<PAGE>
M.S.D. & T. FUNDS, INC.
(the "Company")
Tax-Exempt Money Market Fund
Maryland Tax-Exempt Bond Fund
Intermediate Tax-Exempt Bond Fund
National Tax-Exempt Bond Fund
(the "Funds")
Supplement dated August 17, 1999
to Prospectus dated September 30, 1998
Change in Transfer and Dividend Disbursing Agent
- ------------------------------------------------
Effective August 23, 1999, BISYS Fund Services Ohio, Inc. ("BISYS Ohio") will
replace State Street Bank and Trust Company as the Company's transfer and
dividend disbursing agent and all references in the Prospectus to the "Transfer
Agent" shall be deemed to be references to BISYS Ohio. BISYS Ohio, a
wholly-owned subsidiary of The BISYS Group, Inc., is located at 3435 Stelzer
Road, Columbus, Ohio 43219-3035.
Effective August 23, 1999, certain of the procedures for buying shares of the
Funds directly from the Company and for selling and/or exchanging such shares
are revised as follows (unless referred to below, all current procedures for
buying, selling and/or exchanging shares of the Funds remain unchanged):
How to Buy Fund Shares. An investor wishing to buy Fund shares by mail should
-- ----
send his or her New Account Application, if applicable, and check to:
M.S.D. & T. Funds, Inc.
P.O. Box 182028
Columbus, Ohio 43218-2028
An investor wishing to buy additional shares in an existing Fund account by wire
-- ----
should instruct his or her bank to wire federal funds to:
Huntington Bank
Columbus, Ohio 43219
Bank Routing #044000024
M.S.D. & T. Concentration A/C #01899622436
<PAGE>
How to Sell Fund Shares. An investor wishing to sell Fund shares by mail, or
-- ----
an investor wishing to sell Fund shares by wire or by telephone and who has not
-- ---- -- ---------
previously elected such privilege, should send his or her written request to:
M.S.D. & T. Funds, Inc.
P.O. Box 182028
Columbus, Ohio 43218-2028
Exchange Privilege. An investor wishing to exchange Fund shares by mail
-- ----
should send his or her written request to:
M.S.D. & T. Funds, Inc.
P.O. Box 182028
Columbus, Ohio 43218-2028
Customers of Banks. Customers of Mercantile-Safe Deposit and Trust Company
and its affiliated and correspondent banks (the "Banks") should continue to
contact the Banks directly for appropriate instructions on buying, selling
and/or exchanging shares of the Funds.
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<PAGE>
M.S.D. & T. FUNDS, INC.
(the "Company")
Growth & Income Fund
Equity Income Fund
Equity Growth Fund
International Equity Fund
Diversified Real Estate Fund
(the "Funds")
Supplement dated August 17, 1999
to Prospectus dated September 30, 1998
Change in Transfer and Dividend Disbursing Agent
- ------------------------------------------------
Effective August 23, 1999, BISYS Fund Services Ohio, Inc. ("BISYS Ohio") will
replace State Street Bank and Trust Company as the Company's transfer and
dividend disbursing agent and all references in the Prospectus to the "Transfer
Agent" shall be deemed to be references to BISYS Ohio. BISYS Ohio, a
wholly-owned subsidiary of The BISYS Group, Inc., is located at 3435 Stelzer
Road, Columbus, Ohio 43219-3035.
Effective August 23, 1999, certain of the procedures for buying shares of the
Funds directly from the Company and for selling and/or exchanging such shares
are revised as follows (unless referred to below, all current procedures for
buying, selling and/or exchanging shares of the Funds remain unchanged):
How to Buy Fund Shares. An investor wishing to buy Fund shares by mail should
-- ----
send his or her New Account Application, if applicable, and check to:
M.S.D. & T. Funds, Inc.
