As filed with the Securities and Exchange Commission on April 13, 2001
Registration No. 333-___/811-5151
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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 SELECT 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.
PETER B. ELDRIDGE, ESQ. Simpson Thacher & Bartlett BAUMGARDNER, JR.,
J.P. Morgan Fleming Asset 425 Lexington Avenue ESQ.
Management (USA) Inc. New York, NY 10017-3954 Sullivan & Cromwell
522 Fifth Avenue 125 Broad Street
New York, NY 10036 New York, NY 10004
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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. 333-13319/811-7841) 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 August 31, 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 TAX EXEMPT BOND FUND
A SERIES OF J.P. MORGAN FUNDS
60 STATE STREET, SUITE 1300
BOSTON, MASSACHUSETTS 02109
May 12, 2001
Dear Shareholder:
A special meeting of the shareholders of J.P. Morgan Tax Exempt Bond Fund
(the "Merging Fund"), a series of J.P. Morgan Funds ("JPMF"), 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 and 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 Intermediate Tax Free Income Fund (formerly, Chase Vista Intermediate
Tax Free Income Fund) (the "Surviving Fund"), a series of Mutual Fund Select
Trust ("MFST") (the "Reorganization"). After the Reorganization, shareholders of
the Merging Fund would hold shares of the Surviving Fund. The investment
objective and policies of the Surviving Fund generally are similar to those of
the Merging Fund. In connection with the Reorganization, the Surviving Fund will
be renamed "JPMorgan Tax Exempt Bond 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 an agreement and plan of
reorganization with J.P. Morgan Institutional Tax Exempt Bond Fund, a fund whose
assets are managed by J.P. Morgan Investment Management Inc. ("JPMIM") and which
has identical investment objectives and policies to the Merging Fund (the
"Concurrent Reorganization"). If the Concurrent Reorganization is approved by
the shareholders of J.P. Morgan Institutional Tax Exempt Bond Fund and certain
other conditions are met, this other fund 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 JPMF.
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 JPMF to the Surviving Fund and MFST.
The cost and expenses associated with the Reorganization, including costs of
soliciting proxies, will be borne by JPMC and not by the Merging Fund, JPMF, the
Surviving Fund, MFST or their shareholders.
If approval of the Reorganization is obtained, you will automatically
receive shares of the Surviving Fund.
The Proposals have been carefully reviewed by the Board of Trustees of
JPMF, which has approved the Proposals.
THE BOARD OF TRUSTEES OF JPMF 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 1-800-348-4782.
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 D.F. King
& Co., Inc., our proxy solicitor, 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.
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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 a more diversified fund and in better service for shareholders,
including a wider variety of investment options.
IF THE REORGANIZATION IS APPROVED, WHAT WILL HAPPEN?
In connection with the Reorganization, the Merging Fund 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 shares of 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
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- Investment objective is to - Investment objective is to
seek to provide monthly provide a high level of current
dividends, which are excluded income that is exempt from
from gross income, and to federal income tax consistent
protect the value of your with moderate risk of capital.
investment by investing
primarily in municipal
obligations.
- Invests in securities rated - May invest up to 10% of its
investment grade or unrated assets in non-investment grade
securities of comparable securities (sometimes called
quality. "junk bonds") rated B or BB/Ba.
- The Surviving Fund is not - The Merging Fund is diversified
diversified under the 1940 under the 1940 Act.
Act.
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 assets in The Tax
Exempt Bond Portfolio (the "Master Portfolio") (which in turn invests in
portfolio securities), the Surviving Fund invests directly in portfolio
securities.
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HOW WILL THE FEES AND EXPENSES ASSOCIATED WITH MY INVESTMENT BE AFFECTED?
As a result of the Reorganization, the contractual (or pre-waiver) total expense
ratios are expected to be higher for your shares in the Surviving Fund than they
are for your shares in the Merging Fund. However, the 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 in the Merging Fund. This is
because 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 of the Surviving Fund.
HOW WILL THE PROPOSED CONCURRENT REORGANIZATION AFFECT MY INVESTMENT IF IT IS
APPROVED BY THE SHAREHOLDERS OF THE OTHER FUND?
If the Concurrent Reorganization is approved and certain other conditions are
met, the assets and liabilities of the other merging fund 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 JPMF IF AFTER THE
REORGANIZATION I WILL OWN SHARES IN THE SURVIVING FUND, A SERIES OF MFST?
Even if the Reorganization is approved, other mutual funds that are series of
JPMF will continue to exist and operate. All shareholders of any series of JPMF
as of the record date (April 6, 2001) are required to be given a vote on
proposals regarding Trustees. Because as of the record date you are still a
shareholder in JPMF, you are entitled to vote on this proposal. Shareholders of
MFST are being asked to approve the same Trustees that are proposed for JPMF.
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
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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.
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J.P. MORGAN TAX EXEMPT BOND FUND,
A SERIES OF J.P. MORGAN FUNDS
60 STATE STREET, SUITE 1300
BOSTON, MASSACHUSETTS 02109
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 3, 2001
To the Shareholders of
J.P. Morgan Tax Exempt Bond Fund:
NOTICE IS HEREBY GIVEN THAT a Special Meeting of the shareholders
("Shareholders") of J.P. Morgan Tax Exempt Bond Fund (the "Merging Fund"), a
series of J.P. Morgan Funds ("JPMF"), 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 JPMF, on behalf of the Merging Fund, Mutual Fund Select
Trust ("MFST"), on behalf of JPMorgan Intermediate Tax Free
Income Fund (formerly, Chase Vista Intermediate Tax Free
Income 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 Select
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 JPMF.
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 accompanying 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 JPMF. 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
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COMBINED PROSPECTUS/PROXY STATEMENT
DATED MAY 12, 2001
ACQUISITION OF THE ASSETS AND LIABILITIES OF
J.P. MORGAN TAX EXEMPT BOND FUND,
A SERIES OF J.P. MORGAN FUNDS
60 STATE STREET, SUITE 1300
BOSTON, MASSACHUSETTS 02109
(617) 557-0700
BY AND IN EXCHANGE FOR SHARES OF
JPMORGAN INTERMEDIATE TAX FREE INCOME FUND
(FORMERLY, CHASE VISTA INTERMEDIATE TAX FREE INCOME FUND),
A SERIES OF MUTUAL FUND SELECT 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 Tax Exempt Bond Fund (the "Merging Fund"), a
series of J.P. Morgan Funds ("JPMF"), into JPMorgan Intermediate Tax Free Income
Fund (formerly, Chase Vista Intermediate Tax Free Income Fund) (the "Surviving
Fund"), a series of Mutual Fund Select Trust ("MFST"). If approved by
shareholders of the Merging Fund, 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"). JPMF
and MFST are both open-end management investment companies offering shares in
several portfolios. In connection with the Reorganization, the Surviving Fund
will be renamed "JPMorgan Tax Exempt Bond Fund."
If the proposed Reorganization is approved by Merging Fund Shareholders,
each Merging Fund Shareholder will receive Select 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 offers
Institutional Class shares. In connection with the Reorganization, this class
will be renamed "Select Class" and the Surviving Fund will introduce a new
Institutional Class of shares.
At the Meeting, you also will be asked to consider and vote upon the
election of Trustees of JPMF.
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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 JPMF, on behalf of the Merging
Fund, MFST, 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 JPMF 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 MFST'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 MFST and JPMF that
an investor should know before voting on the proposals. The current
Prospectuses, Statements of Additional Information and Annual Reports of the
Merging Fund (including the Annual Report of The Tax Exempt Bond Portfolio) and
the Surviving Fund, and the current Semi-Annual Report of the Merging Fund
(including the Semi-Annual Report of The Tax Exempt Bond Portfolio), are
incorporated herein by reference, and the current Prospectus and Annual Report
for the Surviving Fund are enclosed with this Combined Prospectus/Proxy
Statement. A Statement of Additional Information relating to this Combined
Prospectus/Proxy Statement containing additional information about MFST and JPMF
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,
Annual Report and Semi-Annual Report of the Merging Fund (including the Annual
Report and Semi-Annual Report of The Tax Exempt Bond Portfolio) may be obtained
without charge by writing to MFST at its address noted above or by calling
1-800-348-4782.
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
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MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY MFST OR JPMF.
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.
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TABLE OF CONTENTS
PAGE
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INTRODUCTION...................................................................1
PROPOSAL 1: REORGANIZATION PLAN...............................................1
SUMMARY........................................................................1
COMPARATIVE FEE AND EXPENSE TABLES.............................................5
RISK FACTORS...................................................................8
INFORMATION RELATING TO THE PROPOSED REORGANIZATION............................9
INVESTMENT POLICIES...........................................................14
PURCHASES, REDEMPTIONS AND EXCHANGES..........................................19
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........................................33
ADDITIONAL INFORMATION ABOUT MFST.............................................36
ADDITIONAL INFORMATION ABOUT JPMF.............................................36
FINANCIAL STATEMENTS AND EXPERTS..............................................37
OTHER BUSINESS................................................................37
LITIGATION....................................................................37
SHAREHOLDER INQUIRIES.........................................................37
APPENDIX A AGREEMENT AND PLAN OF REORGANIZATION.............................A-1
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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 JPMF 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
At the Meeting, Merging Fund Shareholders will consider and vote upon the
Agreement and Plan of Reorganization (the "Reorganization Plan") dated _______,
2001 among JPMF, on behalf of the Merging Fund, MFST, on behalf of the Surviving
Fund (the Merging Fund and the Surviving Fund are collectively defined as the
"Funds"), and J.P. Morgan Chase & Co. ("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 Tax Exempt Bond
Fund." Further information relating to the Surviving Fund is set forth herein,
and the Surviving Fund's Prospectus and Annual Report is enclosed with this
Combined Prospectus/Proxy Statement.
THE JPMF 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 JPMF 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 and Annual Report of each of the Surviving
Fund and the Merging Fund
(including the Annual Report of The Tax Exempt Bond Portfolio), the Semi-Annual
Report in respect of the Merging Fund (including the Semi-Annual Report of The
Tax Exempt Bond Portfolio) and the Reorganization Plan attached to this Combined
Prospectus/Proxy Statement as Appendix A.
PROPOSED REORGANIZATION
Pursuant to the proposed Reorganization, 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 Select 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 MFST
Board and the JPMF 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 that is is in the best interest of the shareholders to operate in a
multi-class rather than a master/feeder structure.
CONCURRENT REORGANIZATION
The Merging Fund currently invests all of its investable assets in The
Tax Exempt Bond 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 Tax
Exempt Bond Fund, a series of J.P. Morgan Institutional Funds with identical
investment objectives and policies as the Merging Fund (the "Feeder Portfolio")
also currently invests all of its investable assets in the Master Portfolio. The
Surviving Fund has entered into a substantially similar agreement and plan of
reorganization with the Feeder Portfolio (the "Concurrent
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Reorganization"). If each of the Reorganization and the Concurrent
Reorganization is approved by the shareholders of the Merging Fund and the
Feeder Portfolio, respectively, and certain other conditions are met, the
Merging Fund and the Feeder Portfolio will be reorganized into the Surviving
Fund and those funds 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. A shareholder's 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 Portfolio) 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 adviser for the Surviving Fund following
the Reorganization.
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of the Surviving Fund is to seek to provide
monthly dividends, which are excluded from gross income, and to protect the
value of your investment by investing primarily in municipal obligations. The
investment objective of the Merging Fund is to provide a high level of current
income that is exempt from federal income tax consistent with moderate risk of
capital. See "Risk Factors" and "Investment Policies."
The investment policies of the Surviving Fund generally are similar to
those of the Merging Fund. However, there are certain important differences. 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. As a fundamental policy, the Surviving Fund normally
invests at least 80% of its total assets in municipal obligations whose interest
payments are (i) excluded from gross income and (ii) excluded from the federal
alternative minimum tax on individuals.
The Surviving Fund invests in securities that are rated as investment
grade by Moody's Investors Service, Inc., Standard & Poor's Corporation or
Fitch Investors Service Inc. or another national rating organization. It may
also invest in unrated securities of comparable quality.
-3-
THE MERGING FUND MAY INVEST UP TO 10% OF ITS ASSETS IN NON-INVESTMENT GRADE
SECURITIES (SOMETIMES CALLED "JUNK BONDS") RATED B OR BB/Ba OR THE UNRATED
EQUIVALENT.
The Surviving Fund is not diversified under the 1940 Act, which means it
can invest a greater percentage of its assets in a particular issuer or group of
issuers than a diversified fund would. THE MERGING FUND IS DIVERSIFIED.
The average dollar-weighted maturity of the Surviving Fund's portfolio
will be between three and 10 years. THE MERGING FUND'S SECURITIES MAY BE OF ANY
MATURITY.
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
fixed income securities. In particular, the value of shares of the Surviving
Fund will be influenced by the performance of the securities selected for its
portfolio. The principal value of fixed-income investments tends to fall when
prevailing interest rates rise. A municipality that gets into financial trouble
could find it difficult to make interest and principal payments, which would
hurt the Surviving Fund's returns and its ability to preserve capital and
liquidity. A number of issuers have a recent history of significant financial
difficulties. More than 5% of the Surviving Fund's total assets may be invested
in any one municipality, which could increase this risk. Normally, the Surviving
Fund may invest up to 20% of its total assets in securities whose interest is
subject to the federal alternative minimum tax. The Surviving Fund is not
diversified. It may invest a greater percentage of its assets in a particular
issuer or group of issuers than a diversified fund would. That makes the value
of its shares more sensitive to economic problems among those issuing the
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
0.30% of average daily net assets. The Merging Fund currently pays a management
fee indirectly at an annual rate of 0.30% of average daily net assets. Following
the Reorganization, JPMFAM will manage the Surviving Fund's assets and will
receive a fee at an annual rate of 0.30% 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,
and an affiliate of the Distributor serves as sub-administrator. DST
Systems, Inc. ("DST") serves as transfer agent and dividend
-4-
disbursing agent for the Surviving Fund. PricewaterhouseCoopers LLP serves as
the Surviving Fund's independent accountants.
ADMINISTRATOR
As administrator, Chase receives a fee of 0.15% 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 0.075% for complex
wide non-money market Fund assets in excess of $26 billion.
