Reg. No. 333-____
811-5514
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
VISION GROUP OF FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
(412) 288-1900
(Area Code and Telephone Number)
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7010
(Address of Principal Executive Offices)
VICTOR R. SICLARI, ESQUIRE
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
Copies to:
C. Todd Gibson, Esquire Matthew G. Maloney, Esquire
Federated Investors, Inc. Dickstein Shapiro Morin & Oshinsky LLP
Federated Investors Tower 2101 L Street, NW
1001 Liberty Avenue Washington, DC 20037
Pittsburgh, PA 15222-3779
Title of Securities Being Registered: shares of common stock of Vision Mid
Cap Stock Fund, a portfolio of Vision Group of Funds, Inc.
It is proposed that this filing will become effective thirty (30) days after
filing pursuant to Rule 488(a) under the Securities Act of 1933, as amended.
No filing fee is required under the Securities Act of 1933, as amended, because
an indefinite number of shares of beneficial interest have previously been
registered pursuant to Rule 24f-2 under the Investment Company Act of 1940, as
amended.
<PAGE>
1022587 v5; LX1705!.DOC
VISION GROUP OF FUNDS, INC.
5800 CORPORATE DRIVE
PITTSBURGH, PENNSYLVANIA 15237-7010
September 10, 1999
Dear Shareholder:
The Board of Directors and management of the Vision Group of Funds,
Inc. ("Vision Funds") are pleased to submit for your vote a proposal to transfer
all of the assets of the Vision Growth & Income Fund and Vision Capital
Appreciation Fund (the "Acquired Funds") to Vision Mid Cap Stock Fund (the
"Acquiring Fund"), a newly-organized portfolio of Vision Funds. Manufacturers
and Traders Trust Company ("M&T Bank") is the investment adviser to the Acquired
Funds and the Acquiring Fund. The Acquiring Fund has an investment objective
similar to that of each Acquired Fund in that it seeks to provide total return.
The Acquiring Fund pursues this investment objective by investing primarily in a
diversified portfolio of mid-cap stocks. As part of the transaction, holders of
shares in each Acquired Fund would receive Class A Shares of the Acquiring Fund
equal in value to such holder's shares in each respective Acquired Fund and the
Acquired Funds would be liquidated.
The Board of Directors of the Vision Funds, as well as M&T Bank,
believe the proposed agreement and plan of reorganization is in the best
interests of the Acquired Funds' shareholders.
Your vote on the transaction is critical to its success. The transfer
will be effected only if approved by a majority of all of each Acquired Fund's
outstanding shares on the record date voted in person or represented by proxy.
We hope you will participate by casting your vote in person, or by proxy if you
are unable to attend the meeting. Please read the enclosed prospectus/proxy
statement carefully before you vote.
THE BOARD OF DIRECTORS BELIEVES THAT THE TRANSACTION IS IN THE BEST
INTERESTS OF EACH ACQUIRED FUND AND ITS SHAREHOLDERS, AND UNANIMOUSLY RECOMMENDS
THAT YOU VOTE FOR ITS APPROVAL.
Thank you for your prompt attention and participation.
Sincerely,
Edward C. Gonzales
President
<PAGE>
VISION GROUP OF FUNDS, INC.
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 14, 1999
A Special Meeting of the shareholders of Vision Growth & Income Fund
and Vision Capital Appreciation Fund (the "Acquired Funds"), each a portfolio of
Vision Group of Funds Inc. (the "Vision Funds") will be held at 5800 Corporate
Drive, Pittsburgh, Pennsylvania 15237-7010, at 2:00 p.m. (Eastern time), on
October 14, 1999 to consider the following proposal:
To approve or disapprove a proposed Agreement and Plan of
Reorganization between the Vision Funds, on behalf of the Acquired
Funds, and the Vision Funds, on behalf of its portfolio, Vision Mid
Cap Stock Fund (the "Acquiring Fund"), whereby the Acquiring Fund
would acquire all of the assets of each Acquired Fund in exchange for
Class A Shares of the Acquiring Fund to be distributed pro rata by
the Acquired Funds to their shareholders in complete liquidation and
termination of each Acquired Fund.
To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed August 25, 1999, as the record date for
determination of shareholders entitled to vote at the meeting.
By Order of the Board of Directors,
Victor R. Siclari
Secretary
September 10, 1999
YOU CAN HELP THE VISION FUNDS AVOID THE NECESSITY AND EXPENSE OF SENDING
FOLLOW UP LETTERS TO ENSURE A QUORUM BY PROMPTLY SIGNING AND RETURNING THE
ENCLOSED PROXY. IF YOU ARE UNABLE TO ATTEND THE MEETING, PLEASE MARK, SIGN, DATE
AND RETURN THE ENCLOSED PROXY SO THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT
THE SPECIAL MEETING. THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES.
PROSPECTUS/PROXY STATEMENT
SEPTEMBER __, 1999
Acquisition of the Assets of
VISION GROWTH & INCOME FUND
and
VISION CAPITAL APPRECIATION FUND
portfolios of
VISION GROUP OF FUNDS, INC.
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7010
Telephone Number: 1-800-836-2211
By and in exchange for Class A Shares of
VISION MID CAP STOCK FUND,
a portfolio of
VISION GROUP OF FUNDS, INC.
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7010
Telephone Number: 1-800-836-2211
This Prospectus/Proxy Statement describes the proposed Agreement and
Plan of Reorganization (the "Reorganization Agreement") whereby Vision Mid Cap
Stock Fund (the "Acquiring Fund"), a newly-organized portfolio of Vision Group
of Funds, Inc., a Maryland corporation (the "Vision Funds"), would acquire all
of the assets of Vision Growth & Income Fund (the "Growth & Income Fund") and
Vision Capital Appreciation Fund (the "Capital Appreciation Fund"), both
portfolios of Vision Funds (the Growth & Income Fund and the Capital
Appreciation Fund being hereinafter collectively referred to as the "Acquired
Funds"), in exchange for the Acquiring Fund's Class A Shares to be distributed
PRO RATA by each Acquired Fund to the holders of its shares, in complete
liquidation of the Acquired Funds. As a result of the Plan, each shareholder of
each Acquired Fund will become the owner of the Acquiring Fund's Class A Shares
having a total net asset value equal to the total net asset value of his or her
holdings in the Acquired Funds. Each of the Acquired Funds and the Acquiring
Fund are sometimes hereinafter referred to individually as a "Fund" and
collectively as the "Funds."
THE BOARD OF DIRECTORS OF THE VISION FUNDS UNANIMOUSLY RECOMMENDS
APPROVAL OF THE REORGANIZATION AGREEMENT.
Each Fund is a diversified portfolio of securities of the Vision
Funds, an open-end management investment company. The Acquiring Fund's
investment objective is to provide total return. It pursues this investment
objective by investing primarily in a diversified portfolio of mid-cap stocks.
The Acquired Funds have similar objectives in that the Growth & Income Fund
seeks long-term growth of capital and income and the Capital Appreciation Fund
seeks to produce long-term capital appreciation. For a comparison of the
investment policies of the Acquiring Fund and the Acquired Funds, see "Summary -
Investment Objectives, Policies and Limitations."
This Prospectus/Proxy Statement should be retained for future
reference. It contains information about the Acquiring Fund that a prospective
investor should know before investing. This Prospectus/Proxy Statement is
accompanied by the Prospectus of the Acquiring Fund dated July 15, 1999, which
is incorporated herein by reference. Statements of Additional Information for
the Acquiring Fund dated July 15, 1999 (relating to the Acquiring Fund's
Prospectus of the same date) and September __, 1999 (relating to this
Prospectus/Proxy Statement), all containing additional information, have been
filed with the Securities and Exchange Commission and are incorporated herein by
reference. Copies of the Statements of Additional Information may be obtained
without charge by writing or calling the Acquiring Fund at the address and
telephone number shown above.
THE SHARES OFFERED BY THIS PROSPECTUS/PROXY STATEMENT ARE NOT DEPOSITS OR
OBLIGATIONS OF ANY BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD,
OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN THESE SHARES INVOLVES INVESTMENT
RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES, OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS/PROXY
STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
1022587 v5; LX1705!.DOC
i
TABLE OF CONTENTS
GE NO.
SUMMARY OF EXPENSES....................................................... 1
SUMMARY................................................................... 3
About the Proposed Reorganization..................................... 3
Investment Objectives, Policies and Limitations....................... 4
Advisory and Other Fees............................................... 6
Distribution Arrangements............................................. 7
Purchase, Exchange and Redemption Procedures.......................... 8
Dividends............................................................. 10
Tax Consequences...................................................... 10
RISK FACTORS.............................................................. 11
INFORMATION ABOUT THE REORGANIZATION...................................... 11
Background and Reasons for the Proposed Reorganization................ 11
Description of the Plan of Reorganization............................. 12
Description of Acquiring Fund Shares.................................. 14
Federal Income Tax Consequences....................................... 14
Comparative Information on Shareholder Rights and Obligations......... 16
Capitalization........................................................ 18
INFORMATION ABOUT VISION FUNDS, THE ACQUIRING FUND AND
THE ACQUIRED FUNDS.................................................... 18
Vision Mid Cap Stock Fund, a portfolio of Vision Funds................ 18
Vision Growth & Income Fund and Vision Capital Appreciation Fund, 20
portfolios of Vision Funds........................................
VOTING INFORMATION........................................................ 20
Outstanding Shares and Voting Requirements............................ 21
Dissenter's Right of Appraisal........................................ 22
OTHER MATTERS AND DISCRETION OF PERSONS NAMED IN THE PROXY................
23
AGREEMENT AND PLAN OF REORGANIZATION -- EXHIBIT A.........................A-1
<PAGE>
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22
1022587 v5; LX1705!.DOC
SUMMARY OF EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Class A Shares of the Funds.
<TABLE>
<CAPTION>
GROWTH & CAPITAL
ACQUIRING INCOME APPRECIATION PRO FORMA
FUND(1) FUND FUND COMBINED(1)
---------- ---------- ------------ ------------
SHAREHOLDER FEES
<S> <C> <C> <C> <C>
FEES PAID DIRECTLY FROM YOUR
INVESTMENT
Maximum Sales Charge (Load) Imposed 5.50% 5.50% 5.50% 5.50%
on Purchases (as a percentage of
offering price)................
Maximum Deferred Sales Charge None None None None
(Load) (as a percentage of
original purchase price or
redemption proceeds, as
applicable)....................
Maximum Sales Charge (Load) Imposed None None None None
on Reinvested Dividends (as a
percentage of offering price)..
Redemption Fee (as a percentage of None None None None
amount redeemed, if applicable)
Exchange Fee...................... None None None None
ANNUAL OPERATING EXPENSES (BEFORE
WAIVERS) (2)
EXPENSES THAT ARE DEDUCTED FROM
FUND ASSETS (AS A PERCENTAGE OF
AVERAGE NET ASSETS)
Management Fee.................... 0.85% 0.70% 0.85% 0.85%
Distribution (12b-1) Fees (3)..... 0.25% 0.25% 0.25% 0.25%
Shareholder Services Fee.......... 0.25% 0.25% 0.25% 0.25%
Other Expenses.................... 0.36% 0.38%(4) 0.40% 0.36%
----- -------- ----- -----
Total Annual Operating 1.71% 1.58% 1.75% 1.71%
Expenses.......................
- ------------------------
</TABLE>
(1) The Acquiring Fund is a newly organized portfolio which has not conducted
any business except that incident to its organization. The fees and
expenses shown for the Class A Shares of the Acquiring Fund and Pro Forma
Combined are estimated fees and expenses expected to be incurred for the
fiscal year ending April 30, 2000.
(2) Although not contractually obligated to do so, the distributor waived
certain amounts during the year ended April 30, 1999 for the Growth &
Income Fund and Capital Appreciation Fund. These are shown below along with
the net expenses the Growth & Income Fund and Capital Appreciation Fund
ACTUALLY PAID for the year ended April 30, 1999. In addition, although not
contractually obligated to do so, the distributor of the Acquiring Fund
expects to waive certain amounts through the fiscal year ending April 30,
2000. These are shown below along with the net expenses the Class A Shares
of the Acquiring Fund and Pro Forma Combined EXPECTS TO ACTUALLY PAY
through the fiscal year ending April 30, 2000.
<TABLE>
<CAPTION>
Acquiring Growth & Capital Pro
Fund Income Appreciation Forma
Fund Fund Combined
<S> <C> <C> <C> <C>
--------- ----------- ----------- ----------
Total Waivers of Fund Expenses. 0.25% 0.25% 0.25% 0.25%
Total Actual Annual Fund 1.46% 1.33% 1.50% 1.46%
Operating Expenses (after
waivers)....................
</TABLE>
(3) For the fiscal year ended April 30, 1999, the Acquired Funds did not pay or
accrue the Distribution (12b-1) fee. The Acquiring Fund does not expect to
pay or accrue the Distribution (12b-1) fee of 0.25% through the fiscal year
ending April 30, 2000. If the Funds were paying or accruing Distribution
(12b-1) fees, each Fund may pay a fee to the distributor up to 0.25% of the
average daily net assets of such Fund's Class A Shares.
(4) Other expenses for the Growth & Income Fund are based on estimated amounts
for the fiscal year ending April 30, 2000. Other expenses for the Growth &
Income Fund were 0.25% for the fiscal year ended April 30, 1999.
The purpose of the above table is to assist an investor in understanding
the various costs and expenses that a shareholder of Class A Shares of each
of the Acquiring Fund, the Growth & Income Fund, the Capital Appreciation
Fund and the Pro Forma Combined Fund will bear, either directly or
indirectly. For more complete descriptions of the various costs and
expenses, see "Summary - Advisory and Other Fees" and "Summary -
Distribution Arrangements."
EXAMPLE
The following Example is intended to help you compare the cost of
investing in Class A Shares of the Acquired Funds with the cost of investing in
the Acquiring Fund's Class A Shares.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
The Example assumes that you invest $10,000 in each 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
respective Fund for the time periods indicated and
then redeem all of your shares at the end of those
periods. The Example assumes that your investment has
a 5% return each year and that each Acquired Fund and
the Acquiring Fund and the Pro Forma Combined
operating expenses are BEFORE WAIVERS as shown above
in the Table and remain the same. Although your
actual costs may be higher or lower, based on these
assumptions your costs would be:......................
