As filed with the Securities and Exchange Commission on April 13, 2001
Registration No. 333-___/811-8358
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U.S. Securities and Exchange Commission
Washington, DC 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. ___ Post-Effective Amendment No.___
(Check appropriate box or boxes)
Exact Name of Registrant as Specified in Charter:
MUTUAL FUND TRUST
Area Code and Telephone Number:
(212) 492-1600
Address of Principal Executive Offices:
1211 Avenue of the Americas, 41st Floor
New York, New York 10036
Name and Address of Agent for Service:
Lisa Hurley
c/o BISYS Fund Services, Inc.
3435 Stelzer Road
Columbus, Ohio 43219
Copies to:
JOSEPH J. BERTINI, ESQ. SARAH E. COGAN, ESQ. JOHN E. BAUMGARDNER,
PETER B. ELDRIDGE, ESQ. Simpson Thacher & Bartlett JR., ESQ.
J.P. Morgan Fleming Asset 425 Lexington Avenue Sullivan & Cromwell
Management (USA) Inc. New York, NY 10017-3954 125 Broad Street
522 Fifth Avenue New York, NY 10004
New York, NY 10036
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Approximate Date of Proposed Public Offering: As soon as practicable after the
Registration Statement becomes effective under the Securities Act of 1933.
It is proposed that this filing will become effective on May 13, 2001 pursuant
to Rule 488 under the Securities Act of 1933.
Calculation of Registration Fee under the Securities Act of 1933: No filing fee
is required because an indefinite number of shares have previously been
registered on Form N-1A (Registration No. 033-75250/811-8358) pursuant to Rule
24f-2 under the Investment Company Act of 1940, as amended. The Registrant's
Form 24f-2 for the fiscal year ended 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 INSTITUTIONAL TREASURY MONEY MARKET FUND
A SERIES OF J.P. MORGAN INSTITUTIONAL FUNDS
60 STATE STREET, SUITE 1300
BOSTON, MASSACHUSETTS 02109
May 12, 2001
Dear Shareholder:
A special meeting of the shareholders of J.P. Morgan Institutional
Treasury Money Market Fund (the "Merging Fund"), a series of J.P. Morgan
Institutional 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 in order to provide
better service for shareholders of funds advised by its subsidiaries. At the
special meeting (the "Meeting"), shareholders will be asked to consider and vote
upon the proposed reorganization of the Merging Fund into JPMorgan Treasury Plus
Money Market Fund (formerly, Chase Vista Treasury Plus Money Market Fund) (the
"Surviving Fund"), a series of Mutual Fund Trust ("MFT") (the "Reorganization").
After the Reorganization, shareholders would hold an interest in the Surviving
Fund. The investment objective and policies of the Merging Fund generally are
similar to those of the Surviving Fund. In connection with the Reorganization,
the Surviving Fund will be renamed "JPMorgan Treasury Plus Money Market Fund."
After the proposed Reorganization, your investment will be in a larger
combined fund with similar investment policies.
The Surviving Fund has also entered into agreements and plans of
reorganization with other money market funds whose assets are managed by J.P.
Morgan Investment Management Inc. ("JPMIM") and which have identical investment
objectives and policies to the Merging Fund (collectively, the "Concurrent
Reorganization"). If the Concurrent Reorganization is approved by the
shareholders of these other funds and certain other conditions are met, these
funds will be reorganized into the Surviving Fund. The consummation of the
Reorganization is contingent upon the consummation of the Concurrent
Reorganization.
At the Meeting, you will also be asked to consider and vote upon the
election of Trustees of 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 MFT. The cost and expenses associated with the Reorganization,
including costs of soliciting proxies, will be borne by JPMC and not by the
Merging Fund, JPMF, the Surviving Fund, MFT or their shareholders.
If approval of the Reorganization is obtained, you will automatically
receive shares in the Surviving Fund.
The Proposals have been carefully reviewed by the Board of Trustees of
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 1-800-766-7722.
A proxy card is enclosed for your use in the shareholder meeting. This
card represents shares you held as of the record date, __________, 2001. IT IS
IMPORTANT THAT YOU COMPLETE, SIGN, AND RETURN YOUR PROXY CARD IN THE ENVELOPE
PROVIDED OR CALL ____________ AS SOON AS POSSIBLE. This will ensure that your
shares will be represented at the Meeting to be held on July 3, 2001.
Please read the enclosed materials carefully. You may, of course,
attend the meeting in person if you wish, in which case the proxy can be revoked
by you at the Meeting.
Sincerely,
Matthew Healey
Chairman
SPECIAL NOTE: Certain shareholders may receive a telephone call from our proxy
solicitor, D.F. King & Co., Inc., or us to answer any questions you may have or
to provide assistance in voting. Remember, your vote is important! Please sign,
date and promptly mail your proxy card(s) in the return envelope provided or
call _______________ in order to vote.
WHY IS THE REORGANIZATION BEING PROPOSED?
The Reorganization is being proposed because each Fund's board believes it is in
the best interests of shareholders to combine funds that have similar investment
objectives and policies and each board believes that the Reorganization should
result in better service for shareholders, including a wider variety of
investment options.
IF THE REORGANIZATION IS APPROVED, WHAT WILL HAPPEN?
Under the Reorganization, the Merging Fund will cease investing in The Treasury
Money Market Portfolio (the "Master Portfolio" in which it currently invests),
will transfer all of its assets and liabilities to the Surviving Fund and will
receive, in exchange, shares of the Surviving Fund. The Merging Fund will then
be liquidated and those shares of the Surviving Fund will be distributed pro
rata to shareholders such as you. After the Reorganization, you will own shares
of the Surviving Fund rather than the Merging Fund. The Surviving Fund invests
directly in portfolio securities rather than in a master portfolio.
WHAT WILL BE THE EFFECT ON THE INVESTMENT STRATEGIES ASSOCIATED WITH MY
INVESTMENT IF THE PROPOSED CHANGES ARE APPROVED?
The Surviving Fund generally has similar investment objectives and policies to
those of the Merging Fund. The principal differences are as follows:
SURVIVING FUND
- - The Surviving Fund's investment objective is to aim to provide the
highest possible level of current income while still maintaining liquidity
and preserving capital.
- - Invests at least 65% of its assets in direct debt securities of the U.S.
Treasury, including Treasury bills, bonds and notes, and repurchase
agreements collateralized by these investments. As an AAA rated fund, the
dollar-weighted average maturity of the Surviving Fund is maintained at 60
days or less.
MERGING FUND
- - The Merging Fund's investment objective is to provide high current income
consistent with the preservation of capital and same-day liquidity.
- - Invests primarily in U.S. Treasury obligations and repurchase agreements
collateralized by these obligations. The Merging Fund attempts to maintain
a dollar-weighted average portfolio maturity of not more than 90 days.
There can be no assurance that the Fund will continue to be rated by Standard &
Poor's Ratings Service and/or Moody's Investors Service or that these agencies
will not downgrade their current ratings. The Merging Fund has not applied for a
rating.
The Reorganization is not intended to have any immediate significant impact on
the investment strategy implemented in respect of your investment. However,
please note that while the Merging Fund invests all of its asset in the Master
Portfolio (which in turn invests in portfolio securities), the Surviving Fund
invests directly in portfolio securities.
HOW WILL THE FEES AND EXPENSES ASSOCIATED WITH MY INVESTMENT BE AFFECTED?
As a result of the Reorganization, the contractual (or pre-waiver) and actual
(or post-waiver) total expense ratios are expected to be the same or less for
your shares in the Surviving Fund than they are for your shares in the Merging
Fund. If an increase does occur, The Chase Manhattan Bank has contractually
agreed to waive fees payable to it and reimburse expenses so that the total
expense ratio will remain the same for at least three years after the
Reorganization.
WILL THERE BE ANY CHANGE IN WHO MANAGES MY INVESTMENT?
Yes. JPMFAM, the investment adviser that currently manages the day-to-day
investment activities of the Surviving Fund, will continue to manage that fund
after the Reorganization.
WHO WILL PAY FOR THE REORGANIZATION?
The cost and expenses associated with the Reorganization, including costs of
soliciting proxies, will be borne by JPMC and not by either the Merging Fund or
the Surviving Fund (or shareholders of either fund).
WHAT IF I DO NOT VOTE OR VOTE AGAINST THE REORGANIZATION, YET APPROVAL OF THE
REORGANIZATION IS OBTAINED?
You will automatically receive shares in the Surviving Fund.
HOW WILL THE PROPOSED CONCURRENT REORGANIZATION AFFECT MY INVESTMENT IF IT IS
APPROVED BY THE SHAREHOLDERS OF THE OTHER FUNDS?
If the Concurrent Reorganization is approved and certain other conditions are
met, the assets and liabilities of the other merging funds will become the
assets and liabilities of the Surviving Fund. The consummation of the
Reorganization is contingent upon the consummation of the Concurrent
Reorganization.
WHY AM I BEING ASKED TO VOTE ON THE ELECTION OF TRUSTEES FOR JPMF IF AFTER THE
REORGANIZATION I WILL OWN SHARES IN THE SURVIVING FUND, A SERIES OF MFT?
Even if the Reorganization is approved, other mutual funds that are series of
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
MFT 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 return envelope as soon as possible after reviewing the enclosed
Combined Prospectus/Proxy Statement.
MAY I ATTEND THE MEETING IN PERSON?
Yes, you may attend the Meeting in person. If you complete a proxy card and
subsequently attend the Meeting, your proxy can be revoked. Therefore, to ensure
that your vote is counted, we strongly urge you to mail us your signed, dated
and completed proxy card(s) even if you plan to attend the Meeting.
J.P. MORGAN INSTITUTIONAL TREASURY MONEY MARKET FUND,
A SERIES OF J.P. MORGAN INSTITUTIONAL FUNDS
60 STATE STREET, SUITE 1300
BOSTON, MASSACHUSETTS 02109
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 3, 2001
To the Shareholders of
J.P. Morgan Institutional Treasury Money Market Fund:
NOTICE IS HEREBY GIVEN THAT a Special Meeting of the shareholders
("Shareholders") of J.P. Morgan Institutional Treasury Money Market Fund (the
"Merging Fund"), a series of J.P. Morgan Institutional Funds ("JPMF"), will be
held at the offices of J.P. Morgan Chase & Co., 1211 Avenue of the Americas,
41st Floor, New York, New York, 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 Trust ("MFT"), on behalf of JPMorgan Treasury
Plus Money Market Fund (formerly, Chase Vista Treasury
Plus Money Market Fund) (the "Surviving Fund"), and J.P.
Morgan Chase & Co., and the transactions contemplated
thereby, including (a) the transfer of all of the assets
and liabilities of the Merging Fund to the Surviving Fund
in exchange for Institutional 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 attached Combined Prospectus/Proxy
Statement. Attached as Appendix A to the Combined Prospectus/Proxy Statement is
a copy of the Reorganization Plan.
Shareholders of record as of the close of business on April 6, 2001 are
entitled to notice of, and to vote at, the Special Meeting or any adjournment(s)
thereof.
SHAREHOLDERS ARE REQUESTED TO EXECUTE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE THE ACCOMPANYING PROXY CARD WHICH IS BEING SOLICITED BY THE BOARD OF
TRUSTEES OF 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
COMBINED PROSPECTUS/PROXY STATEMENT
DATED MAY 12, 2001
ACQUISITION OF THE ASSETS AND LIABILITIES OF
J.P. MORGAN INSTITUTIONAL TREASURY MONEY MARKET FUND,
A SERIES OF J.P. MORGAN INSTITUTIONAL FUNDS
60 STATE STREET, SUITE 1300
BOSTON, MASSACHUSETTS 02109
(617) 557-0700
BY AND IN EXCHANGE FOR SHARES OF
JPMORGAN TREASURY PLUS MONEY MARKET FUND
(FORMERLY, CHASE VISTA TREASURY PLUS MONEY MARKET FUND),
A SERIES OF MUTUAL FUND TRUST
1211 AVENUE OF THE AMERICAS, 41ST FLOOR
NEW YORK, NEW YORK 10036
(800) 348-4782
This Combined Prospectus/Proxy Statement relates to the proposed
Reorganization of J.P. Morgan Institutional Treasury Money Market Fund (the
"Merging Fund"), a series of J.P. Morgan Institutional Funds ("JPMF"), into
JPMorgan Treasury Plus Money Market Fund (formerly, Chase Vista Treasury Plus
Money Market Fund) (the "Surviving Fund"), a series of Mutual Fund Trust
("MFT"). If approved by Shareholders, the proposed reorganization will be
effected by transferring all of the assets and liabilities of the Merging Fund
to the Surviving Fund, which has generally similar investment objectives and
policies to those of the Merging Fund, in exchange for shares of the Surviving
Fund (the "Reorganization"). Therefore, as a result of the proposed
Reorganization, current shareholders of the Merging Fund (the "Merging Fund
Shareholders") will become shareholders of the Surviving Fund ("Surviving Fund
Shareholders"). JPMF and MFT are both open-end management investment companies
offering shares in several portfolios. In connection with the Reorganization,
the Surviving Fund will be renamed "JPMorgan Treasury Plus Money Market Fund."
Under the proposed Reorganization, each Merging Fund Shareholder will
receive Institutional Class shares (the "Surviving Fund Shares") of the
Surviving Fund with a value equal to such Merging Fund Shareholder's holdings in
the Merging Fund. The Surviving Fund currently has a multi-class structure under
which it offers Vista Class, Premier Class and Institutional Class shares. In
connection with the Reorganization, the Surviving Fund will rename the Vista
Class "Morgan Class", rename Institutional Class "Agency Class" and introduce a
new "Institutional Class" and "Reserve 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, MFT, on behalf of the Surviving Fund and J.P. Morgan Chase & Co., attached
to this Combined Prospectus/Proxy Statement as Appendix A.
The Board of Trustees for 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, New York, at which meeting shareholders
in the Merging Fund will be asked to consider and approve the proposed
Reorganization Plan, certain transactions contemplated by the Reorganization
Plan and certain other proposals. This Combined Prospectus/Proxy Statement
constitutes the proxy statement of the Merging Fund for the meeting of its
Shareholders and also constitutes MFT's prospectus for Surviving Fund Shares
that have been registered with the Securities and Exchange Commission (the
"Commission") and are to be issued in connection with the Reorganization.
This Combined Prospectus/Proxy Statement, which should be retained for
future reference, sets forth concisely the information about MFT and JPMF that
an investor should know before voting on the proposals. The current
Prospectuses, Statements of Additional Information and Annual Reports for the
Merging Fund and the Surviving Fund (including the Annual Report of The Treasury
Money Market Portfolio) and the Semi-Annual Report of the Surviving Fund are
incorporated herein by reference, and the current Prospectus, Annual Report and
Semi-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 dated May 12, 2001 containing
additional information about MFT 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 and Annual Report of the Merging Fund
(including the Annual Report of the Treasury Money Market Portfolio), may be
obtained without charge by writing to MFT at its address noted above or by
calling 1-800 766-7722.
This Combined Prospectus/Proxy Statement is expected to first be sent
to shareholders on or about May 12, 2001.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS COMBINED PROSPECTUS/PROXY STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS COMBINED PROSPECTUS/PROXY
STATEMENT AND IN THE MATERIALS EXPRESSLY INCORPORATED HEREIN BY REFERENCE AND,
IF GIVEN OR
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MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY MFT 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 2..................................................................2
COMPARATIVE FEE AND EXPENSE TABLES..........................................5
RISK FACTORS................................................................8
INFORMATION RELATING TO THE PROPOSED REORGANIZATION.........................8
INVESTMENT POLICIES........................................................13
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.....................................34
ADDITIONAL INFORMATION ABOUT MFT...........................................36
ADDITIONAL INFORMATION ABOUT JPMF..........................................36
FINANCIAL STATEMENTS AND EXPERTS...........................................37
OTHER BUSINESS.............................................................37
LITIGATION.................................................................37
SHAREHOLDER INQUIRIES......................................................38
APPENDIX A AGREEMENT AND PLAN OF REORGANIZATION............................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, New York (together with
any adjournments thereof, the "Meeting"). It is expected that the mailing of
this Combined Prospectus/Proxy Statement will be made on or about May 12, 2001.
PROPOSAL 1: REORGANIZATION PLAN
-------------------------------
As you may be aware, J.P. Morgan & Co. Incorporated, the former
corporate parent of the investment adviser of the Merging Fund's assets,
recently completed a merger with The Chase Manhattan Corporation to form J.P.
Morgan Chase & Co. ("JPMC"). As a result of this merger, JPMC is seeking to
reorganize parts of its investment management business in order to provide
better service for shareholders of funds advised by its subsidiaries. At the
Meeting, Merging Fund Shareholders will consider and vote upon the Agreement
and Plan of Reorganization (the "Reorganization Plan") dated _______, 2001
among JPMF, on behalf of the Merging Fund, MFT, on behalf of the Surviving
Fund (the Merging Fund and the Surviving Fund are collectively defined as the
"Funds"), and JPMC pursuant to which all of the assets and liabilities of the
Merging Fund will be transferred to the Surviving Fund in exchange for
Surviving Fund Shares. As a result of the Reorganization, Merging Fund
Shareholders will become shareholders of the Surviving Fund and will receive
Surviving Fund Shares equal in value to their holdings in the Merging Fund on
the date of the Reorganization. In connection with the Reorganization, the
Surviving Fund will be renamed "JPMorgan Treasury Plus Money Market Fund."
Further information relating to the Surviving Fund is set forth herein, and
the Surviving Fund's Prospectus, Annual Report and Semi-Annual Report are
enclosed with this Combined Prospectus/Proxy Statement.
THE 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, Annual Report of each of the Surviving Fund
and the Merging Fund (including the Annual Report of The Treasury Money Market
Portfolio) and Semi-Annual Report of the Surviving Fund, and the Reorganization
Plan attached to this Combined Prospectus/Proxy Statement as Appendix A.
PROPOSED REORGANIZATION
Pursuant to the proposed Reorganization Plan, the Merging Fund will
transfer all of its assets and liabilities to the Surviving Fund in exchange for
shares of the Surviving Fund.
