1933 Act File No. 33-20673
1940 Act File No. 811-5514
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. 31 ........................ X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 32 ....................................... X
VISION GROUP OF FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
5800 Corporate Drive, Pittsburgh, Pennsylvania 15237-7010
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esquire,
Federated Investors Tower,
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
___immediately upon filing pursuant to paragraph (b)
X_on May 1, 1998, pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a) (i)
on pursuant to paragraph (a) (i).
___75 days after filing pursuant to paragraph (a)(ii) on _________________
pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
_ This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Copy to:
Matthew G. Maloney, Esquire
Dickstein Shapiro Morin & Oshinsky LLP
2101 L Street, N.W.
Washington, D.C. 20037
<PAGE>
CROSS-REFERENCE SHEET
This amendment to the Registration Statement of Vision Group of Funds, Inc.,
which is comprised of eight portfolios: (1) Vision Money Market Fund, (a) Class
A Shares and (b) Class S Shares, (2) Vision Treasury Money Market Fund, (a)
Class A Shares and (b) Class S Shares, (3) Vision New York Tax-Free Money Market
Fund, (4) Vision New York Municipal Income Fund (formerly, Vision New York
Tax-Free Fund), (5) Vision U.S. Government Securities Fund, (6) Vision Growth
and Income Fund, (7) Vision Capital Appreciation Fund, and (8) Vision Equity
Income Fund, relates only to (1) Vision Money Market Fund and (2) Vision
Treasury Money Market Fund and is comprised of the following:
PART A. INFORMATION REQUIRED IN A PROSPECTUS.
Prospectus Heading
(Rule 404(c) Cross Reference)
Item 1. Cover Page....................(1-8) Cover Page.
Item 2. Synopsis......................(1-8) Summary of Fund Expenses.
Item 3. Condensed Financial
Information...................(1-7) Financial Highlights;
(1-7) How the Funds Show Performance.
Item 4. General Description of
Registrant....................(1-8) Synopsis; (1-7) How the Funds
Invest; (8) How the Fund Invests;
(1-7) Investment Objective; (1-8)
Investment Policies; (1-8) Acceptable
Investments; (1) Risk Factors
Associated with Foreign Investments;
(3,4) Investment Risks of New York
Municipal Securities; (3)
Concentration of Investments; (3)
Types of Municipal Securities; (3,4)
Temporary Investments; (1-3) Common
Fund Investment Techniques, Features
and Limitations; (4-8) Investment
Techniques, Features, and Limitations.
Item 5. Management of the Fund........(1-8) Fund Management, Distribution,
and Administration; (1-8) Board of
Directors; (1-8) Investment
Adviser; (1-8) Distribution of Fund
Shares; (1-8) Administration of
the Funds.
Item 6. Capital Stock and Other
Securities....................(1-8) Description of Fund Shares;
(1-8) Voting Rights and Other
Information; (1-8) Tax Information.
Item 7. Purchase of Securities Being
Offered.......................(1-7) How the Funds Value Their
Shares; (8) How the Fund Values its
Shares; (1-8) How to Buy Shares;
(1-8) How to Exchange Shares.
Item 8. Redemption or Repurchase......(1-8) How to Redeem Shares.
Item 9. Pending Legal Proceedings None.
<PAGE>
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION.
Item 10. Cover Page....................(1-8) Cover Page.
Item 11. Table of Contents.............(1-8) Table of Contents.
Item 12. General Information and
History.......................(1-8) General Information About the
Funds;
Item 13. Investment Objectives and
Policies......................(1-7) Investment Objectives and
Policies; (8) Investment Objective;
(8) Investment Policies; (1-8)
Investment Limitations.
Item 14. Management of the Fund........(1-8) Vision Group of Funds, Inc.
Management.
Item 15. Control Persons and Principal
Holders of Securities Not Applicable
Item 16. Investment Advisory and Other
Services......................(1-8) Investment Advisory Services;
(1-8) Other Services;
Item 17. Brokerage Allocation..........(1-8) Brokerage Transactions.
Item 18. Capital Stock and Other
Securities (1-8) Description of Fund Shares.
Item 19. Purchase, Redemption and
Pricing of Securities Being
Offered ......................(1-8) How To Buy Shares;
(1-8) Determining Net Asset Value;
(1-8) Redeeming Shares;
(1-8) Redeeming Fund Shares.
Item 20. Tax Status....................(1-8) Tax Status.
Item 21. Underwriters Not applicable.
Item 22. Calculation of Performance
Data..........................(1-8) Performance Comparisons;
(1-8) Total Return; (1-6, 8) Yield;
(3,4) Tax-Equivalent Yield;
(3,4) Tax-Equivalency Table;
(4-7) Appendix.
Item 23. Financial Statements (1-8) Filed in Part A and
incorporated by reference to the
combined Prospectus dated
June 30, 1997.
LOGO
VISION
GROUP OF FUNDS, INC.
PROSPECTUS
VISION GROUP OF FUNDS, INC.
CLASS S SHARES
PROSPECTUS DATED MAY 1, 1998
Vision Group of Funds, Inc. is an open-end management investment company (a
mutual fund) that offers you a choice of eight separate investment portfolios
with distinct investment objectives and policies. This prospectus relates to the
Class S Shares of two diversified portfolios (the "Funds"), each of which is a
no-load fund, so you pay no sales charge to purchase Fund shares. The Funds are:
VISION MONEY MARKET FUND
VISION TREASURY MONEY MARKET FUND
AN INVESTMENT IN CLASS S SHARES OF THE FUNDS IS NEITHER INSURED NOR GUARANTEED
BY THE U.S. GOVERNMENT. THE FUNDS ATTEMPT TO MAINTAIN A STABLE NET ASSET VALUE
OF $1.00 PER SHARE; THERE CAN BE NO ASSURANCE THAT THE FUNDS WILL BE ABLE TO DO
SO.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF
MANUFACTURERS AND TRADERS TRUST COMPANY ("M&T BANK"), ARE NOT ENDORSED OR
GUARANTEED BY M&T BANK, AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY. THESE
SHARES INVOLVE INVESTMENT RISKS INCLUDING POSSIBLE LOSS OF PRINCIPAL.
This prospectus gives you information about each of the Funds and can help you
decide if any of the Funds is a suitable investment for you. Please read the
prospectus before you invest and keep it for future reference.
You can find additional facts about each of the Funds in their combined
Statement of Additional Information dated May 1, 1998, which has also been filed
with the Securities and Exchange Commission ("SEC"). The information contained
in the Statement of Additional Information is incorporated by reference into
this prospectus. To obtain a free copy of any of the Statement of Additional
Information, or a paper copy of this prospectus, if you have received it
electronically, or make other inquiries about any of the Funds, simply call or
write Vision Group of Funds, Inc. at the telephone number or address below. The
Statement of Additional Information, material incorporated by reference into
this document, and other information regarding the Funds is maintained
electronically with the SEC at Internet Web site (http://www.sec.gov).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
VISION GROUP OF FUNDS, INC.
P.O. Box 4556
Buffalo, New York 14240-4556
(800) 836-2211 (716) 635-9368
TABLE OF CONTENTS
<TABLE>
<S> <C>
Synopsis 3
A Summary of the Funds' Expenses 4
Some Basic Facts About the Money Market and Money Market Mutual Funds 5
How the Funds Invest 7
Investment Policies 7
Risk Factors Associated With
Foreign Investments 8
Fund Management, Distribution and Administration 12
Board of Directors 12
Investment Adviser 12
Distribution of Fund Shares 13
Administration of the Funds 14
Expenses of the Funds and Class S Shares 14
Your Guide to Using the Fund 15
How the Fund Values its Shares 15
What Fund Shares Cost 15
How to Buy Shares 15
How to Exchange Shares 17
How to Redeem Shares 19
Tax Information 22
Description of Fund Shares 22
Voting Rights and Other Information 22
Other Classes of Shares 23
</TABLE>
SYNOPSIS
Vision Group of Funds, Inc. (the "Corporation") offers you a convenient,
affordable way to participate in two separate, professionally managed,
diversified portfolios of short-term money market securities. The Funds offer
two classes of shares, Class A Shares and Class S Shares. This prospectus
relates to Class S Shares of the Funds. Class S Shares are available to
customers who purchase shares through cash management services, such as a sweep
account ("Sweep Account") offered by M&T Bank, any of its affiliates and certain
other financial service organizations, such as banks or broker-dealers ("Service
Organizations"). A Sweep Account combines a deposit account (the "Transaction
Account") with a daily sweep of balances to or from the Vision Money Market and
Vision Treasury Money Market Funds' Class S Shares. M&T Bank or Service
Organizations, as applicable, are responsible for providing persons investing in
Class S Shares through a Sweep Account with Sweep Account materials (the "Sweep
Materials") describing the various features and operations of the Sweep Account.
The Sweep Materials should be reviewed in conjunction with this prospectus.
INVESTMENT OBJECTIVE
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VISION MONEY MARKET FUND
(THE "MONEY MARKET FUND") SEEKS
CURRENT INCOME WITH LIQUIDITY
AND STABILITY OF PRINCIPAL BY
INVESTING IN HIGH QUALITY MONEY
MARKET INSTRUMENTS. (SEE PAGE 7
FOR DETAILS.)
VISION TREASURY MONEY MARKET
FUND
(THE "TREASURY FUND") SEEKS
CURRENT INCOME WITH LIQUIDITY
AND STABILITY OF PRINCIPAL BY
INVESTING IN DIRECT OBLIGATIONS
OF THE U.S. TREASURY, SUCH AS
TREASURY BILLS AND NOTES, AND
REPURCHASE AGREEMENTS SECURED
BY THESE OBLIGATIONS. (SEE PAGE
8 FOR MORE INFORMATION.)
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VALUING FUND SHARES
The Funds attempt to maintain a stable market value (referred to as net asset
value) of $1.00 per share, although there is no assurance that they will be
able to do so. (See "How the Funds Value Their Shares.")
BUYING AND REDEEMING FUND SHARES
You can conveniently buy and redeem Fund shares on almost any business day.
Shares of the Funds are bought and redeemed without charge at net asset value.
The minimum initial investment in each Fund is $500 ($250 for retirement
plans), except under certain circumstances described in this prospectus. (See
"Your Guide to Using the Funds.")
FUND MANAGEMENT
The Funds' investment adviser is M&T Bank, which makes investment decisions for
the Funds. M&T Bank is the principal banking subsidiary of First Empire State
Corporation.
SHAREHOLDER SERVICES
When you become a shareholder, you can easily get information about your
account, and about the Funds and their services by calling M&T Bank's Mutual
Fund Services at (800) 836-2211 (in the Buffalo area, phone 635-9368).
RISK FACTORS
An investment in the Funds may involve certain risks that are explained more
fully in the sections of the prospectus discussing each Fund's investment
policies and their common investment techniques.
A SUMMARY OF THE FUNDS' EXPENSES
CLASS S SHARES
Every money market fund incurs expenses in conducting operations, managing
investments and providing service to shareholders. The following summary breaks
out each Fund's expenses. You should consider this expense information, along
with other information provided in this prospectus, in making investment
decisions.
<TABLE>
<CAPTION>
TREASURY
MONEY MARKET MONEY MARKET
FUND FUND
ANNUAL FUND OPERATING EXPENSES*
(as a percentage of average net assets)
<S> <C> <C>
Management Fees (after waiver) (1) 0.45% 0.42%
12b-1 Fees 0.25% 0.25%
Shareholder Services Fee (2) 0.00% 0.00%
Other Expenses 0.18% 0.17%
Total Fund Operating Expenses (after waiver)
(3) 0.88% 0.84%
The table below can help you understand the
various costs and expenses that a shareholder in Class S Shares of the Funds
will bear, either directly or indirectly. For more complete descriptions of the
various costs and expenses, see the section "Fund Management, Distribution and
Administration."
EXAMPLE:
You would pay the following expenses on a
$1,000 investment, assuming (A) a 5% annual
return; and (B) redemption at the end of each
time period. The Funds charge no redemption
fees.
1 Year........................................ $ 9 $ 9
3 Years....................................... $28 $27
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE HIGHER OR LOWER THAN THOSE SHOWN.
(1) The management fees for the Money Market Fund and Treasury Money Market Fund
have been reduced to reflect the anticipated voluntary waivers by the adviser.
The adviser may terminate these voluntary waivers at any time at its sole
discretion. The maximum management fee for each of the above funds is 0.50%.
(2) Class S Shares of the Money Market Fund and Treasury Money Market Fund have
no present intention of accruing or paying shareholder servicing fees. If Class
S Shares of the Funds were accruing or paying shareholder servicing fees, they
would be able to pay up to 0.25% of each Fund's average daily net assets. See
"Fund Management, Distribution and Administration."
(3) Absent the voluntary waiver described in Note 1, the Annual Total Fund
Operating Expenses for Class S Shares of the Money Market Fund and Treasury
Money Market Fund are estimated to be 0.93% and 0.92%, respectively for the year
ending April 30, 1999.
*Annual Fund Operating Expenses for Class S Shares are estimated based on
average expenses expected to be incurred during the fiscal year ending April 30,
1999. During the course of this period, expenses may be more or less than the
average amount shown.
SOME BASIC FACTS ABOUT THE MONEY MARKET AND MONEY MARKET MUTUAL FUNDS
The money market is the marketplace in which governments and companies borrow
money for short periods of time by issuing short-term debt obligations known as
money market instruments or money market securities. These securities often have
maturity dates of a year or less, at which time the debt obligation comes due
and must be repaid by the issuer. The marketplace is known as the money market
because these instruments can generally be converted into cash quickly.
Among the most common types of money market securities are:
Certificates of deposit issued by banks;
Bankers' acceptances, a means of short-term financing for importers and
exporters; Commercial paper, short-term debt obligations issued by corporations;
U.S. Treasury bills issued by the U.S. Government; and
Short-term municipal securities, such as bond anticipation notes ("BANs"), tax
anticipation notes ("TANs") and revenue anticipation notes ("RANs") issued by
state or local governments.
UNDERSTANDING MONEY MARKET FUNDS
When you invest in a money market fund, your money is pooled with that of many
other investors. Professional investment managers use the money to purchase a
portfolio of various money market securities, which represent debt issued by
different companies or government entities. The Fund earns interest on the
securities in its portfolio and passes on the income to shareholders in the form
of dividend distributions. That income represents your return on the money you
have invested in the Fund and it is usually referred to as yield.
Money market funds generally offer the following basic advantages.
PROFESSIONAL INVESTMENT MANAGEMENT. You get the benefit of full-time,
experienced, professional management that might otherwise be unavailable to you.
The Fund's portfolio managers make investment decisions on behalf of you and
other shareholders, selecting securities that they believe will best achieve
each Fund's objective, as stated in the Fund's prospectus.
DIVERSIFICATION. Diversification--spreading investments among a number of
different securities--is a basic principle in reducing overall investment risk.
Money market funds usually invest in a large number of securities, maintaining a
level of diversification that most investors could not afford on their own
because money market instruments typically require a minimum investment of
$10,000 to $1 million.
COMPETITIVE MONEY MARKET YIELDS. Money market funds often offer higher yields
than most investors could obtain on other short-term savings and investment
alternatives. Money market funds are not insured or guaranteed by the U.S.
government, and their yields fluctuate as market conditions change.
STABILITY OF PRINCIPAL. There is relatively little risk of losing your princi-
pal--the money you invest--with a money market fund because the securities it
holds are short-term and of high credit quality. In fact, most money market
funds are managed with the objective of maintaining a stable net asset value of
$1 per share, although there is no guarantee that they can do so.
LIQUIDITY. Money market fund shares are highly liquid and easily converted into
cash. The Funds are legally required to redeem or buy back investors' shares and
pay the investors within seven days.
HOW THE FUNDS SHOW PERFORMANCE
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FROM TIME TO TIME,
ADVERTISEMENTS FOR THE FUNDS
MAY REFER TO RATINGS, RANKINGS,
AND OTHER INFORMATION IN
CERTAIN FINANCIAL PUBLICATIONS
AND/OR COMPARE THE FUNDS'
PERFORMANCE TO CERTAIN INDICES.
THE FUNDS MAY ADVERTISE THEIR
PERFORMANCE IN TERMS OF YIELD,
EFFECTIVE YIELD, AND TOTAL
RETURN, AS DEFINED BELOW. OF
COURSE, YIELD AND TOTAL RETURN
FIGURES ARE BASED ON PAST
RESULTS AND ARE NOT AN
INDICATION OF FUTURE
PERFORMANCE.
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YIELD
The yield of each Fund refers to the income generated by an investment in the
Fund over a seven-day period. This income is then annualized, which means it is
assumed to be generated by the investment each week for a 52-week period, and
then it is expressed as a percentage of the investment.
EFFECTIVE YIELD
The effective yield is calculated similarly to the yield, but it assumes that
the annualized income earned from the investment is reinvested in the Fund on a
daily basis. The effective yield will be slightly higher than the yield because
this assumed reinvestment produces a compounding effect.
TOTAL RETURN
Total return represents the overall change in value of an investment in a Fund
over a specified period of time, assuming all dividend distributions are
reinvested in the Fund. Total return is calculated by dividing that overall
change in value by the amount of the initial investment, and it is expressed as
a percentage.
For example, suppose $1,000 is invested in a Fund on January 1 and on December
31 of that year the investment is worth $1,075 (assuming all dividends are
reinvested). The overall change in value is $75 and the total return on the
investment over that period of time would be 7.5% (75 divided by 1,000 = 7.5%).
HOW THE FUNDS INVEST
VISION MONEY MARKET FUND
The Money Market Fund is designed for conservative investors who want current
income, liquidity and stability of principal.
By investing only in high quality securities with minimal credit risk and with
short-term maturities, the Fund seeks to maintain a stable $1.00 share price,
referred to as net asset value per share. The Fund cannot guarantee a stable
share price. However, the short-term nature of its investments helps to minimize
price fluctuations.
