As filed with the Securities and Exchange Commission on April 16, 2001 Registration No. 333-___/811-8358 ================================================================================ 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 ================================================================================ 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 16, 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 November 30, 2000 was filed on November 27, 2000. Pursuant to Rule 429, this Registration Statement relates to the aforesaid Registration Statement on Form N-1A. J.P. MORGAN INSTITUTIONAL SERVICE PRIME MONEY MARKET FUND A SERIES OF J.P. MORGAN INSTITUTIONAL FUNDS 60 STATE STREET, SUITE 1300 BOSTON, MASSACHUSETTS 02109 May 16, 2001 Dear Shareholder: A special meeting of the shareholders of J.P. Morgan Institutional Service Prime Money Market Fund (the "Merging Fund"), a series of J.P. Morgan Institutional Funds ("JPMIF"), will be held on July 3, 2001 at 9:00 a.m., Eastern time. Formal notice of the meeting appears after this letter, followed by materials regarding the meeting. As you may be aware, J.P. Morgan & Co. Incorporated, the former corporate parent of the investment adviser of the Merging Fund's assets, recently completed a merger with The Chase Manhattan Corporation to form J.P. Morgan Chase & Co. ("JPMC"). As a result of this merger, JPMC is seeking to reorganize parts of its investment management business in order to provide better service for shareholders of funds advised by its subsidiaries. At the special meeting (the "Meeting"), shareholders will be asked to consider and vote upon the proposed reorganization of the Merging Fund into JPMorgan Prime Money Market Fund II (formerly, Chase Vista Prime 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 Prime Money Market Fund." After the proposed Reorganization, your investment will be in a larger combined fund with similar investment policies. The Surviving Fund has also entered into agreements and plans of reorganization with other money market funds whose assets are managed by J.P. Morgan Investment Management Inc. ("JPMIM") and which have identical investment objectives and policies to the Merging Fund (collectively, the "Concurrent Reorganization"). If the Concurrent Reorganization is approved by the shareholders of these other funds and certain other conditions are met, these funds will be reorganized into the Surviving Fund. The consummation of the Reorganization is contingent upon the consummation of the Concurrent Reorganization. At the Meeting, you will also be asked to consider and vote upon the election of Trustees of JPMIF. The investment adviser for the assets of the Merging Fund is JPMIM. The investment adviser for the Surviving Fund is J.P. Morgan Fleming Asset Management (USA) Inc. ("JPMFAM"). After the Reorganization, JPMFAM, the same investment adviser that currently is responsible for the Surviving Fund, will make the day-to-day investment decisions for your portfolio. Please see the enclosed Combined Prospectus/Proxy Statement for detailed information regarding the proposed Reorganization, the Concurrent Reorganization and a comparison of the Merging Fund and JPMIF to the Surviving Fund and MFT. The cost and expenses associated with the Reorganization, including costs of soliciting proxies, will be borne by JPMC and not by the Merging Fund, JPMIF, the Surviving Fund, MFT or their shareholders. If approval of the Reorganization is obtained, you will automatically receive shares in the Surviving Fund. The Proposals have been carefully reviewed by the Board of Trustees of JPMIF, which has approved the Proposals. THE BOARD OF TRUSTEES OF JPMIF UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" EACH OF THE PROPOSALS. Following this letter is a list of commonly asked questions. If you have any additional questions on voting of proxies and/or the meeting agenda, please call us at 1-800-766-7722. A proxy card is enclosed for your use in the shareholder meeting. This card represents shares you held as of the record date, April 6, 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: You 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? In connection with the Reorganization, the Merging Fund