Under the proposed Reorganization, each Merging Fund Shareholder will
receive a number of Institutional 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 objectives and
policies, and the fact that the Reorganization will be tax-free, and in light of
their fiduciary duties under federal and state law, the MFT Board and the 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
it is in the best interests of shareholders to combine funds that have similar
investment objectives and policies and each board believes that the
Reorganization should result in better service for shareholders, including a
wider variety of investment options.
-2-
CONCURRENT REORGANIZATION
The Merging Fund currently invests all of its investable assets in The
Treasury Money Market Portfolio (the "Master Portfolio"), which has identical
investment objectives and policies as the Merging Fund and which is advised by
J.P. Morgan Investment Management Inc. ("JPMIM"). J.P. Morgan Institutional
Service Treasury Money Market Fund and J.P. Morgan Treasury Money Market
Reserves Fund, each a series of JPMF with identical investment objectives and
policies as the Merging Fund (the "Feeder Portfolios") also currently invest all
of their assets in the Master Portfolio. The Surviving Fund has entered into
substantially similar agreements and plans of reorganization with each Feeder
Portfolio (collectively, the "Concurrent Reorganization"). If each of the
Reorganization and the Concurrent Reorganization is approved by the shareholders
of the Merging Fund and each Feeder Portfolio, respectively, and certain other
conditions are met, the Merging Fund and the Feeder Portfolios will be
reorganized into the Surviving Fund and the Merging Fund and the Feeder
Portfolios will no longer invest their assets in the Master Portfolio. The
consummation of the Reorganization is contingent upon the consummation of the
Concurrent Reorganization.
FEDERAL INCOME TAX CONSEQUENCES
Simpson Thacher & Bartlett will issue an opinion (based on certain
assumptions) as of the effective time of the Reorganization to the effect that
the transaction will not give rise to the recognition of income, gain or loss
for federal income tax purposes to the Merging Fund, the Surviving Fund or the
shareholders of the Merging Fund. 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 Portfolios) is JPMIM. The investment
adviser for the Surviving Fund is J.P. Morgan Fleming Asset Management (USA)
Inc. ("JPMFAM"). JPMFAM and JPMIM are each wholly-owned subsidiaries of JPMC.
JPMFAM will continue to serve as investment advisor following the
Reorganization.
INVESTMENT OBJECTIVES AND POLICIES
The Surviving Fund's investment objective is to aim to provide the
highest possible level of current income while still maintaining liquidity and
preserving capital. The Merging Fund's investment objective is to provide high
current income consistent with the preservation of capital and same-day
liquidity. See "Risk Factors" and "Investment Restrictions."
-3-
The investment policies of the Surviving Fund are generally similar to
those of the Merging Fund, although the Surviving Fund invests its assets
directly in portfolio securities, while the Merging Fund invests its assets in
the Master Portfolio, which in turn invests in portfolio securities. The
Surviving Fund invests at least 65% of its assets in direct debt securities of
the U.S. Treasury, including Treasury bills, bonds and notes, and repurchase
agreements collateralized by these investments. The Surviving Fund also seeks to
enhance its performance by investing in repurchase agreements, using debt
securities guaranteed by the U.S. Treasury as collateral. As a AAA- rated fund
the dollar weighted average maturity of the Surviving Fund will be 60 days or
less and the Fund will buy only those instruments which have remaining
maturities of 397 days or less. There can be no assurance that the Fund will
continue to be rated by Standard & Poor's Ratings Service and/or Moody's
Investors Service or that these agencies will not downgrade their current
ratings. The Surviving Fund invests only in securities issued and payable in
U.S. dollars. THE MERGING FUND INVESTS PRIMARILY IN U.S. TREASURY OBLIGATIONS
AND REPURCHASE AGREEMENTS COLLATERALIZED BY THESE OBLIGATIONS. THE MERGING FUND
ATTEMPTS TO MAINTAIN A DOLLAR-WEIGHTED AVERAGE PORTFOLIO MATURITY OF NOT MORE
THAN 90 DAYS. THE MERGING FUND HAS NOT APPLIED FOR A RATING. Each Fund seeks to
maintain a net asset value of $1.00 per share.
PRINCIPAL RISKS OF INVESTING IN THE SURVIVING FUND
The principal risk factors associated with an investment in the
Surviving Fund are those typically associated with investing in a managed
portfolio of money market securities. The Surviving Fund attempts to keep its
net asset value at $1.00, although there is no guarantee it will be able to do
so. In general, the value of a money market investment tends to fall when
prevailing interest rates rise, although it tends to be less sensitive to
interest rate changes than the value of longer-term securities. Additionally,
investments in the Surviving Fund may not earn as high a current income as
longer-term or lower-quality securities. See "Risk Factors."
CERTAIN ARRANGEMENTS WITH SERVICE PROVIDERS
ADVISORY SERVICES
The investment adviser for the Surviving Fund is JPMFAM. JPMFAM
oversees the asset management of the Surviving Fund. As compensation for its
services, JPMFAM receives a management fee from the Surviving Fund at an annual
rate of 0.10% of average daily net assets. The Merging Fund currently pays a
management fee at an annual rate of 0.20% of the first $1 billion of average
daily net assets and 0.10% of average daily net assets for assets over $1
billion. Following the Reorganization, JPMFAM will continue to manage the
Surviving Fund's assets and will receive a fee at an annual rate of 0.10% of
average daily net assets.
OTHER SERVICES
J.P. Morgan Fund Distributors, Inc. (the "Distributor") is the
distributor for the Surviving Fund. The Chase Manhattan Bank ("Chase") serves as
shareholder servicing
-4-
agent, administrator, fund accountant and custodian, the Distributor serves
as sub-administrator and DST Systems, Inc. ("DST") serves as transfer agent
and dividend disbursing agent for the Surviving Fund. It is anticipated that
prior to the consummation of the Reorganization, The Bank of New York
("BONY") will become the Surviving Fund's fund accountant and custodian.
PricewaterhouseCoopers LLP serves as the Surviving Fund's independent
accountants.
ADMINISTRATOR
As administrator, Chase receives a fee of 0.10% of average daily net
assets. It is anticipated that, in connection with the Reorganization, the
administration fee will be amended to reduce the fee to 0.05% for complex wide
money market Fund assets in excess of $100 billion.
ORGANIZATION
Each of MFT and 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 MFT.
PURCHASES, REDEMPTIONS AND EXCHANGES
After the Reorganization, the procedures for making purchases,
redemptions and exchanges of shares of the Surviving Fund will be as described
in this Combined Prospectus/Proxy Statement and in the Surviving Fund's
Prospectus and Statement of Additional Information.
COMPARATIVE FEE AND EXPENSE TABLES
The table below shows (i) information regarding the fees and expenses
paid by each of the Merging Fund and the Surviving Fund that reflect current
expense arrangements, and (ii) estimated fees and expenses on a pro forma basis
for the Surviving Fund after giving effect to the proposed Reorganization and
the Concurrent Reorganization. Under the proposed Reorganization, holders of
shares in the Merging Fund will receive Institutional Class shares in the
Surviving Fund. Please note that the Surviving Fund currently has three classes
of shares: Vista Class, Premier Class and Institutional Class. In connection
with the Reorganization and Concurrent Reorganization, the Surviving Fund will
rename the Vista Class "Morgan Class", rename the Institutional Class "Agency
Class" and introduce a new "Institutional Class" and "Reserves Class".
The table indicates that both contractual (pre-waiver) and actual
(post-waiver) total expense ratios for current shareholders of the Merging Fund
are anticipated to be less or stay the same following the Reorganization. In
addition, Chase has agreed to waive certain fees and/or reimburse certain
expenses to ensure that actual total operating expenses do not increase for at
least three years.
-5-
THE MERGING
FUND THE SURVIVING FUND*
----------- -----------------------------------------------
VISTA CLASS PREMIER CLASS INSTITUTIONAL
SHARES* SHARES SHARES CLASS SHARES
----------- ------------- ----------- -------------
SHAREHOLDER FEES (FEES PAID DIRECTLY
FROM YOUR INVESTMENT) -Maximum Sales
Charge (Load) when you buy shares,
shown as % of the offering price.......... None None None None
Maximum Deferred Sales Charge (Load)
shown as lower of original purchase price
or redemption proceeds.................... None None None None
ANNUAL FUND OPERATING
EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees............................. 0.19% 0.10% 0.10% 0.10%
Distribution (12b-1) Fees................... None 0.10% None None
Other Expenses(B)........................... 0.20% 0.51% 0.42%# 0.25%#
Total Annual Fund Operating Expenses........ 0.39% 0.71% 0.52%# 0.35%#
Fee Waiver and Expense Reimbursement(A)..... 0.19% None None None
Net Expenses................................ 0.20% 0.71% 0.52%# 0.35%#
* The table is based on estimated expenses for current fiscal year.
# Restated from the most recent fiscal year to reflect current expense
arrangements.
(A) Reflects an agreement by Morgan dated 3/01/01, an affiliate of JPMC,
to reimburse the Fund to the extent total operating expenses
(excluding interest, taxes, and extraordinary expenses) exceed 0.20%
of average daily net assets of Institutional Treasury Money Market
through 2/28/02.
(B) The actual Other Expenses are expected to be 0.39% for Vista Class
Shares, 0.38% for Premier Class Shares and 0.15% for Institutional
Shares and Total Annual Fund Operating Expenses are not expected to
exceed 0.59% for Vista Class Shares, 0.48% for Premier Class Shares
and 0.25% for Institutional Class Shares. That is because Chase
volunteered not to collect a portion of its fees and to reimburse
others. Chase may end this arrangement at any time.
The table does not reflect charges or credits which you might incur if
you invest through a financial institution.
-6-
THE SURVIVING FUND
----------------------------------------
PRO FORMA WITH CONCURRENT REORGANIZATION
----------------------------------------
INSTITUTIONAL
CLASS SHARES
-------------
SHAREHOLDER FEES (FEES PAID DIRECTLY
FROM YOUR INVESTMENT) -Maximum Sales
Charge (Load) when you buy shares,
shown as % of the offering price.......... None
Maximum Deferred Sales Charge (Load)
Shown as lower of original purchase price
or redemption proceeds.................... None
ANNUAL FUND OPERATING
EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees.............................. 0.10%
Distribution (12b-1) Fees.................... None
Other Expenses............................... 0.24%
Total Annual Fund Operating Expenses......... 0.34%
Fee Waivers and Expense Reimbursements(C).... 0.14%
Net Expenses................................. 0.20%
(C) Reflects an agreement by Chase, a wholly owned subsidiary of JPMC to
reimburse the Fund to the extent operating expenses (which exclude
interest, taxes, and extraordinary expenses) exceed 0.20% of average
daily net assets with respect to Institutional Class Shares for three
years after the Reorganization.
The table does not reflect charges or credits which investors might
incur if they invest through a financial institution.
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.
-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................................... $20 $106 $200 $474
THE SURVIVING FUND.................................
Vista Class..................................... $73 $227 $395 $883
Premier Class................................... $53 $167 $291 $653
Institutional Class............................. $36 $113 $197 $443
PRO FORMA THE SURVIVING FUND WITH CONCURRENT
REORGANIZATION
Institutional Class............................. $20 $64 $146 $387
RISK FACTORS
The following discussion highlights the principal risk factors
associated with an investment in the Surviving Fund. The Surviving Fund has
investment policies and investment restrictions generally similar to those of
the Merging Fund. Therefore, there should be similarities between the risk
factors associated with the Surviving Fund and the Merging Fund. This discussion
is qualified in its entirety by the more extensive discussion of risk factors
set forth in the Prospectus and Statement of Additional Information of the
Surviving Fund, which are incorporated herein by reference.
The Surviving Fund attempts to keep its net asset value constant, but
there is no guarantee it will be able to do so. Investments in the Surviving
Fund are not bank deposits or obligations of, or guaranteed or endorsed by,
Chase or any of its affiliates and are not insured by the FDIC, the Federal
Reserve Board or any other government agency. Although the Surviving Fund seeks
to preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in the Surviving Fund.
The value of a money market investment tends to fall when prevailing
interest rates rise, although it tends to be generally less sensitive to
interest rate changes than the value of longer-term securities. Although the
Surviving Fund seeks to be fully invested, it may at times hold some of its
assets in cash, which could hurt the Fund's performance. Securities in the
Fund's portfolio may not earn as high a current income as longer term or
lower-quality securities.
Repurchase agreements involve some risk of loss to the Surviving Fund
if the other party does not live up to its obligations under the agreement.
INFORMATION RELATING TO THE PROPOSED REORGANIZATION
GENERAL
The terms and conditions under which the Reorganization may be
consummated are set forth in the Reorganization Plan. Significant provisions of
the Reorganization Plan are summarized below; however, this summary is qualified
in its entirety by reference to
-8-
the Reorganization Plan, a copy of which is attached as Appendix A to this
Combined Prospectus/Proxy Statement and which is incorporated herein by
reference.
DESCRIPTION OF THE REORGANIZATION PLAN
In connection with the Reorganization, the Merging Fund and the
Feeder Portfolios will cease investing in the Master Portfolio. The
Reorganization Plan provides that at the Effective Time (as defined in the
Reorganization Plan) of the Reorganization, the assets and liabilities of the
Merging Fund will be transferred to and assumed by the Surviving Fund. In
exchange for the transfer of the assets and the assumption of the liabilities
of the Merging Fund, MFT will issue at the Effective Time of the
Reorganization full and fractional Institutional Class shares of the
Surviving Fund equal in aggregate dollar value to the aggregate net asset
value of full and fractional outstanding shares of the Merging Fund as
determined at the valuation time specified in the Reorganization Plan. The
Reorganization Plan provides that the Merging Fund will declare a dividend or
dividends prior to the Effective Time of the Reorganization which, together
with all previous dividends, will have the effect of distributing to Merging
Fund Shareholders all undistributed net investment income earned and net
capital gain realized up to and including the Effective Time of the
Reorganization.
Following the transfer of assets to, and the assumption of the
liabilities of the Merging Fund by, the Surviving Fund, the Merging Fund will
distribute Surviving Fund Shares received by it to the Merging Fund Shareholders
in liquidation of the Merging Fund. Each Merging Fund Shareholder at the
Effective Time of the Reorganization will receive an amount of Institutional
Class shares with a total net asset value equal to the net asset value of their
Merging Fund Shares plus the right to receive any dividends or distributions
which were declared before the Effective Time of the Reorganization but that
remained unpaid at that time with respect to the shares of the Merging Fund.
The Surviving Fund expects to maintain most of the portfolio
investments of the Merging Fund in light of the similar investment policies of
the Merging Fund and the Surviving Fund.
After the Reorganization, all of the issued and outstanding shares of
the Merging Fund shall be canceled on the books of the Merging Fund and the
stock transfer books of the Merging Fund will be permanently closed.
The Reorganization is subject to a number of conditions, including
without limitation: approval of the Reorganization Plan and the transactions
contemplated thereby described in this Combined Prospectus/Proxy Statement by
the Merging Fund Shareholders; the receipt of a legal opinion from Simpson
Thacher & Bartlett with respect to certain tax issues, as more fully described
in "Federal Income Tax Consequences" below; and the parties' performance in all
material respects of their respective agreements and undertakings in the
Reorganization Plan. Assuming satisfaction of the conditions in the
Reorganization Plan, the Effective Time of the Reorganization will be on August
11, 2001 or such other date as is agreed to by the parties.
-9-
In addition, the consummation of the Reorganization is contingent upon
the consummation of the Concurrent Reorganization.
The expenses of the Funds in connection with the Reorganization will be
borne by JPMC.
The Reorganization Plan and the Reorganization described herein may be
abandoned at any time prior to the Effective Time of the Reorganization by
either party if a material condition to the performance of such party under the
Reorganization Plan or a material covenant of the other party is not fulfilled
by the date specified in the Reorganization Plan or if there is a material
default or material breach of the Reorganization Plan by the other party. In
addition, either party may terminate the Reorganization Plan if its trustees
determine that proceeding with the Reorganization Plan is not in the best
interests of their Fund's shareholders.
BOARD CONSIDERATIONS
The JPMF Board met on March 26 and 27, 2001 and the MFT Board met on
April 3, 2001, and each considered and discussed the proposed Reorganization.
The Trustees of each Board discussed the advantages of reorganizing the Merging
Fund into the Surviving Fund.
The Board of each trust has determined that it is in the best interests
of the Fund's shareholders to combine the Merging Fund with the Surviving Fund.
This Reorganization is part of the general integration of the J.P. Morgan and
former Chase Vista funds into a single mutual fund complex. In reaching the
conclusion that the Reorganization is in the best interests of Fund
shareholders, each Board considered a number of factors including, among others:
the terms of the Reorganization Plan; a comparison of each Fund's historical and
projected expense ratios; the comparative investment performance of the Merging
Fund and the Surviving Fund; the anticipated effect of such Reorganization on
the relevant Fund and its shareholders; the investment advisory services
supplied by the Surviving Fund's investment adviser; the management and other
fees payable by the Surviving Fund; the similarities and differences in the
investment objectives and policies of the Merging Fund and the Surviving Fund;
and the recommendations of the relevant Fund's current investment adviser with
respect to the proposed Reorganization.
The Board determined that the Funds have generally similar investment
objectives and policies. They noted that the Reorganization could permit the
shareholders of the Merging Fund to pursue similar investment goals in a single
larger fund. The Board also considered benefits expected to arise as a result of
the Reorganization. Among these benefits, the Board noted that Surviving Fund
Shareholders would be able to exchange into a larger number and greater variety
of funds and the Surviving Fund would also benefit from the administrator's
overall intent to enhance its ability effectively to monitor and oversee the
quality of all service providers to the fund, including the investment adviser.
Finally, the Board considered the expenses related to the
Reorganization. The Board noted the administrator's undertaking to waive fees or
reimburse the Surviving
-10-
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 reorganization plans which are substantially
similar to the Reorganization Plan you are considering. As a result of the
Reorganization and the Concurrent Reorganization, the Merging Fund and the
Feeder Portfolios will no longer invest their assets in the Master Portfolio.
The consummation of the Reorganization is contingent upon the consummation of
the Concurrent Reorganization.