INVESTMENT OBJECTIVE
The investment objective of the Money Market Fund (referred to in this section
as the "Fund") is to seek current income with liquidity and stability of
principal by investing in high quality money market instruments. The Fund
pursues this investment objective by investing in a broad range of short-term
debt obligations issued by the U.S. government, banks and corporations.
These obligations generally mature and come due for repayment by the issuer in
397 days or less. However, securities subject to repurchase agreements may have
longer maturities (see "Repurchase Agreements" for a definition of repurchase
agreements). While the Fund may hold individual securities with longer
maturities, the average maturity of the money market instruments in the Fund's
portfolio, computed on a dollar-weighted basis, must be 90 days or less.
In seeking to achieve its investment objective, the Fund must comply with the
diversification and other requirements of Rule 2a-7 under the Investment Company
Act of 1940 which regulates money market mutual funds. For a further discussion
of these requirements, see the "Regulatory Compliance" section in the Statement
of Additional Information. The Fund's investment objective and the investment
policies and limitations described below cannot be changed without shareholder
approval.
INVESTMENT POLICIES
- -------------------------------------------------------------------------------
THE FUND INVESTS IN A WIDE
RANGE OF HIGH QUALITY MONEY
MARKET INSTRUMENTS. THESE
INCLUDE CORPORATE COMMERCIAL
PAPER IN S&P'S OR MOODY'S TWO
HIGHEST RATING CATEGORIES,
CERTIFICATES OF DEPOSIT ISSUED
BY MAJOR BANKS, AND U.S.
GOVERNMENT SECURITIES.
- -------------------------------------------------------------------------------
ACCEPTABLE INVESTMENTS
The high quality money market instruments in which the Fund invests include, but
are not limited to, the following:
. commercial paper (short-term promissory notes issued by corporations) rated
A-2 or better by Standard & Poor's ("S&P") or Prime-2 or better by Moody's
Investors Service, Inc. ("Moody's"), money market instruments (including
commercial paper) which are not rated but are determined by M&T Bank, the
Fund's investment adviser, to be of comparable quality pursuant to guidelines
approved by the Corporation's Board of Directors, variable rate demand notes,
and variable amount demand master notes (as described under "Common Fund
Investment Techniques, Features and Limitations");
. instruments of domestic banks and savings and loans (such as certificates of
deposit, time deposits, and bankers' acceptances) if they have capital,
surplus and undivided profits of over $100,000,000 and if their deposits are
insured by the Bank Insurance Fund ("BIF") or the Savings Association
Insurance Fund ("SAIF"), both of which are administered by the Federal
Deposit Insurance Corporation ("FDIC"). The Fund may also make interest-bear-
ing savings deposits in commercial banks and savings banks not in excess of
5% of the Fund's total assets. In addition, the Fund may purchase U.S. dol-
lar-denominated instruments issued or supported by the credit of U.S. or
foreign banks or savings institutions having total assets at the time of
purchase in excess of $1 billion;
. obligations issued or guaranteed by the U.S. government, its agencies or
instrumentalities, including certain of these obligations purchased on a
when-issued or delayed delivery basis (see "When-Issued and Delayed Deliv-
ery Transactions"). Some obligations issued or guaranteed by agencies or
instrumentalities of the U.S. government, such as Government National Mort-
gage Association participation certificates, are backed by the full faith
and credit of the U.S. Treasury. Other securities, such as obligations of
the Federal National Mortgage Association, Farm Credit Banks or Federal
Home Loan Mortgage Corporation, are backed by the credit of the agency or
instrumentality issuing the obligations but not the full faith and credit
of the U.S. government; and
. repurchase agreements secured by any of the above instruments (see
"Repurchase Agreements").
RISK FACTORS ASSOCIATED WITH FOREIGN INVESTMENTS
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THE FUND MAY INVEST ONLY IN
HIGH QUALITY DEBT OBLIGATIONS
OF FOREIGN BANKS.
- -------------------------------------------------------------------------------
The Fund's investment in U.S. dollar-denominated obligations of foreign banks
and foreign branches of U.S. banks is limited to less than 25% of the value of
the Fund's total assets at the time of purchase. Further, the Fund may invest in
an obligation of a foreign bank or a foreign branch of a U.S. bank only if the
investment adviser considers the instrument to present minimal credit risk.
Nevertheless, this type of investment may subject the Fund to different risks
than investing in domestic obligations of U.S. banks because political,
regulatory, and economic systems and conditions vary from country to country.
These risks include possible adverse political and economic developments, the
possible imposition of withholding taxes on interest income and the possible
seizure or nationalization of foreign deposits. Additional risks include the
possible establishment of exchange controls and the possible adoption of foreign
government restrictions that might adversely affect the payment of principal and
interest on these foreign obligations.
In addition, foreign banks and foreign branches of U.S. banks may be subject to
less stringent reserve requirements and to different accounting, auditing,
reporting and recordkeeping standards than those applicable to domestic branches
of U.S. banks.
VISION TREASURY MONEY MARKET FUND
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THE TREASURY FUND IS DESIGNED FOR CONSERVATIVE INVESTORS WHO WANT CURRENT
INCOME, LIQUIDITY, AND STABILITY OF PRINCIPAL.
BY INVESTING IN U.S. TREASURY
SECURITIES WITH SHORT-TERM
MATURITIES, THE FUND SEEKS TO
MAINTAIN A STABLE $1.00 SHARE
PRICE, REFERRED TO AS NET ASSET
VALUE PER SHARE. THE FUND
CANNOT GUARANTEE A STABLE SHARE
PRICE. HOWEVER, THE SHORT-TERM
NATURE OF ITS INVESTMENTS HELPS
TO MINIMIZE PRICE FLUCTUATIONS.
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INVESTMENT OBJECTIVE
The investment objective of the Treasury Fund (referred to in this section as
the "Fund") is to seek current income with liquidity and stability of principal.
The Fund pursues this investment objective by investing in direct obligations of
the U.S. Treasury, such as Treasury bills and notes, and repurchase agreements
secured by these obligations. A repurchase agreement is an agreement in which
the organization selling U.S. Treasury securities to the Fund agrees to
repurchase the securities at a mutually agreed upon price and time (see
"Repurchase Agreements" for further details).
The Fund invests in direct U.S. Treasury obligations that mature in 397 days or
less from the time of investment. However, securities subject to repurchase
agreements may have longer maturities. While the Fund may hold individual
securities with longer maturities, the average maturity of the obligations in
the Fund's portfolio, computed on a dollar-weighted basis, must be 90 days or
less.
In seeking to achieve its investment objective, the Fund must comply with the
diversification and other requirements of Rule 2a-7 under the Investment Company
Act of 1940 which regulates money market mutual funds. For a further discussion
of these re-quirements, see the "Regulatory Compliance" section in the Statement
of Addi-tional Information. The Fund's investment objective and the investment
poli-cies and limitations described below cannot be changed without shareholder
approval.
INVESTMENT POLICIES
ACCEPTABLE INVESTMENTS
The Fund invests in short-term U. S. Treasury obligations. The obligations are
issued by the U.S. government and are fully guaranteed as to principal and in-
terest by the United States. The Fund may also invest in repurchase agreements
secured by these obligations.
COMMON FUND INVESTMENT TECHNIQUES, FEATURES AND LIMITATIONS
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
The Funds may purchase securities on a when- issued or delayed delivery basis.
These transactions are arrangements in which the Funds purchase securities with
payment and delivery scheduled for a future time. The seller's failure to
complete these transactions may cause the Funds to miss a price or yield
considered to be advantageous. Under normal market conditions, each Fund will
not enter into commitments to purchase securities on a when-issued basis that
exceed 25% of the value of its total assets. Settlement dates may be a month or
more after entering into these transactions, and the market values of the
securities purchased may vary from the purchase prices.
As an operating policy, the Funds reserve the right to dispose of a commitment
prior to settlement if the adviser deems it appropriate to do so. In addition,
the Funds may enter into transactions to sell their purchase commitments to
third parties at current market values and simultaneously acquire other
commitments to purchase similar securities at later dates. The Funds may realize
short-term profits or losses upon the sale of such commitments.
REPURCHASE AGREEMENTS
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IN A REPURCHASE AGREEMENT, A FUND BUYS SECURITIES AND AT THE SAME TIME AGREES
TO SELL THEM BACK AT A STATED PRICE.
- -------------------------------------------------------------------------------
The Funds may enter into repurchase agreements for U.S. government securities
and certificates of deposit with banks, broker/dealers, and other recognized
financial institutions. In a repurchase agreement, a Fund agrees to purchase
securities from the selling institution and the seller simultaneously agrees to
repurchase the securities at a specific price within a stated time. The stated
repurchase date must be within a year of the date the Fund acquires the
securities. The Funds or their custodian (the bank that holds each Fund's assets
in safekeeping) takes possession of securities subject to repurchase agreements,
and these securities are marked to the market or valued daily.
If the original seller does not repurchase the securities from a Fund, that Fund
could receive less than the repurchase price on any sale of those securities. If
the seller filed for bankruptcy or became insolvent, the Fund's sale of the
securities might be delayed pending court action. The Funds have regular
procedures in effect for taking custody of portfolio securities subject to
repurchase agreements. Because of those established procedures, the Funds
believe that a court of competent jurisdiction would rule in favor of the Fund
and allow the Fund to retain or dispose of the securities.
The Funds will only enter into repurchase agreements with banks and other
recognized financial institutions such as broker/dealers that the Funds' adviser
considers creditworthy under guidelines approved by the Corporation's Board of
Directors.
VARIABLE RATE DEMAND NOTES
The Funds may purchase variable rate demand notes, which are long-term debt
instruments that have variable or floating interest rates and provide the Funds
with the right to tender the security for repurchase at its stated principal
amount plus accrued interest. Such securities typically bear interest at a rate
that is intended to cause the securities to trade at par. The interest rate may
float or be adjusted at regular intervals (ranging from daily to annually), and
is normally based on a published interest rate or interest rate index. Many
variable rate demand notes allow the Funds to demand the repurchase of the
security on not more than seven days' prior notice. Other notes only permit the
Funds tender the security at the time of each interest rate adjustment or at
other fixed intervals.
VARIABLE AMOUNT DEMAND MASTER NOTES
- -------------------------------------------------------------------------------
WITH A VARIABLE AMOUNT DEMAND
MASTER NOTE, BOTH THE AMOUNT OF
THE LOAN AND THE INTEREST RATE
MAY VARY.
- -------------------------------------------------------------------------------
The Money Market Fund may purchase variable amount demand master notes. Variable
amount demand master notes represent a borrowing arrangement between an issuer,
the borrower, and an institutional lender, such as the Fund. The Fund has the
right to demand payment of the loan it has made upon short notice. The Fund
typically has the right to increase the amount borrowed under the note, at any
time, up to the full amount provided by the note agreement.
Both the Fund and the borrower have the right to reduce the amount of
outstanding indebtedness at any time. In some instances, however, the Fund and
the borrower may agree that the amount of outstanding indebtedness remain fixed.
Variable amount demand master notes provide that the interest rate on the amount
outstanding varies depending upon a stated short-term interest rate index.
CREDIT ENHANCEMENT
Certain of the Acceptable Investments of the Money Market Fund may have been
credit-enhanced by a guaranty, letter of credit, or insurance. Any bankruptcy,
receivership, or default, or change in the credit quality of the party providing
the credit enhancement will adversely affect the quality and marketability of
the underlying security and could cause losses to the Money Market Fund and
affect its share price. The Money Market Fund may have more than 25% of its
total assets invested in securities credit-enhanced by banks.
DEMAND FEATURES
The Money Market Fund may acquire securities that are subject to puts and
standby commitments ("demand features") to purchase the securities at their
principal amount (usually with accrued interest) within a fixed period (usually
seven days) following a demand by the Fund. The demand feature may be issued by
the issuer of the underlying securities, a dealer in the securities or another
third party, and may not be transferred separately from the underlying security.
The Fund uses these arrangements to provide the Fund with liquidity and not to
protect against changes in the market value of the underlying securities.
The bankruptcy, receivership, or default by the issuer of the demand feature, or
a default on the underlying security or other event that terminates the demand
feature before its exercise, will adversely affect the liquidity of the
underlying security. Demand features that are exercisable even after a payment
default on the underlying security may be treated as a form of credit
enhancement.
INVESTMENT LIMITATIONS
- -------------------------------------------------------------------------------
THE FUNDS FOLLOW A NUMBER OF
GUIDELINES IN MANAGING THEIR
PORTFOLIOS IN ORDER TO LIMIT
INVESTMENT RISKS.
- -------------------------------------------------------------------------------
Many of the investment restrictions to which each Fund is subject may be changed
only by a majority vote of the outstanding shares of the Fund. You can find a
more detailed description of the following investment limitations, together with
other investment limitations that can be changed only with such a vote of
shareholders, in the Statement of Additional Information under""Investment
Limitations."
All of the Funds have the following common investment limitations. The Funds may
not:
. borrow money or issue senior securities, except, under certain circumstances,
a Fund may borrow from banks or enter into reverse repurchase agreements for
temporary purposes in amounts up to 10% of the value of its total assets at
the time of such borrowing. The Fund may not purchase securities while its
borrowings (including reverse repurchase agreements) are outstanding; or
. enter into repurchase agreements providing for settlement more than seven
days after notice, if such an investment, together with any other illiquid
securities in a Fund, exceeds 10% the Fund's total assets.
The Treasury Fund may not:
. purchase securities other than direct obligations of the U.S. Treasury,
such as Treasury bills and notes, some of which may be subject to repur-
chase agreements.
The Money Market Fund may not:
. purchase any securities which would cause 25% or more of the value of the
Fund's total assets at the time of purchase to be invested in securities of
one or more issuers conducting their principal business activities in the
same industry, provided that there is no limita- tion with respect to
obligations issued or guaranteed by the U.S. government or its agencies or
in- strumentalities, domestic bank certificates of deposit, bankers'
acceptances, and repurchase agreements secured by domestic bank instruments
or obligations of the U.S. government, its agencies or instrumentalities.
The above investment limitations cannot be changed without shareholder approval.
The following limitation, however, may be changed by the Directors without
shareholder approval. Shareholders will be notified before any material change
in this limitation becomes effective.
The Funds may not:
. enter into repurchase agreements providing for settlement more than seven
days after notice, if such an investment, together with any illiquid
securities in a Fund, exceeds 10% of the Fund's net assets.
FUND MANAGEMENT,
DISTRIBUTION AND
ADMINISTRATION
BOARD OF DIRECTORS
- -------------------------------------------------------------------------------
A BOARD OF DIRECTORS SUPERVISES
THE FUNDS.
- -------------------------------------------------------------------------------
The Corporation's Board of Directors are responsible for managing the business
affairs of the Funds and for exercising all the Funds' powers, except those
reserved for the Funds' shareholders.
INVESTMENT ADVISER
- -------------------------------------------------------------------------------
MANUFACTURERS AND TRADERS TRUST
COMPANY ("M&T BANK") MAKES
INVESTMENT DECISIONS FOR THE
FUNDS, ACTING UNDER THE
DIRECTION OF THE BOARD OF
DIRECTORS.
- -------------------------------------------------------------------------------
As investment adviser, M&T Bank continually conducts investment research and
supervision for the Funds and is responsible for all purchases and sales of the
securities in each Fund's portfolio. M&T Bank receives an annual fee from each
of the Funds for these services.
Both the Corporation and the Adviser have adopted strict codes of ethics
governing the conduct of all employees who manage the Funds and their portfolio
securities. These codes recognize that such persons owe a fiduciary duty to the
Funds' shareholders and must place the interests of shareholders ahead of the
employees' own interest. Among other things, the codes: require preclearance and
periodic reporting of personal securities transactions; prohibit personal
transactions in securities being purchased or sold, or being considered for
purchase or sale, by the Funds; prohibit purchasing securities in initial public
offerings; and prohibit taking profits on securities held for less than sixty
days. Violations of the codes are subject to review by the Board of Directors,
and could result in severe penalties.
ADVISORY FEES
For the services M&T Bank provides and the expenses it assumes as investment
adviser, M&T Bank is entitled to receive a fee from each Fund equal to an annual
rate of 0.50% of each Fund's average net assets. This fee is computed daily and
paid monthly. M&T Bank has agreed to pay all expenses it incurs in connection
with its advisory activities, other than the cost of securities (including any
brokerage commissions) purchased for the Funds.
- -------------------------------------------------------------------------------
M&T BANK MAY VOLUNTARILY WAIVE
PART OF ITS ADVISORY FEES.
- -------------------------------------------------------------------------------
From time to time, M&T Bank may voluntarily waive all or a portion of its
advisory fees in order to help the Fund maintain a competitive expense ratio.
ADVISER'S BACKGROUND
- -------------------------------------------------------------------------------
FOUNDED IN 1856, M&T BANK
PROVIDES COMPREHENSIVE BANKING
AND FINANCIAL SERVICES.
- -------------------------------------------------------------------------------
M&T Bank is the principal banking subsidiary of First Empire State Corporation,
a $14 billion bank holding company, as of December 31, 1997, headquartered in
Buffalo, New York. M&T Bank has 178 offices throughout New York State and an
office in Nassau, The Bahamas as of December 31, 1997.
M&T Bank was founded in 1856 and provides comprehensive banking and financial
services to individuals, governmental entities and businesses throughout New
York State. The Fund's investments are managed through the Trust & Investment
Services Division of M&T Bank. As of December 31, 1997, M&T Bank had
approximately $4 billion in assets under management for which it has investment
discretion (which includes employee benefits, personal trusts, estates, agencies
and other accounts). M&T Bank has served as investment adviser to various funds
of the Corporation since 1988. As of December 31, 1997, M&T Bank managed over
$1.2 billion in net assets of the Corporation's money market funds. As part of
its regular banking operations, M&T Bank may make loans to public companies.