ORGANIZATION
Each of MFST and JPMF is organized as a Massachusetts business trust. The
Merging Fund is organized as a series of JPMF and the Surviving Fund is
organized as a series of MFST.
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 of the Merging Fund will receive Select Class Shares of the Surviving
Fund. Please note that the Surviving Fund currently offers Institutional Class
Shares. In connection with the Reorganization and the Concurrent Reorganization,
this class will be renamed "Select Class" and the Surviving Fund will introduce
a new Institutional Class of shares.
The table indicates that while contractual (pre-waiver) total expense
ratios for current shareholders of the Merging Fund are anticipated to be higher
following the Reorganization, 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. This is because 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.
-5-
THE SURVIVING
THE MERGING FUND FUND
SHARES 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
Maximum Deferred Sales Charge
(Load) shown as lower of original purchase
price or redemption proceeds................ None None
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND
ASSETS)
Management Fees................................ 0.30% 0.30%
Distribution (12b-1) Fees...................... None None
Other Expenses................................. 0.37% 0.45%#
Total Annual Fund Operating Expenses........... 0.67% 0.75%#
- ---------------------------------------------------------------------------------------------
The table does not reflect charges or credits which investors might incur if
they invest through a financial institution.
*Based on the expenses incurred in the most recent fiscal year.
#Restated from the most recent fiscal year to reflect current expense
arrangements.
-6-
THE SURVIVING FUND
PRO FORMA WITH CONCURRENT
REORGANIZATION
----------------------------------
SELECT 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........................................................ 0.30%
Distribution (12b-1) Fees.............................................. None
Other Expenses......................................................... 0.44%
Total Annual Fund Operating Expense.................................... 0.74%
Fee Waivers and Expense Reimbursements(A).............................. (0.08)%
Net Expenses........................................................... 0.66%
(A) Reflects an agreement by Chase, an affiliate of JPMC, to reimburse the Fund
to the extent operating expenses (which exclude interest, taxes and
extraordinary expense) exceed 0.66% of average daily net assets with
respect to Select Class Shares for three years after the Reorganization.
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 for the period 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........................................ $68 $214 $373 $835
THE SURVIVING FUND
Institutional Class Shares........................... $77 $240 $417 $930
PRO FORMA THE SURVIVING FUND WITH CONCURRENT
REORGANIZATION
Select Class Shares.................................. $67 $211 $387 $895
RISK FACTORS
The following discussion highlights the principal risk factors associated
with an investment in the Surviving Fund. The Surviving Fund generally 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.
All mutual funds carry a certain amount of risk. You may lose money on
your investment in the Surviving Fund. The Surviving Fund may not achieve its
objective if JPMFAM's expectations regarding particular securities or markets
are not met. Adverse market conditions may from time to time cause the Fund to
take temporary defensive positions that are inconsistent with its principal
investment strategies and may hinder the Fund from achieving its investment
objective.
The principal value of fixed-income investments tends to fall when
prevailing interest rates rise.
A municipality that gets into financial trouble could find it difficult
to make interest and principal payments, which would hurt the Surviving Fund's
returns and its ability to preserve capital and liquidity. A number of issuers
have a recent history of significant financial difficulties. More than 5% of the
Fund's total assets may be invested in any one municipality, which could
increase this risk.
The Surviving Fund is not diversified. It may invest a greater percentage
of its assets in a particular issuer or group of issuers than a diversified fund
would. That makes the value of its shares more sensitive to economic problems
among those issuing the securities. In addition, more than 25% of the Surviving
Fund's total assets may be invested in securities that rely on similar projects
for their income stream. As a result, the Surviving Fund could be more
susceptible to developments that affect those projects. THE MERGING FUND IS
DIVERSIFIED.
-8-
Under some circumstances, municipal lease obligations might not pay
interest unless the state or municipal legislature authorizes money for that
purpose. Some securities, including municipal lease obligations, carry
additional risks. For example, they may be difficult to trade or interest
payments may be tied only to a specific stream of revenue.
Normally, the Surviving Fund may invest up to 20% of its total assets in
securities whose interest is subject to the federal alternative minimum tax.
Consult your tax professional for more information.
Since some municipal obligations may be secured or guaranteed by banks
and other institutions, the risk to the Surviving Fund could increase if the
banking or financial sector suffers an economic downturn.
The Surviving Fund may invest in municipal obligations backed by foreign
institutions. This could carry more risk than securities backed by U.S.
institutions, because of political or economic instability, the imposition of
government controls, or regulations that don't match U.S. standards.
The value of zero coupon securities, inverse floaters and interest rate
caps tends to fluctuate according to interest rate changes significantly more
than the value of ordinary interest-paying debt securities. The price of a
security with an interest rate cap will change more often and to a greater
degree than a municipal security without one.
A forward commitment could lose value if the underlying security falls in
value before the settlement date or if the other party fails to meet its
obligation to complete the transaction.
Derivatives may be more risky than other types of investments because
they may respond more to changes in economic conditions than other types of
investments. If they are used for non-hedging purposes, they could cause losses
that exceed the Surviving Fund's original investment.
Investments in the Surviving Fund are not bank deposits or obligations
of, or guaranteed or endorsed by, any bank and are not insured or guaranteed by
the Federal Deposit Insurance Corporation, the Federal Reserve Board or any
other government agency.
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 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.
-9-
DESCRIPTION OF THE REORGANIZATION PLAN
In connection with the Reorganization and the Concurrent Reorganization,
the Merging Fund 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, MFST will issue at the Effective Time of the Reorganization
full and fractional Select 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 Select Class 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 Select 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.
In addition, the consummation of the Reorganization is contingent upon
the consummation of the Concurrent Reorganization.
-10-
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 MFST 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.
Each 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 larger
fund that has generally had better historical performance. A larger fund should
enhance the ability of the investment adviser to effect portfolio transactions
on more favorable terms and provide greater flexibility and the ability to
select a larger number of portfolio securities. This could result in increased
diversification for shareholders. In addition, the larger aggregate asset base
could, over time, result in lower overall expense ratios for shareholders
through the spreading of both fixed and variable costs of operations over a
larger asset base. As a general rule, economies of scale may be realized with
respect to fixed expenses, such as costs of printing and fees for professional
services, although expenses that are based on the
-11-
value of assets or the number of shareholder accounts, such as custody fees,
would be largely unaffected by the Reorganization.
Each 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.
Finally, the Board considered the expenses related to the Reorganization.
The Board noted 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 JPMF BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
PROPOSAL.
The JPMF 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 a reorganization plan which is substantially
similar to the Reorganization Plan you are considering. In connection with the
Reorganization and the Concurrent Reorganization, the Merging Fund and the
Feeder Portfolio 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 JPMF
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
-12-
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 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.
JPMF 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 another fund 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. The Surviving Fund
currently offers Institutional Class shares. In connection with the
Reorganization and the Concurrent Reorganization, this class will be renamed
"Select Class" and the Surviving Fund will introduce a new Institutional Class
of shares.
-13-
BENEFICIAL
INTEREST NET ASSET VALUE
OUTSTANDING SHARES OUTSTANDING NET ASSETS PER SHARE
--------------- -------------------- -------------- -----------------
THE MERGING FUND 29,761 - $ 354,798 $11.92
THE SURVIVING FUND - 65,766 $10.73
PRO FORMA COMBINED WITH
CONCURRENT REORGANIZATION
Select Class Shares - 98,823 $1,060,661 $10.73
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 investment objective of the Surviving Fund is to seek to provide
monthly dividends, which are excluded from gross income, and to protect the
value of your investment by investing primarily in municipal obligations. THE
INVESTMENT OBJECTIVE OF THE MERGING FUND IS TO PROVIDE A HIGH LEVEL OF CURRENT
INCOME THAT IS EXEMPT FROM FEDERAL INCOME TAX CONSISTENT WITH MODERATE RISK OF
CAPITAL. Both Funds may change their 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.
As a fundamental policy, the Surviving Fund normally invests at least 80%
of its total assets in municipal obligations whose interest payments are:
- - excluded from gross income, and
- - excluded from the federal alternative minimum tax on individuals.
Municipal obligations are those issued by states, territories and possessions of
the United States and their political subdivisions, agencies and
instrumentalities.
The Surviving Fund invests in securities that are rated as investment
grade by Moody's Investors Service, Inc., Standard & Poor's Corporation or
Fitch Investors Service Inc. or another national rating organization. It may
also invest in unrated securities of comparable quality. THE MERGING FUND MAY
INVEST UP TO 10% OF ITS ASSETS IN NON-INVESTMENT GRADE SECURITIES (SOMETIMES
CALLED "JUNK BONDS") RATED B OR BB/Ba OR THE UNRATED EQUIVALENT.
-14-
The Surviving Fund may also invest in derivatives, inverse floaters and
interest rate caps, zero coupon securities and forward commitments. These
instruments may be used to increase the Fund's income or gain. Derivatives,
which are financial instruments whose value is based on another security, index
or exchange rate, might also be used to hedge various market risks.
The Surviving Fund seeks to develop an appropriate portfolio by
comparing, among other factors, credit quality, yields and call provisions of
different municipal issuers, and examining structural changes along the yield
curve in an attempt to maximize investment returns while minimizing risk.
The average dollar-weighted maturity of the Surviving Fund's portfolio
will be between three and 10 years. THE MERGING FUND'S SECURITIES MAY BE OF ANY
MATURITY, BUT IT'S DURATION GENERALLY WILL RANGE BETWEEN FOUR AND SEVEN YEARS.
Under normal market conditions, the Surviving Fund reserves the right to
invest up to 20% of its total assets in securities that pay interest subject to
federal income tax or the federal alternative minimum tax on individuals. To
temporarily defend the value of its assets during unusual market conditions, the
Fund may exceed this limit.
No more than 25% of total assets may be invested in any one industry,
other than governments and public authorities.
The Surviving Fund may invest in money market funds so that it can easily
convert investments into cash without losing a significant amount of money in
the process.
The Surviving Fund may also invest in municipal lease obligations. These
allow the Fund to participate in municipal lease agreements and installment
purchase contracts. The Surviving Fund may invest up to 25% of its total assets
in municipal lease obligations backed by letters of credit or guarantees from
U.S. and foreign banks and other foreign institutions.
There may be times when there are not enough securities available to meet
the Surviving Fund's needs. On these occasions, the Fund may invest in
repurchase agreements or Treasury securities that may be subject to federal
income tax.
The Surviving Fund may change any of its non-fundamental investment
policies (including its investment objective) without shareholder approval.
How frequently the Surviving Fund buys and sells securities will vary
from year to year, depending on market conditions.
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
-15-
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 is non-diversified under the 1940 The Merging Fund may not make any investment
Act. inconsistent with the Fund's classification as a
diversified investment company under the 1940 Act.
- --------------------------------------------------------------------------------------------------------------
The Surviving Fund may not purchase the securities The Merging Fund may not purchase any security which
of any issuer (other than securities issued or would cause it to concentrate its investments in the
guaranteed by the U.S. government or any of its securities of issuers primarily engaged in any
agencies or instrumentalities, or repurchase particular industry except as permitted by the
agreements secured thereby) if, as a result, more Commission.
than 25% of the Surviving Fund's total assets would
be invested in the securities of companies whose
principal business activities are in the same
industry. Notwithstanding the foregoing, with
respect to the Surviving Fund's permissible futures
and options transactions in U.S. Government
securities, positions in such options and futures
shall not be subject to this restriction. This
restriction is not applicable to investments in
municipal obligations where the issuer is regarded
as a state, city, municipality or other public
authority since such entities are not members of
any "industry."
- --------------------------------------------------------------------------------------------------------------
The Surviving Fund may not borrow money, except for The Merging Fund may not borrow money, except to the
temporary or emergency purposes, or by engaging in extent permitted by applicable law.
reverse repurchase transactions, in an amount not
exceeding 33-1/3% of the value of its total assets
at the time when the loan is made and may pledge,
mortgage or hypothecate no more than 1/3 of its net
assets to secure such borrowings. Any borrowings
representing more than 5% of the Surviving Fund's
total assets must be repaid before the Surviving
Fund may make additional investments.
- --------------------------------------------------------------------------------------------------------------
The Surviving Fund may not purchase or The Merging Fund may not purchase or sell
- --------------------------------------------------------------------------------------------------------------
-16-
- --------------------------------------------------------------------------------------------------------------
sell physical commodities unless acquired as a commodities or commodity contracts unless acquired
result of ownership of securities or other as a result of ownership of securities or other
instruments but this shall not prevent the Fund instruments issued by persons that purchase or sell
from (i) purchasing or selling options and futures commodities or commodities contracts; but this shall
contracts or from investing in securities or other not prevent the Merging Fund from purchasing,
instruments backed by physical commodities or (ii) selling and entering into financial futures
engaging in forward purchases or sales of foreign contracts (including futures contracts on indices of
currencies or securities. securities, interest rates and currencies), options
on financial futures contracts (including futures
contracts on indices of securities, interest rates
and currencies), warrants, swaps, forward contracts,
foreign currency spot and forward contracts or other
derivative instruments that are not related to
physical commodities.
- --------------------------------------------------------------------------------------------------------------
The Surviving Fund may not make loans, except that The Merging Fund may make loans to other persons, in
the Surviving Fund may: (i) purchase and hold debt accordance with the Fund's investment objective and
instruments (including without limitation, bonds, policies and to the extent permitted by applicable
notes, debentures or other obligations and law.
certificates of deposit, bankers' 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 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.
- --------------------------------------------------------------------------------------------------------------
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.
-17-
Neither Fund may purchase or sell real estate (including, for the
Surviving Fund, real estate limited partnerships), except that, to the extent
permitted by applicable law, each Fund may (a) invest in securities or other
instruments directly or indirectly secured by real estate, (b) invest in
securities or other instruments issued by issuers that invest in real estate and
(c) make direct investments in mortgages.
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. The Merging Fund
currently invests all of its investable assets in the Master Portfolio.
Following the Reorganizations, 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 15% The Merging Fund may not acquire any illiquid
of its net assets in illiquid securities. securities, such as repurchase agreements with more
than seven days to maturity or fixed time deposits
with a duration of over seven calendar days, if as a
result thereof, more than 15% of the market value of
the Merging Fund's net assets would be in investments
which are illiquid.