Growth & Income Fund.................................. $ 702 $1,021 $1,363 $2,325
Capital Appreciation Fund............................. $ 718 $1,071 $1,447 $2,499
Acquiring Fund and Pro Forma Combined................. $ 714 $ 1,059 $1,427 $2,458
</TABLE>
<PAGE>
SUMMARY
This summary is qualified in its entirety by reference to the
additional information contained elsewhere in this Prospectus/Proxy Statement,
the Prospectus of the Acquiring Fund dated July 15, 1999, Statements of
Additional Information of the Acquiring Fund dated July 15, 1999 (relating to
the Acquiring Fund's Prospectus of the same date) and September _, 1999
(relating to this Prospectus/Proxy Statement), the Prospectus of the Acquired
Funds dated August 22, 1999, the Statement of Additional Information of the
Acquired Funds dated August 22, 1999, and the Reorganization Agreement. A copy
of the Reorganization Agreement is attached to this Prospectus/Proxy Statement
as EXHIBIT A. The Prospectus of the Acquiring Fund accompanies this
Prospectus/Proxy Statement.
ABOUT THE PROPOSED REORGANIZATION
The Board of Directors of the Vision Funds has voted to recommend to
holders of shares of each Acquired Fund the approval of the Reorganization
Agreement whereby the Acquiring Fund, a portfolio of the Vision Funds, would
acquire all of the assets of the Acquired Funds, subject to the liabilities of
the Acquired Funds, in exchange for the Acquiring Fund's Class A Shares to be
distributed PRO RATA by each Acquired Fund to its shareholders in complete
liquidation and dissolution of the Acquired Funds (the "Reorganization"). As a
result of the Reorganization, each shareholder of each Acquired Fund will become
the owner of the Acquiring Fund's Class A Shares having a total net asset value
equal to the total net asset value of his or her holdings in the Acquired Funds
on the date of the Reorganization (I.E., the Closing Date (as hereinafter
defined)).
As a condition to the Reorganization, the Acquiring Fund and the
Acquired Funds will receive an opinion of counsel that the Reorganization will
be considered a tax-free "reorganization" under applicable provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), so that no gain or loss
will be recognized by any of the Acquiring Fund or the Acquired Funds or the
shareholders of the Acquired Funds. The tax basis of the Acquiring Fund's Class
A Shares received by shareholders of the Acquired Funds will be the same as the
tax basis of their shares in the Acquired Funds. After the acquisition is
completed, the Acquired Funds will be dissolved.
INVESTMENT OBJECTIVES, POLICIES AND LIMITATIONS
The investment objective of the Acquiring Fund is to provide total
return. The Acquiring Fund will pursue its investment objective by investing
primarily in a diversified portfolio of mid-cap stocks. These stocks will be of
comparable size to those that comprise the S&P Mid Cap 400 Index. The
sub-adviser to the Acquiring Fund will select stocks based upon both their
relative value and potential for growth. In normal market conditions, the
Acquiring Fund will be almost entirely invested in stocks, and will invest at
least 65% of its portfolio in mid-cap stocks. The Acquiring Fund's total return
will result mostly from capital appreciation rather than income.
The investment objective of the Growth & Income Fund is similar to
the investment objective of the Acquiring Fund in that it seeks long-term growth
of capital and income. The Growth & Income Fund pursues its investment objective
by investing in a diversified portfolio consisting primarily of equity
securities (E.G., common stock, convertible securities), although it may also
purchase debt securities (E.G., bonds, notes) when consistent with its
investment objective. The adviser to the Growth & Income Fund selects equity
securities to achieve growth and will select fixed-income, convertible
securities and other interest-paying debt securities to obtain income. In
selecting securities, the Growth & Income Fund invests at least 65% of its total
assets in mid-size (mid-cap) companies that it considers to be "undervalued."
The investment objective of the Capital Appreciation Fund is also
similar to the Acquiring Fund in that it seeks to produce long-term capital
appreciation. The Capital Appreciation Fund pursues its investment objective by
investing in a diversified portfolio comprised primarily of common stocks or
other securities that have some of the characteristics of common stocks, such as
convertible preferred stocks, convertible bonds and warrants. Under normal
market conditions, the Capital Appreciation Fund intends to have at least 75% of
its total assets invested in securities which its adviser believes offer
opportunity for capital appreciation. At least 65% of the Capital Appreciation
Fund's total assets are invested in mid-capitalization securities that are
regarded as having growth opportunities.
The Acquiring Fund's investment focus will be on stocks with both
value and growth characteristics. Currently, the Growth & Income Fund focuses on
value-oriented stocks, while the Capital Appreciation Fund focuses on
growth-oriented stocks. In addition, the Acquiring Fund will invest in companies
similar in size to those that comprise the S&P Mid Cap 400 Index (as of June 30,
1999, the index's range was $240 million to $21.6 billion). The Growth & Income
Fund and Capital Appreciation Fund define "mid cap" as those companies with
market capitalizations between $1 billion and $10 billion.
The Acquiring Fund and the Acquired Funds are subject to certain
investment limitations. The investment limitations of the Growth & Income Fund
are identical to the investment limitations of the Capital Appreciation Fund.
The investment limitations of the Acquiring Fund are similar, but not identical
to, the Acquired Funds' existing investment limitations. Some of the Acquired
Funds' fundamental limitations reflect past regulatory, business or industry
conditions, practices or requirements that are no longer in effect, whereas the
Acquiring Fund's fundamental limitations have been modernized to take into
account changes in the regulatory, business or industry conditions, practices or
requirements. The Acquiring Fund has slightly increased investment flexibility
which will allow the Acquiring Fund to respond to future investment
opportunities. Despite this increased investment flexibility, however, it is not
anticipated that the investment limitations of the Acquiring Fund, individually
or in the aggregate, will result at this time in a material change in the level
of investment risk associated with an investment in either Acquired Fund.
In addition to the policies and limitations set forth above, the
Acquiring Fund and the Acquired Funds are subject to certain additional
investment policies and limitations, described in the Acquiring Fund's Statement
of Additional Information dated July 15, 1999, and the Acquired Funds' Statement
of Additional Information dated August 22, 1999. Reference is hereby made to the
Acquiring Fund's Prospectus (which accompanies this Prospectus/Proxy) and
Statement of Additional Information, each dated July 15, 1999, and to the
Acquired Funds' Prospectus and Statement of Additional Information, each dated
August 22, 1999, which set forth in full the investment objective, policies and
investment limitations of each of the Acquiring Fund and the Acquired Funds.
ADVISORY AND OTHER FEES
Manufacturers and Traders Trust Company ("M&T Bank") is the
investment adviser for each Acquired Fund. The Acquiring Fund has engaged M&T
Bank as its investment adviser, but the daily management is delegated to a
sub-adviser, Independence Investment Associates, Inc. ("IIA"). IIA is a
registered investment adviser founded in 1982 and a subsidiary of John Hancock
Mutual Life Insurance Company. IIA is a sub-adviser for over $12.0 billion in 13
mutual funds and 7 commingled accounts. The annual advisory fees for the Growth
& Income Fund, the Capital Appreciation Fund and the Acquiring Fund are 0.70%,
0.85% and 0.85%, respectively, of such Fund's average daily net assets. M&T Bank
may voluntarily choose to waive a portion of its advisory fee or reimburse other
expenses of the Fund. This voluntary waiver or reimbursement may be terminated
by M&T Bank at any time in its sole discretion. For its services, IIA receives
an allocable portion of the advisory fee M&T Bank receives from the Acquiring
Fund. IIA is paid by M&T Bank out of the advisory fee it receives, and not by
the Acquiring Fund.
Federated Administrative Services ("FAS") provides certain
administrative personnel and services necessary to operate the Funds. Federated
Services Company ("FSC") and its affiliate, Federated Shareholder Services
Company ("FSSC"), a registered transfer agent, provide the Funds with certain
financial, administrative, transfer agency and fund accounting services. FAS,
FSC and FSSC are indirect wholly owned subsidiaries of Federated Investors, Inc.
These services are provided for an aggregate annual fee as specified below:
MAXIMUM FEE AGGREGATE DAILY NET ASSETS OF VISION FUNDS
- --------------------- -------------------------------------------------
0.140% on the first $1.4 billion
0.100% on the next $750 million
0.07% on assets in excess of $2.15 billion
The Funds have entered into a Shareholder Services Plan, which is
administered by FAS. Under the Plan, M&T Bank acts as a 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 Class A Shares for which it
provides shareholder services, such as providing shareholder assistance,
communicating or facilitating purchases and redemptions of shares, and
distributing prospectuses and other information. This fee will be equal to a
maximum annual rate of 0.25% of each Fund's average daily net assets on Class A
Shares for which the shareholder servicing agent provides services.
Due to the waiver of the Distribution (12b-1) fees, the total annual
operating expenses for shares of the Growth & Income Fund and the Capital
Appreciation Fund were 1.33% and 1.50%, respectively, of average daily net
assets (after waivers) for the fiscal year ended April 30, 1999. Without such
waivers, the expense ratio of the Growth & Income Fund and the Capital
Appreciation Fund would have been 1.58% and 1.75%, respectively, or higher by
0.25% of average daily net assets. The total annual operating expenses for the
Acquiring Fund for the fiscal year ending April 30, 2000 are not presently
determinable, but are expected to be 1.46% after waivers. Without such waivers,
the expense ratio of the Acquiring Fund is expected to be 1.71% of average daily
net assets for the fiscal year ending April 30, 2000, or approximately 0.25%
higher.
DISTRIBUTION ARRANGEMENTS
THE DISTRIBUTION ARRANGEMENTS OF THE FUNDS ARE IDENTICAL.
Federated Securities Corp. is the principal distributor for shares of
both the Acquiring Fund and the Acquired Funds. Class A Shares of the Acquiring
Fund and Class A Shares of the Acquired Funds are sold at net asset value, next
determined after an order is received, plus a maximum sales charge of 5.50%.
Certain investors and transactions may be subject to reduced or waived sales
charges. No sales charge will be imposed in connection with the issuance of
Acquiring Fund shares to the shareholders of the Acquired Funds as a result of
the Reorganization. The Funds have adopted a Rule 12b-1 Distribution Plan (the
"Distribution Plan") pursuant to which each Fund may pay a fee to the
distributor in an amount computed at a maximum annual rate of 0.25 of 1% of the
average daily net assets of the Class A Shares to finance any activity which is
principally intended to result in the sale of Class A Shares subject to the
Distribution Plan. The Funds have not paid and have no present intention of
paying or accruing 12b-1 fees on Class A Shares under the Distribution Plan.
Federated Securities Corp., from its own assets, may pay investment
professionals supplemental fees as financial assistance for providing
distribution and administrative services with respect to the Funds. Such
assistance will be based upon shares owned by such investment professionals'
clients or customers. If Federated Securities Corp. pays any fees for these
services, the fees will be reimbursed by M&T Bank and not the Funds.
For sales of Class A Shares of the Funds, a broker/dealer will
normally receive up to 90% of the applicable sales charge. Any portion of the
sales charge which is not paid to a broker/dealer will be retained by the
distributor. However, the distributor will, periodically, uniformly offer to pay
to broker/dealers additional amounts in the form of cash, items of material
value or promotional incentives. For a complete description of sales charges and
exemptions from such charges, reference is hereby made to the accompanying
Prospectus of the Acquiring Fund dated July 15, 1999, and the Prospectus of the
Acquired Funds dated August 22, 1999.
PURCHASE, EXCHANGE AND REDEMPTION PROCEDURES
THE PURCHASE, EXCHANGE AND REDEMPTION PROCEDURES OF THE FUNDS ARE
IDENTICAL.
The transfer agent and dividend disbursing agent for each Fund is
Federated Shareholder Services Company. Procedures for the purchase, exchange
and redemption of the Acquiring Fund's Class A Shares are identical to
procedures applicable to the purchase, exchange and redemption of Class A Shares
of the Acquired Funds. Reference is made to the accompanying Prospectus of the
Acquiring Fund dated July 15, 1999, and the Prospectus of the Acquired Funds
dated August 22, 1999, for a complete description of the purchase, exchange and
redemption procedures applicable to the shares of the Acquiring Fund and
Acquired Funds.
Purchases of shares of the Funds may be made through M&T Bank, M&T
Securities, Inc. or through authorized broker/dealers. The minimum initial
investment in each Fund is $500, unless the investment is in a retirement plan
or an IRA account, in which case, the minimum initial investment is $250.
Subsequent investments must be in amounts of at least $25. The Funds reserve the
right to reject any purchase request. In connection with the sale of shares of
the Funds, Federated Securities Corp. may from time to time offer certain items
of nominal value to any shareholder.
The purchase price of each of the Funds' Class A Shares is based on
net asset value, plus a sales charge. No sales charge will be imposed in
connection with the issuance of Acquiring Fund shares to the shareholders of the
Acquired Funds as a result of the Reorganization. The net asset value per share
for each Fund is calculated as of the close of trading (normally 4:00 p.m.,
Eastern time) on the New York Stock Exchange, Inc. (the "NYSE") on each day on
which the NYSE is open for business, except on most national holidays. Acquiring
Fund purchase orders must be received by 4:00 p.m. (Eastern time) in order to be
credited that same day. Purchase orders through Automated Clearing House must be
received by 3:00 p.m. (Eastern time). For settlement of an order to occur,
payment must be received on the next business day following the order. Purchase
orders for shares of the Acquired Funds must be received by 4:00 p.m. (Eastern
time) in order to be entered at that day's price. Payment is normally required
in three business days.
Holders of Class A Shares of the Funds have exchange privileges with
respect to Class A Shares of other portfolios of the Vision Funds. In addition,
Class A Shares of the Funds may be exchanged into Class A Shares of Federated
International Equity Fund, a fund distributed by Federated Securities Corp.
Exchanges are subject to any initial or subsequent investment amounts of the
funds into which the exchange is being made. Exchanges are treated as a
redemption and new purchase for federal income tax purposes and, accordingly,
may have tax consequences for the shareholder. Exchanges are made at net asset
value plus the difference between the sales charge already paid and any
applicable sales charge on shares to be acquired in the exchange.
Redemptions of shares of the Funds may be made by telephone or by
mailing a written request, or through a Fund's systematic withdrawal program.
The Funds redeem Class A Shares at the net asset value per share next determined
after the redemption request is received. Proceeds will ordinarily be
distributed by check within seven days after receipt of a redemption request.