will cease investing in The Prime Money Market Portfolio (the "Master Portfolio" in which it currently invests), will transfer all of its assets and liabilities to the Surviving Fund and will receive, in exchange, shares of the Surviving Fund. The Merging Fund will then be liquidated and those shares of the Surviving Fund will be distributed pro rata to shareholders such as you. After the Reorganization, you will own shares of the Surviving Fund rather than the Merging Fund. The Surviving Fund invests directly in portfolio securities rather than in a master portfolio. WHAT WILL BE THE EFFECT ON THE INVESTMENT STRATEGIES ASSOCIATED WITH MY INVESTMENT IF THE PROPOSED CHANGES ARE APPROVED? The Surviving Fund generally has similar investment objectives and policies to those of the Merging Fund. The principal differences are as follows: Surviving Fund Merging Fund -------------- ------------ - The Surviving Fund's investment - The Merging Fund's investment objective is to aim to provide objective is to maximize current the highest possible level of income consistent with the current income while still preservation of capital and maintaining liquidity and same-day liquidity. preserving capital. - As an AAA-rated Fund, the - The dollar weighted average dollar weighted average maturity of the Merging Fund will maturity of the Surviving Fund be 90 days or less. is maintained at 60 days or less. There can be no assurance that the Fund will continue to be rated by Standard & Poor's Ratings Service and/or Moody's Investors Service or that these agencies will not downgrade their current ratings. The Merging Fund has not applied for a rating. The Reorganization is not intended to have any immediate significant impact on the investment strategy implemented in respect of your investment. However, please note that while the Merging Fund invests all of its asset in the Master Portfolio (which in turn invests in portfolio securities), the Surviving Fund invests directly in portfolio securities. HOW WILL THE FEES AND EXPENSES ASSOCIATED WITH MY INVESTMENT BE AFFECTED? As a result of the Reorganization, the contractual (or pre-waiver) and the actual (or post-waiver) total expense ratios are expected to be the same or less for your shares in the Surviving Fund than they are for your shares in the Merging Fund. If an increase does occur, The Chase Manhattan Bank has contractually agreed to waive fees payable to it and reimburse expenses so that the total expense ratio will remain the same for at least THREE YEARS after the Reorganization. WILL THERE BE ANY CHANGE IN WHO MANAGES MY INVESTMENT? Yes, JPMFAM, the investment adviser that currently manages the day-to-day investment activities of the Surviving Fund, will continue to manage that fund after the Reorganization. WHO WILL PAY FOR THE REORGANIZATION? The cost and expenses associated with the Reorganization, including costs of soliciting proxies, will be borne by JPMC and not by either the Merging Fund or the Surviving Fund (or shareholders of either fund). WHAT IF I DO NOT VOTE OR VOTE AGAINST THE REORGANIZATION, YET APPROVAL OF THE REORGANIZATION IS OBTAINED? You will automatically receive shares in the Surviving Fund. HOW WILL THE PROPOSED CONCURRENT REORGANIZATION AFFECT MY INVESTMENT IF IT IS APPROVED BY THE SHAREHOLDERS OF THE OTHER FUNDS? If the Concurrent Reorganization is approved and certain other conditions are met, the assets and liabilities of the other merging funds will become the assets and liabilities of the Surviving Fund. The consummation of the Reorganization is contingent upon the consummation of the Concurrent Reorganization. WHY AM I BEING ASKED TO VOTE ON THE ELECTION OF TRUSTEES FOR JPMIF IF AFTER THE REORGANIZATION I WILL OWN SHARES IN THE SURVIVING FUND, A SERIES OF MFT? Even if the Reorganization is approved, other mutual funds that are series of JPMIF will continue to exist and operate. All shareholders of any series of JPMIF as of the record date (April 6, 2001) are required to be given a vote on the proposal regarding Trustees. Because as of the record date you are still a shareholder in JPMIF, you are entitled to vote on this proposal. Shareholders of MFT are being asked to approve the same Trustees that are proposed for JPMIF. AS A