- --------------------------------------------------------------------------------------------------------------
The Surviving Fund may not make short sales of The Merging Fund may not purchase securities on
securities, other than short sales "against the box," margin, make short sales of securities, or maintain
or purchase securities on margin except for a short position, provided that this restriction
short-term credits necessary for clearance of shall not be deemed to be applicable to the purchase
portfolio transactions, provided that this or sale of when-issued or delayed delivery
restriction will not be applied to limit the use of securities, or to short sales that are covered in
options, futures contracts and related options, in accordance with Commission rules.
the manner otherwise permitted by the investment
restrictions, policies and investment program of the
Fund. The Surviving Fund does not have the current
intention of making short sales against the box.
- --------------------------------------------------------------------------------------------------------------
-18-
- --------------------------------------------------------------------------------------------------------------
The Surviving Fund may invest up to 5% of its total The Merging Fund may not acquire securities of other
assets in the securities of any one investment investment companies, except as permitted by the
company, but may not own more than 3% of the 1940 Act or any order pursuant thereto.
securities of any one investment company or invest
more than 10% of its total assets in the securities
of other investment companies.
- --------------------------------------------------------------------------------------------------------------
The Surviving Fund may not purchase or sell The Merging Fund is not subject to a similar
interests in oil, gas or mineral leases. non-fundamental restriction.
- --------------------------------------------------------------------------------------------------------------
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.
provided that this shall not prevent (i) the
writing, purchasing or selling of puts, calls or
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 may not, with respect to 50% of The Merging Fund is not subject to a similar
its assets, hold more than 10% of the outstanding non-fundamental restriction.
voting securities of any issuer.
- --------------------------------------------------------------------------------------------------------------
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. Please note that the Surviving Fund
currently offers Institutional Class shares. In connection with the
Reorganization and the Concurrent Reorganization, this class will be renamed
"Select Class" and the Surviving Fund will introduce a new Institutional Class
of shares. The following discussion applies to Select Class shares. This section
is qualified in its entirety by the discussion in the Prospectus
-19-
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 Select Class Shares.
12b-1 FEES
There is no Rule 12b-1 distribution plan for Select Class Shares of the
Surviving Fund.
BUYING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO PURCHASES OF SELECT 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 generally values its assets at fair market values but may use
fair value if market prices are unavailable.
The NAV of each class of the Surviving Fund's shares is generally
calculated once each day at the close of regular trading on the New York Stock
Exchange. 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.
The Center accepts purchase orders on any business day that the New York
Stock Exchange is open. If an order is received in proper form by the close of
regular trading on the New York Stock Exchange, it will be processed at that
day's price and the purchaser will be entitled to all dividends declared on that
day. If an order is received after the close of regular trading on the New York
Stock Exchange, it will generally be processed at the next day's price. If a
purchaser pays by check for Surviving Fund shares before the close of regular
trading on the New York Stock Exchange, it will generally be processed the next
day the Surviving Fund is open for business.
If a shareholder buys through an agent and not directly from the Center,
the agent could set earlier cut-off times. Each shareholder must provide a
Social Security Number or Taxpayer Identification Number when opening an
account.
The Surviving Fund has the right to reject any purchase order for any
reason.
-20-
All purchases of Select Class Shares of the Surviving Fund must be paid
for by federal funds wire. They generally may be purchased only through
financial service firms, such as broker-dealers and banks that have an agreement
with the Fund or the Fund's distributor.
The investment minimum for Select Class Shares is $1,000,000. However,
shareholders who receive Select Class Shares as a result of the Reorganization
may purchase new Select Class Shares in the Surviving Fund or in other JPMorgan
Funds without regard to such investment minimum. For Select 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 Surviving
Fund. Orders by wire will be canceled if the Center does not receive payment by
4:00 p.m., Eastern time, on the day the shareholder buys.
Shareholders seeking to buy Select 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 Select Class Shares.
SELLING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO SALES OF THE SELECT 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 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 close of
regular trading on the New York Stock Exchange, the Surviving Fund will send the
proceeds the next business day. An order to sell shares will not be accepted if
the 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 for
Select Class Shares. 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 will be sent only to the bank account on the Surviving Fund's
records.
For Select 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
-21-
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 _______.
A systematic withdrawal plan is available for Select Class Shares.
EXCHANGING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO EXCHANGES OF SELECT CLASS SHARES THAT
YOU MIGHT MAKE AFTER THE REORGANIZATION.
Select Class shares of the Surviving Fund may be exchanged for Select
Class shares 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.
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.
OTHER INFORMATION CONCERNING THE SURVIVING FUND
For Select Class Shares, the Surviving Fund may close an account if the
balance falls below $_________. 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 Surviving 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
Surviving 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 Surviving Fund does not follow reasonable procedures.
-22-
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 Surviving Fund may modify or cancel the
sale of shares by phone without notice.
MFST, on behalf of the Surviving Fund, has entered into agreements with
certain shareholder servicing agents (including Chase) under which the
shareholder servicing agents will 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 0.25% of the average daily net assets of the
Select 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 will issue 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 Surviving
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.
The Surviving Fund 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 distributions of net investment income in cash or as a deposit
in a pre-assigned bank account and reinvest distributions of net
capital gain in additional shares; or
- 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. Dividends of tax-exempt interest income
are not subject to federal income taxes but will generally be subject to state
and local taxes. The state or municipality where you live may not charge you
state and local taxes on tax-exempt
-23-
interest earned on certain bonds. Dividends earned on bonds issued by the U.S.
government and its agencies may also be exempt from some types of state and
local taxes.
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 JPMF, which is organized
under the law of the Commonwealth of Massachusetts. As a Massachusetts business
trust, JPMF's operations are governed by JPMF'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.
STRUCTURE OF THE SURVIVING FUND
The Surviving Fund is organized as a series of MFST, which is organized
under the law of the Commonwealth of Massachusetts. As a Massachusetts business
trust, MFST's operations are governed by MFST'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 JPMF's Trustees and the business of the Surviving
Fund is managed by MFST's Trustees, who serve indefinite terms and have all
powers necessary or convenient to carry out their responsibilities.
-24-
Information concerning the current Trustees and officers of MFST and JPMF
is set forth in the Funds' respective Statements of Additional Information,
which are incorporated herein by reference.
SHARES OF FUNDS
Each of MFST and JPMF 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 MFST or JPMF
participate equally in the earnings, dividends and assets of the particular
series or class. Fractional shares have proportionate rights to full shares.
Expenses of MFST or JPMF 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 MFST nor JPMF 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 MFST or
JPMF.
SHAREHOLDER VOTING RIGHTS
A vacancy in the Board of either MFST or JPMF 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.
SHAREHOLDER LIABILITY
Under Massachusetts law, shareholders of either MFST or JPMF could, under
certain circumstances, be held personally liable as partners for the obligations
of that trust. However, the Declaration of Trust of each of MFST and JPMF
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 MFST and JPMF 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.
-25-
LIABILITY OF DIRECTORS AND TRUSTEES
Under the Declaration of Trust of each of MFST and JPMF, 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 MFST and JPMF, 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 MFST and JPMF 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. JPMFAM is
responsible for the day-to-day management of the Surviving Fund.
DESCRIPTION OF JPMFAM
JPMFAM 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.
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 and, therefore, indirectly to the Merging Fund by JPMIM.
-26-
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 0.30%.
The Master Portfolio and, therefore, indirectly the Merging Fund also currently
pay 0.30% of average net assets with respect to its assets in the Master
Portfolio to JPMIM for its advisory services. 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 MFST 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 MFST
or the majority vote of the 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 MFST 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 MFST.
-27-
PORTFOLIO MANAGER
Pamela Hunter and Carolyn J. Gill are responsible for the day-to-day
management of the Surviving Fund. Ms. Hunter is a Managing Director at JPMFAM
and heads the team providing tax exempt strategy, research and portfolio
management. She has been employed at JPMFAM and its predecessors since 1980. Ms.
Gill is a Vice President and Senior Portfolio Manager at JPMFAM. She has been
employed at JPMFAM and its predecessors since 1986.
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 MFST 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 MFST'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 MFST'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, MFST 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, a wholly owned, indirect subsidiary of BISYS Fund
Services, Inc., which currently serves as the Merging Fund's distributor and
sub-administrator, is the distributor and sub-administrator for the Surviving
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.
As administrator, Chase receives a fee of 0.15% 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 0.075% for complex
wide non-money market Fund assets in excess of $26 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 JPMF, 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 JPMF will continue to exist and operate. All
shareholders of any series of JPMF as of the record 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 JPMF, you are entitled to vote on
this proposal. Shareholders of MFST are being asked to approve the same Trustees
as are being proposed for JPMF.
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
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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 MFST and certain
current Trustees of JPMF (including JPMF's Advisory Board). Each Nominee has
consented to being named in this Proxy Statement and has agreed to serve as a
Trustee if elected.
Shareholders of MFST are concurrently considering the election of the
same individuals to the Board of Trustees of MFST. Biographical information
about the Nominees and other relevant information is set forth below. More
information regarding the current Trustees of MFST and JPMF 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 JPMF 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 JPMF.
The following are the nominees:
The Board of Trustees of JPMF met 4 times during the fiscal year ended
July 31, 2000, and each of the Trustees attended at least 75% of the meetings.
The Board of Trustees of JPMF 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 July 31, 2000.
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 JPMF, the Master Portfolio
and certain other investment companies in the Fund Complex, up to and including
creating a separate board of trustees.
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*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 which is allocated
among all investment companies for which the Trustee serves 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 Complex(1) During 2000(2)
- ------------------------------------------ -------------------------- ------------------------------------
Frederick S. Addy, Trustee $11,238 $75,000
William G. Burns, Trustee $11,238 $75,000
Arthur C. Eschenlauer, Trustee $11,238 $75,000
Matthew Healey, Trustee(3)
Chairman and Chief Executive Officer $11,238 $75,000
Michael P. Mallardi, Trustee $11,238 $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 JPMF's business affairs. Each of JPMF 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 Funds"), and
the Trustees are the equal and sole shareholders of Pierpont Group, Inc. JPMF
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 year ended August 31, 1998: $13,354. For the
eleven months ended July 31, 1999: $9,770. For the fiscal year ended July 31,
2000: $6,210.
MASTER PORTFOLIO-- For the fiscal year ended August 31, 1998: $21,294. For the
eleven months ended July 31, 1999: $17,915. For the fiscal year ended July 31,
2000: $12,760.
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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 JPMF; 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 JPMF, 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.
PRINCIPAL EXECUTIVE OFFICERS:
JPMF'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 Distributor, Inc.
("FDI"), a wholly owned indirect subsidiary of Boston Institutional Group, Inc.
The officers conduct and supervise the business operations of JPMF and the
Master Portfolio. JPMF and the Master Portfolio have no employees.
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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 JPMF are as follows:
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 FDI 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 FDI 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 MFST or
JPMF 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 $37,500.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. The
aggregate fees billed for financial information systems design and
implementation services rendered by PricewaterhouseCoopers LLP to the Merging
Fund, the Master Portfolio, JPMIM and JPMIM's affiliates that provide services
to the Fund for the calendar year ended December 31, 2000 was $0.
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, the Master Portfolio, JPMIM and
JPMIM's affiliates that provide services to the Fund for the calendar year ended
December 31, 2000 was $11,029,300.
The Audit Committee has considered whether the provision of non-audit
services is compatible with maintaining the independence of
PricewaterhouseCoopers LLP.
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INFORMATION RELATING TO VOTING MATTERS
GENERAL INFORMATION
This Combined Prospectus/Proxy Statement is being furnished in connection
with the solicitation of proxies by the JPMF Board for use at the Meeting. It is
expected that the solicitation of proxies will be primarily by mail. JPMF's
officers and service providers may also solicit proxies by telephone, facsimile
machine, telegraph, the Internet or personal interview. In addition JPMF 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 JPMF 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 JPMF 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
_________, 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 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
-34-
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 JPMF,
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 JPMF 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 JPMF as a group owned
less than 1% of the outstanding shares of the Merging 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 Merging 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:
-35-
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 MFST 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 MFST
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 MFST'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. MFST 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.
ADDITIONAL INFORMATION ABOUT JPMF
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 JPMF's Statement of Additional Information which has
been filed with the Commission and which is incorporated herein by reference.
Copies of the Statement of
-36-
Additional information may be obtained without charge by calling 1-800-348-4782.
JPMF 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 July 31, 2000 and the Surviving
Fund for the fiscal year ended August 31, 2000 and the audited financial
statements, notes thereto and supplementary data of the Master Portfolio for the
fiscal year ended July 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, of the Merging
Fund, the Surviving Fund and the Master Portfolio 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 Merging Fund for the fiscal period ended January 31, 2001 and the
unaudited financial statements, notes thereto and supplementary data of the
Master Portfolio for the fiscal period ended January 31, 2001 are incorporated
by reference herein and into the Statement of Additional Information related to
this Combined Prospectus/Proxy Statement.
OTHER BUSINESS
The JPMF 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 JPMF 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.
LITIGATION
Neither MFST nor JPMF 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 JPMF in writing at the address
on the cover page of this Combined Prospectus/Proxy Statement or by telephoning
1-800-348-4782.
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* * *
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 Funds (the "Transferor Trust"), a
Massachusetts business trust, on behalf of J.P. Morgan Tax Exempt Bond Fund (the
"Transferor Portfolio"), Mutual Fund Select Trust (the "Acquiring Trust"), a
Massachusetts business trust, on behalf of JPMorgan Intermediate Tax Free Income
Fund (formerly, Chase Vista Intermediate Tax Free Income 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 Select Class share class in exchange for shares of the
Transferor Portfolio, with the amounts of shares of each share class to be
A-1
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 Chase Manhattan
Bank (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 Select 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 Select 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.
A-3
(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 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 beneficial interest, of which as of February 28, 2001 there were outstanding
65,766 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").
(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
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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.
(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 August 31, 2000 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 August 31, 2000, 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
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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 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.
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 29,761 shares of the Transferor Portfolio, and no shares of such
Portfolio were held in the treasury of the Transferor
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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.