Thus, it may be pos-sible, from time to time, for a Fund to hold or acquire the
securities of is-suers which are also lending clients of M&T Bank. The lending
relationship will not be a factor in the selection of securities.
DISTRIBUTION OF FUND SHARES
- -------------------------------------------------------------------------------
FEDERATED SECURITIES CORP. IS
THE PRINCIPAL DISTRIBUTOR FOR
SHARES OF THE FUNDS.
- -------------------------------------------------------------------------------
Shares of the Funds are sold on a continuous basis by Federated Securities
Corp., as the principal distributor. It is a Pennsylvania corporation orga-
nized on November 14, 1969, and is also the principal distributor for a number
of other investment companies. Federated Securities Corp. is a subsidiary of
Federated Investors.
DISTRIBUTION PLAN
Under a distribution plan (referred to as the "Plan") adopted in accordance with
Rule 12b-1 under the Investment Company Act of 1940, the Class S Shares of the
Funds may pay to the distributor an amount computed at an annual rate of 0.25%
of each of the average daily net assets of Class S Shares of the Fund to finance
any activity which is principally intended to result in the sale of shares
subject to the Plan. The distributor may from time to time and for such periods
as it deems appropriate, voluntarily reduce its 12b-1 compensation under the
Plan to the extent the expenses attributable to Class S Shares of the Funds
exceed such lower expense limitation as the distributor may, by notice to the
Corporation, voluntarily declare to be effective.
Financial institutions will receive fees from the distributor based upon shares
owned by their clients or customers. The schedules of such fees and the basis
upon which such fees will be paid will be determined from time to time by the
distributor.
The Funds' Plan is a compensation type plan. As such, Class S Shares of the
Funds make no payments to the distributor except as described above. Therefore,
Class S Shares of the Funds do not pay for unreimbursed expenses of the
distributor, including amounts expended by the distributor in excess of amounts
received by it from Class S Shares of the Funds, interest, carrying or other
financing charges in connection with excess amounts expended, or the
distributor's overhead expenses. However, the distributor may be able to recover
such amounts or may earn a profit from future payments made by Class S Shares of
the Funds under the Plan.
The distributor may select certain entities to provide sales and/or
administrative services as agents for holders of Class S Shares of the Funds.
For a description of administrative services, see "Administrative Arrangements"
below.
SHAREHOLDER SERVICING ARRANGEMENTS
The Funds have adopted a Shareholder Services Plan, which is administered by
Federated Administrative Services. Under the Plan, M&T Bank may act as a
shareholder servicing agent (the "Shareholder Servicing Agent") for the Funds.
The Funds may pay the Shareholder Servicing Agent a fee based on the average
daily net asset value of shares for which it provides shareholder services.
These shareholder services include, but are not limited to, distributing
prospectuses and other information, providing shareholder assistance and
communicating or facilitating purchases and redemptions of shares. This fee will
be equal to 0.25% of a Fund's average daily net assets for which the Shareholder
Servicing Agent provides services. The Funds' Class S Shares are presently not
accruing or paying any shareholder servicing agent fees.
ADMINISTRATIVE ARRANGEMENTS
The distributor may select brokers and dealers to provide distribution and
administrative services. The distributor may also select administrators
(including depository institutions such as commercial banks and savings and loan
associations) to provide certain administrative services that are not provided
by Federated Administrative Services (see below). These administrative services
include distributing prospectuses and other information, providing accounting
assistance and shareholder communications, or otherwise facilitating shareholder
purchases and redemptions (sales) of any Fund shares. The administrators
appointed could include affiliates of the adviser.
Brokers, dealers, and administrators will receive fees from the distributor
based upon shares owned by their clients or customers. The fees are calculated
as a percentage of the average aggregate net asset value of shareholder accounts
during the period for which the brokers, dealers, and administrators provide
services. If the distributor pays any fees for these services, the fees will be
reimbursed by the adviser and not the Funds.
In addition, brokers, dealers, and administrators may receive additional
payments in the form of cash or promotional incentives based on the amount of
any Fund shares purchased by their clients or customers.
The distributor, M&T Bank, or affiliates thereof, at their own expense and out
of their own assets, may also provide other compensation to financial
institutions in connection with sales of shares of the Funds or as financial
assistance for providing substantial marketing, sales and operational support.
Compensation may also include, but is not limited to, financial assistance to
financial institutions in connection with conferences, sales, or training
programs for their employees, seminars for the public, advertising or sales
campaigns, or other special events. In some instances, this compensation may be
predicated upon the amount of shares sold and/or upon the type and nature of
sales or operational support they furnish. Dealers may not use sales of the
Corporation's shares to qualify for this compensation to the extent such may be
prohibited by the laws of any state or any self-regulatory agency, such as the
National Association of Securities Dealers, Inc. None of the aforementioned
other compensation shall be paid for by the Corporation, the Funds or their
shareholders, nor will it change the price paid by investors for the purchase of
Fund shares.
ADMINISTRATION OF THE FUNDS
- -------------------------------------------------------------------------------
FEDERATED SERVICES COMPANY, A
SUBSIDIARY OF FEDERATED INVEST-
ORS, PROVIDES THE FUNDS WITH
CERTAIN ADMINISTRATIVE PERSON-
NEL, FUND ACCOUNTING AND TRANS-
FER AGENCY SERVICES NECESSARY
TO OPERATE THE FUNDS.
- -------------------------------------------------------------------------------
ADMINISTRATIVE SERVICES
Such services include certain legal, fund accounting, and transfer agency
services. Federated Services Company provides these services for an annual fee
as specified in the following table:
<TABLE>
<CAPTION>
MAXIMUM AGGREGATE DAILY NET ASSETS OF
FEE VISION GROUP OF FUNDS, INC.
- ------- ------------------------------------
<S> <C>
0.14% on the first $1.4 billion
0.10% on the next $750 million
0.07% on assets in excess of $2.15 billion
</TABLE>
Federated Services Company may choose voluntarily to waive a portion of its fee
at any time.
EXPENSES OF THE FUNDS AND CLASS S SHARES
Holders of Class S Shares of the Funds pay their allocable portion of
Corporation and Fund expenses.
The Corporation expenses for which holders of Class S Shares pay their allocable
portion include, but are not limited to the cost of: organizing the Corporation
and continuing its existence; registering the Corporation; Directors' fees;
auditors' fees; meetings of Directors; legal fees of the Corporation;
association membership dues and such non-recurring and extraordinary items as
may arise.
Fund expenses for which holders of Class S Shares of the Funds pay their
allocable portion based on average daily net assets include, but are not limited
to: registering a Fund and shares of a Fund; investment advisory services; taxes
and commissions; custodian fees; insurance premiums; auditors' fees; and such
nonrecurring and extraordinary items as may arise.
At present, the only expenses allocated to Class S Shares are expenses under the
Distribution Plan. The Directors reserve the right to allocate certain expenses
to holders of Class S Shares as they deem appropriate ("Class Expenses"). In any
case, Class Expenses would be limited to: transfer agent fees as identified by
the transfer agent as attributable to holders of Class S Shares; printing and
postage expenses related to preparing and distributing materials such as
shareholder reports, prospectuses and proxies to current shareholders;
registration fees paid to the SEC; expenses related to administrative personnel
and services as required to support holders of Class S Shares; legal fees
relating solely to Class S Shares; and Directors' fees incurred as a result of
issues relating solely to Class S Shares.
YOUR GUIDE
TO USING
THE FUNDS
HOW THE FUNDS VALUE THEIR SHARES
- -------------------------------------------------------------------------------
THE TERM "NET ASSET VALUE" RE-
FERS TO THE VALUE OF ONE FUND
SHARE.
- -------------------------------------------------------------------------------
Net asset value is calculated by adding up the value of all of a Fund's
securities and cash (its assets), subtracting all of its liabilities (including
all expenses payable or accrued by the Fund), and then dividing the result (net
assets) by the total number of Fund shares outstanding.
Each Fund attempts to maintain a stable net asset value of $1.00 per share
through its investment policies, which have been described previously, and
through its policies for valuing securities in its portfolio. Each Fund values
its portfolio securities based on their amortized cost. This method of valuation
assumes a stable rate of income from the day securities are purchased until they
mature, without taking into account actual changes in market value based on
interest rate changes. Prices of money market securities and other fixed income
securities typically move in the opposite direction of interest rates. That is,
prices generally increase when interest rates fall and decrease when interest
rates rise.
Under the amortized cost method of valuation used by the Funds, the value of the
Funds' assets will not change in response to fluctuating interest rates.
However, each Fund monitors the difference between the amortized cost value of
its assets and their actual market value, which can be expected to vary
inversely with changes in interest rates. Of course, the Funds cannot guarantee
that their net asset value will always remain at $1.00 per share.
WHAT FUND SHARES COST
- -------------------------------------------------------------------------------
THERE IS NO SALES CHARGE TO BUY
FUND SHARES.
- -------------------------------------------------------------------------------
Shares of the Funds are sold at the next net asset value calculated after your
order is received (normally $1.00 per share). Each Fund's net asset value is
determined at 12:00 p.m. Eastern time, 3:00 p.m. Eastern time and at the close
of trading (normally 4:00 p.m., Eastern time) on the New York Stock Exchange
Monday through Friday, except on: New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Co-
lumbus Day, Veterans' Day, Thanksgiving Day, and Christmas Day.
In connection with the sale of Fund shares, Federated Securities Corp. may from
time to time offer certain items of nominal value to any shareholder or
investor.
HOW TO BUY SHARES
- -------------------------------------------------------------------------------
YOU CAN BUY FUND SHARES BY FEDERAL RESERVE WIRE, MAIL, TRANSFER OR BY OPENING
A SWEEP ACCOUNT, AS EXPLAINED BELOW.
- -------------------------------------------------------------------------------
You can buy shares of the Funds on any business day, except on days when the New
York Stock Exchange or M&T Bank is closed, or on holidays when wire transfers
are restricted (Columbus Day, Veterans' Day, Martin Luther King, Jr. Day, and
Presidents' Day). The Funds reserve the right to reject any purchase request.
OPENING AN ACCOUNT
To make an initial investment in Class S Shares of the Funds, you must open an
account by completing the account application form. Sweep Account customers will
also need to complete a Cash Sweep Agreement. Sweep Account customers may
telephone (800) 724-2240. Information needed to open your account may also be
taken over the telephone. To apply by phone or get help in completing the
enclosed application, simply call an account representative at M&T Bank or those
affiliates of M&T Bank which make shares available or M&T Bank's Mutual Fund
Services at (800) 836-2211 (in the Buffalo area, phone 635-9368). The Funds use
this telephone number only to service shareholders of Vision Group of Funds,
Inc. You also may purchase shares of the Funds through any representative of M&T
Securities, Inc. ("M&T Securities") at M&T Bank, as well as at separate M&T
Securities locations, or by calling 1-800-724-5445. M&T Securities (member NASD
and SIPC) is a wholly-owned regis-tered broker-dealer subsidiary of M&T Bank.
MINIMUM INITIAL INVESTMENT
- -------------------------------------------------------------------------------
A $500 INITIAL INVESTMENT IS
ALL THAT'S REQUIRED.
- -------------------------------------------------------------------------------
The minimum initial investment in each Fund is $500, unless the investment is in
a retirement plan, in which case the minimum initial investment is $250.
Subsequent minimum investments must be in amounts of at least $25, including
retirement plans. In addition, the minimum initial and subsequent investment
amounts may be waived or lowered from time to time, such as for customers
participating in automatic investment services offered by M&T Bank.
BUYING SHARES BY WIRE
You can purchase shares of the Funds by Federal Reserve wire. This is referred
to as wiring federal funds, and it simply means that your bank sends money to
the Funds' bank through the Federal Reserve System. To purchase shares by
Federal Reserve wire, call M&T Bank's Mutual Fund Services before 11:00 a.m.
(Eastern time) to place your order. The order is considered immediately
received. Payment by federal funds must be received before 3:00 p.m. (Eastern
time) that same day.
BUYING SHARES BY MAIL
To buy shares of a Fund for the first time by mail, complete and sign the
account application form and mail it, together with your check made payable to
(Name of the Fund and class name) in an amount of $500 or more, to the address
below:
Vision Group of Funds, Inc.
P.O. Box 4556 Buffalo, NewYork 14240-4556
Current shareholders can purchase shares by mail by sending a check to the same
address. Orders by mail are considered received after payment by check has been
converted into federal funds. This is normally the next business day after the
check has been received.
BUYING SHARES BY TRANSFER
To purchase shares of the Funds by transferring money from a bank account, you
must maintain a checking or NOW deposit account at M&T Bank or any of its
affiliate banks. To place an order, call M&T Bank's Mutual Fund Services before
11:00 a.m. (Eastern time). The money will be transferred from your M&T Bank
checking or NOW deposit account to your Fund account that same day. Sweep
Account customers should refer to their Cash Sweep Agreement.
CUSTOMER AGREEMENTS
Shareholders normally purchase shares of the Funds through different types of
customer accounts at M&T Bank and its affiliates. You should read this
prospectus together with any applicable agreement between you and the
institution to learn about the services provided, the fees charged for those
services, and any restrictions or limitations that may be imposed.
SYSTEMATIC INVESTMENT PROGRAM
- -------------------------------------------------------------------------------
YOU CAN BUY SHARES CONVENIENTLY
THROUGH THE FUNDS' SYSTEMATIC
INVESTMENT PROGRAM.
- -------------------------------------------------------------------------------
Once you have opened a Fund account, you can add to your investment on a regular
basis in amounts of $25 or more through automatic deductions from your bank
checking or NOW deposit account. The money may be withdrawn monthly or quarterly
and invested in Fund shares at the next net asset value calculated after your
order is received. To sign up for this program, please call M&T Bank's Mutual
Fund Services for an application.
DIVIDENDS
- -------------------------------------------------------------------------------
YOU EARN DAILY DIVIDENDS.
- -------------------------------------------------------------------------------
The Funds declare dividends daily and pay them monthly. Shares purchased by wire
before 3:00 p.m. (Eastern time) begin earning dividends that day. Shares
purchased by check begin earning dividends on the day after the check is
converted into federal funds.
Dividends are automatically reinvested in additional shares of a Fund on the
dates the dividends are paid unless you request cash payments on the account
application form or by contacting M&T Bank's Mutual Fund Services.
CAPITAL GAINS
If, for some extraordinary reason, a Fund realizes capital gains, those capital
gains could result in an increase in the Fund's dividends. Conversely, any
capital losses realized by a Fund could result in a decrease in its dividends.
In the unlikely event that a Fund realizes net long-term capital gains, it will
distribute them at least once every 12 months. The Funds do not expect to
realize any capital gains or losses and, therefore, do not foresee paying any
"capital gains dividends," as defined in the Internal Revenue Code.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Funds, Federated Shareholder Services Company
maintains a share account for each shareholder. The Funds do not issue share
certificates. Federated Shareholder Services Company is a subsidiary of
Federated Investors.
Monthly confirmations are sent to report transactions such as purchases and
redemptions as well as dividends paid during the month.
RETIREMENT PLANS
Shares of the Funds can be purchased as an investment for retirement plans or
IRA accounts. For further details, contact the Fund and consult a tax adviser.
HOW TO EXCHANGE SHARES
- -------------------------------------------------------------------------------
IF YOUR INVESTMENT NEEDS CHANGE, YOU CAN CONVENIENTLY EXCHANGE SHARES OF ANY
OF THE FUNDS FOR SHARES OF OTHER FUNDS IN THE CORPORATION THAT ARE REGISTERED
IN YOUR STATE.
- -------------------------------------------------------------------------------
All shareholders in any of the Funds are shareholders of Vision Group of Funds,
Inc. and have access to the other portfolios of the Corporation (referred to as
the "Participating Funds" and listed below under "Description of Fund Shares")
through an exchange program. Shareholders of Class S Shares may only exchange
between portfolios of the Vision Group of Funds, Inc. which offer Class S
Shares. Presently, the only portfolios in the Vision Group of Funds, Inc. which
offer Class S Shares are the Money Market Fund and Treasury Fund.
When exchanging into and out of Participating Funds with a sales charge and
Participating Funds without a sales charge, shareholders who have paid a sales
charge once upon purchasing shares of any Participating Fund, including those
shares acquired by the reinvestment of dividends, will not have to pay a sales
charge again on an exchange. When exchanging into and out of Participating Funds
with different sales charges, exchanges are made at net asset value. Shares of
Participating Funds with no sales charge acquired by direct purchase may be
exchanged for shares of other Participating Funds with a sales charge at net
asset value plus the applicable sales charge. However, shares of Participating
Funds with no sales charge that were acquired by the reinvestment of dividends
will not be subject to a sales charge upon an exchange into shares of a
Participating Fund with a sales charge. Instead, such exchanges will be made at
net asset value.
To be eligible for this exchange privilege, you must exchange shares with a net
asset value of at least $500. This privilege is available to shareholders
resident in any state in which the fund shares being acquired may be sold. You
may exchange your shares only for shares of Participating Funds that may legally
be sold in your state of residence. Prior to any exchange, you must receive a
copy of the current prospectus of the Participating Fund into which the exchange
is being made.
Once Federated Shareholder Services Company has received proper instructions and
all necessary supporting documents, shares submitted for exchange will be
redeemed at the next net asset value calculated. If you do not have an account
in the Participating Fund whose shares you want to acquire, you must establish a
new account. Unless you specify otherwise, this account will be registered in
the same name and have the same dividend and capital gains payment options as
you selected with your existing account. If the new account registration (name,
address, and taxpayer identification number) is not identical to your existing
account, you must provide a signature guarantee to verify your signature. Please
see "Signature Guarantees" below for more information about signature
guarantees.