FEDERAL INCOME TAX CONSEQUENCES
Consummation of the Reorganization is subject to the condition that
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 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
-11-
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 other funds as a result of the Concurrent
Reorganization, the total capitalization of the Surviving Fund after the
Reorganization and the Concurrent Reorganization is expected to be greater than
the current capitalization of the Merging Fund. The following table sets forth
as of February 28, 2001: (i) the capitalization of the Merging Fund; (ii) the
capitalization of the Surviving Fund; and (iii) the pro forma capitalization of
the Surviving Fund as adjusted to give effect to the Reorganization and the
Concurrent Reorganization. There is, of course, no assurance that the
Reorganization and the Concurrent Reorganization will be consummated. Moreover,
if consummated, the capitalizations of the Surviving Fund and the Merging Fund
are likely to be different at the Effective Time of the Reorganization as a
result of fluctuations in the value of portfolio securities of each Fund and
daily share purchase and redemption activity in each Fund. Please note that the
Surviving Fund currently has three classes of shares: Vista Class, Premier Class
and Institutional Class. In connection with the Reorganization, the Surviving
Fund will rename the Vista Class "Morgan Class", rename the Institutional Class
"Agency Class" and introduce a new "Institutional Class" and "Reserves Class."
CAPITALIZATION
PRO FORMA WITH CONCURRENT REORGANIZATION
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
BENEFICIAL
INTEREST SHARES NET ASSET
OUTSTANDING OUTSTANDING NET ASSETS VALUE PER SHARE
J.P.MORGAN FUNDS
Treasury Money Market 524,371 -- 524,328 $1.00
Reserves Fund....
Institutional Service Treasury 473,243 -- 473,086 $1.00
Money Market Fund....
Institutional Treasury Money 537,242 -- 537,150 $1.00
Market Fund (Merging Fund)
THE SURVIVING FUND
Vista (Renamed Morgan) 1,391,162 1,390,971 $1.00
Premier 347,882 347,866 $1.00
Institutional (Renamed Agency) 1,074,655 1,074,678 $1.00
PRO FORMA THE SURVIVING FUND
WITH CONCURRENT REORGANIZATION
Reserves 524,371 524,328 $1.00
Morgan 1,391,162 1,390,971 $1.00
Premier 821,125 820,952 $1.00
Agency 1,074,655 1,074,678 $1.00
Institutional 537,242 537,150 $1.00
-12-
INVESTMENT POLICIES
The following discussion summarizes some of the investment policies of
the Surviving Fund. Except as noted below, the Merging Fund generally has
similar investment policies to those of the Surviving Fund. This section is
qualified in its entirety by the discussion in the Prospectus and Statement of
Additional Information of the Surviving Fund, which are incorporated herein by
reference.
OBJECTIVE
The Surviving Fund's investment objective is to aim to provide the
highest possible level of current income while still maintaining liquidity and
preserving capital. THE MERGING FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE HIGH
CURRENT INCOME CONSISTENT WITH THE PRESERVATION OF CAPITAL AND SAME-DAY
LIQUIDITY. Neither Fund can change its objective without shareholder approval.
Shareholders of the Surviving Fund currently are considering a proposal that, if
passed at a shareholder meeting to be held the same day as the Meeting of the
Merging Fund, would allow the Surviving Fund to change its objective without
shareholder approval.
MAIN INVESTMENT STRATEGIES
The Surviving Fund invests its assets directly in portfolio securities.
THE MERGING FUND INVESTS ITS ASSETS IN THE MASTER PORTFOLIO, WHICH IN TURN
INVESTS IN PORTFOLIO SECURITIES.
The Surviving Fund invests at least 65% of its assets in direct debt
securities of the U.S. Treasury, including Treasury bills, bonds and notes, and
repurchase agreements collateralized by these investments. These debt securities
carry different interest rates, maturities and issue dates. The Surviving Fund
also seeks to enhance its performance by investing in repurchase agreements,
using debt securities guaranteed by the U.S. Treasury as collateral. THE MERGING
FUND INVESTS PRIMARILY IN U.S. TREASURY OBLIGATIONS AND REPURCHASE AGREEMENTS
COLLATERALIZED BY THESE OBLIGATIONS.
The Surviving Fund seeks to maintain a net asset value of $1.00 per
share.
The dollar weighted average maturity of the Surviving Fund will be 60
days or less and the Fund will buy only those instruments which have remaining
maturities of 397 days or less. THE MERGING FUND MAINTAINS A DOLLAR-WEIGHTED
AVERAGE MATURITY OF NO MORE THAN 90 DAYS.
The Surviving Fund may invest significantly in securities with floating
or variable rates of interest. Their yields will vary as interest rates change.
The Surviving Fund invests only in securities issued and payable in
U.S. dollars. Each investment must have the highest possible short-term rating
from at least two
-13-
national rating organizations, or one such rating if only one organization
rates that security. Alternatively, some securities may have additional third
party guarantees in order to meet the rating requirements mentioned above. If
the security is not rated, it must be considered of comparable quality by
JPMFAM. The Surviving Fund seeks to develop an appropriate portfolio by
considering the differences in yields among securities of different
maturities, market sectors and issuers.
-14-
INVESTMENT RESTRICTIONS
The Surviving Fund and the Merging Fund have each adopted the following
investment restrictions which may not be changed without approval by a "majority
of the outstanding shares" of a Fund, which means the vote of the lesser of (i)
67% or more of the shares of a Fund present at a meeting, if the holders of more
than 50% of the outstanding shares of a Fund are present or represented by
proxy, and (ii) more than 50% of the outstanding shares of a Fund.
- -------------------------------------------------------- ------------------------------------------------------
SURVIVING FUND MERGING FUND
-------------- ------------
- -------------------------------------------------------- ------------------------------------------------------
The Surviving Fund may not purchase the securities of The Merging Fund may not purchase the securities or
any issuer (other than securities issued or guaranteed other obligations of issuers conducting their
by the U.S. government or any of its agencies or principal business activity in the same industry if,
instrumentalities, or repurchase agreements secured immediately after such purchase, the value of its
thereby) if, as a result, more than 25% of the investment in such industry would exceed 25% of the
Surviving Fund's total assets would be invested in the value of the Fund's total assets; provided, however,
securities of companies whose principal that the Fund may invest all or part of its assets
business activities are in the same industry. in an open-end management investment company with
Notwithstanding the foregoing, (i) with respect to the the same investment objective and restrictions as
Surviving Fund's permissible futures and options the Fund. For purposes of industry concentration,
transactions in U.S. Government securities, positions there is no percentage limitation with respect to
in such options and futures shall not be subject to investments in U.S. Government securities and
this restriction; and (ii) the Surviving Fund may repurchase agreements related thereto.
invest more than 25% of its total assets in
obligations issued by banks, including U.S. banks.
- -------------------------------------------------------- ------------------------------------------------------
The Surviving Fund may not borrow money, except for The Merging Fund may not borrow money, except in
temporary or emergency purposes, or by engaging in amounts not to exceed one third of the Fund's total
reverse repurchase transactions, in an amount not assets (including the amount borrowed) less
exceeding 33% of the value of its total assets at the liabilities (other than borrowings) (i) from banks
time when the loan is made and may pledge, mortgage or for temporary or short-term purposes or for the
hypothecate no more than 1/3 of its net assets to clearance of transactions, (ii) in connection with
secure such borrowings. Any borrowings representing the redemption of Fund shares or to finance failed
more than 5% of the Surviving Fund's total assets must settlements of portfolio trades without immediately
be repaid before the Surviving Fund may make liquidating portfolio securities or other assets,
additional investments. (iii) in order to fulfill commitments or plans to
purchase additional securities pending the
anticipated sale of other portfolio securities or assets
- -------------------------------------------------------- ------------------------------------------------------
-15-
and (iv) pursuant to reverse repurchase
agreements entered into by the Fund.
The Merging Fund may not enter into reverse
repurchase agreements which together with any
other borrowing exceed in the aggregate
one-third of the market value of the Fund's
total assets, less liabilities other than
the obligations created by reverse repurchase
agreements.
- -------------------------------------------------------- ------------------------------------------------------
The Surviving Fund may not purchase or sell real The Merging Fund may not purchase or sell puts,
estate unless acquired as a result of ownership of calls, straddles, spreads, or any combination
securities or other instruments (but this shall not thereof, real estate, commodities, or commodity
prevent the Fund from investing in securities or other contracts or interests in oil, gas, or mineral
instruments backed by real estate or securities of exploration or development programs.
companies engaged in the real estate business).
Investments by the Fund in securities backed by
mortgages on real estate or in marketable securities
of companies engaged in such activities are not
hereby precluded.
The Surviving Fund may not purchase or sell physical
commodities unless acquired as a result of ownership of
securities or other instruments but this shall not
prevent the Fund from (i) purchasing or selling options
and futures contracts or from investing in securities
or other instruments backed by physical commodities
or (ii) engaging in forward purchases or sales of
foreign currencies or securities.
- -------------------------------------------------------- ------------------------------------------------------
The Surviving Fund may not make loans, except that the The Merging Fund may not make loans, except through
Surviving Fund may: (i) purchase and hold debt purchasing or holding debt obligations, repurchase
instruments (including without limitation, bonds, agreements, or loans of portfolio securities in
notes, debentures or other obligations and accordance with the Fund's investment objective and
certificates of deposit, bankers' acceptances and policies.
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
- -------------------------------------------------------- ------------------------------------------------------
-16-
assets. SHAREHOLDERS OF THE SURVIVING FUND CURRENTLY
ARE CONSIDERING A PROPOSAL THAT, IF PASSED AT A
SHAREHOLDER MEETING TO BE HELD THE SAME DAY AS THE
MEETING OF THE MERGING FUND, WOULD ADOPT A FUNDAMENTAL
INVESTMENT RESTRICTION REGARDING LOANS THAT IS IDENTICAL
TO THE MERGING FUND'S RESTRICTION.
- -------------------------------------------------------- ------------------------------------------------------
The Surviving Fund is not subject to a similar The Merging Fund may not purchase securities on
fundamental restriction, although it is subject to a margin, make short sales of securities, or maintain
similar non-fundamental restriction (see below). a short position, provided that this restriction shall
not be deemed to be applicable to the purchase or
sale of when-issued securities or of securities for
delivery at a future date.
- -------------------------------------------------------- ------------------------------------------------------
Notwithstanding any other investment policy or The Merging Fund may not purchase the securities or
restriction, the Surviving Fund may seek to achieve other obligations of any one issuer if, immediately
its investment objective by investing all of its after such purchase, more than 5% of the value of
investable assets in another investment company having the Fund's total assets would be invested in
substantially the same investment objective and securities or other obligations of any one such
policies as the Surviving Fund. issuer; provided, however, that the Fund may invest
all or part of its investable assets in an open-end
management investment company with the same investment
objective and restrictions as the Fund. This
limitation also shall not apply to issues of the U.S.
Government and repurchase agreements related thereto.
The Merging Fund may not acquire securities companies,
except as permitted by the 1940 Act or in connection
with a merger, consolidation, reorganization, acquisition
of assets or an offer of exchange; provided, however,
that nothing in this investment restriction shall
prevent the Fund from investing all or part of its assets
in an open-end management investment company with the
same investment objective and restrictions as the Fund.
- -------------------------------------------------------- ------------------------------------------------------
-17-
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.
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 The Merging Fund may not acquire
more than 10% of its net assets in any illiquid securities, such as
illiquid securities. For purposes repurchase agreements with more
of this non-fundamental than seven days to maturity or
restriction, "illiquid securities" fixed time deposits with a duration
include securities restricted as to of over seven calendar days, if as
resale unless they are determined a result thereof, more than 10% of
to be readily marketable in the Fund's net assets would be in
accordance with the procedures investments which are illiquid.
established by the Board of
Trustees.
- ------------------------------------ ------------------------------------------
The Surviving Fund may not make The Merging Fund is not subject to
short sales of securities, other a similar non-fundamental
than short sales "against the box," restriction. However, it is subject
or purchase securities on margin to a fundamental restriction
except for short-term credits regarding investing more than 5% of
necessary for clearance of its assets in securities of one
portfolio transactions, provided issuer (see above).
that this restriction will not be
applied to limit the use of
options, futures contracts and
related options, in the manner
otherwise permitted by the
investment restrictions, policies
and investment program of the Fund.
The Surviving Fund has no current
intention of making short sales
against the box.
- ------------------------------------ ------------------------------------------
The Surviving Fund may not, with The Merging Fund is not subject to
respect to 75% of its assets, hold a similar non-fundamental
more than 10% of the outstanding restriction. However, it is subject
voting securities of any issuer or to a fundamental restriction
invest more than 5% of its assets regarding investing more than 5% of
in the securities of any one issuer its assets in securities of one
(other than obligations of the U.S. issuer
Government, its
- ------------------------------------ ------------------------------------------
-18-
- ------------------------------------ ------------------------------------------
agencies and instrumentalities). (see above).
- ------------------------------------ ------------------------------------------
The Surviving Fund may invest up to The Merging Fund is not subject to
5% of its total assets in the a similar non-fundamental
securities of any one investment restriction, although it is subject
company, but may not own more than to a similar restriction under the
3% of the securities of any one terms of the 1940 Act.
investment company or invest more
than 10% of its total assets in the
securities of other investment
companies.
- ------------------------------------ ------------------------------------------
The Surviving Fund may not purchase The Merging Fund is not subject to
or sell interests in oil, gas or a similar non-fundamental
mineral leases. restriction. However, it is subject
to a similar fundamental
restriction (see above).
- ------------------------------------ ------------------------------------------
The Surviving Fund may not write, The Merging Fund is not subject to
purchase or sell any put or call a similar non-fundamental
option or any combination thereof, restriction. However, it is subject
provided that this shall not to a similar fundamental
prevent (i) the writing, purchasing restriction (see above).
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 will not invest The Merging Fund is not subject to
more than 25% of its total assets a similar non-fundamental
in obligations issued by foreign restriction.
banks (other than foreign branches
of U.S. banks).
- ------------------------------------ ------------------------------------------
There will be no violation of any investment restriction if that
restriction is complied with at the time the relevant action is taken
notwithstanding a later change in market value of an investment, in net or total
assets, in the securities rating of the investment, or any other later change.
PURCHASES, REDEMPTIONS AND EXCHANGES
Following the Reorganization, the procedures for purchases, redemptions
and exchanges of shares will be those of the Surviving Fund, which are generally
similar to those of the Merging Fund. The following discussion applies to
Institutional Class shares.
-19-
This section is qualified in its entirety by the discussion in the Prospectus
and Statement of Additional Information of the Surviving Fund, which are
incorporated herein by reference.
SALES CHARGES
There is no sales charge to buy or sell Institutional Class shares.
12b-1 FEES
There is no Rule 12b-1 distribution plan for Institutional Class shares
of the Surviving Fund.
BUYING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO PURCHASES OF INSTITUTIONAL CLASS
SHARES THAT YOU MIGHT MAKE AFTER THE REORGANIZATION.
The price shareholders pay for their shares is the net asset value per
share (NAV). NAV is the value of everything the Surviving Fund owns, minus
everything it owes, divided by the number of shares held by investors. The
Surviving Fund seeks to maintain a stable NAV of $1.00. The Surviving Fund uses
the amortized cost method to value its portfolio of securities. This method
provides more stability in valuations. However, it may also result in periods
during which the stated value of a security is different than the price the Fund
would receive if it sold the investment.
The NAV of each class of shares is generally calculated as of 4:30 p.m.
Eastern time each day the Surviving Fund is accepting purchase orders.
A shareholder will pay the next NAV calculated after the JPMorgan Funds
Service Center (the "Center") receives that shareholder's order in proper form.
An order is in proper form only after payment is converted into federal funds.
The Center accepts purchase orders on any business day that the Federal
Reserve Bank of New York and the New York Stock Exchange are open. If an order
is sent in proper form by the Surviving Fund's cut-off time, it will be
processed at that day's price and you will be entitled to all dividends declared
on that day. If your order is received after the cut-off time, it generally will
be processed at the next day's price. If you pay by check before the cut-off
time, your order generally will be processed the next day the Surviving Fund is
open for business. Normally, the cut-off (in Eastern time) is 4:30 p.m. A later
cut-off time may be permitted for investors buying their shares through Chase or
a bank affiliate of Chase so long as such later cut-off time is before the
Fund's NAV is calculated. If you buy through an agent and not directly from the
Center, the agent could set earlier cut-off times. The Fund can set an earlier
cut-off time if the Public Securities Association recommends that the U.S.
Government securities market close trading early. You must provide a Taxpayer
Identification Number when you open an account.
The Surviving Fund has the right to reject any purchase order for any
reason.
-20-
Institutional shares are available only to qualified investors.
These are defined as institutions, trusts, partnerships, corporations and
certain retirement plans and fiduciary accounts opened by a bank, trust
company or thrift institution which has investment authority over such
accounts, as well as individuals who meet the Surviving Fund's minimum
investment requirements. Shareholders receiving Institutional Class shares in
the Reorganization will be permitted to purchase additional Institutional
shares in the future.
For Institutional Class shares, checks should be made out to
JPMorgan Funds in U.S. dollars. Credit cards, cash, or checks from a third
party will not be accepted. Shares bought by check may not be sold for 15
calendar days. Shares bought through an automated clearing house cannot be
sold until the payment clears. This could take more than seven business days.
Purchase orders will be canceled if a check does not clear and the investor
will be responsible for any expenses and losses to the Fund. Orders by wire
will be canceled if the Center does not receive payment by 4:30 p.m., Eastern
time, on the day the shareholder buys.
Shareholders seeking to buy Institutional 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 Institutional Class
shares.
SELLING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO SALES OF THE INSTITUTIONAL 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
cut-off time, the Surviving Fund will send the proceeds the next business
day. An order to sell shares will not be accepted if the Surviving Fund has
not collected payment for the shares. The Fund may stop accepting orders to
sell and may postpone payments for more than seven days, as federal
securities laws permit.
Generally, proceeds are sent by check, electronic transfer or wire.
If a shareholder's address of record has changed within the 30 days prior to
the sale request or if more than $25,000 of shares is sold by phone, proceeds
by electronic transfer or wire will be sent only to the bank account on the
Surviving Fund's records.
-21-
For Institutional Class shares, a shareholder will need to have his
or her signature guaranteed if he or she wants payment to be sent to an
address other than the one in the Surviving Fund's records. Additional
documents or a letter from a surviving joint owner may also be needed.