(e) FINANCIAL STATEMENTS
. The financial statements for the Transferor Trust with respect
to the Transferor Portfolio and The Tax Exempt Bond Portfolio for the fiscal
year ended July 31, 2000 which have been audited by PricewaterhouseCoopers LLP
fairly present the financial position of the Transferor Portfolio and The Tax
Exempt Bond 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. The unaudited financial statements for the Transferor
Trust with respect to the Transferor Portfolio and The Tax Exempt Bond Portfolio
for the fiscal period ended January 31, 2001 fairly present the financial
position of the Transferor Portfolio and The Tax Exempt Bond 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.
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(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 January 31, 2001 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 January 31, 2001, 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.
(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.
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(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.
(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.
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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 effective, the
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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").
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(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 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.
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The reorganization of J.P. Morgan Institutional Tax Exempt Bond
Fund, a series of J.P. Morgan Institutional Funds, 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:
(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 January 31, 2001.
(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.
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The reorganization of J.P. Morgan Institutional Tax Exempt Bond
Fund, a series of J.P. Morgan Institutional Funds, 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.
(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
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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.
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
A-15
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.
(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 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
A-16
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 Select Trust" is the designation of its
Trustees under a Declaration of Trust dated October 1, 1996, 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-17
IN WITNESS WHEREOF, the undersigned have executed this Plan as of the
date first above written.
J.P. MORGAN FUNDS
on behalf of J.P. Morgan Tax Exempt Bond Fund
By:
---------------------------------------
Name:
Title:
MUTUAL FUND SELECT TRUST
on behalf of JPMorgan Intermediate Tax Free Income Fund
By:
---------------------------------------
Name:
Title:
Agreed and acknowledged with respect to Section 9:
J.P. MORGAN CHASE & CO.
By:
---------------------------------------
Name:
Title:
A-18
STATEMENT OF ADDITIONAL INFORMATION
(SPECIAL MEETING OF SHAREHOLDERS OF
J.P. MORGAN TAX EXEMPT BOND FUND,
A SERIES OF J.P. MORGAN 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 Tax Exempt
Bond Fund (the "Merging Fund"), a series of J.P. Morgan Funds ("JPMF"), 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 1-800-348-4782.
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 MFST's and JPMF's Statements of Additional Information,
which are incorporated herein by reference.
The date of this Statement of Additional Information is May 12, 2001.
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 JPMF, on behalf
of the Merging Fund, MFST, 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 MFST 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 Select Class shares of the Surviving
Fund 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 JPMF.
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 July 3,
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 audited financial statements, notes
thereto and supplementary data of the Master Portfolio contained in their
respective Annual Reports, each dated July 31, 2000, are incorporated by
reference into this Statement of Additional Information related to this
Combined Prospectus/Proxy Statement. The audited financial highlights,
financial statements and notes thereto of the Surviving Fund contained in its
Annual Report dated August 31, 2000 and its Semi-Annual Report dated February
28, 2001 of Surviving Fund are incorporated by reference into this Statement
of Additional Information related to this Combined Prospectus/Proxy
Statement. The unaudited financial highlights, financial statements and notes
thereto of the Merging Fund and the unaudited financial statements, notes
thereto and supplementary data of the Master Portfolio contained in their
respective Semi-Annual Reports, each dated January 31, 2001, are incorporated
by reference into this Statement of Additional Information related to this
Combined Prospectus/Proxy Statement. The audited 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 July 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.
-3-
JPMORGAN TAX EXEMPT BOND PORTFOLIO/JPMORGAN INTERMEDIATE TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS
PROFORMA COMBINING SCHEDULE OF INVESTMENTS
FEBRUARY 28, 2001
(AMOUNTS IN THOUSANDS)
Shares Market Value
---------- PRO FORMA ------------- PRO FORMA
JPMORGAN JPMORGAN COMBINED JPMORGAN JPMORGAN COMBINED
INTERMEDIATE TAX EXEMPT JPMORGAN INTERMEDIATE TAX EXEMPT JPMORGAN
TAX FREE BOND TAX EXEMPT TAX FREE BOND TAX EXEMPT
INCOME FUND PORTFOLIO BOND FUND INCOME FUND PORTFOLIO BOND FUND
- ------------ ---------- -------- -------------- ------------- --------
MUNICIPALS 98.29%
GENERAL OBLIGATIONS & HOUSE
AUTHORITY 58.76%
ALABAMA 0.80%
Alabama State, Public School &
College Authority, Capital
Improvement, Ser. D, Rev., 5.25%,
8,485 8,485 8/1/2005 $ 8,975 $ - $ 8,975
Alabama State, Ser. A, GO, 5.50%,
2,650 2,650 10/1/2002 2,732 2,732
Shelby County, Alabama, Board of
Education, Capital Outlay School
1,000 1,000 Warrants, 5.70%, 2/1/2009 1,070 1,070
---------------------------------------------
12,777 - 12,777
CALIFORNIA 0.34%
Los Angeles County, California,
Public Works Financing Authority,
Regional Park & Open Space
District, Ser. A, Rev., ^, 6.00%,
5,000 5,000 10/1/2004 5,513 5,513
---------------------------------------------
COLORADO 0.21%
Eagle, Garfield & Routt Counties,
Colorado, School District No. Re
3,000 3,000 50J, GO, ^, 6.13%, 12/1/2004 3,312 3,312
---------------------------------------------
CONNECTICUT 1.25%
Connecticut, Series 1997 B, 5.88%,
7,240 7,240 6/15/17 7,858 7,858
Connecticut, Series 2000 C, 5.25%,
6,655 6,655 12/15/11 7,142 7,142
Connecticut State, Special Tax
Obligation, Transportation
Infrastructure, Ser. A, Rev.,
4,735 4,735 5.40%, 6/1/2009 5,003 5,003
---------------------------------------------
5,003 15,000 20,003
DELAWARE 0.20%
Delaware Transportation Authority,
Transportation System, Rev.,
3,000 3,000 6.00%, 7/1/2005 3,252 3,252
---------------------------------------------
FLORIDA 0.56%
Dade County, Florida, Aviation,
2,000 2,000 Ser. B, Rev., 6.40%, 10/1/2006 2,205 2,205
Florida State Board Education
465 465 Capital Outlay, 7.00%, 6/1/01 466 466
Florida State, Board of Education,
Capital Outlay, Public Education,
1,495 1,495 Ser. B, GO, 5.25%, 6/1/2012 1,600 1,600
Florida State, Department of
Corrections, Okeechobee
2,000 2,000 Correctional, COP, 6.00%, 3/1/2008 2,173 2,173
Miami-Dade County, Florida,
Aviation, Ser. A, Rev., 5.25%,
2,350 2,350 10/1/2007 2,487 2,487
---------------------------------------------
8,465 466 8,931
GEORGIA 2.83%
Forsyth County, Georgia, School
1,720 1,720 District, GO, 5.00%, 7/1/2012 1,800 1,800
Fulton County School District,
2,630 2,630 6.38%, 5/1/14 3,072 3,072
Georgia Municipal Electric
Authority, Ser. DD, Rev., 7.00%,
5,000 5,000 1/1/2008 5,822 5,822
Georgia State, Ser. B, GO, 6.25%,
5,000 5,000 4/1/2004 5,372 5,372
Georgia State, Ser. D, GO, 6.00%,
2,000 2,000 10/1/2004 2,156 2,156
Georgia, Series 1991 D, 3.00%,
11,000 11,000 11/1/11 9,713 9,713
Georgia, Series 1992 B, 6.30%,
3,000 3,000 3/1/10 3,450 3,450
Georgia, Series 1995 B, 7.20%,
6,000 6,000 3/1/07 6,996 6,996
Gwinnett County School District,
2,500 2,500 Series 1992 B, 6.40%, 2/1/08 2,836 2,836
Metropolitan Atlanta Rapid Transit
Authority, Georgia, Sales Tax,
Second Indenture, Ser. A, Rev., ^,
3,700 3,700 6.90%, 7/1/2004 4,140 4,140
---------------------------------------------
19,290 26,067 45,357
HAWAI 0.44%
Hawaii State, Ser CK, GO, ^,
4,405 4,405 5.25%, 9/1/2005 4,675 4,675
Honolulu, Hawaii, City & County,
2,000 2,000 Ser. A, GO, 7.35%, 7/1/2006 2,313 2,313
---------------------------------------------
6,988 - 6,988
ILLINOIS 5.18%
Chicago, Illinois, Metropolitan
Water Reclamation District,
Greater Chicago, Capital
Improvement Bonds, GO, ^, 7.00%,
1,500 1,500 1/1/2008 1,746 1,746
Chicago, Illinois, Metropolitan
Water Reclamation District,
Greater Chicago, Capital
10,000 10,000 Improvement, GO, 5.50%, 12/1/2012 10,895 10,895
Chicago, Illinois, Metropolitan
Water Reclamation District,
Greater Chicago, GO, 5.50%,
5,000 5,000 12/1/2008 5,437 5,437
Chicago, Illinois, Metropolitan
Water Reclamation District,
Greater Chicago, GO, 5.50%,
10,025 10,025 12/1/2009 10,917 10,917
Chicago, Illinois, Metropolitan
Water Reclamation District,
Greater Chicago, GO, 5.95%,
7,200 7,200 12/1/2007 7,987 7,987
Chicago, Illinois, O'Hare
International Airport, General
Airport, Second Lien, Ser. A,
3,000 3,000 Rev., 6.75%, 1/1/2006 3,347 3,347
Chicago, Illinois, O'Hare
International Airport, Passenger
Facilities Charge, Ser. A, Rev.,
6,055 6,055 5.38%, 1/1/2007 6,440 6,440
Chicago, Illinois, Park District,
Harbor Facilities, Rev., 5.38%,
1,245 1,245 1/1/2006 1,315 1,315
Cook, Kane, Lake & McHenry
Counties Community College
District No. 512, Series 2001 A,
(William Rainey Harper College),
4,520 4,520 5.50%, 12/1/17 4,672 4,672
Illinois Regional Transportation
Authority, Ser. B, Rev., 6.40%,
1,000 1,000 6/1/2012 1,165 1,165
Illinois State, 1st Ser., GO,
1,810 1,810 5.25%, 8/1/2005 1,908 1,908
Illinois State, 1st Ser., GO,
2,565 2,565 5.50%, 8/1/2006 2,751 2,751
Illinois State, 1st Ser., GO,
4,000 4,000 5.50%, 8/1/2007 4,313 4,313
5,485 5,485 Illinois State, GO, 5.25%, 4/1/2004 5,713 5,713
2,000 2,000 Illinois State, GO, 5.25%, 6/1/2010 2,125 2,125
1,320 1,320 Illinois State, GO, 5.50%, 8/1/2006 1,405 1,405
10,000 10,000 Illinois State, GO, 5.50%, 4/1/2010 10,762 10,762
---------------------------------------------
78,226 4,672 82,898
INDIANA 1.42%
Indiana Municipal Power Agency,
Power Supply Systems, Ser. B,
2,600 2,600 Rev., 5.63%, 1/1/2005 2,757 2,757
Indiana Municipal Power Agency,
Power Supply Systems, Ser. B,
5,500 5,500 Rev.,5.80%, 1/1/2008 6,015 6,015
Indiana State, Office Building
Commission Facilities, Ser. A,
2,485 2,485 Rev., 5.00%, 7/1/2004 2,576 2,576
Indianapolis, Indiana, Gas
Utility, Distribution Systems,
7,315 7,315 Ser. A, Rev., 5.75%, 8/15/2008 8,030 8,030
Indianapolis, Indiana, Local
Public Improvement, Bond Bank,
3,000 3,000 Ser. A, Rev., 6.50%, 1/1/2008 3,397 3,397
---------------------------------------------
22,775 - 22,775
KANSAS 0.14%
Kansas State, Department of
Transportation, Highway, Rev.,
2,175 2,175 5.00%, 9/1/2003 2,245 2,245
---------------------------------------------
KENTUCKY 0.02%
Owensboro, Kentucky, Electric
Light & Power, Rev., ^, 10.50%,
275 275 1/1/2004 298 298
---------------------------------------------
LOUISIANA 0.22%
Lake Charles, Louisiana, Harbor &
Terminal District, Reynolds Metals
3,500 3,500 Co. Project, Rev., 5.50%, 5/1/2006 3,571 3,571
---------------------------------------------
MARYLAND 3.38%
Maryland, Series 1991-3, 6.40%,
3,000 3,000 7/15/03 3,045 3,045
Maryland State GO, Series 2000-1,
(State & Local Facilities Loan),
5,000 5,000 5.13%, 8/1/05 5,275 5,275
Maryland State, Stadium Authority,
3,335 3,335 Rev., 5.75%, 12/15/2008 3,587 3,587
Maryland State, Stadium Authority,
3,535 3,535 Rev., 5.80%, 12/15/2009 3,796 3,796
Maryland State, State & Local
Facilities Loan, Third Ser., GO,
15,640 15,640 5.80%, 10/15/2008 16,768 16,768
Maryland State, Transportation
Authority, Transportation
Facilities Project, Rev., 5.80%,
6,500 6,500 7/1/2006 7,103 7,103
Montgomery County, (Consumer
7,000 7,000 Public Improvement), 4.75%, 2/1/04 7,220 7,220
Montgomery County, (Consumer
7,000 7,000 Public Improvement), 5.00%, 2/1/10 7,403 7,403
---------------------------------------------
31,254 22,943 54,197
MASSACHUSETTS 2.82%
Chelsea, Massachusetts, School
Project Loan Act of 1948, GO, ^,
5,000 5,000 5.90%, 6/15/2004 5,438 5,438
Massachusetts Bay, Transportation
Authority, General Transportation
Systems, Ser. A, Rev., 5.50%,
2,045 2,045 3/1/2014 2,222 2,222
Massachusetts State GO, Series
14,035 14,035 2000 B, 5.75%, 6/1/12 15,319 15,319
Massachusetts State, Housing
Finance Agency, Residential
Development, Ser. C, Rev., 6.45%,
3,000 3,000 5/15/2004 3,146 3,146
Massachusetts State, Turnpike
Authority, Ser. A, Rev., ^, 5.00%,
10,000 10,000 1/1/2013 10,445 10,445
Massachusetts State, Water
Resources Authority, Ser. C, Rev.,
3,000 3,000 5.25%, 12/1/2015 3,177 3,177
Massachusetts State, Water
Resources Authority, Ser. A, Rev.,
2,000 2,000 5.50%, 8/1/2013 2,185 2,185
Southeastern, Massachusetts,
University Building Authority
Project, Ser. A, Rev., 5.90%,
1,980 1,980 5/1/2009 2,138 2,138
Southeastern, Massachusetts,
University Building Authority
Project, Ser. A, Rev., 5.90%,
1,000 1,000 5/1/2010 1,076 1,076
---------------------------------------------
29,827 15,319 45,146
MICHIGAN 2.26%
Michigan State, Environmental
Protection Program, GO, 5.50%,
2,030 2,030 11/1/2004 2,157 2,157
Michigan State, Trunk Line, Ser.