HOLDER OF SHARES OF THE MERGING FUND, WHAT DO I NEED TO DO? Please read the enclosed Combined Prospectus/Proxy Statement and vote. Your vote is important! Accordingly, please sign, date and mail the proxy card(s) promptly in the enclosed return envelope as soon as possible after reviewing the enclosed Combined Prospectus/Proxy Statement. MAY I ATTEND THE MEETING IN PERSON? Yes, you may attend the Meeting in person. If you complete a proxy card and subsequently attend the Meeting, your proxy can be revoked. Therefore, to ensure that your vote is counted, we strongly urge you to mail us your signed, dated and completed proxy card(s) even if you plan to attend the Meeting. J.P. MORGAN INSTITUTIONAL SERVICE PRIME 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 Service Prime Money Market Fund: NOTICE IS HEREBY GIVEN THAT a Special Meeting of the shareholders ("Shareholders") of J.P. Morgan Institutional Service Prime Money Market Fund (the "Merging Fund"), a series of J.P. Morgan Institutional Funds ("JPMIF"), will be held at the offices of J.P. Morgan Chase & Co., 1211 Avenue of the Americas, 41st Floor, New York, NY, on July 3, 2001 at 9:00 a.m., (Eastern time) for the following purposes: ITEM 1. To consider and act upon a proposal to approve an Agreement and Plan of Reorganization (the "Reorganization Plan") by and among JPMIF, on behalf of the Merging Fund, Mutual Fund Trust ("MFT"), on behalf of JPMorgan Prime Money Market Fund II (formerly, Chase Vista Prime Money Market Fund) (the "Surviving Fund"), and J.P. Morgan Chase & Co., and the transactions contemplated thereby, including (a) the transfer of all of the assets and liabilities of the Merging Fund to the Surviving Fund in exchange for Premier Class shares of the Surviving Fund (the "Surviving Fund Shares"); and (b) the distribution of such Surviving Fund Shares to the Shareholders of the Merging Fund in connection with the liquidation of the Merging Fund. ITEM 2. To elect __ Trustees to serve as members of the Board of Trustees of JPMIF. ITEM 3. To transact such other business as may properly come before the Special Meeting or any adjournment(s) thereof. YOUR FUND TRUSTEES UNANIMOUSLY RECOMMEND THAT YOU VOTE IN FAVOR OF ITEMS 1 AND 2. Each proposal is described in the attached Combined Prospectus/Proxy Statement. Attached as Appendix A to the Combined Prospectus/Proxy Statement is a copy of the Reorganization Plan. Shareholders of record as of the close of business on April 6, 2001 are entitled to notice of, and to vote at, the Special Meeting or any adjournment(s) thereof. SHAREHOLDERS ARE REQUESTED TO EXECUTE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE THE ACCOMPANYING PROXY CARD WHICH IS BEING SOLICITED BY THE BOARD OF TRUSTEES OF JPMIF. THIS IS IMPORTANT TO ENSURE A QUORUM AT THE SPECIAL MEETING. PROXIES MAY BE REVOKED AT ANY TIME BEFORE THEY ARE EXERCISED BY SUBMITTING TO THE MERGING FUND A WRITTEN NOTICE OF REVOCATION OR A SUBSEQUENTLY EXECUTED PROXY OR BY ATTENDING THE SPECIAL MEETING AND VOTING IN PERSON. Margaret W. Chambers Secretary May 16, 2001 COMBINED PROSPECTUS/PROXY STATEMENT DATED MAY 16, 2001 ACQUISITION OF THE ASSETS AND LIABILITIES OF J.P. MORGAN INSTITUTIONAL SERVICE PRIME 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 PRIME MONEY MARKET FUND II (FORMERLY, CHASE VISTA PRIME MONEY MARKET FUND), A SERIES OF MUTUAL FUND TRUST 1211 AVENUE OF THE AMERICAS, 41ST FLOOR NEW YORK, NEW YORK 10036 (800) ___________ This Combined Prospectus/Proxy Statement relates to the proposed reorganization of J.P. Morgan Institutional Service Prime Money Market Fund (the "Merging Fund"), a series of J.P. Morgan Institutional Funds ("JPMIF"), into JPMorgan Prime Money Market Fund II (formerly, Chase Vista Prime Money Market Fund) (the "Surviving Fund"), a series of Mutual Fund Trust ("MFT"). If approved by Shareholders, the proposed reorganization will be effected by transferring all of the assets and liabilities of the Merging Fund to the Surviving Fund, which has generally similar investment objectives and policies to those of the Merging Fund, in exchange for shares of the Surviving Fund (the "Reorganization"). Therefore, as a result of the proposed Reorganization, current shareholders of the Merging Fund (the "Merging Fund