A shareholder who purchased through an investment representative or
through a financial service firm, should contact that representative, who
will send the necessary documents to the Center. The representative might
charge a fee for this service.
Shareholders may also sell their shares by contacting the Center
directly by calling 1-800-________.
A systematic withdrawal plan is available for Institutional Class
shares.
EXCHANGING SURVIVING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO EXCHANGES OF INSTITUTIONAL CLASS
SHARES THAT YOU MIGHT MAKE AFTER THE REORGANIZATION.
Institutional Class shares of the Surviving Fund may be exchanged
for shares of the same class in certain other JPMorgan Funds.
For tax purposes, an exchange is treated as a sale of those shares.
Shareholders should carefully read the prospectus of the fund into which they
want to exchange. Shareholders who exchange must meet any minimum investment
requirements and may have to pay a sales commission.
The exchange privilege is not a means of short-term trading as this
could increase management cost and affect all shareholders of the Surviving
Fund. The Surviving Fund reserves the right to limit the number of exchanges
or refuse an exchange. Each exchange privilege may also be terminated. The
Surviving Fund charges an administration fee of $5 for each exchange if an
investor makes more than 10 exchanges in a year or three in a quarter.
OTHER INFORMATION CONCERNING THE SURVIVING FUND
For Institutional Class shares, the Surviving Fund may close an
account if the balance falls below $10,000,000. The Surviving Fund may also
close the account if an investor is in the systematic investment plan and
fails to meet investment minimums over a 12-month period. At least 60 days'
notice will be given before closing the account.
Unless a shareholder indicates otherwise on his or her account
application, the Surviving Fund is authorized to act on redemption and
transfer instructions received by phone. If someone trades on an account by
phone, the Surviving Fund will ask that person to confirm the account
registration and address to make sure they match those in the Fund records.
If they do correspond, the Surviving Fund is generally authorized to follow
that person's instructions. The Surviving Fund will take all reasonable
precautions to confirm that the instructions are genuine. Investors agree
that they will not hold the Surviving Fund
-22-
liable for any loss or expenses from any sales request, if the Fund takes
reasonable precautions. The Surviving Fund will be liable for any losses to a
shareholder from an unauthorized sale or fraud against such shareholder if
the Fund does not follow reasonable procedures.
It may not always be possible to reach the Center by telephone. This
may be true at times of unusual market changes and shareholder activity. In
that event, shareholders can mail instructions to the Surviving Fund or
contact their investment representative or agent. The Surviving Fund may
modify or cancel the sale of shares by phone without notice.
MFT, on behalf of the Surviving Fund, has entered into agreements
with certain shareholder servicing agents (including Chase) under which the
shareholder servicing agents agree to provide certain support services to
their customers. For performing these services, each shareholder servicing
agent will receive an annual fee of up to 0.10% of the average daily net
assets of the Institutional Class shares held by investors serviced by the
shareholder servicing agent.
JPMFAM and/or the Distributor may, at their own expense, make
additional payments to certain selected dealers or other shareholder
servicing agents for performing administrative services for their customers.
The Surviving Fund issues multiple classes of shares. Each class may
have different requirements for who may invest, and may have different sales
charges and expense levels. A person who gets compensated for selling Fund
shares may receive a different amount for each class.
DISTRIBUTIONS AND TAXES
The Surviving Fund can earn income and realize capital gain. The
Surviving Fund will deduct from these earnings any expenses and then pay to
shareholders the distributions.
The Surviving Fund declares dividends daily and distributes any net
investment income at least monthly. Net capital gain is distributed annually.
You have three options for your Surviving Fund distributions. You may:
- reinvest all of them in additional Fund shares;
- take all distributions in cash or as a deposit in a pre-assigned
bank account.
If you don't notify us otherwise, we'll reinvest all distributions.
If your distributions are reinvested, they will be in the form of shares of
the same class. The taxation of dividends won't be affected by the form in
which you receive them.
Dividends of net investment income are usually taxable as ordinary
income at the federal, state and local levels.
-23-
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 MFT, which is
organized under the law of the Commonwealth of Massachusetts. As a
Massachusetts business trust, MFT's operations are governed by MFT's
Declaration of Trust and By-Laws and applicable Massachusetts law. The
operations of the Surviving Fund are also subject to the provisions of the
1940 Act and the rules and regulations thereunder.
TRUSTEES AND OFFICERS
Subject to the provisions of its trust documents, the business of
the Merging Fund is managed by JPMF's Trustees and the business of the
Surviving Fund is managed by MFT's Trustees, who serve indefinite terms and
have all powers necessary or convenient to carry out their responsibilities.
Information concerning the current Trustees and officers of MFT and
JPMF is set forth in the Funds' respective Statements of Additional
Information, which are incorporated herein by reference.
-24-
SHARES OF FUNDS
Each of MFT and JPMF is a trust with an unlimited number of
authorized shares of beneficial interest which may be divided into of classes
thereof. Each Fund is one series of a trust and may issue multiple classes of
shares. Each share of a series or class of a trust represents an equal
proportionate interest in that series or class with each other share of that
series or class. The shares of each series or class of either MFT or 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 MFT 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 MFT 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 MFT or JPMF.
SHAREHOLDER VOTING RIGHTS
A vacancy in the Board of either MFT 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 MFT 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 MFT
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 MFT 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 MFT 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 MFT 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 MFT 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.
DESCRIPTION OF JPMFAM
JPMFAM, a registered investment adviser, is an indirect wholly-owned
subsidiary of JPMC, incorporated under the laws of Delaware. JPMFAM's
principal executive offices are located at 522 Fifth Avenue, New York, New
York 10036. As of _______ __, 2001, JPMFAM and certain of its affiliates
(including JPMIM) provided investment management services with respect to
assets of approximately $___ billion.
Under the Advisory Agreement, JPMFAM is responsible for making
decisions with respect to, and placing orders for, all purchases and sales of
the portfolio securities of the Surviving Fund. JPMFAM's responsibilities
under the Advisory Agreement include supervising the Surviving Fund's
investments and maintaining a continuous investment program, placing purchase
and sale orders and paying costs of certain clerical and administrative
services involved in managing and servicing the Surviving Fund's investments
and complying with regulatory reporting requirements. Under the Advisory
Agreement, JPMFAM is obligated to furnish employees, office space and
facilities required for the operation of the Surviving Fund. The services
provided to the Surviving Fund by JPMFAM are substantially similar to the
services currently provided to the Master Portfolio by JPMIM.
EXPENSES AND MANAGEMENT FEES. The Advisory Agreement provides that
the Surviving Fund will pay JPMFAM a monthly management fee based upon the
net assets of
-26-
the Surviving Fund. The annual rate of this management fee is 0.10%. The
Merging Fund currently pays JPMIM 0.20% of the first $1 billion of average
daily net assets and 0.10% of average daily net assets in excess of $1
billion with respect to its assets in the Master Portfolio. JPMFAM may waive
fees from time to time.
Under the Advisory Agreement, except as indicated above, the
Surviving Fund is responsible for its operating expenses including, but not
limited to, taxes; interest; fees (including fees paid to its Trustees who
are not affiliated with JPMFAM or any of its affiliates); fees payable to the
Commission; state securities qualification fees; association membership dues;
costs of preparing and printing prospectuses for regulatory purposes and for
distribution to existing shareholders; advisory and administrative fees;
charges of the custodian and transfer agent; insurance premiums; auditing and
legal expenses; costs of shareholders' reports and shareholder meetings; any
extraordinary expenses; and brokerage fees and commissions, if any, in
connection with the purchase or sale of portfolio securities.
SUBCONTRACTING. JPMFAM is authorized by the Advisory Agreement to
employ or associate with such other persons or entities as it believes to be
appropriate to assist it in the performance of its duties. Any such person is
required to be compensated by JPMFAM, not by the Surviving Fund, and to be
approved by the shareholders of that Fund as required by the 1940 Act.
LIMITATION ON LIABILITY. The Advisory Agreement provides that JPMFAM
will not be liable for any error of judgment or mistake of law or for any act
or omission or loss suffered by MFT or the Surviving Fund in connection with
the performance of the Advisory Agreement except a loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation for
services or from willful misfeasance, bad faith, or gross negligence in the
performance of its duties or reckless disregard of its obligations and duties
under the Advisory Agreement.
DURATION AND TERMINATION. The Advisory Agreement continues in effect
from year to year with respect to the Surviving Fund, only so long as such
continuation is approved at least annually by (i) the Board of Trustees of
MFT or the majority vote of the outstanding voting securities of the
Surviving Fund, and (ii) a majority of those Trustees who are neither parties
to the Advisory Agreement nor "interested persons," as defined in the 1940
Act, of any such party, acting in person at a meeting called for the purpose
of voting on such approval. The Advisory Agreement will terminate
automatically in the event of its "assignment," as defined in the 1940 Act.
In addition, the Advisory Agreement is terminable at any time as to the
Surviving Fund without penalty by the MFT Board or by vote of the majority of
the Surviving Fund's outstanding voting securities upon 60 days' written
notice to JPMFAM, and by JPMFAM on 60 days' written notice to MFT.
-27-
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
JPMFAM, as the investment adviser to the Surviving Fund, has
responsibilities with respect to the Fund's portfolio transactions and brokerage
arrangements pursuant to the Fund's policies, subject to the overall authority
of the MFT Board.
Under the Advisory Agreement, JPMFAM, subject to the general
supervision of the Board, is responsible for the placement of orders for the
purchase and sale of portfolio securities for the Surviving Fund with brokers
and dealers selected by JPMFAM. These brokers and dealers may include brokers
or dealers affiliated with JPMFAM to the extent permitted by the 1940 Act and
MFT's policies and procedures applicable to the Fund. JPMFAM shall use its
best efforts to seek to execute portfolio transactions at prices which, under
the circumstances, result in total costs or proceeds being the most favorable
to such Fund. In assessing the best overall terms available for any
transaction, JPMFAM shall consider all factors it deems relevant, including
the breadth of the market in the security, the price of the security, the
financial condition and execution capability of the broker or dealer,
research services provided to JPMFAM, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing
basis. In no event shall JPMFAM be under any duty to obtain the lowest
commission or the best net price for the Fund on any particular transaction,
nor shall JPMFAM be under any duty to execute any order in a fashion either
preferential to such Fund relative to other accounts managed by JPMFAM or
otherwise materially adverse to such other accounts.
In selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to JPMFAM, the Fund and/or the other
accounts over which JPMFAM exercises investment discretion. JPMFAM is
authorized to pay a broker or dealer who provides such brokerage and research
services a commission for executing a portfolio transaction for the Fund
which is in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction if JPMFAM determines in good
faith that the total commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the overall responsibilities
of JPMFAM with respect to accounts over which it exercises investment
discretion. JPMFAM shall report to the Board regarding overall commissions
paid by the Fund and their reasonableness in relation to the benefits to such
Fund.
In executing portfolio transactions for the Fund, JPMFAM may, to the
extent permitted by applicable laws and regulations, but shall not be
obligated to, aggregate the securities to be sold or purchased with those of
other funds or its other clients if, in JPMFAM's reasonable judgment, such
aggregation (i) will result in an overall economic benefit to such fund,
taking into consideration the advantageous selling or purchase price,
brokerage commission and other expenses, and trading requirements, and (ii)
is not inconsistent with the policies set forth in MFT's registration
statement, as the case may be, and the Fund's Prospectus and Statement of
Additional Information. In such event, JPMFAM will allocate the securities so
purchased or sold, and the expenses incurred in the
-28-
transaction, in an equitable manner, consistent with its fiduciary
obligations to such Fund and such other clients.
It is possible that certain of the brokerage and research services
received will primarily benefit one or more other investment companies or
other accounts for which JPMFAM exercises investment discretion. Conversely,
MFT or any of its portfolios may be the primary beneficiary of the brokerage
or research services received as a result of portfolio transactions effected
for such other accounts or investment companies.
OTHER SERVICES
The Distributor is a wholly owned, indirect subsidiary of BISYS Fund
Services, Inc., which currently serves as the distributor for both the
Surviving Fund and the Merging Fund. BISYS Fund Services, Inc., is the
sub-administrator. The Distributor is unaffiliated with JPMC or any of its
subsidiaries.
Chase serves as administrator, shareholder servicing agent, fund
accountant and custodian, and DST serves as transfer agent and dividend
disbursing agent, for the Surviving Fund. The services provided by Chase
include day-to-day maintenance of certain books and records, calculation of
the offering price of the shares and preparation of reports. In its role as
custodian, Chase is responsible for the daily safekeeping of securities and
cash held by the Surviving Fund. It is anticipated that prior to the
consummation of the Reorganization, BONY will become the Surviving Fund's
fund accountant and custodian.
As administrator, Chase receives a fee of 0.10% of average daily net
assets. It is anticipated that, in connection with the Reorganization, the
administration fee will be amended to reduce the fee to 0.05% for complex
wide money market Fund assets in excess of $100 billion.
PROPOSAL 2:
ELECTION OF TRUSTEES
--------------------
It is proposed that shareholders of the Merging Fund consider the
election of the individuals listed below (the "Nominees") to the Board of
Trustees of 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 MFT 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 Boards of Trustees of the investment companies managed by
JPMFAM, JPMIM and their affiliates be rationalized in order to obtain
additional operating efficiencies by having the same Board of Trustees for
all of the funds. Therefore, the Nominees include certain current Trustees of
MFT and certain current Trustees of JPMF (including certain members of 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.
-29-
Shareholders of MFT are concurrently considering the election of the
same individuals to the Board of Trustees of MFT. Biographical information
about the Nominees and other relevant information is set forth below. More
information regarding the current Trustees of MFT and 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 four times during the fiscal year
ended October 31, 2000, and each of the Trustees attended at least 75% of the
meetings.
The Board of Trustees of 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 October 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.
*Interested Trustee, as defined by the 1940 Act.
-30-
REMUNERATION OF TRUSTEES AND CERTAIN EXECUTIVE OFFICERS
Each Trustee is currently paid an annual fee of $75,000 for serving
as Trustee of the investment companies in the Fund Complex and is reimbursed
for expenses incurred in connection with service as a Trustee. The Trustees
may hold various other directorships unrelated to these funds.
Trustee compensation expenses paid for the calendar year ended
December 31, 2000 are set forth below.
Aggregate Trustee Total Trustee Compensation
Compensation Paid by Accrued by Fund Complex(1) During
Name of Trustee the Trust During 2000 2000(2)
- ------------------------------------------ --------------------- ---------------------------------
Frederick S. Addy, Trustee $ 23,538 $ 75,000
William G. Burns, Trustee $ 23,538 $ 75,000
Arthur C. Eschenlauer, Trustee $ 23,538 $ 75,000
Matthew Healey, Trustee(3)
Chairman and Chief Executive Officer $ 23,538 $ 75,000
Michael P. Mallardi, Trustee $ 23,538 $ 75,000
- ---------------------
(1) A Fund Complex means two or more investment companies that hold
themselves out to investors as related companies for purposes of
investment and investment services, or have a common investment adviser
or have an investment adviser that is an affiliated person of the
investment adviser of any of the other investment companies.
(2) No investment company within the Fund Complex has a pension or
retirement plan.
(3) During 2000, Pierpont Group, Inc. paid Mr. Healey, in his role as
Chairman of Pierpont Group, Inc., compensation in the amount of
$200,000, contributed $25,500 to a defined contribution plan on his
behalf and paid $18,400 in insurance premiums for his benefit.
The Trustees decide upon general policies and are responsible for
overseeing 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.
-31-
The aggregate fees paid to Pierpont Group, Inc. by the Merging Fund and
the Master Portfolio during the indicated fiscal periods are set forth below:
MERGING FUND -- For the fiscal years ended October 31, 1998, 1999 and 2000:
$5,064, $5,894 and $4,579.
MASTER PORTFOLIO -- For the fiscal years ended October 31, 1998, 1999 and
2000: $15,548, $17,351 and $16,550.
ADVISORY BOARD
The Trustees determined as of January 26, 2000 to establish an
advisory board and appoint four members ("Members of the Advisory Board")
thereto. Each member serves at the pleasure of the Trustees. The Advisory
Board is distinct from the Trustees and provides advice to the Trustees as to
investment, management and operations of 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 Distributors,
Inc., a wholly owned indirect subsidiary of Boston Institutional Group, Inc.
The officers conduct and supervise the business
-32-
operations of JPMF and the Master Portfolio. JPMF and the Master Portfolio
have no employees.
The business address of each of the officers unless otherwise noted
is Funds Distributor, Inc., 60 State Street, Suite 1300, Boston,
Massachusetts 02109. The principal executive officers of 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 the Distributor since April,
1998. From August 1996 to March 1998, Ms. Chambers was
Vice President and Assistant General Counsel for
Loomis, Sayles & Company, L.P. From January 1986 to
July 1996, she was an associate with the law firm of
Ropes & Gray.
George A. Rio 46 President and Treasurer. Executive Vice President and
Client Service Director of the Distributor since April
1998. From June 1995 to March 1998, Mr. Rio was Senior
Vice President and Senior Key Account Manager for
Putnam Mutual Funds. From May 1994 to June 1995, Mr.
Rio was Director of Business Development for First Data
Corporation.
ACCOUNTANTS
PricewaterhouseCoopers LLP serves as the Merging Fund's, the Master
Portfolio's and the Surviving Fund's independent accountants, auditing and
reporting on the annual financial statements and reviewing certain regulatory
reports and federal income tax returns. PricewaterhouseCoopers LLP also
performs other professional accounting, auditing, tax and advisory services
when MFT or 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 ended October 31, 2000 was $32,500.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. The
aggregate fees billed for financial information systems and design
implementation services rendered by PricewaterhouseCoopers LLP to the Merging
Fund, JPMIM and JPMIM's affiliates that provide services to the Fund for the
calendar year ended December 31, 2000 was $0.
ALL OTHER FEES. The aggregate fees billed for all other non-audit
services, including fees for tax-related services, rendered by
PricewaterhouseCoopers LLP to the Merging Fund, JPMIM and JPMIM's affiliates
that provide services to the Fund for the calendar year ended December 31,
2000 was $11,029,150.
-33-
The Audit Committee has considered whether the provision of non-audit
services is compatible with maintaining the independence of
PricewaterhouseCoopers LLP.