10,750 10,750 A, Rev., 5.25%, 11/1/2013 11,457 11,457
Michigan State, Trunk Line, Ser.
4,000 4,000 A, Rev., 5.25%, 11/1/2015 4,218 4,218
Michigan State, Underground
Storage Tank, Financial Assurance
Authority, Ser. I, Rev., 5.75%,
3,565 3,565 5/1/2010 3,824 3,824
Wayne Charter County, Michigan,
Airport, Ser. A, Rev., 5.25%,
10,000 10,000 12/1/2006 10,537 10,537
Wayne Charter County, Michigan,
Airport, Ser. A, Rev., 5.50%,
3,780 3,780 12/1/2007 4,046 4,046
---------------------------------------------
36,239 - 36,239
MINNESOTA 0.84%
9,330 9,330 Minnesota State, 5.50%, 6/1/10 10,201 10,201
University of Minnesota, Ser. A,
3,000 3,000 Rev., 5.75%, 7/1/2015 3,316 3,316
---------------------------------------------
3,316 10,201 13,517
MISSISSIPPI 1.18%
11,150 11,150 Mississippi State, 6.20%, 2/1/08 12,405 12,405
Mississippi State, Capital
Improvements Issue, Ser. I, GO,
4,000 4,000 5.50%, 11/1/2006 4,312 4,312
Mississippi State, GO, 5.75%,
2,000 2,000 12/1/2012 2,228 2,228
---------------------------------------------
6,540 12,405 18,945
MISSOURI 0.08%
Missouri State, Environmental
Improvement & Energy Resources
Authority, Water Pollution Control
& Drinking Water, State Revolving
Funds Program, Ser. B, Rev.,
1,105 1,105 5.50%, 7/1/2012 1,209 1,209
---------------------------------------------
NEBRASKA 0.16%
American Public Energy Agency,
Nebraska, Gas Supply, Public Gas
Agency Project, Ser. A, Rev.,
2,635 2,635 5.25%, 6/1/2011 2,637 2,637
---------------------------------------------
NEVADA 1.17%
Henderson, Nevada, Water & Sewer,
2,415 2,415 Ser. A, GO, 5.50%, 9/1/2008 2,614 2,614
1,000 1,000 Nevada State, GO, 6.75%, 7/1/2003 1,010 1,010
Nevada State, Municipal Bond Bank,
1,000 1,000 GO, ^, 7.20%, 11/1/2004 1,023 1,023
Nevada State, Municipal Bond Bank,
Project No. 20-23A, GO, ^, 7.20%,
1,000 1,000 7/1/2002 1,008 1,008
Nevada State, Ser. A, GO, 5.00%,
5,390 5,390 7/1/2010 5,629 5,629
Nevada State, Ser. A, GO, 5.60%,
5,000 5,000 7/15/2006 5,299 5,299
Nevada State, Ser. C, GO, 6.50%,
2,000 2,000 5/1/2005 2,197 2,197
---------------------------------------------
18,780 - 18,780
NEW JERSEY 4.86%
Elizabeth, New Jersey, GO, 6.25,
3,245 3,245 8/15/2008 3,576 3,576
Jersey City, Series 1996 A, 6.25%,
4,180 4,180 10/1/11 4,815 4,815
New Jersey Building Authority,
State Building, Rev., 5.75%,
10,000 10,000 6/15/2009 11,015 11,015
New Jersey Economic Development
Authority, Market Transition
Facility, Senior Lien, Ser. A,
955 955 Rev., 5.80%, 7/1/2008 1,029 1,029
New Jersey Economic Development
Authority, Market Transition
Facility, Senior Lien, Ser. A,
8,800 8,800 Rev., 5.80%, 7/1/2009 9,482 9,482
10,000 10,000 New Jersey State, 5.50%, 5/1/07 10,815 10,815
New Jersey State, Transportation
Trust Fund Authority, Ser. B,
7,000 7,000 Rev., 5.50%, 6/15/2009 7,485 7,485
New Jersey State, Transportation
Trust Fund Authority,
Transportation Systems, Ser. A,
3,660 3,660 Rev., 5.75%, 6/15/2015 4,069 4,069
New Jersey State, Turnpike
Authority, Rev., ^, 5.70%,
4,190 4,190 5/1/2013 4,536 4,536
New Jersey State, Turnpike
Authority, Rev., ^, 10.38%,
400 400 1/1/2003 436 436
New Jersey State, Turnpike
Authority, Ser. G, Rev., ^, 5.75%,
3,895 3,895 1/1/2009 4,214 4,214
New Jersey Wastewater Treatment
Trust, Ser. A, Rev., 7.00%,
2,545 2,545 5/15/2006 2,910 2,910
New Jersey Wastewater Treatment
Trust, Ser. A, Rev., 7.00%,
2,910 2,910 5/15/2008 3,428 3,428
New Jersey Wastewater Treatment
Trust, Ser. A, Rev., 7.00%,
3,120 3,120 5/15/2009 3,724 3,724
New Jersey Wastewater Treatment
Trust, Ser. C, Rev., 6.88%,
5,520 5,520 6/15/2007 6,382 6,382
---------------------------------------------
62,286 15,630 77,916
NEW MEXICO 0.14%
Gallup, New Mexico, PCR, Plains
Electric Generation, Rev., 6.40%,
2,075 2,075 8/15/2005 2,181 2,181
---------------------------------------------
NEW YORK 5.16%
Long Island Power Authority, New
York, Electric Systems, Ser. A,
1,500 1,500 Rev., 5.50%, 12/1/2013 1,647 1,647
New York, Series 1994 A, 5.75%,
50 50 8/1/02 52 52
New York, Series 2001 F, 5.00%,
11,615 11,615 8/1/10 12,096 12,096
New York State, Dorm Authority,
Pooled Capital Program, Rev., ^,
155 155 7.80%, 12/1/2005 158 158
New York State, Dorm Authority,
St. John's University, Rev.,
770 770 6.70%, 7/1/2004 793 793
New York State, Dorm Authority,
State University Educational
Facilities, Ser. A, Rev., 5.50%,
2,800 2,800 5/15/2006 2,994 2,994
New York State, Dorm Authority,
State University Educational
Facilities, Ser. A, Rev., 5.50%,
1,500 1,500 5/15/2013 1,643 1,643
New York State, Dorm Authority,
State University Educational
Facilities, Ser. A, Rev., 5.50%,
4,025 4,025 5/15/2013 4,404 4,404
New York State, Environmental
Facilities Corp., PCR, State Water
Revolving Fund, Ser. D, Rev.,
1,200 1,200 6.55%, 3/15/2008 1,227 1,227
New York State, Housing Finance
Agency, Housing Project Mortgage,
4,915 4,915 Ser. A, Rev., 5.40%, 11/1/2005 5,201 5,201
New York State, Medical Care
Facilities, Finance Agency, Rev.,
75 75 7.38%, 8/15/2003 75 75
New York State, Ser. B, GO, 5.60%,
6,000 6,000 8/15/2007 6,426 6,426
New York State, Ser. B, GO, 5.70%,
5,000 5,000 8/15/2010 5,314 5,314
New York State, Thruway Authority,
Highway & Bridge Trust Fund, Ser.
4,000 4,000 A, Rev., ^, 5.60%, 4/1/2004 4,301 4,301
New York State, Thruway Authority,
Highway & Bridge Trust Fund, Ser.
5,700 5,700 B, Rev., ^, 6.00%, 4/1/2004 6,195 6,195
New York State, Thruway Authority,
Service Contract, Local Highway &
5,000 5,000 Bridge, Rev., 5.10%, 4/1/2008 5,258 5,258
New York State, Thruway Authority,
Service Contract, Local Highway &
10,000 10,000 Bridge, Rev., 5.20%, 4/1/2009 10,574 10,574
New York State, Thruway Authority,
Service Contract, Local Highway &
7,500 7,500 Bridge, Rev., 5.25%, 4/1/2003 7,735 7,735
Port Authority of New York & New
Jersey, Consolidated Bonds 112th
3,910 3,910 Ser., Rev., 5.00%, 12/1/2005 4,072 4,072
Suffolk County, New York, IDA,
IDR, Nissequogue Cogen Partners
1,500 1,500 Facility, Rev., 4.88%, 1/1/2008 1,457 1,457
Westchester County, New York, IDA,
Resource Recovery, Resco Co.
Project, Ser. A, Rev., 5.60%,
990 990 7/1/2007 1,045 1,045
---------------------------------------------
70,519 12,148 82,667
NORTH CAROLINA 0.68%
North Carolina GO, Series 2000 A,
(Public Improvements), 5.00%,
10,410 10,410 9/1/04 10,870 10,870
---------------------------------------------
OHIO 4.63%
Columbus GO, Series 2000-1, 5.25%,
17,385 17,385 11/15/03 to 11/15/05 18,289 18,289
Columbus GO, Series 2000-1, 5.50%,
12,245 12,245 11/15/06 to 11/15/11 13,328 13,328
Montgomery County, Ohio, Solid
4,000 4,000 Waste, Rev., 5.50%, 11/1/2010 4,267 4,267
Ohio GO, Series 2000 E, (Highway
Capital Improvements), 5.25%,
10,000 10,000 5/1/04 10,472 10,472
Ohio, Series 2000 E, (Highway
Capital Improvements), 5.63%,
10,000 10,000 5/1/10 11,005 11,005
Ohio State, Building Authority,
State Facilities, Administration
Building Fund, Ser. A, Rev.,
1,420 1,420 6.00%, 10/1/2006 1,564 1,564
Ohio State, Building Authority,
State Facilities, Adult
Correctional, Ser. A, Rev., 5.75%,
3,360 3,360 10/1/2008 3,571 3,571
Ohio State, Infrastructure
Improvement, Ser. B, GO, 5.25%,
5,000 5,000 2/1/2014 5,309 5,309
Ohio State, Turnpike Commission,
6,000 6,000 Ser. A, Rev., 5.40%, 2/15/2009 6,412 6,412
---------------------------------------------
21,123 53,094 74,217
OREGON 0.57%
Oregon State, State Board of
Higher Education, Ser. A, GO, ^,
5,300 5,300 6.00%, 8/1/2006 5,925 5,925
Washington County, Oregon, School
District No. 3, Hillsboro, GO, ^,
3,000 3,000 6.00%, 11/1/2005 3,285 3,285
---------------------------------------------
9,210 - 9,210
PENNSYLVANIA 0.32%
Carbon County, Pennsylvania, IDA,
Panther Creek Partners Project,
3,000 3,000 Rev., 6.65%, 5/1/2010 3,074 3,074
Pennsylvania State, Second Ser.,
2,000 2,000 GO, 5.00%, 8/1/2009 2,108 2,108
---------------------------------------------
5,182 - 5,182
PUERTO RICO 1.14%
Puerto Rico Commonwealth, GO,
10,000 10,000 5.50%, 7/1/2008 10,999 10,999
Puerto Rico Commonwealth, GO,
5,500 5,500 5.50%, 7/1/2009 6,072 6,072
Puerto Rico Industrial, Medical &
Environmental PCFFA, Renasa Inc.,
Squibb Corp. Project, Rev., 6.50%,
1,140 1,140 7/1/2004 1,143 1,143
---------------------------------------------
18,214 - 18,214
SOUTH CAROLINA 0.87%
South Carolina, Series 2001 A,
(State School Facilities), 5.00%,
13,305 13,305 1/1/05 - 13,877 13,877
---------------------------------------------
TENNESSEE 0.86%
Knox County, 6.00%, 5/1/12 to
6,820 6,820 5/1/13 7,480 7,480
Tennergy Corp., Tennessee, Gas,
5,335 5,335 Rev., 5.00%, 6/1/2009 5,250 5,250
Tennessee State, Ser. A, GO,
1,000 1,000 5.00%, 5/1/2013 1,044 1,044
---------------------------------------------
6,294 7,480 13,774
TEXAS 6.61%
Austin, Texas, Independent School
District, Public Property Finance,
Contractual Obligation, GO, 5.25%,
2,000 2,000 2/1/2008 2,126 2,126
Austin, Texas, Utility Systems,
5,255 5,255 Rev., 5.80%, 11/15/2006 5,736 5,736
Austin, Texas, Utility Systems,
3,000 3,000 Rev., ^, 6.25%, 5/15/2004 3,235 3,235
Dallas, Texas, Civic Center,
6,200 6,200 Improvement, Rev., 5.25%, 8/15/2007 6,605 6,605
4,845 4,845 Dallas, Texas, GO, 5.00%, 2/15/2009 5,105 5,105
Fort Worth Independent School
District, (Premium Capital
12,485 12,485 Appreciation), 4.99%, 2/15/06(y) 9,750 9,750
Harris County, Texas, GO, 5.88%,
6,220 6,220 10/1/2007 6,856 6,856
Houston, Texas, Ser. A, GO, 5.50%,
4,940 4,940 3/1/2004 5,172 5,172
Houston, Texas, Ser. A, GO, 5.50%,
8,675 8,675 3/1/2008 9,337 9,337
Houston, Texas, Water & Sewer
Systems, Ser. B, Rev., 6.40%,
4,975 4,975 12/1/2009 5,297 5,297
Katy, Texas, Independent School
District, Ser. A, GO, 5.00%,
1,520 1,520 2/15/2011 1,585 1,585
North East Independent School
District, Texas, GO, 6.50%,
5,300 5,300 10/1/2009 6,126 6,126
Texas Series 1992 C, 5.50%,
10,000 10,000 4/1/20, Prerefunded at 102% of Par 10,418 10,418
Texas State, Ser. A, GO, 6.00%,
5,650 5,650 10/1/2005 6,147 6,147
Texas State, Ser. A, GO, 6.00%,
7,500 7,500 10/1/2009 8,430 8,430
Texas Water Development Board,
State Revolving Fund, Senior Lien,
1,320 1,320 Rev., 6.20%, 7/15/2005 1,385 1,385
Texas Water Development Board,
State Revolving Fund, Senior Lien,
4,700 4,700 Ser. A, Rev., 5.00%, 7/15/2007 4,946 4,946
Texas Water Development Board,
State Revolving Fund, Senior Lien,
3,000 3,000 Ser. A, Rev., 5.25%, 7/15/2009 3,186 3,186
Texas Water Development Board,
State Revolving Fund, Senior Lien,
1,000 1,000 Ser. A, Rev., 5.63%, 7/15/2011 1,084 1,084
Texas Water Development Board,
State Revolving Fund, Senior Lien,
3,175 3,175 Ser. B, Rev., 5.25%, 7/15/2008 3,391 3,391
---------------------------------------------
85,749 20,168 105,917
UTAH 0.73%
Intermountain Power Agency, Utah,
Power Supply, Ser. B, Rev., 6.50%,
3,800 3,800 7/1/2010 4,402 4,402
Salt Lake City, Utah, GO, 5.50%,
2,850 2,850 6/15/2011 3,101 3,101
Utah State, Building Ownership
Authority, State Facilities Master
Lease Program, Ser. C, Rev.,
3,915 3,915 5.50%, 5/15/2008 4,226 4,226
---------------------------------------------
11,729 - 11,729
VERMONT 0.78%
Burlington, Vermont, Electric,
4,100 4,100 Ser. A, Rev., 6.38%, 7/1/2009 4,702 4,702
Vermont State, Ser. A, GO, ^,
3,510 3,510 6.40%, 1/15/2005 3,897 3,897
Vermont State, Ser. A, GO, ^,
3,510 3,510 6.50%, 1/15/2005 3,909 3,909
---------------------------------------------
12,508 - 12,508
VIRGIN ISLANDS 0.68%
Virgin Islands Public Finance
Authority, Gross Receipts, Taxes
Lien Notes, Ser. A, Rev., 5.63%,
2,500 2,500 10/1/2010 2,633 2,633
Virgin Islands Public Finance
Authority, Senior Lien, Fund Lien
Notes, Ser. C, Rev., 5.50%,
5,000 5,000 10/1/2006 5,172 5,172
Virgin Islands Water & Power
Authority, Electric Systems, Rev.,
3,070 3,070 5.25%, 7/1/2007 3,151 3,151
---------------------------------------------
10,956 - 10,956
VIRGINIA 0.82%
Chesapeake Bay Bridge & Tunnel
Commission, Virginia, General
5,515 5,515 Resolution, Rev., 5.75%, 7/1/2008 5,968 5,968
Loudoun County, Series 2000 B,
(State Aid Withholding), 5.13%,
3,650 3,650 1/1/04 3,792 3,792
Virginia Commonwealth,
Transportation Board, Federal
Highway Reimbursement Anticipation
3,135 3,135 Notes, Rev., 5.50%, 10/1/2006 3,388 3,388
---------------------------------------------
9,356 3,792 13,148
WASHINGTON 1.02%
Grant County, Washington, Public
Utilities District No. 2,
Electric, Ser. G, Rev., 5.25%,
4,340 4,340 1/1/2008 4,603 4,603
Washington State GO, Series 1991
1,750 1,750 R-92-A, 6.30%, 9/1/02 1,792 1,792
Washington State GO, Series 1992 B
4,000 4,000 & AT-7, 6.40%, 6/1/17 4,705 4,705
Washington State, Ser. B, GO,
5,000 5,000 5.00%, 1/1/2007 5,237 5,237
---------------------------------------------
9,840 6,497 16,337
WISCONSIN 3.37%
Milwaukee County, Wisconsin,
Corporate Purpose, Ser. A, GO,
3,025 3,025 5.38%, 9/1/2005 3,210 3,210
Milwaukee County, Wisconsin,
Corporate Purpose, Ser. A, GO,
2,350 2,350 5.63%, 9/1/2010 2,558 2,558
Wisconsin State, Clean Water, Ser.