Any questions about the foregoing procedures may be directed to, and
assistance in effecting purchases, exchanges or redemptions of the Funds' Class
A Shares may be obtained from M&T Bank's Mutual Fund Services at 1-800-836-2211.
DIVIDENDS
The Acquiring Fund and the Growth & Income Fund declare and pay
dividends quarterly. The Capital Appreciation Fund declares and pays dividends
annually. Capital gains realized by the Funds, if any, will be distributed at
least annually. With respect to both the Acquiring Fund and the Acquired Funds,
unless a shareholder otherwise instructs, dividends and capital gain
distributions will be reinvested automatically in additional shares at net asset
value, without a sales charge.
TAX CONSEQUENCES
As a condition to the Reorganization, the Acquiring Fund and the
Acquired Funds will receive an opinion of counsel that the Reorganization will
be considered a tax-free "reorganization" under applicable provisions of the
Code so that no gain or loss will be recognized by any of the Acquiring Fund or
the Acquired Funds or the shareholders of the Acquired Funds. The tax basis of
the Acquiring Fund shares received by shareholders of the Acquired Funds will be
the same as the tax basis of their shares in the Acquired Funds.
RISK FACTORS
As with other mutual funds, the Acquiring Fund is subject to market
risks and credit risks. The value of equity securities in the Acquiring Fund's
portfolio will fluctuate and, as a result, the Acquiring Fund's share price may
decline suddenly or over a sustained period of time. Since the Acquiring Fund
invests primarily in mid-cap stocks, it is susceptible to risks related to
company size. Mid-cap companies, as opposed to large companies, tend to have
fewer shareholders, less liquidity, more volatility, unproven track records,
limited product service base and limited access to capital. Generally, the
smaller the market capitalization of a company, the fewer the number of shares
traded daily, the less liquid its stock and the more volatile its price. There
are also risks related to investing in growth stocks and value stocks, in which
the Acquiring Fund may invest. Due to their relatively high valuations, growth
stocks are typically more volatile than value stocks; however, this also means
that value stocks may lag behind growth stocks in an appreciating market. Since
both Acquired Funds also invest primarily in mid-cap stocks, these risk factors
are generally also present in an investment in the Acquired Funds. A full
discussion of the risks inherent in investing in the Acquiring Fund and the
Acquired Funds is set forth in the Acquiring Fund's Prospectus and Statement of
Additional Information, each dated July 15, 1999, and the Acquired Funds'
Prospectus and Statement of Additional Information, each dated August 22, 1999.
INFORMATION ABOUT THE REORGANIZATION
BACKGROUND AND REASONS FOR THE PROPOSED REORGANIZATION
M&T Bank, the Acquired Funds' investment adviser, recently completed
a review of the Acquired Funds' performance and growth in assets, as well as its
own capabilities and business focus, and concluded that certain operating
efficiencies and economies of scale could ultimately be achieved by transferring
the assets of the Acquired Funds to the Acquiring Fund and refocusing the
Acquiring Fund's investment emphasis to include both "growth" and "value"
characteristics. In this regard, it also concluded that engaging IIA as
sub-advisor to the Acquiring Fund with responsibilities for day-to-day portfolio
management would provide a better allocation of resources and expertise for the
management of the Acquiring Fund. As a result, M&T Bank has recommended to the
Board of Directors that it would be in the best interests of all of the
shareholders of the Acquired Funds that the Acquired Funds' assets be
transferred to the Vision Funds, on behalf of the Acquiring Fund, in order to
reorganize them as a single portfolio of the Vision Funds.
The Board of Directors of the Vision Funds, all of whom are
independent Directors, determined that participation in the Reorganization is in
the best interests of each Fund and that the interests of shareholders of each
Fund would not be diluted as a result of its effecting the Reorganization. Based
upon the foregoing considerations and the fact that shareholders of the Funds
will not suffer any adverse tax consequences as a result of the Reorganization,
the Board of Directors of the Vision Funds unanimously approved, and recommends
shareholders of each Acquired Fund to approve, the Reorganization.
DESCRIPTION OF THE PLAN OF REORGANIZATION
The Reorganization Agreement provides that the Acquiring Fund will
acquire all of the assets of the Acquired Funds (subject to the liabilities of
the Acquired Funds) in exchange for the Acquiring Fund's Class A Shares having
an aggregate net asset value equal to the value of the net assets of the
Acquired Funds on or about October 15, 1999 (the "Exchange Date"). The value of
the assets of the Acquired Funds and the net asset value per share of the
Acquiring Fund's Class A Shares shall be computed as of the close of the New
York Stock Exchange (normally 4:00 p.m. Eastern time) on the Exchange Date (the
"Valuation Time"). As soon as practicable after the Exchange Date, the Acquired
Funds shall distribute all of the Acquiring Fund Class A Shares received by them
among the shareholders of the Acquired Funds in proportion to the aggregate
value of the shares each such shareholder holds in the Acquired Funds and the
Acquired Funds shall be terminated.
On or before the Valuation Time, each Acquired Fund will declare and
pay a dividend or dividends which, together with all previous such dividends,
shall have the effect of distributing to its shareholders all of its net
investment income and realized net capital gain, if any, for all taxable years
ending on or before the Exchange Date.
The Reorganization is subject to certain conditions, including:
approval of the Reorganization Agreement and the transactions and exchange
contemplated thereby as described in this Prospectus/Proxy Statement by the
shareholders of each Acquired Fund; the receipt of exemptive relief from the
Securities and Exchange Commission; the receipt of a legal opinion described in
the Reorganization Agreement regarding tax matters; the receipt of certain
certificates from the parties concerning the continuing accuracy of the
representations and warranties in the Reorganization Agreement and other
matters; and the parties' performance, in all material respects, of the
agreements and undertakings in the Reorganization Agreement. Assuming
satisfaction of the conditions in the Reorganization Agreement, the
Reorganization is expected to occur on or after October 15, 1999.
The Funds are responsible for the payment of all expenses of the
Reorganization. Such expenses include, but are not limited to, legal fees,
registration fees, transfer taxes (if any), the fees of banks and transfer
agents and the costs of preparing, printing, copying and mailing proxy
solicitation materials to the shareholders of the Acquired Funds.
The Reorganization may be terminated at any time prior to its
consummation by the Vision Funds if circumstances should develop that, in the
opinion of the Board of Directors of the Vision Funds, make proceeding with the
Reorganization Agreement inadvisable. The Reorganization Agreement provides
further that at any time prior to the consummation of the Reorganization: (i)
the parties thereto may amend or modify any of the provisions of the
Reorganization Agreement provided that such amendment or modification would not
have a material adverse effect upon the benefits intended under the
Reorganization Agreement and it would be consistent with the best interests of
shareholders of the Acquired Funds and the Acquiring Fund; and (ii) either party
may waive any of the conditions set forth in the Reorganization Agreement if, in
the judgment of the waiving party, such waiver will not have a material adverse
effect on the benefits intended under the Reorganization Agreement to the
shareholders of the Acquired Funds or the shareholders of the Acquiring Fund, as
the case may be.
DESCRIPTION OF ACQUIRING FUND SHARES
THE RIGHTS, PRIVILEGES AND RESTRICTIONS OF CLASS A SHARES OF THE
ACQUIRING FUND AND THE ACQUIRED FUNDS ARE IDENTICAL, EXCEPT THAT THEY REPRESENT
INTERESTS IN DIFFERENT PORTFOLIOS.
Full and fractional Class A Shares of the Acquiring Fund will be
issued in connection with the Reorganization without the imposition of a sales
charge or other fee to the shareholders of the Acquired Funds in accordance with
the procedures described above. Class A Shares of the Acquiring Fund to be
issued to shareholders of the Acquired Funds under the Plan will be fully paid
and nonassessable when issued and transferable without restriction and will have
no preemptive or conversion rights. Please refer to the accompanying Prospectus
of the Acquiring Fund dated July 15, 1999, for additional information about
Class A Shares of the Acquiring Fund.
FEDERAL INCOME TAX CONSEQUENCES
As a condition to the Reorganization, the Vision Funds, on behalf of
the Acquiring Fund and the Acquired Funds, will receive an opinion from
Dickstein Shapiro Morin & Oshinsky LLP, special counsel to the Vision Funds, to
the effect that, on the basis of the existing provisions of the Code, current
administrative rules and court decisions, for federal income tax purposes: (1)
the Reorganization as set forth in the Reorganization Agreement will constitute
a tax-free "reorganization" with respect to each Acquired Fund under Section
368(a)(1) of the Code, and the Acquired Funds and the Acquiring Fund each will
be "a party to a reorganization" within the meaning of Section 368(b) of the
Code; (2) no gain or loss will be recognized by the Acquiring Fund upon its
receipt of the Acquired Funds' assets (subject to the liabilities of the
Acquired Funds) in exchange for Acquiring Fund Class A Shares; (3) no gain or
loss will be recognized by either Acquired Fund upon the transfer of its assets
(subject to the liabilities of the Acquired Funds) to the Acquiring Fund in
exchange for Acquiring Fund Class A Shares or upon the distribution (whether
actual or constructive) of the Acquiring Fund Class A Shares to the shareholders
of the Acquired Funds in exchange for their shares of the Acquired Funds; (4) no
gain or loss will be recognized by shareholders of the Acquired Funds upon the
exchange of their shares for Acquiring Fund Class A Shares; (5) the tax basis of
the assets of each Acquired Fund acquired by the Acquiring Fund will be the same
as the tax basis of such assets to such Acquired Fund immediately prior to the
Reorganization; (6) the tax basis of Acquiring Fund Class A Shares received by
each shareholder of each Acquired Fund pursuant to the Reorganization will be
the same as the tax basis of the shares of the Acquired Funds held by such
shareholder immediately prior to the Reorganization; (7) the holding period of
the assets of each Acquired Fund in the hands of the Acquiring Fund will include
the period during which those assets were held by such Acquired Fund; and (8)
the holding period of the Acquiring Fund Class A Shares received by each
shareholder of each Acquired Fund pursuant to the Reorganization will include
the period during which the Acquired Fund shares exchanged therefor were held by
such shareholder, provided the Acquired Fund shares were held as capital assets
on the date of the Reorganization.
The Acquired Funds and the Acquiring Fund are not seeking a tax
ruling from the Internal Revenue Service ("IRS"), but are acting in reliance
upon the opinion of counsel discussed in the previous paragraph. That opinion is
not binding on the IRS and does not preclude the IRS from adopting a contrary
position. Shareholders should consult their own advisers concerning the
potential tax consequences to them, including state and local income taxes.
The Acquiring Fund does not anticipate that taxable sales involving
significant amounts of securities of the combined portfolio will have to be made
after the Reorganization to effect a realignment with the investment objectives
and strategies of the Acquiring Fund.
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS AND OBLIGATIONS
GENERAL. Each Fund is a diversified portfolio of the Vision Funds, an
open-end, management investment company registered under the 1940 Act, which
continuously offers to sell shares at their current net asset value. The Vision
Funds is organized as a corporation under the laws of the State of Maryland and
is governed by its Articles of Incorporation, Bylaws and Board of Directors, in
addition to applicable state and federal law. The rights of shareholders of the
Acquiring Fund and shareholders of the Acquired Funds are identical. Set forth
below is a brief summary of the significant rights of shareholders of the Funds.
SHARES OF THE ACQUIRING FUND AND THE ACQUIRED FUNDS. The Vision
Funds is authorized to issue Twenty Billion (20,000,000,000) shares of
beneficial interest (par value one mill ($0.001) per share). The Acquiring Fund,
the Growth & Income Fund and the Capital Appreciation Fund are each separate
series of the Vision Funds. The Board of Directors has established two classes
of shares of the Acquiring Fund, known as Class A Shares and Class B Shares. The
Board of Directors has established one class of shares of each of the Acquired
Funds, known as Class A Shares. Issued and outstanding shares of the Acquiring
Fund and the Acquired Funds are fully paid and nonassessable, and freely
transferable.
VOTING RIGHTS. The Vision Funds is not required to hold annual
meetings of shareholders, except as required under the 1940 Act. Shareholder
approval is necessary only for certain changes in operations or the election of
Directors under certain circumstances. The Vision Funds requires that a special
meeting of shareholders be called for any permissible purpose upon the written
request of the holders of at least 25% of the outstanding shares of the series
or class of the Vision Funds entitled to vote. All shares of each portfolio or
class of the Vision Funds have equal voting rights except that in matters
affecting only a particular portfolio or class, only shares of that portfolio or
class are entitled to vote.
DIRECTORS. The Bylaws of the Vision Funds provide that each Director
holds office from the time of his or her election until the next annual meeting
of shareholders or special meeting at which Directors are elected and until his
or her successor has been duly chosen and qualified, until he or she shall have
resigned, or until he or she shall have been removed. The Board of Directors of
the Vision Funds shall call a meeting of shareholders for the purpose of voting
upon the question of removal of any Director or Directors when requested in
writing to do so by the record holders of at least 10% of the outstanding
shares. A Director of the Vision Funds may be removed, with or without cause, by
the affirmative vote of a majority of the votes entitled to be cast for the
election of Directors, and such shareholders may elect a qualified person as
Director to replace the Director so removed. In case of any vacancy on the Board
of Directors, a majority of the remaining Directors may elect a successor to
hold office until the next annual meeting of the shareholders or special meeting
at which Directors are elected and until his or her successor shall have been
duly elected and qualified. A meeting of shareholders will be required for the
purpose of electing additional Directors whenever fewer than a majority of the
Directors then in office were elected by shareholders.
LIABILITY OF DIRECTORS AND OFFICERS. The Articles of Incorporation
of the Vision Funds contain provisions eliminating liability of its Directors
and officers to the Vision Funds or its shareholders to the fullest extent
permitted by Maryland law. However, the Vision Funds provide that no Director or
officer shall be indemnified against any liability to the Vision Funds or its
shareholders to which he or she would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office.
TERMINATION. In the event of the termination of the Vision Funds or
any portfolio or class of the Vision Funds, the shareholders of the respective
portfolio or class are entitled to receive, when and as declared by its
Directors, the excess of the assets belonging to the respective portfolio or
class over the liabilities belonging to the respective portfolio or class. In
either case, the assets belonging to the portfolio or class will be distributed
among the shareholders in proportion to the number of shares of the respective
portfolio or class held by them.
