Exhibit 5(b)
FORM OF
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, made this 4th day of February, 1997, between St.
Clair Funds, Inc. ("St. Clair") on behalf of the 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 and Munder
Aggregate Bond Index Fund (each, a "Fund" and collectively, the
"Funds") and Munder Capital Management (the "Advisor"), a Delaware
partnership.
WHEREAS, St. Clair is a Maryland corporation authorized to
issue shares in series and is registered as an open-end management
investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and each Fund is a series of St. Clair;
WHEREAS, the Advisor is registered as an investment advisor
under the Investment Advisers Act of 1940, as amended ("Advisers
Act"); and
WHEREAS, St. Clair wishes to retain the Advisor to render
investment advisory services to the Funds, and the Advisor is
willing to furnish such services to the Funds;
NOW, THEREFORE, in consideration of the promises and mutual
covenants herein contained, it is agreed between St. Clair and the
Advisor as follows:
1. Appointment
St. Clair hereby appoints the Advisor to act as investment
advisor to the Funds for the periods and on the terms set forth
herein. The Advisor accepts the appointment and agrees to furnish
the services set forth herein for the compensation provided
herein.
2. Services as Investment Advisor
Subject to the general supervision and direction of the
Board of Directors of St. Clair, the Advisor will (a) manage each
Fund in accordance with the Fund's investment objective and
policies as stated in the Fund's Prospectus and the Statement of
Additional Information filed with the Securities and Exchange
Commission, as they may be amended from time to time; (b) make
investment decisions for the Funds; (c) place purchase and sale
orders on behalf of the Funds; and (d) employ professional
portfolio managers and securities analysts to provide research
services to the Funds. In providing those services, the Advisor
will provide the Funds with ongoing research, analysis, advice and
judgments regarding individual investments, general economic
conditions and trends and long-range investment policy. In
addition, the Advisor will furnish the Funds with whatever
statistical information the Funds may reasonably request with
respect to the securities that the Funds may hold or contemplate
purchasing.
The Advisor further agrees that, in performing its duties
hereunder, it will:
(a) comply with the 1940 Act and all rules and regulations
thereunder the Advisers Act, the Internal Revenue Code of 1986, as
amended (the "Code"), and all other applicable federal and state
laws and regulations, and with any applicable procedures adopted
by the Directors;
(b) use reasonable efforts to manage each Fund so that it
will qualify, and continue to qualify, as a regulated investment
company under Subchapter M of the Code and regulations issued
thereunder;
(c) maintain books and records with respect to the Funds'
securities transactions, render to the Board of Directors of St.
Clair such periodic and special reports as the Board may
reasonably request, and keep the Directors informed of
developments materially affecting the Funds' portfolios;
(d) make available to the Funds' administrator and St.
Clair, promptly upon their request, such copies of its investment
records and ledgers with respect to the Funds as may be required
to assist the administrator and St. Clair in their compliance with
applicable laws and regulations. The Advisor will furnish the
Directors with such periodic and special reports regarding the
Funds as they may reasonably request; and
(e) immediately notify St. Clair in the event that the
Advisor or any of its affiliates: (1) becomes aware that it is
subject to a statutory disqualification that prevents the Advisor
from serving as investment advisor pursuant to this Agreement; or
(2) becomes aware that it is the subject of an administrative
proceeding or enforcement action by the Securities and Exchange
Commission or other regulatory authority. The Advisor further
agrees to notify St. Clair immediately of any material fact known
to the Advisor respecting or relating to the Advisor that is not
contained in St. Clair's Registration Statement regarding the
Funds, or any amendment or supplement thereto, but that is
required to be disclosed therein, and of any statement contained
therein that becomes untrue in any material respect.
3. Documents
St. Clair has delivered properly certified or authenticated
copies of each of the following documents to the Advisor and will
deliver to it all future amendments and supplements thereto, if
any:
(a) certified resolution of the Board of Directors of St.
Clair authorizing the appointment of the Advisor and approving the
form of this Agreement;
(b) the Registration Statement as filed with the
Securities and Exchange Commission and any amendments thereto; and
(c) exhibits, powers of attorneys, certificates and any
and all other documents relating to or filed in connection with
the Registration Statement described above.
4. Brokerage
In selecting brokers or dealers to execute transactions on
behalf of the Funds, the Advisor will use its best efforts to seek
the best overall terms available. In assessing the best overall
terms available for any Fund transaction, the Advisor will
consider all factors it deems relevant, including, but not limited
to, the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the
broker or dealer and the reasonableness of the commission, if any,
for the specific transaction and on a continuing basis. In
selecting brokers or dealers to execute a particular transaction,
and in evaluating the best overall terms available, the Advisor is
authorized to consider the brokerage and research services (as
those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934, as amended (the "1934 Act")) provided to the
Funds and/or other accounts over which the Advisor or its
affiliates exercise investment discretion. In accordance with
Section 11(a) of the 1934 Act and Rule 11a2-2(T) thereunder and
subject to any other applicable laws and regulations, the Advisor
and its affiliates are authorized to effect portfolio transactions
for the Funds and to retain brokerage commissions on such
transactions.
5. Records
The Advisor agrees to maintain and to preserve for the
periods prescribed under the 1940 Act any such records as are
required to be maintained by the Advisor with respect to the Funds
by the 1940 Act. The Advisor further agrees that all records
which it maintains for the Funds are the property of the Funds and
it will promptly surrender any of such records upon request.