5,000 5,000 2, Rev., 5.50%, 6/1/2011 5,437 5,437
Wisconsin State, Clean Water, Ser.
6,545 6,545 2, Rev., 5.50%, 6/1/2014 7,090 7,090
Wisconsin State, Clean Water, Ser.
3,585 3,585 2, Rev., 6.13%, 6/1/2006 3,941 3,941
Wisconsin State, GO, 6.20%,
6,000 6,000 5/1/2006 6,618 6,618
Wisconsin State, GO, 6.25%,
1,000 1,000 5/1/2012 1,154 1,154
Wisconsin State, Ser. 1, GO,
2,775 2,775 5.00%, 11/1/2007 2,928 2,928
Wisconsin State, Ser. 1, GO,
6,275 6,275 5.50%, 11/1/2011 6,852 6,852
Wisconsin State, Ser. 2, GO,
5,000 5,000 5.00%, 5/1/2004 5,184 5,184
Wisconsin State, Ser. 3, GO,
4,450 4,450 5.20%, 11/1/2009 4,750 4,750
Wisconsin State, Transportation,
4,040 4,040 Ser. A, Rev., 5.00%, 7/1/2005 4,212 4,212
---------------------------------------------
53,934 - 53,934
TOTAL GENERAL OBLIGATIONS & HOUSE
AUTHORITY 58.76% 690,598 250,629 941,227
INSURED 17.47%
ALASKA 0.13%
Anchorage GO, 6.60%, 7/1/02,
2,000 2,000 Prerefunded at 100% of Par (MBIA) - 2,021 2,021
---------------------------------------------
CALIFORNIA 3.79%
Bay Area Governments Association
Lease Rev., Series 2001 A,(Bart
SFO Extension-FTA Capital Grant),
35,000 35,000 4.88%, 6/15/09 (AMBAC) 35,844 35,844
Bay Area Governments Association
Lease Rev., Series 2001 A,(Bart
SFO Extension-FTA Capital Grant),
2,140 2,140 5.00%, 6/15/08 (AMBAC) 2,164 2,164
California, 5.00%, 12/1/09
5,000 5,000 (FGIC-TCRS) 5,378 5,378
California, 6.50%, 9/1/10
3,000 3,000 (FGIC-TCRS) 3,545 3,545
California, Series 1999, 5.50%,
10,000 10,000 2/1/10 (FGIC-TCRS) 10,997 10,997
Los Angeles County Public Works
Financing Auth. Lease Rev., Series
2,500 2,500 1996 A, 6.00%, 9/1/06 (MBIA) 2,787 2,787
---------------------------------------------
- 60,715 60,715
DISTRICT OF COLUMBIA 0.83%
District of Columbia, Series 1992
B, 6.00%, 6/1/02, Escrowed to
2,600 2,600 Maturity (MBIA) 2,678 2,678
District of Columbia, Series 1993
A, 6.00%, 6/1/07 to 6/1/07,
3,220 3,220 Escrowed to Maturity(MBIA-IBC) 3,552 3,552
District of Columbia, Series 1993
C, 5.25%, 12/1/03, Escrowed to
6,795 6,795 Maturity (FGIC) 7,074 7,074
---------------------------------------------
- 13,304 13,304
FLORIDA 0.13%
Volusia County School District,
2,000 2,000 6.10%, 8/1/02 (FGIC) - 2,060 2,060
---------------------------------------------
GEORGIA 0.36%
Metropolitan Atlanta Rapid
Transportation Auth., Series 1992
5,000 5,000 P, 6.25%, 7/1/11(AMBAC) - 5,795 5,795
---------------------------------------------
ILLINOIS 1.32%
Cook County, Series 2001 A, 5.38%,
10,065 10,065 11/15/14 (FGIC) 10,522 10,522
Cook County, Series 2001 A, 5.50%,
6,760 6,760 11/15/13 (FGIC) 7,202 7,202
Regional Transportation Auth.,
2,810 2,810 Series 1994 D, 7.75%, 6/1/07 (FGIC) 3,349 3,349
---------------------------------------------
- 21,073 21,073
LOUISIANA 0.16%
New Orleans, (Capital
4,165 4,165 Appreciation), 5.28%, 9/1/11(y) 2,559 2,559
---------------------------------------------
MASSACHUSETTS 1.28%
Massachusetts, Series 2000 A,
(Grant Anticipation Notes), 5.75%,
18,620 18,620 12/15/12 (FSA) 20,513 20,513
---------------------------------------------
MICHIGAN 1.16%
Grand Rapids Water Supply System
3,910 3,910 Rev., 5.75%, 1/1/13 (FGIC) 4,267 4,267
Michigan State Hospital Finance
Auth. Rev., Series 1999 A,
(Ascension Health Credit), 6.25%,
13,050 13,050 11/15/15 (MBIA) 14,305 14,305
---------------------------------------------
- 18,572 18,572
NEBRASKA 1.00%
Nebhelp Inc, Series 1993 A-5B,
5,245 5,245 6.20%, 6/1/13 (MBIA) 5,517 5,517
Nebraska Public Power District,
10,000 10,000 Series 1998 A, 5.25%, 1/1/05(MBIA) 10,464 10,464
---------------------------------------------
- 15,981 15,981
NEVADA 0.64%
Clark County School District,
8,200 8,200 Series 1991 A, 7.00%, 6/1/11(MBIA) 9,901 9,901
Las Vegas-Clark County Library
District, Series 1991 B, 6.70%,
280 280 8/1/04(FGIC) 286 286
---------------------------------------------
- 10,187 10,187
NEW JERSEY 1.14%
New Jersey Economic Development
Auth. Rev., Series A, Market
Transition Facilities Rev., Sr.
7,000 7,000 Lien, 5.40%, 7/1/02 (MBIA) 7,174 7,174
New Jersey Economic Development
Auth. Rev., Series A, Transition
Project Sublease, 5.75%, 5/1/11
4,100 4,100 (FSA) 4,548 4,548
New Jersey State Transportation
Trust Fund, Series 1995
B,Transportation System, 6.00%,
6,000 6,000 6/15/05(MBIA) 6,516 6,516
---------------------------------------------
- 18,238 18,238
NEW YORK 0.68%
Monroe County, 6.00%, 6/1/10
75 75 (AMBAC) 85 85
New York State Thruway Auth.,
Series 2000 B-1, 5.50%,4/1/09
10,000 10,000 (FGIC) 10,834 10,834
---------------------------------------------
- 10,919 10,919
OHIO 0.68%
Ohio State Turnpike Commission,
Series 1996 A, 5.50%, 2/15/26,
10,000 10,000 Prerefunded at 102% of Par(MBIA) - 10,902 10,902
---------------------------------------------
PENNSYLVANIA 0.10%
Pennsylvania, Series 1991 A2,
6.50%, 11/1/04, Prerefunded at
1,500 1,500 101.5% of Par (MBIA) - 1,553 1,553
---------------------------------------------
SOUTH CAROLINA - 3.1% 1.81%
Piedmont Municipal Power Agency
Electric Rev., 6.20%, 1/1/08
1,000 1,000 (MBIA) 1,124 1,124
Piedmont Municipal Power Agency
Electric Rev., 6.75%, 1/1/20
15,000 15,000 (FGIC) 18,075 18,075
South Carolina GO, Series 2000 A,
(State School Facilities), 4.25%,
10,310 10,310 1/1/15 (State Aid Withholding) 9,728 9,728
---------------------------------------------
- 28,927 28,927
TEXAS 2.01%
Houston Independent School
District, (Capital Appreciation),
11,135 11,135 4.76%, 8/15/13 (PSFG) (y) 6,045 6,045
Humble Independent School
District, Series 2000 C, (Humble
Island), 3.95%, 2/15/16 to 2/15/17
10,880 10,880 (PSFG) (y) 4,840 4,840
Lewisville Independent School
4,105 4,105 District, 5.50%, 8/15/16 (PSFG) 4,262 4,262
Lubbock Health Facilities
Development Corp., (St. Joseph
Health System), 5.00%, 7/1/07
2,100 2,100 (FSA-CR) 2,185 2,185
Texas Municipal Power Agency Rev.,
(Capital Appreciation), 4.76%,
12,500 12,500 9/1/13 (MBIA) (y) 6,772 6,772
Texas Public Building Auth.,
(Capital Appreciation), 4.21%,
10,100 10,100 8/1/06 (MBIA) (y) 8,068 8,068
---------------------------------------------
- 32,172 32,172
WASHINGTON 0.27%
Pierce County School District No.
320 Sumner, 6.60%,
12/1/02,Prerefunded at 100% of Par
1,000 1,000 (MBIA) 1,024 1,024
Snohomish County School District
No. 2 Everett, Series 1991 A,
1,250 1,250 6.70%, 12/1/02 (MBIA) 1,259 1,259
Washington Public Power Supply
System Rev., Series 1990 C,
(Nuclear Project No. 2), 7.00%,
2,000 2,000 7/1/01 (FGIC) 2,022 2,022
---------------------------------------------
- 4,305 4,305
Total Insured 17.47% - 279,796 279,796
PRE-REFUNDED/TAX EXEMPT 1.61%
ALABAMA 0.06%
Daphne Special Care Facilities
Financing Auth. Rev., Series 1988
A, (Presbyterian Retirement),
7.30%, 8/15/18, Prerefunded at
1,000 1,000 100% of Par - 1,017 1,017
---------------------------------------------
CONNECTICUT 0.19%
Connecticut Special Tax Obligation
Rev., Series 1999 A,
(Transportation Infrastructure),
6.60%, 6/1/04, Prerefunded at 100%
2,815 2,815 of Par - 2,994 2,994
---------------------------------------------
MICHIGAN 0.66%
Detroit Water Supply System Rev.,
6.37%, 3/3/01, Prerefunded at 102%
10,000 10,000 of Par (FGIC) - 10,570 10,570
---------------------------------------------
MISSOURI 0.61%
Missouri State Regional Convention
& Sports Complex Auth., Series A,
6.90%, 8/15/21, Prerefunded at
5,000 5,000 100% of Par 5,381 5,381
St. Louis County Regional
Convention & Sports Complex Auth.,
Series 1991 B, 7.00%, 8/15/21,
4,000 4,000 Prerefunded at 100% of Par 4,314 4,314
---------------------------------------------
- 9,695 9,695
TEXAS 0.10%
Dallas County Flood Control
District, 9.25%, 4/1/10,
1,305 1,305 Prerefunded at 100% of Par 1,581 1,581
---------------------------------------------
TOTAL PRE-REFUNDED/TAX EXEMPT 1.61% - 25,857 25,857
PRIVATE PLACEMENT 2.60%
CALIFORNIA 0.09%
Kaweah Delta Hospital District,
1,049 1,049 5.25%, 6/1/14 1,047 1,047
Kawaeh Delta Hospital District,
353 353 6.40%, 6/1/14 376 376
---------------------------------------------
- 1,423 1,423
FLORIDA 0.64%
Orlando Utility Commission, 4.48%,
10,250 10,250 9/1/03 - 10,299 10,299
---------------------------------------------
ILLINOIS 0.19%
Illinois Development Bank, 4.90%,
3,000 3,000 8/1/28 - 3,063 3,063
---------------------------------------------
NEW YORK 0.64%
New York Convention Center
Operating Corporation Certificates
of Partnership, (Yale Building
10,000 10,000 Acquisition), 6.50%, 12/1/04 - 10,189 10,189
---------------------------------------------
PENNSYLVANIA 0.27%
Philadelphia Auth. for Industrial
4,250 4,250 Development, 4.75%, 1/1/18 - 4,262 4,262
---------------------------------------------
WISCONSIN 0.78%
Wisconsin Health & Educational
6,250 6,250 Facilities, 5.70%, 5/1/14 6,275 6,275
Wisconsin Health & Educational
6,250 6,250 Facilities, 5.95%, 5/1/19 6,141 6,141
---------------------------------------------
- 12,416 12,416
TOTAL PRIVATE PLACEMENT 2.60% - 41,652 41,652
REVENUE BONDS 17.34%
ARIZONA 0.21%
Arizona Health Facilities Auth.