Shareholders") will become shareholders of the Surviving Fund ("Surviving Fund Shareholders"). JPMIF and MFT are both open-end management investment companies offering shares in several portfolios. In connection with the Reorganization, the Surviving Fund will be renamed "JPMorgan Prime Money Market Fund." Under the proposed Reorganization, each Merging Fund Shareholder will receive Premier Class shares (the "Surviving Fund Shares") of the Surviving Fund with a value equal to such Merging Fund Shareholder's holdings in the Merging Fund. The Surviving Fund currently has a multi-class structure under which it offers Reserve Class, Vista Class, Premier Class, Institutional Class, Class B and Class C Shares. In connection with the Reorganization, the Surviving Fund will introduce Cash Management Class, Retail Class, a new Reserve Class and a new Institutional Class and will re-name the Vista Class "Morgan Class" and the Institutional Class "Agency Class" and the Reserve Class will merge into the Morgan Class. At the Meeting, you also will be asked to consider and vote upon the election of Trustees of JPMIF. 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") between JPMIF, on behalf of the Merging Fund, and MFT, on behalf of the Surviving Fund, attached to this Combined Prospectus/Proxy Statement as Appendix A. The Board of Trustees for JPMIF is soliciting proxies in connection with a Special Meeting (the "Meeting") of Shareholders to be held on July 3, 2001 at 9:00 a.m., Eastern time, at the offices of J.P. Morgan Chase & Co., 1211 Avenue of the Americas, 41st Floor, New York, 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 JPMIF that an investor should know before voting on the proposals. The current Prospectuses, Statements of Additional Information and Annual Reports for the Merging Fund and the Surviving Fund (including the Annual Report of the Prime 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 of the Surviving Fund are enclosed with this Combined Prospectus/Proxy Statement. A Statement of Additional Information relating to this Combined Prospectus/Proxy Statement containing additional information about MFT and JPMIF has been filed with the Commission and is incorporated by reference into this Combined Prospectus/Proxy Statement. A copy of the Statement of Additional Information, as well as the Prospectus, Statement of Additional Information and Annual Report of the Merging Fund (including the Annual Report of the Prime 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 16, 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 MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY MFT OR JPMIF. -2- INVESTMENTS IN THE SURVIVING FUND ARE SUBJECT TO RISK--INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. NO SHARES IN THE SURVIVING FUND ARE BANK DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK AND ARE NOT FEDERALLY INSURED BY, OBLIGATIONS OF, OR OTHERWISE SUPPORTED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. -3- TABLE OF CONTENTS PAGE ---- INTRODUCTION...................................................................1 PROPOSAL 1: REORGANIZATION PLAN...............................................1 SUMMARY........................................................................2 COMPARATIVE FEE AND EXPENSE TABLES.............................................5 RISK FACTORS...................................................................8 INFORMATION RELATING TO THE PROPOSED REORGANIZATION............................9 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 JPMIF............................................36 FINANCIAL STATEMENTS AND EXPERTS..............................................37 OTHER BUSINESS................................................................37 LITIGATION....................................................................37 SHAREHOLDER INQUIRIES.........................................................38 APPENDIX A AGREEMENT AND PLAN OF REORGANIZATION.............................A-1 -i- INTRODUCTION GENERAL This Combined Prospectus/Proxy Statement is being furnished to the shareholders of the Merging Fund, an open-end management investment company, in connection with the solicitation by the Board of Trustees of JPMIF of