As filed with the Securities and Exchange Commission on April 13, 2001
Registration No. 333-___/811-8358
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U.S. Securities and Exchange Commission
Washington, DC 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. ___ Post-Effective Amendment No.___
(Check appropriate box or boxes)
Exact Name of Registrant as Specified in Charter:
MUTUAL FUND TRUST
Area Code and Telephone Number:
(212) 492-1600
Address of Principal Executive Offices:
1211 Avenue of the Americas, 41st Floor
New York, New York 10036
Name and Address of Agent for Service:
Lisa Hurley
c/o BISYS Fund Services, Inc.
3435 Stelzer Road
Columbus, Ohio 43219
Copies to:
JOSEPH J. BERTINI, ESQ. SARAH E. COGAN, ESQ. JOHN E. BAUMGARDNER,
PETER B. ELDRIDGE, ESQ. Simpson Thacher & Bartlett JR., ESQ.
J.P. Morgan Fleming Asset 425 Lexington Avenue Sullivan & Cromwell
Management (USA) Inc. New York, NY 10017-3954 125 Broad Street
522 Fifth Avenue New York, NY 10004
New York, NY 10036
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Approximate Date of Proposed Public Offering: As soon as practicable after the
Registration Statement becomes effective under the Securities Act of 1933.
It is proposed that this filing will become effective on May 13, 2001 pursuant
to Rule 488 under the Securities Act of 1933.
Calculation of Registration Fee under the Securities Act of 1933: No filing fee
is required because an indefinite number of shares have previously been
registered on Form N-1A (Registration No. 033-75250/811-8358) pursuant to Rule
24f-2 under the Investment Company Act of 1940, as amended. The Registrant's
Form 24f-2 for the fiscal year ended September 30, 2000 was filed on November
27, 2000. Pursuant to Rule 429, this Registration Statement relates to the
aforesaid Registration Statement on Form N-1A.
J.P. MORGAN INSTITUTIONAL SERVICE TREASURY MONEY MARKET FUND
A SERIES OF J.P. MORGAN INSTITUTIONAL FUNDS
60 STATE STREET, SUITE 1300
BOSTON, MASSACHUSETTS 02109
May 12, 2001
Dear Shareholder:
A special meeting of the shareholders of J.P. Morgan Institutional
Service Treasury Money Market Fund (the "Merging Fund"), a series of J.P. Morgan
Institutional Funds ("JPMIF"), will be held on July 3, 2001 at 9:00 a.m.,
Eastern time. Formal notice of the meeting appears after this letter, followed
by materials regarding the meeting.
As you may be aware, J.P. Morgan & Co. Incorporated, the former
corporate parent of the investment adviser of the Merging Fund's assets,
recently completed a merger with The Chase Manhattan Corporation to form J.P.
Morgan Chase & Co. ("JPMC"). As a result of this merger, JPMC is seeking to
reorganize parts of its investment management business in order to provide
better service for shareholders of funds advised by its subsidiaries. At the
special meeting (the "Meeting"), shareholders will be asked to consider and vote
upon the proposed reorganization of the Merging Fund into JPMorgan Treasury Plus
Money Market Fund (formerly, Chase Vista Treasury Plus Money Market Fund) (the
"Surviving Fund"), a series of Mutual Fund Trust ("MFT") (the "Reorganization").
After the Reorganization, shareholders would hold an interest in the Surviving
Fund. The investment objective and policies of the Merging Fund generally are
similar to those of the Surviving Fund. In connection with the Reorganization,
the Surviving Fund will be renamed "JPMorgan Treasury Plus Money Market Fund."
After the proposed Reorganization, your investment will be in a larger
combined fund with similar investment policies.
The Surviving Fund has also entered into agreements and plans of
reorganization with other money market funds whose assets are managed by J.P.
Morgan Investment Management Inc. ("JPMIM") and which have identical investment
objectives and policies to the Merging Fund (collectively, the "Concurrent
Reorganization"). If the Concurrent Reorganization is approved by the
shareholders of these other funds and certain other conditions are met, these
funds will be reorganized into the Surviving Fund. The consummation of the
Reorganization is contingent upon the consummation of the Concurrent
Reorganization.
At the Meeting, you will also be asked to consider and vote upon the
election of Trustees of JPMIF.
The investment adviser for the assets of the Merging Fund is JPMIM. The
investment adviser for the Surviving Fund is J.P. Morgan Fleming Asset
Management (USA) Inc. ("JPMFAM"). After the Reorganization, JPMFAM, the same
investment adviser that currently is responsible for the Surviving Fund, will
make the day-to-day investment decisions for your portfolio.
Please see the enclosed Combined Prospectus/Proxy Statement for
detailed information regarding the proposed Reorganization, the Concurrent
Reorganization and a comparison of the Merging Fund and JPMIF to the Surviving
Fund and MFT. The cost and expenses associated with the Reorganization,
including costs of soliciting proxies, will be borne by JPMC and not by the
Merging Fund, JPMIF, the Surviving Fund, MFT or their shareholders.
If approval of the Reorganization is obtained, you will automatically
receive shares in the Surviving Fund.
The Proposals have been carefully reviewed by the Board of Trustees of
JPMIF, which has approved the Proposals.
THE BOARD OF TRUSTEES OF JPMIF UNANIMOUSLY RECOMMENDS THAT YOU VOTE
"FOR" EACH OF THE PROPOSALS.
Following this letter is a list of commonly asked questions. If you
have any additional questions on voting of proxies and/or the meeting agenda,
please call us at 1-800-766-7722.
A proxy card is enclosed for your use in the shareholder meeting. This
card represents shares you held as of the record date, __________, 2001. IT IS
IMPORTANT THAT YOU COMPLETE, SIGN, AND RETURN YOUR PROXY CARD IN THE ENVELOPE
PROVIDED OR CALL _______ AS SOON AS POSSIBLE. This will ensure that your shares
will be represented at the Meeting to be held on July 3, 2001.
Please read the enclosed materials carefully. You may, of course,
attend the meeting in person if you wish, in which case the proxy can be revoked
by you at the Meeting.
Sincerely,
Matthew Healey
Chairman
SPECIAL NOTE: Certain shareholders may receive a telephone call from our proxy
solicitor, D.F. King & Co., Inc. or us to answer any questions you may have or
to provide assistance in voting. Remember, your vote is important! Please sign,
date and promptly mail your proxy card(s) in the return envelope provided or
call ____________ in order to vote.
WHY IS THE REORGANIZATION BEING PROPOSED?
The Reorganization is being proposed because each Fund's board believes it is in
the best interests of shareholders to combine funds that have similar investment
objectives and policies and each board believes that the Reorganization should
result in better service for shareholders, including a wider variety of
investment options.
IF THE REORGANIZATION IS APPROVED, WHAT WILL HAPPEN?
Under the Reorganization, the Merging Fund will cease investing in The Treasury
Money Market Portfolio (the "Master Portfolio" in which it currently invests),
will transfer all of its assets and liabilities to the Surviving Fund and will
receive, in exchange, shares of the Surviving Fund. The Merging Fund will then
be liquidated and those shares of the Surviving Fund will be distributed pro
rata to shareholders such as you. After the Reorganization, you will own shares
of the Surviving Fund rather than the Merging Fund. The Surviving Fund invests
directly in portfolio securities rather than in a master portfolio.
WHAT WILL BE THE EFFECT ON THE INVESTMENT STRATEGIES ASSOCIATED WITH MY
INVESTMENT IF THE PROPOSED CHANGES ARE APPROVED?
The Surviving Fund generally has similar investment objectives and policies to
those of the Merging Fund. The principal differences are as follows:
SURVIVING FUND MERGING FUND
- -------------- ------------
- - The Surviving Fund's investment - The Merging Fund's investment
objective is to aim to provide the objective is to provide high
highest possible level of current current income consistent with the
income while still maintaining preservation of capital and
liquidity and preserving capital. same-day liquidity.
- - Invests at least 65% of its assets - Invests primarily in U.S. Treasury
in direct debt securities of the obligations and repurchase
U.S. Treasury, including Treasury agreements collateralized by these
bills, bonds and notes, and obligations. The Merging Fund
repurchase agreements attempts to maintain a
collateralized by these dollar-weighted average portfolio
investments. As an AAA rated fund, maturity of not more than 90 days.
the dollar-weighted average
maturity of the Surviving Fund is 60
days or less.
There can be no assurance that the Fund will continue to be rated by Standard &
Poor's Ratings Service and/or Moody's Investors Service or that these agencies
will not downgrade their current ratings. The Merging Fund has not applied for a
rating.
The Reorganization is not intended to have any immediate significant impact on
the investment strategy implemented in respect of your investment. However,
please note that while the Merging Fund invests all of its asset in the Master
Portfolio (which in turn invests in portfolio securities), the Surviving Fund
invests directly in portfolio securities.
HOW WILL THE FEES AND EXPENSES ASSOCIATED WITH MY INVESTMENT BE AFFECTED?
As a result of the Reorganization, the contractual (or pre-waiver) and actual
(or post-waiver) total expense ratios are expected to be the same or less for
your shares in the Surviving Fund than they are for your shares I the Merging
Fund. If an increase does occur, The Chase Manhattan Bank has contractually
agreed to waive fees payable to it and reimburse expenses so that the total
expense ratio will remain the same for at least THREE YEARS after the
Reorganization.
WILL THERE BE ANY CHANGE IN WHO MANAGES MY INVESTMENT?
Yes. JPMFAM, the investment adviser that currently manages the day-to-day
investment activities of the Surviving Fund, will continue to manage that fund
after the Reorganization.
WHO WILL PAY FOR THE REORGANIZATION?
The cost and expenses associated with the Reorganization, including costs of
soliciting proxies, will be borne by JPMC and not by either the Merging Fund or
the Surviving Fund (or shareholders of either fund).
WHAT IF I DO NOT VOTE OR VOTE AGAINST THE REORGANIZATION, YET APPROVAL OF THE
REORGANIZATION IS OBTAINED?
You will automatically receive shares in the Surviving Fund.
HOW WILL THE PROPOSED CONCURRENT REORGANIZATION AFFECT MY INVESTMENT IF IT IS
APPROVED BY THE SHAREHOLDERS OF THE OTHER FUNDS?
If the Concurrent Reorganization is approved and certain other conditions are
met, the assets and liabilities of the other merging funds will become the
assets and liabilities of the Surviving Fund. The consummation of the
Reorganization is contingent upon the consummation of the Concurrent
Reorganization.
WHY AM I BEING ASKED TO VOTE ON THE ELECTION OF TRUSTEES FOR JPMIF IF AFTER THE
REORGANIZATION I WILL OWN SHARES IN THE SURVIVING FUND, A SERIES OF MFT?
Even if the Reorganization is approved, other mutual funds that are series of
JPMIF will continue to exist and operate. All shareholders of any series of
JPMIF as of the record date (April 6, 2001) are required to be given a vote on
the proposals regarding Trustees. Because as of the record date you are still a
shareholder in JPMIF, you are entitled to vote on this proposal. Shareholders of
MFT are being asked to approve the same Trustees are proposed for JPMIF.
AS A HOLDER OF SHARES OF THE MERGING FUND, WHAT DO I NEED TO DO?
Please read the enclosed Combined Prospectus/Proxy Statement and vote. Your vote
is important! Accordingly, please sign, date and mail the proxy card(s) promptly
in the enclosed return envelope as soon as possible after reviewing the enclosed
Combined Prospectus/Proxy Statement.
MAY I ATTEND THE MEETING IN PERSON?
Yes, you may attend the Meeting in person. If you complete a proxy card and
subsequently attend the Meeting, your proxy can be revoked. Therefore, to ensure
that your vote is counted, we strongly urge you to mail us your signed, dated
and completed proxy card(s) even if you plan to attend the Meeting.
J.P. MORGAN INSTITUTIONAL SERVICE TREASURY MONEY MARKET FUND,
A SERIES OF J.P. MORGAN INSTITUTIONAL FUNDS
60 STATE STREET, SUITE 1300
BOSTON, MASSACHUSETTS 02109
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON _______, 2001
To the Shareholders of
J.P. Morgan Institutional Service Treasury Money Market Fund:
NOTICE IS HEREBY GIVEN THAT a Special Meeting of the shareholders
("Shareholders") of J.P. Morgan Institutional Service Treasury Money Market Fund
(the "Merging Fund"), a series of J.P. Morgan Institutional Funds ("JPMIF"),
will be held at the offices of J.P. Morgan Chase & Co., 1211 Avenue of the
Americas, 41st Floor, New York, NY, on July 3, 2001 at 9:00 a.m., (Eastern time)
for the following purposes:
ITEM 1. To consider and act upon a proposal to approve an Agreement
and Plan of Reorganization (the "Reorganization Plan") by
and among JPMIF, on behalf of the Merging Fund, Mutual Fund
Trust ("MFT"), on behalf of JPMorgan Treasury Plus Money
Market Fund (formerly, Chase Vista Treasury Plus Money
Market Fund) (the "Surviving Fund"), and J.P. Morgan Chase &
Co., and the transactions contemplated thereby, including
(a) the transfer of all of the assets and liabilities of the
Merging Fund to the Surviving Fund in exchange for Premier
Class shares of the Surviving Fund (the "Surviving Fund
Shares"); and (b) the distribution of such Surviving Fund
Shares to the Shareholders of the Merging Fund in connection
with the liquidation of the Merging Fund.
ITEM 2. To elect __ Trustees to serve as members of the Board of
Trustees of JPMIF.
ITEM 3. To transact such other business as may properly come before
the Special Meeting or any adjournment(s) thereof.
YOUR FUND TRUSTEES UNANIMOUSLY RECOMMEND THAT YOU VOTE IN FAVOR OF
ITEMS 1 AND 2.
Each proposal is described in the attached Combined Prospectus/Proxy
Statement. Attached as Appendix A to the Combined Prospectus/Proxy Statement is
a copy of the Reorganization Plan.
Shareholders of record as of the close of business on April 6, 2001
are entitled to notice of, and to vote at, the Special Meeting or any
adjournment(s) thereof.
SHAREHOLDERS ARE REQUESTED TO EXECUTE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE THE ACCOMPANYING PROXY CARD WHICH IS BEING SOLICITED BY THE BOARD OF
TRUSTEES OF JPMIF. THIS IS IMPORTANT TO ENSURE A QUORUM AT THE SPECIAL MEETING.
PROXIES MAY BE REVOKED AT ANY TIME BEFORE THEY ARE EXERCISED BY SUBMITTING TO
THE MERGING FUND A WRITTEN NOTICE OF REVOCATION OR A SUBSEQUENTLY EXECUTED PROXY
OR BY ATTENDING THE SPECIAL MEETING AND VOTING IN PERSON.
Margaret W. Chambers
Secretary
May 12, 2001
COMBINED PROSPECTUS/PROXY STATEMENT
DATED MAY 12, 2001
ACQUISITION OF THE ASSETS AND LIABILITIES OF
J.P. MORGAN INSTITUTIONAL SERVICE TREASURY MONEY MARKET FUND,
A SERIES OF J.P. MORGAN INSTITUTIONAL FUNDS
60 STATE STREET, SUITE 1300
BOSTON, MASSACHUSETTS 02109
(617) 557-0700
BY AND IN EXCHANGE FOR SHARES OF
JPMORGAN TREASURY PLUS MONEY MARKET FUND
(FORMERLY, CHASE VISTA TREASURY PLUS MONEY MARKET FUND),
A SERIES OF MUTUAL FUND TRUST
1211 AVENUE OF THE AMERICAS, 41ST FLOOR
NEW YORK, NEW YORK 10036
(800) 348-4782
This Combined Prospectus/Proxy Statement relates to the proposed
reorganization of J.P. Morgan Institutional Service Treasury Money Market Fund
(the "Merging Fund"), a series of J.P. Morgan Institutional Funds ("JPMIF"),
into JPMorgan Treasury Plus Money Market Fund (formerly, Chase Vista Treasury
Plus Money Market Fund) (the "Surviving Fund"), a series of Mutual Fund Trust
("MFT"). If approved by Shareholders, the proposed reorganization will be
effected by transferring all of the assets and liabilities of the Merging Fund
to the Surviving Fund, which has generally similar investment objectives and
policies to those of the Merging Fund, in exchange for shares of the Surviving
Fund (the "Reorganization"). Therefore, as a result of the proposed
Reorganization, current shareholders of the Merging Fund (the "Merging Fund
Shareholders") will become shareholders of the Surviving Fund ("Surviving Fund
Shareholders"). JPMIF and MFT are both open-end management investment companies
offering shares in several portfolios. In connection with the Reorganization,
the Surviving Fund will be renamed "J.P. Morgan Treasury Plus Money Market
Fund."
Under the proposed Reorganization, each Merging Fund Shareholder will
receive Premier Class shares (the "Surviving Fund Shares") of the Surviving Fund
with a value equal to such Merging Fund Shareholder's holdings in the Merging
Fund. The Surviving Fund currently has a multi-class structure under which it
offers Vista Class, Premier Class and Institutional Class Shares. In connection
with the Reorganization, the Surviving Fund will rename the Vista Class "Morgan
Class," rename Institutional Class "Agency Class" and introduce a new
"Institutional Class" and "Reserves Class" of shares.
At the Meeting, you also will be asked to consider and vote upon the
election of Trustees of JPMIF.
1
The terms and conditions of these transactions are more fully described
in this Combined Prospectus/Proxy Statement and in the Agreement and Plan of
Reorganization (the "Reorganization Plan") among JPMIF, on behalf of the Merging
Fund, MFT, on behalf of the Surviving Fund and J.P. Morgan Chase & Co., attached
to this Combined Prospectus/Proxy Statement as Appendix A.
The Board of Trustees for JPMIF is soliciting proxies in connection
with a Special Meeting (the "Meeting") of Shareholders to be held on July 3,
2001 at 9:00 a.m., Eastern time, at the offices of J.P. Morgan Chase & Co., 1211
Avenue of the Americas, 41st Floor, New York, NY, at which meeting shareholders
in the Merging Fund will be asked to consider and approve the proposed
Reorganization Plan, certain transactions contemplated by the Reorganization
Plan and certain other proposals. This Combined Prospectus/Proxy Statement
constitutes the proxy statement of the Merging Fund for the meeting of its
Shareholders and also constitutes MFT's prospectus for Surviving Fund Shares
that have been registered with the Securities and Exchange Commission (the
"Commission") and are to be issued in connection with the Reorganization.
This Combined Prospectus/Proxy Statement, which should be retained for
future reference, sets forth concisely the information about MFT and JPMIF that
an investor should know before voting on the proposals. The current
Prospectuses, Statements of Additional Information and Annual Reports for the
Merging Fund (including the Annual Report of The Treasury Money Market
Portfolio) and the Semi-Annual Report of the Surviving Fund are incorporated
herein by reference, and the current Prospectus and Annual Report and
Semi-Annual Report for the Surviving Fund (including the Semi-Annual Report of
The Treasury Money Market Portfolio) are enclosed with this Combined
Prospectus/Proxy Statement. A Statement of Additional Information relating to
this Combined Prospectus/Proxy Statement dated __________ containing additional
information about MFT and JPMIF has been filed with the Commission and is
incorporated by reference into this Combined Prospectus/Proxy Statement. A copy
of the Statement of Additional Information, as well as the Prospectus, Statement
of Additional Information and Annual Report of the Merging Fund (including the
Annual Report of the Treasury Money Market Portfolio) and Semi-Annual Report of
the Treasury Money Market Portfolio, may be obtained without charge by writing
to MFT at its address noted above or by calling 1-800-766-7722.
This Combined Prospectus/Proxy Statement is expected to first be sent
to shareholders on or about May 12, 2001.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS COMBINED PROSPECTUS/PROXY STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS COMBINED PROSPECTUS/PROXY
STATEMENT AND IN THE MATERIALS EXPRESSLY INCORPORATED HEREIN BY REFERENCE AND,
IF GIVEN OR
2
MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY MFT OR JPMIF.
INVESTMENTS IN THE SURVIVING FUND ARE SUBJECT TO RISK--INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL. NO SHARES IN THE SURVIVING FUND ARE BANK DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK AND ARE NOT FEDERALLY
INSURED BY, OBLIGATIONS OF, OR OTHERWISE SUPPORTED BY THE U.S. GOVERNMENT, THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY.
3
TABLE OF CONTENTS
PAGE
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INTRODUCTION......................................................................................................1
PROPOSAL 1: REORGANIZATION PLAN..................................................................................1
SUMMARY...........................................................................................................2
COMPARATIVE FEE AND EXPENSE TABLES................................................................................5
RISK FACTORS......................................................................................................8
INFORMATION RELATING TO THE PROPOSED REORGANIZATION...............................................................8
INVESTMENT POLICIES..............................................................................................13
PURCHASES, REDEMPTIONS AND EXCHANGES.............................................................................20
DISTRIBUTIONS AND TAXES..........................................................................................23
COMPARISON OF THE MERGING FUND'S AND THE SURVIVING
FUND'S ORGANIZATION STRUCTURE ...................................................................................24
INFORMATION RELATING TO THE ADVISORY CONTRACTS AND
OTHER SERVICES ..................................................................................................26
PROPOSAL 2: ELECTION OF TRUSTEES................................................................................29
VOTE REQUIRED....................................................................................................30
INFORMATION RELATING TO VOTING MATTERS...........................................................................34
ADDITIONAL INFORMATION ABOUT MFT.................................................................................36
ADDITIONAL INFORMATION ABOUT JPMIF...............................................................................37
FINANCIAL STATEMENTS AND EXPERTS.................................................................................37
OTHER BUSINESS...................................................................................................37
LITIGATION.......................................................................................................37
SHAREHOLDER INQUIRIES............................................................................................38
APPENDIX A AGREEMENT AND PLAN OF REORGANIZATION..................................................................1
i
INTRODUCTION
GENERAL
This Combined Prospectus/Proxy Statement is being furnished to the
shareholders of the Merging Fund, an open-end management investment company, in
connection with the solicitation by the Board of Trustees of JPMIF of proxies to
be used at a Special Meeting of Shareholders of the Merging Fund to be held on
July 3, 2001 at 9:00 a.m., Eastern time, at the offices of J.P. Morgan Chase &
Co., 1211 Avenue of the Americas, 41st Floor, New York, NY (together with any
adjournments thereof, the "Meeting"). It is expected that the mailing of this
Combined Prospectus/Proxy Statement will be made on or about May 12, 2001.
PROPOSAL 1: REORGANIZATION PLAN
As you may be aware, J.P. Morgan & Co. Incorporated, the former
corporate parent of the investment adviser of the Merging Fund's assets,
recently completed a merger with The Chase Manhattan Corporation to form J.P.
Morgan Chase & Co. ("JPMC"). As a result of this merger, JPMC is seeking to
reorganize parts of its investment management business in order to provide
better service for shareholders of funds advised by its subsidiaries. At the
Meeting, Merging Fund Shareholders will consider and vote upon the Agreement and
Plan of Reorganization (the "Reorganization Plan") dated _______, 2001 among
JPMIF, on behalf of the Merging Fund, MFT, on behalf of the Surviving Fund (the
Merging Fund and the Surviving Fund are collectively defined as the "Funds"),
and JPMC pursuant to which all of the assets and liabilities of the Merging Fund
will be transferred to the Surviving Fund in exchange for Surviving Fund Shares.