Rev., Series 1999 A, (Catholic
3,430 3,430 Healthcare West), 6.13%, 7/1/09 - 3,416 3,416
---------------------------------------------
CALIFORNIA 1.03%
California State Department of
Water Resources Center Valley
Project, Series 1992 J-1, (Water
2,520 2,520 systems), 7.00%, 12/1/12 3,120 3,120
California Statewide Community
13,070 13,070 Development Auth., 6.00%, 7/1/09 13,328 13,328
---------------------------------------------
- 16,448 16,448
GEORGIA 0.09%
Georgia Municipal Electric Auth.,
1,250 1,250 Series 1997 A, 6.50%, 1/1/12 - 1,443 1,443
---------------------------------------------
ILLINOIS 0.47%
Illinois Health Facilities Auth.
1,665 1,665 Rev., 6.63%, 2/15/12 1,807 1,807
Illinois Health Facilities Auth.
3,770 3,770 Rev., 6.75%, 11/15/10 4,087 4,087
Metropolitan Pier & Exposition
Auth. Dedicated State Tax Rev.,
1,380 1,380 Series 1992 A, 8.50%, 6/15/06 1,667 1,667
---------------------------------------------
- 7,561 7,561
IOWA 0.46%
Iowa Finance Auth., 6.75%, 2/15/15
6,920 6,920 to 2/15/17 - 7,433 7,433
---------------------------------------------
MARYLAND 0.36%
Maryland State Health & Higher
Educational Facilities Auth. Rev.,
(John Hopkins University), 5.75%,
5,435 5,435 7/1/03 - 5,703 5,703
---------------------------------------------
MASSACHUSETTS 2.31%
Massachusetts Bay Transportation
Auth., Series 1994 A, (General
Transportation System), 7.00%,
5,650 5,650 3/1/08 6,596 6,596
Massachusetts Health & Educational
Facilities Auth., Series 2000 A,
(Harvard University), 5.00%,
6,750 6,750 1/15/07 7,120 7,120
Massachusetts State College
Building Auth., Series 1994 A,
1,495 1,495 7.50%, 5/1/11 1,864 1,864
Massachusetts State Water
Pollution Abatement, Series 1999
9,500 9,500 A, (MWRA Program), 6.00%, 8/1/15 10,513 10,513
Massachusetts State Water
Resources Auth., Series 2000 D,
10,000 10,000 5.50%, 8/1/09 10,885 10,885
---------------------------------------------
- 36,978 36,978
MICHIGAN 1.64%
Michigan State Hospital Finance
Auth. Rev., Series 1997 T, (Mercy
2,905 2,905 Health Services), 5.75%, 8/15/04 3,027 3,027
Michigan State Hospital Finance
Auth. Rev., Series 1999 B,
(Ascension Health Credit), 5.30%,
10,000 10,000 11/15/33 10,236 10,236
Michigan State Hospital Finance
Auth. Rev., Series 2000 A,
3,755 3,755 (Trinity Health), 5.50%, 12/1/05 3,876 3,876
Michigan State Hospital Finance
Auth. Rev., Series 2000 A,
(Trinity Health), 6.00%, 12/1/11
8,565 8,565 to 12/1/12 9,173 9,173
---------------------------------------------
- 26,312 26,312
MINNESOTA 0.69%
University of Minnesota, Series
10,000 10,000 1996 A, 5.75%, 7/1/10 to 7/1/15 - 11,101 11,101
---------------------------------------------
MISSISSIPPI 0.16%
Mississippi Higher Education
Assistance Corp., Series 1993 B,
2,505 2,505 5.60%, 9/1/04 - 2,595 2,595
---------------------------------------------
NEBRASKA 0.27%
University of Nebraska Facilities
Corp., (Deferred Maintenance
4,190 4,190 Project), 5.00%, 7/15/04 - 4,356 4,356
---------------------------------------------
NEW HAMPSHIRE 0.35%
New Hampshire Higher Educational &
Health Facilities Auth.,
4,900 4,900 (Dartmouth College), 6.75%, 6/1/07 - 5,628 5,628
---------------------------------------------
NEW YORK 1.30%
New York City Transitional Finance
Auth., Series 2001 B, 5.50%,
10,000 10,000 2/1/15 to 2/1/16 10,553 10,553
Triborough Bridge & Tunnel
8,700 8,700 Authority, 6.63%, 1/1/12 10,250 10,250
---------------------------------------------
- 20,803 20,803
NORTH CAROLINA 1.00%
North Carolina Municipal Power
Agency No. 1 Catawba Electric
8,900 8,900 Rev., Series 1999 B, 6.13%, 1/1/06 9,351 9,351
North Carolina Municipal Power
Agency No. 1 Catawba Electric
6,275 6,275 Rev., Series 1999 B, 6.25%, 1/1/07 6,659 6,659
---------------------------------------------
- 16,010 16,010
NORTH DAKOTA 0.72%
North Dakota State Housing Finance
Agency Mortgage Rev., Series 2000
C, (Housing Finance Program),
11,280 11,280 5.55%, 1/1/31 - 11,522 11,522
---------------------------------------------
OHIO 0.20%
Ohio State Water Development
2,585 2,585 Auth., 9.38%, 12/1/10 - 3,153 3,153
---------------------------------------------
PENNSYLVANIA 0.96%
Clinton County Industrial
Development Auth. Rev., Series
1992 A, (International Paper Co.),
10,000 10,000 VRN, 4.73%, 9/1/22 10,000 10,000
Pennsylvania State Higher
Educational Facilities Auth. Rev.,
Series 1995 A, (University of
1,310 1,310 Pennsylvania), 6.50%, 9/1/02 1,365 1,365
Pennsylvania State Higher
Educational Facilities Auth. Rev.,
Series 1996 A, (University of
Pennsylvania Health Services),
3,800 3,800 6.00%, 1/1/06 3,958 3,958
---------------------------------------------
- 15,323 15,323
SOUTH CAROLINA 0.54%
South Carolina Jobs-Economic
Development Auth. Hospital
Facilities Rev., Series 2000 A,
(Palmetto Health Alliance), 7.00%,
5,500 5,500 12/15/10 5,662 5,662
South Carolina Jobs-Economic
Development Auth. Hospital
Facilities Rev., Series 2000 A,
(Palmetto Health Alliance), 7.13%,
3,000 3,000 12/15/15 2,985 2,985
---------------------------------------------
- 8,647 8,647
TEXAS 1.83%
Brazos River Auth. Rev., Series
1999 A, (Utility Electric
10,000 10,000 Company), 5.00%, 4/1/33 10,008 10,008
Dallas-Fort Worth International
Airport Facility Improvement Corp.
Rev., Series 2000 B, (American
13,000 13,000 Airlines), 6.05%, 5/1/29 13,321 13,321
Lubbock Health Facilities
Development Corp., (St. Joseph
5,875 5,875 Health Systems), 5.25%, 7/1/11 6,017 6,017
---------------------------------------------
- 29,346 29,346
VIRGINIA 2.18%
Virginia College Building Auth.,
5,000 5,000 5.75%, 2/1/03 5,195 5,195
Virginia Commonwealth
Transportation Board, (Federal
27,415 27,415 Highway), 5.50%, 10/1/05 to 10/1/08 29,690 29,690
---------------------------------------------
- 34,885 34,885
WASHINGTON 0.57%
Washington Public Power Supply
System, Series 1990 A, (Project
2,000 2,000 II), 7.25%, 7/1/06 2,295 2,295
Washington Public Power Supply
System, Series 1990 C, 7.50%,
1,500 1,500 7/1/02 1,534 1,534
Washington Public Power Supply
System, Series 1991 A, 6.30%,
5,265 5,265 7/1/01 5,312 5,312
---------------------------------------------
- 9,141 9,141
TOTAL REVENUE BONDS 17.34% - 277,804 277,804
TAX ANTICIPATION NOTES 0.51%
CALIFORNIA 0.51%
Tustin Unified School District
Rev., (Community Facilities 97-1),
8,000 8,000 6.10%, 9/1/02 - 8,121 8,121
---------------------------------------------
TOTAL TAX ANTICIPATION NOTES 0.51% - 8,121 8,121
TOTAL MUNICIPALS 98.29% 690,598 883,859 1,574,457
SHORT-TERM INVESTMENTS 3.36%
CALIFORNIA 0.06%
California PCFA, Resource
Recovery, OMS Equity Stanislaus
Project, Rev., FRDO, 1.50%,
100 100 3/1/2001 100 100
Irvine Ranch, California, Water
District, Capital Improvement
500 500 Project, COP, FRDO, 1.40%, 3/1/2001 500 500
Irvine Ranch, California, Water
District, District No. 105, 140,
240 & 250, GO, FRDO, 1.40%,
100 100 3/1/2001 100 100
Irvine Ranch, California, Water
District, District No. 182, Ser.
100 100 A, GO, FRDO, 1.40%, 3/1/2001 100 100
Los Angeles, California, Regional
Airports Improvement Corp.,
Terminal Facility, Los Angeles
International Airport, Rev., FRDO,
100 100 3.30%, 3/1/2001 100 100
---------------------------------------------
900 - 900
INVESTMENT COMPANIES 3.29%
J.P. Morgan Institutional Tax
45,221 45,221 Exempt Money Market Fund (a) 45,221 45,221
Provident Municipal Cash Money
3,654 3,654 Market Fund, 3.41% 3,654 3,654
Provident Municipal Cash Money
3,876 3,876 Market Fund, 3.48% 3,876 3,876
---------------------------------------------
7,530 45,221 52,751
NEW YORK 0.01%
Port Authority of New York & New
Jersey, Special Obligation,
Versatile Structure Obligation,
100 100 Ser. 6, Rev., FRDO, 3.00%, 3/1/2001 100 100
---------------------------------------------
TOTAL SHORT-TERM INVESTMENTS 3.36% 8,530 45,221 53,751
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS 101.64% $ 699,128 $ 929,080 $ 1,628,208
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL COST $ (667,091) $ (898,224) $(1,565,315)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $ 705,863 $ 899,327 $ 1,601,879
- -----------------------------------------------------------------------------------------------------------------------------------
^ - Security is prerefunded or escrowed to maturity.
The maturity date shown is the date of the prerefunded call
AMBAC - AMBAC Assurance Corporation
COP - Certificates of Participation
FGIC - Financial Guaranty Insurance Co.
FRDO - Floating Rate Demand Obligation.
The Maturity date shown is the next interest reset date. The interest rate
shown is the rate in effect at February 28, 2001
FSA - Financial Securities Assurance
GO - General Obligation
IBC - IBC Financial Data, Inc.
IDA - Industrial Development Authority
IDR - Industrial Development Revenue
MBIA - MBIA Insurance Corp.
PCFFA - Pollution Control Facilities Financing Authority
PCR - Pollution Control Revenue
PSFG - Permanent School Fund Guarantee
Rev. - Revenue Bond
Ser. - Series
VRN - Variable Rate Note
(a) Money market mutual fund registered under the Investment Company Act of
1940, as amended, and advised by J.P. Morgan Investment Management, Inc.
(y) Yield to maturity
The Accompanying Notes are an Integral Part of the Financial Statements.
