated and accrued daily and paid at
such intervals as the Board of Directors shall determine, subject to any
applicable restriction imposed by rules of the National Securities Association
of Dealers, Inc.
1
<PAGE>
2. The amount set forth in paragraph 1.A. of this Plan shall be paid for
the Distributor's services as distributor of the shares of the Funds in
connection with any activities or expenses primarily intended to result in the
sale of the Class C shares of the Fund, including, but not limited to, payment
of compensation, including incentive compensation, to securities dealers (which
may include the Distributor itself) and other financial institutions and
organizations to obtain various distribution related and/or administrative
services for the Fund. These services include, among other things, processing
new shareholder account applications, preparing and transmitting to the Fund's
Transfer Agent computer processable tapes of all transactions by customers and
serving as the primary source of information to customers in answering questions
concerning the Fund and their transactions with the Fund. The Distributor is
also authorized to engage in advertising, the preparation and distribution of
sales literature and other promotional activities on behalf of the Fund. In
addition, this Plan hereby authorizes payment by the Fund of the cost of
preparing, printing and distributing the Fund's Prospectuses and Statements of
Additional Information to prospective investors and of implementing and
operating the Plan. Distribution expenses also include an allocation of overhead
of the Distributor and accruals for interest on the amount of distribution
expenses that exceed distribution fees and contingent deferred sales charges
received by the Distributor. Payments under the Plan are not tied exclusively to
actual distribution and service expenses, and the payments may exceed
distribution and service expenses actually incurred.
The amount set forth in paragraph 1.B. of this Plan may be used by the
Distributor to pay securities dealers (which may include the Distributor itself)
and other financial institutions and organizations for servicing shareholder
accounts, including a continuing fee which may accrue immediately after the sale
of shares.
3. This Plan shall not take effect with respect to the Class C Shares of
the Fund until it has been approved by a vote of the then sole shareholder of
the Class C Shares of the Fund.
4. This Plan shall not take effect until it, with any related agreements,
has been approved by votes of a majority of both (a) the Directors of the
Company and (b) those Directors of the Company who are not "interested persons"
of the Company (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan or any agreements related to it
(the "Rule 12b-1 Directors"), cast in person at a meeting (or meetings) called
for the purpose of voting on this Plan and such related agreements.
5. After approval as set forth in paragraphs 3 and 4, this Plan shall
take effect. The Plan shall continue in full force and effect as to the Class C
shares of the Fund for so long as such continuance is specifically approved at
least annually in the manner provided for approval of this Plan in paragraph 4.
6. The Distributor shall provide to the Directors of the Company, and the
Directors shall review, at least quarterly, a written report of the amounts so
expended and the purposes for which such expenditures were made.
2
<PAGE>
7. This Plan may be terminated as to the Fund at any time, without
payment of any penalty, by vote of the Directors of the Company, by vote of a
majority of the Rule 12b-1 Directors, or by a vote of a majority of the
outstanding voting securities of Class C shares of the Fund on not more than 30
days' written notice to any other party to the Plan.
8. This Plan may not be amended to increase materially the amount of
distribution fee (including any service fee) provided for in paragraph 1 hereof
unless amendment is approved in the manner provided for initial approval in
paragraph 3 hereof, and no material amendment to the Plan shall be made unless
approved in the manner provided for approval and annual renewal in paragraph 4
hereof.
9. While this Plan is in effect, the selection and nomination of
Directors who are not interested persons (as defined in the Act) of the Company
shall be committed to the discretion of the Directors who are not such
interested persons.
10. The Company shall preserve copies of this Plan and any related
agreements and all reports made to paragraph 6 hereof, for a period of not less
than six years from the date of this Plan, any such agreement or any such
report, as the case may be, the first two years in an easily accessible place.
IN WITNESS WHEREOF, the Company, on behalf of the Fund, and the Distributor
have executed this Service and Distribution Plan as of the 4th day of May, 1999.
THE MUNDER FUNDS, INC.
By:
---------------------------------
FUNDS DISTRIBUTOR, INC.
By:
---------------------------------
3
<PAGE>
Exhibit 99(o)
THE MUNDER FUNDS, INC.
Fourth Amended and Restated Multi-Class Plan
--------------------------------------------
Introduction
------------
The purpose of this Plan is to specify the attributes of the classes of
shares offered by The Munder Funds, Inc. (the "Company"), including the sales
loads, expense allocations, conversion features and exchange features of each
class, as required by Rule 18f-3 under the Investment Company Act of 1940, as
amended (the "1940 Act").