As a result of the Reorganization, Merging Fund Shareholders will become
shareholders of the Surviving Fund and will receive Surviving Fund Shares equal
in value to their holdings in the Merging Fund on the date of the
Reorganization. In connection with the Reorganization, the Surviving Fund will
be renamed "JPMorgan Treasury Plus Money Market Fund." Further information
relating to the Surviving Fund is set forth herein, and the Surviving Fund's
Prospectus, Annual Report and Semi-Annual Report are enclosed with this Combined
Prospectus/Proxy Statement.
THE JPMIF BOARD HAS UNANIMOUSLY RECOMMENDED THAT SHAREHOLDERS VOTE "FOR"
PROPOSAL 1.
VOTE REQUIRED
Approval of the Reorganization Plan by the Merging Fund requires the
affirmative vote of the lesser of (i) 67% or more of the shares of the Merging
Fund present at the Meeting if the holders of more than 50% of the outstanding
shares of the Merging Fund are present or represented by proxy and (ii) more
than 50% of all outstanding shares of the Merging Fund. If the Reorganization
Plan is not approved by the Merging Fund Shareholders, the JPMIF Board will
consider other appropriate courses of action.
SUMMARY
The following is a summary of certain information relating to the
proposed Reorganization, the parties thereto and the transactions contemplated
thereby, and is qualified by reference to the more complete information
contained elsewhere in this Combined Prospectus/Proxy Statement, the Prospectus,
Statement of Additional Information, Annual Report of each of the Surviving Fund
and the Merging Fund (including the Annual Report of The Treasury Money Market
Portfolio) and Semi-Annual Report (including the Semi-Annual Report of The
Treasury Money Market Portfolio) of the Surviving Fund, and the Reorganization
Plan attached to this Combined Prospectus/Proxy Statement as Appendix A.
PROPOSED REORGANIZATION
Pursuant to the proposed Reorganization Plan, the Merging Fund will
transfer all of its assets and liabilities to the Surviving Fund in exchange for
shares of the Surviving Fund.
Under the proposed Reorganization, each Merging Fund Shareholder will
receive a number of Premier Class shares of the Surviving Fund with an aggregate
net asset value equal on the date of the exchange to the aggregate net asset
value of such shareholder's Merging Fund Shares on such date. Therefore,
following the proposed Reorganization, Merging Fund Shareholders will be
Surviving Fund Shareholders. Merging Fund Shareholders will not pay a sales
charge in connection with the Reorganization. See "Information Relating to the
Proposed Reorganization."
The Surviving Fund has investment objectives, policies and restrictions
generally similar to the Merging Fund.
Based upon their evaluation of the relevant information presented to
them, including an analysis of the operation of the Surviving Fund both before
and after the Reorganization, the terms of the Reorganization Plan, the
opportunity to combine the two Funds with generally similar investment
objectives and policies, and the fact that the Reorganization will be tax-free,
and in light of their fiduciary duties under federal and state law, the MFT
Board and the JPMIF Board, including a majority of each Board's members who are
not "interested persons" within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act"), have each determined that the proposed
Reorganization is in the best interests of each Fund and its respective
shareholders and that the interests of such shareholders will not be diluted as
a result of such Reorganization.
REASONS FOR THE REORGANIZATION
The Reorganization is being proposed because each Fund's board believes
it is in the best interests of shareholders to combine funds that have similar
investment objectives and policies and each board believes that the
Reorganization should result in better service for shareholders, including a
wider variety of investment options.
2
CONCURRENT REORGANIZATION
The Merging Fund currently invests all of its investable assets in The
Treasury Money Market Portfolio (the "Master Portfolio"), which has identical
investment objectives and policies as the Merging Fund and which is advised by
J.P. Morgan Investment Management Inc. ("JPMIM"). J.P.Morgan Institutional
Treasury Money Market Fund and J.P.Morgan Treasury Money Market Reserves Fund,
each a series of JPMIF with identical investment objectives and policies as the
Merging Fund (the "Feeder Portfolios") also currently invest all of their assets
in the Master Portfolio. The Surviving Fund has entered into substantially
similar agreements and plans of reorganization with each Feeder Portfolio
(collectively, the "Concurrent Reorganization"). If each of the Reorganization
and the Concurrent Reorganization is approved by the shareholders of the Merging
Fund and each Feeder Portfolio, respectively, and certain other conditions are
met, the Merging Fund and the Feeder Portfolios will be reorganized into the
Surviving Fund and the Merging Fund and the Feeder Portfolios will no longer
invest their assets in the Master Portfolio. The consummation of the
Reorganization is contingent upon the consummation of the Concurrent
Reorganization.
FEDERAL INCOME TAX CONSEQUENCES
Simpson Thacher & Bartlett will issue an opinion (based on certain
assumptions) as of the effective time of the Reorganization to the effect that
the transaction will not give rise to the recognition of income, gain or loss
for federal income tax purposes to the Merging Fund, the Surviving Fund or the
shareholders of the Merging Fund. The holding period and tax basis of Surviving
Fund Shares received by a shareholder of the Merging Fund will be the same as
the holding period and tax basis of such shareholder's shares of the Merging
Fund. In addition, the holding period and tax basis of those assets owned by the
Merging Fund and transferred to the Surviving Fund will be identical for the
Surviving Fund. See "Information Relating to the Proposed Reorganization -
Federal Income Tax Consequences."
INVESTMENT ADVISERS
The investment adviser for the Master Portfolio (and therefore the
assets of the Merging Fund and the Feeder Portfolios) is JPMIM. The investment
adviser for the Surviving Fund is J.P. Morgan Fleming Asset Management (USA)
Inc. ("JPMFAM"). JPMFAM and JPMIM are each wholly-owned subsidiaries of JPMC.
JPMFAM will continue to serve as investment advisor following the
Reorganization.
INVESTMENT OBJECTIVES AND POLICIES
The Surviving Fund's investment objective is to aim to provide the
highest possible level of current income while still maintaining liquidity and
preserving capital. The Merging Fund's investment objective is to provide high
current income consistent with the preservation of capital and same-day
liquidity. See "Risk Factors" and "Investment Restrictions."
The investment policies of the Surviving Fund are generally similar to
those of the
3
Merging Fund, although the Surviving Fund invests its assets directly in
portfolio securities, while the Merging Fund invests its assets in the Master
Portfolio, which in turn invests in portfolio securities. The Surviving Fund
invests at least 65% of its assets in direct debt securities of the U.S.
Treasury, including Treasury bills, bonds and notes, and repurchase agreements
collateralized by these investments. The Surviving Fund also seeks to enhance
its performance by investing in repurchase agreements, using debt securities
guaranteed by the U.S. Treasury as collateral. As a AAA - rated fund the dollar
weighted average maturity of the Surviving Fund will be 60 days or less and the
Fund will buy only those instruments which have remaining maturities of 397 days
or less. There can be no assurance that the Fund will continue to be rated by
Standard & Poor's Ratings Service and/or Moody's Investors Service or that these
agencies will not downgrade their current ratings. The Surviving Fund invests
only in securities issued and payable in U.S. dollars. THE MERGING FUND INVESTS
PRIMARILY IN U.S. TREASURY OBLIGATIONS AND REPURCHASE AGREEMENTS COLLATERALIZED
BY THESE OBLIGATIONS. THE MERGING FUND ATTEMPTS TO MAINTAIN A DOLLAR-WEIGHTED
AVERAGE PORTFOLIO MATURITY OF NOT MORE THAN 90 DAYS. THE MERGING FUND HAS NOT
APPLIED FOR A RATING. Each Fund seeks to maintain a net asset value of $1.00 per
share.
PRINCIPAL RISKS OF INVESTING IN THE SURVIVING FUND
The principal risk factors associated with an investment in the
Surviving Fund are those typically associated with investing in a managed
portfolio of money market securities. The Surviving Fund attempts to keep its
net asset value at $1.00, although there is no guarantee it will be able to do
so. In general, the value of a money market investment tends to fall when
prevailing interest rates rise, although it tends to be less sensitive to
interest rate changes than the value of longer-term securities. Additionally,
investments in the Surviving Fund may not earn as high a current income as
longer-term or lower-quality securities. See "Risk Factors."
CERTAIN ARRANGEMENTS WITH SERVICE PROVIDERS
ADVISORY SERVICES
The investment adviser for the Surviving Fund is JPMFAM. JPMFAM
oversees the asset management of the Surviving Fund. As compensation for its
services, JPMFAM receives a management fee from the Surviving Fund at an annual
rate of 0.10% of average daily net asset. The Merging Fund currently pays a
management fee at an annual rate of 0.20% of the first $1 billion of average
daily net assets and 0.10% of average daily net assets for assets over $1
billion. Following the Reorganization, JPMFAM will continue to manage the
Surviving Fund's assets and will receive a fee at an annual rate of 0.10% of
average daily net assets.
OTHER SERVICES
J.P. Morgan Fund Distributors, Inc. ( the "Distributor") is the
distributor for the Surviving Fund. The Chase Manhattan Bank ("Chase") serves as
shareholder servicing agent, administrator, fund accountant and custodian, The
Distributor serves as sub-
4
administrator and DST Systems, Inc. ("DST") serves as transfer agent and
dividend disbursing agent for the Surviving Fund. It is anticipated that prior
to the consummation of the Reorganization, The Bank of New York ("BONY") will
become the Surviving Fund's fund accountant and custodian.
PricewaterhouseCoopers LLP serves as the Surviving Fund's independent
accountants.
ADMINISTRATOR
As administrator, Chase receives a fee of 0.10% of average daily net
assets. It is anticipated that, in connection with the Reorganization, the
administration fee will be amended to reduce the fee to 0.05% for complex wide
money market Fund assets in excess of $100 billion.
ORGANIZATION
Each of MFT and JPMIF is organized as a Massachusetts business trust.
The Merging Fund is organized as a series of JPMIF and the Surviving Fund is
organized as a series of MFT.
PURCHASES, REDEMPTIONS AND EXCHANGES
After the Reorganization, the procedures for making purchases,
redemptions and exchanges of shares of the Surviving Fund will be as described
in this Combined Prospectus/Proxy Statement and in the Surviving Fund's
Prospectus and Statement of Additional Information.
COMPARATIVE FEE AND EXPENSE TABLES
The table below shows (i) information regarding the fees and expenses
paid by each of the Merging Fund and the Surviving Fund that reflect current
expense arrangements; and (ii) estimated fees and expenses on a pro forma basis
for the Surviving Fund after giving effect to the proposed Reorganization and
the Concurrent Reorganization. Under the proposed Reorganization, holders of
shares in the Merging Fund will receive Premier Class shares in the Surviving
Fund. Please note that the Surviving Fund currently has three classes of shares:
Vista Class, Premier Class and Institutional Class. In connection with the
Reorganization and Concurrent Reorganization, the Surviving Fund will rename the
Vista Class "Morgan Class," rename the Institutional Class "Agency Class" and
introduce a new "Institutional Class" and "Reserves Class."
5
The table indicates that both contractual (pre-waiver) and actual
(post-waiver) total expense ratios for current shareholders of the Merging Fund
are anticipated to be less or stay the same following the Reorganization. In
addition, Chase has agreed to waive certain fees and/or reimburse certain
expenses to ensure that actual total operating expenses do not increase for at
least three years.
THE MERGING
FUND THE SURVIVING FUND*
----------- -----------------------------------------------------
VISTA CLASS PREMIER CLASS INSTITUTIONAL
SHARES* SHARES SHARES CLASS SHARES
----------- -----------------------------------------------------
SHAREHOLDER FEES (FEES PAID
DIRECTLY FROM YOUR INVESTMENT) -
Maximum Sales Charge (Load) when you
buy shares, shown as % of the
offering price............................ None None None None
Maximum Deferred Sales Charge (Load)
shown as lower of original purchase
price or redemption proceeds.............. None None None None
ANNUAL FUND OPERATING
EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees............................. 0.19% 0.10% 0.10% 0.10%
Distribution (12b-1) Fees................... None 0.10% None None
Other Expenses.............................. 0.41% 0.51% 0.42%# 0.25%#
Total Annual Fund Operating Expenses........ 0.60% 0.71% 0.52%# 0.35%#
Fee Waivers and Expense Reimbursements
(A) (B).................................. 0.15% None None None
Net Expenses................................ 0.45% 0.71% 0.52%# 0.35%#
* The table is based on estimated expenses for current fiscal year.
# Restated from the most recent fiscal year to reflect current expense
arrangements.
(A) Reflects an agreement dated 3/1/01 by Morgan, an affiliate of JPMC, to
reimburse the Fund to the extent operating expenses exceed 0.45% (excluding
interest, taxes, and extraordinary expenses) of average daily net assets
with respect to the Merging Fund through 2/28/02.
(B) The actual Other Expenses are expected to be 0.39% for Vista Class Shares,
0.38% for Premier Class Shares and 0.15% for Institutional Class Shares and
Total Annual Fund Operating Expenses are not expected to exceed 0.59% for
Vista Class Shares, 0.48% for Premier Class Shares and 0.25% for
Institutional Class Shares. That is because Chase has volunteered not to
collect a portion of its fees and to reimburse others. Chase may end this
arrangement at any time.
The table does not reflect charges or credits which you might incur if you
invest through a financial institution.
6
THE SURVIVING FUND
-------------------------
PRO FORMA WITH CONCURRENT
REORGANIZATION
-------------------------
PREMIER CLASS SHARES
-------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) -Maximum
Sales Charge (Load) when you buy shares, shown as % of the offering
price............................................................ None
Maximum Deferred Sales Charge (Load) Shown as lower of original
purchase price or redemption proceeds........................... None
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM
FUND ASSETS)
Management Fees..................................................... 0.10%
Distribution (12b-1) Fees........................................... None
Other Expenses...................................................... 0.40%
Total Annual Fund Operating Expenses................................ 0.50%
Fee Waivers and Expense Reimbursements (A).......................... 0.05%
Net Expenses........................................................ 0.45%
(A) Reflects an agreement by Chase, a wholly owned subsidiary of JPMC to
reimburse the Fund to the extent operating expenses (excluding interest,
taxes, and extraordinary expenses) exceed 0.45% of average daily net
assets with respect to Premier Class Shares for three years after the
Reorganization.
The table does not reflect charges or credits which investors might incur
if they invest through a financial institution.
The table does not reflect charges or credits which investors might
incur if they invest through a financial institution.
EXAMPLE: This example helps investors compare the cost of investing in
the Funds with the cost of investing in other mutual funds. The example assumes:
- - you invest $10,000;
- - you sell all of your shares at the end of each period;
- - your investment has a 5% return each year; and
- - each Fund's operating expenses are waived for three years after the
Reorganization and unwaived thereafter and remain the same as shown above.
7
Although actual costs may be higher or lower, based upon these assumptions your
costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
THE MERGING FUND........................................... $46 $177 $320 $736
THE SURVIVING FUND
Vista Class............................................. $73 $227 $395 $883
Premier Class........................................... $53 $167 $291 $653
Institutional Class..................................... $36 $113 $197 $443
PRO FORMA THE SURVIVING FUND WITH CONCURRENT REORGANIZATION
Premier Class.............................................. $46 $144 $264 $613
- ----------------------
RISK FACTORS
The following discussion highlights the principal risk factors
associated with an investment in the Surviving Fund. The Surviving Fund has
investment policies and investment restrictions generally similar to those of
the Merging Fund. Therefore, there should be similarities between the risk
factors associated with the Surviving Fund and the Merging Fund. This discussion
is qualified in its entirety by the more extensive discussion of risk factors
set forth in the Prospectus and Statement of Additional Information of the
Surviving Fund, which are incorporated herein by reference.
The Surviving Fund attempts to keep its net asset value constant, but
there is no guarantee it will be able to do so. Investments in the Surviving
Fund are not bank deposits or obligations of, or guaranteed or endorsed by,
Chase or any of its affiliates and are not insured by the FDIC, the Federal
Reserve Board or any other government agency. Although the Surviving Fund seeks
to preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in the Surviving Fund.
The value of a money market investment tends to fall when prevailing
interest rates rise, although it tends to be generally less sensitive to
interest rate changes than the value of longer-term securities. Although the
Surviving Fund seeks to be fully invested, it may at times hold some of its
assets in cash, which could hurt the Fund's performance. Securities in the
Fund's portfolio may not earn as high a current income as longer term or
lower-quality securities.
Repurchase agreements involve some risk of loss to the Surviving Fund
if the other party does not live up to its obligations under the agreement.
INFORMATION RELATING TO THE PROPOSED REORGANIZATION
GENERAL
The terms and conditions under which the Reorganization may be
consummated are set forth in the Reorganization Plan. Significant provisions of
the Reorganization Plan
8
are summarized below; however, this summary is qualified in its entirety by
reference to the Reorganization Plan, a copy of which is attached as Appendix A
to this Combined Prospectus/Proxy Statement and which is incorporated herein by
reference.
DESCRIPTION OF THE REORGANIZATION PLAN
In connection with the Reorganization, the Merging Fund and the Feeder
Portfolios will cease investing in the Master Portfolio. The Reorganization Plan
provides that at the Effective Time (as defined in the Reorganization Plan) of
the Reorganization, the assets and liabilities of the Merging Fund will be
transferred to and assumed by the Surviving Fund. In exchange for the transfer
of the assets and the assumption of the liabilities of the Merging Fund, MFT
will issue at the Effective Time of the Reorganization full and fractional
Premier Class shares of the Surviving Fund equal in aggregate dollar value to
the aggregate net asset value of full and fractional outstanding shares of the
Merging Fund as determined at the valuation time specified in the Reorganization
Plan. The Reorganization Plan provides that the Merging Fund will declare a
dividend or dividends prior to the Effective Time of the Reorganization which,
together with all previous dividends, will have the effect of distributing to
Merging Fund Shareholders all undistributed net investment income earned and net
capital gain realized up to and including the Effective Time of the
Reorganization.
Following the transfer of assets to, and the assumption of the
liabilities of the Merging Fund by, the Surviving Fund, the Merging Fund will
distribute Surviving Fund Shares received by it to the Merging Fund Shareholders
in liquidation of the Merging Fund. Each Merging Fund Shareholder at the
Effective Time of the Reorganization will receive an amount of Premier Class
shares with a total net asset value equal to the net asset value of their
Merging Fund Shares plus the right to receive any dividends or distributions
which were declared before the Effective Time of the Reorganization but that
remained unpaid at that time with respect to the shares of the Merging Fund.
The Surviving Fund expects to maintain most of the portfolio
investments of the Merging Fund in light of the similar investment policies of
the Merging Fund and the Surviving Fund.
After the Reorganization, all of the issued and outstanding shares of
the Merging Fund shall be canceled on the books of the Merging Fund and the
stock transfer books of the Merging Fund will be permanently closed.
The Reorganization is subject to a number of conditions, including
without limitation: approval of the Reorganization Plan and the transactions
contemplated thereby described in this Combined Prospectus/Proxy Statement by
the Merging Fund Shareholders; the receipt of a legal opinion from Simpson
Thacher & Bartlett with respect to certain tax issues, as more fully described
in "Federal Income Tax Consequences" below; and the parties' performance in all
material respects of their respective agreements and undertakings in the
Reorganization Plan. Assuming satisfaction of the conditions in the
Reorganization Plan, the Effective Time of the Reorganization will be on August
11, 2001 or such other date as is agreed to by the parties.
9
In addition, the consummation of the Reorganization is contingent upon
the consummation of the Concurrent Reorganization.
The expenses of the Funds in connection with the Reorganization will be
borne by JPMC.
The Reorganization Plan and the Reorganization described herein may be
abandoned at any time prior to the Effective Time of the Reorganization by
either party if a material condition to the performance of such party under the
Reorganization Plan or a material covenant of the other party is not fulfilled
by the date specified in the Reorganization Plan or if there is a material
default or material breach of the Reorganization Plan by the other party. In
addition, either party may terminate the Reorganization Plan if its trustees
determine that proceeding with the Reorganization Plan is not in the best
interests of their Fund's shareholders.
BOARD CONSIDERATIONS
The JPMF Board met on March 26 and 27, 2001 and the MFT Board met on
April 3, 2001, and each considered and discussed the proposed Reorganization.
The Trustees of each Board discussed the advantages of reorganizing the Merging
Fund into the Surviving Fund.
The Board of each trust has determined that it is in the best interests
of the Fund's shareholders to combine the Merging Fund with the Surviving Fund.
This Reorganization is part of the general integration of the J.P. Morgan and
former Chase Vista funds into a single mutual fund complex. In reaching the
conclusion that the Reorganization is in the best interests of Fund
shareholders, each Board considered a number of factors including, among others:
The terms of the Reorganization Plan; a comparison of each Fund's
historical and projected expense ratios; the comparative investment performance
of the Merging Fund and the Surviving Fund; the anticipated effect of such
Reorganization on the relevant Fund and its shareholders; the investment
advisory services supplied by the Surviving Fund's investment adviser; the
management and other fees payable by the Surviving Fund; the similarities and
differences in the investment objectives and policies of the Merging Fund and
the Surviving Fund; and the recommendations of the relevant Fund's current
investment adviser with respect to the proposed Reorganization.
The Board determined that the Funds have generally similar investment
objectives and policies. They noted that the Reorganization could permit the
shareholders of the Merging Fund to pursue similar investment goals in a single
larger fund. The Board also considered benefits expected to arise as a result of
the Reorganization. Among these benefits, the Board noted that Surviving Fund
Shareholders would be able to exchange into a larger number and greater variety
of funds and the Surviving Fund would also benefit from the administrator's
overall intent to enhance its ability effectively to monitor and oversee the
quality of all service providers to the fund, including the investment adviser.
10
Finally, the Board considered the expenses related to the
Reorganization. The Board noted to the administrator's undertaking to waive fees
or reimburse the Surviving Fund's expenses so that the total expense ratio of
each share class of the Merging Fund does not increase during the period
specified in the expense table. Additional important factors were that all costs
and expenses of the Reorganization would be borne by JPMC and the fact that the
Board was advised that Reorganization would constitute a tax-free
reorganization.
After considering the foregoing factors, together with such information
as it believed to be relevant, and in light of its fiduciary duties under
federal and state law, each Board determined that the proposed Reorganization is
in the best interests of the applicable Fund and its shareholders, determined
the interests of the shareholders would not be diluted as a result of the
Reorganization, approved the Reorganization Plan and directed that the
Reorganization Plan be submitted to the Merging Fund Shareholders for approval.
THE JPMIF BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
PROPOSAL.
The JPMIF Board has not determined what action the Merging Fund will
take in the event shareholders do not approve the Reorganization Plan or for any
reason the Reorganization is not consummated. In either such event, the Board
will consider other appropriate courses of action.