J.P. MORGAN TAX EXEMPT BOND FUND / J.P. MORGAN INSTITUTIONAL TAX EXEMPT
BOND FUND / THE TAX EXEMPT BOND PORTFOLIO /
JPMORGAN INTERMEDIATE TAX FREE INCOME 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 TAX INSTITUTIONAL TAX
EXEMPT BOND EXEMPT BOND THE TAX EXEMPT
FUND FUND BOND PORTFOLIO
ASSETS:
Investment Securities, at Value $ - $ - $ 929,080
Investment in The Tax Exempt Bond Portfolio
("Portfolio"), at Value 356,116 543,211 -
Prepaid Trustees' Fees and Expenses - - 1
Accrued Domestic Interest Income - - 67
Accrued Municipal Bond Interest - - 10,359
Other 1 1 1
Receivables: - - -
Investment Securities Sold - - 45,754
Interest - - 679
Dividends - - 4
------------------------------------------------------------
Total Assets 356,117 543,212 985,945
------------------------------------------------------------
LIABILITIES:
Payables:
Investment Securities Purchased - - 72,216
Due To Custodian - - 13,851
Dividends 1,209 1,906 -
Accrued Liabilities:
Investment Advisory Fees - - 208
Shareholder Servicing Fees 68 42 -
Administrative Service Fees 6 10 16
Custodian Fees - - 41
Administration Fees - 1 1
Other 36 35 285
------------------------------------------------------------
Total Liabilities 1,319 1,994 86,618
------------------------------------------------------------
NET ASSETS:
Paid-in Capital 337,096 531,262 -
Accumulated Undistributed (distributions in excess
of) Net Investment Income (103) (135) -
Accumulated Net Realized Loss on Investment
Transactions 3,151 (6,111) -
Net Unrealized appreciation on Investments and
Futures Contracts 14,654 16,202 -
------------------------------------------------------------
Net Assets $ 354,798 $ 541,218 $ 899,327
============================================================
Shares of Beneficial Interest Outstanding 29,761 52,586 -
Shares Outstanding - -
Net Asset Value Per Share $ 11.92 $ 10.29 -
PRO FORMA WITH CONCURRENT REORGANIZATION
JPMORGAN TAX EXEMPT BOND FUND
SHARES OUTSTANDING - - -
Select - - -
Institutional
NET ASSET VALUE PER SHARE
Select - - -
Institutional - - -
-----------------------------------------------------------------
Cost of Investments $ - $ - $ 898,224
=================================================================
PRO FORMA
JPMORGAN COMBINED
INTERMEDIATE TAX JPMORGAN
FREE INCOME PRO FORMA TAX EXEMPT
FUND ADJUSTMENT BOND FUND
ASSETS:
Investment Securities, at Value $ 699,128 $ - $ 1,628,208
Investment in The Tax Exempt Bond Portfolio
("Portfolio"), at Value - (899,327) (a) -
Prepaid Trustees' Fees and Expenses - - 1
Accrued Domestic Interest Income - - 67
Accrued Municipal Bond Interest - - 10,359
Other 9 - 12
Receivables: - - -
Investment Securities Sold - - 45,754
Interest 9,514 - 10,193
Dividends - - 4
-------------------------------------------------------
Total Assets 708,651 (899,327) 1,694,598
-------------------------------------------------------
LIABILITIES:
Payables:
Investment Securities Purchased - - 72,216
Due To Custodian - - 13,851
Dividends 2,216 - 5,331
Accrued Liabilities:
Investment Advisory Fees 162 - 370
Shareholder Servicing Fees 135 - 245
Administrative Service Fees 81 - 113
Custodian Fees 27 - 68
Administration Fees - - 2
Other 167 - 523
-------------------------------------------------------
Total Liabilities 2,788 92,719
-------------------------------------------------------
NET ASSETS:
Paid-in Capital 675,926 - 1,544,284
Accumulated Undistributed (distributions in excess
of) Net Investment Income 40 - (198)
Accumulated Net Realized Loss on Investment
Transactions (2,140) - (5,100)
Net Unrealized appreciation on Investments and
Futures Contracts 32,037 - 62,893
-
-------------------------------------------------------
Net Assets $ 705,863 $ (899,327) $ 1,601,879
=======================================================
Shares of Beneficial Interest Outstanding - (82,347)(c) -
Shares Outstanding 65,766 (65,766)(d) -
Net Asset Value Per Share $ 10.73 - -
PRO FORMA WITH CONCURRENT REORGANIZATION
JPMORGAN TAX EXEMPT BOND FUND
SHARES OUTSTANDING - 98,823 (b) 98,823
Select - 50,426 (b) 50,426
Institutional
NET ASSET VALUE PER SHARE
Select - - $ 10.73
Institutional - - $ 10.73
-------------------------------------------------------
Cost of Investments $ 667,091 $ - $ 1,565,315
=======================================================
(a) Reflects reallocation of investment from the feeder funds to master
portfolio.
(b) The difference in number of shares outstanding due to the Concurrent
Reorganization.
(c) Reallocation of feeder funds beneficial interest to Select and Institutional
due to the Concurrent Reorganization.
(d) Reallocation of Chase Vista Intermediate Tax Free Income Fund's shares
outstanding to Select and Institutional shares due to the Concurrent
Reorganization.
See Notes to Pro Forma Financial Statements.
J.P. MORGAN TAX EXEMPT BOND FUND / J.P. MORGAN INSTITUTIONAL TAX EXEMPT
BOND FUND / THE TAX EXEMPT BOND PORTFOLIO /
JPMORGAN INTERMEDIATE TAX FREE INCOME 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 TAX INSTITUTIONAL TAX
EXEMPT BOND EXEMPT BOND THE TAX EXEMPT
FUND FUND BOND PORTFOLIO
INCOME:
Interest Income $ - $ - $ 42,160
Allocated Investment Income from Portfolio 17,789 24,370 -
Allocated Portfolio Expenses (1,205) (1,652) -
------------------------------------------------------------
Investment Income 16,584 22,718 42,160
------------------------------------------------------------
EXPENSES:
Investment Advisory Fees - - 2,437
Shareholder Servicing Fees 855 469
Administrative Service Fees 82 112 195
Custodian Fees - - 141
Professional Fees 16 16 44
Transfer Agent Fees 47 26 -
Printing and Postage 16 12 10
Trustees' Fees 6 6 12
Registration Fees (2) 4
Fund Services Fees 5 7 12
Administration Fees 4 5 5
Insurance Expense 1 - 2
Financial and Fund Accounting Services Fee 35 34 -
Other 27 22 -
------------------------------------------------------------
Total Expenses 1,092 713 2,858
------------------------------------------------------------
Less: Amounts Waived - - -
Less: Expense Reimbursements 13 23 26
Less: Earnings Credits - - -
------------------------------------------------------------
Net Expenses 1,079 690 2,832
------------------------------------------------------------
------------------------------------------------------------
Net Investment Income $ 15,505 $ 22,028 $ 39,328
------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net Realized Gain on:
Investments 3,228 4,880 8,108
Futures Transactions - - -
Change in Net Unrealized Appreciation (Depreciation)
of:
Investments 7,045 21,977 29,022
Futures Contracts - -
------------------------------------------------------------
Net Realized and Unrealized Gain on Investments
Allocated from Portfolio 10,273 26,857 37,130
------------------------------------------------------------
------------------------------------------------------------
Net Increase in Net Assets from Operations $ 25,778 $ 48,885 $ 76,458
============================================================
PRO FORMA
CHASE VISTA COMBINED
INTERMEDIATE TAX JPMORGAN
FREE INCOME PRO FORMA TAX EXEMPT
FUND ADJUSTMENTS BOND FUND
INCOME:
Interest Income $ 34,643 $ - $ 76,803
Allocated Investment Income from Portfolio - (42,159) (c) -
Allocated Portfolio Expenses - 2,857 (b) -
--------------------------------------------------------
Investment Income 34,643 (39,302) 76,803
--------------------------------------------------------
EXPENSES:
Investment Advisory Fees 2,076 - 4,513
Shareholder Servicing Fees 1,731 - 3,055
Administrative Service Fees 1,039 831 (e) 2,259
Custodian Fees 116 (95)(f,g) 162
Professional Fees 45 (22) (g) 99
Transfer Agent Fees 22 - 95
Printing and Postage 28 (7) (g) 59
Trustees' Fees 34 - 58
Registration Fees 34 - 36
Fund Services Fees - - 24
Administration Fees - - 14
Insurance Expense - - 3
Financial and Fund Accounting Services Fee - (69) (f) -
Other 35 - 84
--------------------------------------------------------
Total Expenses 5,160 638 10,461
--------------------------------------------------------
Less: Amounts Waived - 638 (a) 638
Less: Expense Reimbursements - 638 (a) 700
Less: Earnings Credits 3 - 3
--------------------------------------------------------
Net Expenses 5,157 (638) 9,120
--------------------------------------------------------
--------------------------------------------------------
Net Investment Income $ 29,486 $ (38,664) $ 67,683
--------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net Realized Gain on:
Investments 2,115 (8,108) (d) 10,223
Futures Transactions 235 - 235
Change in Net Unrealized Appreciation (Depreciation)
of:
Investments 34,954 (29,022) (d) 63,976
Futures Contracts 40 40
--------------------------------------------------------
Net Realized and Unrealized Gain on Investments
Allocated from Portfolio 37,344 (37,130) 74,474
--------------------------------------------------------
--------------------------------------------------------
Net Increase in Net Assets from Operations $ 66,830 $ (75,794) $ 142,157
========================================================
(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) Reflects adjustment to master portfolio expenses for reclass of feeder
expense reimbursements.
(f) Reflects reclassification of fund accounting into revised combined
custodian agreement.
(g) Reduction reflects expected benefit of combined operations.
See Notes to Pro Forma Financial Statements
PRO FORMA FINANCIAL STATEMENTS
J.P. MORGAN TAX EXEMPT BOND FUND/ J.P. MORGAN INSTITUTIONAL TAX EXEMPT BOND
FUND/J.P. MORGAN INSTITUTIONAL SERVICE TAX EXEMPT BOND FUND/THE TAX EXEMPT BOND
PORTFOLIO/ JPMORGAN INTERMEDIATE TAX FREE INCOME 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 Tax Exempt Bond Portfolio ("Master Portfolio"), J.P. Morgan
Institutional Tax Exempt Bond Fund ("Institutional Fund"), J.P. Morgan Tax
Exempt Bond Fund ("Tax Exempt Bond Fund"), (collectively the "feeder funds" of
the Master Portfolio) and JPMorgan Intermediate Tax Free Income Fund
("JPMITFIF") 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 Master Portfolio, Tax Exempt
Bond Fund, and Institutional Fund in exchange for shares in JPMITFIF. The Pro
Forma Statements should be read in conjunction with the historical financial
statements of each Fund, whch have been incorporated by reference in their
respective Statements of Additional Information.
2. SHARES OF BENEFICIAL INTEREST: Immediately prior to the Concurrent
Reorganization, JPMITFIF would commence offering Select Class Shares. The net
asset value per share for Select Class Shares at the commencement of offering
would be identical to the closing net asset value per share for the JPMITFIF
Institutional Class Shares prior to the Concurrent Reorganization.
Under the proposed Concurrent Reorganization, each shareholder of Tax Exempt
Bond Fund and Institutional Fund would receive shares of JPMITFIF with a
value equal to their holding in their respective funds. Holders of the Tax
Exempt Bond Fund will receive Select Class Shares, and Institutional Fund
will receive Institutional Class shares. Holders of Institutional Class in
JPMITFIF will receive Select Class shares. Therefore, as a result of the
proposed Concurrent Reorganization, current shareholders Tax Exempt Bond Fund
and Institutional Fund will become shareholders of JPMITFIF.
The Pro Forma net asset value per share assumes the issuance of additional
shares of JPMITFIF which would have been issued on February 28, 2001 in
connection with the proposed Concurrent Reorganization. The amount of
additional shares assumed to be issued under the Concurrent Reorganization
was calculated based on February 28, 2001 net assets of Tax Exempt Bond Fund
and Institutional Fund and net asset value per share of JPMITFIF --
Institutional Class.
JPMORGAN INTERMEDIATE TAX FREE INCOME WITH CONCURRENT REORGANIZATION
Select Institutional
Class Shares Class Shares
Increase in Shares Issued 98,823 50,426
-4-
Pro Forma Net Assets 2/28/01 $1,060,661 $541,218
Pro Forma Net Asset Value 2/28/01 $10.73 $10.73
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.
-5-
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 (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.(1)
7 Form of Distribution and Sub-Administration Agreement (1)
8(a) Form of Retirement Plan for Eligible Trustees.(2)
8(b) Form of Deferred Compensation Plan for Eligible Trustees.(2)
9 Form of Custodian Agreement. (1)
10(a) Rule 12b-1 Distribution Plan of Mutual Funds including Selected
Dealer Agreement and Shareholder Service Agreement. (2)
10(b) Rule 12b-1 Distribution Plan - Class B Shares (including forms of
Selected Dealer Agreement and Shareholder Servicing Agreement).(4)
10(c) Form of Rule 12b-1 Distribution Plan - Class C Shares (including
forms of Shareholder Servicing Agreements).(5)
10(d) Form of Rule 18f-3 Multi-Class Plan.(4)
Part C-2
11 Opinion and Consent of Nixon Peabody LLP as to the Legality of
Shares to be filed by Amendment.
12 Opinion and Consent of Simpson Thacher & Bartlett as to Tax
Consequences to be filed by Amendment.
13(a) Form of Transfer Agency Agreement. (1)
13(b) Form of Shareholder Servicing Agreement. (4)
13(c) Form of Administration Agreement.(1)
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 Powers of Attorney. (3)
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) Annual Report of the Merging Fund (including the Annual Report of
the Master Portfolio) dated July 31, 2000.
17(h) Semi-Annual Report of the Merging Fund (including the Semi-Annual
Report of the Master Portfolio) dated January 31, 2001.
- --------------------
(1) Filed as an exhibit to the Registration Statement on Form N-1A of the
Registrant (File No. 333-13319) as filed with the Securities and Exchange
Commission on October 2, 1996.
(2) Incorporated by reference to Amendment No. 6 to the Registration
Statement on Form N-1A of Mutual Fund Group (File No. 33-14196) as filed with
the Securities and Exchange Commission on March 23, 1990.
(3) Filed as an exhibit to Pre-Effective Amendment No. 2 as filed with the
Securities and Exchange Commission on December 19, 1996.
Part C-3
(4) Filed as an Exhibit to Amendment No. 32 to the Registration Statement on
Form N-1A of Mutual Fund Group (File No. 33-14196) on December 28, 1995.
(5) Filed as an Exhibit to Amendment No. 45 to the Registration Statement on
Form N-1A of Mutual Fund Group (File No. 33-14196) filed on October 28, 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 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-4
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 SELECT 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
- ------------------------------ and Trustee
H. Richard Vartabedian
* 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
- ------------------------------ Principal Financial
Martin R. Dean 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 Tax Exempt Bond Fund.
(e) Statement of Additional Information for J.P. Morgan Tax Exempt
Bond Fund.
(f) Annual Report of JPMorgan Intermediate Tax Free Income Fund
(formerly, Chase Vista Intermediate Tax Free Income Fund) dated
August 31, 2000.
(g) Annual Report of J.P. Morgan Tax Exempt Bond Fund (including
the Annual Report of The Tax Exempt Bond Portfolio) dated
July 31, 2000.
(h) Semi-Annual Report of J.P. Morgan Tax Exempt Bond Fund
(including the Semi-Annual Report of The Tax Exempt Bond
Portfolio) dated January 31, 2001.