INFORMATION RELATING TO VOTING MATTERS
GENERAL INFORMATION
This Combined Prospectus/Proxy Statement is being furnished in
connection with the solicitation of proxies by the 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).
-34-
PROXIES
All Merging Fund Shares represented by each properly signed proxy
received prior to the Meeting will be voted at the Meeting. If a Merging Fund
Shareholder specifies how the proxy is to be voted on any of the business to
come before the Meeting, it will be voted in accordance with such
specifications. If a Merging Fund Shareholder returns its proxy but no
direction is made on the proxy, the proxy will be voted FOR each Proposal
described in this Combined Prospectus/Proxy Statement. The Merging Fund
Shareholders voting to ABSTAIN on the Proposals will be treated as present
for purposes of achieving a quorum and in determining the votes cast on the
Proposals, but not as having voted FOR the Proposals. A properly signed proxy
on which a broker has indicated that it has no authority to vote on the
Proposals on behalf of the beneficial owner (a "broker non-vote") will be
treated as present for purposes of achieving a quorum but will not be counted
in determining the votes cast on the Proposals.
A proxy granted by any Merging Fund Shareholder may be revoked by
such Merging Fund Shareholder at any time prior to its use by written notice
to 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
-35-
consummation of the Reorganization and the Concurrent Reorganization based
upon their holdings at _______, 2001 are as follows:
Percentage of Percentage of
Amount of Merging Fund Surviving Fund
Shares Owned on Owned Upon
Name and Address Owned Record Date Consummation
- ----------------------------- --------- --------------- --------------
On the record date, the Trustees and officers of MFT as a group
owned less than 1% of the outstanding shares of the Surviving Fund. On the
record date, the name, address and percentage ownership of the persons who
owned beneficially more than 5% of shares of the Surviving Fund or any class
thereof and the percentage of shares of the Surviving Fund or any class
thereof that would be owned by such persons upon consummation of the
Reorganization and the Concurrent Reorganization based upon their holdings at
_______, 2001 are as follows:
Percentage of
Amount of Surviving Fund Percentage of Surviving
Shares Owned on Record Fund Owned Upon
Name and Address Owned Date Consummation
- ------------------------------------ --------- --------------- -----------------------
ADDITIONAL INFORMATION ABOUT MFT
Information about the Surviving Fund is included in its Prospectus,
which is incorporated by reference and enclosed herein. Additional
information about the Surviving Fund is also included in MFT's Statement of
Additional Information, which has been filed with the Commission and which is
incorporated herein by reference. Copies of the Statement of Additional
information may be obtained without charge by calling 1-800-348-4782. MFT is
subject to the requirements of the 1940 Act and, in accordance with such
requirements, files reports and other information with the Commission. These
materials can be inspected and copied at the Public Reference Facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, and at the Commission's Regional Offices at 7 World Trade Center,
Suite 1300, New York, NY 10048 and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material can also be obtained from
the Public Reference Branch, Office of Consumer Affairs and Information
Services, Securities and Exchange Commission, Washington, D.C. 20549, at
prescribed rates, and are also available on the Commission's web site at
http://www.sec.gov.
-36-
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 Additional information may be obtained
without charge by calling 1-800-766-7722. 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 October 31, 2000, the
audited financial statements, notes thereto and supplementary data of the
Master Portfolio for the fiscal year ended October 31, 2000 and the audited
financial highlights, financial statements and notes thereto of the Surviving
Fund for the fiscal year ended August 31, 2000 are incorporated by reference
herein and into the Statement of Additional Information related to this
Combined Prospectus/Proxy Statement. The audited financial highlights,
financial statements, notes thereto and supplementary data, as applicable,
for the Merging Fund, the Master Portfolio and the Surviving Fund have been
incorporated herein by reference in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on their authority
as experts in auditing and accounting.
The unaudited financial highlights, financial statements and notes
thereto of the Surviving Fund for the fiscal period ended February 28, 2001,
are incorporated by reference herein and into the Statement of Additional
Information related to this Combined Prospectus/Proxy Statement.
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 MFT nor JPMF is involved in any litigation that would have
any material adverse effect upon either the Merging Fund or the Surviving
Fund.
-37-
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 1-800-766-7722.
* * *
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING ARE
REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
-38-
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Plan") made this ____
day of ______, 2001 by and among J.P. Morgan Institutional Funds (the
"Transferor Trust"), a Massachusetts business trust, on behalf of the JPMorgan
Institutional Treasury Money Market Fund (the "Transferor Portfolio"), Mutual
Fund Trust (the "Acquiring Trust"), a Massachusetts business trust, on behalf of
JPMorgan Treasury Plus Money Market Fund (formerly, Chase Vista Treasury Plus
Money Market Fund) (the "Acquiring Portfolio") and J.P. Morgan Chase & Co.
WHEREAS, the Board of Trustees of each of the Transferor Trust and the
Acquiring Trust has determined that the transfer of all of the assets and
liabilities of the Transferor Portfolio to the Acquiring Portfolio is in the
best interests of the Transferor Portfolio and the Acquiring Portfolio, as well
as the best interests of shareholders of the Transferor Portfolio and the
Acquiring Portfolio, and that the interests of existing shareholders would not
be diluted as a result of this transaction;
WHEREAS, each of the Transferor Trust and the Acquiring Trust intends
to provide for the reorganization of the Transferor Portfolio (the
"Reorganization") through the acquisition by the Acquiring Portfolio of all of
the assets, subject to all of the liabilities, of the Transferor Portfolio in
exchange for shares of beneficial interest of the Acquiring Portfolio (the
"Acquiring Portfolio Shares"), the liquidation of the Transferor Portfolio and
the distribution to Transferor Portfolio shareholders of such Acquiring
Portfolio Shares, all pursuant to the provisions of Section 368(a)(1) of the
Internal Revenue Code of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree as follows:
1. TRANSFER OF ASSETS OF THE TRANSFEROR PORTFOLIO IN EXCHANGE FOR THE
ACQUIRING PORTFOLIO SHARES AND LIQUIDATION AMD 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 Agency 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 Bank of New York (the
"Custodian"), as custodian and pricing agent for the Transferor Portfolio and
the Acquiring Portfolio. The determination of said Custodian shall be conclusive
and binding on all parties in interest.
(ii) As of the Effective Time of the Reorganization, the Transferor
Trust will liquidate and distribute pro rata to its shareholders of record
("Transferor Portfolio Shareholders") as of the Effective Time of the
Reorganization the Acquiring Portfolio Shares received by such Transferor
Portfolio pursuant to Section 1(a)(i) in actual or constructive exchange for the
shares of the Transferor Portfolio held by the Transferor Portfolio
shareholders. Such liquidation and distribution will be accomplished by the
transfer of the Acquiring Portfolio Shares then credited to the account of the
Transferor Portfolio on the books of the Acquiring Portfolio, to open accounts
on the share records of the Acquiring Portfolio in the names of the Transferor
Portfolio Shareholders and representing the respective pro rata number of the
Acquiring Portfolio Shares due such shareholders. The Acquiring Portfolio will
not issue certificates representing the Acquiring Portfolio Shares in connection
with such exchange.
(iii) As soon as practicable after the Effective Time of the
Reorganization, the Transferor Trust shall take all the necessary steps under
Massachusetts law, the Transferor Trust's Declaration of Trust and any other
applicable law to effect a complete termination of the Transferor Portfolio.
(b) EXCHANGE DATE AND EFFECTIVE TIME OF THE REORGANIZATION.
(i) Subject to the satisfaction of the conditions to the Reorganization
specified in this Plan, the Reorganization shall occur as of the close of
regularly scheduled trading on the New York Stock Exchange (the "Effective Time
of the Reorganization") on August 11, 2001, or such later date as may be agreed
upon by the parties (the "Exchange Date").
(ii) All acts taking place on the Exchange Date shall be deemed to take
place simultaneously as of the Effective Time of the Reorganization unless
otherwise provided.
(iii) In the event that on the proposed Exchange Date (A) the New York
Stock Exchange shall be closed to trading or trading thereon shall be
restricted, or (B) trading or the reporting of trading on said Exchange or
elsewhere shall be disrupted so that accurate valuation of the net assets of the
Acquiring Portfolio or the Transferor Portfolio is impracticable, the Exchange
Date shall be postponed until the first business day after the day when trading
shall have been fully resumed and reporting shall have been restored.
(iv) On the Exchange Date, portfolio securities of the Transferor
Portfolio shall be transferred by the Custodian to the accounts of the Acquiring
Portfolio duly endorsed in proper form for transfer, in such condition as to
constitute good delivery thereof in accordance with the
A-2
custom of brokers, and shall be accompanied by all necessary federal and
state stock transfer stamps or a check for the appropriate purchase price
thereof.
(c) VALUATION.
(i) The net asset value of the shares of the Acquiring Portfolio and
the net value of the assets of the Transferor Portfolio to be transferred in
exchange therefore shall be determined as of the Effective Time of the
Reorganization. The net asset value of the Acquiring Portfolio Shares shall be
computed by the Custodian in the manner set forth in the Acquiring Trust's
Declaration of Trust or By-laws and then current prospectus and statement of
additional information and shall be computed to not less than two decimal
places. The net value of the assets of the Transferor Portfolio to be
transferred shall be computed by the Custodian by calculating the value of the
assets transferred by the Transferor Portfolio and by subtracting therefrom the
amount of the liabilities assigned and transferred to the Acquiring Portfolio,
said assets and liabilities to be valued in the manner set forth in the
Transferor Trust's Declaration of Trust or By-laws and then current prospectus
and statement of additional information.
(ii) The number of Agency 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 Agency Class shares of the Acquiring
Portfolio, both as determined in accordance with Section 1(c)(i).
(iii) All computations of value shall be made by the Custodian in
accordance with its regular practice as pricing agent for the Acquiring
Portfolio and the Transferor Portfolio.
2. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING TRUST
The Acquiring Trust represents and warrants as follows:
(a) ORGANIZATION, EXISTENCE, ETC. The Acquiring Trust is a business
trust that is duly organized, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts and has the power to carry on its
business as it is now being conducted. The Acquiring Portfolio is a validly
existing series of shares of such business trust representing interests therein
under the laws of Massachusetts. Each of the Acquiring Portfolio and the
Acquiring Trust have all necessary federal, state and local authorization to own
all of its properties and assets and to carry on its business as now being
conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. The Acquiring Trust is
registered under the Investment Company Act of 1940, as amended (the "Act") as
an open-end investment company of the management type; such registration has not
been revoked or rescinded and is in full force and effect.
(c) CURRENT OFFERING DOCUMENTS. The current prospectus and statement of
additional information of the Acquiring Trust, as amended, included in the
Acquiring Trust's registration
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statement on Form N-1A filed with the Securities and Exchange Commission,
comply in all material respects with the requirements of the Securities Act
of 1933, as amended (the "Securities Act") and the Act and do not contain an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(d) CAPITALIZATION. The Acquiring Trust has an unlimited number of
authorized shares of beneficial interest of which as of February 28, 2001 there
were 1,074,655 outstanding shares of the Acquiring Portfolio, and no shares of
such Portfolio were held in the treasury of the Acquiring Trust. All of the
outstanding shares of the Acquiring Trust have been duly authorized and are
validly issued, fully paid and nonassessable (except as disclosed in the
Acquiring Trust's prospectus and recognizing that under Massachusetts law,
shareholders of an Acquiring Trust portfolio could, under certain circumstances,
be held personally liable for the obligations of such Acquiring Trust
portfolio). Because the Acquiring Trust is an open-end investment company
engaged in the continuous offering and redemption of its shares, the number of
outstanding shares may change prior to the Effective Time of the Reorganization.
All of the issued and outstanding shares of the Acquiring Portfolio have been
offered and sold in compliance in all material respects with applicable
registration requirements of the Securities Act and applicable state securities
laws.
(e) FINANCIAL STATEMENTS. The financial statements of the Acquiring
Trust with respect to the Acquiring Portfolio for the fiscal year ended August
31, 2000, which have been audited by PricewaterhouseCoopers LLP, fairly present
the financial position of the Acquiring Portfolio as of the dates thereof and
the respective results of operations and changes in net assets for each of the
periods indicated in accordance with generally accepted accounting principles
("GAAP"). The financial statements of the Acquiring Trust with respect to the
Acquiring Portfolio for the fiscal period ended February 28, 2001 fairly present
the financial position of the Acquiring Portfolio as of the dates thereof and
the respective results of operations and changes in net assets for each of the
periods indicated in accordance with GAAP.
(f) SHARES TO BE ISSUED UPON REORGANIZATION. The Acquiring Portfolio
Shares to be issued in connection with the Reorganization will be duly
authorized and upon consummation of the Reorganization will be validly issued,
fully paid and nonassessable (except as disclosed in the Trust's prospectus and
recognizing that under Massachusetts law, shareholders of an Acquiring Trust
portfolio could, under certain circumstances, be held personally liable for the
obligations of such portfolio).
(g) AUTHORITY RELATIVE TO THIS PLAN. The Acquiring Trust, on behalf of
the Acquiring Portfolio, has the power to enter into this Plan and to carry out
its obligations hereunder. The execution and delivery of this Plan and the
consummation of the transactions contemplated hereby have been duly authorized
by the Acquiring Trust's Board of Trustees and no other proceedings by the
Acquiring Trust other than those contemplated under this Plan are necessary to
authorize its officers to effectuate this Plan and the transactions contemplated
hereby. The Acquiring Trust is not a party to or obligated under any provision
of its Declaration of Trust or By-laws, or under any indenture or contract
provision or any other commitment or obligation, or subject to any order or
decree, which would be violated by or which would prevent its execution and
performance of this Plan in accordance with its terms.
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(h) LIABILITIES. There are no liabilities of the Acquiring Portfolio,
whether actual or contingent and whether or not determined or determinable,
other than liabilities disclosed or provided for in the Acquiring Trust's
financial statements with respect to the Acquiring Portfolio and liabilities
incurred in the ordinary course of business subsequent to February 28, 2001 or
otherwise previously disclosed to the Acquiring Trust with respect to the
Acquiring Portfolio, none of which has been materially adverse to the business,
assets or results of operations of the Acquiring Portfolio.
(i) NO MATERIAL ADVERSE CHANGE. Since February 28, 2001, there has been
no material adverse change in the financial condition, results of operations,
business, properties or assets of the Acquiring Portfolio, other than those
occurring in the ordinary course of business (for these purposes, a decline in
net asset value and a decline in net assets due to redemptions do not constitute
a material adverse change).
(j) LITIGATION. There are no claims, actions, suits or proceedings
pending or, to the knowledge of the Acquiring Trust, threatened which would
adversely affect the Acquiring Trust or the Acquiring Portfolio's assets or
business or which would prevent or hinder consummation of the transactions
contemplated hereby, there are no facts which would form the basis for the
institution of administrative proceedings against the Acquiring Trust or the
Acquiring Portfolio and, to the knowledge of the Acquiring Trust, there are no
regulatory investigations of the Acquiring Trust or the Acquiring Portfolio,
pending or threatened, other than routine inspections and audits.
(k) CONTRACTS. No default exists under any material contract or other
commitment to which the Acquiring Trust, on behalf of the Acquiring Portfolio,
is subject.
(l) TAXES. The federal income tax returns of the Acquiring Trust with
respect to the Acquiring Portfolio, and all other income tax returns required to
be filed by the Acquiring Trust with respect to the Acquiring Portfolio, have
been filed, and all taxes payable pursuant to such returns have been paid. To
the knowledge of the Acquiring Trust, no such return is under audit and no
assessment has been asserted in respect of any such return. All federal and
other taxes owed by the Acquiring Trust with respect to the Acquiring Portfolio
have been paid so far as due. The Acquiring Portfolio has elected to qualify and
has qualified as a "regulated investment company" under Subchapter M of the Code
as of and since its first taxable year and intends to continue to so qualify.
(m) NO APPROVALS REQUIRED. Except for the Registration Statement (as
defined in Section 4(a) hereof) and the approval of the Transferor Portfolio's
shareholders (referred to in Section 6(a) hereof), no consents, approvals,
authorizations, registrations or exemptions under federal or state laws are
necessary for the consummation by the Acquiring Trust of the Reorganization,
except such as have been obtained as of the date hereof.
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3. REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR TRUST
The Transferor Trust represents and warrants as follows:
(a) ORGANIZATION, EXISTENCE, ETC. The Transferor Trust is a business
trust that is duly organized, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts and has the power to carry on its
business as it is now being conducted. The Transferor Portfolio is a validly
existing series of shares of such business trust representing interests therein
under the laws of Massachusetts. Each of Transferor Portfolio and the Transferor
Trust has all necessary federal, state and local authorization to own all of its
properties and assets and to carry on its business as now being conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. The Transferor Trust is
registered under the Act as an open-end investment company of the management
type; such registration has not been revoked or rescinded and is in full force
and effect.
(c) CURRENT OFFERING DOCUMENTS. The current prospectus and statement of
additional information of the Transferor Trust, as amended, included in the
Transferor Trust's registration statement on Form N-1A filed with the
Commission, comply in all material respects with the requirements of the
Securities Act and the Act and do not contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(d) CAPITALIZATION. The Transferor Trust has an unlimited number of
authorized shares of beneficial interest of which as of February 28, 2001 there
were outstanding 537,242 shares of the Transferor Portfolio, and no shares of
such Portfolio were held in the treasury of the Transferor Trust. All of the
outstanding shares of the Transferor Trust have been duly authorized and are
validly issued, fully paid and nonassessable (except as disclosed in the
Transferor Trust's prospectus and recognizing that under Massachusetts law,
shareholders of a Trust portfolio could, under certain circumstances, be held
personally liable for the obligations of such Trust portfolio). Because the
Transferor Trust is an open-end investment company engaged in the continuous
offering and redemption of its shares, the number of outstanding shares may
change prior to the Effective Time of the Reorganization. All such shares will,
at the Exchange Date, be held by the shareholders of record of the Transferor
Portfolio as set forth on the books and records of the Transferor Trust in the
amounts set forth therein, and as set forth in any list of shareholders of
record provided to the Acquiring Portfolio for purposes of the Reorganization,
and no such shareholders of record will have any preemptive rights to purchase
any Transferor Portfolio shares, and the Transferor Portfolio does not have
outstanding any options, warrants or other rights to subscribe for or purchase
any Transferor Portfolio shares (other than any existing dividend reinvestment
plans of the Transferor Portfolio or as set forth in this Plan), nor are there
outstanding any securities convertible into any shares of the Transferor
Portfolio (except pursuant to any existing exchange privileges described in the
current prospectus and statement of additional information of the Transferor
Trust). All of the Transferor Portfolio's issued and outstanding shares have
been offered and sold in compliance in all material respects with applicable
registration requirements of the Securities Act and applicable state securities
laws.