P.O. Box 182028
Columbus, Ohio 43218-2028
An investor wishing to buy additional shares in an existing Fund account by wire
-- ----
should instruct his or her bank to wire federal funds to:
Huntington Bank
Columbus, Ohio 43219
Bank Routing #044000024
M.S.D. & T. Concentration A/C #01899622436
<PAGE>
How to Sell Fund Shares. An investor wishing to sell Fund shares by mail, or
-- ----
an investor wishing to sell Fund shares by wire or by telephone and who has not
-- ---- -- ---------
previously elected such privilege, should send his or her written request to:
M.S.D. & T. Funds, Inc.
P.O. Box 182028
Columbus, Ohio 43218-2028
Exchange Privilege. An investor wishing to exchange Fund shares by mail
-- ----
should send his or her written request to:
M.S.D. & T. Funds, Inc.
P.O. Box 182028
Columbus, Ohio 43218-2028
Customers of Banks. Customers of Mercantile-Safe Deposit and Trust Company
("Mercantile") and its affiliated and correspondent banks (together with
Mercantile, the "Banks") should continue to contact the Banks directly for
appropriate instructions on buying, selling and/or exchanging shares of the
Funds.
Change in Portfolio Manager - Equity Growth Fund
- ------------------------------------------------
Effective August 13, 1999, the Equity Growth Fund will be co-managed by
Charles W. Brooks Jr., C.F.A., Senior Vice President and Director of Equity
Research, in conjunction with Christopher G. Frink. Mr. Brooks has been with
Mercantile since 1993 and is responsible for the management of equity selection
at Mercantile. Mr. Brooks has thirty-six years of investment research. Mr.
Frink, Assistant Vice President of Mercantile, is responsible for equity
management of endowment and pension funds and has been with Mercantile since
1997. Prior to joining Mercantile, he was a portfolio manager at Oxford Capital
Management. Mr. Frink has eight years of investment experience.
-2-
<PAGE>
M.S.D. & T. FUNDS, INC.
(the "Company")
Prime Money Market Fund
Government Money Market Fund
Limited Maturity Bond Fund
Total Return Bond Fund
(the "Funds")
Supplement dated August 17, 1999
to Prospectus dated September 30, 1998
Change in Transfer and Dividend Disbursing Agent
- ------------------------------------------------
Effective August 23, 1999, BISYS Fund Services Ohio, Inc. ("BISYS Ohio") will
replace State Street Bank and Trust Company as the Company's transfer and
dividend disbursing agent and all references in the Prospectus to the "Transfer
Agent" shall be deemed to be references to BISYS Ohio. BISYS Ohio, a
wholly-owned subsidiary of The BISYS Group, Inc., is located at 3435 Stelzer
Road, Columbus, Ohio 43219-3035.
Effective August 23, 1999, certain of the procedures for buying shares of the
Funds directly from the Company and for selling and/or exchanging such shares
are revised as follows (unless referred to below, all current procedures for
buying, selling and/or exchanging shares of the Funds remain unchanged):
How to Buy Fund Shares. An investor wishing to buy Fund shares by mail should
-- ----
send his or her New Account Application, if applicable, and check to:
M.S.D. & T. Funds, Inc.
P.O. Box 182028
Columbus, Ohio 43218-2028
An investor wishing to buy additional shares in an existing Fund account by wire
-- ----
should instruct his or her bank to wire federal funds to:
Huntington Bank
Columbus, Ohio 43219
Bank Routing #044000024
M.S.D. & T. Concentration A/C #01899622436
<PAGE>
How to Sell Fund Shares. An investor wishing to sell Fund shares by mail, or
-- ----
an investor wishing to sell Fund shares by wire or by telephone and who has not
-- ---- -- ---------
previously elected such privilege, should send his or her written request to:
M.S.D. & T. Funds, Inc.
P.O. Box 182028
Columbus, Ohio 43218-2028
Exchange Privilege. An investor wishing to exchange Fund shares by mail
-- ----
should send his or her written request to:
M.S.D. & T. Funds, Inc.
P.O. Box 182028
Columbus, Ohio 43218-2028
Customers of Banks. Customers of Mercantile-Safe Deposit and Trust Company
and its affiliated and correspondent banks (the "Banks") should continue to
contact the Banks directly for appropriate instructions on buying, selling
and/or exchanging shares of the Funds.
-2-