Each exchange is considered a sale of shares of one Fund and a purchase of
shares of another Fund and, depending on the circumstances, may generate a short
or long-term capital gain or loss for federal income tax purposes.
Each Fund reserves the right to modify or terminate the exchange privilege at
any time. Shareholders will be notified prior to any modification or
termination.
To find out more about the exchange privilege, call M&T Bank's Mutual Fund
Services at the number listed below.
EXCHANGING SHARES BY TELEPHONE
- -------------------------------------------------------------------------------
TO BE ELIGIBLE FOR TELEPHONE EXCHANGES, SELECT THAT OPTION WHEN YOU OPEN YOUR
ACCOUNT.
- -------------------------------------------------------------------------------
You may exchange shares between Participating Funds by calling M&T Bank's Mutual
Fund Services at (800) 836-2211 (in the Buffalo area, phone 635-9368). To
sign-up for telephone exchanges, you must select the telephone exchange option
on the new account application. It is recommended that you request this
privilege on your initial application. If you do not and later wish to take
advantage of telephone exchanges, you may call M&T Bank's Mutual Fund Services
for authorization.
You can only exchange shares by telephone between Fund accounts with identical
shareholder registrations (names, addresses, and taxpayer identification
numbers).
Telephone exchange instructions must be received by M&T Bank by 11:00 a.m.
(Eastern time) and transmitted to Federated Shareholder Services Company before
4:00 p.m. (Eastern time) for shares to be exchanged that same day. You will not
receive a dividend from the Fund into which you are exchanging on the date of
the exchange.
You may have difficulty making exchanges by telephone in times of unusual
economic or market changes when the volume of telephone requests may be
exceptionally high. If you cannot contact M&T Bank's Mutual Fund Services by
telephone, please send a written exchange request by mail for next day delivery
to the Vision Group of Funds, Inc. at the address shown below.
If you have certificates for the shares you want to exchange, you cannot make a
telephone exchange. Instead, the certificates must be properly endorsed and
should be sent by registered or certified mail, along with your written exchange
request, to the Vision Group of Funds, Inc. at the address shown below. M&T
Bank's Mutual Fund Services will then forward the certificate to the transfer
agent, Federated Shareholder Services Company, and the shares will be deposited
in your account before the exchange is made.
Shareholders requesting the telephone exchange service authorize the corporation
and its agents to act upon their telephonic instructions to exchange shares from
any account for which they have authorized such services. Exchange instructions
given by telephone may be electronically recorded for your protection. If
reasonable procedures are not followed by the Funds, the Funds may be liable for
losses due to unauthorized or fraudulent telephone instructions.
EXCHANGING SHARES BY MAIL
You may exchange shares by mail by sending your written request to:
Vision Group of Funds, Inc.
P.O. Box 4556
Buffalo, New York 14240-4556
SYSTEMATIC EXCHANGE PROGRAM
If you desire to automatically exchange shares of a predetermined amount from
one Fund into another Fund on a monthly, quarterly or annual basis, you may take
advantage of a systematic exchange privilege. Exchanges are subject to
investment minimums and any applicable sales charges. The minimum amount that
may be exchanged is $25. Shareholders interested in participating in this
program should contact M&T Bank's Mutual Fund Services for more information.
HOW TO REDEEM SHARES
- -------------------------------------------------------------------------------
YOU CAN REDEEM FUND SHARES BY
TELEPHONE, CHECK, OR MAIL. TO
ENSURE YOUR SHARES ARE REDEEMED
EXPEDITIOUSLY, PLEASE FOLLOW
THE PROCEDURES EXPLAINED BELOW.
- -------------------------------------------------------------------------------
Each Fund redeems or repurchases your shares at the net asset value per share
next determined after the Fund receives your redemption request. Sweep Account
customers should refer to their Cash Sweep Agreement. You may only redeem shares
on days when the Funds compute their net asset value. You cannot redeem shares
on days when the New York Stock Exchange or M&T Bank is closed, or on federal
holidays when wire transfers are restricted (Columbus Day, Veterans' Day, Martin
Luther King, Jr. Day, and Presidents' Day). While you may redeem various amounts
by telephone, check, or written request, you can close your account only by
writing.
TELEPHONE REDEMPTIONS
- -------------------------------------------------------------------------------
TO QUALIFY FOR TELEPHONE
REDEMPTIONS, CHOOSE THAT OPTION
WHEN YOU OPEN YOUR ACCOUNT.
- -------------------------------------------------------------------------------
You may redeem your shares by calling M&T Bank's Mutual Fund Services at (800)
836-2211 (in the Buffalo area, phone 635-9368) before 11:00 a.m. (Eastern time).
The proceeds will be wired that same day directly to your account at M&T Bank or
an affiliate or to another account you previously designated at a domestic
commercial bank account that is a member of the Federal Reserve system. M&T Bank
reserves the right to charge a fee for a wire transfer from a customer checking
account, which may contain redemption proceeds, to another commercial bank.
You will be automatically eligible for telephone redemptions, unless you check
the box on the new account application form to decline this privilege. It is
recommended that you provide the necessary information for the telephone/wire
redemption option on your initial application. If you do not do this and later
wish to take advantage of telephone redemptions, you must call M&T Bank's Mutual
Fund Services for authorization forms. If your redemption request is received
after 11:00 a.m. (Eastern time), you will be paid the Fund's daily dividend on
those shares. However, the proceeds will not be wired to your bank account until
the following business day. If your redemption request is received before 11:00
a.m. (Eastern time), the proceeds will be wired the same day, but you will not
receive that day's dividend.
You may have difficulty redeeming shares by telephone in times of unusual
economic or market changes when the volume of telephone requests may be
exceptionally high. If you cannot contact M&T Bank's Mutual Fund Services by
telephone, please send a written redemption request by mail for next day
delivery to the Vision Group of Funds. Inc. at the address shown below.
Each Fund reserves the right to modify or terminate the telephone redemption
privilege at any time. Shareholders will be notified prior to any modification
or termination.
If you hold shares in certificate form or hold Fund shares through an IRA
account, you cannot redeem those shares by phone, but instead must redeem them
in writing as explained below.
Shareholders who accept the telephone redemption service authorize the
Corporation and its agents to act upon their telephonic instructions to redeem
shares from any account for which they have authorized such services. Redemption
instructions given by telephone may be electronically recorded for your
protection. If reasonable procedures are not followed by the Funds, the Funds
may be liable for losses due to unauthorized or fraudulent telephone
instructions.
REDEEMING SHARES BY CHECK
At your request, Federated Shareholder Services Company will establish a
checking account that allows you to redeem Fund shares by writing checks in
amounts of $250 or more. Checkwriting privileges are not available to Sweep
Account customers. The ability to redeem shares by check may not be available
when establishing an account through certain financial institutions (such as
brokers). You should read this prospectus together with any applicable agreement
between you and the institution to learn about the services provided, the fees
charged for those services, and any restrictions or limitations that may be
imposed. For more information, contact M&T Bank's Mutual Fund Services.
REDEEMING SHARES BY MAIL
You may also redeem shares by sending your written request to:
Vision Group of Funds, Inc.
P.O. Box 4556
Buffalo, New York 14240-4556
Please call M&T Bank's Mutual Fund Services for specific instructions before
redeeming by letter. Your written request must include your name, the Fund's
name, class name, your account number, and the share or dollar amount you want
to redeem. If share certificates have been issued to you, those certificates
must be properly endorsed and should be sent by registered or certified mail
along with your redemption request.
SIGNATURE GUARANTEES
A signature guarantee verifies the authenticity of your signature. For your
protection, you must have your signature guaranteed on written redemption
requests in the following instances:
. if you are redeeming shares worth $50,000 or more;
. if you want a redemption of any amount sent to an address other than your
address on record with a Fund;
. if you want a redemption of any amount payable to someone other than your-
self as the shareholder of record; or
. if you want to transfer the registration of Fund shares.
signature guarantee must be provided by:
. a trust company or commercial bank whose deposits are insured by BIF, which
is administered by the FDIC;
. a savings bank or savings association whose deposits are insured by SAIF,
which is administered by the FDIC;
. a member firm of the New York, American, Boston, Midwest, or Pacific Stock
Exchanges; or
. any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The Funds do not accept signatures guaranteed by a notary public.
The Funds and their transfer agent have adopted standards for accepting
signature guarantees from the above institutions. The Funds may elect in the
future to limit eligible signature guarantors to institutions that are members
of a signature guarantee program. The Funds and their transfer agent reserve the
right to amend these standards at any time without notice.
RECEIVING PAYMENT
Normally, a check for the proceeds is mailed within one business day, but in no
event more than seven days, after receipt of a proper written redemption
request, provided the Fund or its agents have received payment for shares from
the shareholder.
SYSTEMATIC WITHDRAWAL PROGRAM
- -------------------------------------------------------------------------------
THE FUNDS' SYSTEMATIC
WITHDRAWAL PROGRAM LETS YOU
RECEIVE REGULAR AUTOMATIC
PAYMENTS OF A PREDETERMINED
AMOUNT.
- -------------------------------------------------------------------------------
If you own Fund shares worth $10,000 or more you can have regular payments of
$50 or more sent from your Fund account to you, another person you designate or
your bank checking or NOW deposit account. Fund shares are redeemed to provide
monthly or quarterly payments in the amount you specify.
Depending on the amount you are withdrawing, the amount of dividends and any
capital gains distributions paid on the Fund shares, and any possible
fluctuations in a Fund's net asset value per share, these redemptions may reduce
and eventually exhaust your investment in the Fund. For this reason, you should
not consider systematic withdrawal payments as yield or income received on your
investment in the Fund.
For more information and an application form for the Systematic Withdrawal
Program, call M&T Bank's Mutual Fund Services.
INVOLUNTARY REDEMPTIONS
Because of the high cost of maintaining accounts with low balances, the Funds
may redeem your shares and send you the proceeds if your account balance falls
below a minimum value of $250 due to shareholder redemptions. Shareholders who
make large or frequent withdrawals may be particularly vulnerable to this
involuntary redemption process. However, before shares are redeemed to close an
account, the shareholder will be notified in writing and given 30 days to
purchase additional shares to meet the minimum balance requirement.
Further, each Fund reserves the right to redeem shares involuntarily or make
payment for redemptions in the form of securities if it appears appropriate to
do so in light of the Funds' responsibilities under the Investment Company Act
of 1940.
TAX INFORMATION
- -------------------------------------------------------------------------------
THE FOLLOWING DISCUSSION ON
TAXES IS FOR GENERAL
INFORMATION ONLY. PLEASE
CONSULT YOUR OWN TAX ADVISER
FOR SPECIFIC TAX INFORMATION
ABOUT YOUR PARTICULAR
SITUATION.
- -------------------------------------------------------------------------------
Below is a general discussion of tax considerations for each of the Funds. No
attempt has been made to present a detailed explanation of the federal, state,
and local income tax treatment of a Fund or its shareholders, and this
discussion is not intended as a substitute for careful tax planning.
The tax consequences discussed here apply whether you receive dividends in cash
or reinvest them in additional shares. The Funds will send you tax information
annually regarding the federal income tax consequences of distributions made
during the year. You should definitely consult your own tax adviser about any
state or local taxes that may apply.
Each Fund will be treated as a separate entity for federal income tax purposes.
Income earned by each of the Funds, including any capital gains or losses
realized, is not combined with income earned on the Corporation's other
portfolios.
The Funds intend to qualify each year as a regulated investment company under
the Internal Revenue Code so that they are not required to pay federal income
taxes on the income and capital gains distributed to shareholders.
FEDERAL INCOME TAXES
Unless shareholders are otherwise exempt from taxes, they are required to pay
federal income taxes on Fund dividends and other distributions received
(including capital gains distributions, if any).
DESCRIPTION OF FUND SHARES
Vision Group of Funds, Inc. (the "Corporation") was organized as a Maryland
corporation on February 23, 1988, and the Funds commenced operations on June 1,
1988. The Corporation has authorized capital of 20 billion shares of common
stock with a par value of $.001 per share (referred to as capital stock). The
Corporation's Articles of Incorporation permit the Corporation to offer separate
series of shares in the Funds or other future portfolios. Currently, the
Corporation offers eight portfolios: Vision Money Market Fund, Vision Treasury
Money Market Fund, Vision New York Tax-Free Money Market Fund, Vision U.S.
Government Securities Fund, Vision New York Municipal Income Fund, Vision Equity
Income Fund, Vision Growth and Income Fund, and Vision Capital Appreciation
Fund. The Vision Money Market Fund and Vision Treasury Money Market Fund also
offer another class of shares, Class A Shares.
Each Fund share represents an equal proportionate interest in the Fund with
other shares of the same class and participates equally in the dividends and any
other distributions that are declared at the discretion of the Corpora- tion's
Board of Directors.
VOTING RIGHTS AND OTHER INFORMATION
- -------------------------------------------------------------------------------
SHAREHOLDERS OF THE FUNDS ARE ENTITLED TO ONE VOTE FOR EACH FULL SHARE THEY
HOLD AND TO FRACTIONAL VOTES FOR ANY FRACTIONAL SHARES THEY HOLD.
- -------------------------------------------------------------------------------
Shareholders in each Fund generally vote in the aggregate and not by class,
unless the law expressly requires otherwise or the Directors determine that the
matter to be voted upon affects only the interests of shareholders of a
particular Fund or class of shares. (See the "Description of Fund Shares" in the
Statement of Additional Information for examples of when the Investment Company
Act of 1940 requires that shareholders vote by class.) As of April 15, 1998,
Tice & Co., Buffalo, New York, acting in various capacities for numerous
accounts, was the owner of record of 256,813,668 shares (37.73%) of the Money
Market Fund; and 332,297,413 shares (70.88%) of the Treasury Money Market Fund
and, therefore, may for certain purposes be deemed to control the Funds and be
able to affect the out-come of certain matters presented for a vote of
shareholders. The Funds did not have class designations prior to May 1, 1998.
The Funds are not required to hold annual shareholder meetings, unless matters
arise that require a vote of the shareholders under the Investment Company Act
of 1940. That law requires a vote of the shareholders to approve changes in the
Funds' investment advisory agreement, to replace the Funds' independent
certified public accountants and, under certain circumstances, to elect members
to the Corporation's Board of Directors. All shares of all classes of each Fund
in the Corporation have equal voting rights, except in matters affecting only a
particular Fund or class of shares, only shares of that Fund or class of shares
are entitled to vote.
Directors may be removed by the Corporation's Board of Directors or by a vote of
shareholders at a special meeting. The Corporation's Board of Directors will
promptly call a special meeting of shareholders upon the written request of
shareholders owning at least 10% of any Fund's outstanding shares.
As used in this prospectus, "assets belonging to the Fund" means the money
received by the Corporation upon the issuance or sale of shares in a Fund,
together with all income, earnings, profits, and proceeds derived from the
investment of that money. This includes any proceeds from the sale, exchange, or
liquidation of these investments, any funds or payments derived from the rein-
vestment of these proceeds, and a portion of the general assets of the
Corporation that do not otherwise belong to the Fund.
Assets belonging to a Fund are charged with the direct expenses and liabilities
of that Fund and with a share of the general expenses and liabilities of the
Corporation. The general expenses and liabilities of the Corporation are
allocated in proportion to the relative asset values of all the Corporation's
portfolios at the time the expense or liability is incurred.
The management of the Corporation determines each Fund's direct and allocable
liabilities at the time the expense or liability is incurred as well as each
Fund's allocable share of any general assets at the time the asset is acquired.
These determinations are reviewed and approved annually by the Corpo- ration's
Board of Directors and are conclusive.
OTHER CLASSES OF SHARES
The Funds also offer another class of shares, Class A Shares. Class A Shares are
sold at net asset value and are subject to an initial investment of $500, unless
the investment is in a retirement plan, in which case the minimum initial
investment is $250.
Class A and S Shares are subject to certain of the same expenses.
Class A Shares of the Funds are not distributed with a 12b-1 Plan, but are
subject to a maximum shareholder servicing fee of 0.25%. Class S Shares are
distributed with a 12b-1 Plan fee of 0.25%, as well as a shareholder servicing
fee, although no shareholder servicing fee is currently being accrued or paid by
Class S Shares.
Expense differences between classes may affect the performance of each class of
shares.
To obtain more information and a prospectus for Class A Shares, investors may
call 1-800-836-2211 or in the Buffalo area, call (716) 635-9368.
ADDRESSES
Vision Group of Funds, Inc.
P.O. Box 4556
Buffalo, New York 14240-4556
(800) 836-2211 (716) 635-9368
DISTRIBUTOR
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
INVESTMENT ADVISER
Manufacturers and Traders Trust Company
One M&T Plaza
Buffalo, New York 14240
CUSTODIAN
State Street Bank and Trust Company
P.O. Box 8609
Boston, Massachusetts 02266-8609
ADMINISTRATOR
Federated Administrative Services
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Federated Shareholder Services Company
P.O. Box 8609
Boston, Massachusetts 02266-8609
INDEPENDENT AUDITORS
Ernst & Young LLP
One Oxford Centre
Pittsburgh, Pennsylvania 15219
Vision
Money Market
Fund
------------------------------
Vision
Treasury Money Market
Fund
------------------------------
Prospectus dated
May 1, 1998
LOGO
VISION
GROUP OF FUNDS, INC.
Manufacturers And Traders
Trust Company
-----------------------------------
Since 1955
Investment Adviser
A subsidiary of First Empire State
Corporation
LOGO FEDERATED INVESTORS
Federated Securities Corp. is the distributor of the fund and is
subsidiary of Federated Investors.
92830F 1072302 (4/98)
92830F TR1072302A (4/98)
VISION MONEY MARKET FUND
VISION TREASURY MONEY MARKET FUND
(PORTFOLIOS OF VISION GROUP OF FUNDS, INC.)