CAPITALIZATION
The Acquiring Fund is a newly-organized portfolio which, as of the
date of this Prospectus/Proxy Statement, has not conducted any business (other
than matters incident to its organization) and has no shareholders. Accordingly,
the capitalization of the Acquiring Fund immediately following the
Reorganization is expected to be identical to the combined capitalization of the
Acquired Funds immediately prior to the Reorganization. The following table sets
forth the unaudited capitalization of the Class A Shares of the Acquiring Fund
and the Acquired Funds as of August 25, 1999 and on a pro forma combined basis
as of that date:
<TABLE>
<CAPTION>
ACQUIRING FUND GROWTH & CAPITAL PRO FORMA
INCOME FUND APPRECIATION FUND COMBINED
----------------- -------------- ------------------ --------------
<S> <C> <C> <C> <C>
Net Assets.............. -- $_________ $_________ $_________
Net Asset Value Per Share -- $_________ $_________ $_________
Offering Price Per Share -- $_________ $_________ $_________
Shares Outstanding...... -- $_________ $_________ $_________
</TABLE>
INFORMATION ABOUT VISION FUNDS, THE ACQUIRING FUND
AND THE ACQUIRED FUNDS
VISION MID CAP STOCK FUND, A PORTFOLIO OF VISION GROUP OF FUNDS, INC.
Information about the Vision Funds and the Acquiring Fund is
contained in the Acquiring Fund's current Prospectus dated July 15, 1999, a copy
of which is included herewith and incorporated herein by reference. Additional
information about the Acquiring Fund is included in the Acquiring Fund's
Statement of Additional Information dated July 15, 1999, and the Statement of
Additional Information dated September __, 1999 (relating to this
Prospectus/Proxy Statement), each of which is incorporated herein by reference.
Copies of the Statements of Additional Information, which have been filed with
the Securities and Exchange Commission (the "SEC"), may be obtained upon request
and without charge by contacting the Acquiring Fund at 1-800-836-2211, or by
writing the Acquiring Fund at 5800 Corporate Drive, Pittsburgh, PA 15237-7010.
The Vision Funds is subject to the informational requirements of the Securities
Act of 1933, as amended (the "1933 Act"), the Securities Exchange Act of 1934,
as amended (the "1934 Act"), and the 1940 Act and in accordance therewith files
reports and other information with the SEC. Reports, proxy and information
statements, charter documents and other information filed by the Vision Funds or
the Acquiring Fund can be obtained by calling or writing the Acquiring Fund and
can also be inspected and copied by the public at the public reference
facilities maintained by the SEC in Washington, D.C. located at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549 and at certain of its regional
offices located at Suite 1400, Northwestern Atrium Center, 500 West Madison
Street, Chicago, IL 60661 and 13th Floor, Seven World Trade Center, New York, NY
10048. Copies of such material can be obtained from the Public Reference Branch,
Office of Consumer Affairs and Information Services, SEC, 450 Fifth Street,
N.W., Washington, D.C. 20549 at prescribed rates or from the SEC's Internet site
at http://www.sec.gov.
This Prospectus/Proxy Statement, which constitutes part of a
Registration Statement filed by the Vision Funds with the SEC under the 1933
Act, omits certain of the information contained in the Registration Statement.
Reference is hereby made to the Registration Statement and to the exhibits
thereto for further information with respect to the Vision Funds and the
Acquiring Fund and the shares offered hereby. Statements contained herein
concerning the provisions of documents are necessarily summaries of such
documents, and each such statement is qualified in its entirety by reference to
the copy of the applicable document filed with the SEC.
VISION GROWTH & INCOME FUND AND VISION CAPITAL APPRECIATION FUND, PORTFOLIOS OF
VISION GROUP OF FUNDS, INC.
Information about the Vision Funds and the Acquired Funds is
contained in the Acquired Funds' current Prospectus dated August 22, 1999, their
Annual Report to Shareholders dated April 30, 1999, their Statement of
Additional Information dated August 22, 1999, and the Statement of Additional
Information dated September __, 1999 (relating to this Prospectus/Proxy
Statement), each of which is incorporated herein by reference. Copies of such
Prospectus, Annual Report and Statements of Additional Information, which have
been filed with the SEC, may be obtained upon request and without charge from
the Acquired Funds by calling 1-800-836-2211, or by writing to the Acquired Fund
at 5800 Corporate Drive, Pittsburgh, PA 15237-7010. The Vision Funds is subject
to the informational requirements of the 1933 Act, the 1934 Act and the 1940 Act
and in accordance therewith files reports and other information with the SEC.
Reports, proxy and information statements, charter documents and other
information filed by Vision Funds or its portfolios, the Acquired Funds, can be
obtained by calling or writing the Acquired Fund and can also be inspected at
the public reference facilities maintained by the SEC or obtained at prescribed
rates at the addresses listed in the previous section or from the SEC's Internet
site at http://www.sec.gov.
VOTING INFORMATION
This Prospectus/Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of the Vision Funds of proxies for use at
the Special Meeting of Shareholders of the Growth & Income Fund and the Capital
Appreciation Fund (the "Special Meeting") to be held at 2:00 p.m. on October 14,
1999 at: 5800 Corporate Drive, Pittsburgh, Pennsylvania 15237-7010, and at any
adjournments thereof. The proxy confers discretionary authority on the persons
designated therein to vote on other business not currently contemplated which
may properly come before the Special Meeting. A proxy, if properly executed,
duly returned and not revoked, will be voted in accordance with the
specifications thereon; if no instructions are given, such proxy will be voted
in favor of the Reorganization Agreement. A shareholder may revoke a proxy at
any time prior to use by filing with the Secretary of the Acquired Funds an
instrument revoking the proxy, by submitting a proxy bearing a later date or by
attending and voting at the Special Meeting.
The cost of the solicitation, including the printing and mailing of
proxy materials, will be borne by the Funds. In addition to solicitations
through the mails, proxies may be solicited by officers, employees and agents of
the Acquired Funds, M&T Bank and their respective affiliates. Such solicitations
may be by telephone, telegraph or personal contact. The Funds will reimburse
custodians, nominees and fiduciaries for the reasonable costs incurred by them
in connection with forwarding solicitation materials to the beneficial owners of
shares held of record by such persons.
OUTSTANDING SHARES AND VOTING REQUIREMENTS
The Board of Directors of the Acquired Funds has fixed the close of
business on August 25, 1999, as the record date for the determination of
shareholders of the Acquired Funds entitled to notice of and to vote at the
Special Meeting and any adjournments thereof. As of the record date, there were
_______ shares and _______ shares of the Growth & Income Fund and Capital
Appreciation Fund, respectively, outstanding. Each share of each Acquired Fund
is entitled to one vote and fractional shares have proportionate voting rights.
On the record date, the Directors and officers of the Acquired Funds as a group
owned less than 1% of the outstanding shares of each Acquired Fund. To the best
knowledge of M&T Bank, as of the record date, no person, except as set forth in
the table below, owned beneficially or of record 5% or more of each Acquired
Fund's outstanding shares.
NAME AND ADDRESS GROWTH & INCOME FUND PERCENT OF
SHARES OWNED OUTSTANDING SHARES
OF RECORD AND BENEFICIALLY
- ----------------------------- ---------------------------- ----------------
M&T Bank __.__%
Buffalo, New York
NAME AND ADDRESS CAPITAL APPRECIATION PERCENT OF
SHARES OWNED OUTSTANDING SHARES
OF RECORD AND BENEFICIALLY
- ----------------------------- ---------------------------- ----------------
M&T Bank __.__%
Buffalo, New York
As of the record date, there were no Class A Shares of the Acquiring
Fund outstanding.
Approval of the Plan requires the affirmative vote of a majority of
the outstanding shares of each Acquired Fund. If the Plan is not approved by
both Acquired Funds, the Reorganization will not be consummated. The votes of
shareholders of the Acquiring Fund are not being solicited since their approval
is not required in order to effect the Reorganization.
A majority of the issued and outstanding shares of the Acquired Fund,
represented in person or by proxy, will be required to constitute a quorum at
the Special Meeting for the purpose of voting on the proposed Reorganization.
For purposes of determining the presence of a quorum, shares represented by
abstentions and "broker non-votes" will be counted as present, but not as votes
cast, at the Special Meeting. Under the 1940 Act, however, which governs this
transaction, matters subject to the requirements of the 1940 Act, including the
Reorganization, are determined on the basis of a percentage of votes present at
the Special Meeting, which would have the effect of treating abstentions and
"broker non-votes" as if they were votes against the Reorganization.
DISSENTER'S RIGHT OF APPRAISAL
Shareholders of the Acquired Funds objecting to the Reorganization
have no appraisal rights under the Vision Funds' Articles of Incorporation or
Maryland law. Under the Plan, if approved by the shareholders of the Acquired
Funds, each shareholder will become the owner of Class A Shares of the Acquiring
Fund having a total net asset value equal to the total net asset value of his or
her holdings in the Acquired Funds at the Closing Date.
OTHER MATTERS AND DISCRETION OF PERSONS NAMED IN THE PROXY
Management of the Acquired Funds knows of no other matters that may
properly be, or which are likely to be, brought before the Special Meeting.
However, if any other business shall properly come before the Special Meeting,
the persons named in the proxy intend to vote thereon in accordance with their
best judgment.
If at the time any session of the Special Meeting is called to order,
a quorum is not present in person or by proxy, the persons named as proxies may
vote those proxies which have been received to adjourn the Special Meeting to a
later date. In the event that a quorum is present but sufficient votes in favor
of one or more of the proposals have not been received, the persons named as
proxies may propose one or more adjournments of the Special Meeting to permit
further solicitation of proxies with respect to any such proposal. All such
adjournments will require the affirmative vote of a majority of the shares
present in person or by proxy at the session of the Special Meeting to be
adjourned. The persons named as proxies will vote those proxies which they are
entitled to vote in favor of the proposal, in favor of such an adjournment, and
will vote those proxies required to be voted against the proposal, against any
such adjournment.
Whether or not shareholders expect to attend the Special Meeting, all
shareholders are urged to sign, fill in and return the enclosed proxy form
promptly.
<PAGE>
1022587 v5; LX1705!.DOC
A-33
EXHIBIT A
1022587 v5; LX1705!.DOC
A-1
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated as of June 21, 1999 (the
"Agreement") between Vision Group of Funds, Inc., a Maryland corporation
("Vision"), on behalf of its portfolio Vision Mid Cap Stock Fund (the "Acquiring
Fund"), with its principal place of business at 5800 Corporate Drive,
Pittsburgh, Pennsylvania 15237-7010 and Vision, on behalf of its portfolios
Vision Growth & Income Fund (the "Growth & Income Fund") and Vision Capital
Appreciation Fund (the "Capital Appreciation Fund") (the Growth & Income Fund
and Capital Appreciation Fund being hereinafter collectively referred to as the
"Acquired Funds").
WHEREAS, the Board of Directors of Vision has determined that it is
in the best interests of the shareholders of the Acquired Funds, that the assets
of the Acquired Funds be acquired by the Acquiring Fund, a newly organized
portfolio of Vision pursuant to this Agreement; and
WHEREAS, the parties desire to enter into a plan of exchange which
would constitute a reorganization with respect to each Acquired Fund within the
meaning of Section 368(a)(1) of the Internal Revenue Code of 1986, as amended
(the "Code"):
NOW THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto agree as follows:
1. PLAN OF EXCHANGE.
(a) Subject to the terms and conditions set forth herein, the
Acquired Funds shall each assign, transfer and convey their respective assets,
including all securities and cash held by the Acquired Funds (subject to the
liabilities of the Acquired Funds) to the Acquiring Fund, and the Acquiring Fund
shall acquire all of the assets of the Acquired Funds (subject to the
liabilities of the Fund) in exchange for full and fractional Class A Shares of
the Acquiring Fund (the "Acquiring Fund Shares"), to be issued by Vision, having
an aggregate net asset value equal to the value of the net assets of the
Acquired Funds. The value of the assets of the Acquired Funds and the net asset
value per share of the Acquiring Fund Shares shall be computed as of the close
of the New York Stock Exchange (normally 4:00 p.m. Eastern time) on the Exchange
Date (such time and date being hereinafter called the "Valuation Time") in
accordance with the procedures for determining the value of the Acquiring Fund's
assets set forth in the Acquiring Fund's organizational documents and the
then-current prospectus and statement of additional information for the
Acquiring Fund that forms a part of the Acquiring Fund's Registration Statement
on Form N-1A (the "Registration Statement"). In lieu of delivering certificates
for the Acquiring Fund Shares, Vision shall credit the Acquiring Fund Shares to
the Acquired Funds' account on the share record books of Vision and shall
deliver a confirmation thereof to the Acquired Funds. The Acquired Funds shall
then deliver written instructions to Vision's transfer agent to establish
accounts for the shareholders on the share record books relating to the
Acquiring Fund.
(b) Delivery of the assets of the Acquired Funds to be
transferred shall be made on the Exchange Date (as defined herein). Assets
transferred shall be delivered to the account of the Acquiring Fund at State
Street Bank and Trust Company, Vision's custodian (the "Custodian"), with all
securities not in bearer or book entry form duly endorsed, or accompanied by
duly executed separate assignments or stock powers, in proper form for transfer,
with signatures guaranteed, and with all necessary stock transfer stamps,
sufficient to transfer good and marketable title thereto (including all accrued
interest and dividends and rights pertaining thereto) to the Custodian for the
account of the Acquiring Fund free and clear of all liens, encumbrances, rights,
restrictions and claims All cash delivered shall be in the form of immediately
available funds payable to the order of the Custodian for the account of the
Acquiring Fund.
(c) The Acquired Funds will pay or cause to be paid to the
Acquiring Fund any interest received on or after the Exchange Date with respect
to assets transferred from the Acquired Funds to the Acquiring Fund hereunder
and any distributions, rights or other assets received by the Acquired Funds
after the Exchange Date as distributions on or with respect to the securities
transferred from the Acquired Funds to the Acquiring Fund hereunder. All such
assets shall be deemed included in assets transferred to the Acquiring Fund on
the Exchange Date and shall not be separately valued.
(d) The Exchange Date shall be October 15, 1999, or such
earlier or later date as may be mutually agreed upon by the parties.