INFORMATION RELATING TO CONCURRENT REORGANIZATION
The terms and conditions under which the Concurrent Reorganization may
be consummated are set forth in reorganization plans which are substantially
similar to the Reorganization Plan you are considering. As a result of the
Reorganization and the Concurrent Reorganization, the Merging Fund and the
Feeder Portfolios will no longer invest their assets in the Master Portfolio.
The consummation of the Reorganization is contingent upon the consummation of
the Concurrent Reorganization.
FEDERAL INCOME TAX CONSEQUENCES
Consummation of the Reorganization is subject to the condition that
JPMIF receive an opinion from Simpson Thacher & Bartlett to the effect that for
federal income tax purposes: (i) the transfer of all of the assets and
liabilities of the Merging Fund to the Surviving Fund in exchange for the
Surviving Fund Shares and the liquidating distributions to shareholders of the
Surviving Fund Shares so received, as described in the Reorganization Plan, will
constitute a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), and with respect to the
Reorganization, the Merging Fund and the Surviving Fund will each be considered
"a party to a reorganization" within the meaning of Section 368(b) of the Code;
(ii) no gain or loss will be recognized by the Merging Fund as a result of such
transaction; (iii) no gain or loss will be recognized by the Surviving Fund as a
result of such transaction; (iv) no gain or loss will be recognized by the
Merging Fund Shareholders on the distribution to the Merging Fund Shareholders
of the Surviving Fund Shares solely in exchange for their
11
Merging Fund Shares; (v) the aggregate basis of shares of the Surviving Fund
received by a shareholder of the Merging Fund will be the same as the aggregate
basis of such Merging Fund Shareholder's Merging Fund Shares immediately prior
to the Reorganization; (vi) the basis of the Surviving Fund in the assets of the
Merging Fund received pursuant to such transaction will be the same as the basis
of such assets in the hands of the Merging Fund immediately before such
transaction; (vii) a Merging Fund Shareholder's holding period for the Surviving
Fund Shares will be determined by including the period for which such Merging
Fund Shareholder held the Merging Fund Shares exchanged therefor, provided that
the Merging Fund Shareholder held such Merging Fund Shares as a capital asset;
and (viii) the Surviving Fund's holding period with respect to the assets
received in the Reorganization will include the period for which such assets
were held by the Merging Fund.
JPMIF has not sought a tax ruling from the Internal Revenue Service
(the "IRS"), but is 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.
CAPITALIZATION
Because the Merging Fund will be combined with the Surviving Fund in
the Reorganization as well as other funds as a result of the Concurrent
Reorganization, the total capitalization of the Surviving Fund after the
Reorganization and the Concurrent Reorganization is expected to be greater than
the current capitalization of the Merging Fund. The following table sets forth
as of February 28, 2001: (i) the capitalization of the Merging Fund; (ii) the
capitalization of the Surviving Fund; and (iii) the pro forma capitalization of
the Surviving Fund as adjusted to give effect to the Reorganization and the
Concurrent Reorganization. There is, of course, no assurance that the
Reorganization and the Concurrent Reorganization will be consummated. Moreover,
if consummated, the capitalizations of the Surviving Fund and the Merging Fund
are likely to be different at the Effective Time of the Reorganization as a
result of fluctuations in the value of portfolio securities of each Fund and
daily share purchase and redemption activity in each Fund. Please note that the
Surviving Fund currently has three classes of shares: Vista Class, Premier Class
and Institutional Class. In connection with the Reorganization, the Surviving
Fund will rename the Vista Class "Morgan Class," rename the Institutional Class
"Agency Class" and introduce a new "Institutional Class" and "Reserves Class."
12
CAPITALIZATION
PRO FORMA WITH CONCURRENT REORGANIZATION
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
BENEFICIAL NET ASSETS
INTEREST SHARES VALUE PER
OUTSTANDING OUTSTANDING NET ASSETS SHARE
------------ ------------- ------------- --------------
J.P. MORGAN FUNDS
Treasury Money Market 524,371 -- 524,328 $ 1.00
Reserves Fund
Institutional Service Treasury 473,243 -- 473,086 $ 1.00
Money Market Fund (Merging Fund)
Institutional Treasury Money 537,242 -- 537,150 $ 1.00
Market Fund
THE SURVIVING FUND
Vista (Renamed Morgan) 1,391,162 1,390,971 $ 1.00
Premier 347,882 347,866 $ 1.00
Institutional (Renamed Agency) 1,074,655 1,074,678 $ 1.00
PRO FORMA THE SURVIVING FUND WITH CONCURRENT
REORGANIZATION
Reserves 524,371 524,328 $ 1.00
Morgan 1,391,162 1,390,971 $ 1.00
Premier 821,125 820,952 $ 1.00
Agency 1,074,655 1,074,678 $ 1.00
Institutional 537,242 537,150 $ 1.00
INVESTMENT POLICIES
The following discussion summarizes some of the investment policies of
the Surviving Fund. Except as noted below, the Merging Fund generally has
similar investment policies to those of the Surviving Fund. This section is
qualified in its entirety by the discussion in the Prospectus and Statement of
Additional Information of the Surviving Fund, which are incorporated herein by
reference.
OBJECTIVE
The Surviving Fund's investment objective is to aim to provide the
highest possible level of current income while still maintaining liquidity and
preserving capital. THE MERGING FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE HIGH
CURRENT INCOME CONSISTENT WITH THE PRESERVATION OF CAPITAL AND SAME-DAY
LIQUIDITY. Neither Fund can change its objective without shareholder approval.
SHAREHOLDERS OF THE SURVIVING FUND CURRENTLY ARE CONSIDERING A PROPOSAL THAT, IF
PASSED AT A SHAREHOLDER MEETING TO BE HELD THE SAME DAY AS THE MEETING OF THE
MERGING FUND, WOULD ALLOW THE SURVIVING FUND TO CHANGE IT'S OBJECTIVE WITHOUT
SHAREHOLDER APPROVAL.
MAIN INVESTMENT STRATEGIES
The Surviving Fund invests its assets directly in portfolio securities.
THE MERGING FUND INVESTS ITS ASSETS IN THE MASTER PORTFOLIO, WHICH IN TURN
INVESTS IN PORTFOLIO SECURITIES.
The Surviving Fund invests at least 65% of its assets in direct debt
securities of the U.S. Treasury, including Treasury bills, bonds and notes, and
repurchase agreements collateralized by these investments. These debt securities
carry different interest rates, maturities and issue dates. The Surviving Fund
also seeks to enhance its performance by investing in repurchase agreements,
using debt securities guaranteed by the U.S. Treasury as collateral. THE MERGING
FUND INVESTS PRIMARILY IN U.S. TREASURY OBLIGATIONS AND REPURCHASE AGREEMENTS
COLLATERALIZED BY THESE OBLIGATIONS.
13
The Surviving Fund seeks to maintain a net asset value of $1.00 per
share.
The dollar weighted average maturity of the Surviving Fund will be 60
days or less and the Fund will buy only those instruments which have remaining
maturities of 397 days or less. THE MERGING FUND MAINTAINS A DOLLAR-WEIGHTED
AVERAGE MATURITY OF NO MORE THAN 90 DAYS.
The Surviving Fund may invest significantly in securities with floating
or variable rates of interest. Their yields will vary as interest rates change.
The Surviving Fund invests only in securities issued and payable in
U.S. dollars. Each investment must have the highest possible short-term rating
from at least two national rating organizations, or one such rating if only one
organization rates that security. Alternatively, some securities may have
additional third party guarantees in order to meet the rating requirements
mentioned above. If the security is not rated, it must be considered of
comparable quality by JPMFAM. The Surviving Fund seeks to develop an appropriate
portfolio by considering the differences in yields among securities of different
maturities, market sectors and issuers.
14
INVESTMENT RESTRICTIONS
The Surviving Fund and the Merging Fund have each adopted the following
investment restrictions which may not be changed without approval by a "majority
of the outstanding shares" of a Fund, which means the vote of the lesser of (i)
67% or more of the shares of a Fund present at a meeting, if the holders of more
than 50% of the outstanding shares of a Fund are present or represented by
proxy, and (ii) more than 50% of the outstanding shares of a Fund.
- --------------------------------------------------------------------------------------------------
SURVIVING FUND MERGING FUND
-------------- ------------
- --------------------------------------------------------------------------------------------------
The Surviving Fund may not purchase the The Merging Fund may not purchase the
securities of any issuer (other than securities or other obligations of
securities issued or guaranteed by the issuers conducting their principal
U.S. government or any of its agencies business activity in the same industry
or instrumentalities, or repurchase if, immediately after such purchase, the
agreements secured thereby) if, as a value of its investment in such industry
result, more than 25% of the Surviving would exceed 25% of the value of the
Fund's total assets would be invested in Fund's total assets; provided, however,
the securities of companies whose that the Fund may invest all or part of
principal business activities are in the its assets in an open-end management
same industry. Notwithstanding the investment company with the same
foregoing, (i) with respect to the investment objective and restrictions as
Surviving Fund's permissible futures and the Fund. For purposes of industry
options transactions in U.S. Government concentration, there is no percentage
securities, positions in such options limitation with respect to investments
and futures shall not be subject to this in U.S. Government securities and
restriction; and (ii) the Surviving Fund repurchase agreements related thereto.
may invest more than 25% of its total
assets in obligations issued by banks,
including U.S. banks.
- --------------------------------------------------------------------------------------------------
The Surviving Fund may not borrow money, The Merging Fund may not borrow money,
except for temporary or emergency except in amounts not to exceed one
purposes, or by engaging in reverse third of the Fund's total assets
repurchase transactions, in an amount (including the amount borrowed) less
not exceeding 33% of the value of its liabilities (other than borrowings) (i)
total assets at the time when the loan from banks for temporary or short-term
is made and may pledge, mortgage or purposes or for the clearance of
hypothecate no more than 1/3 of its net transactions, (ii) in connection with
assets to secure such borrowings. Any the redemption of Fund shares or to
borrowings representing more than 5% of finance failed settlements of portfolio
the Surviving Fund's total assets must trades without immediately liquidating
be repaid before the Surviving Fund may portfolio securities or other assets,
make additional investments. (iii) in order to fulfill commitments or
plans to purchase additional securities
pending the anticipated sale of other
portfolio securities or assets and (iv)
pursuant to reverse repurchase
- --------------------------------------------------------------------------------------------------
15
- --------------------------------------------------------------------------------------------------
SURVIVING FUND MERGING FUND
-------------- ------------
- --------------------------------------------------------------------------------------------------
agreements entered into by the Fund. The
Merging Fund may not enter into reverse
repurchase agreements which together
with any other borrowing exceed in the
aggregate one-third of the market value
of the Fund's total assets, less
liabilities other than the obligations
created by reverse repurchase
agreements.
- --------------------------------------------------------------------------------------------------
The Surviving Fund may not purchase or The Merging Fund may not purchase or
sell real estate unless acquired as a sell puts, calls, straddles, spreads, or
result of ownership of securities or any combination thereof, real estate,
other instruments (but this shall not commodities, or commodity contracts or
prevent the Fund from investing in interests in oil, gas, or mineral
securities or other instruments backed exploration or development programs.
by real estate or securities of
companies engaged in the real estate
business). Investments by the Fund in
securities backed by mortgages on real
estate or in marketable securities of
companies engaged in such activities are
not hereby precluded.
The Surviving Fund may not purchase or
sell physical commodities unless acquired
as a result of ownership of securities or
other instruments but this shall not prevent
the Fund from (i) purchasing or selling
options and futures contracts or from
investing in securities or other
instruments backed by physical
commodities or (ii) engaging in forward
purchases or sales of foreign currencies
or securities.
- --------------------------------------------------------------------------------------------------
The Surviving Fund may not make loans, The Merging Fund may not make loans,
except that the Surviving Fund may: (i) except through purchasing or holding
purchase and hold debt instruments debt obligations, repurchase agreements,
(including without limitation, bonds, or loans of portfolio securities in
notes, debentures or other obligations accordance with the Fund's investment
and certificates of deposit, bankers' objective and policies.
acceptances and fixed time deposits) in
accordance with its investment
objectives and policies; (ii) enter into
repurchase agreements with respect to
portfolio securities; and (iii) lend
- --------------------------------------------------------------------------------------------------
16
- --------------------------------------------------------------------------------------------------
SURVIVING FUND MERGING FUND
-------------- ------------
- --------------------------------------------------------------------------------------------------
portfolio securities with a value not in
excess of one-third of the value of its
total assets. SHAREHOLDERS OF THE
SURVIVING FUND CURRENTLY ARE CONSIDERING
A PROPOSAL THAT, IF PASSED AT A
SHAREHOLDER MEETING TO BE HELD THE SAME
DAY AS THE MEETING OF THE MERGING FUND,
WOULD ADOPT A FUNDAMENTAL INVESTMENT
RESTRICTION REGARDING LOANS THAT IS
IDENTICAL TO THE MERGING FUND'S
RESTRICTION.
- --------------------------------------------------------------------------------------------------
The Surviving Fund is not subject to a The Merging Fund may not purchase
similar fundamental restriction, securities on margin, make short sales
although it is subject to a similar of securities, or maintain a short
non-fundamental restriction (see below). position, provided that this restriction
shall not be deemed to be applicable to
the purchase or sale of when-issued
securities or of securities for delivery
at a future date.
- --------------------------------------------------------------------------------------------------
The Merging Fund may not purchase the
securities or other obligations of any
one issuer if, immediately after such
purchase, more than 5% of the value of
the Fund's total assets would be
invested in securities or other
obligations of any one such issuer;
provided, however, that the Fund may
invest all or part of its investable
assets in an open-end management
investment company with the same
investment objective and restrictions as
the Fund. This limitation also shall not
apply to issues of the U.S. Government
and repurchase agreements related
thereto.
The Merging Fund may not acquire securities of
other investment companies, except as permitted
by the 1940 Act or in connection with a merger,
consolidation, reorganization,
acquisition of assets or an offer of
exchange; provided, however, that
nothing in this investment restriction
shall prevent the Fund from investing
all or part of its assets in an open-end
management
- --------------------------------------------------------------------------------------------------
17
- --------------------------------------------------------------------------------------------------
SURVIVING FUND MERGING FUND
-------------- ------------
- --------------------------------------------------------------------------------------------------
investment company with the same investment
objective and restrictions as the Fund.
- --------------------------------------------------------------------------------------------------
Neither Fund may issue senior securities, except as permitted under the
1940 Act or any rule, order or interpretation thereunder.
Neither Fund may underwrite securities of other issuers, except to the
extent that the Fund, in disposing of portfolio securities, may be deemed an
underwriter within the meaning of the Securities Act of 1933, as amended.
Notwithstanding any other investment policy or restriction, the
Surviving Fund may seek to achieve its investment objective by investing all of
its investable assets in another investment company having substantially the
same investment objective and policies as the Surviving Fund. Although the
Merging Fund currently invests all of its assets in the Merging Fund Master
Portfolio, following the Reorganization, the Merging Fund will invest directly
in portfolio securities.
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS. The investment restrictions
described below are not fundamental policies of the Surviving Fund and/or the
Merging Fund and may be changed by their respective Trustees.
- -------------------------------------------------------- ------------------------------------------------------
SURVIVING FUND MERGING FUND
- -------------------------------------------------------- ------------------------------------------------------
The Surviving Fund may not invest more than 10% of The Merging Fund may not acquire any illiquid
its net assets in illiquid securities. For securities, such as repurchase agreements with
purposes of this non-fundamental restriction, more than seven days to maturity or fixed time
"illiquid securities" include securities deposits with a duration of over seven calendar
restricted as to resale unless they are determined days, if as a result thereof, more than 10% of the
to be readily marketable in accordance with the Fund's net assets would be in investments which
procedures established by the Board of Trustees. are illiquid.
- -------------------------------------------------------- ------------------------------------------------------
The Surviving Fund may not make short sales of The Merging Fund is not subject to a similar
securities, other than short sales "against the non-fundamental restriction. However, it is
box," or purchase securities on margin except for subject to a fundamental restriction regarding
short-term credits necessary for clearance of investing more than 5% of its assets in securities
portfolio transactions, provided that this of one issuer (see above).
restriction will not be applied to limit the use
of options, futures contracts and related options,
in the manner otherwise permitted
- -------------------------------------------------------- ------------------------------------------------------
18
- -------------------------------------------------------- ------------------------------------------------------
SURVIVING FUND MERGING FUND
- -------------------------------------------------------- ------------------------------------------------------
by the investment restrictions, policies and
investment program of the Fund. The Surviving Fund
has no current intention of making short sales
against the box.
- -------------------------------------------------------- ------------------------------------------------------
The Surviving Fund may not, with respect to 75% of The Merging Fund is not subject to a similar
its assets, hold more than 10% of the outstanding non-fundamental restriction. However, it is
voting securities of any issuer or invest more subject to a similar fundamental restriction (see
than 5% of its assets in the securities of any one above).
issuer (other than obligations of the U.S.
Government, its agencies and instrumentalities).
- -------------------------------------------------------- ------------------------------------------------------
The Surviving Fund may invest up to 5% of its The Merging Fund is not subject to a similar
total assets in the securities of any one non-fundamental restriction, although it is
investment company, but may not own more than 3% subject to a similar restriction under the terms
of the securities of any one investment company or of the 1940 Act.
invest more than 10% of its total assets in the
securities of other investment companies.
- -------------------------------------------------------- ------------------------------------------------------
The Surviving Fund may not purchase or sell interests The Merging Fund is not subject to a similar
in oil, gas or mineral leases. non-fundamental restriction. However, it is subject
to a similar fundamental restriction (see above).
- -------------------------------------------------------- ------------------------------------------------------
The Surviving Fund may not write, purchase or sell The Merging Fund is not subject to a similar
any put or call option or any combination thereof, non-fundamental restriction. However, it is
provided that this shall not prevent (i) the subject to a similar fundamental restriction (see
writing, purchasing or selling of puts, calls or above).
combinations thereof with respect to portfolio
securities or (ii) with respect to the Surviving
Fund's permissible futures and options
transactions, the writing, purchasing, ownership,
holding or selling of futures and options
positions or of puts, calls or combinations
thereof with respect to futures.
- -------------------------------------------------------- ------------------------------------------------------
The Surviving Fund will not invest more than 25% of The Merging Fund is not subject to a similar
its total assets in obligations issued by foreign non-fundamental restriction.
banks (other than foreign
- -------------------------------------------------------- ------------------------------------------------------
19
- -------------------------------------------------------- ------------------------------------------------------
SURVIVING FUND MERGING FUND
- -------------------------------------------------------- ------------------------------------------------------
branches of U.S. banks).
- -------------------------------------------------------- ------------------------------------------------------
There will be no violation of any investment restriction if that
restriction is complied with at the time the relevant action is taken
notwithstanding a later change in market value of an investment, in net or total
assets, in the securities rating of the investment, or any other later change.
PURCHASES, REDEMPTIONS AND EXCHANGES
Following the Reorganization, the procedures for purchases, redemptions
and exchanges of shares will be those of the Surviving Fund, which are generally
similar to those of the Merging Fund. The following discussion applies to
Premier Class shares. This section is qualified in its entirety by the
discussion in the Prospectus and Statement of Additional Information of the
Surviving Fund, which are incorporated herein by reference.
SALES CHARGES
There is no sales charge to buy or sell Premier Class shares.
12b-1 FEES
There is no Rule 12b-1 distribution plan for Premier Class shares of
the Surviving Fund.
BUYING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO PURCHASES OF PREMIER CLASS SHARES
THAT YOU MIGHT MAKE AFTER THE REORGANIZATION.
The price shareholders pay for their shares is the net asset value per
share (NAV). NAV is the value of everything the Surviving Fund owns, minus
everything it owes, divided by the number of shares held by investors. The
Surviving Fund seeks to maintain a stable NAV of $1.00. The Surviving Fund uses
the amortized cost method to value its portfolio of securities. This method
provides more stability in valuations. However, it may also result in periods
during which the stated value of a security is different than the price the
Surviving Fund would receive if it sold the investment.
The NAV of each class of shares is generally calculated as of 4:30 p.m.
Eastern time each day the Surviving Fund is accepting purchase orders.
A shareholder will pay the next NAV calculated after the JPMorgan Funds
Service Center (the "Center") receives that shareholder's order in proper form.
An order is in proper form only after payment is converted into federal funds.
20
The Center accepts purchase orders on any business day that the Federal
Reserve Bank of New York and the New York Stock Exchange are open. If an order
is sent in proper form by the Surviving Fund's cut-off time, it will be
processed at that day's price and you will be entitled to all dividends declared
on that day. If your order is received after the cut-off time, it generally will
be processed at the next day's price. If you pay by check before the cut-off
time, your order generally will be processed the next day the Surviving Fund is
open for business. Normally, the cut-off (in Eastern time) is 4:30 p.m. A later
cut-off time may be permitted for investors buying their shares through Chase or
a bank affiliate of Chase so long as such later cut-off time is before the
Fund's NAV is calculated. If you buy through an agent and not directly from the
Center, the agent could set earlier cut-off times. The Surviving Fund can set an
earlier cut-off time if the Public Securities Association recommends that the
U.S. Government securities market close trading early. You must provide a
Taxpayer Identification Number when you open an account.
The Surviving Fund has the right to reject any purchase order for any
reason.
Premier shares are available only to qualified investors. These are
defined as institutions, trusts, partnerships, corporations and certain
retirement plans and fiduciary accounts opened by a bank, trust company or
thrift institution which has investment authority over such accounts, as well as
individuals who meet the Surviving Fund's minimum investment requirements.
Shareholders receiving Premier Class shares in the Reorganization will be
permitted to purchase additional Premier shares in the future.
For Premier Class shares, checks should be made out to JPMorgan Funds
in U.S. dollars. Credit cards, cash, or checks from a third party will not be
accepted. Shares bought by check may not be sold for 15 calendar days. Shares
bought through an automated clearing house cannot be sold until the payment
clears. This could take more than seven business days. Purchase orders will be
canceled if a check does not clear and the investor will be responsible for any
expenses and losses to the Fund. Orders by wire will be canceled if the Center
does not receive payment by 4:30 p.m., Eastern time, on the day the shareholder
buys.
Shareholders seeking to buy Premier Class shares through an investment
representative should instruct their representative to contact the Surviving
Fund. Such representatives may charge investors a fee and may offer additional
services, such as special purchase and redemption programs, "sweep" programs,
cash advances and redemption checks. Such representative may set different
minimum investments and earlier cut-off times.
A systematic investment plan is available for Premier Class shares.
SELLING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO SALES OF THE PREMIER CLASS SHARES
THAT YOU MIGHT MAKE AFTER THE REORGANIZATION.
Shares of the Surviving Fund may be sold on any day the Center is open
for trading, either directly to the Fund or through an investment
representative. Shareholders
21
of the Surviving Fund will receive the next NAV calculated after the Center
accepts his or her sale order.
Under normal circumstances, if a request is received before the cut-off
time, the Surviving Fund will send the proceeds the next business day. An order
to sell shares will not be accepted if the Surviving Fund has not collected
payment for the shares. The Surviving Fund may stop accepting orders to sell and
may postpone payments for more than seven days, as federal securities laws
permit.