CLASS S SHARES
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information relates to the prospectus of two
portfolios of the Vision Group of Funds, Inc., referred to as the Vision
Money Market Fund and Vision Treasury Money Market Fund (collectively, the
"Funds" or individually, a "Fund") which Funds offer Class S Shares dated
May 1, 1998.
This Statement of Additional Information is not a prospectus itself, but
should be read in conjunction with the Funds' current prospectus dated May
1, 1998. This Statement of Additional Information is incorporated into the
Funds' prospectus by reference. To receive a copy of the prospectus, or a
paper copy of this Statement of Additional Information, if you have received
it electronically, write to Vision Group of Funds, Inc., P.O. Box 4556,
Buffalo, NY 14240-4556, or call (800) 836-2211 or (716) 635-9368. Please
retain this Statement of Additional Information for further reference.
5800 CORPORATE DRIVE
PITTSBURGH, PENNSYLVANIA 15237-7010
Statement of Additional Information dated May 1, 1998
MANUFACTURERS AND TRADERS
TRUST COMPANY
Investment Adviser
A subsidiary of First Empire State Corporation
Federated Securities Corp. is distributor for the Funds.
<PAGE>
TABLE OF CONTENTS
I
GENERAL INFORMATION ABOUT THE FUNDS 1
INVESTMENT OBJECTIVES AND POLICIES 1
Types of Investments 1
Temporary Investments 2
Credit Enhancement 4
INVESTMENT LIMITATIONS 5
Regulatory Compliance 7
VISION GROUP OF FUNDS, INC. MANAGEMENT 7
Fund Ownership 9
Directors' Compensation 9
Director Liability 9
INVESTMENT ADVISORY SERVICES 9
Adviser to the Funds 9
Advisory Fees 10
OTHER SERVICES 10
Administrative Services 10
Custodian and Portfolio Accountant 10
Transfer Agent and Dividend Disbursing
Agent 10
Independent Auditors 10
BROKERAGE TRANSACTIONS 10
DESCRIPTION OF FUND SHARES 11
HOW TO BUY SHARES 12
Conversion to Federal Funds 12
Cash Sweep Program 12
DETERMINING NET ASSET VALUE 12
REDEEMING FUND SHARES 13
BANKING LAWS 13
TAX STATUS 13
The Funds' Tax Status 13
Shareholders' Tax Status 13
TOTAL RETURN 14
YIELD 14
EFFECTIVE YIELD 16
PERFORMANCE COMPARISONS 16
Economic and Market Information 17
APPENDIX 18
<PAGE>
GENERAL INFORMATION ABOUT THE FUNDS
The Funds are portfolios of Vision Group of Funds, Inc. (the "Corporation"). The
Corporation was established as a Maryland corporation under Articles of
Incorporation dated February 23, 1988. The Funds offer two classes of shares,
Class A Shares and Class S Shares. This Statement relates to Class S Shares of
the Funds.
INVESTMENT OBJECTIVES AND POLICIES
MONEY MARKET FUND
The investment objective of Vision Money Market Fund ("Money Market Fund") is to
seek current income with liquidity and stability of principal by investing in
high-quality money market instruments.
The Money Market Fund invests in money market instruments which mature in 397
days or less and which include, but are not limited to, commercial paper and
variable amount demand master notes, bank instruments, U.S. government
obligations, and repurchase agreements.
The instruments of banks and savings and loans that are members of the Federal
Deposit Insurance Corporation, such as certificates of deposit, demand and time
deposits, savings shares, and bankers' acceptances, are not necessarily
guaranteed by those organizations.
TREASURY MONEY MARKET FUND
The investment objective of Vision Treasury Money Market Fund ("Treasury Money
Market Fund") is to seek current income with liquidity and stability of
principal by investing in direct obligations of the U.S. Treasury with remaining
maturities of 397 days.
The Treasury Money Market Fund invests in direct obligations of the U.S.
Treasury, such as bills, notes, and bonds, and repurchase agreements
collateralized by U.S. Treasury obligations, which mature in 397 days or less.
"U.S. Treasury Obligations" refers to evidences of indebtedness issued by the
United States that are fully guaranteed as to principal and interest by the
United States, maturing in one year or less from the date of acquisition or
purchased pursuant to repurchase agreements that provide for repurchase by the
seller within one year from the date of acquisition.
U.S. GOVERNMENT OBLIGATIONS
The types of U.S. government obligations in which the Money Market Fund may
invest generally include direct obligations of the U.S. Treasury (such as U.S.
Treasury bills, notes, and bonds) and obligations issued or guaranteed by U.S.
government agencies or instrumentalities. These securities are backed by:
o the full faith and credit of the U.S. Treasury;
o the issuer's right to borrow from the U.S. Treasury;
o the discretionary authority of the U.S. government to purchase
certain obligations of agencies or instrumentalities; or
o the credit of the agency or instrumentality issuing the obligations.
Examples of agencies and instrumentalities which may not always receive
financial support from the U.S. government are:
o Farm Credit Banks;
o Student Loan Marketing Association;
o Federal Home Loan Banks;
o Federal Home Loan Mortgage Corporation; and
o Federal National Mortgage Association.
The Treasury Money Market Fund may only invest in direct obligations of
the U.S. Treasury which matures in 397 days or less, and repurchase
agreements collateralized by such securities.
<PAGE>
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are made to secure what is considered to be an
advantageous price or yield for the Funds. Each of the Funds engage in
when-issued and delayed delivery transactions only for the purpose of
acquiring portfolio securities consistent with a Fund's investment
objective and policies, not for investment leverage. No fees or other
expenses, other than normal transaction costs, are incurred. However,
liquid assets of a Fund sufficient to make payment for the securities to
be purchased are segregated on the Fund's records at the trade date. These
assets are marked to market daily and are maintained until the transaction
has been settled. The Funds do not intend to engage in when-issued and
delayed delivery transactions to an extent that would cause the
segregation of more than 25% of the total value of its assets.
CERTIFICATES OF DEPOSIT AND BANKERS' ACCEPTANCES
The Money Market Fund may invest in certificates of deposit of domestic
branches of U.S. commercial banks which are members of the Federal Reserve
System or the deposits of which are insured by the Federal Deposit
Insurance Corporation having total assets at the time of purchase in
excess of $1 billion, and bankers' acceptances guaranteed by domestic
branches of U.S. commercial banks having total assets at the time of
purchase in excess of $1 billion.
COMMERCIAL PAPER
The Money Market Fund may invest in commercial paper rated at the time of
purchase "A-2" or better by Standard & Poor's ("S&P") or "Prime-2" or
better by Moody's Investors Service, Inc. ("Moody's") or, if not rated,
found by M&T Bank to be of comparable quality pursuant to guidelines
approved by the Board of Directors.
REPURCHASE AGREEMENTS
The Funds may invest in repurchase agreements as described in the
prospectus.
REVERSE REPURCHASE AGREEMENTS
The Funds may also enter into reverse repurchase agreements. This
transaction is similar to borrowing cash. In a reverse repurchase
agreement a Fund transfers possession of a portfolio instrument to another
person, such as a financial institution, broker, or dealer, in return for
a percentage of the instrument's market value in cash, and agrees that on
a stipulated date in the future the Fund will repurchase the portfolio
instrument by remitting the original consideration plus interest at an
agreed upon rate. The use of reverse repurchase agreements may enable the
Funds to avoid selling portfolio instruments at a time when a sale may be
deemed to be disadvantageous, but the ability to enter into reverse
repurchase agreements does not ensure that the Funds will be able to avoid
selling portfolio instruments at a disadvantageous time.
When effecting reverse repurchase agreements, liquid assets of a Fund, in
a dollar amount sufficient to make payment for the obligations to be
purchased, are segregated on the Fund's records at the trade date. These
securities are marked to market daily and maintained until the transaction
is settled.
With respect to the Money Market Fund, the above investment objectives and
policies cannot be changed without approval of a majority of the outstanding
shares of the Fund.
CREDIT ENHANCEMENT
The Money Market Fund typically evaluates the credit quality and ratings of
credit-enhanced securities based upon the financial condition and ratings of the
party providing the credit enhancement (the "credit enhancer"), rather than the
issuer. However, credit-enhanced securities will not be treated as having been
issued by the credit enhancer for diversification purposes, unless the Fund has
invested more than 10% of its assets in securities issued, guaranteed or
otherwise credit enhanced by the credit enhancer, in which case the securities
will be treated as having been issued by both the issuer and the credit
enhancer.
<PAGE>
INVESTMENT LIMITATIONS
The Funds will not change any of the investment limitations described below
without approval of a majority of the outstanding shares of the Funds.
SELLING SHORT AND BUYING ON MARGIN
The Funds will not sell any securities short or purchase any securities on
margin, or participate on a joint or joint and several basis in any
securities trading account.
BORROWING MONEY
The Funds may borrow funds for temporary purposes by entering into reverse
repurchase agreements in accordance with the terms described in the
prospectus. No Fund anticipates entering into reverse repurchase
agreements in excess of 5% of its net assets.
PLEDGING SECURITIES
The Funds will not mortgage, pledge, or hypothecate any assets, except in
connection with any such borrowing and in amounts not in excess of the
lesser of the dollar amounts borrowed or 10% of the value of the Fund's
total assets at the time of its borrowing.
INVESTING IN COMMODITIES, COMMODITY CONTRACTS, OR REAL ESTATE
The Funds will not invest in commodities, commodity contracts (including
futures contracts), real estate, oil, gas, or mineral exploration or
development programs, except that it may purchase marketable securities of
companies engaged in such activities.
UNDERWRITING
The Funds will not engage in underwriting securities issued by others.
LENDING CASH OR SECURITIES
The Funds will not make loans, except that each Fund may purchase or hold
debt instruments, including repurchase agreements, in accordance with its
investment objective and policies.
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
The Funds will not invest in securities issued by any other investment
company, except as part of a merger, consolidation, reorganization, or
acquisition of assets.
DIVERSIFICATION OF INVESTMENTS
The Money Market Fund will not purchase securities issued by any one
issuer (other than cash, cash items, or securities issued or guaranteed by
the U.S. government, its agencies or instrumentalities, and repurchase
agreements collateralized by such securities) if as a result more than 5%
of the value of its total assets would be invested in the securities of
that issuer, except that up to 25% of the value of the Fund's total assets
may be invested without regard to this 5% limitation.
CONCENTRATION OF INVESTMENTS
The Money Market Fund will not invest more than 25% of the value of its
total assets in issuers in the same industry.
With respect to the Money Market Fund, utilities will be divided according
to their services; for example, gas, gas transmissions, electric and gas,
electric, and telephone will each be considered a separate industry.
Wholly-owned finance companies will be considered to be in the industries
of their parents if their activities are primarily related to the
financing activities of their parents.
The Money Market Fund may invest more than 25% of the value of its total
assets in obligations issued by any state, territory, or possession of the
United States, the District of Columbia or any of their authorities,
agencies, instrumentalities or political subdivisions, in cash or cash
items (including instruments issued by a U.S. branch of a domestic bank or
savings and loan association and bankers' acceptances), securities issued
or guaranteed by the U.S. government, its agencies or instrumentalities,
or instruments secured by these money market instruments (i.e., repurchase
agreements).
ISSUING SENIOR SECURITIES
The Funds will not issue senior securities.
INVESTING IN RESTRICTED SECURITIES
The Funds will not invest in securities subject to legal or contractual
restrictions.
INVESTING IN ISSUERS WHOSE SECURITIES ARE OWNED BY OFFICERS AND DIRECTORS
OF THE CORPORATION
The Funds will not purchase or retain the securities of any issuer if the
officers or Directors of the Corporation or the Funds' investment adviser
owning beneficially more than one-half of 1% of the issuer's securities
together own beneficially more than 5% of such securities.
DEALING IN PUTS AND CALLS
The Funds will not write or purchase put or call options.
INVESTING IN NEW ISSUERS
The Funds will not invest more than 10% of the value of its total assets
in the securities of issuers which have records of less than three years
of continuous operation, including the operation of any predecessor.
VOTING SECURITIES
The Funds will not buy common stocks.
PURCHASING SECURITIES TO EXERCISE CONTROL
The Funds will not invest in any issuer for purposes of exercising control
or management.
Except with respect to borrowing money, if a percentage limitation is adhered to
at the time of investment, a later increase or decrease in percentage resulting
from any change in value or net assets will not result in a violation of such
restriction.
The Funds did not borrow money in excess of 5% of the value of their
respective net assets during the last fiscal year and have no present intent to
do so in the coming fiscal year.
REGULATORY COMPLIANCE
The Funds are money market funds. Many of a Fund's investment policies are
fundamental, cannot be changed without vote of shareholders, and were
constructed so as to comply with Rules promulgated by the Securities and
Exchange Commission (SEC) governing mutual funds' use of the amortized cost
method of accounting, as they were in effect at the time a Fund was created.
The SEC has subsequently revised Rule 2a-7 under the Investment Company Act of
1940 which governs money market funds' use of the amortized cost method of
accounting. As a result of the revisions, the Funds will adhere to certain
nonfundamental operating policies that are more restrictive in order to comply
with revised Rule 2a-7. Since the Funds may follow such operating policies
without violating their fundamental investment policies and limitations, the
Funds do not presently intend to ask for shareholder approval of changes to a
Fund's investment policies or limitations.
The Funds will invest in money market instruments (See the section of the
prospectus entitled "Acceptable Investments") rated in one of the two highest
short-term rating categories by nationally recognized statistical rating
organizations ("NRSROs") or of comparable quality to securities having such
rating.
The Funds will follow applicable regulations in determining whether a security
rated by NRSROs can be treated as being in the two highest short-term rating
categories.
The Funds will invest more than 5% of their respective total assets in any one
issuer only under circumstances permitted by Rule 2a-7. The Funds will also
determine the effective maturity of their investments, as well as their ability
to consider a security as having received the requisite short-term ratings by
NRSROs, according to Rule 2a-7. The Fund may change these operating policies to
reflect changes in the laws and regulations without the approval of their
shareholders, unless such changes are more permissive than the Funds'
fundamental policies.
VISION GROUP OF FUNDS, INC. MANAGEMENT
Officers and Directors are listed with their addresses, birthdates, present
positions with Vision Group of Funds, Inc., and principal occupations.
Randall I. Benderson
570 Delaware Avenue
Buffalo, NY
Birthdate: January 12, 1955
Director
Senior Vice President and Chief Operating Officer, Benderson Development
Company, Inc.
Joseph J. Castiglia
Roycroft Campus
21 South Grove Street, Suite 291
East Aurora, NY 14052
Birthdate: July 20, 1934
Director
Director, New York State Electric & Gas Corp.; Secewsow Environmental Services,
Inc.; Blue Cross & Blue Shield of Western New York; Buffalo Branch, Federal
Reserve Bank of New York; and Former President, Chief Executive Officer and Vice
Chairman, Pratt & Lambert United, Inc.
Daniel R. Gernatt, Jr.
Richardson & Taylor Hollow Roads
Collins, NY
Birthdate: July 14, 1940
Director
President and CFO of Gernatt Asphalt Products, Inc.; Executive Vice President,
Dan Gernatt Gravel Products, Inc.; Vice President, Countryside Sand & Gravel,
Inc.
George K. Hambleton, Jr.
670 Young Street
Tonawanda, NY
Birthdate: February 8, 1933
Director
Former President, Brand Name Sales, Inc.; President, Hambleton & Carr, Inc.
<PAGE>
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
President and Treasurer
Vice Chairman, Treasurer, and Trustee, Federated Investors; Vice President,
Federated Advisers, Federated Management, Federated Research, Federated Research
Corp., Federated Global Research Corp., and Passport Research, Ltd.; Executive
Vice President and Director, Federated Securities Corp.; Trustee, Federated
Shareholder Services Company; Trustee or Director of other funds distributed by
Federated Securities Corp.; President, Executive Vice President and Treasurer of
other funds distributed by Federated Securities Corp.
Beth S. Broderick
Federated Investors Tower
Pittsburgh, PA
Birthdate: August 2, 1965
Vice President and Assistant Treasurer
Assistant Vice President & Client Services Officer, Mutual Fund Services
Division, Federated Administrative Services.
Charles L. Davis, Jr.
Federated Investors Tower
Pittsburgh, PA
Birthdate: March 23, 1960
Vice President and Assistant Treasurer
Vice President, Federated Administrative Services; Vice President and Assistant
Treasurer of other funds distributed by Federated Securities Corp.
Victor R. Siclari
Federated Investors Tower
Pittsburgh, PA
Birthdate: November 17, 1961
Secretary
Corporate Counsel and Vice President, Federated Administrative Services;
formerly Attorney, Morrison & Foerster (law firm).
FUND OWNERSHIP
As of April 15, 1998, Officers and Directors own less than 1% of each Fund's
outstanding shares.
As of April 15, 1998, the following shareholders of record owned 5% or more of
the outstanding shares of the Money Market Fund: Tice & Co., Buffalo, New York,
owned approximately 256,813,668 shares (37.73%) and National Financial Services
Co., New York, New York, owned approximately 40,783,430 shares (5.99%).
As of April 15, 1998, the following shareholder of record owned 5% or more of
the outstanding shares of the Treasury Money Market Fund: Tice & Co., Buffalo,
New York, owned approximately 332,297,413 shares (70.88%).
The Funds did not have class designations prior to May 1, 1998.
<PAGE>
DIRECTORS' COMPENSATION
AGGREGATE
NAME , COMPENSATION
POSITION WITH FROM
CORPORATION CORPORATION * #
Randall I. Benderson,
Director $8,500
Joseph J. Castiglia,
Director $8,000
Daniel R. Gernatt, Jr.,
Director $8,500
George K. Hambleton, Jr.,
Director $8,000
*Information is furnished for the fiscal year ended April 30, 1997. The
Corporation is the only investment company in the Fund Complex.