(e) As soon as practicable after the Exchange Date, the
Acquired Funds shall distribute all of the Acquiring Fund Shares received by
them among the shareholders of the Acquired Funds in proportion to the aggregate
value of the shares each such shareholder holds in the Acquired Funds and shall
take all other steps necessary to effect their termination. After the Exchange
Date, the Acquired Funds shall not conduct any business except in connection
with their termination.
2. VISION'S REPRESENTATIONS AND WARRANTIES ON BEHALF OF THE ACQUIRED
FUNDS. Vision, on behalf of the Acquired Funds, represents and warrants to and
agrees with Vision, on behalf and for the benefit of the Acquiring Fund, as
follows:
(a) Vision is a corporation duly organized, validly existing
and in good standing under the laws of the State of Maryland and has power to
own all of its properties and assets and, subject to the approval of the
shareholders of each of the Acquired Funds as contemplated hereby, to carry out
this Agreement.
(b) This Agreement has been duly authorized, executed and
delivered by Vision and is valid and binding on each of the Acquired Funds,
enforceable in accordance with its terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, and other similar laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity. The execution and delivery of this Agreement does not and
will not, and the consummation of the transactions contemplated by this
Agreement will not, violate Vision's Articles of Incorporation or By-Laws or any
agreement or arrangement to which either Acquired Fund is a party or by which
either is bound.
(c) Vision is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company,
and such registration has not been revoked or rescinded and is in full force and
effect.
(d) Except as shown on the audited financial statements of
each Acquired Fund for its most recently completed fiscal period and as incurred
in the ordinary course of each Acquired Fund's business since then, neither
Acquired Fund has any known liabilities of a material amount, contingent or
otherwise, and there are no legal, administrative or other proceedings pending
or, to Vision's knowledge, threatened against either Acquired Fund.
(e) On the Exchange Date, Vision will have full right, power
and authority to sell, assign, transfer and deliver each Acquired Fund's assets
to be transferred by it hereunder.
3. VISION'S REPRESENTATIONS AND WARRANTIES ON BEHALF OF THE ACQUIRING
FUND. Vision, on behalf of the Acquiring Fund, represents and warrants to and
agrees with Vision, on behalf and for the benefit of each Acquired Fund, as
follows:
(a) Vision is a corporation duly organized, validly existing
and in good standing under the laws of the State of Maryland and has power to
carry on its business as it is now being conducted and to carry out this
Agreement.
(b) This Agreement has been duly authorized, executed and
delivered by Vision and is valid and binding on the Acquiring Fund, enforceable
in accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, and other similar laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity. The execution and delivery of this Agreement does not and
will not, and the consummation of the transactions contemplated by this
Agreement will not, violate Vision's Articles of Incorporation or By-Laws or any
agreement or arrangement to which the Acquiring Fund is a party or by which it
is bound.
(c) Vision is registered under the 1940 Act as an open-end
management investment company and such registration has not been revoked or
rescinded and is in full force and effect.
(d) The Acquiring Fund does not have any known liabilities of
a material amount, contingent or otherwise, and there are no legal,
administrative or other proceedings pending or, to Vision's knowledge,
threatened against the Acquiring Fund. Other than organizational activities, the
Acquiring Fund has not engaged in any business activities.
(e) At the Exchange Date, the Acquiring Fund Shares to be
issued to the Acquired Funds (the only Acquiring Fund Shares to be issued as of
the Exchange Date, except for the initial capital, if any) will have been duly
authorized and, when issued and delivered pursuant to this Agreement, will be
legally and validly issued and will be fully paid and non-assessable and
registered under the Securities Act of 1933, as amended. No Vision or Acquiring
Fund shareholder will have any preemptive right of subscription or purchase in
respect thereof.
4. ACQUIRING FUND'S CONDITIONS PRECEDENT. The obligations of Vision
hereunder with respect to the Acquiring Fund shall be subject to the following
conditions:
(a) The Acquiring Fund shall have been furnished a statement
of each Acquired Fund's assets and liabilities, including a list of securities
owned by each Acquired Fund with their respective tax costs and values
determined as provided in Section 1 hereof, all as of the Valuation Time.
(b) As of the Exchange Date, all representations and
warranties made on behalf of each Acquired Fund made in this Agreement shall be
true and correct as if made at and as of such date, and each Acquired Fund shall
have complied with all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to such date.
(c) A vote of the shareholders of each Acquired Fund approving
this Agreement and the transactions and exchange contemplated hereby shall have
been adopted by the vote required by applicable law and the Articles of
Incorporation and By-Laws of Vision.
(d) At or before the Valuation Time, each Acquired Fund shall
have declared and paid a dividend or dividends, with a record date and
ex-dividend date at or before the Valuation Time, which, together with all
previous dividends, shall have the effect of distributing to its shareholders
all of its investment company taxable income (computed without regard to any
deduction for dividends paid), if any, plus the excess of its interest income,
if any, excludable from gross income under Section 103(a) of the Code over its
deductions disallowed under Sections 265 and 171(a)(2) of the Code for the
taxable periods or years ended on or before April 30, 1999 and for the period
from said date to and including the Exchange Date, and all of its net capital
gain realized (after reduction for any capital loss carryforward), if any, in
taxable periods or years ended on or before April 30, 1999 and in the period
from said date to and including the Exchange Date.
5. ACQUIRED FUNDS' CONDITIONS PRECEDENT. The obligations of Vision
hereunder with respect to each Acquired Fund shall be subject to the condition
that as of the Exchange Date all representations and warranties made in the
Agreement on behalf of the Acquiring Fund shall be true and correct as if made
at and as of such date, and the Acquiring Fund shall have complied with all of
the agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to such date.
6. MUTUAL CONDITIONS PRECEDENT. The obligations of both the Acquiring
Fund and the Acquired Funds hereunder shall be subject to the following
conditions:
(a) The post-effective amendment to Vision's Registration
Statement on Form N-1A relating to the Acquiring Fund under the 1933 Act and the
1940 Act, if applicable, shall have become effective, and any additional
post-effective amendments to such Registration Statement as are determined by
Vision to be necessary and appropriate shall have been filed with the Securities
and Exchange Commission and shall have become effective.
(b) No action, suit or other proceeding shall be threatened or
pending before any court or governmental agency which seeks to restrain or
prohibit, or obtain damages or other relief in connection with, this Agreement
or the transaction contemplated herein.
(c) Each party shall have received an opinion of Dickstein
Shapiro Morin & Oshinsky LLP to the effect that the reorganization contemplated
by this Agreement with respect to each Acquired Fund qualifies as a
"reorganization" under Section 368(a)(1) of the Code.
Provided, however, that at any time prior to the Exchange Date, any
of the foregoing conditions in this Section 6 may be waived by the parties if,
in the judgment of the parties, such waiver will not have a material adverse
effect on the benefits intended under this Agreement to the shareholders of the
Acquiring Fund or each Acquired Fund.
7. TERMINATION OF AGREEMENT. This Agreement and the transactions
contemplated hereby may be terminated and abandoned by resolution of the Board
of Directors of Vision at any time prior to the Exchange Date (and
notwithstanding any vote of the shareholders of the Acquired Funds) if
circumstances should develop that, in the opinion of the Board of Directors of
Vision, make proceeding with this Agreement inadvisable.
If this Agreement is terminated and the exchange contemplated
hereby is abandoned pursuant to the provisions of this Section 7, this Agreement
shall become void and have no effect, without any liability on the part of any
party hereto or the Directors, officers or shareholders of Vision, in respect of
this Agreement.
8. WAIVER AND AMENDMENTS. At any time prior to the Exchange Date, any
of the conditions set forth in Section 4 or Section 5 may be waived by the Board
of Vision, if, in the judgment of the waiving party, such waiver will not have a
material adverse effect on the benefits intended under this Agreement to the
shareholders of the Acquired Funds or the shareholders of the Acquiring Fund, as
the case may be. In addition, prior to the Exchange Date, any provision of this
Agreement may be amended or modified by the Board of Vision if such amendment or
modification would not have a material adverse effect upon the benefits intended
under this Agreement and would be consistent with the best interests of
shareholders of the Acquired Funds and the Acquiring Fund.
9. NO SURVIVAL OF REPRESENTATIONS. None of the representations and
warranties included or provided for herein shall survive consummation of the
transactions contemplated hereby.
10. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Pennsylvania, without giving
effect to principles of conflict of laws; provided, however, that the due
authorization, execution and delivery of this Agreement, shall be governed and
construed in accordance with the laws of the State of Maryland without giving
effect to principles of conflict of laws.
11. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which, when executed and delivered, shall be deemed to be an original.
<PAGE>
IN WITNESS WHEREOF, Vision has caused this Agreement and Plan of
Reorganization to be executed as of the date first above written.
VISION GROUP OF FUNDS, INC., on
behalf of its portfolio, Vision Mid Cap Stock Fund
/S/ VICTOR R. SICLARI
Victor R. Siclari
Secretary
VISION GROUP OF FUNDS, INC., on
behalf of its portfolio, Vision Growth & Income Fund
/S/ VICTOR R. SICLARI
Victor R. Siclari
Secretary
VISION GROUP OF FUNDS, INC., on
behalf of its portfolio, Vision
Capital Appreciation Fund
/S/ VICTOR R. SICLARI
Victor R. SiclarI
Secretary
STATEMENT OF ADDITIONAL INFORMATION
SEPTEMBER ___, 1999
Acquisition of the Assets of
VISION GROWTH & INCOME FUND
and
VISION CAPITAL APPRECIATION FUND
portfolios of
VISION GROUP OF FUNDS, INC.
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7010
Telephone Number: 1-800-836-2211
By and in exchange for shares of
VISION MID CAP STOCK FUND
a portfolio of
VISION GROUP OF FUNDS, INC.
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7010
TELEPHONE NUMBER: 1-800-836-2211
This Statement of Additional Information dated September ___, 1999 is
not a prospectus. A Prospectus/Proxy Statement dated September ___, 1999 related
to the above-referenced matter may be obtained from Vision Group of Funds, Inc.,
5800 Corporate Drive, Pittsburgh, Pennsylvania 15237-7010. This Statement of
Additional Information should be read in conjunction with such Prospectus/Proxy
Statement.
<PAGE>
TABLE OF CONTENTS
1. Statement of Additional Information of Vision Mid Cap Stock Fund, a
portfolio of Vision Group of Funds, Inc. dated July 15, 1999.
2. Statement of Additional Information of Vision Growth & Income Fund
and Vision Capital Appreciation Fund, portfolios of Vision Group of Funds, Inc.
dated August 22, 1999.
3. Combined Annual Report of the Vision Group of Funds, Inc.,
containing the audited Financial Statements of Vision Growth & Income Fund and
Vision Capital Appreciation Fund dated April 30, 1999.
4. Pro Forma Financial Information of Vision Mid Cap Stock Fund, a
portfolio of Vision Group of Funds, Inc. as of April 30, 1999.
<PAGE>
The Statement of Additional Information of Vision Mid Cap Stock Fund
(the "Acquiring Fund"), a portfolio of Vision Group of Funds, Inc. (the "Vision
Funds") dated July 15, 1999, accompanies and is incorporated herein by reference
to this Statement of Additional Information.
The Statement of Additional Information of the Vision Growth & Income
Fund (the "Growth & Income Fund") and Vision Capital Appreciation Fund (the
"Capital Appreciation Fund"), both portfolios of Vision Funds (the Growth &
Income Fund and the Capital Appreciation Fund being hereinafter collectively
referred to as the "Acquired Funds") dated August 22, 1999, accompanies and is
incorporated herein by reference to this Statement of Additional Information.
Financial Statements of the Acquiring Fund are not included herein
because the Acquiring Fund has not yet commenced operations.
The audited financial statements of the Acquired Funds dated April
30, 1999, are incorporated herein by reference to their Annual Report to
Shareholders dated April 30, 1999 which accompanies their Statement of
Additional Information, dated August 22, 1999.
The pro forma financial information of the Acquiring Fund dated April
30, 1999 is included herein.
<PAGE>
Vision Growth And Income Fund
Vision Capital Appreciation Fund
Notes to Pro Forma Financial Statements (Unaudited)
April 30, 1999
BASIS OF COMBINATION
The accompanying unaudited Pro Forma Combining Portfolios of Investments,
Statements of Assets and Liabilities and Statements of Operations ("Pro Forma
Financial Statements") reflect the accounts of Vision Growth and Income Fund and
Vision Capital Appreciation Fund, collectively ("the Funds"), for the year ended
April 30, 1999. These statements have been derived from the books and records
utilized in calculating daily net asset values at April 30, 1999.
The Pro Forma Financial Statements should be read in conjunction with the
historical financial statements of the Funds which have been incorporated by
reference in the Statement of Additional Information. The Funds follow generally
accepted accounting principles applicable to management investment companies
which are disclosed in the historical financial statements of each fund.
The Pro Forma Financial Statements give effect to the proposed exchange of
assets of Vision Growth and Income Fund and Vision Capital Appreciation Fund for
shares of Vision Mid Cap Stock Fund.
The Pro Forma Financial Statements have been adjusted to reflect the anticipated
advisory fee arrangement for the combined entity. Certain other operating costs
have also been adjusted to reflect anticipated expenses of the combined entity.
Other costs which may change as a result of the reorganization are currently
undeterminable.
For the year ended April 30, 1999, Vision Growth and Income Fund and Vision
Capital Appreciation Fund paid investment advisory fees computed at the annual
rate of 0.70% and 0.85%, respectively, as a percentage of average daily net
assets.
SHARES OF COMMON STOCK
The Pro Forma net asset value per share assumes the issuance of 11,352,381
shares of the Vision Mid Cap Stock Fund in exchange for 6,111,388 shares of the
Vision Growth and Income Fund and 2,836,532 shares of the Vision Capital
Appreciation Fund which would have been issued at April 30, 1999, in connection
with the proposed reorganization.
<PAGE>
PRO FORMA COMBINING PORTFOLIO OF INVESTMENTS
April 30, 1999 (unaudited)
VISION VISION VISION VISION
GROWTH CAPITAL GROWTH CAPITAL
AND APPRE- AND APPRE-
INCOME CIATION PRO INCOME CIATION PRO FORMA
FORMA
FUND FUND COMBINED FUND FUND COMBINED
- ----------- --------- -------- --------------- ---------- --------- ------------
COMMON STOCKS - 97.9%
- --------------------------------------------------------------------------------
AIR FREIGHT - 0.7%
- --------------------------------------------------------------------------------
- 18,200 18,200 CNF $- $795,112 $795,112
Transportation,
Inc.