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(e) FINANCIAL STATEMENTS. The financial statements for the Transferor
Trust with respect to the Transferor Portfolio and for The Treasury Money Market
Portfolio for the fiscal year ended October 31, 2000 which have been audited by
PricewaterhouseCoopers LLP fairly present the financial position of the
Transferor Portfolio and The Treasury Money Market Portfolio as of the dates
thereof and the respective results of operations and changes in net assets for
each of the periods indicated in accordance with GAAP.
(f) AUTHORITY RELATIVE TO THIS PLAN. The Transferor Trust, on behalf of
the Transferor Portfolio, has the power to enter into this Plan and to carry out
its obligations hereunder. The execution and delivery of this Plan and the
consummation of the transactions contemplated hereby have been duly authorized
by the Transferor Trust's Board of Trustees and no other proceedings by the
Transferor Trust other than those contemplated under this Plan are necessary to
authorize its officers to effectuate this Plan and the transactions contemplated
hereby. The Transferor Trust is not a party to or obligated under any provision
of its Declaration of Trust or By-laws, or under any indenture or contract
provision or any other commitment or obligation, or subject to any order or
decree, which would be violated by or which would prevent its execution and
performance of this Plan in accordance with its terms.
(g) LIABILITIES. There are no liabilities of the Transferor Portfolio,
whether actual or contingent and whether or not determined or determinable,
other than liabilities disclosed or provided for in the Transferor Trust's
Financial Statements with respect to the Transferor Portfolio and liabilities
incurred in the ordinary course of business subsequent to October 31, 2000 or
otherwise previously disclosed to the Transferor Trust with respect to the
Transferor Portfolio, none of which has been materially adverse to the business,
assets or results of operations of the Transferor Portfolio.
(h) NO MATERIAL ADVERSE CHANGE. Since October 31, 2000, there has been
no material adverse change in the financial condition, results of operations,
business, properties or assets of the Transferor Portfolio, other than those
occurring in the ordinary course of business (for these purposes, a decline in
net asset value and a decline in net assets due to redemptions do not constitute
a material adverse change).
(i) LITIGATION. There are no claims, actions, suits or proceedings
pending or, to the knowledge of the Transferor Trust, threatened which would
adversely affect the Transferor Trust or the Transferor Portfolio's assets or
business or which would prevent or hinder consummation of the transactions
contemplated hereby, there are no facts which would form the basis for the
institution of administrative proceedings against the Transferor Trust or the
Transferor Portfolio and, to the knowledge of the Transferor Trust, there are no
regulatory investigations of the Transferor Trust or the Transferor Portfolio,
pending or threatened, other than routine inspections and audits.
(j) CONTRACTS. The Transferor Trust, on behalf of the Transferor
Portfolio, is not subject to any contracts or other commitments (other than this
Plan) which will not be terminated with respect to the Transferor Portfolio
without liability to the Transferor Trust or the Transferor Portfolio as of or
prior to the Effective Time of the Reorganization.
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(k) TAXES. The federal income tax returns of the Transferor Trust with
respect to the Transferor Portfolio, and all other income tax returns required
to be filed by the Transferor Trust with respect to the Transferor Portfolio,
have been, and all taxes payable pursuant to such returns have been paid. To the
knowledge of the Transferor Trust, no such return is under audit and no
assessment has been asserted in respect of any such return. All federal and
other taxes owed by the Transferor Trust with respect to the Transferor
Portfolio have been paid so far as due. The Transferor Portfolio has elected to
qualify as a "regulated investment company" under Subchapter M of the Code, as
of and since its first taxable year, and shall continue to so qualify until the
Effective Time of the Reorganization.
(l) NO APPROVALS REQUIRED. Except for the Registration Statement (as
defined in Section 4(a) hereof) and the approval of the Transferor Portfolio's
shareholders referred to in Section 6(a) hereof, no consents, approvals,
authorizations, registrations or exemptions under federal or state laws are
necessary for the consummation by the Transferor Trust of the Reorganization,
except such as have been obtained as of the date hereof.
4. COVENANTS OF THE ACQUIRING TRUST
The Acquiring Trust covenants to the following:
(a) REGISTRATION STATEMENT. On behalf of the Acquiring Portfolio, the
Acquiring Trust shall file with the Commission a Registration Statement on Form
N-14 (the "Registration Statement") under the Securities Act relating to the
Acquiring Portfolio Shares issuable hereunder and the proxy statement of the
Transferor Portfolio relating to the meeting of the Transferor Portfolio's
shareholders referred to in Section 5(a) herein. At the time the Registration
Statement becomes effective, the Registration Statement (i) will comply in all
material respects with the provisions of the Securities Act and the rules and
regulations of the Commission thereunder (the "Regulations") and (ii) will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and at the time the Registration Statement becomes effective, at the
time of the Transferor Portfolio shareholders' meeting referred to in Section
5(a) hereof, and at the Effective Time of the Reorganization, the
prospectus/proxy statement (the "Prospectus") and statement of additional
information (the "Statement of Additional Information") included therein, as
amended or supplemented by any amendments or supplements filed by the Trust,
will not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) COOPERATION IN EFFECTING REORGANIZATION. The Acquiring Trust agrees
to use all reasonable efforts to effectuate the Reorganization, to continue in
operation thereafter, and to obtain any necessary regulatory approvals for the
Reorganization. The Acquiring Trust shall furnish such data and information
relating to the Acquiring Trust as shall be reasonably requested for inclusion
in the information to be furnished to the Transferor Portfolio shareholders in
connection with the meeting of the Transferor Portfolio's shareholders for the
purpose of acting upon this Plan and the transactions contemplated herein.
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(c) OPERATIONS IN THE ORDINARY COURSE. Except as otherwise contemplated
by this Plan, the Acquiring Trust shall conduct the business of the Acquiring
Portfolio in the ordinary course until the consummation of the Reorganization,
it being understood that such ordinary course of business will include the
declaration and payment of customary dividends and distributions.
5. COVENANTS OF THE TRANSFEROR TRUST
The Transferor Trust covenants to the following:
(a) MEETING OF THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. The Transferor
Trust shall call and hold a meeting of the shareholders of the Transferor
Portfolio for the purpose of acting upon this Plan and the transactions
contemplated herein.
(b) PORTFOLIO SECURITIES. With respect to the assets to be transferred
in accordance with Section 1(a), the Transferor Portfolio's assets shall consist
of all property and assets of any nature whatsoever, including, without
limitation, all cash, cash equivalents, securities, claims and receivables
(including dividend and interest receivables) owned, and any deferred or prepaid
expenses shown as an asset on the Transferor Trust's books maintained on behalf
of the Transferor Portfolio. At least five (5) business days prior to the
Exchange Date, the Transferor Portfolio will provide the Acquiring Trust, for
the benefit of the Acquiring Portfolio, with a list of its assets and a list of
its stated liabilities. The Transferor Portfolio shall have the right to sell
any of the securities or other assets shown on the list of assets prior to the
Exchange Date but will not, without the prior approval of the Acquiring Trust,
on behalf of the Acquiring Portfolio, acquire any additional securities other
than securities which the Acquiring Portfolio is permitted to purchase, pursuant
to its investment objective and policies or otherwise (taking into consideration
its own portfolio composition as of such date). In the event that the Transferor
Portfolio holds any investments that the Acquiring Portfolio would not be
permitted to hold, the Transferor Portfolio will dispose of such securities
prior to the Exchange Date to the extent practicable, to the extent permitted by
its investment objective and policies and to the extent that its shareholders
would not be materially affected in an adverse manner by such a disposition. In
addition, the Transferor Trust will prepare and deliver immediately prior to the
Effective Time of the Reorganization, a Statement of Assets and Liabilities of
the Transferor Portfolio, prepared in accordance with GAAP (each, a "Schedule").
All securities to be listed in the Schedule for the Transferor Portfolio as of
the Effective Time of the Reorganization will be owned by the Transferor
Portfolio free and clear of any liens, claims, charges, options and
encumbrances, except as indicated in such Schedule, and, except as so indicated,
none of such securities is or, after the Reorganization as contemplated hereby,
will be subject to any restrictions, legal or contractual, on the disposition
thereof (including restrictions as to the public offering or sale thereof under
the Securities Act) and, except as so indicated, all such securities are or will
be readily marketable.
(c) REGISTRATION STATEMENT. In connection with the preparation of the
Registration Statement, the Transferor Trust will cooperate with the Acquiring
Trust and will furnish to the Acquiring Trust the information relating to the
Transferor Portfolio required by the Securities Act and the Regulations to be
set forth in the Registration Statement (including the Prospectus and Statement
of Additional Information). At the time the Registration Statement becomes
A-9
effective, the Registration Statement, insofar as it relates to the Transferor
Portfolio, (i) will comply in all material respects with the provisions of the
Securities Act and the Regulations and (ii) will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and at the
time the Registration Statement becomes effective, at the time of the Transferor
Portfolio's shareholders' meeting referred to in Section 5(a) and at the
Effective Time of the Reorganization, the Prospectus and Statement of Additional
Information, as amended or supplemented by any amendments or supplements filed
by the Transferor Trust, insofar as they relate to the Transferor Portfolio,
will not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this subsection shall apply only to
statements in or omissions from the Registration Statement, Prospectus or
Statement of Additional Information made in reliance upon and in conformity with
information furnished by the Transferor Portfolio for use in the registration
statement, prospectus or statement of additional information as provided in this
Section 5(c).
(d) COOPERATION IN EFFECTING REORGANIZATION. The Transferor Trust
agrees to use all reasonable efforts to effectuate the Reorganization and to
obtain any necessary regulatory approvals for the Reorganization.
(e) OPERATIONS IN THE ORDINARY COURSE. Except as otherwise contemplated
by this Plan, the Transferor Trust shall conduct the business of the Transferor
Portfolio in the ordinary course until the consummation of the Reorganization,
it being understood that such ordinary course of business will include the
declaration and payment of customary dividends and distributions.
(f) STATEMENT OF EARNINGS AND PROFITS. As promptly as practicable, but
in any case within 60 days after the Exchange Date, the Transferor Trust on
behalf of the Transferor Portfolio, shall prepare a statement of the earnings
and profits of the Transferor Portfolio for federal income tax purposes, and of
any capital loss carryovers and other items that the Acquiring Portfolio will
succeed to and take into account as a result of Section 381 of the Code.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRANSFEROR TRUST
The obligations of the Transferor Trust with respect to the
consummation of the Reorganization are subject to the satisfaction of the
following conditions:
(a) APPROVAL BY THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. This Plan and
the transactions contemplated by the Reorganization shall have been approved by
the requisite vote of the shares of the Transferor Portfolio entitled to vote on
the matter ("Transferor Shareholder Approval").
(b) COVENANTS, WARRANTIES AND REPRESENTATIONS. The Acquiring Trust
shall have complied with each of its covenants contained herein, each of the
representations and warranties contained herein shall be true in all material
respects as of the Effective Time of the Reorganization (except as otherwise
contemplated herein), and there shall have been no material
A-10
adverse change (as described in Section 2(i)) in the financial condition,
results of operations, business, properties or assets of the Acquiring
Portfolio since August 31, 2000.
(c) REGULATORY APPROVAL. The Registration Statement shall have been
declared effective by the Commission and no stop orders under the Securities Act
pertaining thereto shall have been issued, and all other approvals,
registrations, and exemptions under federal and state laws considered to be
necessary shall have been obtained (collectively, the "Regulatory Approvals").
(d) TAX OPINION. The Transferor Trust shall have received the opinion
of Simpson Thacher & Bartlett, dated on or before the Exchange Date, addressed
to and in form and substance satisfactory to the Transferor Trust, as to certain
of the federal income tax consequences under the Code of the Reorganization,
insofar as it relates to the Transferor Portfolio and the Acquiring Portfolio,
and to shareholders of each Transferor Portfolio (the "Tax Opinion"). For
purposes of rendering the Tax Opinion, Simpson Thacher & Bartlett may rely
exclusively and without independent verification, as to factual matters, upon
the statements made in this Plan, the Prospectus and Statement of Additional
Information, and upon such other written representations as the President or
Treasurer of the Transferor Trust will have verified as of the Effective Time of
the Reorganization. The Tax Opinion will be to the effect that, based on the
facts and assumptions stated therein, for federal income tax purposes: (i) the
Reorganization will constitute a reorganization within the meaning of section
368(a)(1) of the Code with respect to the Transferor Portfolio and the Acquiring
Portfolio; (ii) no gain or loss will be recognized by any of the Transferor
Portfolio or the Acquiring Portfolio upon the transfer of all the assets and
liabilities, if any, of the Transferor Portfolio to the Acquiring Portfolio
solely in exchange for shares of the Acquiring Portfolio or upon the
distribution of the shares of the Acquiring Portfolio to the holders of the
shares of the Transferor Portfolio solely in exchange for all of the shares of
the Transferor Portfolio; (iii) no gain or loss will be recognized by
shareholders of the Transferor Portfolio upon the exchange of shares of such
Transferor Portfolio solely for shares of the Acquiring Portfolio; (iv) the
holding period and tax basis of the shares of the Acquiring Portfolio received
by each holder of shares of the Transferor Portfolio pursuant to the
Reorganization will be the same as the holding period and tax basis of shares of
the Transferor Portfolio held by such holder immediately prior to the
Reorganization; (provided the shares of the Transferor Portfolio were held as a
capital asset on the date of the Reorganization) and (v) the holding period and
tax basis of the assets of the Transferor Portfolio acquired by the Acquiring
Portfolio will be the same as the holding period and tax basis of those assets
to the Transferor Portfolio immediately prior to the Reorganization.
(e) CONCURRENT REORGANIZATION. The reorganization of each of J.P.
Morgan Institutional Service Treasury Money Market Fund and J.P. Morgan Treasury
Money Market Reserves Fund, each a series of the Transferor Trust, into the
Acquiring Portfolio shall have been consummated.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING TRUST
The obligations of the Acquiring Trust with respect to the consummation
of the Reorganization are subject to the satisfaction of the following
conditions:
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(a) APPROVAL BY THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. The Transferor
Shareholder Approval shall have been obtained.
(b) COVENANTS, WARRANTIES AND REPRESENTATIONS. The Transferor Trust
shall have complied with each of its covenants contained herein, each of the
representations and warranties contained herein shall be true in all material
respects as of the Effective Time of the Reorganization (except as otherwise
contemplated herein), and there shall have been no material adverse change (as
described in Section 3(h)) in the financial condition, results of operations,
business, properties or assets of the Transferor Portfolio since October 31,
2000.
(c) PORTFOLIO SECURITIES. All securities to be acquired by the
Acquiring Portfolio in the Reorganization shall have been approved for
acquisition by J.P. Morgan Fleming Asset Management (USA) Inc. ("JPMFAM"), in
its capacity as investment adviser to the Acquiring Portfolio, as consistent
with the investment policies of the Acquiring Portfolio.
(d) REGULATORY APPROVAL. The Regulatory Approvals shall have been
obtained.
(e) DISTRIBUTION OF INCOME AND GAINS. The Transferor Trust on behalf of
the Transferor Portfolio shall have distributed to the shareholders of the
Transferor Portfolio all of the Transferor Portfolio's investment company
taxable income (determined without regard to the deduction for dividends paid)
as defined in Section 852(b)(2) of the Code for its taxable year ending on the
Exchange Date and all of its net capital gain as such term is used in Section
852(b)(3) of the Code, after reduction by any capital loss carry forward, for
its taxable year ending on the Exchange Date.
(f) TAX OPINION. The Acquiring Trust shall have received the Tax
Opinion.
(g) CONCURRENT REORGANIZATION. The reorganization of each of J.P.
Morgan Institutional Service Treasury Money Market Fund and J.P. Morgan Treasury
Money Market Reserves Fund, each a series of the Transferor Trust, into the
Acquiring Portfolio shall have been consummated.
8. AMENDMENTS; TERMINATIONS; NO SURVIVAL OF COVENANTS, WARRANTIES AND
REPRESENTATIONS
(a) AMENDMENTS. The parties hereto may, by agreement in writing
authorized by their respective Boards of Trustees amend this Plan at any time
before or after approval hereof by the shareholders of the Transferor Portfolio,
but after such approval, no amendment shall be made which substantially changes
the terms hereof.
(b) WAIVERS. At any time prior to the Effective Time of the
Reorganization, either the Transferor Trust or the Acquiring Trust may by
written instrument signed by it (i) waive any inaccuracies in the
representations and warranties made to it contained herein and (ii) waive
compliance with any of the covenants or conditions made for its benefit
contained herein, except that conditions set forth in Sections 6(c) and 7(d) may
not be waived.
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(c) TERMINATION BY THE TRANSFEROR TRUST. The Transferor Trust, on
behalf of the Transferor Portfolio, may terminate this Plan with respect to the
Transferor Portfolio at any time prior to the Effective Time of the
Reorganization by notice to the Acquiring Trust and JPMFAM if (i) a material
condition to the performance of the Transferor Trust hereunder or a material
covenant of the Acquiring Trust contained herein shall not be fulfilled on or
before the date specified for the fulfillment thereof or (ii) a material default
or material breach of this Plan shall be made by the Acquiring Trust. In
addition, this Plan may be terminated by the Transferor Trust at any time prior
to the Effective Time of the Reorganization, whether before or after approval of
this Plan by the shareholders of the Transferor Portfolio, without liability on
the part of any party hereto, its Trustees, officers or shareholders or J.P.
Morgan Investment Management Inc. ("JPMIM") on notice to the other parties in
the event that the Board of Trustees determines that proceeding with this Plan
is not in the best interests of the shareholders of the Transferor Portfolio.