#The aggregate compensation is provided for the Corporation which is
comprised of seven portfolios.
DIRECTOR LIABILITY
With respect to the removal of a Director of the Corporation, the Corporation's
By-Laws provide, in accordance with applicable law, that a Director may be
removed from the Board at a meeting of shareholders called for that purpose upon
the majority vote of the shareholders of the Corporation entitled to vote at
such meeting. Such a meeting shall be called by the President or the Board of
Directors or at the request in writing of shareholders entitled to cast at least
ten percent (10%) of the votes entitled to be cast at such meeting. Such
shareholders' request shall state the purpose of the proposed meeting, and the
Corporation shall inform those shareholders of the reasonably estimated cost of
preparing and mailing a notice of the meeting to the other shareholders and, on
payment of these costs, shall notify each shareholder entitled to notice of the
meeting.
INVESTMENT ADVISORY SERVICES
ADVISER TO THE FUNDS
Investment advisory services are provided to the Funds by Manufacturers and
Traders Trust Company ("M&T Bank"), pursuant to an investment advisory agreement
dated April 25, 1988. The advisory services provided and the expenses assumed by
M&T Bank, as well as the advisory fees payable to it, are described in the
Funds' prospectus.
The investment advisory agreement provides that M&T Bank shall not be liable for
any error of judgment or mistake of law or for any loss suffered by a Fund in
connection with its performance under the advisory agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of M&T Bank in the performance of its
duties, or from reckless disregard by it of its duties and obligations
thereunder. Because of internal controls maintained by M&T Bank to restrict the
flow of non-public information, Fund investments are typically made without any
knowledge of M&T Bank's or its affiliates' lending relationships with an issuer.
Unless sooner terminated, the advisory agreement between the Funds and M&T Bank
will continue in effect from year to year if such continuance is approved at
least annually by the Corporation's Board of Directors, or by vote of a majority
of the outstanding shares of a Fund (as defined in the prospectus), and by a
majority of the Directors who are not parties to the advisory agreement or
interested persons (as defined in the Investment Company Act of 1940) of any
party to the advisory agreement, by vote cast in person at a meeting called for
such purpose. The advisory agreement is terminable at any time on 60 days'
written notice without penalty by the Directors, by vote of a majority of the
outstanding shares of a Fund, or by M&T Bank. The advisory agreement also
terminates automatically in the event of its assignment, as defined in the
Investment Company Act of 1940.
<PAGE>
ADVISORY FEES
For its advisory services, M&T Bank receives an annual investment advisory fee
as described in the prospectus.
During the fiscal years ended April 30, 1997, 1996, and 1995, for the Money
Market Fund and Treasury Money Market Fund, M&T Bank earned $2,862,559,
$2,339,981, and $1,635,164 and $2,296,162, $1,699,400, and $1,120,905,
respectively, which was reduced by $555,870, $530,234, and $618,151 and
$448,656, $319,668, and $418,701, respectively, because of undertakings to limit
the Funds' expenses. All advisory fees were computed on the same basis as in the
advisory contract described in the Prospectus.
OTHER SERVICES
ADMINISTRATIVE SERVICES
Federated Administrative Services, a subsidiary of Federated Investors, provides
administrative personnel and services to the Funds for a fee as described in the
prospectus. For the fiscal years ended April 30, 1997, 1996, and 1995 the Money
Market Fund and Treasury Money Market Fund incurred costs for administrative
services of $598,092 and $531,676; $478,882 and $384,262; and $74,362 and
$62,956, respectively, of which $27,570 and $5,988; $11,635 and $2,303; and
$1,843 and $392, respectively, were voluntarily waived.
CUSTODIAN AND PORTFOLIO ACCOUNTANT
State Street Bank and Trust Company ("State Street Bank"), Boston,
Massachusetts, is custodian for the securities and cash of the Funds. Federated
Services Company, Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
provides certain accounting and recordkeeping services with respect to the
Funds' portfolio investments.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Federated Shareholder Services Company, Pittsburgh, Pennsylvania, the Funds'
registered transfer agent, maintains all necessary shareholder records.
INDEPENDENT AUDITORS
The independent auditors for the Funds are Ernst & Young LLP, Pittsburgh,
Pennsylvania.
BROKERAGE TRANSACTIONS
Pursuant to the Funds' advisory agreement, M&T Bank determines which securities
are to be sold and purchased by the Funds and which brokers are to be eligible
to execute its portfolio transactions. Portfolio securities are normally
purchased directly from the issuer or from an underwriter or market maker for
the securities. Purchases from underwriters of portfolio securities include a
commission or concession paid by the issuer to the underwriter and purchases
from dealers serving as market makers may include the spread between the bid and
asking price. While M&T Bank generally seeks competitive spreads or commissions,
a Fund may not necessarily pay the lowest spread or commission available on each
transaction for reasons discussed below.
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the adviser looks for prompt execution of the order at a favorable
price. In working with dealers, the adviser will generally use those who are
recognized dealers in specific portfolio instruments, except when a better price
and execution of the order can be obtained elsewhere. The adviser makes
decisions on portfolio transactions and selects brokers and dealers subject to
review by the Board of Directors. The adviser may select brokers and dealers who
offer brokerage and research services. These services may be furnished directly
to the Funds or to the adviser and may include: advice as to the advisability of
investing in securities; security analysis and reports; economic studies;
industry studies; receipt of quotations for portfolio evaluations; and similar
services. Research services provided by brokers and dealers may be used by the
adviser or its affiliates in advising the Funds and other accounts. To the
extent that receipt of these services may supplant services for which the
adviser or its affiliates might otherwise have paid, it would tend to reduce
their expenses. The adviser and its affiliates exercise reasonable business
judgment in selecting brokers who offer brokerage and research services to
execute securities transactions. They determine in good faith that commissions
charged by such persons are reasonable in relationship to the value of the
brokerage and research services provided.
The Funds will not execute portfolio transactions through, acquire portfolio
securities issued by, make savings deposits in, or enter into repurchase or
reverse repurchase agreements with M&T Bank or its affiliates, and will not give
preference to M&T Bank's correspondents with respect to such transactions,
securities, savings deposits, repurchase agreements and reverse repurchase
agreements. While serving as investment adviser to the Funds, M&T Bank has
agreed to maintain its policy and practice of conducting its Trust and
Investment Services Division independently of its Commercial Department.
The Funds' advisory agreement provides that, in making investment
recommendations for the Funds, Trust and Investment Services Division personnel
will not inquire or take into consideration whether the issuer of securities
proposed for purchase or sale by the Funds is a customer of the Commercial
Department and, in dealing with its commercial customers, the Commercial
Department will not inquire or take into consideration whether securities of
such customers are held by the Funds.
Although investment decisions for the Funds are made independently from those of
the other accounts managed by M&T Bank, investments of the type the Fund may
make may also be made by those other accounts. When the Funds and one or more
other accounts managed by M&T Bank are prepared to invest in, or desire to
dispose of, the same security, available investments or opportunities for sales
will be allocated in a manner believed by M&T Bank to be equitable to each. In
some cases, this procedure may adversely affect the price paid or received by
the Funds or the size of the position obtained or disposed of by the Funds. In
other cases, however, it is believed that coordination and the ability to
participate in volume transactions will be to the benefit of the Funds.
For the fiscal years ended April 30, 1997, 1996, and 1995, the Money Market Fund
and Treasury Money Market Fund, paid no commissions on brokerage transactions.
DESCRIPTION OF FUND SHARES
The Corporation's Articles of Incorporation authorize the Board of Directors to
issue up to twenty billion full and fractional shares of Common Stock, of which
fourteen billion shares have been classified into eight classes. Six billion
shares remain unclassified at this time. Authorized classes of shares for each
Fund and amounts are as follows:
<TABLE>
<CAPTION>
FUND NAME AUTHORIZED CLASS AND AMOUNT
<S> <C>
Vision Money Market Fund 2 billion Class A Common Stock, Series A
2 billion Class A Common Stock, Series S
Vision Treasury Money Market Fund 2 billion Class B Common Stock, Series A
2 billion Class B Common Stock, Series S
Vision New York Tax-Free Money Market Fund 1 billion Class C Common Stock, Series A
Vision U.S. Government Securities Fund 1 billion Class D Common Stock, Series A
Vision New York Municipal Income Fund 1 billion Class E Common Stock, Series A
Vision Growth and Income Fund 1 billion Class F Common Stock, Series A
Vision Capital Appreciation Fund 1 billion Class G Common Stock, Series A
Vision Equity Income Fund 1 billion Class H Common Stock, Series A
</TABLE>
The Board of Directors may classify or reclassify any unissued shares of the
Corporation into one or more additional classes by setting or changing in any
one or more respects their respective preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends, qualifications, and
terms and conditions of redemption.
Shares have no subscription or pre-emptive rights and only such conversion or
exchange rights as the Board of Directors may grant in its discretion. When
issued for payment as described in the Funds' Prospectus and this Statement of
Additional Information, the Funds' shares will be fully paid and non-assessable.
In the event of a liquidation or dissolution of the Corporation, shares of the
Fund are entitled to receive the assets available for distribution belonging to
the respective shares of a Fund and a proportionate distribution, based upon the
relative asset values of that Fund and the Corporation's other portfolios, of
any general assets not belonging to any particular portfolio or class of shares
which are available for distribution.
Rule 18f-2 under the Investment Company Act of 1940 provides that any matter
required to be submitted to the holders of the outstanding voting securities of
an investment company such as the Corporation shall not be deemed to have been
effectively acted upon unless approved by the holders of a majority of the
outstanding shares of each portfolio affected by the matter. A portfolio is
affected by a matter unless it is clear that the interests of each portfolio in
the matter are identical or that the matter does not affect any interest of the
portfolio. Under Rule 18f-2, the approval of an investment advisory agreement or
any change in a fundamental investment policy would be effectively acted upon
with respect to a portfolio only if approved by a majority of the outstanding
shares of such portfolio. However, Rule 18f-2 also provides that the
ratification of independent certified public accountants, the approval of
principal underwriting contracts and the election of directors may be
effectively acted upon by shareholders of the Corporation voting without regard
to class. All shares of all classes of each Fund in the Corporation have equal
voting rights, except in matters affecting only a particular Fund or class of
shares, only shares of that Fund or class of shares are entitled to vote.
Notwithstanding any provision of Maryland law requiring a greater vote of the
Corporation's shares (or of any class voting as a class) in connection with any
corporate action, unless otherwise provided by law (for example, by Rule 18f-2)
or by the Corporation's Articles of Incorporation, the Corporation may take or
authorize such action upon the favorable vote of the holders of more than 50% of
the outstanding Common Stock of the Fund and the Corporation's other portfolios
(voting together without regard to class).
HOW TO BUY SHARES
Shares of the Funds are sold at their net asset value without a sales charge on
days on which the New York Stock Exchange and the Federal Reserve wire system
are open for business. The procedure for purchasing shares of the Funds is
explained in the prospectus under "How to Buy Shares."
CONVERSION TO FEDERAL FUNDS
It is the Funds' policy to be as fully invested as possible so that maximum
interest may be earned. To this end, all payments from shareholders must be in
federal funds or be converted into federal funds. M&T Bank and State Street Bank
act as the shareholders' agents in depositing checks and converting them to
federal funds.
CASH SWEEP PROGRAM
Class S Shares of the Funds are offered through a Cash Sweep Program. For
participating accounts, cash accumulations in demand deposit accounts with M&T
Bank are automatically invested in shares of the Funds on a day selected by M&T
Bank and its customer, or when the demand deposit account reaches a
predetermined dollar amount (e.g., $5,000).
PARTICIPATING DEPOSITORY INSTITUTIONS
Participating depository institutions would be responsible for prompt
transmission of orders relating to the program. These depository
institutions would be the record owners of the shares of the Funds.
Depository institutions participating in this program would be able to
charge their customers for services relating to the program. This
Statement of Additional Information should, therefore, be read together
with any agreement between the customer and the depository institution
with regard to the services to be provided, the fees to be charged for
those services, and any restrictions and limitations that would be
imposed. Beneficial ownership of shares of the Funds held by M&T Bank and
other institutional investors on behalf of their customers would be
recorded by the institutions and reflected in the regular account
statements provided by institutions to their customers.
DETERMINING NET ASSET VALUE
The Directors have decided that the best method for determining the value of
portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for amortization of
premium or accumulation of discount rather than at current market value.
Accordingly, neither the amount of daily income nor the net asset value is
affected by any unrealized appreciation or depreciation of the portfolio. In
periods of declining interest rates, the indicated daily yield on shares of the
Funds computed by dividing the annualized daily income on a Fund's portfolio by
the net asset value computed as above may tend to be higher than a similar
computation made by using a method of valuation based upon market prices and
estimates. In periods of rising interest rates, the opposite may be true.
The Funds' use of the amortized cost method of valuing portfolio instruments
depends on its compliance with certain conditions of Rule 2a-7 (the "Rule")
promulgated by the Securities and Exchange Commission under the Investment
Company Act of 1940. Under the Rule, the Directors must establish procedures
reasonably designed to stabilize the net asset value per share, as computed for
purposes of distribution and redemption, at $1.00 per share, taking into account
current market conditions and a Fund's investment objective. The procedures
include monitoring the relationship between the amortized cost value per share
and the net asset value per share based upon available indications of market
value. The Directors will decide what, if any, steps should be taken if there is
a difference of more than 0.5% between the two values. The Directors will take
any steps they consider appropriate (such as redemption in kind or shortening
the average portfolio maturity) to minimize any material dilution or other
unfair results arising from differences between the two methods of determining
net asset value.
REDEEMING FUND SHARES
The Funds redeem shares at the next computed net asset value after the Funds
receive the redemption request. Redemption procedures are explained in the
Prospectus under "Redeeming Shares."
BANKING LAWS
The Glass-Steagall Act and other banking laws and regulations presently prohibit
a bank holding company registered under the Bank Holding Company Act of 1956 or
any affiliate thereof from sponsoring, organizing or controlling a registered,
open-end investment company continuously engaged in the issuance of its shares,
and from issuing, underwriting, selling or distributing securities in general.
Such laws and regulations do not prohibit such a holding company or affiliate
from acting as investment adviser, transfer agent, or custodian to such an
investment company or from purchasing shares of such company as agent for and
upon the order of their customers. Some entities providing services to the Funds
are subject to such banking laws and regulations. They believe that they may
perform those services for the Funds contemplated by any agreement entered into
with the Funds without violating those laws or regulations. Changes in either
federal or state statutes and regulations relating to the permissible activities
of banks and their subsidiaries or affiliates, as well as further judicial or
administrative decisions or interpretations of present or future statutes and
regulations, could prevent these entities from continuing to perform all or a
part of the above services. If this happens, the Corporation's Board of
Directors would consider alternative means of continuing available services. It
is not expected that shareholders would suffer any adverse financial
consequences as a result of any of these occurrences. TAX STATUS
THE FUNDS' TAX STATUS
The Funds will pay no federal income tax because they expect to meet the
requirements of Subchapter M of the Internal Revenue Code applicable to
regulated investment companies and to receive the special tax treatment afforded
to such companies. To qualify for this treatment, a Fund must, among other
requirements:
o derive at least 90% of its gross income from dividends, interest, and
gains from the sale of securities;
o invest in securities within certain statutory limits; and
o distribute to its shareholders at least 90% of its net income earned
during the year.
SHAREHOLDERS' TAX STATUS
No portion of any income dividend paid by the Funds is eligible for the
dividends received deduction available to corporations. These dividends (to the
extent taxable), and any short-term capital gains, are taxable as ordinary
income.
Net income for dividend purposes includes (i) interest and dividends accrued and
discount earned on a Fund's assets (including both original issue and market
discount), less (ii) amortization of any premium and accrued expenses directly
attributable to such Fund, and the general expenses (e.g. legal, accounting and
directors' fees) of the Corporation prorated to each Fund on the basis of its
relative net assets.
CAPITAL GAINS
Capital gains experienced by the Fund could result in an increase in
dividends. Capital losses could result in a decrease in dividends. If for
some extraordinary reason a Fund realizes net long-term capital gains, it
will distribute them at least once every 12 months.
TOTAL RETURN
The Money Market Fund's and Treasury Money Market Fund's average annual total
returns for the one-year and five-year periods ended April 30, 1997, and for the
period from June 1, 1988 (date of initial public investment for the Funds) to
April 30, 1997, were 4.93% and 4.24% ; 4.82% and 4.11% ; and 2.96% and 2.51% ,
respectively.
The average annual total return for the shares is the average compounded rate of
return for a given period that would equate a $1,000 initial investment to the
ending redeemable value of that investment. The ending redeemable value is
computed by multiplying the number of shares owned at the end of the period by
the offering price per share at the end of the period. The number of shares
owned at the end of the period is based on the number of shares purchased at the
beginning of the period with $1,000, adjusted over the period by any additional
shares, assuming the monthly reinvestment of all dividends and distributions.
The Funds did not have class designations prior to May 1, 1998.
YIELD
The yields for the Money Market Fund and Treasury Money Market Fund for the
seven-day period ended April 30, 1997, were 4.90% and 4.80%, respectively. The
Funds did not have class designations prior to May 1, 1998. The Fund calculates
its yield daily, based upon the seven days ending on the day of the calculation,
called the "base period." This yield is computed by:
o determining the net change in the value of a hypothetical account with
a balance of one share at the beginning of the base period, with the
net change excluding capital changes but including the value of any
additional shares purchased with dividends earned from the original one
share and all dividends declared on the original and any purchased
shares;
o dividing the net change in the account's value by the value of the
account at the beginning of the base period to determine the
base period return; and
o multiplying the base period return by (365/7).
To the extent that financial institutions and broker/dealers charge fees in
connection with services provided in conjunction with an investment in the Fund,
the performance will be reduced for those shareholders paying those fees.