--------------- ---------- --------- ------------
AIRLINES - 0.7%
- --------------------------------------------------------------------------------
- - 34,100 34,100 Comair - 752,331 752,331
Holdings, Inc.
--------------- ---------- --------- ------------
AUTO PARTS & EQUIPMENT - 2.4%
- --------------------------------------------------------------------------------
47,175 - 47,175 Borg-Warner 2,677,181 - 2,677,181
Automotive,
Inc.
--------------- ---------- --------- ------------
CHEMICALS - 2.5%
- --------------------------------------------------------------------------------
115,700 - 115,700 IMC Global, 2,892,500 - 2,892,500
Inc.
--------------- ---------- --------- ------------
CHEMICALS SPECIALTY - 2.2%
- --------------------------------------------------------------------------------
66,600 - 66,600 Hercules, Inc. 2,518,312 - 2,518,312
--------------- ---------- --------- ------------
COMMUNICATIONS EQUIPMENT - 1.8%
- --------------------------------------------------------------------------------
- 21,500 21,500 (a) ADC - 1,027,969 1,027,969
Telecommunications,
Inc.
---------------
- 27,200 27,200 (a) Newbridge - 1,013,200 1,013,200
Networks Corp.
--------------- ---------- --------- ------------
Total - 2,041,169 2,041,169
--------------- ---------- --------- ------------
COMPUTERS (HARDWARE) - 3.7%
- --------------------------------------------------------------------------------
- 48,765 48,765 (a) Apex PC - 810,718 810,718
Solutions,
Inc.
---------------
- 21,200 21,200 (a) - 1,003,025 1,003,025
Electronics
for Imaging,
Inc.
---------------
40,100 - 40,100 (a) Sun 2,398,481 - 2,398,481
Microsystems,
Inc.
--------------- ---------- --------- ------------
Total 2,398,481 1,813,743 4,212,224
--------------- ---------- --------- ------------
COMPUTERS (PERIPHERALS) - 0.8%
- --------------------------------------------------------------------------------
- 7,600 7,600 (a) Lexmark - 938,600 938,600
Intl. Group,
Class A
--------------- ---------- --------- ------------
COMPUTERS (SOFTWARE/SERVICES) - 3.3%
- --------------------------------------------------------------------------------
- 2,400 2,400 (a) At Home - 345,450 345,450
Corp., Class A
---------------
- 14,400 14,400 (a) Citrix - 612,000 612,000
Systems, Inc.
---------------
- 2,100 2,100 (a) Excite, - 306,600 306,600
Inc.
---------------
50 - 50 (a) Oracle 1,353 - 1,353
Corp.
---------------
56,100 - 56,100 (a) The 1,739,100 - 1,739,100
Learning Co.,
Inc.
---------------
- 34,840 34,840 (a) USWeb - 781,722 781,722
Corp.
--------------- ---------- --------- ------------
Total 1,740,453 2,045,772 3,786,225
--------------- ---------- --------- ------------
CONSUMER FINANCE - 0.4%
- --------------------------------------------------------------------------------
- 3,900 3,900 Providian - 503,344 503,344
Financial
Corp.
--------------- ---------- --------- ------------
CONTAINERS/PACKAGING (PAPER) - 0.7%
- --------------------------------------------------------------------------------
- 78,100 78,100 Earthshell - 761,475 761,475
Corp.
--------------- ---------- --------- ------------
DISTRIBUTORS (FOOD & HEALTH) - 0.6%
- --------------------------------------------------------------------------------
- 38,550 38,550 Bergen - 732,450 732,450
Brunswig
Corp., Class A
--------------- ---------- --------- ------------
ELECTRICAL EQUIPMENT - 6.1%
- --------------------------------------------------------------------------------
65,000 - 65,000 (a) SCI 2,474,062 - 2,474,062
Systems, Inc.
---------------
- 15,700 15,700 SPX Corp. - 1,025,406 1,025,406
---------------
194,300 - 194,300 (a) Vishay 3,388,106 - 3,388,106
Intertechnology,
Inc.
--------------- ---------- --------- ------------
5,862,168 1,025,406 6,887,574
--------------- ---------- --------- ------------
ELECTRONICS (COMPONENT DISTRIBUTION) - 2.1%
- --------------------------------------------------------------------------------
134,500 - 134,500 (a) Arrow 2,446,219 - 2,446,219
Electronics,
Inc.
--------------- ---------- --------- ------------
ELECTRONICS (SEMICONDUCTORS) - 3.4%
- --------------------------------------------------------------------------------
80,450 - 80,450 (a) LSI Logic 2,735,300 - 2,735,300
Corp.
---------------
- 8,900 8,900 (a) Uniphase - 1,080,237 1,080,237
Corp.
--------------- ---------- --------- ------------
Total 2,735,300 1,080,237 3,815,537
--------------- ---------- --------- ------------
ENGINEERING & CONSTRUCTION - 0.5%
- --------------------------------------------------------------------------------
- 13,700 13,700 (a) Jacobs - 540,294 540,294
Engineering
Group, Inc.
--------------- ---------- --------- ------------
FINANCIAL (DIVERSIFIED) - 4.4%
- --------------------------------------------------------------------------------
- 23,000 23,000 (a) Concord - 767,625 767,625
EFS, Inc.
---------------
- 15,400 15,400 Financial - 879,725 879,725
Security
Assurance
Holdings Ltd.
---------------
200,300 - 200,300 Indy Mac 3,304,950 - 3,304,950
Mortgage
Holdings, Inc.
--------------- ---------- --------- ------------
Total 3,304,950 1,647,350 4,952,300
--------------- ---------- --------- ------------
HARDWARE & TOOLS - 0.7%
- --------------------------------------------------------------------------------
- 14,400 14,400 Black & - 817,200 817,200
Decker Corp.
--------------- ---------- --------- ------------
HEALTH CARE (DRUGS) - 1.0%
- --------------------------------------------------------------------------------
- 36,100 36,100 ICN - 1,193,556 1,193,556
Pharmaceuticals,
Inc.
--------------- ---------- --------- ------------
HEALTH CARE (DRUGS/PHARMACEUTICALS) - 0.6%
- --------------------------------------------------------------------------------
- 28,250 28,250 (a) Medicis - 686,828 686,828
Pharmaceutical
Corp., Class A
--------------- ---------- --------- ------------
HEALTH CARE (LONG TERM CARE) - 3.2%
- --------------------------------------------------------------------------------
161,350 - 161,350 (a) Genesis 1,119,366 - 1,119,366
Health
Ventures, Inc.
---------------
185,604 - 185,604 (a) 2,494,054 - 2,494,054
Healthsouth
Corp.
--------------- ---------- --------- ------------
Total 3,613,420 - 3,613,420
--------------- ---------- --------- ------------
HEALTH CARE (MEDICAL PRODUCTS/SUPPLIES) - 0.4%
- --------------------------------------------------------------------------------
- 8,900 8,900 Guidant Corp - 477,819 477,819
--------------- ---------- --------- ------------
HEALTH CARE (SPECIAL SERVICES) - 1.5%
- --------------------------------------------------------------------------------
50,000 - 50,000 (a) Alza Corp. 1,678,125 - 1,678,125
--------------- ---------- --------- ------------
HOMEBUILDING - 3.2%
- --------------------------------------------------------------------------------
- 22,800 22,800 D.R. Horton, - 440,325 440,325
Inc.
---------------
292,050 - 292,050 (a) Sunterra 3,139,537 - 3,139,537
Corp.
--------------- ---------- --------- ------------
Total 3,139,537 440,325 3,579,862
--------------- ---------- --------- ------------
HOUSEHOLD FURNISHING & APPLIANCES - 0.9%
- 15,300 15,300 Maytag Corp. - 1,046,137 1,046,137
--------------- ---------- --------- ------------
INSURANCE (LIFE/HEALTH) - 1.6%
48,875 - 48,875 Reliastar 1,796,156 - 1,796,156
Financial
Corp.
--------------- ---------- --------- ------------
INSURANCE (MULTI-LINE) - 1.9%
35,750 - 35,750 Hartford 2,107,016 - 2,107,016
Financial
Services
Group, Inc.
--------------- ---------- --------- ------------
INSURANCE (PROPERTY-CASUALTY) - 2.7%
81,500 - 81,500 Old Republic 1,594,344 - 1,594,344
International
Corp.
---------------
193,050 - 193,050 Reliance 1,447,875 - 1,447,875
Group
Holding, Inc.
--------------- ---------- --------- ------------
Total 3,042,219 - 3,042,219
--------------- ---------- --------- ------------
INVESTMENT BANKING/BROKERAGE - 4.1%
30,200 - 30,200 Lehman 1,677,988 - 1,677,988
Brothers
Holdings, Inc.
---------------
50,700 - 50,700 PaineWebber 2,379,731 - 2,379,731
Group, Inc.
---------------
- 5,100 5,100 Schwab - 559,725 559,725
(Charles)
Corp.
--------------- ---------- --------- ------------
Total 4,057,719 559,725 4,617,444
--------------- ---------- --------- ------------
LEISURE TIME (PRODUCTS) - 1.7%
- 31,200 31,200 (a) Action - 1,056,900 1,056,900
Performance
Cos., Inc.
---------------
- 59,100 59,100 Callaway Golf - 890,194 890,194
Co.
--------------- ---------- --------- ------------
Total - 1,947,094 1,947,094
--------------- ---------- --------- ------------
MACHINERY (DIVERSIFIED) - 2.1%
105,700 - 105,700 Milacron, Inc. 2,431,100 - 2,431,100
--------------- ---------- --------- ------------
MANUFACTURING (DIVERSIFIED) - 0.2%
- 4,900 4,900 Corning, Inc. - 280,525 280,525
--------------- ---------- --------- ------------
METAL FABRICATORS - 1.6%
69,400 - 69,400 Kennametal, 1,843,437 - 1,843,437
Inc.
--------------- ---------- --------- ------------
NATURAL GAS (DISTRIBUTION-PIPE LINE) - 3.2%
26,500 - 26,500 Consolidated 1,576,750 - 1,576,750
Natural Gas
Co.
---------------
105,400 - 105,400 MCN Energy 2,101,413 - 2,101,413
Group, Inc.
--------------- ---------- --------- ------------
Total 3,678,163 - 3,678,163
--------------- ---------- --------- ------------
OIL & GAS (DRILLING & EQUIPMENT) - 3.4%
99,950 - 99,950 Baker Hughes, 2,986,006 - 2,986,006
Inc.
---------------
- 25,000 25,000 Diamond - 826,563 826,563
Offshore
Drilling, Inc.
--------------- ---------- --------- ------------
Total 2,986,006 826,563 3,812,569
--------------- ---------- --------- ------------
OIL & GAS (REFINING & MANUFACTURING) - 0.6%
- 24,900 24,900 Tosco Corp. - 666,075 666,075
--------------- ---------- --------- ------------
OIL (DOMESTIC INTEGRATED) - 1.9%
50,800 - 50,800 Unocal Corp. 2,111,375 - 2,111,375
--------------- ---------- --------- ------------
PAPER & FOREST PRODUCTS - 2.6%
52,100 - 52,100 Mead Corp. 2,178,431 - 2,178,431
---------------
- 32,100 32,100 (a) - 750,338 750,338
Smurfit-Stone
Container
Corp.
--------------- ---------- --------- ------------
Total 2,178,431 750,338 2,928,769
--------------- ---------- --------- ------------
PUBLISHING (NEWSPAPERS) - 2.4%
194,075 - 194,075 Hollinger 2,729,180 - 2,729,180
International,
Inc.
--------------- ---------- --------- ------------
RETAIL (BUILDING SUPPLIES) - 0.8%
- 16,400 16,400 Lowe's Cos., - 865,100 865,100
Inc.
--------------- ---------- --------- ------------
RETAIL (COMPUTERS & ELECTRONICS) - 2.1%
32,475 - 32,475 Tandy Corp. 2,352,408 - 2,352,408
--------------- ---------- --------- ------------
RETAIL (DEPT. STORES) - 0.2%
- 3,900 3,900 (a) Kohl's - 259,106 259,106
Corp.
--------------- ---------- --------- ------------
RETAIL (DISCOUNTERS) - 1.5%
- 35,700 35,700 Family Dollar - 861,263 861,263
Stores, Inc.
---------------
- 18,800 18,800 Ross Stores, - 863,625 863,625
Inc.
--------------- ---------- --------- ------------
Total - 1,724,888 1,724,888
--------------- ---------- --------- ------------
RETAIL (GENERAL MERCHANDISE CHAIN) - 1.3%
102,700 - 102,700 (a) K Mart 1,527,662 - 1,527,662
Corp.
--------------- ---------- --------- ------------
RETAIL (HOME SHOPPING) - 1.2%
283,300 - 283,300 (a) Corporate 1,416,500 - 1,416,500
Express, Inc.
--------------- ---------- --------- ------------
RETAIL (SPECIALTY) - 4.3%
125,300 - 125,300 (a) General 2,075,281 - 2,075,281
Nutrition
Cos., Inc.
---------------
174,900 - 174,900 (a) 1,770,863 - 1,770,863
Officemax,
Inc.
---------------
- 33,650 33,650 (a) Staples, - 1,009,500 1,009,500
Inc.
--------------- ---------- --------- ------------
Total 3,846,144 1,009,500 4,855,644
--------------- ---------- --------- ------------
SERVICES (ADVERTISING/MARKETING) - 0.5%
- 7,600 7,600 Omnicom - 551,000 551,000
Group, Incl.
--------------- ---------- --------- ------------
SERVICES (COMMERCIAL & CONSUMER) - 2.0%
159,700 - 159,700 (a) Budget 1,986,269 - 1,986,269
Group, Inc.,
Class A
---------------
- 8,600 8,600 (a) - 276,813 276,813
Intermedia
Communications,
Inc.
--------------- ---------- --------- ------------
1,986,269 276,813 2,263,082
--------------- ---------- --------- ------------
SERVICES (COMPUTER SYSTEMS) - 1.4%
308,200 - 308,200 (a) CHS 1,560,263 - 1,560,263
Electronics,
Inc.