6. Standard of Care
The Advisor shall exercise its best judgment in rendering
the services under this Agreement. The Advisor shall not be
liable for any error of judgment or mistake of law or for any loss
suffered by a Fund or a Fund's shareholders in connection with the
matters to which this Agreement relates, provided that nothing
herein shall be deemed to protect or purport to protect the
Advisor against any liability to a Fund or to its shareholders to
which the Advisor would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of the Advisor's reckless
disregard of its obligations and duties under this Agreement. As
used in this Section 6, the term "Advisor" shall include any
officers, directors, employees, or other affiliates of the Advisor
performing services with respect to the Funds.
7. Compensation
In consideration of the services rendered pursuant to this
Agreement, each Fund will pay the Advisor a fee at an annual rate
equal to .05% of the average daily net assets of each Fund. This
fee shall be computed and accrued daily and payable monthly. For
the purpose of determining fees payable to the Advisor, the value
of a Fund's average daily net assets shall be computed at the
times and in the manner specified in the Fund's Prospectus or
Statement of Additional Information.
8. Expenses
The Advisor will bear all expenses in connection with the
performance of its services under this Agreement. Each Fund will
bear certain other expenses to be incurred in its operation,
including: taxes, interest, brokerage fees and commissions, if
any, fees of Directors of St. Clair who are not officers,
directors, or employees of the Advisor; Securities and Exchange
Commission fees and state blue sky fees; charges of custodians and
transfer and dividend disbursing agents; shareholder servicing
fees; the Fund's proportionate share of insurance premiums;
outside auditing and legal expenses; costs of maintenance of the
Fund's existence; costs attributable to investor services,
including, without limitation, telephone and personal expenses;
charges of an independent pricing service; costs of preparing and
printing prospectuses and statements of additional information for
regulatory purposes and for distribution to existing shareholders;
costs of shareholders' reports and meetings of the shareholders of
the Fund and of the officers of Board of Directors of St. Clair;
and any extraordinary expenses.
9. Services to Other Companies or Accounts
The investment advisory services of the Advisor to the Funds
under this Agreement are not to be deemed exclusive, and the
Advisor, or any affiliate thereof, shall be free to render similar
services to other investment companies and the clients (whether or
not their investment objectives and policies are similar to those
of the Funds) and to engage in the activities, so long as it
services hereunder are not impaired thereby.
10. Duration and Termination
This Agreement shall become effective on the date of this
Agreement and shall continue in effect with respect to a Fund,
unless sooner terminated as provided herein, for two years from
such date and shall continue from year to year thereafter,
provided each continuance is specifically approve at least
annually by (i) the vote of a majority of the Board of Directors
of St. Clair or (ii) a vote of a "majority" (as defined in the
0000 Xxx) of the Fund's outstanding voting securities, provided
that in either event the continuance is also approved by a
majority of the Board of Directors who are not "interested
persons" (as defined in the 0000 Xxx) of any party to this
Agreement, by vote cast in person at a meeting called for the
purpose of voting on such approval. This Agreement is terminable
with respect to a Fund, without penalty, on sixty (60) days'
written notice by the Board of Directors of St. Clair or by vote
of holders of a "majority" (as defined in the 0000 Xxx) of the
Fund's shares or upon ninety (90) days' written notice by the
Advisor. This Agreement will be terminated automatically in the
event of its "assignment" (as defined in the 1940 Act).
11. Amendment
No provision of this Agreement shall be changed, waived,
discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought, and no
amendment of this Agreement with respect to a Fund shall be
effective until approved by an affirmative vote of (i) a majority
of the outstanding voting securities of the Fund, and (ii) a
majority of the Directors of St. Clair, including a majority of
Directors who are not "interested persons" (as defined in the 0000
Xxx) of any party to this Agreement, cast in person at a meeting
called for the purpose of voting on such approval, if such
approval is required by applicable law.
12. Use of Name
It is understood that the name of Munder Capital Management
or any derivative thereof or logo associated with that name is the
valuable property of the Advisor and its affiliates, and that each
Fund has the right to use such name (or derivable or logo) only so
long as this Agreement shall continue with respect to the Fund.
Upon termination of this Agreement, each Fund shall forthwith
cease to use such name (or derivative or logo) and St. Clair shall
promptly amend its Articles of Incorporation to change the Funds'
names to comply herewith.
13. Miscellaneous
(a) This Agreement constitutes the full and complete
agreement of the parties hereto with respect to the subject matter
hereof.
(b) Titles or captions of sections contained in this
Agreement are inserted only as a matter of convenience and for
reference, and in no way define, limit, extend or describe the
scope of this Agreement or the intent of any provisions thereof.
(c) This Agreement may be executed in several
counterparts, all of which together shall for all purposes
constitute one Agreement, binding on all the parties.
(d) This Agreement and the rights and obligations of the
parties hereunder shall be governed by, and interpreted, construed
and enforced in accordance with the laws of the State of Michigan.
(e) If any provisions of this Agreement or the application
thereof to any party or circumstances shall be determined by any
court of competent jurisdiction to be invalid or unenforceable to
any extent, the remainder of this Agreement or the application of
such provision to such person circumstance, other than these as to
which it is so determined to be invalid or unenforceable, shall
not be affected thereby, and each provision hereof shall be valid
and shall be enforced to the fullest extent permitted by law.
(f) Notices of any kind to be given to the Advisor by St.
Clair shall be in writing and shall be duly given if mailed or
delivered to the Advisor at 000 Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000, or at such other address or to such individual as
shall be specified by the Advisor to St. Clair. Notices of any
kind to be given to St. Clair by the Advisor shall be in writing
and shall be duly given if mailed or delivered to 000 Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, or at such the address or to
such individual as shall be specified by St. Clair to the Advisor.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below on
the day and year first above written.
ST. CLAIR FUNDS, INC.
By:
MUNDER CAPITAL MANAGEMENT
By:
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