EFFECTIVE YIELD
The effective yield for the Money Market Fund and, Treasury Money Market Fund
for the seven-day period ended April 30, 1997, were 5.02% and 4.92%,
respectively. The Funds did not have class designations prior to May 1, 1998.
The Fund's effective yield is computed by compounding the unannualized base
period return by:
o adding 1 to the base period return;
o raising the sum to the 365/7th power; and
o subtracting 1 from the result.
<PAGE>
PERFORMANCE COMPARISONS
The Fund's performance depends upon such variables as:
o portfolio quality;
o average portfolio maturity;
o type of instruments in which the portfolio is invested;
o changes in interest rates on money market instruments;
o changes in Fund expenses; and
o the relative amount of Fund cash flow.
Investors may use financial publications and/or indices to obtain a more
complete view of the each Fund's performance. When comparing performance,
investors should consider all relevant factors such as the composition of any
index used, prevailing market conditions, portfolio compositions of other funds,
and methods used to value portfolio securities and compute offering price. The
financial publications and/or indices which the Funds use in advertising may
include:
o LIPPER ANALYTICAL SERVICES, INC. ranks funds in various fund
categories by making comparative calculations using total return.
Total return assumes the reinvestment of all income dividends and
capital gains distributions, if any.
o SALOMON 30-DAY TREASURY BILL INDEX is a weekly quote of the most
representative yields for selected securities issued by the U.S.
Treasury maturing in 30 days.
o BANK RATE MONITOR NATIONAL INDEX, Miami Beach, Florida, is a financial
reporting service which publishes weekly average rates of 50 leading
banks and thrift institution money market deposit accounts. The rates
published in the index are an average of the personal account rates
offered on the Wednesday prior to the date of publication by ten of the
largest banks and thrifts in each of the five largest Standard
Metropolitan Statistical Areas. Account minimums range upward from
$2,500 in each institution and compounding methods vary. If more than
one rate is offered, the lowest rate is used. Rates are subject to
change at any time specified by the institution.
o DONOGHUE'S MONEY FUND REPORT publishes annualized yields of hundreds of
money market funds on a weekly basis and through its MONEY MARKET
Insight publication reports monthly and year-to-date investment results
for the same money funds.
From time to time, the Funds will quote their Lipper rankings in the "money
market instrument funds" category in advertising and sales literature. Investors
may use such a reporting service in addition to the Funds' prospectus to obtain
a more complete view of the Funds' performance before investing. Of course, when
comparing Fund performance to any reporting service, factors such as composition
of the reporting service and prevailing market conditions should be considered
in assessing the significance of such comparisons.
Advertising and other promotional literature may include charts, graphs and
other illustrations using the Funds' returns, or returns in general, that
demonstrate basic investment concepts such as tax-deferred compounding,
dollar-cost averaging and systematic investment. In addition, a Fund can compare
its performance, or performance for the types of securities in which it invests,
to a variety of other investments, such as federally insured bank products,
including time deposits, bank savings accounts, certificates of deposit, and
Treasury bills, and to money market funds using the Lipper Analytical Services
money market instruments average. Unlike federally insured bank products, the
shares of the Funds are not insured.
ECONOMIC AND MARKET INFORMATION
Advertising and sales literature for the Funds may include discussions of
economic, financial and political developments and their effect on the
securities market. Such discussions may take the form of commentary on these
developments by Funds' portfolio managers and their views and analysis on how
such developments could affect the Funds. In addition, advertising and sales
literature may quote statistics and give general information about the mutual
fund industry, including the growth of the industry, from sources such as the
Investment Company Institute ("ICI"). For example, according to the ICI,
thirty-seven percent of American households are pursuing their financial goals
through mutual funds. These investors, as well as businesses and institutions,
have entrusted over $4.4 trillion to the more than 6,700 funds available.
<PAGE>
APPENDIX
STANDARD & POOR'S 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 the higher rated issues only in small degree.
A-Debt rated "A" has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible o the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB-Debt rated "BBB" is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits 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
debt in this category than in higher rated categories.
NR-Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.
Plus (+) or minus (-): The ratings from AA to BBB may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
MOODY'S INVESTORS SERVICE, INC. BOND RATINGS
AAA-Bonds which 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 which 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 which 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 which 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.
NR-Not rated by Moody's.
Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through Baa in its generic rating category; the modifier
2 indicates a mid-range ranking; and the modifier 3 indicates that the issue
ranks in the lower end of its generic rating category.
FITCH IBCA, INC. LONG-TERM DEBT RATINGS
AAA-Bonds considered to be investment grade and of the highest credit quality.
The obligor has an exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably foreseeable events.
AA-Bonds considered to be investment grade and of very high quality. The
obligor's ability to pay interest and repay principal is very strong, although
not quite as strong as bonds rated "AAA." Because bonds rated in the "AAA" and
"AA" categories are not significantly vulnerable to foreseeable future
developments, short-term debt of these issuers is generally rated "F-1+."
A-Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered strong, but
may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
BBB-Bonds considered to be investment grade and of satisfactory credit quality.
The obligor's ability to pay interest and repay principal is considered to be
adequate. Adverse changes in economic conditions and circumstances, however, are
more likely to have adverse impact on these bonds, and therefore, impair timely
payment. The likelihood that the ratings of these bonds will fall below
investment grade is higher than for bonds with higher ratings.
NR-NR indicates that Fitch does not rate the specific issue.
Plus (+) or Minus (-): Plus and minus signs are used with a rating symbol to
indicate the relative position of a credit within the rating category. Plus and
minus signs, however, are not used in the AAA category.
STANDARD & POOR'S MUNICIPAL NOTE RATINGS
SP-1-Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
sign (+) designation.
SP-2-Satisfactory capacity to pay principal and interest.
FITCH IBCA, INC. SHORT-TERM DEBT RATINGS
F-1+-EXCEPTIONALLY STRONG CREDIT QUALITY. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1-VERY STRONG CREDIT QUALITY. Issues assigned this rating reflect an assurance
of timely payment only slightly less in degree than issues rated F-1+.
F-2-GOOD CREDIT QUALITY. Issues carrying this rating have a satisfactory degree
of assurance for timely payment, but the margin of safety is not as great as the
F-1+ and F-1 ratings.
STANDARD & POOR'S COMMERCIAL PAPER RATINGS
A-1-This highest category indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus sign (+) designation.
A-2-Capacity for timely payment on issues with this designation is satisfactory.
However, the relative degree of safety is not as high as for issues designated
A-1.
MOODY'S INVESTORS SERVICE, INC. COMMERCIAL PAPER RATINGS
PRIME-1-Issuers rated PRIME-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations. Prime-1
repayment capacity will normally be evidenced by the following characteristics:
leading market positions in well established industries; high rates of return on
funds employed; conservative capitalization structure with moderate reliance on
debt and ample asset protection; broad margins in earning coverage of fixed
financial charges and high internal cash generation; and well-established access
to a range of financial markets and assured sources of alternate liquidity.
PRIME-2-Issuers rated PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will normally
be evidenced by many of the characteristics cited above, but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
92830F___
92830F___
G01716-__ (5/98)
PART C. OTHER INFORMATION.
Item 24. Financial Statements and Exhibits:
(a) Financial Statements. (1-8) Filed in Part A and incorprated by
reference to the combined Prospectus dated June 30, 1997.
(b) Exhibits:
(1) Conformed copy of Articles of Incorporation of the Registrant
(11); (i) Conformed copy of Amended Articles of Incorporation
of the Registrant;+ (ii) Conformed copy of Articles
Supplementary (8); (iii) Conformed copy of Articles
Supplementary dated May 29, 1996 (15); (iv) Conformed copy of
Articles Supplementary dated April 20, 1998;+
(2) Copy of By-Laws of the Registrant (11); (i) Copy of Amendment
No. 1 to Bylaws;+
(3) Not applicable;
(4) Copy of Specimen Certificate for Shares of Capital Stock of
the Registrant (8);
(i) Copy of Specimen Certificate for Shares of Capital
Stock of the Vision Capital Appreciation Fund (15);
(5) (i) Conformed copy of Investment Advisory Contract of the
Registrant (9);
(ii) Conformed copy of Sub-Advisory Contract (10); (iii)
Conformed copy of Exhibit B to Investment Advisory Contract
(14); (iv) Conformed copy of Exhibit C to Investment Advisory
Contract (19);
+ All Exhibits have been filed electronically.
8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 11 on Form N-1A filed September 3, l993. (File Nos. 33-20673
and 811-5514)
9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 13 on Form N-1A filed December 27, 1993 (File Nos. 33-20673
and 811-5514)
10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 17 on Form N-1A filed March 31, 1994 (File Nos. 33-20673 and
811-5514)
11. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 19 on Form N-1A filed June 27, 1994. (File Nos. 33-20673 and
811-5514)
14. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 23 on Form N-1A filed June 27, 1996. (File Nos. 33-20673 and
811-5514)
15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 24 on Form N-1A filed December 20, 1996. (File Nos. 33-20673
and 811-5514)
19. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 29 on Form N-1A filed September 24, 1997 (File Nos. 33- 20673
and 811-5514)
<PAGE>
(6) (i) Conformed copy of Distributor's Contract of the
Registrant (9); (a) Conformed copy of Distribution
Plan of the Registrant (9);
(ii) Conformed copy of Exhibit D to the Distributor's Contract
(20); (ii) Conformed copy of Administrative Services Agreement
of the Registrant (9); (iii) Conformed copy of Shareholder
Services Plan of Registrant (9);
(a) Copy of Exhibit A to Amended and Restated
Shareholder Services Plan (18); (iv) Conformed copy of Exhibit
C to Distributor's Contract (14); (v) Conformed copy of
Amended and Restated Shareholder Services Agreement (13); (vi)
Copy of Amendment No. 1 to Exhibit A to Shareholder Services
Agreement (14); (vii) Copy of Amendment No. 2 to Exhibit A to
Shareholder Services Agreement (18);
(7) Not applicable;
+ All Exhibits have been filed electronically.
9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 13 on Form N-1A filed December 27, 1993 (File Nos. 33-20673
and 811-5514)
13. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 19 on Form N-1A filed May 3, 1996. (File Nos. 33-20673 and
811-5514)
14. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 23 on Form N-1A filed June 27, 1996. (File Nos. 33-20673 and
811-5514)
18. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed August 6, 1997. (File Nos. 33-20673 and
811-5514)
20. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 30 on Form N-1A filed December 22, 1997. (File Nos. 33-20673
and 811-5514)
<PAGE>
(8) Conformed copy of Custodian Agreement of the Registrant (12);
(i) Copy of Amendment No. 2 to Exhibit A to
Custodian Contract (14);
(ii) Copy of Amendment No. 3 to Exhibit A to Custodian
Contract (18);
(iii) Conformed copy of State Street Domestic Custody
Fee Schedule (20);
(9) Conformed copy of Agreement for Fund Accounting Services and
Transfer Agency Services (16); (i) Copy of Exhibit 1 to
Agreement for Fund Accounting Services and Transfer Agency
Services (18); (ii) Conformed copy of Amendment to
Administrative Services Agreement and the Agreement for Fund
Accounting Services and Transfer Agency Services (20);
(10) Conformed copy of Opinion and Consent of Counsel as to
legality of shares being registered (11);
(11) Conformed copy of Consent of Independent Auditors (17);
(12) Not applicable;
(13) Conformed copy of Initial Capital Understanding (11);
(14) Not applicable;
- ----------------------------------
+ All Exhibits have been filed electronically.
11. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 19 on Form N-1A filed June 27, 1994. (File Nos. 33-20673 and
811-5514)
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 20 on Form N-1A filed June 26, 1995. (File Nos. 33-20673 and
811-5514)
14. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 23 on Form N-1A filed June 27, 1996. (File Nos. 33-20673 and
811-5514)
16. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 26 on Form N-1A filed June 20, 1997. (File Nos. 33-20673 and
811-5514)
17. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 27 on Form N-1A filed June 27, 1997. (File Nos. 33-20673 and
811-5514)
18. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed August 6, 1997. (File Nos. 33-20673 and
811-5514)
20. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 30 on Form N-1A filed December 22, 1997. (File Nos. 33-20673
and 811-5514)
<PAGE>
(15) (i) Copy of Rule 12b-1 Plan (7);
(a) Conformed copy of Exhibit B to Rule 12b-1 Plan
(14); (b) Conformed copy of Exhibit C to Rule
12b-1 Plan (20);
(ii) Copy of Rule 12b-1 Agreement (7);
(a) Copy of Exhibit B to Rule
12b-1 Agreement (14);
(b) Copy of Exhibit C to Rule
12b-1 Agreement (18);
(iii) Copy of Dealer (Sales) Agreement (7);
(16) Copy of Schedule for Computation of Fund Performance
Data (12);
(i) Copy of Schedule for Computation of Fund Performance Data
for the Vision Capital Appreciation Fund (15); (ii) Copy of
Schedule for Computation of Fund Performance Data for the
Vision Equity Income Fund (20);
(17) Copy of Financial Data Schedules (17); (18) Not Applicable (19)
Conformed copy of Power of Attorney (14);
Item 25. Persons Controlled by or Under Common Control with Registrant
None
- ----------------------------------
+ All Exhibits have been filed electronically.
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 9 on Form N-1A filed June 17, 1993. (File Nos. 33-20673 and
811-5514)
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 20 on Form N-1A filed June 26, 1995. (File Nos. 33-20673 and
811-5514)
14. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 23 on Form N-1A filed June 27, 1996. (File Nos. 33-20673 and
811-5514)
15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 24 on Form N-1A filed December 20, 1996. (File Nos. 33-20673
and 811-5514)
18. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed August 6, 1997. (File Nos. 33-20673 and
811-5514)
20. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 30 on Form N-1A filed December 22, 1997. (File Nos. 33-20673
and 811-5514)
<PAGE>
Item 26. Number of Holders of Securities:
Number of Record Holders
Title of Class as of April 15, 1998
Shares of capital stock
($0.001 per Share par value)
Vision Money Market Fund
Class A Shares 13,695
Class S Shares Not Currently Effective
Vision New York Tax-Free Money Market Fund 561
Vision Treasury Money Market Fund
Class A Shares 813
Class S Shares Not Currently Effective
Vision U.S. Government Securities Fund 990
Vision New York Municipal Income Fund
(formerly, Vision New York Tax-Free Fund) 1,527
Vision Growth and Income Fund 7,194
Vision Capital Appreciation Fund 3,993
Vision Equity Income Fund 762
Item 27. Indemnification: (7)
Item 28. Business and Other Connections of Investment Adviser:
(a) Manufacturers & Traders Trust Company ("M&T Bank") performs
investment advisory services for the Registrant. M&T Bank is the
principal banking subsidiary of First Empire State Corporation, a
$13 billion bank holding company, as of December 31, 1996,
headquartered in Buffalo, New York. As of May 31, 1997, M&T Bank has
174 offices throughout New York State and an office in Nassau, The
Bahamas.
M&T Bank was founded in 1856 and provides comprehensive banking and
financial services to individuals, governmental entities and
businesses throughout western New York. Registrant's investments are
managed through the Trust and Investment Services Division of M&T
Bank. As of December 31, 1996, M&T Bank had $3.1 billion in assets
under management for which it has investment discretion (which
includes employee benefits, personal trusts, estates, agencies and
other accounts). As of December 3l, 1996, M&T Bank managed over $1.2
billion in VISION money market mutual fund assets. Except for Vision
Group of Funds, Inc., M&T Bank does not presently provide investment
advisory services to any other registered investment companies. The
Funds' investments are managed through the Trust & Investment
Services Division of M&T Bank.
The principal executive Officers and Directors of M&T Bank are set
forth in the following tables. Unless otherwise noted, the position
listed under Other Substantial Business, Profession, Vocation or
Employment is with M&T Bank.
- ---------------------
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 9 on Form N-1A filed June 17, 1993. (File Nos. 33-20673 and
811-5514)
<PAGE>
(b)
Other Substantial
Position with Business, Profession,
Name the Adviser Vocation or Employment
Brent D. Baird Director Private Investor
1350 One M&T Plaza
Buffalo, NY 14203-2396
C. Angela Bontempo Director Senior V.P. & Exec. Dir.
Elm & Carlton Streets Roswell Park Cancer
Buffalo, NY 14263-0001 Institute
Robert T. Brady Director Chairman, President and
East Aurora, NY 14052-0018 C.E.O. Moog, Inc.
Atwood Collins, III Executive Officer President of the
350 Park Avenue New York City
6th Floor Division of
New York, NY 10022-6022 M&T Bank
Barber B. Conable, Jr. Director Former Member of
P.O. Box 218 Congress; Retired
Alexander, NY 14005-0218 President
The World Bank
Richard E. Garman Director President and Chief
2544 Clinton Street Executive Officer
Buffalo, NY 14224-1092 A.B.C. Paving Co., Inc.
and Buffalo Crushed
Stone, Inc.
James V. Glynn Director President
151 Buffalo Avenue Maid of the Mist
Suite 204 Corporation
Niagara Falls, NY 14303-1288
Brian E. Hickey Executive Officer Executive Vice President
44 Exchange Street and President-Rochester
3rd Floor Division-Manufacturers
Rochester, NY 14614-2097 and Traders Trust
Company
Patrick W.E. Hodgson Director President Cinnamon
248 Pall Mall Street Investments Limited
Suite 400
London, Ontario
CANADA N6A5P6
James L. Hoffman Executive Officer Executive Vice President
700 Corporate Blvd. and President-Hudson
Suite 701 Valley Division-
Newburgh, NY 12552-6046 Manufacturers and
Traders Trust Company
Samual T. Hubbard, Jr. Director President & CEO
1059 West Ridge Road The Alling and Cory
Rochester, NY 14615-2731 Company
Robert J. Irwin Advisory Director Chairman and CEO
Ellicott Station ASA Limited
P.O. Box 1210
Buffalo, NY 14205-1210
Other Substantial
Position with Business, Profession,
Name the Adviser Vocation or Employment
Wilfred J. Larson Director Retired President and
88 Oakland Place Chief Executive Officer
Buffalo, NY 14222-2030 Westwood-Squibb
Pharmaceuticals Inc.