--------------- ---------- --------- ------------
SHIPPING - 0.7%
- 21,500 21,500 Royal - 794,156 794,156
Caribbean
Cruises, Ltd.
--------------- ---------- --------- ------------
STEEL - 1.7%
- ----------------------------------------------
65,000 - 65,000 USX-U.S. 1,966,250 - 1,966,250
Steel Group,
Inc.
--------------- ---------- --------- ------------
TRUCKS & PARTS - 1.8%
38,000 - 38,000 Cummins 2,033,000 - 2,033,000
Engine Co.,
Inc.
--------------- ---------- --------- ------------
WASTE MANAGEMENT - 0.6%
- 11,900 11,900 Waste - 672,350 672,350
Management,
Inc.
--------------- ---------- --------- ------------
TOTAL COMMON 80,655,944 30,522,381111,178,325
STOCKS
(IDENTIFIED
COST
$102,161,996)
--------------- ---------- --------- ------------
COMMERCIAL PAPER - 1.3%
$- $1,500,000$1,500,00American - 1,500,000 1,500,000
Express
Credit Corp.,
4.85%,
5/4/1999
--------------- ---------- --------- ------------
(at amortized
cost)
---------------
MUTUAL FUND SHARES - 3.2%
2,754,282 855,543 3,609,825SSGA Money 2,754,282 855,543 3,609,825
Market Fund
(at net asset
value)
--------------- ---------- --------- ------------
TOTAL 83,410,226 32,877,924116,288,150
INVESTMENTS
(IDENTIFIED
COST
$103,661,996)
--------------- ---------- --------- ------------
(a) Non-income producing security.
(b) The cost of investments for federal tax purposes amounts to $105,203,517.
The net unrealized appreciation of investments on a federal tax basis
amounts to $11,084,633 which is comprised of $19,227,822 appreciation and
$8,143,189 depreciation at April 30, 1999.
Note: The categories of investments are shown as a percentage of net assets
($113,523,807) at April 30, 1999.
(See Notes to the Pro Forma Financial Statements)
<PAGE>
<TABLE>
<CAPTION>
VISION EQUITY AND INCOME FUNDS
PRO FORMA COMBINING STATEMENTS OF ASSETS AND LIABILITIES
APRIL 30, 1999 (UNAUDITED)
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
VISION VISION
GROWTH CAPITAL
AND INCOME APPRECIATION PRO FORMA PROFORMA
FUND FUND ADJUSTMENT COMBINED
------------ -------------- ----------- ------------
ASSETS:
- ---------------------------------
Investments in securities, at -
value $83,410,226 $32,877,924 116,288,150
- ---------------------------------
Cash 74,233 - - 74,233
- ---------------------------------
Income receivable 121,007 9,097 - 130,104
- ---------------------------------
Receivable for shares sold 70,321 120,098 - 190,419
- ---------------------------------
Receivable for Investments sold - - - -
- ---------------------------------
Deferred organizational costs - 8,972 (8,972) (a) -
- --------------------------------- ------------ -------------- ----------- ------------
Total assets (8,972)
83,675,787 33,016,091 116,682,906
- --------------------------------- ------------ -------------- ----------- ------------
LIABILITIES:
- ---------------------------------
Payable for investments 1,626,192 -
purchased 1,412,005 3,038,197
- ---------------------------------
Payable for shares redeemed 49,427 28,474 - 77,901
- ---------------------------------
Accrued expenses 11,016 31,985 - 43,001
- --------------------------------- ------------ -------------- ----------- ------------
Total liabilities 1,686,651 -
1,472,448 3,159,099
- --------------------------------- ------------ -------------- ----------- ------------
NET ASSETS $(8,972)
$82,203,339 $31,329,440 $113,523,807
- --------------------------------- ------------ -------------- ----------- ------------
NET ASSETS CONSISTS OF:
- ---------------------------------
Paid in capital $(8,972)
$76,104,400 $34,840,849 110,936,277
- ---------------------------------
Net unrealized appreciation
(depreciation)
of investments 4,460,231 -
8,165,923 12,626,154
- ---------------------------------
Accumulated net realized gain
(loss) on
investments (7,971,640) -
(2,068,640) (10,040,280)
- ---------------------------------
Accumulated undistributed net
investment
income/ (Distributions in
excess of net
investment income) 1,656 - - 1,656
- --------------------------------- ------------ -------------- ----------- ------------
Total Net Assets $(8,972)
$82,203,339 $31,329,440 $113,523,807
- --------------------------------- ------------ -------------- ----------- ------------
NET ASSET VALUE, OFFERING PRICE
AND
REDEMPTION PROCEEDS PER SHARE
- ---------------------------------
Net Asset Value and Redemption $13.45 $11.04 $10.00
Proceeds Per Share
- --------------------------------- ------------ -------------- ----------- ------------
Offering Price Per Share* $14.23 $11.68 * $10.58 *
*
- --------------------------------- ------------ -------------- ----------- ------------
SHARES OUTSTANDING: 2,836,532 (b)
6,111,388 2,404,461 11,352,381
- --------------------------------- ------------ -------------- ----------- ------------
Investments, at identified cost $-
$75,244,303 $28,417,693 $103,661,996
- --------------------------------- ------------ -------------- ----------- ------------
Investments, at tax cost $-
$76,346,816 $28,856,701 $105,203,517
- --------------------------------- ------------ -------------- ----------- ------------
</TABLE>
* Computation of offering price per share 100/94.5 of net asset value.
(a) Deferred organizational costs cannot be carried forward into the combined
fund.
(b) Adjustment to reflect share balance as a result of the combination.
(See Notes to Pro Forma Financial Statements)
<PAGE>
<TABLE>
<CAPTION>
VISION GROWTH AND INCOME FUND
VISION CAPITAL APPRECIATION FUND
PRO FORMA COMBINING STATEMENTS OF OPERATIONS
YEAR ENDED APRIL 30, 1999 (UNAUDITED)
----------------------------------------------------------
<S> <C> <C> <C> <C>
VISION
VISION CAPITAL
GROWTH AND APPRECIATION PRO FORMA PRO FORMA
INCOME FUND FUND ADJUSTMENT COMBINED
INVESTMENT INCOME:
Dividends * ** $-
$1,506,147 $201,833 $1,707,980
Interest 107,014 151,217 - 258,231
------------ ------------ ----------- ------------
Total investment income 353,050
1,613,161 1,966,211
EXPENSES:
Investment advisory fee 739,869 432,670 (a)
158,543 1,331,082
Administrative personnel and 138,723 67,260 - 205,983
services fee
Custodian fees 11,536 6,013 (6,509) (b) 11,040
Transfer and dividend
disbursing agent
fees and expenses 39,816 55,216 (15,991) (c) 79,042
Directors' fees 2,891 363 - 3,254
Auditing fees 13,070 13,257 (12,827) (d) 13,500
Legal fees 2,172 2,992 (1,164) (e) 4,000
Portfolio accounting fees 1,102 1,125 (727) (f) 1,500
Shareholder services fees 264,239 127,256 - 391,495
Share registration costs 13,228 8,298 (1,143) (g) 20,383
Printing and postage 9,333 15,161 (9,494) (h) 15,000
Taxes 12,237 3,519 - 15,756
Insurance premiums 1,004 2,344 - 3,348
Miscellaneous 22,713 26,254 (26,467) (i) 22,500
------------ ------------ ----------- ------------
----------- ------------
TOTAL EXPENSES 761,728 84,222
1,271,933 2,117,883
------------ ------------ ----------- ------------
------------
NET INVESTMENT INCOME/(NET
OPERATING LOSS) $341,228 $(408,678) $(84,222) $(151,672)
------------ ------------ ----------- ------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on -
investments (2,004,995) (7,959,870) (9,964,865)
Net change in unrealized -
appreciation (depreciation) on (17,284,916) (7,298,753) (24,583,669)
investments
------------ ------------ ----------- ------------
Net realized and unrealized -
gain (loss) on investments (19,289,911) (15,258,623) (34,548,534)
------------ ------------ ----------- ------------
-----------
Change in net assets $(18,948,683) $(15,667,301) - $(34,615,984)
resulting from operations
------------ ------------ ----------- ------------
</TABLE>
* Net of foreign taxes
withheld $5,043.
** Net of foreign taxes
withheld $303.
(See Notes to Pro Forma Combining Statement of Operations on the following page)
(See Notes to Pro Forma Financial Statements)
<PAGE>
VISION GROWTH AND INCOME FUND
VISION CAPITAL APPRECIATION FUND
NOTES TO PRO FORMA COMBINING STATEMENTS OF OPERATIONS
YEAR ENDED APRIL 30, 1999
(a) Manufacturers and Traders Trust Company (the "Adviser") receives for its
services an annual investment advisory fee equal to 0.85% of the Vision
Mid Cap Stock Fund's average daily net assets. The adviser may voluntarily
choose to waive a portion of its fee. The Adviser can modify or terminate
this voluntary waiver at its sole discretion. The Adviser currently
receives an advisory fee equal to 0.70% of the Vision Growth and Income
Fund's average daily net assets and 0.85% of the Vision Capital
Appreciation Fund's average daily net assets.
(b) The custodian fee is based on a percentage of assets, plus out-of-pocket
expenses.
(c) Federated Services Company ("FServ") through its subsidiary, Federated
Shareholder Services Company, serves as transfer and dividend disbursing
agent for the Funds. The fee paid to FServ is based on the level of
average aggregate net assets of the Vision Group of Funds, Inc. (the
"Corporation") for the period. FServ is required to maintain the records
of the Vision Growth and Income Fund and the Vision Capital Appreciation
Fund for a period of one year after the merger date. The reduction is due
to the combining of two portfolios into one.
(d) Adjustment to reflect the audit fee reductions due to the combining of two
portfolios into one.
(e) Adjustment to reflect the legal fee reductions due to the combining of two
portfolios into one.
(f) FServ provides the Funds with certain fund accounting services. The fee
paid to FServ is based on the level of average aggregate net assets of the
Corporation plus out-of-pocket expenses for the period.
(g) Adjustment to reflect state registration costs for only the one combined
fund.
(h) Printing and postage expenses are adjusted to reflect estimated savings to
be realized by combining two portfolios into a single portfolio.
(i) Adjustment to reflect the miscellaneous expense reductions due to the
combining of two portfolios into one.
<PAGE>
PART C - OTHER INFORMATION
ITEM 15. INDEMNIFICATION
Indemnification is provided to Directors and officers of the
Registrant pursuant to the Registrant's Articles of Incorporation and Bylaws,
except where such indemnification is not permitted by law. However, the Articles
of Incorporation and Bylaws do not protect the Directors or officers from
liability based on willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of their office.
Directors and officers of the Registrant are insured against certain
liabilities, including liabilities arising under the Securities Act
of 1933 (the "Act"). Insofar as indemnification for liabilities
arising under the Act may be permitted to Directors, officers, and
controlling persons of the Registrant by the
Registrant pursuant to the Articles of Incorporation or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by Directors, officers, or controlling
persons of the Registrant in connection with the successful defense of any act,
suit, or proceeding) is asserted by such Directors, officers, or controlling
persons in connection with the shares being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
Insofar as indemnification for liabilities may be permitted pursuant
to Section 17 of the Investment Company Act of 1940, as amended, for Directors,
officers, or controlling persons of the Registrant by the Registrant pursuant to
the Articles of Incorporation or otherwise, the Registrant is aware of the
position of the Securities and Exchange Commission as set forth in Investment
Company Act Release No. IC-11330. Therefore, the Registrant undertakes that in
addition to complying with the applicable provisions of the Articles of
Incorporation or otherwise, in the absence of a final decision on the merits by
a court or other body before which the proceeding was brought, that an
indemnification payment will not be made unless in the absence of such a
decision, a reasonable determination based upon factual review has been made (i)
by a majority vote of a quorum of non-party Directors who are not interested
persons of the Registrant or (ii) by independent legal counsel in a written
opinion that the indemnitee was not liable for an act of willful misfeasance,
bad faith, gross negligence, or reckless disregard of duties. The Registrant
further undertakes that advancement of expenses incurred in the defense of a
proceeding (upon undertaking for repayment unless it is ultimately determined
that indemnification is appropriate) against an officer, Director, or
controlling person of the Registrant will not be made absent the fulfillment of
at least one of the following conditions: (i) the indemnitee provides security
for his undertaking; (ii) the Registrant is insured against losses arising by
reason of any lawful advances; or (iii) a majority of a quorum of disinterested
non-party Directors or independent legal counsel in a written opinion makes a
factual determination that there is reason to believe the indemnitee will be
entitled to indemnification.