Generally, proceeds are sent by check, electronic transfer or wire. If
a shareholder's address of record has changed within the 30 days prior to the
sale request or if more than $25,000 of shares is sold by phone, proceeds by
electronic transfer or wire will be sent only to the bank account on the
Surviving Fund's records.
For Premier Class shares, a shareholder will need to have his or her
signature guaranteed if he or she wants payment to be sent to an address other
than the one in the Surviving Fund's records. Additional documents or a letter
from a surviving joint owner may also be needed.
A shareholder who purchased through an investment representative or
through a financial service firm, should contact that representative, who will
send the necessary documents to the Center. The representative might charge a
fee for this service.
Shareholders may also sell their shares by contacting the Center
directly by calling 1-800-348-4782.
A systematic withdrawal plan is available for Premier Class shares.
EXCHANGING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO EXCHANGES OF PREMIER CLASS SHARES
THAT YOU MIGHT MAKE AFTER THE REORGANIZATION.
Premier Class shares of the Surviving Fund may be exchanged for shares
of the same class in certain other JPMorgan Funds.
For tax purposes, an exchange is treated as a sale of those shares.
Shareholders should carefully read the prospectus of the fund into which they
want to exchange. Shareholders who exchange must meet any minimum investment
requirements and may have to pay a sales commission.
The exchange privilege is not a means of short-term trading as this
could increase management cost and affect all shareholders of the Surviving
Fund. The Surviving Fund reserves the right to limit the number of exchanges or
refuse an exchange. Each exchange privilege may also be terminated. The
Surviving Fund charges an administration fee of $5 for each exchange if an
investor makes more than 10 exchanges in a year or three in a quarter.
22
OTHER INFORMATION CONCERNING THE SURVIVING FUND
For Premier Class shares, the Surviving Fund may close an account if
the balance falls below $10,000,000. The Surviving Fund may also close the
account if an investor is in the systematic investment plan and fails to meet
investment minimums over a 12-month period. At least 60 days' notice will be
given before closing the account.
Unless a shareholder indicates otherwise on his or her account
application, the Surviving Fund is authorized to act on redemption and transfer
instructions received by phone. If someone trades on an account by phone, the
Surviving Fund will ask that person to confirm the account registration and
address to make sure they match those in the Fund records. If they do
correspond, the Surviving Fund is generally authorized to follow that person's
instructions. The Surviving Fund will take all reasonable precautions to confirm
that the instructions are genuine. Investors agree that they will not hold the
Surviving Fund liable for any loss or expenses from any sales request, if the
Fund takes reasonable precautions. The Surviving Fund will be liable for any
losses to a shareholder from an unauthorized sale or fraud against such
shareholder if the Fund does not follow reasonable procedures.
It may not always be possible to reach the Center by telephone. This
may be true at times of unusual market changes and shareholder activity. In that
event, shareholders can mail instructions to the Surviving Fund or contact their
investment representative or agent. The Fund may modify or cancel the sale of
shares by phone without notice.
MFT, on behalf of the Surviving Fund has entered into agreements with
certain shareholder servicing agents (including Chase) under which the
shareholder servicing agents agree to provide certain support services to their
customers. For performing these services, each shareholder servicing agent will
receive an annual fee of up to 0.10% of the average daily net assets of the
Premier Class shares held by investors serviced by the shareholder servicing
agent.
JPMFAM and/or the Distributor may, at their own expense, make
additional payments to certain selected dealers or other shareholder servicing
agents for performing administrative services for their customers.
The Surviving Fund issues multiple classes of shares. Each class may
have different requirements for who may invest, and may have different sales
charges and expense levels. A person who gets compensated for selling Fund
shares may receive a different amount for each class.
DISTRIBUTIONS AND TAXES
The Surviving Fund can earn income and realize capital gain. The
Surviving Fund will deduct from these earnings any expenses and then pay to
shareholders the distributions.
23
The Surviving Fund declares dividends daily and distributes any net
investment income at least monthly. Net capital gain is distributed annually.
You have three options for your Surviving Fund distributions. You may:
- reinvest all of them in additional Surviving Fund shares;
- take all distributions in cash or as a deposit in a pre-assigned
bank account.
If you don't notify us otherwise, we'll reinvest all distributions. If
your distributions are reinvested, they will be in the form of shares of the
same class. The taxation of dividends won't be affected by the form in which you
receive them.
Dividends of net investment income are usually taxable as ordinary
income at the federal, state and local levels.
If you receive distributions of net capital gain, the tax rate will be
based on how long the Surviving Fund held a particular asset, not on how long
you have owned your shares. If you buy shares just before a distribution, you
will pay tax on the entire amount of the taxable distribution you receive, even
though the NAV will be higher on that date because it includes the distribution
amount.
Early in each calendar year, the Surviving Fund will send its
shareholders a notice showing the amount of distributions received in the
preceding year and the tax status of those distributions.
The above is only a general summary of tax implications of investing in
the Surviving Fund. Shareholders should consult their tax advisors to see how
investing in the Surviving Fund will affect their own tax situation.
COMPARISON OF THE MERGING FUND'S
AND THE SURVIVING FUND'S
ORGANIZATION STRUCTURE
There are no material differences in the organizational structure of
the Merging Fund and the Surviving Fund. Set forth below are descriptions of the
structure, voting rights, shareholder liability and the liability of Trustees.
STRUCTURE OF THE MERGING FUND
The Merging Fund is organized as a series of JPMIF, which is organized
under the law of the Commonwealth of Massachusetts. As a Massachusetts business
trust, JPMIF's operations are governed by JPMIF's Declaration of Trust and
By-Laws and applicable Massachusetts law. The operations of the Merging Fund are
also subject to the provisions of the 1940 Act and the rules and regulations
thereunder.
24
STRUCTURE OF THE SURVIVING FUND
The Surviving Fund is organized as a series of MFT, which is organized
under the law of the Commonwealth of Massachusetts. As a Massachusetts business
trust, MFT's operations are governed by MFT's Declaration of Trust and By-Laws
and applicable Massachusetts law. The operations of the Surviving Fund are also
subject to the provisions of the 1940 Act and the rules and regulations
thereunder.
TRUSTEES AND OFFICERS
Subject to the provisions of its trust documents, the business of the
Merging Fund is managed by JPMIF's Trustees and the business of the Surviving
Fund is managed by MFT's Trustees, who serve indefinite terms and have all
powers necessary or convenient to carry out their responsibilities.
Information concerning the current Trustees and officers of MFT and
JPMIF is set forth in the Funds' respective Statements of Additional
Information, which are incorporated herein by reference.
SHARES OF FUNDS
Each of MFT and JPMIF is a trust with an unlimited number of authorized
shares of beneficial interest which may be divided into series or classes
thereof. Each Fund is one series of a trust and may issue multiple classes of
shares. Each share of a series or class of a trust represents an equal
proportionate interest in that series or class with each other share of that
series or class. The shares of each series or class of either MFT or JPMIF
participate equally in the earnings, dividends and assets of the particular
series or class. Fractional shares have proportionate rights to full shares.
Expenses of MFT or JPMIF that are not attributable to a specific series or class
will be allocated to all the series of that trust in a manner believed by its
board to be fair and equitable. Generally, shares of each series will be voted
separately, for example, to approve an investment advisory agreement. Likewise,
shares of each class of each series will be voted separately, for example, to
approve a distribution plan, but shares of all series and classes vote together,
to the extent required by the 1940 Act, including for the election of Trustees.
Neither MFT nor JPMIF is required to hold regular annual meetings of
shareholders, but may hold special meetings from time to time. There are no
conversion or preemptive rights in connection with shares of either MFT or
JPMIF.
SHAREHOLDER VOTING RIGHTS
A vacancy in the Board of either MFT or JPMIF resulting from the
resignation of a Trustee or otherwise may be filled similarly by a vote of a
majority of the remaining Trustees then in office, subject to the 1940 Act. In
addition, Trustees may be removed from office by a vote of holders of shares
representing two-thirds of the outstanding shares of each portfolio of that
trust. A meeting of shareholders shall be held upon the written request of the
holders of shares representing not less than 10% of the outstanding shares
entitled to vote on the matters specified in the written request. Except as set
forth above, the Trustees may continue to hold office and may appoint successor
Trustees.
25
SHAREHOLDER LIABILITY
Under Massachusetts law, shareholders of either MFT or JPMIF could,
under certain circumstances, be held personally liable as partners for the
obligations of that trust. However, the Declaration of Trust of each of MFT and
JPMIF disclaims shareholder liability for acts or obligations of that trust and
provides for indemnification and reimbursement of expenses out of trust property
for any shareholder held personally liable for the obligations of that trust.
Each of MFT and JPMIF may maintain appropriate insurance (for example, fidelity
bonding and errors and omissions insurance) for the protection of that trust,
its shareholders, Trustees, officers, employees and agents covering possible
tort and other liabilities. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability generally is limited to circumstances
in which both inadequate insurance existed and the trust itself was unable to
meet its obligations.
LIABILITY OF DIRECTORS AND TRUSTEES
Under the Declaration of Trust of each of MFT and JPMIF, the Trustees
of that trust are personally liable only for bad faith, willful misfeasance,
gross negligence or reckless disregard of their duties as Trustees. Under the
Declaration of Trust of each of MFT and JPMIF, a Trustee or officer will
generally be indemnified against all liability and against all expenses
reasonably incurred or paid by such person in connection with any claim, action,
suit or proceeding in which such person becomes involved as a party or otherwise
by virtue of such person being or having been a Trustee or officer and against
amounts paid or incurred by such person in the settlement thereof.
The foregoing is only a summary of certain organizational and governing
documents and Massachusetts business trust law. It is not a complete
description. Shareholders should refer to the provisions of these documents and
state law directly for a more thorough comparison. Copies of the Declaration of
Trust and By-Laws of each of MFT and JPMIF are available without charge upon
written request to that trust.
INFORMATION RELATING TO THE ADVISORY CONTRACTS AND OTHER SERVICES
GENERAL INFORMATION
As noted above, the investment adviser of the Master Portfolio (and
therefore the Merging Fund's assets) is JPMIM. Pursuant to an Advisory
Agreement, the investment adviser of the Surviving Fund is JPMFAM.
DESCRIPTION OF JPMFAM
JPMFAM, a registered investment adviser, is an indirect wholly-owned
subsidiary of JPMC, incorporated under the laws of Delaware. JPMFAM's principal
executive offices are located at 522 Fifth Avenue, New York, New York 10036. As
of _______ __, 2001, JPMFAM and certain of its affiliates (including JPMIM)
provided investment management services with respect to assets of approximately
$___ billion.
26
Under the Advisory Agreement, JPMFAM is responsible for making
decisions with respect to, and placing orders for, all purchases and sales of
the portfolio securities of the Surviving Fund. JPMFAM's responsibilities under
the Advisory Agreement include supervising the Surviving Fund's investments and
maintaining a continuous investment program, placing purchase and sale orders
and paying costs of certain clerical and administrative services involved in
managing and servicing the Surviving Fund's investments and complying with
regulatory reporting requirements. Under the Advisory Agreement, JPMFAM is
obligated to furnish employees, office space and facilities required for the
operation of the Surviving Fund. The services provided to the Surviving Fund by
JPMFAM are substantially similar to the services currently provided to the
Master Portfolio by JPMIM.
EXPENSES AND MANAGEMENT FEES. The Advisory Agreement provides that the
Surviving Fund will pay JPMFAM a monthly management fee based upon the net
assets of the Surviving Fund. The annual rate of this management fee is 0.10%.
The Merging Fund currently pays JPMIM 0.20% of the first $1 billion of average
daily net assets and 0.10% of average daily net assets in excess of $1 billion
with respect to its assets in the Master Portfolio. JPMFAM may waive fees from
time to time.
Under the Advisory Agreement, except as indicated above, the Surviving
Fund is responsible for its operating expenses including, but not limited to,
taxes; interest; fees (including fees paid to its Trustees who are not
affiliated with JPMFAM or any of its affiliates); fees payable to the
Commission; state securities qualification fees; association membership dues;
costs of preparing and printing prospectuses for regulatory purposes and for
distribution to existing shareholders; advisory and administrative fees; charges
of the custodian and transfer agent; insurance premiums; auditing and legal
expenses; costs of shareholders' reports and shareholder meetings; any
extraordinary expenses; and brokerage fees and commissions, if any, in
connection with the purchase or sale of portfolio securities.
SUBCONTRACTING. JPMFAM is authorized by the Advisory Agreement to
employ or associate with such other persons or entities as it believes to be
appropriate to assist it in the performance of its duties. Any such person is
required to be compensated by JPMFAM, not by the Surviving Fund, and to be
approved by the shareholders of that Fund as required by the 1940 Act.
LIMITATION ON LIABILITY. The Advisory Agreement provides that JPMFAM
will not be liable for any error of judgment or mistake of law or for any act or
omission or loss suffered by MFT or the Surviving Fund in connection with the
performance of the Advisory Agreement except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services or from
willful misfeasance, bad faith, or gross negligence in the performance of its
duties or reckless disregard of its obligations and duties under the Advisory
Agreement.
DURATION AND TERMINATION. The Advisory Agreement will continue in
effect from year to year with respect to the Surviving Fund, only so long as
such continuation is approved at least annually by (i) the Board of Trustees of
MFT or the majority vote of the
27
outstanding voting securities of the Surviving Fund, and (ii) a majority of
those Trustees who are neither parties to the Advisory Agreement nor "interested
persons," as defined in the 1940 Act, of any such party, acting in person at a
meeting called for the purpose of voting on such approval. The Advisory
Agreement will terminate automatically in the event of its "assignment," as
defined in the 1940 Act. In addition, the Advisory Agreement is terminable at
any time as to the Surviving Fund without penalty by the MFT Board or by vote of
the majority of the Surviving Fund's outstanding voting securities upon 60 days'
written notice to JPMFAM, and by JPMFAM on 60 days' written notice to MFT.
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
JPMFAM, as the investment adviser to the Surviving Fund, has
responsibilities with respect to the Fund's portfolio transactions and brokerage
arrangements pursuant to the Fund's policies, subject to the overall authority
of the MFT Board.
Under the Advisory Agreement, JPMFAM, subject to the general
supervision of the Board, is responsible for the placement of orders for the
purchase and sale of portfolio securities for the Surviving Fund with brokers
and dealers selected by JPMFAM. These brokers and dealers may include brokers or
dealers affiliated with JPMFAM to the extent permitted by the 1940 Act and MFT's
policies and procedures applicable to the Fund. JPMFAM shall use its best
efforts to seek to execute portfolio transactions at prices which, under the
circumstances, result in total costs or proceeds being the most favorable to
such Fund. In assessing the best overall terms available for any transaction,
JPMFAM shall consider all factors it deems relevant, including the breadth of
the market in the security, the price of the security, the financial condition
and execution capability of the broker or dealer, research services provided to
JPMFAM, and the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. In no event shall JPMFAM be under any
duty to obtain the lowest commission or the best net price for the Fund on any
particular transaction, nor shall JPMFAM be under any duty to execute any order
in a fashion either preferential to such Fund relative to other accounts managed
by JPMFAM or otherwise materially adverse to such other accounts.
In selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide brokerage and
research services (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934) to JPMFAM, the Fund and/or the other accounts over which
JPMFAM exercises investment discretion. JPMFAM is authorized to pay a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for the Fund which is in excess of the amount
of commission another broker or dealer would have charged for effecting that
transaction if JPMFAM determines in good faith that the total commission is
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer, viewed in terms of either that particular
transaction or the overall responsibilities of JPMFAM with respect to accounts
over which it exercises investment discretion. JPMFAM shall report to the Board
regarding overall commissions paid by the Fund and their reasonableness in
relation to the benefits to such Fund.
28
In executing portfolio transactions for the Fund, JPMFAM may, to the
extent permitted by applicable laws and regulations, but shall not be obligated
to, aggregate the securities to be sold or purchased with those of other funds
or its other clients if, in JPMFAM's reasonable judgment, such aggregation (i)
will result in an overall economic benefit to such fund, taking into
consideration the advantageous selling or purchase price, brokerage commission
and other expenses, and trading requirements, and (ii) is not inconsistent with
the policies set forth in MFT's registration statement, as the case may be, and
the Fund's Prospectus and Statement of Additional Information. In such event,
JPMFAM will allocate the securities so purchased or sold, and the expenses
incurred in the transaction, in an equitable manner, consistent with its
fiduciary obligations to such Fund and such other clients.
It is possible that certain of the brokerage and research services
received will primarily benefit one or more other investment companies or other
accounts for which JPMFAM exercises investment discretion. Conversely, MFT or
any of its portfolios may be the primary beneficiary of the brokerage or
research services received as a result of portfolio transactions effected for
such other accounts or investment companies.
OTHER SERVICES
The Distributor is a wholly owned, indirect subsidiary of BISYS Fund
Services, Inc. which currently serves as the distributor for both the Surviving
Fund and the Merging Fund. BISYS is the sub-administrator for both the Surviving
Fund and the Merging Fund. The Distributor is unaffiliated with JPMC or any of
its subsidiaries.
Chase serves as administrator, shareholder servicing agent, fund
accountant and custodian, and DST serves as transfer agent and dividend
disbursing agent, for the Surviving Fund. The services provided by Chase include
day-to-day maintenance of certain books and records, calculation of the offering
price of the shares and preparation of reports. In its role as custodian, Chase
is responsible for the daily safekeeping of securities and cash held by the
Surviving Fund. It is anticipated that prior to the consummation of the
Reorganization, BONY will become the Surviving Fund's fund accountant and
custodian.
As administrator, Chase receives a fee of 0.10% of average daily net
assets. It is anticipated that, in connection with the Reorganization, the
administration fee will be amended to reduce the fee to 0.05% for complex wide
money market Fund assets in excess of $100 billion.
PROPOSAL 2: ELECTION OF TRUSTEES
It is proposed that shareholders of the Merging Fund consider the
election of the individuals listed below (the "Nominees") to the Board of
Trustees of JPMIF, which is currently organized as a Massachusetts business
trust. Even if the Reorganization described in Proposal 1 is approved, other
mutual funds that are series of JPMIF will continue to exist and operate. All
shareholders of any series of JPMIF as of the record
29
date (April 6, 2001) are required to be given a vote on the proposal regarding
Trustees. Because as of the record date you are still a shareholder in JPMIF,
you are entitled to vote on this proposal. Shareholders of MFT are being asked
to approve the same Trustees as are being proposed for JPMIF.
In connection with the merger of J.P. Morgan & Co. Incorporated and The
Chase Manhattan Corporation, it has been proposed, subject to shareholder
approval, that the Boards of Trustees of the investment companies managed by
JPMFAM, JPMIM and their affiliates be rationalized in order to obtain additional
operating efficiencies by having the same Board of Trustees for all of the
funds. Therefore, the Nominees include certain current Trustees of MFT and
certain current Trustees of JPMIF (including certain members of JPMIF's Advisory
Boards). Each Nominee has consented to being named in this Proxy Statement and
has agreed to serve as a Trustee if elected.
Shareholders of MFT are concurrently considering the election of the
same individuals to the Board of Trustees of MFT. Biographical information about
the Nominees and other relevant information is set forth below. More information
regarding the current Trustees of MFT and JPMIF is contained in the Funds'
Statements of Additional Information, which are incorporated herein by
reference.
The persons named in the accompanying form of proxy intend to vote each
such proxy "FOR" the election of the Nominees, unless shareholders specifically
indicate on their proxies the desire to withhold authority to vote for elections
to office. It is not contemplated that any Nominee will be unable to serve as a
Board member for any reason, but if that should occur prior to the Meeting, the
proxy holders reserve the right to substitute another person or persons of their
choice as nominee or nominees.
THE JPMIF BOARD HAS UNANIMOUSLY RECOMMENDED THAT
SHAREHOLDERS VOTE "FOR" EACH OF THE NOMINEES LISTED BELOW.
VOTE REQUIRED
The election of each of the Nominees listed below requires the
affirmative vote of a majority of all the votes entitled to be cast at the
Meeting by all shareholders of JPMIF.
The following are the nominees:
------------------------------------------------
The Board of Trustees of JPMIF met four times during the fiscal year
ended October 31, 2000, and each of the Trustees attended at least 75% of the
meetings.
The Board of Trustees of JPMIF presently has an Audit Committee. The
members of the Audit Committee are Messrs. Addy (Chairman), Eschenlauer, Burns,
Mallardi and Healey. The function of the Audit Committee is to recommend
independent auditors and monitor accounting and financial matters. The Audit
Committee met four times during the fiscal year ended October 31, 2000.
30
A majority of the disinterested Trustees have adopted written
procedures reasonably appropriate to deal with potential conflicts of interest
arising from the fact that the same individuals are Trustees of JPMIF, the
Master Portfolio and certain other investment companies in the Fund Complex, up
to and including creating a separate board of trustees.
*Interested Trustee, as defined by the 1940 Act.
REMUNERATION OF TRUSTEES AND CERTAIN EXECUTIVE OFFICERS
Each Trustee is currently paid an annual fee of $75,000 for serving as
Trustee of the investment companies in the Fund Complex and is reimbursed for
expenses incurred in connection with service as a Trustee. The Trustees may hold
various other directorships unrelated to these funds.
Trustee compensation expenses paid for the calendar year ended December
31, 2000 are set forth below.
Aggregate Trustee
Compensation Paid by the Total Trustee Compensation Accrued
Name of Trustee Trust During 2000 by Fund Complex1 During 2000(2)
- ------------------------------------------- ------------------------- -------------------------------------
Frederick S. Addy, Trustee $ 23,538 $ 75,000
William G. Burns, Trustee $ 23,538 $ 75,000
Arthur C. Eschenlauer, Trustee $ 23,538 $ 75,000
Matthew Healey, Trustee(3)
Chairman and Chief Executive Officer $ 23,538 $ 75,000
Michael P. Mallardi, Trustee $ 23,538 $ 75,000
- --------------------
(1) A Fund Complex means two or more investment companies that hold themselves
out to investors as related companies for purposes of investment and
investment services, or have a common investment adviser or have an
investment adviser that is an affiliated person of the investment adviser
of any of the other investment companies.
(2) No investment company within the Fund Complex has a pension or retirement
plan.
(3) During 2000, Pierpont Group, Inc. paid Mr. Healey, in his role as Chairman
of Pierpont Group, Inc., compensation in the amount of $200,000,
contributed $25,500 to a defined contribution plan on his behalf and paid
$18,400 in insurance premiums for his benefit.
The Trustees decide upon general policies and are responsible for
overseeing JPMIF's business affairs. Each of JPMIF and the Master Portfolio has
entered into a Fund Services Agreement with Pierpont Group, Inc. to assist the
Trustees in exercising their overall supervisory responsibilities. Pierpont
Group, Inc. was organized in July 1989 to provide services for the J.P. Morgan
Family of Funds (formerly "The Pierpont Family of
31
Funds"), and the Trustees are the equal and sole shareholders of Pierpont Group,
Inc. JPMIF has agreed to pay Pierpont Group, Inc. a fee in an amount
representing its reasonable costs in performing these services. These costs are
periodically reviewed by the Trustees. The principal offices of Pierpont Group,
Inc. are located at 461 Fifth Avenue, New York, New York 10017. It is
anticipated that the Merging Fund will terminate its agreement with Pierpont
Group, Inc. in connection with the Reorganization.