Barbara L. Laughlin Executive Officer Executive Vice President
One M&T Plaza First Empire State
13th Floor Corporation and
Buffalo, NY 14203-2399 Manufacturers and
Traders Trust Company
Jorge G. Pereira Director Vice Chairman of the
350 Park Ave. Board First Empire State
6th Floor Corporation and
New York, NY 10022-6022 Manufacturers and
Traders Trust Company
John L. Pett Executive Officer Executive Vice President
One Fountain Plaza and Chief Credit Officer
9th Floor Manufacturers and
Buffalo, NY 14203-1495 Traders Trust Company
Michael P. Pinto Executive Officer Executive Vice President
One M&T Plaza and Chief Financial
5th Floor Officer Manufacturers
Buffalo, NY 14203-2399 and Traders Trust
Company
Donald P. Quinlan Director Retired Chairman of the
27 Pine Terrace Board and Chief
Orchard Park, NY 14127-3929 Executive Officer
Graphic Controls
Corporation
William C. Rappolt Executive Officer Executive Vice President
One M&T Plaza and Treasurer
19th Floor First Empire State
Buffalo, NY 14203-2399 Corporation and
Manufacturers and
Traders Trust Company
Melinda R. Rich Director President
P.O. Box 245 Rich Entertainment
Buffalo, NY 14240-0245 Group;
Robert E. Sadler, Jr. Executive Officer President Manufacturers
One M&T Plaza and Traders Trust
19th Floor Company and
Buffalo, NY 14203-2399 Executive Vice President
First Empire State
Corporation
Other Substantial
Mark J. Czarnecki Executive Officer Executive Vice President
One M&T Plaza First Empire State
9th Floor Corporation and
Buffalo, NY 14203-2399 Manufacturers and
Traders Trust Company
<PAGE>
Position with Business, Profession,
Name the Adviser Vocation or Employment
Raymond D. Stevens, Jr. Director Retired Chairman of
11 Summer Street the Board Pratt &
Suite 308 Lambert United, Inc.
Buffalo, NY 14209-2256
Herbert L. Washington Director President
3280 Monroe Avenue H.L.W. Fast Track, Inc.
Rochester, NY 14618-4608
John L. Wehle, Jr. Director Chairman of the
445 St. Paul Street Board, President &
Rochester, NY 14605-1775 Chief Executive
Officer, Genessee
Corporation
Robert G. Wilmers Director and Chairman of the Board,
One M&T Plaza Executive Officer President and Chief
19th Floor Executive Officer
Buffalo, NY 14203-2399 First Empire State
Corporation; and
Chairman of the Board
and Chief Executive
Officer Manufacturers
and Traders Trust
Company
Item 29. Principal Underwriters:
(a) Federated Securities Corp. the Distributor for shares of the
Registrant, acts as principal underwriter for the following
open-end investment companies, including the Registrant:
111 Corcoran Funds; Automated Government Money Trust; Blanchard Funds; Blanchard
Precious Metals Fund, Inc.; Cash Trust Series II; Cash Trust Series, Inc.; DG
Investor Series; Edward D. Jones & Co. Daily Passport Cash Trust; Federated
Adjustable Rate U.S. Government Fund, Inc.; Federated American Leaders Fund,
Inc.; Federated ARMs Fund; Federated Core Trust; Federated Equity Funds;
Federated Equity Income Fund, Inc.; Federated Fund for U.S. Government
Securities, Inc.; Federated GNMA Trust; Federated Government Income Securities,
Inc.; Federated Government Trust; Federated High Income Bond Fund, Inc.;
Federated High Yield Trust; Federated Income Securities Trust; Federated Income
Trust; Federated Index Trust; Federated Institutional Trust; Federated Insurance
Series; Federated Investment Portfolios; Federated Investment Trust; Federated
Master Trust; Federated Municipal Opportunities Fund, Inc.; Federated Municipal
Securities Fund, Inc.; Federated Municipal Trust; Federated Short-Term Municipal
Trust; Federated Short-Term U.S. Government Trust; Federated Stock and Bond
Fund, Inc.; Federated Stock Trust; Federated Tax-Free Trust; Federated Total
Return Series, Inc.; Federated U.S. Government Bond Fund; Federated U.S.
Government Securities Fund: 1-3 Years; Federated U.S. Government Securities
Fund: 2-5 Years; Federated U.S. Government Securities Fund: 5-10 Years;
Federated Utility Fund, Inc.; First Priority Funds; Fixed Income Securities,
Inc.; High Yield Cash Trust; Independence One Mutual Funds; Intermediate
Municipal Trust; International Series, Inc.; Investment Series Funds, Inc.;
Investment Series Trust; Liberty U.S. Government Money Market Trust; Liquid Cash
Trust; Managed Series Trust; Marshall Funds, Inc.; Money Market Management,
Inc.; Money Market Obligations Trust; Money Market Obligations Trust II; Money
Market Trust; Municipal Securities Income Trust; Newpoint Funds; Peachtree
Funds; RIMCO Monument Funds; SouthTrust Vulcan Funds; Star Funds; Targeted
Duration Trust; Tax-Free Instruments Trust; The Planters Funds; The Virtus
Funds; The Wachovia Funds; The Wachovia Municipal Funds; Tower Mutual Funds;
Trust for Financial Institutions; Trust for Government Cash Reserves; Trust for
Short-Term U.S. Government Securities; Trust for U.S. Treasury Obligations;
Vision Group of Funds, Inc.; and World Investment Series, Inc.
Federated Securities Corp. also acts as principal underwriter for the
following closed-end investment company: Liberty Term Trust, Inc.- 1999.
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant
Richard B. Fisher Director, Chairman, Chief
Federated Investors Tower Executive Officer, Chief
Pittsburgh, PA 15222-3779 Operating Officer, Asst.
Secretary and Asst.
Treasurer, Federated
Securities Corp.
Edward C. Gonzales Director, Executive Vice President and
Federated Investors Tower President, Federated, Treasurer
Pittsburgh, PA 15222-3779 Securities Corp.
Thomas R. Donahue Director, Assistant Secretary
Federated Investors Tower and Assistant Treasurer
Pittsburgh, PA 15222-3779 Federated Securities Corp
James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David M. Taylor Executive Vice President --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Laura M. Deger Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
<PAGE>
Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Ernest G. Anderson Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Teresa M. Antoszyk Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Byron F. Bowman Vice President, Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David J. Callahan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Leonard Corton, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
<PAGE>
Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Marc C. Danile Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William C. Doyle Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John K. Goettlicher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Raymond Hanley Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Bruce E. Hastings Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Beth A. Hetzel Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James E. Hickey Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Charlene H. Jennings Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
<PAGE>
Brian G. Kelly Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
H. Joseph Kennedy Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael W. Koenig Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael R. Manning Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Alec H. Neilly Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas A. Peters III Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard A. Recker Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John Rogers Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Brian S. Ronayne Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas S. Schinabeck Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
<PAGE>
Edward L. Smith Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John A. Staley Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Colin B. Starks Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Miles J. Wallace Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John F. Wallin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Edward J. Wojnarowski Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Edward R. Bozek Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Terri E. Bush Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Beth C. Dell Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David L. Immonen Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
<PAGE>
Renee L. Martin Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert M. Rossi Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Denis McAuley Treasurer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Leslie K. Platt Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(c) Not applicable
Item 30. Location of Accounts and Records:
All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 through 31a-3 promulgated
thereunder are maintained at one of the following locations:
Vision Group of Funds, Inc. 5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7010
Federated Shareholder P.O. Box 8600
Services Company Boston, Massachusetts 02266-8600
("Transfer Agent, Dividend
Disbursing Agent and Portfolio
Recordkeeper")
Federated Administrative Services Federated Investors Tower
("Administrator") 1001 Libery Avenue
Pittsburgh, Pennsylvania 15222-3779
Manufacturers and Traders Trust One M&T Plaza
Company Buffalo, New York 14240
("Adviser")
State Street Bank and Trust Company P.O. Box 8600
("Custodian") Boston, Massachusetts 02266-8600
Item 31. Management Services: Not applicable.
Item 32. Undertakings:
Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to the removal of
Trustees/Directors and the calling of special shareholder meetings
by shareholders.
Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, VISION GROUP OF FUNDS, INC.,
certifies that it meets all of the requirements for effectiveness of this
Amendment to its Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Amendment to its Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Pittsburgh and Commonwealth of Pennsylvania, on the
22nd day of April, 1998.
VISION GROUP OF FUNDS, INC.
BY: /s/Victor R. Siclari
Victor R. Siclari, Secretary
Attorney in Fact for Edward C. Gonzales
April 22, 1998
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to its Registration Statement has been signed below by the following person in
the capacity and on the date indicated:
NAME TITLE DATE
By: /s/ Victor R. Siclari
Victor R. Siclari Attorney In Fact April 22, 1998
SECRETARY For the Persons
Listed Below
NAME TITLE
Edward C. Gonzales* President and Treasurer
(Chief Executive Officer
and Principal Financial and
Accounting Officer)
Randall I. Benderson* Director
Joseph J. Castiglia* Director
Daniel R. Gernatt, Jr.* Director
George K. Hambleton, Jr.* Director
* By Power of Attorney
Exhibit 1(i) under Form N-1A
Exhibit 3(i) under Item 601/Reg. S-K
VISION GROUP OF FUNDS, INC.
ARTICLES OF AMENDMENT
VISION GROUP OF FUNDS, INC., a Maryland corporation having its
principal office in the State of Maryland in the City of Baltimore (hereinafter
called the "Corporation"), hereby certifies to the State Department of
Assessments and Taxation of Maryland that:
FIRST: The Charter of the Corporation is hereby amended by renaming
all of the issued and unissued shares of Class A Common Stock and Class B Common
Stock, respectively, as shares of Class A Common Stock Series A and Class B
Common Stock Series A of the Corporation, respectively.
SECOND: The foregoing amendment to the Charter of the Corporation
was approved by a majority of the entire Board of Directors; the foregoing
amendment is limited to a change expressly permitted by Section 2-605 of Title 2
of Subtitle 6 of the Maryland General Corporation Law to be made without action
by the stockholders of the Corporation; and the Corporation is registered as an
open-end investment company under the Investment Company Act of 1940, as
amended.
The undersigned Vice President acknowledges that these Articles of
Amendment are the act of the Corporation and states that to the best of his
knowledge, information and belief, the matters and facts set forth in these
Articles with respect to authorization and approval are true in all material
respects and that this statement is made under the penalties of perjury.
IN WITNESS WHEREOF, Vision Group of Funds, Inc. has caused these
presents to be signed in its name and on its behalf by its Vice President and
witnessed by its Secretary as of this 20th day of April, 1998.
VISION GROUP OF FUNDS, INC.
By: /s/ Charles L. Davis
Charles L. Davis
Vice President
WITNESS:
/s/ Victor R. Siclari
Victor R. Siclari
Secretary
Exhibit 1(iv) under Form N-1A
Exhibit 3(i) under Item 601/Reg. S-K
VISION GROUP OF FUNDS, INC.
ARTICLES SUPPLEMENTARY
VISION GROUP OF FUNDS, INC., a Maryland corporation having its
principal office in the State of Maryland in the City of Baltimore (hereinafter
called the "Corporation"), hereby certifies to the State Department of
Assessments and Taxation of Maryland that:
FIRST: The aggregate number of shares of capital stock that the
Corporation has authority to issue is increased by ten billion (10,000,000,000)
shares. Six billion (6,000,000,000) of such additional shares shall be
classified as set forth below, the other four billion (4,000,000,000) remaining
unclassified:
Name Number of
Shares
Class A Common Stock Series A 1,000,000,000
Class A Common Stock Series S 2,000,000,000
Class B Common Stock Series A 1,000,000,000
Class B Common Stock Series S 2,000,000,000
SECOND: The shares of Class A Common Stock Series A, and Class B
Common Stock Series A, respectively, classified hereby shall have the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption of the said respective classes and series of shares as set forth in
the Corporation's Charter. The shares of Class A Common Stock Series S, and
Class B Common Stock Series S classified hereby shall have the preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption set forth in
Article VI of the Corporation's Charter and shall be subject to all provisions
of the Charter relating to stock of the Corporation generally and to the
following:
(1) The assets attributable to the Class A Common Stock Series S
shall be invested in the same investment portfolio of the Corporation as the
assets attributable to the other series of Class A Common Stock. The assets
attributable to the Class B Common Stock Series S shall be invested in the same
investment portfolio of the Corporation as the assets attributable to the other
series of Class B Common Stock.
(2) The dividends and distributions of investment income and capital
gains with respect to the Class A Common Stock Series S and Class B Common Stock
Series S, respectively, shall be in such amounts as may be declared from time to
time by the Board of Directors, and such dividends and distributions may vary
from the dividends and distributions of investment income and capital gains with
respect to the other series of Class A Common Stock and Class B Common Stock,
respectively, to reflect differing allocations of the expenses of the
Corporation and of the classes among the holders of the various series in each
class and any resultant differences among the net asset values per share of the
various series in each class, to such extent and for such purposes as the Board
of Directors may deem appropriate. The allocation of investment income, capital
gains and losses, expenses, and liabilities of the Corporation and of the
various classes, and the amounts distributable in the event of dissolution of
the Corporation or liquidation of the Corporation or of a class of capital stock
of the Corporation among the classes and among the series of a given class shall
be determined by the Board of Directors in a manner that is consistent with the
Investment Company Act of 1940, and the rules and regulations thereunder, in
each case as from time to time amended, modified or superseded.
(3) Except as may otherwise be required by law pursuant to any
applicable order, rule or interpretation issued by the Securities and Exchange
Commission, or otherwise, the holders of the Class A Common Stock Series S and
Class B Common Stock Series S, respectively, shall have (i) exclusive voting
rights with respect to any matter submitted to a vote of stockholders that
affects only holders of the Class A Common Stock Series S or Class B Common
Stock Series S, respectively, and (ii) no voting rights with respect to any
matter submitted to a vote of stockholders that does not affect holders of the
Class A Common Stock Series S or Class B Common Stock Series S, respectively.
THIRD: Immediately before the increase in the aggregate number of
shares of capital stock as set forth in Article FIRST hereto, the Corporation
was authorized to issue ten billion (10,000,000,000) shares of capital stock,
all of which were of the par value of one mill ($.001) per share, with the
aggregate par value of $10,000,000, classified as follows:
Name Number of
Shares
Class A Common Stock Series A 1,000,000,000
Class B Common Stock Series A 1,000,000,000
Class C Common Stock 1,000,000,000
Class D Common Stock 1,000,000,000
Class E Common Stock 1,000,000,000
Class F Common Stock 1,000,000,000
Class G Common Stock 1,000,000,000
Class H Common Stock 1,000,000,000
Unclassified 2,000,000,000
Total 10,000,000,000
FOURTH: As hereby increased and classified, the total number of
shares of capital stock which the Corporation has authority to issue is twenty
billion (20,000,000,000) shares of capital stock, all of which are of the par
value of one mill ($.001) per share, and with the aggregate par value of
$20,000,000, classified as follows:
Name Number of
Shares
Class A Common Stock Series A 2,000,000,000
Class A Common Stock Series S 2,000,000,000
Class B Common Stock Series A 2,000,000,000
Class B Common Stock Series S 2,000,000,000
Class C Common Stock 1,000,000,000
Class D Common Stock 1,000,000,000
Class E Common Stock 1,000,000,000
Class F Common Stock 1,000,000,000
Class G Common Stock 1,000,000,000
Class H Common Stock 1,000,000,000
Unclassified 6,000,000,000
Total 20,000,000,000
FIFTH: The Corporation is registered as an open-end investment company
under the Investment Company Act of 1940, as amended.
SIXTH: The Board of Directors of the Corporation increased the total
number of shares of capital stock that the Corporation has authority to issue
pursuant to Section 2-105(c) of the Maryland General Corporation Law and
classified six billion (6,000,000,000) of the additional shares as set forth
herein pursuant to authority provided in the Corporation's Charter.
The undersigned Vice President acknowledges these Articles
Supplementary to be the corporate act of the Corporation and states that to the
best of his knowledge, information and belief, the matters and facts set forth
in these Articles with respect to authorization and approval are true in all
material respects and that this statement is made under the penalties of
perjury.
<PAGE>
IN WITNESS WHEREOF, Vision Group of Funds, Inc. has caused these
presents to be signed in its name and on its behalf by its Vice President and
witnessed by its Secretary as of this 20th day of April, 1998.
VISION GROUP OF FUNDS, INC.
By: /s/ Charles L. Davis
Charles L. Davis
Vice President
WITNESS:
/s/ Victor R. Siclari
Victor R. Siclari
Secretary
Exhibit 2(i) under Form N-1A
Exhibit 3(ii) under Item 601/Reg. S-K
Amendment No. 1 to Bylaws
VISION GROUP OF FUNDS, INC.
Effective September 1, 1997
Delete in its entirety Section 1 of Article 4 and substitute in its place
the following:
"SECTION 1. Certificates. The Corporation may, in its discretion, issue a
stock certificate or certificates to a stockholder, certifying the number and
kind of full shares owned by him, signed by the President, a Vice President or
the Chairman of the Board and countersigned by the Secretary, an Assistant
Secretary, the Treasurer or an Assistant Treasurer, which signatures may be
either manual or facsimile signatures, and sealed with the seal of the
Corporation, which seal may be either facsimile or any other form of seal. Stock
certificates shall be in such form, not inconsistent with law or with the
Charter, as shall be approved by the Board of Directors."