Each of the Company's investment portfolios (each, a "Fund"), other than
the Munder All-Season Conservative Fund, the Munder All-Season Moderate Fund and
the Munder All-Season Aggressive Fund (together, the "Lifestyle Funds"), the
Money Market Fund, the Munder NetNet Fund the Munder Short Term Treasury Fund
and the Munder Technology Fund, issues its shares of common stock in five
classes: "Class A" Shares, "Class B" Shares, "Class C" Shares, "Class K" Shares
and "Class Y" Shares. The Munder Short Term Treasury Fund issues its share of
common stock in five classes: "Class A" Shares, "Class B" Shares, "Class C"
Shares, "Class Y" Shares and "Michigan Municipal" Shares. The Money Market Fund
issues its shares of common stock in four classes: "Class A" Shares, "Class B"
Shares, "Class C" Shares and "Class Y" Shares. The Munder NetNet Fund and the
Munder Technology Fund issue shares of common stock in four classes: "Class A"
Shares, "Class B" Shares, "Class C" Shares and "Class Y" Shares. Each of the
Lifestyle Funds issues its shares of common stock in three classes: "Class A"
Shares, "Class B" Shares and "Class Y" Shares. Shares of each Class of a Fund
shall represent an equal pro rata interest in such Fund, and generally, shall
have identical voting, dividend, liquidation and other rights, preferences,
powers, restrictions, limitations, qualifications, and terms and conditions,
except that: (a) each Class shall have a different designation; (b) each Class
may have a different sales charge structure; (c) each Class of shares shall bear
any Class Expenses, as defined below; (d) each Class shall have exclusive voting
rights on any matter submitted to shareholders that relates solely to its
arrangement and each Class shall have separate voting rights on any matter
submitted to shareholders in which the interests of one Class differ from the
interests of any other Class; and (e) each Class may have different exchange
and/or conversion features as described below.
Allocation of Expenses
----------------------
To the extent practicable, certain expenses (other than Class Expenses as
defined below which shall be allocated more specifically), shall be subtracted
from the gross income allocated to each Class of a Fund on the basis of net
assets of each Class of the Fund. These expenses include:
(1) Expenses incurred by the Company (for example, fees of Directors,
auditors, and legal counsel) not attributable to a particular Fund or to a
particular Class of shares of a Fund ("Company Level Expenses"); and
(2) Expenses incurred by a Fund not attributable to any particular Class
of the Fund's shares (for example, advisory fees, custodial fees, or other
expenses relating to the management of the Fund's assets) ("Fund Expenses").
<PAGE>
Expenses attributable to a particular Class ("Class Expenses") shall be
limited to: (i) payments made pursuant to a Service Plan, Service and
Distribution Plan or Shareholder Servicing Plan; (ii) transfer agent fees
attributable to a specific Class; (iii) printing and postage expenses related to
preparing and distributing materials such as shareholder reports, prospectuses
and proxies to current shareholders of a specific Class; (iv) Blue Sky fees
incurred by a Class; (v) Securities and Exchange Commission registration fees
incurred by a Class; (vi) the expense of administrative personnel and services
to support the shareholders of a specific Class; (vii) litigation or other legal
expenses relating solely to one Class; and (viii) Directors' fees incurred as a
result of issues relating solely to one Class. Expenses in category (i) above
must be allocated to the Class for which such expenses are incurred. For all
other "Class Expenses" listed in categories (ii) - (viii) above, the President
and Chief Financial Officer shall determine, subject to Board approval or
ratification, which such categories of expenses will be treated as Class
Expenses, consistent with applicable legal principles under the Act and the
Internal Revenue Code of 1986, as amended, any private letter ruling with
respect to the Company issued by the Internal Revenue Service.
Therefore, expenses of a Fund shall be apportioned to each Class of shares
depending upon the nature of the expense item. Company Level Expenses and Fund
Expenses will be allocated among the Classes of shares based on their relative
net asset values. Approved Class Expenses shall be allocated to the particular
Class to which they are attributable. In addition, certain expenses may be
allocated differently if their method of imposition changes. Thus, if a Class
Expense can no longer be attributed to a Class, it shall be charged to a Fund
for allocation among Classes, as may be appropriate; however, any additional
Class Expenses not specifically identified above which are subsequently
identified and determined to be properly allocated to one Class of shares shall
not be so allocated until approved by the Board of Directors of the Company in
light of the requirements of the Act and the Internal Revenue Code of 1986, as
amended.
Class A Shares
--------------
Class A Shares of a Fund are offered at net asset value plus, for Funds
other than the Money Market Fund, an initial sales charge as set forth in the
then-current prospectus of the Fund. The initial sales charge may be waived or
reduced on certain types of purchases as set forth in a Fund's then-current
prospectus. A contingent deferred sales charge may apply to certain redemptions
made within a specified period as set forth in the Fund's then-current
prospectus. Class A Shares of a Fund may be exchanged for Class A Shares of
another fund of the Company, The Munder Framlington Funds Trust or The Munder
Funds Trust subject to any sales charge differential.
Class A Shares of the Funds pay a Rule 12b-1 service fee of up to 0.25%
(annualized) of the average daily net assets of a Fund's Class A Shares.
Distribution and support services provided by brokers, dealers and other
institutions may include forwarding sales literature and advertising materials
provided by the Company's distributor; processing purchase, exchange and
redemption requests from customers placing orders with the Company's transfer
agent; processing dividend and distribution payments from the Funds of the
Company on behalf of customers; providing information periodically to customers
showing their positions in Class A Shares; providing sub-accounting with respect
to Class A Shares beneficially owned by customers or the information necessary
for sub-accounting; responding to inquiries from customers concerning their
investments in Class A Shares; arranging for bank wires; and providing such
other similar services as may reasonably be requested.