(d) TERMINATION BY THE ACQUIRING TRUST. The Acquiring Trust, on behalf
of the Acquiring Portfolio, may terminate this Plan with respect to the
Acquiring Portfolio at any time prior to the Effective Time of the
Reorganization by notice to the Transferor Trust and JPMIM if (i) a material
condition to the performance of the Acquiring Trust hereunder or a material
covenant of the Transferor Trust contained herein shall not be fulfilled on or
before the date specified for the fulfillment thereof or (ii) a material default
or material breach of this Plan shall be made by the Transferor Trust. In
addition, this Plan may be terminated by the Acquiring Trust at any time prior
to the Effective Time of the Reorganization, whether before or after approval of
this Plan by the shareholders of the Transferor Portfolio, without liability on
the part of any party hereto, its Trustees, officers or shareholders or JPMIM on
notice to the other parties in the event that the Board of Trustees determines
that proceeding with this Plan is not in the best interests of the shareholders
of the Acquiring Portfolio.
(e) SURVIVAL. No representations, warranties or covenants in or
pursuant to this Plan, except for the provisions of Section 5(f) and Section 9
of this Plan, shall survive the Reorganization.
9. EXPENSES
The expenses of the Reorganization will be borne by J.P. Morgan Chase &
Co. ("JPMC"). Such expenses include, without limitation, (i) expenses incurred
in connection with the entering into and the carrying out of the provisions of
this Plan; (ii) expenses associated with the preparation and filing of the
Registration Statement; (iii) fees and expenses of preparing and filing such
forms as are necessary under any applicable state securities laws in connection
with the Reorganization; (iv) postage; (v) printing; (vi) accounting fees; (vii)
legal fees and (viii) solicitation costs relating to the Reorganization. In
addition, JPMC or an affiliate will waive fees payable to it or reimburse
expenses to the extent necessary such that the actual (post-waiver) total
expense ratios of the Select Class Shares and the Institutional Class Shares of
the Acquiring Portfolio are not higher than those set forth in the Registration
Statement for a period of three years after the Exchange Date.
A-13
10. NOTICES
Any notice, report, statement or demand required or permitted by any
provision of this Plan shall be in writing and shall be given by hand, certified
mail or by facsimile transmission, shall be deemed given when received and shall
be addressed to the parties hereto at their respective addresses listed below or
to such other persons or addresses as the relevant party shall designate as to
itself from time to time in writing delivered in like manner:
if to the Acquiring Trust (for itself or on behalf of the Acquiring
Portfolio):
1211 Avenue of the Americas, 41st Floor
New York, New York 10036
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Sarah E. Cogan, Esq.
if to the Transferor Trust (for itself or on behalf of the Transferor
Portfolio):
60 State Street
Suite 1300
Boston, Massachusetts 02109
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: John E. Baumgardner, Jr., Esq.
11. RELIANCE
All covenants and agreements made under this Plan shall be deemed to
have been material and relied upon by the Transferor Trust and the Acquiring
Trust notwithstanding any investigation made by such party or on its behalf.
12. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
(a) The section and paragraph headings contained in this Plan are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Plan.
(b) This Plan may be executed in any number of counterparts, each of
which shall be deemed an original.
A-14
(c) This Plan shall be governed by and construed in accordance with the
laws of The State of New York.
(d) This Plan shall bind and inure to the benefit of the Transferor
Trust, the Transferor Portfolio, the Acquiring Trust and the Acquiring Portfolio
and their respective successors and assigns, but no assignment or transfer
hereof or of any rights or obligations hereunder shall be made by any party
without the written consent of the other parties. Nothing herein expressed or
implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this Plan.
(e) The name "J.P. Morgan Institutional Funds" is the designation of
its Trustees under a Declaration of Trust dated November 4, 1992, as amended,
and all persons dealing with the Transferor Trust must look solely to the
Transferor Trust's property for the enforcement of any claims against the
Transferor Trust, as none of the Transferor Trustees, officers, agents or
shareholders assumes any personal liability for obligations entered into on
behalf of the Transferor Trust. No series of the Transferor Trust shall be
liable for claims against any other series of the Transferor Trust.
(f) The name "Mutual Fund Trust" is the designation of its Trustees
under a Declaration of Trust dated February 1, 1994, as amended, and all persons
dealing with the Acquiring Trust must look solely to the Acquiring Trust's
property for the enforcement of any claims against the Acquiring Trust, as none
of the Acquiring Trustees, officers, agents or shareholders assumes any personal
liability for obligations entered into on behalf of the Acquiring Trust. No
series of the Acquiring Trust shall be liable for claims against any other
series of the Acquiring Trust.
A-15
IN WITNESS WHEREOF, the undersigned have executed this Plan as of the
date first above written.
J.P. MORGAN INSTITUTIONAL FUNDS
on behalf of J.P. Morgan Institutional Treasury Money Market Fund
By:
--------------------------------------------------
Name:
Title:
MUTUAL FUND TRUST
on behalf of JPMorgan Treasury Plus Money Market Fund
By:
--------------------------------------------------
Name:
Title:
Agreed and acknowledged with respect to Section 9:
J.P. MORGAN CHASE & CO.
By:
--------------------------------------------------
Name:
Title:
A-16
STATEMENT OF ADDITIONAL INFORMATION
(SPECIAL MEETING OF SHAREHOLDERS OF
J.P. MORGAN INSTITUTIONAL TREASURY MONEY MARKET FUND,
A SERIES OF J.P. MORGAN INSTITUTIONAL FUNDS)
This Statement of Additional Information is not a prospectus but should
be read in conjunction with the Combined Prospectus/Proxy Statement dated May
12, 2001 for the Special Meeting of Shareholders of J.P. Morgan Institutional
Treasury Money Market Fund (the "Merging Fund"), a series of J.P. Morgan
Institutional 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 1-800-766-7722.
Unless otherwise indicated, capitalized terms used herein and not
otherwise defined have the same meanings as are given to them in the Combined
Prospectus/Proxy Statement.
Further information about the Surviving Fund and the Merging Fund is
contained in each of MFT's and 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 three 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, MFT, on behalf of the Surviving Fund, and JPMC, and the
transactions contemplated thereby, the Reorganization Plan contemplates the
transfer of all of the assets and liabilities of the Merging Fund to the
Surviving Fund in exchange for shares issued by MFT in the Surviving Fund that
will have an aggregate net asset value equal to the aggregate net asset value of
the shares of the Merging Fund that are outstanding immediately before the
Effective Time of the Reorganization.
Following the exchange, the Merging Fund will make a liquidating
distribution of the Surviving Fund shares to its Shareholders, so that a holder
of shares in the Merging Fund will receive Agency Class shares of the Surviving
of equal value, plus the right to receive any unpaid dividends and distributions
that were declared before the Effective Time of the Reorganization.
At the Meeting, shareholders will also be asked to consider and vote
upon the election of Trustees of 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, New York, 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 Surviving Fund contained in their Annual
Reports dated October 31, 2000 and August 31, 2000, respectively, are
incorporated by reference into this Statement of Additional Information related
to this Combined Prospectus/Proxy Statement. The audited financial statements,
notes thereto and supplementary data of the Master Portfolio contained in its
Annual Report dated October 31, 2000 are incorporated by reference into this
Statement of Additional Information related to this Combined Prospectus/Proxy
Statement. The financial highlights, financial statements, notes thereto and
supplementary data, as applicable, which appear in each of the Merging Fund's,
the Master Portfolio's and the Surviving Fund's Annual Report have been audited
by PricewaterhouseCoopers LLP, whose reports thereon also appear in such Annual
Reports and are also incorporated herein by reference. The financial highlights,
financial statements, notes thereto and supplementary data, as applicable, for
the Merging Fund and the Master Portfolio for the fiscal year ended October 31,
2000 and for the Surviving Fund for the fiscal year ended August 31, 2000 have
been incorporated herein by reference in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on their authority as
experts in auditing and accounting.
The unaudited financial highlights, financial statements and notes
thereto of the Surviving Fund for the fiscal period ended February 28, 2001, are
incorporated by reference herein and into the Statement of Additional
Information related to this Combined Prospectus/Proxy Statement.
-3-
J.P. MORGAN TREASURY MONEY MARKET PORTFOLIO
PROFORMA COMBINED PORTFOLIO OF INVESTMENTS
FOR THE YEAR ENDED FEBRUARY 28, 2001
(AMOUNTS IN THOUSANDS)
Principal Amount Market Value
- -------------------------------------------------- -------------------------------------------
PRO FORMA
JPMORGAN JPMORGAN JPMORGAN JPMORGAN COMBINED
TREASURY TREASURY TREASURY TREASURY JPMORGAN
MONEY MONEY MONEY MONEY TREASURY
MARKET MARKET PRO FORMA PRO FORMA MARKET MARKET PRO FORMA PLUS MONEY
FUND PORTFOLIO ADJUSTMENT COMBINED FUND PORTFOLIO ADJUSTMENT MARKET FUND
- -------------------------------------------------- ------------------------ -------------------------------------------
MONEY MARKET INSTRUMENTS 100.35%
------------------------
U.S. TREASURY SECURITIES 33.13%
U.S Treasury Bills,
- 100,000 - 100,000 4.83%, 04/26/01 $ - $ 99,224 $ 99,224
200,000 200,000 4.94%, 03/29/01 199,236 199,236
100,000 100,000 4.95%, 04/05/01 99,522 99,522
100,000 100,000 4.95%, 04/19/01 99,327 99,327
100,000 100,000 4.97%, 05/03/01 99,138 99,138
200,000 200,000 4.98%, 05/17/01 197,895 197,895
100,000 100,000 4.99%, 04/19/01 99,328 99,328
100,000 100,000 4.99%, 05/10/01 99,041 99,041
100,000 100,000 5.08%, 04/12/01 99,413 99,413
250,000 250,000 5.11%, 04/12/01 248,532 248,532
U.S. Treasury Notes, -
25,000 25,000 4.88%, 3/31/01 24,965 24,965
40,000 40,000 5.63%, 5/15/01 39,934 39,934
35,000 35,000 6.63%, 7/31/01 35,143 35,143
------------------------------------------
1,250,000 200,000 1,450,000 TOTAL U.S. TREASURY SECURITIES 1,241,432 199,266 1,440,698
REPURCHASE AGREEMENTS 67.22%
Bear Stearns, 5.38%, due
3/01/01 (Dated 02/28/01,
Proceeds $250,037,
Secured by USTR,
$208,360, various rates,
due 08/15/02 through
02/15/25, Market Value
250,000 250,000 $255,859) Credit Suisse 250,000 250,000
First Boston, Tri Party,
5.38%, due 03/01/01 (Dated
2/28/01, Proceeds $215,032,
Secured by USTR, $218,063,
various rates, due 04/30/01
through 05/15/08;
215,000 215,000 Market Value $219,513) 215,000 215,000
Deutsche Morgan Grenfel, Tri
Party, 5.34%, due 03/01/01,
(Dated 2/28/01, Proceeds
$144,907, Secured by USTR,
$205,950, various rates, due
06/30/01 through 08/15/25;
144,886 144,886 Market Value $146,930) 144,886 144,886
Goldman Sachs & Co., Tri
Party, 5.35%, due 03/01/01
(Dated 2/28/01, Proceeds
$240,036, Secured by USTR,
$213,091, various rates, due
11/15/07 through 05/15/20;
240,000 240,000 Market Value $241,153) 240,000 240,000
Goldman Sachs & Co., 5.10%,
due 03/01/01 Dated 02/28/01,
Proceeds $57,842, Secured by
USTR, $50,311, various
rates,due 05/15/06 through
02/15/29,
57,834 57,834 Market Value $58,991) 57,834 57,834
Goldman Sachs & Co., 5.20%,
due 03/01/01 (Dated
02/28/01,
Proceeds $175,025, Secured
by USTR, $152,235, various
rates, due 05/15/06 through
02/15/29,
175,000 175,000 Market Value $178,500) 175,000 175,000
See Notes to Pro Forma Financial Statements
4
Goldman Sachs & Co., 5.35%,
due 03/01/01 (Dated
02/28/01,
Proceeds $200,030, Secured
by USTR, $173,983, various
rates, due 05/15/06 through
02/15/29,
200,000 200,000 Market Value $204,000) 200,000 200,000
Greenwich Capital Markets,
Inc., Tri Party, 5.37%, due
03/01/01 (Dated 2/28/01,
Proceeds $240,036, Secured
by USTR, $231,671, various
rates, due 06/30/01 through
07/15/02;
240,000 240,000 Market Value $243,095) 240,000 240,000
Greenwich Capital Markets,
Inc., 5.37%, due 03/01/01
(Dated 02/28/01, Proceeds
$250,037, Secured by
USTR, $211,607, various
rates, due 11/15/01 through
08/15/29,
250,000 250,000 Market Value $254,660) 250,000 250,000
Greenwich Capital Markets,
Inc., 5.45%, due 03/06/01
(Dated 02/28/01, Proceeds
$250,227, Secured by U.S.
Government Agency
Obligations, $316,639,
various
rates, due 02/15/07 through
02/15/31,
250,000 250,000 Market Value $255,003) 250,000 250,000
Merrill Lynch & Co., Inc.,
Tri Party, 5.37%, due 03/01/01,
(Dated 2/28/01, Proceeds
$255,038, Secured by USTR,
$268,503, various rates, due
5/15/01 through 11/15/20;
255,000 255,000 Market Value $259,517) 255,000 255,000
Merrill Lynch & Co., Inc.,
5.37%, due 03/01/01 (Dated
02/28/01, Proceeds $400,060,
Secured by USTR, $339,469,
various rates, due 06/30/01
through 05/15/30,
400,000 400,000 Market Value $406,655) 400,000 400,000
Westdeutsche Landesbank, Tri
Party, 5.38%, due 03/01/01,
(Dated 2/28/01, Proceeds
$245,037, Secured by
USTR, $215,680, various
rates, due 08/15/03
through 08/15/29;
245,000 245,000 Market Value $247,765) 245,000 245,000
1,582,834 1,339,886 2,922,720 TOTAL REPURCHASE AGREEMENTS 1,582,834 1,339,886 2,922,720
- ------------------------------------------------------------------------------------------------------------------------------------
2,832,834 1,539,886 - 4,372,720 TOTAL INVESTMENTS 100.35% $ 2,824,266 $ 1,539,152 $ - $ 4,363,418
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL COST $ 2,824,266 $ 1,539,152 $ - $ 4,363,418
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $ 2,813,515 $ 1,540,440 $ - $ 4,348,079
- ------------------------------------------------------------------------------------------------------------------------------------
USTR - United States Treasury Notes, Bonds and Bills
See Notes to Pro Forma Financial Statements
5
J.P. MORGAN INSTITUTIONAL SERVICE TREASURY MONEY MARKET FUND /
J.P. MORGAN INSTITUTIONAL TREASURY MONEY MARKET FUND /
J.P. MORGAN TREASURY MONEY MARKET RESERVES FUND /
THE TREASURY MONEY MARKET PORTFOLIO /
JPMORGAN TREASURY PLUS MONEY MARKET FUND
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
AS OF FEBRUARY 28, 2001 (UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
J.P. MORGAN J.P. MORGAN J.P. MORGAN THE TREASURY
INSTITUTIONAL INSTITUTIONAL TREASURY MONEY MARKET
TREASURY SERVICE MONEY MARKET PORTFOLIO
MONEY MARKET TREASURY RESERVES FUND
FUND MONEY MARKET
FUND
ASSETS:
Investment securities, at Value $ 538,786 $ 474,954 $ 526,700 $ 1,539,152
Deferred organization expenses 3 3 - -
Other assets - 1 1 31
Receivables:
Interest - - - 1,553
Expense reimbursement 86 71 90 -
------------ --------------- ---------------- ----------------
Total Assets 538,875 $ 475,029 526,791 1,540,736
------------ --------------- ---------------- ----------------
LIABILITIES:
Payables:
Dividends 1,659 1,785 2,109 -
Custodian - - - 35
Accrued liabilities:
Investment advisory fees - - - 188
Administration fees 7 7 11 26
Shareholder servicing fees 31 18 22 -
Distribution fees - - - -
Custody fees - - - 14
Service organization fees - 88 109 -
Other 28 45 212 33
------------ --------------- ---------------- ----------------
Total Liabilities 1,725 1,943 2,463 296
------------ --------------- ---------------- ----------------
NET ASSETS:
Paid in capital 537,241 473,244 524,371
Distributions in excess of net investment income (1) (2) (3)
Accumulated net realized loss on investment transactions (90) (156) (40)
------------ --------------- ---------------- ----------------
Net Assets $ 537,150 $ 473,086 $ 524,328 $ 1,540,440
============ =============== ================ ================
Shares of beneficial interest outstanding 537,242 473,243 524,371
Shares outstanding
Vista (Renamed Morgan)
Premier
Institutional (Renamed Agency)
Net Assets Value Per Share $ 1.00 $ 1.00 $ 1.00
Pro Forma with Concurrent Reorganization
JPMorgan Treasury Plus Money Market Fund
Shares Outstanding
Morgan
Premier
Agency
Reserves
Institutional
Net Asset Value Per Share
Morgan
Premier
Agency
Reserves
Institutional
------------ --------------- ---------------- ----------------
Cost of investments $ - $ - $ - $ 1,539,152
============ =============== ================ ================
PRO FORMA
COMBINED
JPMORGAN PRO FORMA JPMORGAN
TREASURY PLUS ADJUSTMENTS TREASURY
MONEY MARKET PLUS MONEY
FUND MARKET FUND
ASSETS:
Investment securities, at Value $ 2,824,266 $ (1,540,440) (a) $ 4,363,418
Deferred organization expenses - (6) (d) -
Other assets 17 - 50
Receivables: -
Interest 273 - 1,826
Expense reimbursement - 6 253
--------------- --------------- -------------
Total Assets 2,824,556 (1,540,440) 4,365,547
--------------- --------------- -------------
LIABILITIES:
Payables:
Dividends 9,671 - 15,224
Custodian - - 35
Accrued liabilities:
Investment advisory fees 198 - 386
Administration fees 119 - 170
Shareholder servicing fees 379 - 450
Distribution fees 105 - 105
Custody fees 27 - 41
Service organization fees - - 197
Other 542 - 860
---------------------------------- -------------
Total Liabilities 11,041 - 17,468
---------------------------------- -------------
NET ASSETS:
Paid in capital 2,813,618 4,348,474
Distributions in excess of net investment income (59) (65)
Accumulated net realized loss on investment transactions (44) (330)
---------------------------------- -------------
Net Assets $ 2,813,515 $ (1,540,440) 4,348,079
================================== =============
Shares of beneficial interest outstanding (1,534,856) (b) -
Shares outstanding
Vista (Renamed Morgan) 1,391,162 (1,391,162) (c) -
Premier 347,882 (347,882) (c) -
Institutional (Renamed Agency) 1,074,655 (1,074,655) (c) -
Net Assets Value Per Share $ 1.00 *
Pro Forma with Concurrent Reorganization
JPMorgan Treasury Plus Money Market Fund
Shares Outstanding
Morgan 1,391,162 (e) 1,391,162
Premier 821,125 (e) 821,125
Agency 1,074,655 (e) 1,074,655
Reserves 524,371 (e) 524,371
See Notes to Pro Forma Financial Statements.