The aggregate fees paid to Pierpont Group, Inc. by the Merging Fund and
the Master Portfolio during the indicated fiscal periods are set forth below:
MERGING FUND -- For the fiscal years ended October 31, 1998, 1999 and 2000:
$10,469, $10,799 and $8,467.
MASTER PORTFOLIO-- For the fiscal years ended October 31, 1998, 1999 and 2000:
$15,548 $17,351 and $16,550.
ADVISORY BOARD
The Trustees determined as of January 26, 2000 to establish an advisory
board and appoint four members ("Members of the Advisory Board") thereto. Each
member serves at the pleasure of the Trustees. The Advisory Board is distinct
from the Trustees and provides advice to the Trustees as to investment,
management and operations of JPMIF; but has no power to vote upon any matter put
to a vote of the Trustees. The Advisory Board and the members thereof also serve
each of the other trusts in the Fund Complex. The creation of the Advisory Board
and the appointment of the members thereof was designed so that the Board of
Trustees will continuously consist of persons able to assume the duties of
Trustees and be fully familiar with the business and affairs of JPMIF, in
anticipation of the current Trustees reaching the mandatory retirement age of
seventy. Each Member of the Advisory Board is paid an annual fee of $75,000 for
serving in this capacity for the Fund Complex and is reimbursed for expenses
incurred in connection for such service. The Members of the Advisory Board may
hold various other directorships unrelated to these funds. The mailing address
of the Members of the Advisory Board is c/o Pierpont Group, Inc., 461 Fifth
Avenue, New York, New York 10017. Their names, principal occupations during the
past five years and dates of birth are set forth below:
Ann Maynard Gray -- Former President, Diversified Publishing Group and
Vice President, Capital Cities/ABC, Inc. Her date of birth is August 22, 1945.
John R. Laird-- Retired; Former Chief Executive Officer, Shearson
Lehman Brothers and The Boston Company. His date of birth is June 21, 1942.
Gerard P. Lynch -- Retired; Former Managing Director, Morgan Stanley
Group and President and Chief Operating Officer, Morgan Stanley Services, Inc.
His date of birth is October 5, 1936.
James J. Schonbachler -- Retired; Prior to September, 1998, Managing
Director, Bankers Trust Company and Chief Executive Officer and Director,
Bankers Trust A.G., Zurich and BT Brokerage Corp. His date of birth is January
26, 1943.
32
PRINCIPAL EXECUTIVE OFFICERS:
JPMIF's and the Master Portfolio's principal executive officers (listed
below), other than the Chief Executive Officer and the officers who are
employees of JPMIM, are provided and compensated by Funds Distributors, Inc., a
wholly owned indirect subsidiary of Boston Institutional Group, Inc. The
officers conduct and supervise the business operations of JPMIF and the Master
Portfolio. JPMIF and the Master Portfolio have no employees.
The business address of each of the officers unless otherwise noted is
Funds Distributor, Inc., 60 State Street, Suite 1300, Boston, Massachusetts
02109. The principal executive officers of JPMIF are as follows: New Officers
from JPFD?
NAME AND POSITION AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ----------------- --- ------------------------------------------
Matthew Healey 63 Chief Executive Officer; Chairman, Pierpont Group,
since prior to 1993. His address is Pine Tree Country
Club Estates, 10286 Saint Andrews Road, Boynton Beach,
Florida 33436.
Margaret W. Chambers 41 Vice President and Secretary. Senior Vice President
and General Counsel of the Distributor since April,
1998. From August 1996 to March 1998, Ms. Chambers was
Vice President and Assistant General Counsel for
Loomis, Sayles & Company, L.P. From January 1986 to
July 1996, she was an associate with the law firm of
Ropes & Gray.
George A. Rio 46 President and Treasurer. Executive Vice President and
Client Service Director of the Distributor since April
1998. From June 1995 to March 1998, Mr. Rio was Senior
Vice President and Senior Key Account Manager for
Putnam Mutual Funds. From May 1994 to June 1995, Mr.
Rio was Director of Business Development for First Data
Corporation.
ACCOUNTANTS
PricewaterhouseCoopers LLP serves as the Merging Fund's, the Master
Portfolio's and the Surviving Fund's independent accountants, auditing and
reporting on the annual financial statements and reviewing certain regulatory
reports and federal income tax returns. PricewaterhouseCoopers LLP also performs
other professional accounting, auditing, tax and advisory services when MFT or
JPMIF engages it to do so.
AUDIT FEES. The aggregate fees paid to PricewaterhouseCoopers LLP in
connection with the annual audit of the Merging Fund and the Master Portfolio
for the last fiscal year was $32,500.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. The
aggregate fees billed for financial information systems and design
implementation services rendered by PricewaterhouseCoopers LLP to the Merging
Fund, JPMIM and JPMIM's affiliates that provide services to the Fund for the
calendar year ended December 31, 2000 was $0.
33
ALL OTHER FEES. The aggregate fees billed for all other non-audit
services, including fees for tax-related services, rendered by
PricewaterhouseCoopers LLP to the Merging Fund, JPMIM and JPMIM's affiliates
that provide services to the Fund for the calendar year ended December 31, 2000
was $11,029,150.
The Audit Committee has considered whether the provision of non-audit
services is compatible with maintaining the independence of
PricewaterhouseCoopers LLP.
INFORMATION RELATING TO VOTING MATTERS
GENERAL INFORMATION
This Combined Prospectus/Proxy Statement is being furnished in
connection with the solicitation of proxies by the JPMIF Board for use at the
Meeting. It is expected that the solicitation of proxies will be primarily by
mail. JPMIF's officers and service providers may also solicit proxies by
telephone, facsimile machine, telegraph, the Internet or personal interview. In
addition JPMIF may retain the services of professional solicitors to aid in the
solicitation of proxies for a fee. It is anticipated that banks, brokerage
houses and other custodians will be requested on behalf of JPMIF to forward
solicitation materials to their principals to obtain authorizations for the
execution of proxies. Any Merging Fund Shareholder giving a proxy may revoke it
at any time before it is exercised by submitting to JPMIF a written notice of
revocation or a subsequently executed proxy or by attending the Meeting and
electing to vote in person.
Only the Merging Fund Shareholders of record at the close of business
on April 6, 2001 will be entitled to vote at the Meeting. On that date, there
were outstanding and entitled to be voted _____________ Merging Fund Shares.
Each share or fraction thereof is entitled to one vote or fraction thereof.
The presence in person or by proxy of shareholders that own one-third
of the outstanding Merging Fund Shares will constitute a quorum for purposes of
transacting all business at the Meeting. If a quorum is not present at the
Meeting, sufficient votes in favor of the proposals are not received by the time
scheduled for the Meeting, or the Merging Fund Shareholders determine to adjourn
the Meeting for any other reason, the Merging Fund Shareholders present (in
person or proxy) may adjourn the Meeting from time to time, without notice other
than announcement at the Meeting. Any such adjournment will require the
affirmative vote of the Merging Fund Shareholders holding a majority of the
Merging Fund Shares present, in person or by proxy, at the Meeting. The persons
named in the Proxy will vote in favor of such adjournment those Merging Fund
Shares that they are entitled to vote if such adjournment is necessary to obtain
a quorum or if they determine such an adjournment is desirable for any other
reason. Business may be conducted once a quorum is present and may continue
until adjournment of the Meeting notwithstanding the withdrawal or temporary
absence of sufficient Merging Fund Shares to reduce the number present to less
than a quorum. If the accompanying proxy is
34
executed and returned in time for the Meeting, the shares covered thereby will
be voted in accordance with the proxy on all matters that may properly come
before the meeting (or any adjournment thereof).
PROXIES
All Merging Fund Shares represented by each properly signed proxy
received prior to the Meeting will be voted at the Meeting. If a Merging Fund
Shareholder specifies how the proxy is to be voted on any of the business to
come before the Meeting, it will be voted in accordance with such
specifications. If a Merging Fund Shareholder returns its proxy but no direction
is made on the proxy, the proxy will be voted FOR each Proposal described in
this Combined Prospectus/Proxy Statement. The Merging Fund Shareholders voting
to ABSTAIN on the Proposals will be treated as present for purposes of achieving
a quorum and in determining the votes cast on the Proposals, but not as having
voted FOR the Proposals. A properly signed proxy on which a broker has indicated
that it has no authority to vote on the Proposals on behalf of the beneficial
owner (a "broker non-vote") will be treated as present for purposes of achieving
a quorum but will not be counted in determining the votes cast on the Proposals.
A proxy granted by any Merging Fund Shareholder may be revoked by such
Merging Fund Shareholder at any time prior to its use by written notice to
JPMIF, by submission of a later dated Proxy or by voting in person at the
Meeting. If any other matters come before the Meeting, proxies will be voted by
the persons named as proxies in accordance with their best judgment.
EXPENSES OF PROXY SOLICITATION
JPMC, and not the Merging Fund or the Surviving Fund (or shareholders
of either Fund), will bear the cost of solicitation of proxies, including the
cost of printing, preparing, assembling and mailing the Notice of Meeting,
Combined Prospectus/Proxy Statement and form of proxy. In addition to
solicitations by mail, proxies may also be solicited by officers and regular
employees of JPMIF by personal interview, by telephone or by telegraph without
additional remuneration thereof. Professional solicitors may also be retained.
ABSTENTIONS AND BROKER NON-VOTES
In tallying the Merging Fund Shareholder votes, abstentions and broker
non-votes (i.e., proxies sent in by brokers and other nominees that cannot be
voted on a proposal because instructions have not been received from the
beneficial owners) will be counted for purposes of determining whether or not a
quorum is present for purposes of convening the Meeting. Abstentions and broker
non-votes will be considered to be a vote against each proposal.
INTERESTED PARTIES
On the record date, the Trustees and officers of JPMIF as a group owned
less than 1% of the outstanding shares of the Merging Fund. On the record date,
the name, address
35
and percentage ownership of the persons who owned beneficially more than 5% of
the shares of the Merging Fund or any class thereof and the percentage of any
class or series of shares of the Surviving Fund or any class thereof that would
be owned by such persons upon consummation of the Reorganization and the
Concurrent Reorganization based upon their holdings at _______, 2001 are as
follows:
Percentage of Percentage of
Amount of Merging Fund Surviving Fund
Shares Owned on Record Owned Upon
Name and Address Owned Date Consummation
---------------- ----- ---- ------------
On the record date, the Trustees and officers of MFT as a group owned
less than 1% of the outstanding shares of the Surviving Fund. On the record
date, the name, address and percentage ownership of the persons who owned
beneficially more than 5% of the shares of the Surviving Fund or any class
thereof and the percentage of shares of the Surviving Fund or any class thereof
that would be owned by such persons upon consummation of the Reorganization and
the Concurrent Reorganization based upon their holdings at _______, 2001 are as
follows:
Percentage of
Amount of Surviving Fund Percentage of Surviving
Shares Owned on Record Fund Owned Upon
Name and Address Owned Date Consummation
---------------- ----- ---- ------------
ADDITIONAL INFORMATION ABOUT MFT
Information about the Surviving Fund is included in its Prospectus,
which is incorporated by reference and enclosed herein. Additional information
about the Surviving Fund is also included in MFT's Statement of Additional
Information, which has been filed with the Commission and which is incorporated
herein by reference. Copies of the Statement of Additional information may be
obtained without charge by calling 1-800-348-4782. MFT is subject to the
requirements of the 1940 Act and, in accordance with such requirements, files
reports and other information with the Commission. These materials can be
inspected and copied at the Public Reference Facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's Regional Offices at 7 World Trade Center, Suite 1300, New York, NY
10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies
of such material can also be obtained from the Public Reference Branch, Office
of Consumer Affairs and Information Services, Securities and Exchange
Commission, Washington, D.C. 20549, at
36
prescribed rates, and are also available on the Commission's web site at
http://www.sec.gov.
ADDITIONAL INFORMATION ABOUT JPMIF
Information about the Merging Fund is included in its Prospectus, which
is incorporated by reference herein. Additional information about the Merging
Fund is also included in JPMIF's Statement of Additional Information which has
been filed with the Commission and which is incorporated herein by reference.
Copies of the Statement of Additional information may be obtained without charge
by calling 1-800-766-7722. JPMIF is subject to the requirements of the 1940 Act
and, in accordance with such requirements, files reports and other information
with the Commission. These materials can be inspected and copied at the Public
Reference Facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices at 7 World
Trade Center, Suite 1300, New York, NY 10048 and 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such material can also be obtained from
the Public Reference Branch, Office of Consumer Affairs and Information
Services, Securities and Exchange Commission, Washington, D.C. 20549, at
prescribed rates, and are also available on the Commission's web site at
http://www.sec.gov.
FINANCIAL STATEMENTS AND EXPERTS
The audited financial highlights, financial statements and notes
thereto of the Merging Fund for the fiscal year ended October 31, 2000, the
audited financial statements, notes thereto and supplementary data of the Master
Portfolio for the fiscal year ended October 31,2000 and the audited financial
highlights, financial statements and notes thereto of the Surviving Fund for the
fiscal year ended August 31, 2000 are incorporated by reference herein and into
the Statement of Additional Information related to this Combined
Prospectus/Proxy Statement. The audited financial highlights, financial
statements, notes thereto and supplementary data, as applicable, for the Merging
Fund, the Master Portfolio and the Surviving Fund have been incorporated herein
by reference in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on their authority as experts in auditing and
accounting.
The unaudited financial statements and notes thereto of the Surviving
Fund for the fiscal period ended February 28, 2001 are incorporated by reference
herein into the Statement of Additional Information related to this Combined
Prospectus/Proxy Statement.
OTHER BUSINESS
The JPMIF Board knows of no other business to be brought before the
Meeting. However, if any other matters come before the Meeting, it is the
intention of the JPMIF Board that proxies that do not contain specific
restrictions to the contrary will be voted on such matters in accordance with
the judgment of the persons named in the enclosed form of proxy.
37
LITIGATION
Neither MFT nor JPMIF is involved in any litigation that would have any
material adverse effect upon either the Merging Fund or the Surviving Fund.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be addressed to JPMIF in writing at the
address on the cover page of this Combined Prospectus/Proxy Statement or by
telephoning 1-800-766-7722.
* * *
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING ARE
REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
38
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Plan") made this ____
day of ______, 2001 by and among J.P. Morgan Institutional Funds (the
"Transferor Trust"), a Massachusetts business trust, on behalf of the JPMorgan
Institutional Service Treasury Money Market Fund (the "Transferor Portfolio")
and Mutual Fund Trust (the "Acquiring Trust"), a Massachusetts business trust,
on behalf of JPMorgan Treasury Plus Money Market Fund (formerly, Chase Vista
Treasury Plus Money Market Fund) (the "Acquiring Portfolio") and J.P. Morgan
Chase & Co.
WHEREAS, the Board of Trustees of each of the Transferor Trust and the
Acquiring Trust has determined that the transfer of all of the assets and
liabilities of the Transferor Portfolio to the Acquiring Portfolio is in the
best interests of the Transferor Portfolio and the Acquiring Portfolio, as well
as the best interests of shareholders of the Transferor Portfolio and the
Acquiring Portfolio, and that the interests of existing shareholders would not
be diluted as a result of this transaction;
WHEREAS, each of the Transferor Trust and the Acquiring Trust intends
to provide for the reorganization of the Transferor Portfolio (the
"Reorganization") through the acquisition by the Acquiring Portfolio of all of
the assets, subject to all of the liabilities, of the Transferor Portfolio in
exchange for shares of beneficial interest of the Acquiring Portfolio (the
"Acquiring Portfolio Shares"), the liquidation of the Transferor Portfolio and
the distribution to Transferor Portfolio shareholders of such Acquiring
Portfolio Shares, all pursuant to the provisions of Section 368(a)(1) of the
Internal Revenue Code of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree as follows:
1. TRANSFER OF ASSETS OF THE TRANSFEROR PORTFOLIO IN EXCHANGE FOR THE
ACQUIRING PORTFOLIO SHARES AND LIQUIDATION AND TERMINATION OF THE TRANSFEROR
PORTFOLIO
(a) PLAN OF REORGANIZATION.
(i) The Transferor Trust on behalf of the Transferor Portfolio listed
above, will convey, transfer and deliver to the Acquiring Portfolio all of the
then existing assets of the Transferor Portfolio (consisting, without
limitation, of portfolio securities and instruments, dividend and interest
receivables, cash and other assets). In consideration thereof, the Acquiring
Trust on behalf of the Acquiring Portfolio will (A) assume and pay, to the
extent that they exist on or after the Effective Time of the Reorganization (as
defined in Section 1(b)(i) hereof), all of the obligations and liabilities of
the Transferor Portfolio and (B) issue and deliver to the Transferor Portfolio
full and fractional shares of beneficial interest of the Acquiring Portfolio,
with respect to the Acquiring Portfolio equal to that number of full and
fractional Acquiring Portfolio Shares as determined in Section 1(c) hereof. The
Acquiring Portfolio Shares issued and delivered to the Transferor Portfolio
shall be of the Premier Class share class in exchange for
A-1
shares of the Transferor Portfolio, with the amounts of shares of each share
class to be determined by the parties. Any shares of beneficial interest (if
any) of the Transferor Portfolio ("Transferor Portfolio Shares") held in the
treasury of the Transferor Trust at the Effective Time of the Reorganization
shall thereupon be retired. Such transactions shall take place on the date
provided for in Section 1(b) hereof (the "Exchange Date"). All computations
for the Transferor Portfolio and the Acquiring Portfolio shall be performed
by The Bank of New York (the "Custodian"), as custodian and pricing agent for
the Transferor Portfolio and the Acquiring Portfolio. The determination of
said Custodian shall be conclusive and binding on all parties in interest.
(ii) As of the Effective Time of the Reorganization, the Transferor
Trust will liquidate and distribute pro rata to its shareholders of record
("Transferor Portfolio Shareholders") as of the Effective Time of the
Reorganization the Acquiring Portfolio Shares received by such Transferor
Portfolio pursuant to Section 1(a)(i) in actual or constructive exchange for the
shares of the Transferor Portfolio held by the Transferor Portfolio
shareholders. Such liquidation and distribution will be accomplished by the
transfer of the Acquiring Portfolio Shares then credited to the account of the
Transferor Portfolio on the books of the Acquiring Portfolio, to open accounts
on the share records of the Acquiring Portfolio in the names of the Transferor
Portfolio Shareholders and representing the respective pro rata number of the
Acquiring Portfolio Shares due such shareholders. The Acquiring Portfolio will
not issue certificates representing the Acquiring Portfolio Shares in connection
with such exchange.
(iii) As soon as practicable after the Effective Time of the
Reorganization, the Transferor Trust shall take all the necessary steps under
Massachusetts law, the Transferor Trust's Declaration of Trust and any other
applicable law to effect a complete termination of the Transferor Portfolio.
(b) EXCHANGE DATE AND EFFECTIVE TIME OF THE REORGANIZATION.
(i) Subject to the satisfaction of the conditions to the
Reorganization specified in this Plan, the Reorganization shall occur as of
the close of regularly scheduled trading on the New York Stock Exchange (the
"Effective Time of the Reorganization") on August 11, 2001, or such later
date as may be agreed upon by the parties (the "Exchange Date").
(ii) All acts taking place on the Exchange Date shall be deemed to take
place simultaneously as of the Effective Time of the Reorganization unless
otherwise provided.
(iii) In the event that on the proposed Exchange Date (A) the New York
Stock Exchange shall be closed to trading or trading thereon shall be
restricted, or (B) trading or the reporting of trading on said Exchange or
elsewhere shall be disrupted so that accurate valuation of the net assets of the
Acquiring Portfolio or the Transferor Portfolio is impracticable, the Exchange
Date shall be postponed until the first business day after the day when trading
shall have been fully resumed and reporting shall have been restored.
(iv) On the Exchange Date, portfolio securities of the Transferor
Portfolio shall be transferred by the Custodian to the accounts of the Acquiring
Portfolio duly endorsed in proper form for transfer, in such condition as to
constitute good delivery thereof in accordance with the
A-2
custom of brokers, and shall be accompanied by all necessary federal and
state stock transfer stamps or a check for the appropriate purchase price
thereof.
(c) VALUATION.
(i) The net asset value of the shares of the Acquiring Portfolio and
the net value of the assets of the Transferor Portfolio to be transferred in
exchange therefore shall be determined as of the Effective Time of the
Reorganization. The net asset value of the Acquiring Portfolio Shares shall be
computed by the Custodian in the manner set forth in the Acquiring Trust's
Declaration of Trust or By-laws and then current prospectus and statement of
additional information and shall be computed to not less than two decimal
places. The net value of the assets of the Transferor Portfolio to be
transferred shall be computed by the Custodian by calculating the value of the
assets transferred by the Transferor Portfolio and by subtracting therefrom the
amount of the liabilities assigned and transferred to the Acquiring Portfolio,
said assets and liabilities to be valued in the manner set forth in the
Transferor Trust's Declaration of Trust or By-laws and then current prospectus
and statement of additional information.
(ii) The number of Premier Class shares of the Acquiring Portfolio to
be issued (including fractional shares, if any) by the Acquiring Portfolio in
exchange for the Transferor Portfolio's assets attributable to the Transferor
Portfolio's shares shall be determined by an exchange ratio computed by dividing
the net value of the Transferor Portfolio's assets attributable to its shares by
the net asset value per share of the Premier Class shares of the Acquiring
Portfolio, both as determined in accordance with Section 1(c)(i).
(iii) All computations of value shall be made by the Custodian in
accordance with its regular practice as pricing agent for the Acquiring
Portfolio and the Transferor Portfolio.
2. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING TRUST
The Acquiring Trust represents and warrants as follows:
(a) ORGANIZATION, EXISTENCE, ETC. The Acquiring Trust is a business
trust that is duly organized, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts and has the power to carry on its
business as it is now being conducted. The Acquiring Portfolio is a validly
existing series of shares of such business trust representing interests therein
under the laws of Massachusetts. Each of the Acquiring Portfolio and the
Acquiring Trust have all necessary federal, state and local authorization to own
all of its properties and assets and to carry on its business as now being
conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. The Acquiring Trust is
registered under the Investment Company Act of 1940, as amended (the "Act") as
an open-end investment company of the management type; such registration has not
been revoked or rescinded and is in full force and effect.