2
<PAGE>
Class B Shares
--------------
Class B Shares of the Funds are offered without an initial sales charge but
are subject to a contingent deferred sales charge payable upon certain
redemptions as set forth in the Fund's then-current prospectus. Class B Shares
of a Fund may be exchanged for Class B Shares of another fund of the Company,
The Munder Framlington Funds Trust or The Munder Funds Trust subject to any
sales charge differential.
Class B Shares of a Fund will automatically convert to Class A Shares of
the Fund on the first business day of the month on which the sixth anniversary
of the issuance of the Class B Shares occurs. The conversion will be effected at
the relative net asset values per share of the two classes.
Class B Shares pay a Rule 12b-1 service fee of up to 0.25% (annualized) and
a distribution fee of up to 0.75% (annualized) of the average daily net assets
of a Fund's Class B Shares. Brokers, dealers and other institutions may maintain
Class B shareholder accounts and provide personal service to Class B
shareholders. Services relating to the sale of Class B Shares may include, but
not be limited to, preparation, printing and distribution of prospectuses, sales
literature and advertising materials by the Company's distributor, or, as
applicable, brokers, dealer or other institutions; commissions, incentive
compensation or other compensation to, and expenses of, account executives or
other employees of the Company's distributor or brokers, dealers and other
institutions; overhead and other office expenses of the Company's distributor
attributable to distribution or sales support activities; and opportunity costs
related to the foregoing (which may be calculated as a carrying charge on the
Company's distributor unreimbursed expenses) incurred in connection with
distribution or sales support activities. The overhead and other office expenses
referenced above may include, without limitation, (a) the expenses of operating
the Company's distributor's offices in connection with the sale of the Class B
Shares of the Funds, including lease costs, the salaries and employee benefit
costs of administrative, operations and support personnel, utility costs,
communication costs and the costs of stationery and supplies, (b) the costs of
client sales seminars and travel related to distribution and sales support
activities, and (c) other expenses relating to distribution and sales support
activities.
Class C Shares
--------------
Class C Shares of the Funds are offered at net asset value. A contingent
deferred sales charge may apply to certain redemptions made within the first
year of investing as set forth in the relevant Fund's then-current prospectus.
Class C Shares of a Fund may be exchanged for Class C Shares of another fund of
the Company, The Munder Framlington Funds Trust and The Munder Funds Trust
subject to any sales charge differential.
Class C Shares pay a Rule 12b-1 service fee up to 0.25% (annualized) and a
distribution fee of up to 0.75% (annualized) of the average daily net assets of
a Fund's Class C Shares. Brokers, dealers and other institutions may maintain
Class C shareholder accounts and provide personal services to Class C
shareholders. Services relating to the sale of Class C Shares may include, but
not be limited to, preparation, printing and distribution of prospectuses, sales
literature and advertising materials by the Company's distributor, or, as
applicable, brokers, dealers or other institutions; commissions, incentive
compensation or other compensation to, and expenses of, account executives or
other employees of the Company's distributor or brokers, dealers and other
institutions; overhead and other office expenses of the Company's distributor
attributable to distribution or sales support activities; and opportunity costs
related to the foregoing (which may be calculated as a carrying charge on the
Company's distributor
3
<PAGE>
unreimbursed expenses) incurred in connection with distribution or sales support
activities. The overhead and other office expenses referenced above may include,
without limitation, (a) the expenses of operating the Company's distributor's
offices in connection with the sale of the Class C Shares of the Funds,
including lease costs, the salaries and employee benefit costs of
administrative, operations and support personnel, utility costs, communication
costs and costs of stationery and supplies; (b) the costs of client sales
seminars and travel related to distribution and sales support activities, and
(c) other expenses relating to distribution and sales support activities.
Class Y Shares
--------------
Class Y Shares of a Fund are offered at net asset value. Class Y Shares of
a Fund may be exchanged for Class Y Shares of another fund of the Company, The
Munder Framlington Funds Trust or The Munder Funds Trust without the imposition
of a sales charge.
Class K Shares
--------------
Class K Shares of a Fund are offered at net asset value. Class K Shares of
a Fund may be exchanged for Class K Shares of another fund of the Company, The
Munder Framlington Funds Trust or The Munder Funds Trust without the imposition
of a sales charge.
Class K Shares pay a service fee of up to 0.25% (annualized) of the average
daily net assets of a Fund's Class K Shares. Services provided by brokers,
dealers and other institutions for such service fees include: processing
purchase, exchange and redemption requests from customers and placing orders
with the Company's transfer agent; processing dividend and distribution payments
from the Funds on behalf of customers; providing information periodically to
customers showing their positions in Class K Shares; providing sub-accounting
with respect to Class K Shares beneficially owned by customers or the
information necessary for sub-accounting; responding to inquiries from customers
concerning their investment in Class K Shares; arranging for bank wires; and
providing such other similar services as may reasonably be requested.
Michigan Municipal Shares
-------------------------
Michigan Municipal Shares of the Short Term Treasury Fund are offered at
net asset value.
4