<PAGE>
ITEM 16. EXHIBITS
1.1 Conformed copy of Amended Articles of Incorporation of the Registrant(13)
1.2 Conformed copy of Articles Supplementary(2) 1.3 Conformed copy of Articles
Supplementary dated May 29, 1996(8) 1.4 Conformed copy of Articles Supplementary
dated April 20, 1998(13) 1.5 Conformed copy of Articles of Amendment effective
June 1, 1999(17) 1.6 Conformed copy of Articles Supplementary effective June 1,
1999(17)
2.1 Copy of Bylaws of the Registrant(4)
2.2 Copy of Amendment No. 1 to Bylaws(13)
3 Not Applicable
4 Agreement and Plan of Reorganization dated June 21, 1999, between Vision Group
of Funds, Inc., a Maryland corporation, on behalf of its portfolio, Vision Mid
Cap Stock Fund and Vision Group of Funds, Inc., on behalf of its portfolios,
Vision Growth & Income Fund and Vision Capital Appreciation Fund*
5.1 Copy of Specimen Certificates for Shares of Capital Stock of the
Registrant(2)
5.2 Copy of Specimen Certificate for Shares of Capital Stock of the Vision
Capital Appreciation Fund(8)
6.1 Conformed copy of Investment Advisory Contract of the Registrant(3)
6.2 Conformed copy of Sub-advisory Agreement for the Vision New York
Tax-Free Money Market Fund(15)
6.3 Conformed copy of Exhibit B to Investment Advisory Contract(7)
6.4 Conformed copy of Exhibit C to Investment Advisory Contract(11)
6.5 Conformed copy of Investment Advisory Contract for the Vision New York
Tax-Free Money Market Fund including Exhibit A(15)
6.6 Form of Exhibit D to Investment Advisory Contract(17)
7.1 Conformed copy of Distributor's Contract of the Registrant(3) 7.2 Conformed
copy of Exhibit C to the Distributor's Contract(7) 7.3 Conformed copy of Exhibit
D to the Distributor's Contract(12) 7.4 Conformed copy of Exhibit E to the
Distributor's Contract(14) 7.5 Conformed copy of Exhibit F to the Distributor's
Contract(17)
8 Not Applicable
9.1 Conformed copy of Custodian Agreement of the Registrant(5) 9.2 Copy of
Amendment No. 2 to Exhibit A to the Custodian Agreement(7) 9.3 Copy of Amendment
No. 3 to Exhibit A to the Custodian Contract(10) 9.4 Conformed copy of State
Street Domestic Custody Fee Schedule(12) 9.5 Conformed copy of Amendment No. 4
to Exhibit A to the Custodian Contract(25)
10.1 Copy of Rule 12b-1 Plan of the Registrant(1)
10.2 Conformed copy of Exhibit B to Rule 12b-1 Plan(7)
10.3 Conformed copy of Exhibit C to Rule 12b-1 Plan(12)
10.4 Conformed copy of Exhibit D to Rule 12b-1 Plan(14)
10.5 Copy of Rule 12b-1 Agreement(1)
10.6 Copy of Exhibit B to Rule 12b-1 Agreement(7)
10.7 Copy of Exhibit C to Rule 12b-1 Agreement(10)
10.8 Amended and Restated Plan with conformed copy of Exhibit D(14)
10.9 Copy of Dealer (Sales) Agreement(1)
10.10 Conformed copy of Exhibit E to Rule 12b-1 Plan(16)
10.11 Conformed copy of the Registrant's Multiple Class Plan with conformed
copies of Exhibits A and B(14)
10.12 Conformed copy of Exhibit C to the Multiple Class Plan(16)
11 Form of Opinion and Consent of Counsel regarding legality of shares being
issued*
12 Opinion of Dickstein Shapiro Morin & Oshinsky LLP regarding tax consequences
of Reorganization(18)
13.1 Conformed copy of Agreement for Fund Accounting Services and Transfer
Agency Service(9) 13.2 Copy of Exhibit 1 to Agreement for Fund Accounting
Services and Transfer Agency Services(10)
13.3 Conformed copy of Amendment to Administrative Services Agreement and
the Agreement for Fund Accounting Services and Transfer Agency
Services(12)
13.4 Conformed copy of Amendment No. 1 to Exhibit 1 to Agreement for Fund
Accounting Services and Transfer Agency Services(14)
13.5 Conformed copy of Amendment No. 2 to Exhibit 1 to the Agreement for
Fund Accounting Services and Transfer Agency Services(16)
13.6 Conformed copy of Recordkeeping Agreement including Exhibits A - C(15)
13.7 Form of Amendment No. 1 to Exhibit A to the Recordkeeping Agreement(17)
13.8 Conformed copy of Sub-Transfer Agency Agreement(15)
13.9 Form of Amendment No. 1 to Exhibit A of the Sub-Transfer Agency
Agreement(17)
13.10 Conformed copy of Administrative Services Agreement of the Registrant(3)
13.11 Conformed copy of Shareholder Services Plan of Registrant(3)
13.12 Conformed copy of Exhibit A to Amended and Restated Shareholder
Services Plan(14)
13.13 Conformed copy of Amended and Restated Shareholder Services Agreement(6)
13.14 Copy of Amendment No. 1 to Exhibit A to Shareholder Services
Agreement(7)
13.15 Copy of Amendment No. 2 to Exhibit A to Shareholder Services
Agreement(10)
13.16 Conformed copy of Amendment No. 1 to Exhibit A to Amended and Restated
Shareholder Services Plan(16)
13.17 Form of Amendment No. 1 (dated June 1, 1999) to Exhibit A to
Shareholder Services Agreement(17)
14. Conformed copy of Consent of Independent Auditors of Vision Group of
Funds, Inc., Ernst & Young LLP*
15 Not Applicable
16 Conformed copy of Power of Attorney7
17.1 Form of Proxy of Vision Growth & Income Fund*
17.2 Form of Proxy of Vision Capital Appreciation Fund*
- -------------------
* FILED ELECTRONICALLY.
1. 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)
2. 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)
3. 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)
4. 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)
5. 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)
6. 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)
7. 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)
8. 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)
9. 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)
10. 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)
11. 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)
12. 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)
13. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 31 on Form N-1A filed April 22, 1998, (File Nos. 33-20673 and
811-5514)
14. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 32 on Form N-1A filed July 8, 1998, (File Nos. 33-20673 and
811-5514)
15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 34 on Form N-1A filed March 12, 1999, (File Nos. 33-20673 and
811-5514)
16. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 36 on Form N-1A filed June 11, 1999, (File Nos. 33-20673 and
811-5514)
17. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 37 on Form N-1A filed June 23, 1999, (File Nos. 33-20673 and
811-5514)
18. To be filed by Post-Effective Amendment pursuant to "Dear Registrant"
letter dated February 15, 1996.
<PAGE>
ITEM 17. UNDERTAKINGS
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a prospectus which is
a part of this Registration Statement by any person or party who is deemed to be
an underwriter within the meaning of Rule 145(c) of the Securities Act of 1933,
the reoffering prospectus will contain the information called for by the
applicable registration form for reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items of
the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as a part of an amendment to the
Registration Statement and will not be used until the amendment is effective,
and that, in determining any liability under the Securities Act of 1933, each
post-effective amendment shall be deemed to be a new Registration Statement for
the securities offered therein, and the offering of the securities at that time
shall be deemed to be the initial bona fide offering of them.
(3) The undersigned Registrant agrees to file by Post-Effective
Amendment the opinion of counsel regarding the tax consequences of the proposed
reorganization required by Item 16 (12) of Form N-14 within a reasonable time
after receipt of such opinion.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Vision Group of Funds, Inc., has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Pittsburgh, Commonwealth of Pennsylvania on the 30th
day of July, 1999.
VISION GROUP OF FUNDS, INC.
(Registrant)
By: *
Edward C. Gonzales
President
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on the 30th day of July, 1999:
* President and Treasurer (Chief Executive
Officer and Principal Financial and Accounting
Officer)
Edward C. Gonzales
* Director
Randall I. Benderson
* Director
Joseph J. Castiglia
* Director
Daniel R. Gernatt, Jr.
* Director
George K. Hambleton
1*By: /S/ VICTOR R. SICLARI Attorney in Fact
Secretary
EXHIBIT 17.1
VISION GROWTH & INCOME FUND,
a Portfolio of
VISION GROUP OF FUNDS, INC.,
SPECIAL MEETING OF SHAREHOLDERS
October 14, 1999
- ------------------------------------------------------------
VISION GROWTH & INCOME FUND, a Portfolio of VISION GROUP OF FUNDS, INC.
CUSIP NO. 92830F604
The undersigned shareholder(s) of Vision Growth & Income Fund (the "Acquired
Fund"), a portfolio of Vision Group of Funds, Inc. (the "Vision Funds"), hereby
appoint(s) Antoinette D. Brkovich, Patricia F. Conner, Erin J. Dugan, C. Todd
Gibson, Cristina M. Rice and Victor R. Siclari, or any of them true and lawful
proxies, with power of substitution of each, to vote all shares of the Acquired
Fund which the undersigned is entitled to vote, at the Special Meeting of
Shareholders to be held on October 14, 1999, at 5800 Corporate Drive,
Pittsburgh, Pennsylvania 15237-7010, at 2:00 p.m. (local time) and at any
adjournment thereof.
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Special Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The proxies named
will vote the shares represented by this proxy in accordance with the choice
made on this ballot. IF NO CHOICE IS INDICATED, THIS PROXY WILL BE VOTED
AFFIRMATIVELY ON THAT MATTER.
PROPOSAL
TO APPROVE OR DISAPPROVE AN AGREEMENT AND PLAN OF REORGANIZATION BETWEEN THE
VISION FUNDS, ON BEHALF OF THE ACQUIRED FUND, AND VISION FUNDS, ON BEHALF OF
ITS PORTFOLIO, VISION MID CAP STOCK FUND
<PAGE>
PLEASE RETURN BOTTOM PORTION WITH YOUR VOTE IN THE ENCLOSED ENVELOPE AND RETAIN
THE TOP PORTION.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS X
KEEP THIS PORTION FOR YOUR RECORDS.
- --------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY.
VISION GROWTH & INCOME FUND, a portfolio of VISION GROUP OF FUNDS, INC.
RECORD DATE SHARES: _________________
VOTE ON THE PROPOSAL
FOR AGAINST ABSTAIN
Please sign EXACTLY as your name(s) appear(s) above. When signing as attorney,
executor, administrator, guardian, Director, custodian, etc., please give your
full title as such. If a corporation or partnership, please sign the full name
by an authorized officer or partner. If stock is owned jointly, all owners
should sign.
- -----------------------------------
- -----------------------------------
Signature(s) of Shareholder(s)
Date: _________________________________
<PAGE>
EXHIBIT 17.2
VISION CAPITAL APPRECIATION FUND,
a Portfolio of
VISION GROUP OF FUNDS, INC.,
SPECIAL MEETING OF SHAREHOLDERS
October 14, 1999
- ------------------------------------------------------------
VISION CAPITAL APPRECIATION FUND,
a Portfolio of
VISION GROUP OF FUNDS, INC.
CUSIP NO. 92830F703
The undersigned shareholder(s) of Vision Capital Appreciation Fund (the
"Acquired Fund"), a portfolio of Vision Group of Funds, Inc. (the "Vision
Funds"), hereby appoint(s) Antoinette D. Brkovich, Patricia F. Conner, Erin J.
Dugan, C. Todd Gibson, Cristina M. Rice and Victor R. Siclari, or any of them
true and lawful proxies, with power of substitution of each, to vote all shares
of the Acquired Fund which the undersigned is entitled to vote, at the Special
Meeting of Shareholders to be held on October 14, 1999, at 5800 Corporate Drive,
Pittsburgh, Pennsylvania 15237-7010, at 2:00 p.m. (local time) and at any
adjournment thereof.
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Special Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The proxies named
will vote the shares represented by this proxy in accordance with the choice
made on this ballot. IF NO CHOICE IS INDICATED, THIS PROXY WILL BE VOTED
AFFIRMATIVELY ON THAT MATTER.
PROPOSAL
TO APPROVE OR DISAPPROVE AN AGREEMENT AND PLAN OF REORGANIZATION BETWEEN THE
VISION FUNDS, ON BEHALF OF THE ACQUIRED FUND, AND VISION FUNDS, ON BEHALF OF
ITS PORTFOLIO, VISION MID CAP STOCK FUND
<PAGE>
PLEASE RETURN BOTTOM PORTION WITH YOUR VOTE IN THE ENCLOSED ENVELOPE AND RETAIN
THE TOP PORTION.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS X
KEEP THIS PORTION FOR YOUR RECORDS.
- --------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY.
VISION CAPITAL APPRECIATION FUND,
a portfolio of VISION GROUP OF FUNDS, INC.
RECORD DATE SHARES: _________________
VOTE ON THE PROPOSAL
FOR AGAINST ABSTAIN
Please sign EXACTLY as your name(s) appear(s) above. When signing as attorney,
executor, administrator, guardian, Director, custodian, etc., please give your
full title as such. If a corporation or partnership, please sign the full name
by an authorized officer or partner. If stock is owned jointly, all owners
should sign.
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- -----------------------------------
Signature(s) of Shareholder(s)
Date: _________________________________
EXHIBIT 11
FORM OF LEGALITY OF SHARES OPINION
VISION MID CAP STOCK FUND
A PORTFOLIO OF VISION GROUP OF FUNDS, INC.
5800 CORPORATE DRIVE
PITTSBURGH, PA 15237-7010
JULY __, 1999
The Directors of
Vision Group of Funds, Inc.
5800 Corporate Drive
Pittsburgh, PA 15237-7010
Gentlemen:
Vision Group of Funds, Inc., a Maryland Corporation ("Corporation"),
proposes to issue shares of common stock representing interests in the Class A
Shares of a separate portfolio of securities known as "Vision Mid Cap Stock
Fund" (such shares of common stock being herein referred to as "Shares") in
connection with the acquisition of the assets of Vision Capital Appreciation
Fund and Vision Growth & Income Fund, portfolios of the Corporation, pursuant to
the Agreement and Plan of Reorganization dated June 21, 1999 ("Agreement"),
filed as an exhibit to the registration statement of the Corporation filed on
Form N-14 (Securities Act of 1933 No. to be assigned) under the Securities Act
of 1933, as amended ("N-14 Registration").
As counsel I have participated in the organization of the Corporation,
its registration under the Investment Company Act of 1940, as amended, the
registration of its securities on Form N-1A under the Securities Act of 1933 and
its N-14 Registration. I have examined and am familiar with the written Articles
of Incorporation dated February 23, 1988, and all amendments thereto
(collectively, the "Articles of Incorporation"), the Bylaws of the Corporation,
the Agreement and such other documents and records deemed relevant. I have also
reviewed questions of law and consulted with counsel thereon as deemed necessary
or appropriate by me for the purposes of this opinion.
<PAGE>
Based upon the foregoing, it is my opinion that;
1. The Corporation is duly organized and validly existing pursuant to the
Articles of Incorporation.
2. The Shares which are currently being registered by the N-14
Registration may be legally and validly issued in accordance with the Agreement
and the Articles of Incorporation and subject to compliance with the Investment
Company Act of 1940, as amended, and applicable state laws regulating the sale
of securities. Such Shares, when so issued, will be fully paid and
non-assessable.
I hereby consent to the filing of this opinion as an exhibit to the N-14
Registration referred to above and to any application or registration statement
filed under the securities laws of any of the states of the United States.
Very truly yours,
VISION MID CAP STOCK FUND - A PORTFOLIO OF VISION GROUP
FUNDS, INC.
BY: NAME: VICTOR R. SICLARI
TITLE: SECRETARY
Exhibit 14.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference of our report dated June 11,
1999, with respect to the financial statements and financial highlights of the
Vision Growth and Income Fund and Vision Capital Appreciation Fund portfolios of
the Vision Group of Funds, Inc. for the year ended April 30, 1999 in the
Prospectus/Proxy Statement and the Statement of Additional Information included
in this Registration Statement.
/s/ERNST & YOUNG LLP
Boston, Massachusetts
July 30, 1999