(c) CURRENT OFFERING DOCUMENTS. The current prospectus and statement of
additional information of the Acquiring Trust, as amended, included in the
Acquiring Trust's registration
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statement on Form N-1A filed with the Securities and Exchange Commission,
comply in all material respects with the requirements of the Securities Act
of 1933, as amended (the "Securities Act") and the Act and do not contain an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(d) CAPITALIZATION. The Acquiring Trust has an unlimited number of
authorized shares of which as of February 28, 2001 there were outstanding
2,813,699 shares of the Acquiring Portfolio, and no shares of such Portfolio
were held in the treasury of the Acquiring Trust. All of the outstanding
shares of the Acquiring Trust have been duly authorized and are validly
issued, fully paid and nonassessable (except as disclosed in the Acquiring
Trust's prospectus and recognizing that under Massachusetts law, shareholders
of an Acquiring Trust portfolio could, under certain circumstances, be held
personally liable for the obligations of such Acquiring Trust portfolio).
Because the Acquiring Trust is an open-end investment company engaged in the
continuous offering and redemption of its shares, the number of outstanding
shares may change prior to the Effective Time of the Reorganization. All of
the issued and outstanding shares of the Acquiring Portfolio have been
offered and sold in compliance in all material respects with applicable
registration requirements of the Securities Act and applicable state
securities laws.
(e) FINANCIAL STATEMENTS. The financial statements of the Acquiring
Trust with respect to the Acquiring Portfolio for the fiscal year ended August
31, 2000, which have been audited by PricewaterhouseCoopers LLP, fairly present
the financial position of the Acquiring Portfolio as of the dates thereof and
the respective results of operations and changes in net assets for each of the
periods indicated in accordance with generally accepted accounting principles
("GAAP"). The financial statements of the Acquiring Trust with respect to the
Acquiring Portfolio for the fiscal period ended February 28, 2001 fairly present
the financial position of the Acquiring Portfolio as of the dates thereof and
the respective results of operations and changes in net assets for each of the
periods indicated in accordance with GAAP.
(f) SHARES TO BE ISSUED UPON REORGANIZATION. The Acquiring Portfolio
Shares to be issued in connection with the Reorganization will be duly
authorized and upon consummation of the Reorganization will be validly issued,
fully paid and nonassessable (except as disclosed in the Trust's prospectus and
recognizing that under Massachusetts law, shareholders of an Acquiring Trust
portfolio could, under certain circumstances, be held personally liable for the
obligations of such portfolio).
(g) AUTHORITY RELATIVE TO THIS PLAN. The Acquiring Trust, on behalf of
the Acquiring Portfolio, has the power to enter into this Plan and to carry out
its obligations hereunder. The execution and delivery of this Plan and the
consummation of the transactions contemplated hereby have been duly authorized
by the Acquiring Trust's Board of Trustees and no other proceedings by the
Acquiring Trust other than those contemplated under this Plan are necessary to
authorize its officers to effectuate this Plan and the transactions contemplated
hereby. The Acquiring Trust is not a party to or obligated under any provision
of its Declaration of Trust or By-laws, or under any indenture or contract
provision or any other commitment or obligation, or subject to any order or
decree, which would be violated by or which would prevent its execution and
performance of this Plan in accordance with its terms.
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(h) LIABILITIES. There are no liabilities of the Acquiring Portfolio,
whether actual or contingent and whether or not determined or determinable,
other than liabilities disclosed or provided for in the Acquiring Trust's
financial statements with respect to the Acquiring Portfolio and liabilities
incurred in the ordinary course of business subsequent to February 28, 2001 or
otherwise previously disclosed to the Acquiring Trust with respect to the
Acquiring Portfolio, none of which has been materially adverse to the business,
assets or results of operations of the Acquiring Portfolio.
(i) NO MATERIAL ADVERSE CHANGE. Since February 28, 2001, there has been
no material adverse change in the financial condition, results of operations,
business, properties or assets of the Acquiring Portfolio, other than those
occurring in the ordinary course of business (for these purposes, a decline in
net asset value and a decline in net assets due to redemptions do not constitute
a material adverse change).
(j) LITIGATION. There are no claims, actions, suits or proceedings
pending or, to the knowledge of the Acquiring Trust, threatened which would
adversely affect the Acquiring Trust or the Acquiring Portfolio's assets or
business or which would prevent or hinder consummation of the transactions
contemplated hereby, there are no facts which would form the basis for the
institution of administrative proceedings against the Acquiring Trust or the
Acquiring Portfolio and, to the knowledge of the Acquiring Trust, there are no
regulatory investigations of the Acquiring Trust or the Acquiring Portfolio,
pending or threatened, other than routine inspections and audits.
(k) CONTRACTS. No default exists under any material contract or other
commitment to which the Acquiring Trust, on behalf of the Acquiring Portfolio,
is subject.
(l) TAXES. The federal income tax returns of the Acquiring Trust with
respect to the Acquiring Portfolio, and all other income tax returns required to
be filed by the Acquiring Trust with respect to the Acquiring Portfolio, have
been filed and all taxes payable pursuant to such returns have been paid. To the
knowledge of the Acquiring Trust, no such return is under audit and no
assessment has been asserted in respect of any such return. All federal and
other taxes owed by the Acquiring Trust with respect to the Acquiring Portfolio
have been paid so far as due. The Acquiring Portfolio has elected to qualify and
has qualified as a "regulated investment company" under Subchapter M of the Code
as of and since its first taxable year and intends to continue to so qualify.
(m) NO APPROVALS REQUIRED. Except for the Registration Statement (as
defined in Section 4(a) hereof) and the approval of the Transferor Portfolio's
shareholders (referred to in Section 6(a) hereof), no consents, approvals,
authorizations, registrations or exemptions under federal or state laws are
necessary for the consummation by the Acquiring Trust of the Reorganization,
except such as have been obtained as of the date hereof.
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3. REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR TRUST
The Transferor Trust represents and warrants as follows:
(a) ORGANIZATION, EXISTENCE, ETC. The Transferor Trust is a business
trust that is duly organized, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts and has the power to carry on its
business as it is now being conducted. The Transferor Portfolio is a validly
existing series of shares of such business trust representing interests therein
under the laws of Massachusetts. Each of Transferor Portfolio and the Transferor
Trust has all necessary federal, state and local authorization to own all of its
properties and assets and to carry on its business as now being conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. The Transferor Trust is
registered under the Act as an open-end investment company of the management
type; such registration has not been revoked or rescinded and is in full force
and effect.
(c) CURRENT OFFERING DOCUMENTS. The current prospectus and
statement of additional information of the Transferor Trust, as amended,
included in the Transferor Trust's registration statement on Form N-1A filed
with the Commission, comply in all material respects with the requirements of
the Securities Act and the Act and do not contain an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(d) CAPITALIZATION. The Transferor Trust has an unlimited number of
authorized shares of beneficial interest of which as of February 28, 2001
there were outstanding 1,534,856 shares of the Transferor Portfolio, and no
shares of such Portfolio were held in the treasury of the Transferor Trust.
All of the outstanding shares of the Transferor Trust have been duly
authorized and are validly issued, fully paid and nonassessable (except as
disclosed in the Transferor Trust's prospectus and recognizing that under
Massachusetts law, shareholders of a Trust portfolio could, under certain
circumstances, be held personally liable for the obligations of such Trust
portfolio). Because the Transferor Trust is an open-end investment company
engaged in the continuous offering and redemption of its shares, the number
of outstanding shares may change prior to the Effective Time of the
Reorganization. All such shares will, at the Exchange Date, be held by the
shareholders of record of the Transferor Portfolio as set forth on the books
and records of the Transferor Trust in the amounts set forth therein, and as
set forth in any list of shareholders of record provided to the Acquiring
Portfolio for purposes of the Reorganization, and no such shareholders of
record will have any preemptive rights to purchase any Transferor Portfolio
shares, and the Transferor Portfolio does not have outstanding any options,
warrants or other rights to subscribe for or purchase any Transferor
Portfolio shares (other than any existing dividend reinvestment plans of the
Transferor Portfolio or as set forth in this Plan), nor are there outstanding
any securities convertible into any shares of the Transferor Portfolio
(except pursuant to any existing exchange privileges described in the current
prospectus and statement of additional information of the Transferor Trust).
All of the Transferor Portfolio's issued and outstanding shares have been
offered and sold in compliance in all material respects with applicable
registration requirements of the Securities Act and applicable state
securities laws.
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(e) FINANCIAL STATEMENTS. The financial statements for the Transferor
Trust with respect to the Transferor Portfolio and for The Treasury Money Market
Portfolio for the fiscal year ended October 31, 2000 which have been audited by
PricewaterhouseCoopers LLP fairly present the financial position of the
Transferor Portfolio and The Treasury Money Market Portfolio as of the dates
thereof and the respective results of operations and changes in net assets for
each of the periods indicated in accordance with GAAP.
(f) AUTHORITY RELATIVE TO THIS PLAN. The Transferor Trust, on behalf of
the Transferor Portfolio, has the power to enter into this Plan and to carry out
its obligations hereunder. The execution and delivery of this Plan and the
consummation of the transactions contemplated hereby have been duly authorized
by the Transferor Trust's Board of Trustees and no other proceedings by the
Transferor Trust other than those contemplated under this Plan are necessary to
authorize its officers to effectuate this Plan and the transactions contemplated
hereby. The Transferor Trust is not a party to or obligated under any provision
of its Declaration of Trust or By-laws, or under any indenture or contract
provision or any other commitment or obligation, or subject to any order or
decree, which would be violated by or which would prevent its execution and
performance of this Plan in accordance with its terms.
(g) LIABILITIES. There are no liabilities of the Transferor Portfolio,
whether actual or contingent and whether or not determined or determinable,
other than liabilities disclosed or provided for in the Transferor Trust's
Financial Statements with respect to the Transferor Portfolio and liabilities
incurred in the ordinary course of business subsequent to October 31, 2000 or
otherwise previously disclosed to the Transferor Trust with respect to the
Transferor Portfolio, none of which has been materially adverse to the business,
assets or results of operations of the Transferor Portfolio.
(h) NO MATERIAL ADVERSE CHANGE. Since October 31, 2000, there has been
no material adverse change in the financial condition, results of operations,
business, properties or assets of the Transferor Portfolio, other than those
occurring in the ordinary course of business (for these purposes, a decline in
net asset value and a decline in net assets due to redemptions do not constitute
a material adverse change).
(i) LITIGATION. There are no claims, actions, suits or proceedings
pending or, to the knowledge of the Transferor Trust, threatened which would
adversely affect the Transferor Trust or the Transferor Portfolio's assets or
business or which would prevent or hinder consummation of the transactions
contemplated hereby, there are no facts which would form the basis for the
institution of administrative proceedings against the Transferor Trust or the
Transferor Portfolio and, to the knowledge of the Transferor Trust, there are no
regulatory investigations of the Transferor Trust or the Transferor Portfolio,
pending or threatened, other than routine inspections and audits.
(j) CONTRACTS. The Transferor Trust, on behalf of the Transferor
Portfolio, is not subject to any contracts or other commitments (other than this
Plan) which will not be terminated with respect to the Transferor Portfolio
without liability to the Transferor Trust or the Transferor Portfolio as of or
prior to the Effective Time of the Reorganization.
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(k) TAXES. The federal income tax returns of the Transferor Trust with
respect to the Transferor Portfolio, and all other income tax returns required
to be filed by the Transferor Trust with respect to the Transferor Portfolio,
have been filed, and all taxes payable pursuant to such returns have been paid.
To the knowledge of the Transferor Trust, no such return is under audit and no
assessment has been asserted in respect of any such return. All federal and
other taxes owed by the Transferor Trust with respect to the Transferor
Portfolio have been paid so far as due. The Transferor Portfolio has elected to
qualify as a "regulated investment company" under Subchapter M of the Code, as
of and since its first taxable year, and shall continue to so qualify until the
Effective Time of the Reorganization.
(l) NO APPROVALS REQUIRED. Except for the Registration Statement (as
defined in Section 4(a) hereof) and the approval of the Transferor Portfolio's
shareholders referred to in Section 6(a) hereof, no consents, approvals,
authorizations, registrations or exemptions under federal or state laws are
necessary for the consummation by the Transferor Trust of the Reorganization,
except such as have been obtained as of the date hereof.
4. COVENANTS OF THE ACQUIRING TRUST
The Acquiring Trust covenants to the following:
(a) REGISTRATION STATEMENT. On behalf of the Acquiring Portfolio, the
Acquiring Trust shall file with the Commission a Registration Statement on Form
N-14 (the "Registration Statement") under the Securities Act relating to the
Acquiring Portfolio Shares issuable hereunder and the proxy statement of the
Transferor Portfolio relating to the meeting of the Transferor Portfolio's
shareholders referred to in Section 5(a) herein. At the time the Registration
Statement becomes effective, the Registration Statement (i) will comply in all
material respects with the provisions of the Securities Act and the rules and
regulations of the Commission thereunder (the "Regulations") and (ii) will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and at the time the Registration Statement becomes effective, at the
time of the Transferor Portfolio shareholders' meeting referred to in Section
5(a) hereof, and at the Effective Time of the Reorganization, the
prospectus/proxy statement (the "Prospectus") and statement of additional
information (the "Statement of Additional Information") included therein, as
amended or supplemented by any amendments or supplements filed by the Trust,
will not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) COOPERATION IN EFFECTING REORGANIZATION. The Acquiring Trust agrees
to use all reasonable efforts to effectuate the Reorganization, to continue in
operation thereafter, and to obtain any necessary regulatory approvals for the
Reorganization. The Acquiring Trust shall furnish such data and information
relating to the Acquiring Trust as shall be reasonably requested for inclusion
in the information to be furnished to the Transferor Portfolio shareholders in
connection with the meeting of the Transferor Portfolio's shareholders for the
purpose of acting upon this Plan and the transactions contemplated herein.
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(c) OPERATIONS IN THE ORDINARY COURSE. Except as otherwise contemplated
by this Plan, the Acquiring Trust shall conduct the business of the Acquiring
Portfolio in the ordinary course until the consummation of the Reorganization,
it being understood that such ordinary course of business will include the
declaration and payment of customary dividends and distributions.
5. COVENANTS OF THE TRANSFEROR TRUST
The Transferor Trust covenants to the following:
(a) MEETING OF THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. The Transferor
Trust shall call and hold a meeting of the shareholders of the Transferor
Portfolio for the purpose of acting upon this Plan and the transactions
contemplated herein.
(b) PORTFOLIO SECURITIES. With respect to the assets to be transferred
in accordance with Section 1(a), the Transferor Portfolio's assets shall consist
of all property and assets of any nature whatsoever, including, without
limitation, all cash, cash equivalents, securities, claims and receivables
(including dividend and interest receivables) owned, and any deferred or prepaid
expenses shown as an asset on the Transferor Trust's books maintained on behalf
of the Transferor Portfolio. At least five (5) business days prior to the
Exchange Date, the Transferor Portfolio will provide the Acquiring Trust, for
the benefit of the Acquiring Portfolio, with a list of its assets and a list of
its stated liabilities. The Transferor Portfolio shall have the right to sell
any of the securities or other assets shown on the list of assets prior to the
Exchange Date but will not, without the prior approval of the Acquiring Trust,
on behalf of the Acquiring Portfolio, acquire any additional securities other
than securities which the Acquiring Portfolio is permitted to purchase, pursuant
to its investment objective and policies or otherwise (taking into consideration
its own portfolio composition as of such date). In the event that the Transferor
Portfolio holds any investments that the Acquiring Portfolio would not be
permitted to hold, the Transferor Portfolio will dispose of such securities
prior to the Exchange Date to the extent practicable, to the extent permitted by
its investment objective and policies and to the extent that its shareholders
would not be materially affected in an adverse manner by such a disposition. In
addition, the Transferor Trust will prepare and deliver immediately prior to the
Effective Time of the Reorganization, a Statement of Assets and Liabilities of
the Transferor Portfolio, prepared in accordance with GAAP (each, a "Schedule").
All securities to be listed in the Schedule for the Transferor Portfolio as of
the Effective Time of the Reorganization will be owned by the Transferor
Portfolio free and clear of any liens, claims, charges, options and
encumbrances, except as indicated in such Schedule, and, except as so indicated,
none of such securities is or, after the Reorganization as contemplated hereby,
will be subject to any restrictions, legal or contractual, on the disposition
thereof (including restrictions as to the public offering or sale thereof under
the Securities Act) and, except as so indicated, all such securities are or will
be readily marketable.
(c) REGISTRATION STATEMENT. In connection with the preparation of the
Registration Statement, the Transferor Trust will cooperate with the Acquiring
Trust and will furnish to the Acquiring Trust the information relating to the
Transferor Portfolio required by the Securities Act and the Regulations to be
set forth in the Registration Statement (including the Prospectus and Statement
of Additional Information). At the time the Registration Statement becomes
A-9
effective, the Registration Statement, insofar as it relates to the Transferor
Portfolio, (i) will comply in all material respects with the provisions of the
Securities Act and the Regulations and (ii) will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and at the
time the Registration Statement becomes effective, at the time of the Transferor
Portfolio's shareholders' meeting referred to in Section 5(a) and at the
Effective Time of the Reorganization, the Prospectus and Statement of Additional
Information, as amended or supplemented by any amendments or supplements filed
by the Transferor Trust, insofar as they relate to the Transferor Portfolio,
will not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this subsection shall apply only to
statements in or omissions from the Registration Statement, Prospectus or
Statement of Additional Information made in reliance upon and in conformity with
information furnished by the Transferor Portfolio for use in the registration
statement, prospectus or statement of additional information as provided in this
Section 5(c).
(d) COOPERATION IN EFFECTING REORGANIZATION. The Transferor Trust
agrees to use all reasonable efforts to effectuate the Reorganization and to
obtain any necessary regulatory approvals for the Reorganization.
(e) OPERATIONS IN THE ORDINARY COURSE. Except as otherwise
contemplated by this Plan, the Transferor Trust shall conduct the business of
the Transferor Portfolio in the ordinary course until the consummation of the
Reorganization, it being understood that such ordinary course of business
will include the declaration and payment of customary dividends and
distributions.
(f) STATEMENT OF EARNINGS AND PROFITS. As promptly as practicable, but
in any case within 60 days after the Exchange Date, the Transferor Trust on
behalf of the Transferor Portfolio, shall prepare a statement of the earnings
and profits of the Transferor Portfolio for federal income tax purposes, and of
any capital loss carryovers and other items that the Acquiring Portfolio will
succeed to and take into account as a result of Section 381 of the Code.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRANSFEROR TRUST
The obligations of the Transferor Trust with respect to the
consummation of the Reorganization are subject to the satisfaction of the
following conditions:
(a) APPROVAL BY THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. This Plan and
the transactions contemplated by the Reorganization shall have been approved by
the requisite vote of the shares of the Transferor Portfolio entitled to vote on
the matter ("Transferor Shareholder Approval").
(b) COVENANTS, WARRANTIES AND REPRESENTATIONS. The Acquiring Trust
shall have complied with each of its covenants contained herein, each of the
representations and warranties contained herein shall be true in all material
respects as of the Effective Time of the Reorganization (except as otherwise
contemplated herein), and there shall have been no material
A-10
adverse change (as described in Section 2(i)) in the financial condition,
results of operations, business, properties or assets of the Acquiring
Portfolio since August 31, 2000.
(c) REGULATORY APPROVAL. The Registration Statement shall have been
declared effective by the Commission and no stop orders under the Securities Act
pertaining thereto shall have been issued, and all other approvals,
registrations, and exemptions under federal and state laws considered to be
necessary shall have been obtained (collectively, the "Regulatory Approvals").
(d) TAX OPINION. The Transferor Trust shall have received the opinion
of Simpson Thacher & Bartlett, dated on or before the Exchange Date, addressed
to and in form and substance satisfactory to the Transferor Trust, as to certain
of the federal income tax consequences under the Code of the Reorganization,
insofar as it relates to the Transferor Portfolio and the Acquiring Portfolio,
and to shareholders of each Transferor Portfolio (the "Tax Opinion"). For
purposes of rendering the Tax Opinion, Simpson Thacher & Bartlett may rely
exclusively and without independent verification, as to factual matters, upon
the statements made in this Plan, the Prospectus and Statement of Additional
Information, and upon such other written representations as the President or
Treasurer of the Transferor Trust will have verified as of the Effective Time of
the Reorganization. The Tax Opinion will be to the effect that, based on the
facts and assumptions stated therein, for federal income tax purposes: (i) the
Reorganization will constitute a reorganization within the meaning of section
368(a)(1) of the Code with respect to the Transferor Portfolio and the Acquiring
Portfolio; (ii) no gain or loss will be recognized by any of the Transferor
Portfolio or the Acquiring Portfolio upon the transfer of all the assets and
liabilities, if any, of the Transferor Portfolio to the Acquiring Portfolio
solely in exchange for shares of the Acquiring Portfolio or upon the
distribution of the shares of the Acquiring Portfolio to the holders of the
shares of the Transferor Portfolio solely in exchange for all of the shares of
the Transferor Portfolio; (iii) no gain or loss will be recognized by
shareholders of the Transferor Portfolio upon the exchange of shares of such
Transferor Portfolio solely for shares of the Acquiring Portfolio; (iv) the
holding period and tax basis of the shares of the Acquiring Portfolio received
by each holder of shares of the Transferor Portfolio pursuant to the
Reorganization will be the same as the holding period and tax basis of shares of
the Transferor Portfolio held by such holder immediately prior to the
Reorganization (provided the shares of the Transferor Portfolio were held as a
capital asset on the date of the Reorganization); and (v) the holding period and
tax basis of the assets of the Transferor Portfolio acquired by the Acquiring
Portfolio will be the same as the holding period and tax basis of those assets
to the Transferor Portfolio immediately prior to the Reorganization.
(e) CONCURRENT REORGANIZATION. The reorganization of each of
J.P.Morgan Institutional Treasury Money Market Fund and J.P.Morgan Treasury
Money Market Reserves Fund, each a series of the Transferor Trust, into the
Acquiring Portfolio shall have been consummated.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING TRUST
The obligations of the Acquiring Trust with respect to the consummation
of the Reorganization are subject to the satisfaction of the following
conditions:
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(a) APPROVAL BY THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. The
Transferor Shareholder Approval shall have been obtained.
(b) COVENANTS, WARRANTIES AND REPRESENTATIONS. The Transferor Trust
shall have complied with each of its covenants contained herein, each of the
representations and warranties contained herein shall be true in all material
respects as of the Effective Time of the Reorganization (except as otherwise
contemplated herein), and there shall have been no material adverse change (as
described in Section 3(h)) in the financial condition, results of operations,
business, properties or assets of the Transferor Portfolio since October 31,
2000.
(c) PORTFOLIO SECURITIES. All securities to be acquired by the
Acquiring Portfolio in the Reorganization shall have been approved for
acquisition by J.P. Morgan Fleming Asset Management (USA) Inc. ("JPMFAM"), in
its capacity as investment adviser to the Acquiring Portfolio, as consistent
with the investment policies of the Acquiring Portfolio.
(d) REGULATORY APPROVAL. The Regulatory Approvals shall have been
obtained.