6
Institutional 537,242 (e) 537,242
Net Asset Value Per Share
Morgan $ 1.00
Premier $ 1.00
Agency $ 1.00
Reserves $ 1.00
Institutional $ 1.00
---------------------------------- -------------
Cost of investments $ 2,824,266 $ - $ 4,363,418
================================== =============
(a) Reallocation of investments from the feeder funds to the master portfolio.
(b) Reallocation of the feeder fund's beneficial interest to Morgan, Premier,
Institutional, Reserves and Agency Shares due to the Concurrent
Reorganization.
(c) Reallocation of shares outstanding to Reserves, Morgan, Premier,
Institutional, and Agency Share due to the Concurrent Reorganization.
(d) Write-off of deferred organization expenses of the portfolio.
(e) Reflects the additional number of shares outstanding due to the Concurrent
Reorganization.
* All classes
7
J.P. MORGAN INSTITUTIONAL SERVICE TREASURY MONEY MARKET FUND /
J.P. MORGAN INSTITUTIONAL TREASURY MONEY MARKET FUND /
J.P. MORGAN TREASURY MONEY MARKET RESERVES FUND /
THE TREASURY MONEY MARKET PORTFOLIO /
JPMORGAN TREASURY PLUS MONEY MARKET FUND
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED FEBRUARY 28, 2001 (UNAUDITED)
(AMOUNTS IN THOUSANDS)
J.P. MORGAN J.P. MORGAN J.P. MORGAN THE TREASURY
INSTITUTIONAL INSTITUTIONAL TREASURY MONEY MARKET
TREASURY SERVICE MONEY MARKET PORTFOLIO
MONEY MARKET TREASURY RESERVES FUND
FUND MONEY MARKET
FUND
INCOME:
Interest Income $ 18,826 $ 27,475 $ 23,109 $ 69,410
Allocated Portfolio Expenses (606) (888) (737) -
-----------------------------------------------------------------------
Investment Income 18,220 26,587 22,372 69,410
-----------------------------------------------------------------------
EXPENSES:
Shareholder Servicing Fees 303 222 764 -
Investment Advisory Fees - - - 2,099
Administration Service Fees 72 107 87 266
Distribution Fees/Service Organization Fees - 1,108 1,257 -
Registration Expenses 10 78 168 -
Custodian Fees - - - 106
Transfer Agent Fees 17 17 21 -
Professional Fees 12 13 11 41
Trustees' Fees and Expenses 4 6 1 13
Financial and Fund Accounting Services Fees 20 20 20 -
Printing and Postage 6 4 10 -
Fund Services Fees 4 7 5 16
Administration Fees 3 5 5 7
Amortization of organizational expenses 2 2 - -
Other 12 18 11 13
- - - -
-----------------------------------------------------------------------
Total Expenses 465 1,607 2,360 2,561
-----------------------------------------------------------------------
Less amounts waived - - - -
Less earnings credits - - - -
Less Reimbursement of Expenses 464 501 522 330
-----------------------------------------------------------------------
Net Expenses 1 1,106 1,838 2,231
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Net Investment Income 18,219 25,481 20,534 67,179
-----------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments (49) (74) (26) (149)
Net change in net unrealized appreciation
(depreciation) on investments -- -- -- --
-----------------------------------------------------------------------
Net (decrease) increase in net assets from operations $ 18,170 $ 25,407 $ 20,508 $ 67,030
=======================================================================
JPMORGAN PRO FORMA PRO FORMA
TREASURY PLUS ADJUSTMENTS COMBINED
MONEY MARKET JPMORGAN
FUND TREASURY
PLUS MONEY
MARKET FUND
INCOME:
Interest Income $ 159,318 $ (69,411)(c) $ 228,727
Allocated Portfolio Expenses - 2,231 (b) -
-------------------------------- -----------------
Investment Income 159,318 (67,180) 228,727
-------------------------------- -----------------
EXPENSES:
Shareholder Servicing Fees 6,362 1,609 (a) 9,260
Investment Advisory Fees 2,547 (978) (a) 3,668
Administration Service Fees 2,547 590 (a) 3,669
Distribution Fees/Service Organization Fees 1,364 (1,444) (a) 2,285
Registration Expenses 647 903
Custodian Fees 249 188 (f) 543
Transfer Agent Fees 197 252
Professional Fees 82 (34) (g) 125
Trustees' Fees and Expenses 126 150
Financial and Fund Accounting Services Fees - (57) (f) 3
Printing and Postage 27 (10) (g) 37
Fund Services Fees - 32
Administration Fees - 20
Amortization of Organizational Expenses - (4) (e) -
Other 190 244
-
-------------------------------- -----------------
Total Expenses 14,338 (140) 21,191
-------------------------------- -----------------
Less amounts waived 2,672 (140) (a) 2,532
Less earnings credits 119 - 119
Less Reimbursement of Expenses - - 1,817
-------------------------------- -----------------
Net Expenses 11,547 - 16,723
-------------------------------- -----------------
-------------------------------- -----------------
Net Investment Income 147,771 (67,180) 212,004
-------------------------------- -----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net Realized Gain (Loss) on Investments (97) 149 (d) (246)
Net Change in Net Unrealized Appreciation
(Depreciation) on Investments -- -- --
-------------------------------- -----------------
Net (Decrease) Increase in Net Assets from Operations $ 147,674 $ (67,031) $ 211,758
================================ =================
(a) Reflects adjustments to investment advisory fee, administrative fees and
shareholder servicing fees and/or related waivers based on the surviving
Fund's revised fee schedule.
(b) Reflects the elimination of master portfolio expenses which have been
disclosed under feeder expenses.
(c) Reallocation of investments income to feeder funds.
(d) Reallocation of realized and unrealized loss to feeder funds.
(e) Reflect write off of deferred organization expense.
(f) Reclassification of fund accounting fees into the new combined custody fees.
(g) Reduction reflects expected benefits from combined operations.
8
PRO FORMA FINANCIAL STATEMENTS
J.P. MORGAN INSTITUTIONAL TREASURY MONEY MARKET FUND /
JPMORGAN TREASURY PLUS MONEY MARKET FUND
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF COMBINATION:
The Pro Forma Combining Statement of Assets and Liabilities, Statement of
Operations and Schedule of Investments ("Pro Forma Statements") reflect the
accounts of The Treasury Money Market Portfolio ("Master Portfolio"), J.P.
Morgan Institutional Service Treasury Money Market Fund ("Institutional
Service Fund"), J.P. Morgan Institutional Treasury Money Market Fund
("Institutional Fund") and J.P. Morgan Treasury Money Market Reserves Fund
("Treasury Money Market Reserves Fund"), (collectively the "feeder funds" of
the Master Portfolio) and JPMorgan Treasury Plus Money Market Fund
("JPMTMMF") as if the proposed Concurrent Reorganization occurred as of and
for the twelve months ended February 28, 2001.
Under the Concurrent Reorganization, the Pro Forma Statements give effect to
the proposed transfer of all assets and liabilities of the Master Portfolio
and the feeder funds in exchange for shares in JPMTPMMF. The Pro Forma
Statements should be read in conjunction with the historical financial
statements of each Fund, which have been incorporated by reference in their
respective Statements of Additional Information.
2. SHARES OF BENEFICIAL INTEREST:
Immediately prior to the Concurrent Reorganization, JPMTPMMF would commence
offering Reserve Class Shares and Institutional Class Shares. The net asset
value per share for the Reserve and Institutional Class Shares at the
commencement of offering would be identical to the closing net asset value
per share for the Premier Shares immediately prior to Concurrent
Reorganization.
Under the Concurrent Reorganization, the existing shares of the Treasury
Money Market Reserves Fund would be renamed Reserves Class Shares, the
Institutional Fund would be renamed Institutional Class Shares and the
Institutional Service Fund would be renamed Premier Shares. The net asset
values per share for the Reserves, Agency and Premier Class Shares at the
commencement of offering would be identical to the closing net asset value
per share for the Premier Shares immediately prior to the organization. In
addition, the Chase Vista Class shares would be renamed the Investor Class
Shares and the Chase Institutional Class Shares would be renamed Agency Class
Shares.
Under the proposed Concurrent Reorganization, each shareholder of Treasury
Money Market Reserves Fund, Institutional Service Fund and the Institutional
Fund would receive shares of JPMTPMMF with a value equal to their holdings in
their respective funds. Holders of the Treasury Money Market Reserves Fund
will receive Reserves Class Shares in JPMTPMMF, holders of the Institutional
Service Fund will receive Premier Class Shares and holders of Institutional
Fund will receive Institutional Class Shares. Therefore, as a result of the
proposed Concurrent Reorganization,
9
current shareholders of Treasury Money Market Reserves, Institutional Service
Fund and Institutional Fund will become shareholders of JPMTPMMF.
The Pro Forma net asset value per share assumes the issuance of additional
shares of JPMTPMMF which would have been issued on February 28, 2001 in
connection with the proposed reorganization. The amount of additional shares
assumed to be issued was calculated based on the February 28, 2001 net assets
of Treasury Money Market Reserves Fund, Institutional Service Fund and
Institutional Fund and the net asset value per share of JPMTPMMF - Premier
Class.
JPMORGAN TREASURY PLUS MONEY MARKET FUND WITH CONCURRENT REORGANIZATION
Premier Institutional Reserves
Increase in Shares Issued 473,243 537,242 524,371
Net Assets 2/28/01 473,086 537,150 524,328
Pro Forma Net Asset Value 2/28/01 1.00 1.00 1.00
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.
10
FORM N-14
---------
PART C - OTHER INFORMATION
--------------------------
Item 15. Indemnification.
---------------
Reference is hereby made to Article V of the Registrant's Declaration
of Trust.
The Trustees and officers of the Registrant and the personnel of the
Registrant's investment adviser, administrator and distributor are insured under
an errors and omissions liability insurance policy. The Registrant and its
officers are also insured under the fidelity bond required by Rule 17g-1 under
the Investment Company Act of 1940.
Under the terms of the Registrant's Declaration of Trust, the
Registrant may indemnify any person who was or is a Trustee, officer or employee
of the Registrant to the maximum extent permitted by law; provided, however,
that any such indemnification (unless ordered by a court) shall be made by the
Registrant only as authorized in the specific case upon a determination that
indemnification of such persons is proper in the circumstances. Such
determination shall be made (i) by the Trustees, by a majority vote of a quorum
which consists of Trustees who are neither described in Section 2(a)(19) of the
Investment Company Act of 1940 nor parties to the proceeding, or (ii) if the
required quorum is not obtainable or, if a quorum of such Trustees so directs,
by independent legal counsel in a written opinion. No indemnification will be
provided by the Registrant to any Trustee or officer of the Registrant for any
liability to the Registrant or shareholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of duty.
Insofar as the conditional advancing of indemnification monies for
actions based upon the Investment Company Act of 1940 may be concerned, such
payments will be made only on the following conditions: (i) the advances must be
limited to amounts used, or to be used, for the preparation or presentation of a
defense to the action, including costs connected with the preparation of a
settlement; (ii) advances may be made only upon receipt of a written promise by,
or on behalf of, the recipient to repay that amount of the advance which exceeds
that amount to which it is ultimately determined that he is entitled to receive
from the Registrant by reason of indemnification; and (iii) (a) such promise
must be secured by a surety bond, other suitable insurance or an equivalent form
of security which assures that any repayments may be obtained by the Registrant
without delay or litigation, which bond, insurance or other form of security
must be provided by the recipient of the advance, or (b) a majority of a quorum
of the Registrant's disinterested, non-party Trustees, or an independent legal
counsel in a written opinion, shall determine, based upon a review of readily
available facts, that the recipient of the advance ultimately will be found
entitled to indemnification.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Part C-1
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a trustee, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such trustee, officer or controlling
person in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
Item 16. Exhibits.
---------------
Declaration of Trust.
1 Declaration of Trust, as amended. (1)
2 By-laws. (1)
3 None.
4 Agreement and Plan of Reorganization filed herewith as
Appendix A to the Combined Prospectus/Proxy Statement.
5 None.
6 Form of Investment Advisory Agreement.(6)
7 Distribution and Sub-Administration Agreement dated August 21,
1995.(6)
8(a) Retirement Plan for Eligible Trustees.(6)
8(b) Deferred Compensation Plan for Eligible Trustees.(6)
9 Custodian Agreement. (1)
10(a) Rule 12b-1 Distribution Plan of Mutual Funds including
Selected Dealer Agreement and Shareholder Service Agreement.
(1) and (3)
10(b) Rule 12b-1 Distribution Plan - Class B Shares (including forms
of Selected Dealer Agreement and Shareholder Servicing
Agreement).(6)
10(c) Form of Rule 12b-1 Distribution Plan - Class C Shares
(including forms of Shareholder Servicing Agreements).(12)
10(d) Form of Rule 18f-3 Multi-Class Plan.(12)
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) Transfer Agency Agreement. (1)
13(b) Form of Shareholder Servicing Agreement. (6)
13(c) Form of Administration Agreement.(6)
13(d) Form of Administration Agreement (to be filed by Amendment).
13(e) Form of Sub-Administration Agreement (to be filed by
Amendment).
14 Consent of PricewaterhouseCoopers LLP.
15 None.
16(a) Powers of Attorney for: Fergus Reid, III, H. Richard
Vartabedian, William J. Armstrong, John R.H. Blum, Stuart W.
Cragin, Jr., Roland R. Eppley, Jr., Joseph J. Harkins, W.D.
MacCallan, W. Perry Neff, Richard E. Ten Haken, Irving L.
Thode.
16(b) Powers of Attorney for: Sarah E. Jones and Leonard M.
Spalding, Jr.
17(a) Form of Proxy Card.
17(b) Prospectus for the Surviving Fund to be filed by Amendment.
17(c) Prospectus for the Merging Fund.
17(d) Statement of Additional Information for the Surviving Fund to
be filed by Amendment.
17(e) Statement of Additional Information for the Merging Fund.
17(f) Annual Report of the Surviving Fund dated August 31, 2000.
17(g) Semi-Annual Report of the Surviving Fund, dated February 28,
2001 (to be filed by amendment).
17(h) Annual Report of the Merging Fund (including the Annual Report
of the Master Portfolio) dated October 31, 2000.
- ----------
Part C-3
(1) Filed as an Exhibit to the Registration Statement on Form N-1A of the
Registrant (File No. 33-75250) as filed with the Securities and
Exchange Commission on February 14, 1994.
(2) Filed as an Exhibit to Post-Effective Amendment No. 1 to the
Registration Statement on Form N-1A of the Registrant (File No.
33-75250) as filed with the Securities and Exchange Commission on
August 29, 1994.
(3) Filed as an Exhibit to Post-Effective Amendment No. 2 to the
Registration Statement on Form N-1A of the Registrant (File No.
33-75250) as filed with the Securities and Exchange Commission on
October 28, 1994.
(4) Filed as an Exhibit to Post-Effective Amendment No. 3 to the
Registration Statement on Form N-1A of the Registrant (File No. 33-
75250) as filed with the Securities and Exchange Commission on October
31, 1995.
(5) Filed as an Exhibit to Post-Effective Amendment No. 4 to the
Registration Statement on Form N-1A of the Registrant as filed with the
Securities and Exchange Commission on December 28, 1995.
(6) Filed as an Exhibit to Post-Effective Amendment No. 5 to the
Registration Statement on Form N-1A of the Registrant as filed with the
Securities and Exchange Commission on March 7, 1996.
(7) Filed as an Exhibit to Post-Effective Amendment No. 6 to the
Registration Statement on Form N-1A of the Registrant as filed with the
Securities and Exchange Commission on April 22, 1996.
(8) Filed as an exhibit to Post-Effective Amendment No. 7 to the
Registration Statement on Form N-1A of the Registrant as filed with the
Securities and Exchange Commission on September 6, 1996.
(9) Filed as an exhibit to Post-Effective Amendment No. 8 to the
Registration Statement on Form N-1A of the Registrant as filed with the
Securities and Exchange Commission on December 27, 1996.
(10) Filed herewith.
(11) Filed as an exhibit to Post-Effective Amendment No. 10 to the
Registration Statement on Form N-1A of the Registrant as filed with the
Securities and Exchange Commission on October 27, 1997.
Item 17. Undertakings.
---------------
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a prospectus which is
part of this registration statement by any person or party who is deemed to be
an underwriter within the meaning of Rule 145(c) of
Part C-4
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-5
SIGNATURES
----------
As required by the Securities Act of 1933, this registration statement
has been signed on behalf of the registrant, in the City of New York and the
State of New York, on the 12th day of April, 2001.
MUTUAL FUND TRUST
Registrant
By: /s/ H. Richard Vartabedian
-----------------------------------------
H. Richard Vartabedian
President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities indicated on April 12, 2001.
* Chairman and Trustee
- -----------------------------
Fergus Reid, III
/s/ H. Richard Vartabedian President
- ----------------------------- 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 Institutional Treasury Money Market Fund.
(e) Statement of Additional Information for J.P. Morgan Institutional
Treasury Money Market Fund.
(f) Annual Report of JPMorgan Treasury Plus Money Market Fund
(formerly, Chase Vista Treasury Plus Money Market Fund) dated
August 31, 2000.
(h) Annual Report of J.P. Morgan Institutional Treasury Money Market
Fund (including the Annual Report of The Treasury Money Market
Portfolio) dated October 31, 2000.