(e) DISTRIBUTION OF INCOME AND GAINS. The Transferor Trust on
behalf of the Transferor Portfolio shall have distributed to the shareholders
of the Transferor Portfolio all of the Transferor Portfolio's investment
company taxable income (determined without regard to the deduction for
dividends paid) as defined in Section 852(b)(2) of the Code for its taxable
year ending on the Exchange Date and all of its net capital gain as such term
is used in Section 852(b)(3) of the Code, after reduction by any capital loss
carry forward, for its taxable year ending on the Exchange Date.
(f) TAX OPINION. The Acquiring Trust shall have received the Tax
Opinion.
(g) CONCURRENT REORGANIZATION. The reorganization of each of
J.P.Morgan Institutional Treasury Money Market Fund and J.P.Morgan Treasury
Money Market Reserves Fund, each a series of the Transferor Trust, into the
Acquiring Portfolio shall have been consummated.
8. AMENDMENTS; TERMINATIONS; NO SURVIVAL OF COVENANTS, WARRANTIES AND
REPRESENTATIONS
(a) AMENDMENTS. The parties hereto may, by agreement in writing
authorized by their respective Boards of Trustees amend this Plan at any time
before or after approval hereof by the shareholders of the Transferor Portfolio,
but after such approval, no amendment shall be made which substantially changes
the terms hereof.
(b) WAIVERS. At any time prior to the Effective Time of the
Reorganization, either the Transferor Trust or the Acquiring Trust may by
written instrument signed by it (i) waive any inaccuracies in the
representations and warranties made to it contained herein and (ii) waive
compliance with any of the covenants or conditions made for its benefit
contained herein, except that conditions set forth in Sections 6(c) and 7(d) may
not be waived.
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(c) TERMINATION BY THE TRANSFEROR TRUST. The Transferor Trust, on
behalf of the Transferor Portfolio, may terminate this Plan with respect to the
Transferor Portfolio at any time prior to the Effective Time of the
Reorganization by notice to the Acquiring Trust and JPMFAM if (i) a material
condition to the performance of the Transferor Trust hereunder or a material
covenant of the Acquiring Trust contained herein shall not be fulfilled on or
before the date specified for the fulfillment thereof or (ii) a material default
or material breach of this Plan shall be made by the Acquiring Trust. In
addition, this Plan may be terminated by the Transferor Trust at any time prior
to the Effective Time of the Reorganization, whether before or after approval of
this Plan by the shareholders of the Transferor Portfolio, without liability on
the part of any party hereto, its Trustees, officers or shareholders or J.P.
Morgan Investment Management Inc. ("JPMIM") on notice to the other parties in
the event that the Board of Trustees determines that proceeding with this Plan
is not in the best interests of the shareholders of the Transferor Portfolio.
(d) TERMINATION BY THE ACQUIRING TRUST. The Acquiring Trust, on behalf
of the Acquiring Portfolio, may terminate this Plan with respect to the
Acquiring Portfolio at any time prior to the Effective Time of the
Reorganization by notice to the Transferor Trust and JPMIM if (i) a material
condition to the performance of the Acquiring Trust hereunder or a material
covenant of the Transferor Trust contained herein shall not be fulfilled on or
before the date specified for the fulfillment thereof or (ii) a material default
or material breach of this Plan shall be made by the Transferor Trust. In
addition, this Plan may be terminated by the Acquiring Trust at any time prior
to the Effective Time of the Reorganization, whether before or after approval of
this Plan by the shareholders of the Transferor Portfolio, without liability on
the part of any party hereto, its Trustees, officers or shareholders or JPMIM on
notice to the other parties in the event that the Board of Trustees determines
that proceeding with this Plan is not in the best interests of the shareholders
of the Acquiring Portfolio.
(e) SURVIVAL. No representations, warranties or covenants in or
pursuant to this Plan, except for the provisions of Section 5(f) and Section 9
of this Plan, shall survive the Reorganization.
9. EXPENSES
The expenses of the Reorganization will be borne by J.P. Morgan Chase &
Co. ("JPMC"). Such expenses include, without limitation, (i) expenses incurred
in connection with the entering into and the carrying out of the provisions of
this Plan; (ii) expenses associated with the preparation and filing of the
Registration Statement; (iii) fees and expenses of preparing and filing such
forms as are necessary under any applicable state securities laws in connection
with the Reorganization; (iv) postage; (v) printing; (vi) accounting fees; (vii)
legal fees and (viii) solicitation costs relating to the Reorganization. In
addition, JPMC or an affiliate will waive fees payable to it or reimburse
expenses to the extent necessary such that the actual (post-waiver) total
expense ratios of the Select Class Shares and the Institutional Class Shares of
the Acquiring Portfolio are not higher than those set forth in the Registration
Statement for a period of three years after the Exchange Date.
A-13
10. NOTICES
Any notice, report, statement or demand required or permitted by any
provision of this Plan shall be in writing and shall be given by hand, certified
mail or by facsimile transmission, shall be deemed given when received and shall
be addressed to the parties hereto at their respective addresses listed below or
to such other persons or addresses as the relevant party shall designate as to
itself from time to time in writing delivered in like manner:
if to the Acquiring Trust (for itself or on behalf of the
Acquiring Portfolio):
1211 Avenue of the Americas, 41st Floor
New York, New York 10036
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Sarah E. Cogan, Esq.
if to the Transferor Trust (for itself or on behalf of the Transferor
Portfolio):
60 State Street
Suite 1300
Boston, Massachusetts 02109
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: John E. Baumgardner, Jr., Esq.
11. RELIANCE
All covenants and agreements made under this Plan shall be deemed to
have been material and relied upon by the Transferor Trust and the Acquiring
Trust notwithstanding any investigation made by such party or on its behalf.
12. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
(a) The section and paragraph headings contained in this Plan are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Plan.
(b) This Plan may be executed in any number of counterparts, each of
which shall be deemed an original.
A-14
(c) This Plan shall be governed by and construed in accordance with
the laws of The State of New York.
(d) This Plan shall bind and inure to the benefit of the Transferor
Trust, the Transferor Portfolio, the Acquiring Trust and the Acquiring Portfolio
and their respective successors and assigns, but no assignment or transfer
hereof or of any rights or obligations hereunder shall be made by any party
without the written consent of the other parties. Nothing herein expressed or
implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this Plan.
(e) The name "J.P. Morgan Institutional Funds" is the designation of
its Trustees under a Declaration of Trust dated November 4, 1992, as amended,
and all persons dealing with the Transferor Trust must look solely to the
Transferor Trust's property for the enforcement of any claims against the
Transferor Trust, as none of the Transferor Trustees, officers, agents or
shareholders assumes any personal liability for obligations entered into on
behalf of the Transferor Trust. No series of the Transferor Trust shall be
liable for claims against any other series of the Transferor Trust.
(f) The name "Mutual Fund Trust" is the designation of its Trustees
under a Declaration of Trust dated February 1, 1994, as amended, and all persons
dealing with the Acquiring Trust must look solely to the Acquiring Trust's
property for the enforcement of any claims against the Acquiring Trust, as none
of the Acquiring Trustees, officers, agents or shareholders assumes any personal
liability for obligations entered into on behalf of the Acquiring Trust. No
series of the Acquiring Trust shall be liable for claims against any other
series of the Acquiring Trust.
A-15
IN WITNESS WHEREOF, the undersigned have executed this Plan as of the
date first above written.
J.P. MORGAN INSTITUTIONAL FUNDS
on behalf of J.P.Morgan Institutional Service Treasury Money Market
Fund
By:
--------------------------------------------------
Name:
Title:
MUTUAL FUND TRUST
on behalf of JPMorgan Treasury Plus Money Market Fund
By:
--------------------------------------------------
Name:
Title:
Agreed and acknowledged with respect to Section 9:
J.P. MORGAN CHASE & CO.
By:
--------------------------------------------------
Name:
Title:
A-16
STATEMENT OF ADDITIONAL INFORMATION
(SPECIAL MEETING OF SHAREHOLDERS OF
J.P.MORGAN INSTITUTIONAL SERVICE TREASURY MONEY MARKET FUND,
A SERIES OF J.P. MORGAN INSTITUTIONAL FUNDS)
This Statement of Additional Information is not a prospectus but should
be read in conjunction with the Combined Prospectus/Proxy Statement dated May
12, 2001 for the Special Meeting of Shareholders of J.P. Morgan Institutional
Service Treasury Money Market Fund (the "Merging Fund"), a series of J.P. Morgan
Institutional Funds ("JPMIF"), to be held on July 3, 2001. Copies of the
Combined Prospectus/Proxy Statement may be obtained at no charge by calling the
Merging Fund at 1-800-766-7722
Unless otherwise indicated, capitalized terms used herein and not
otherwise defined have the same meanings as are given to them in the Combined
Prospectus/Proxy Statement.
Further information about the Surviving Fund and the Merging Fund is
contained in each of MFT's and JPMIF's Statements of Additional Information,
which are incorporated herein by reference.
The date of this Statement of Additional Information is May 12, 2001.
1
GENERAL INFORMATION
The Shareholders of the Merging Fund are being asked to consider and
vote on two proposals.
With respect to an Agreement and Plan of Reorganization (the
"Reorganization Plan") dated as of __________, 2001 by and among JPMIF, on
behalf of the Merging Fund, MFT, on behalf of the Surviving Fund, and JPMC, and
the transactions contemplated thereby, the Reorganization Plan contemplates the
transfer of all of the assets and liabilities of the Merging Fund to the
Surviving Fund in exchange for shares issued by MFT in the Surviving Fund that
will have an aggregate net asset value equal to the aggregate net asset value of
the shares of the Merging Fund that are outstanding immediately before the
Effective Time of the Reorganization.
Following the exchange, the Merging Fund will make a liquidating
distribution of the Surviving Fund shares to its Shareholders, so that a holder
of shares in the Merging Fund will receive Premier Class shares of the Surviving
of equal value, plus the right to receive any unpaid dividends and distributions
that were declared before the Effective Time of the Reorganization.
At the Meeting, shareholders will also be asked to consider and vote
upon the election of Trustees of JPMIF.
A Special Meeting of Shareholders of the Merging Fund to consider the
proposals and the related transaction will be held at the offices of J.P. Morgan
Chase & Co., 1211 Avenue of the Americas, 41st Floor, New York, NY, on
__________, 2001 at 9:00 a.m., Eastern time. For further information about the
transaction, see the Combined Prospectus/Proxy Statement.
2
FINANCIAL STATEMENTS
The audited financial highlights, financial statements and notes
thereto of the Merging Fund and the Surviving Fund contained in their Annual
Reports dated October 31, 2000 and August 31, 2000, respectively, are
incorporated by reference into this Statement of Additional Information related
to this Combined Prospectus/Proxy Statement. The audited financial statements,
notes thereto and supplementary data of the Master Portfolio contained in its
Annual Report dated October 31, 2000 are incorporated by reference into this
Statement of Additional Information related to this Combined Prospectus/Proxy
Statement. The financial highlights, financial statements, notes thereto and
supplementary data, as applicable, which appear in each of the Merging Fund's,
the Master Portfolio's and the Surviving Fund's Annual Report have been audited
by PricewaterhouseCoopers LLP, whose reports thereon also appear in such Annual
Reports and are also incorporated herein by reference. The financial highlights,
financial statements, notes thereto and supplementary data, as applicable, for
the Merging Fund and the Master Portfolio for the fiscal year ended October 31,
2000 and for the Surviving Fund for the fiscal year ended August 31, 2000 have
been incorporated herein by reference in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on their authority as
experts in auditing and accounting.
The unaudited financial highlights, financial statements and notes
thereto of the Surviving Fund for the fiscal period ended February 28, 2001, are
incorporated by reference herein and into the Statement of Additional
Information related to this Combined Prospectus/Proxy Statement.
3
THE TREASURY MONEY MARKET PORTFOLIO/
THE JPMORGAN TREASURY PLUS MONEY MARKET FUND
PROFORMA COMBINED PORTFOLIO OF INVESTMENTS
FOR THE YEAR ENDED FEBRUARY 28, 2001
(AMOUNTS IN THOUSANDS)
PRINCIPAL AMOUNT
- ---------------------------------------------------
PRO FORMA
COMBINED
THE JPMORGAN THE JPMORGAN
TREASURY PLUS TREASURY TREASURY
MONEY MARKET MONEY MARKET PRO FORMA PLUS MONEY
FUND PORTFOLIO ADJUSTMENT MARKET FUND
- --------------------------------------------------- --------------------------------
MONEY MARKET INSTRUMENTS 100.35%
--------------------------------
U.S. TREASURY SECURITIES 33.13%
U.S Treasury Bills,
- 100,000 - 100,000 4.83%, 04/26/01
200,000 200,000 4.94%, 03/29/01
100,000 100,000 4.95%, 04/05/01
100,000 100,000 4.95%, 04/19/01
100,000 100,000 4.97%, 05/03/01
200,000 200,000 4.98%, 05/17/01
100,000 100,000 4.99%, 04/19/01
100,000 100,000 4.99%, 05/10/01
100,000 100,000 5.08%, 04/12/01
250,000 250,000 5.11%, 04/12/01
U.S. Treasury Notes,
25,000 25,000 4.88%, 3/31/01
40,000 40,000 5.63%, 5/15/01
35,000 35,000 6.63%, 7/31/01
1,250,000 200,000 1,450,000 TOTAL U.S. TREASURY SECURITIES
REPURCHASE AGREEMENTS 67.22%
Bear Stearns, 5.38%, due
03/01/01 (Dated 02/28/01,
Proceeds $250,037, Secured
by USTR, $208,360, various
rates, due 08/15/02 through
02/15/25,
250,000 250,000 Market Value $255,859)
Credit Suisse First Boston, Tri
Party, 5.38%, due 03/01/01
(Dated 2/28/01, Proceeds
$215,032, Secured by USTR,
$218,063, various rates, due
04/30/01 through 05/15/08;
215,000 215,000 Market Value $219,513)
Deutsche Morgan Grenfel, Tri
Party, 5.34%, due 03/01/01,
(Dated 2/28/01, Proceeds
$144,907, Secured by USTR,
$205,950, various rates, due
06/30/01 through 08/15/25;
144,886 144,886 Market Value $146,930)
Goldman Sachs & Co., Tri
Party, 5.35%, due 03/01/01
(Dated 2/28/01, Proceeds
$240,036, Secured by USTR,
$213,091, various rates, due
11/15/07 through 05/15/20;
240,000 240,000 Market Value $241,153)
Goldman Sachs & Co., 5.10%,
due 03/01/01 Dated 02/28/01,
Proceeds $57,842, Secured by
USTR, $50,311, various rates,
due 05/15/06 through 02/15/29,
57,834 57,834 Market Value $58,991)
Goldman Sachs & Co., 5.20%,
due 03/01/01 (Dated 02/28/01,
Proceeds $175,025, Secured by
USTR, $152,235, various rates,
due 05/15/06 through 02/15/29,
175,000 175,000 Market Value $178,500)
MARKET VALUE
-------------------------------------------------------
PRO FORMA
COMBINED
JPMORGAN
JPMORGAN THE TREASURY
TREASURY PLUS TREASURY PLUS
MONEY MARKET MONEY MARKET PRO FORMA MONEY MARKET
FUND PORTFOLIO ADJUSTMENT FUND
-------------------------------- -------------------------------------------------------
MONEY MARKET INSTRUMENTS 100.35%
--------------------------------
U.S. TREASURY SECURITIES 33.13%
U.S Treasury Bills,
4.83%, 04/26/01 $- $99,224 $99,224
4.94%, 03/29/01 199,236 199,236
4.95%, 04/05/01 99,522 99,522
4.95%, 04/19/01 99,327 99,327
4.97%, 05/03/01 99,138 99,138
4.98%, 05/17/01 197,895 197,895
4.99%, 04/19/01 99,328 99,328
4.99%, 05/10/01 99,041 99,041
5.08%, 04/12/01 99,413 99,413
5.11%, 04/12/01 248,532 248,532
U.S. Treasury Notes, -
4.88%, 3/31/01 24,965 24,965
5.63%, 5/15/01 39,934 39,934
6.63%, 7/31/01 35,143 35,143
-----------------------------------------------------
-
TOTAL U.S. TREASURY SECURITIES 1,241,432 199,266 1,440,698
REPURCHASE AGREEMENTS 67.22%
Bear Stearns, 5.38%, due
03/01/01 (Dated 02/28/01,
Proceeds $250,037, Secured
by USTR, $208,360, various
rates, due 08/15/02 through
02/15/25,
Market Value $255,859) 250,000 250,000
Credit Suisse First Boston, Tri
Party, 5.38%, due 03/01/01
(Dated 2/28/01, Proceeds
$215,032, Secured by USTR,
$218,063, various rates, due
04/30/01 through 05/15/08;
Market Value $219,513) 215,000 215,000
Deutsche Morgan Grenfel, Tri
Party, 5.34%, due 03/01/01,
(Dated 2/28/01, Proceeds
$144,907, Secured by USTR,
$205,950, various rates, due
06/30/01 through 08/15/25;
Market Value $146,930) 144,886 144,886
Goldman Sachs & Co., Tri
Party, 5.35%, due 03/01/01
(Dated 2/28/01, Proceeds
$240,036, Secured by USTR,
$213,091, various rates, due
11/15/07 through 05/15/20;
Market Value $241,153) 240,000 240,000
Goldman Sachs & Co., 5.10%,
due 03/01/01 Dated 02/28/01,
Proceeds $57,842, Secured by
USTR, $50,311, various rates,
due 05/15/06 through 02/15/29,
Market Value $58,991) 57,834 57,834
Goldman Sachs & Co., 5.20%,
due 03/01/01 (Dated 02/28/01,
Proceeds $175,025, Secured by
USTR, $152,235, various rates,
due 05/15/06 through 02/15/29,
Market Value $178,500) 175,000 175,000
See Notes to Pro Forma Financial Statements.
4
Goldman Sachs & Co., 5.35%, due
03/01/01 (Dated 02/28/01,
Proceeds $200,030, Secured by
USTR, $173,983, various rates,
due 05/15/06 through 02/15/29,
200,000 200,000 Market Value $204,000)
Greenwich Capital Markets,
Inc., Tri Party, 5.37%, due
03/01/01 (Dated 2/28/01,
Proceeds $240,036, Secured by
USTR, $231,671, various rates,
due 06/30/01 through 07/15/02;
240,000 240,000 Market Value $243,095)
Greenwich Capital Markets,
Inc., 5.37%, due 03/01/01
(Dated 02/28/01, Proceeds
$250,037, Secured by
USTR,$211,607, various rates,
due 11/15/01 through 08/15/29,
250,000 250,000 Market Value $254,660)
Greenwich Capital Markets,
Inc., 5.45%, due 03/06/01
(Dated 02/28/01, Proceeds
$250,227, Secured by U.S.
Government Agency
Obligations, $316,639, various
rates, due 02/15/07 through
02/15/31,
250,000 250,000 Market Value $255,003)
Merrill Lynch & Co., Inc., Tri
Party, 5.37%, due 03/01/01,
(Dated 2/28/01, Proceeds
$255,038, Secured by USTR,
$268,503, various rates, due
05/15/01 through 11/15/20;
255,000 255,000 Market Value $259,517)
Merrill Lynch & Co., Inc.,
5.37%, due 03/01/01 (Dated
02/28/01, Proceeds $400,060,
Secured by USTR, $339,469,
various rates, due 06/30/01
through 05/15/30,
400,000 400,000 Market Value $406,655)
Westdeutsche Landesbank, Tri
Party, 5.38%, due 03/01/01,
(Dated 2/28/01, Proceeds
$245,037, Secured by USTR,
$215,680, various rates, due
08/15/03 through 08/15/29;
245,000 245,000 Market Value $247,765)
1,582,834 1,339,886 922,720 TOTAL REPURCHASE AGREEMENTS
- --------------------------------------------------------------------------------------------
2,832,834 1,539,886 - 372,720 TOTAL INVESTMENTS 100.35%
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
TOTAL COST
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
TOTAL NET ASSETS
- --------------------------------------------------------------------------------------------
Goldman Sachs & Co., 5.35%, due
03/01/01 (Dated 02/28/01,
Proceeds $200,030, Secured by
USTR, $173,983, various rates,
due 05/15/06 through 02/15/29,
Market Value $204,000) 200,000 200,000
Greenwich Capital Markets,
Inc., Tri Party, 5.37%, due
03/01/01 (Dated 2/28/01,
Proceeds $240,036, Secured by
USTR, $231,671, various rates,
due 06/30/01 through 07/15/02;
Market Value $243,095) 240,000 240,000
Greenwich Capital Markets,
Inc., 5.37%, due 03/01/01
(Dated 02/28/01, Proceeds
$250,037, Secured by
USTR,$211,607, various rates,
due 11/15/01 through 08/15/29,
Market Value $254,660) 250,000 250,000
Greenwich Capital Markets,
Inc., 5.45%, due 03/06/01
(Dated 02/28/01, Proceeds
$250,227, Secured by U.S.
Government Agency
Obligations, $316,639, various
rates, due 02/15/07 through
02/15/31,
Market Value $255,003) 250,000 250,000
Merrill Lynch & Co., Inc., Tri
Party, 5.37%, due 03/01/01,
(Dated 2/28/01, Proceeds
$255,038, Secured by USTR,
$268,503, various rates, due
05/15/01 through 11/15/20;
Market Value $259,517) 255,000 255,000
Merrill Lynch & Co., Inc.,
5.37%, due 03/01/01 (Dated
02/28/01, Proceeds $400,060,
Secured by USTR, $339,469,
various rates, due 06/30/01
through 05/15/30,
Market Value $406,655) 400,000 400,000
Westdeutsche Landesbank, Tri
Party, 5.38%, due 03/01/01,
(Dated 2/28/01, Proceeds
$245,037, Secured by USTR,
$215,680, various rates, due
08/15/03 through 08/15/29;
Market Value $247,765) 245,000 245,000
TOTAL REPURCHASE AGREEMENTS 1,582,834 1,339,886 2,922,720
- ------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS 100.35% $2,824,266 $1,539,152 $ - $4,363,418
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
TOTAL COST $2,824,266 $1,539,152 $ - $4,363,418
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $2,813,515 $1,540,440 $ - $4,348,079
- ------------------------------------------------------------------------------------------------
USTR - United States Treasury Notes, Bonds and Bills
See Notes to Pro Forma Financial Statements.
5
J.P. MORGAN INSTITUTIONAL SERVICE TREASURY MONEY MARKET FUND /
J.P. MORGAN INSTITUTIONAL TREASURY MONEY MARKET FUND /
J.P. MORGAN TREASURY MONEY MARKET RESERVES FUND /
THE TREASURY MONEY MARKET PORTFOLIO /
JPMORGAN TREASURY PLUS MONEY MARKET FUND
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
AS OF FEBRUARY 28, 2001 (UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
J.P. MORGAN J.P. MORGAN J.P. MORGAN THE TREASURY
INSTITUTIONAL INSTITUTIONAL TREASURY MONEY MARKET
TREASURY SERVICE MONEY MARKET PORTFOLIO
MONEY MARKET TREASURY RESERVES FUND
FUND MONEY MARKET
FUND
ASSETS:
Investment securities, at Value $ 538,786 $ 474,954 $ 526,700 $ 1,539,152
Deferred organization expenses 3 3 - -
Other assets - 1 1 31
Receivables:
Interest - - - 1,553
Expense reimbursement 86 71 90 -
------------ --------------- ---------------- ----------------
Total Assets 538,875 $ 475,029 526,791 1,540,736
------------ --------------- ---------------- ----------------
LIABILITIES:
Payables:
Dividends 1,659 1,785 2,109 -
Custodian - - - 35
Accrued liabilities:
Investment advisory fees - - - 188
Administration fees 7 7 11 26
Shareholder servicing fees 31 18 22 -
Distribution fees - - - -
Custody fees - - - 14
Service organization fees - 88 109 -
Other 28 45 212 33
------------ --------------- ---------------- ----------------
Total Liabilities 1,725 1,943 2,463 296
------------ --------------- ---------------- ----------------
NET ASSETS:
Paid in capital 537,241 473,244 524,371
Distributions in excess of net investment income (1) (2) (3)
Accumulated net realized loss on investment transactions (90) (156) (40)
------------ --------------- ---------------- ----------------
Net Assets $ 537,150 $ 473,086 $ 524,328 $ 1,540,440
============ =============== ================ ================
Shares of beneficial interest outstanding 537,242 473,243 524,371
Shares outstanding
Vista (Renamed Morgan)
Premier
Institutional (Renamed Agency)
Net Assets Value Per Share $ 1.00 $ 1.00 $ 1.00
Pro Forma with Concurrent Reorganization
JPMorgan Treasury Plus Money Market Fund
Shares Outstanding
Morgan
Premier
Agency
Reserves
Institutional
Net Asset Value Per Share
Morgan
Premier
Institutional
Reserves
Agency
------------ --------------- ---------------- ----------------
Cost of investments $ - $ - $ - $ 1,539,152
============ =============== ================ ================
PRO FORMA
JPMORGAN PRO FORMA COMBINED
TREASURY PLUS ADJUSTMENTS JPMORGAN TREASURY
MONEY MARKET PLUS MONEY
FUND MARKET FUND
ASSETS:
Investment securities, at Value $ 2,824,266 $ (1,540,440) (a) $ 4,363,418
Deferred organization expenses - (6) (d) -
Other assets 17 - 50
Receivables: -
Interest 273 - 1,826
Expense reimbursement - 6 253
--------------- --------------- -------------
Total Assets 2,824,556 (1,540,440) 4,365,547
--------------- --------------- -------------
LIABILITIES:
Payables:
Dividends 9,671 - 15,224
Custodian - - 35
Accrued liabilities:
Investment advisory fees 198 - 386
Administration fees 119 - 170
Shareholder servicing fees 379 - 450
Distribution fees 105 - 105
Custody fees 27 - 41
Service organization fees - - 197
Other 542 - 860
---------------------------------- -------------
Total Liabilities 11,041 - 17,468
---------------------------------- -------------
NET ASSETS:
Paid in capital 2,813,618 4,348,474
Distributions in excess of net investment income (59) (65)
Accumulated net realized loss on investment transactions (44) (330)
---------------------------------- -------------
Net Assets $ 2,813,515 $ (1,540,440) 4,348,079
================================== =============
Shares of beneficial interest outstanding (1,534,856) (b) -
Shares outstanding
Vista (Renamed Morgan) 1,391,162 (1,391,162) (c) -
Premier 347,882 (347,882) (c) -
Institutional (Renamed Agency) 1,074,655 (1,074,655) (c) -
Net Assets Value Per Share $ 1.00 *
Pro Forma with Concurrent Reorganization
JPMorgan Treasury Plus Money Market Fund
Shares Outstanding
Morgan 1,391,162 (e) 1,391,162
Premier 821,125 (e) 821,125
Agency 1,074,655 (e) 1,074,655
Reserves 524,371 (e) 524,371
See Notes to Pro Forma Financial Statements.
6
Institutional 537,242 (e) 537,242
Net Asset Value Per Share
Morgan $ 1.00
Premier $ 1.00
Institutional $ 1.00
Reserves $ 1.00
Agency $ 1.00
---------------------------------- -------------
Cost of investments $ 2,824,266 $ - $ 4,363,418
================================== =============
(a) Reallocation of investments from the feeder funds to the master portfolio.
(b) Reallocation of the feeder fund's beneficial interest to Morgan, Premier,
Institutional, Reserves and Agency Shares due to the Concurrent
Reorganization.
(c) Reallocation of shares outstanding to Reserves, Morgan, Premier,
Institutional, and Agency Share due to the Concurrent Reorganization.
(d) Write-off of deferred organization expenses of the portfolio.
(e) Reflects the additional number of shares outstanding due to the Concurrent
Reorganization.
* All classes
7
J.P. MORGAN INSTITUTIONAL SERVICE TREASURY MONEY MARKET FUND /
J.P. MORGAN INSTITUTIONAL TREASURY MONEY MARKET FUND /
J.P. MORGAN TREASURY MONEY MARKET RESERVES FUND /
THE TREASURY MONEY MARKET PORTFOLIO /
JPMORGAN TREASURY PLUS MONEY MARKET FUND
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED FEBRUARY 28, 2001 (UNAUDITED)
(AMOUNTS IN THOUSANDS)
J.P. MORGAN J.P. MORGAN J.P. MORGAN
INSTITUTIONAL INSTITUTIONAL TREASURY MONEY THE TREASURY
TREASURY MONEY SERVICE TREASURY MARKET RESERVES MONEY MARKET
MARKET FUND MONEY MARKET FUND FUND PORTFOLIO
INCOME:
Interest Income $ 18,826 $ 27,475 $ 23,109 $ 69,410
Allocated Portfolio Expenses (606) (888) (737) -
--------------------------------------------------------------------------
Investment Income 18,220 26,587 22,372 69,410
--------------------------------------------------------------------------
EXPENSES:
Shareholder Servicing Fees 303 222 764 -
Investment Advisory Fees - - - 2,099
Administration Service Fees 72 107 87 266
Distribution Fees/Service
Organization Fees - 1,108 1,257 -
Registration Expenses 10 78 168 -
Custodian Fees - - - 106
Transfer Agent Fees 17 17 21 -
Professional Fees 12 13 11 41
Trustees' Fees and Expenses 4 6 1 13
Financial and Fund Accounting
Services Fees 20 20 20 -
Printing and Postage 6 4 10 -
Fund Services Fees 4 7 5 16
Administration Fees 3 5 5 7
Amortization of Organizational
Expenses 2 2 - -
Other 12 18 11 13
--------------------------------------------------------------------------
Total Expenses 465 1,607 2,360 2,561
--------------------------------------------------------------------------
Less amounts waived - - - -
Less earnings credits - - - -
Less Reimbursement of Expenses 464 501 522 330
--------------------------------------------------------------------------
Net Expenses 1 1,106 1,838 2,231
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Net Investment Income 18,219 25,481 20,534 67,179
--------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net Realized Gain (Loss) on Investments (49) (74) (26) (149)
Net Change in Net Unrealized Appreciation
(Depreciation) on Investments
--------------------------------------------------------------------------
Net (Decrease) Increase in Net Assets
From Operations $ 18,170 $ 25,407 $ 20,508 $ 67,030
==========================================================================
PRO FORMA
COMBINED
JPMORGAN JPMORGAN TREASURY
TREASURY PLUS PRO FORMA PLUS MONEY
MONEY MARKET FUND ADJUSTMENTS MARKET FUND
INCOME:
Interest Income $ 159,318 $ (69,410)(c) $ 228,728
Allocated Portfolio Expenses - 2,231 (b) -
--------------------------------------- ----------------------
Investment Income 159,318 (67,179) 228,728
--------------------------------------- ----------------------
EXPENSES:
Shareholder Servicing Fees 6,362 1,609 (a) 9,260
Investment Advisory Fees 2,547 (978) (a) 3,668
Administration Service Fees 2,547 590 (a) 3,669
Distribution Fees/Service
Organization Fees 1,364 (1,444) (a) 2,285
Registration Expenses 647 903
Custodian Fees 249 188 (f) 543
Transfer Agent Fees 197 252
Professional Fees 82 (34) (g) 125
Trustees' Fees and Expenses 126 150
Financial and Fund Accounting
Services Fees - (57) (f) 3
Printing and Postage 27 (10) (g) 37
Fund Services Fees - 32
Administration Fees - 20
Amortization of Organizational
Expenses - (4) (e) -
Other 190 244
--------------------------------------- ----------------------
Total Expenses 14,338 (140) 21,191
--------------------------------------- ----------------------
Less amounts waived 2,672 (140) (a) 2,532
Less earnings credits 119 - 119
Less Reimbursement of Expenses - - 1,817
--------------------------------------- ----------------------
Net Expenses 11,547 - 16,723
--------------------------------------- ----------------------
--------------------------------------- ----------------------
Net Investment Income 147,771 (67,179) 212,005
--------------------------------------- ----------------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net Realized Gain (Loss) on Investments (97) 149 (d) (246)
Net Change in Net Unrealized Appreciation
(depreciation) on Investments
--------------------------------------- ----------------------
Net (Decrease) Increase in Net Assets
From Operations $ 147,674 $ (67,030) $ 211,759
======================================= ======================
(a) Reflects adjustments to investment advisory fee,
administrative fees and shareholder servicing fees
and/or related waivers based on the surviving Fund's
revised fee schedule.
(b) Reflects the elimination of master portfolio expenses
which have been disclosed under feeder expenses.
(c) Reallocation of investments income to feeder funds.
(d) Reallocation of realized and unrealized loss to feeder
funds.
(e) Reflect write off of deferred organization expense.
(f) Reclassification of fund accounting fees into the new
combined custody fees.
(g) Reduction reflects expected benefits from combined
operations.
See Notes to Pro Forma Financial Statements.
8
J.P. MORGAN INSTITUTIONAL SERVICE TREASURY MONEY MARKET FUND/JPMORGAN TREASURY
PLUS MONEY MARKET FUND
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF COMBINATION
The Pro Forma Combining Statement of Assets and
Liabilities, Statement of Operations and Schedule of Investments ("Pro Forma
Statements") reflect the accounts of The Treasury Money Market Portfolio
("Master Portfolio"), J.P. Morgan Institutional Tresury Money Market Fund
("Institutional Fund") J.P. Morgan Institutional Service Treasury Money
Market Fund ("Institutional Service Fund") and J.P. Morgan Treasury Money
Market Reserves Fund ("Treasury Money Market Reserves Fund"), (collectively
the "feeder funds" of the Master Portfolio) and JPMorgan Treasury Plus Money
Market Fund ("JPTPMF") as if the proposed Concurrent Reorganization occurred
as of and for the twelve months ended February 28, 2001.
Under the Concurrent Reorganization, the Pro Forma
Statements give effect to the proposed transfer of all assets and liabilities
of the Master Portfolio and the feeder funds in exchange for shares in
JPTPMF. The Pro Forma Statements should be read in conjunction with the
historical financial statements of each Fund, which have been incorporated by
reference in their respective Statements of Additional Information.
2. SHARES OF BENEFICIAL INTEREST:
Immediately prior to the Concurrent Reorganization, JPTPMF
would commence offering Reserve Shares and Institutional Shares. The net asset
value per share for the Reserve and Institutional Shares at the commencement of
offering would be identical to the closing net asset value per share for the
Premier Shares immediately prior to Concurrent Reorganization.
Under the Concurrent Reorganization, the existing shares of
the Treasury Money Market Reserves Fund would be renamed Reserves Shares, the
Institutional Fund would be renamed Institutional shares and the
Institutional Service Fund would be renamed Premier shares. The net asset
values per share for the Reserves, Institutional and Premier Shares at the
commencement of offering would be identical to the closing net asset value
per share for the Premier Class Shares immediately prior to the organization.
In addition, the Chase Vista Class shares would be renamed the Investor Class
and the Chase Institutional Class shares would be renamed Agency Shares.
Under the proposed Concurrent Reorganization, each
shareholder of Treasury Money Market Reserves Fund, Institutional Service
Fund and the Institutional Fund would receive shares of JPTPMF with a value
equal to their holdings in their respective funds. Holders of the Treasury
Money Market Reserves Fund will receive Reserves Shares in JPTPMF, holders of
the Institutional Service Fund will receive Premier Shares and holders of
Institutional Fund will receive Institutional Shares. Therefore, as a result
of the proposed Concurrent Reorganization, current shareholders of Treasury
Money Market Reserves, Institutional Service Fund and Institutional Fund will
become shareholders of JPTPMF.
7
The Pro Forma net asset value per share assumes the
issuance of additional shares of JPMTPMMF which would have been issued on
February 28, 2001 in connection with the proposed reorganization. The amount
of additional shares assumed to be issued was calculated based on the
February 28, 2001 net assets of Treasury Money Market Reserves Fund,
Institutional Service and Institutional Fund and the net asset value per
share of JPTPMF - Premier Class.
JPMORGAN TREASURY PLUS MONEY MARKET FUND WITH CONCURRENT
REORGANIZATION
Premier
Class Shares
Increase in Shares 473,243
Issued
Net Assets 2/28/01 473,086
Pro Forma Net Asset 1.00
Value 2/28/01
3. PRO FORMA OPERATIONS:
The Pro Forma Statement of Operations assumes similar rates of
gross investment income for the investments of each Fund. Accordingly, the
combined gross investment income is equal to the sum of each Fund's gross
investment income. Certain expenses have been adjusted to reflect the expected
expenses of the combined entity. The pro forma investment advisory,
administration, shareholder servicing and distribution fees of the combined Fund
and/or the related waivers are based on the fee schedule in effect for the
Surviving Fund at the combined level of average net assets for the twelve months
ended February 28, 2001.
8
FORM N-14
PART C - OTHER INFORMATION
Item 15. Indemnification.
---------------
Reference is hereby made to Article V of the Registrant's Declaration
of Trust.
The Trustees and officers of the Registrant and the personnel of the
Registrant's investment adviser, administrator and distributor are insured under
an errors and omissions liability insurance policy. The Registrant and its
officers are also insured under the fidelity bond required by Rule 17g-1 under
the Investment Company Act of 1940.
Under the terms of the Registrant's Declaration of Trust, the
Registrant may indemnify any person who was or is a Trustee, officer or employee
of the Registrant to the maximum extent permitted by law; provided, however,
that any such indemnification (unless ordered by a court) shall be made by the
Registrant only as authorized in the specific case upon a determination that
indemnification of such persons is proper in the circumstances. Such
determination shall be made (i) by the Trustees, by a majority vote of a quorum
which consists of Trustees who are neither described in Section 2(a)(19) of the
Investment Company Act of 1940 nor parties to the proceeding, or (ii) if the
required quorum is not obtainable or, if a quorum of such Trustees so directs,
by independent legal counsel in a written opinion. No indemnification will be
provided by the Registrant to any Trustee or officer of the Registrant for any
liability to the Registrant or shareholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of duty.
Insofar as the conditional advancing of indemnification monies for
actions based upon the Investment Company Act of 1940 may be concerned, such
payments will be made only on the following conditions: (i) the advances must be
limited to amounts used, or to be used, for the preparation or presentation of a
defense to the action, including costs connected with the preparation of a
settlement; (ii) advances may be made only upon receipt of a written promise by,
or on behalf of, the recipient to repay that amount of the advance which exceeds
that amount to which it is ultimately determined that he is entitled to receive
from the Registrant by reason of indemnification; and (iii) (a) such promise
must be secured by a surety bond, other suitable insurance or an equivalent form
of security which assures that any repayments may be obtained by the Registrant
without delay or litigation, which bond, insurance or other form of security
must be provided by the recipient of the advance, or (b) a majority of a quorum
of the Registrant's disinterested, non-party Trustees, or an independent legal
counsel in a written opinion, shall determine, based upon a review of readily
available facts, that the recipient of the advance ultimately will be found
entitled to indemnification.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Part C-1
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 a trustee, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such trustee, officer or controlling
person in connection with the securities 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.
Item 16. Exhibits.
Declaration of Trust.
1 Declaration of Trust, as amended. (1)
2 By-laws. (1)
3 None.
4 Agreement and Plan of Reorganization filed herewith as Appendix A to
the Combined Prospectus/Proxy Statement.
5 None.
6 Form of Investment Advisory Agreement.(6)
7 Distribution and Sub-Administration Agreement dated August 21,
1995.(6)
8(a) Retirement Plan for Eligible Trustees.(6)
8(b) Deferred Compensation Plan for Eligible Trustees.(6)
9 Custodian Agreement. (1)
10(a) Rule 12b-1 Distribution Plan of Mutual Funds including Selected
Dealer Agreement and Shareholder Service Agreement. (1) and (3)
10(b) Rule 12b-1 Distribution Plan - Class B Shares (including forms of
Selected Dealer Agreement and Shareholder Servicing Agreement).(6)
10(c) Form of Rule 12b-1 Distribution Plan - Class C Shares (including
forms of Shareholder Servicing Agreements).(12)
10(d) Form of Rule 18f-3 Multi-Class Plan.(12)
11 Opinion and Consent of Nixon Peabody LLP as to the Legality of Shares
to be filed by Amendment.
Part C-2
12 Opinion and Consent of Simpson Thacher & Bartlett as to Tax
Consequences to be filed by Amendment.
13(a) Transfer Agency Agreement. (1)
13(b) Form of Shareholder Servicing Agreement. (6)
13(c) Form of Administration Agreement.(6)
13(d) Form of Administration Agreement (to be filed by Amendment).
13(e) Form of Sub-Administration Agreement (to be filed by Amendment).
14 Consent of PricewaterhouseCoopers LLP.
15 None.
16(a) Powers of Attorney for: Fergus Reid, III, H. Richard Vartabedian,
William J. Armstrong, John R.H. Blum, Stuart W. Cragin, Jr.,
Roland R. Eppley, Jr., Joseph J. Harkins, W.D. MacCallan,
W. Perry Neff, Richard E. Ten Haken, Irving L. Thode.
16(b) Powers of Attorney for: Sarah E. Jones and Leonard M. Spalding,
Jr.
17(a) Form of Proxy Card.
17(b) Prospectus for the Surviving Fund to be filed by Amendment.
17(c) Prospectus for the Merging Fund.
17(d) Statement of Additional Information for the Surviving Fund to be
filed by Amendment.
17(e) Statement of Additional Information for the Merging Fund.
17(f) Annual Report of the Surviving Fund dated August 31, 2000.
17(g) Semi-Annual Report of the Surviving Fund, dated February 28,
2001. (To be filed by Amendment)
17(h) Annual Report of the Merging Fund (including the Annual Report of
the Master Portfolio) dated October 31, 2000.
- ----------
(1) Filed as an Exhibit to the Registration Statement on Form N-1A of the
Registrant (File No. 33-75250) as filed with the Securities and Exchange
Commission on February 14, 1994.
Part C-3
(2) Filed as an Exhibit to Post-Effective Amendment No. 1 to the Registration
Statement on Form N-1A of the Registrant (File No. 33-75250) as filed with
the Securities and Exchange Commission on August 29, 1994.
(3) Filed as an Exhibit to Post-Effective Amendment No. 2 to the Registration
Statement on Form N-1A of the Registrant (File No. 33-75250) as filed with
the Securities and Exchange Commission on October 28, 1994.
(4) Filed as an Exhibit to Post-Effective Amendment No. 3 to the Registration
Statement on Form N-1A of the Registrant (File No. 33- 75250) as filed with
the Securities and Exchange Commission on October 31, 1995.
(5) Filed as an Exhibit to Post-Effective Amendment No. 4 to the Registration
Statement on Form N-1A of the Registrant as filed with the Securities and
Exchange Commission on December 28, 1995.
(6) Filed as an Exhibit to Post-Effective Amendment No. 5 to the Registration
Statement on Form N-1A of the Registrant as filed with the Securities and
Exchange Commission on March 7, 1996.
(7) Filed as an Exhibit to Post-Effective Amendment No. 6 to the Registration
Statement on Form N-1A of the Registrant as filed with the Securities and
Exchange Commission on April 22, 1996.
(8) Filed as an exhibit to Post-Effective Amendment No. 7 to the Registration
Statement on Form N-1A of the Registrant as filed with the Securities and
Exchange Commission on September 6, 1996.
(9) Filed as an exhibit to Post-Effective Amendment No. 8 to the Registration
Statement on Form N-1A of the Registrant as filed with the Securities and
Exchange Commission on December 27, 1996.
(10) Filed herewith.
(11) Filed as an exhibit to Post-Effective Amendment No. 10 to the Registration
Statement on Form N-1A of the Registrant as filed with the Securities and
Exchange Commission on October 27, 1997.
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
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,
as amended (the "1933 Act"), the reoffering prospectus will contain the
information called for by the applicable registration form for reofferings by
persons who may
Part C-4
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 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 1933 Act, 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.
Part C-5
SIGNATURES
----------
As required by the Securities Act of 1933, this registration statement
has been signed on behalf of the registrant, in the City of New York and the
State of New York, on the 12th day of April, 2001.
MUTUAL FUND TRUST
Registrant
By: /S/ H. RICHARD VARTABEDIAN
-----------------------------------------
H. Richard Vartabedian
President
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 April 12, 2001.
* Chairman and Trustee
- ----------------------------
Fergus Reid, III
/S/ H. RICHARD VARTABEDIAN President
- ------------------------------------
H. Richard Vartabedian and Trustee
* Trustee
- ------------------------------------
William J. Armstrong
* Trustee
- ------------------------------------
John R.H. Blum
* Trustee
- ------------------------------------
Stuart W. Cragin, Jr.
* Trustee
- ------------------------------------
Roland R. Eppley, Jr.
* Trustee
- ------------------------------------
Joseph J. Harkins
* Trustee
- ------------------------------------
Sarah E. Jones
* Trustee
- ------------------------------------
W.D. MacCallan
* Trustee
- ------------------------------------
W. Perry Neff
* Trustee
- ------------------------------------
Leonard M. Spalding, Jr.
* Trustee
- ------------------------------------
Irv Thode
* Trustee
- ------------------------------------
Richard E. Ten Haken
/S/ MARTIN R. DEAN Treasurer and
- ------------------------------------
Martin R. Dean Principal Financial
Officer
/S/ H. RICHARD VARTABEDIAN Attorney in Fact
- ------------------------------------
H. Richard Vartabedian
EXHIBITS
ITEM DESCRIPTION
(14) Consent of PricewaterhouseCoopers LLP.
(16) Powers of Attorney
(17)(a) Form of Proxy Card.
(c) Prospectus for J.P. Morgan Institutional Service Treasury
Money Market Fund.
(e) Statement of Additional Information for J.P. Morgan
Institutional Service Treasury Money Market Fund.
(f) Annual Report of JPMorgan Treasury Plus Money Market Fund
(formerly, Chase Vista Treasury Plus Money Market Fund)
dated August 31, 2000.
(h) Annual Report of J.P. Morgan Institutional Service Treasury
Money Market Fund (including the Annual Report of The
Treasury Money Market Portfolio) dated October 31, 2000.