proxies to be used at a Special Meeting of Shareholders of the Merging Fund to be held on July 3, 2001 at 9:00 a.m., Eastern time, at the offices of J.P. Morgan Chase & Co., 1211 Avenue of the Americas, 41st Floor, New York, 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 16, 2001. PROPOSAL 1: REORGANIZATION PLAN As you may be aware, J.P. Morgan & Co. Incorporated, the former corporate parent of the investment adviser of the Merging Fund's assets, recently completed a merger with The Chase Manhattan Corporation to form J.P. Morgan Chase & Co. ("JPMC"). As a result of this merger, JPMC is seeking to reorganize parts of its investment management business in order to provide better service for shareholders of funds advised by its subsidiaries. At the Meeting, Merging Fund Shareholders will consider and vote upon the Agreement and Plan of Reorganization (the "Reorganization Plan") dated _______, 2001 among JPMIF, on behalf of the Merging Fund, MFT, on behalf of the Surviving Fund (the Merging Fund and the Surviving Fund are collectively defined as the "Funds"), and JPMC pursuant to which all of the assets and liabilities of the Merging Fund will be transferred to the Surviving Fund in exchange for Surviving Fund Shares. As a result of the Reorganization, Merging Fund Shareholders will become shareholders of the Surviving Fund and will receive Surviving Fund Shares equal in value to their holdings in the Merging Fund on the date of the Reorganization. Further information relating to the Surviving Fund is set forth herein, and the Surviving Fund's Prospectus, Annual Report and Semi-Annual Report are enclosed with this Combined Prospectus/Proxy Statement. THE JPMIF BOARD HAS UNANIMOUSLY RECOMMENDED THAT SHAREHOLDERS VOTE "FOR" PROPOSAL 1. VOTE REQUIRED Approval of the Reorganization Plan by the Merging Fund requires the affirmative vote of the lesser of (i) 67% or more of the shares of the Merging Fund present at the Meeting if the holders of more than 50% of the outstanding shares of the Merging Fund are present or represented by proxy and (ii) more than 50% of all outstanding shares of the Merging Fund. If the Reorganization Plan is not approved by the Merging Fund Shareholders, the JPMIF Board will consider other appropriate courses of action. SUMMARY The following is a summary of certain information relating to the proposed Reorganization, the parties thereto and the transactions contemplated thereby, and is qualified by reference to the more complete information contained elsewhere in this Combined Prospectus/Proxy Statement, the Prospectus, Statement of Additional Information, Annual Report of each of the Surviving Fund and the Merging Fund (including the Annual Report if the Prime Money Market Portfolio), the 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 Premier Class shares of the Surviving Fund with an aggregate net asset value equal on the date of the exchange to the aggregate net asset value of such shareholder's Merging Fund Shares on such date. Therefore, following the proposed Reorganization, Merging Fund Shareholders will be Surviving Fund Shareholders. Merging Fund Shareholders will not pay a sales charge in connection with the Reorganization. See "Information Relating to the Proposed Reorganization." The Surviving Fund has investment objectives, policies and restrictions generally similar to the Merging Fund. Based upon their evaluation of the relevant information presented to them, including an analysis of the operation of the Surviving Fund both before and after the Reorganization, the terms of the Reorganization Plan, the opportunity to combine the two Funds with generally similar investment objectives and policies, and the fact that the Reorganization will be tax-free, and in light of their fiduciary duties under federal and state law, the MFT Board and the JPMIF Board, including a majority of each Board's members who are not "interested persons" within the meaning of the Investment Company Act of 1940, as amended (the "1940 Act"), have each determined that the proposed Reorganization is in the best interests of each Fund and its respective shareholders and that the interests of such shareholders will not be diluted as a result of such Reorganization. REASONS FOR THE REORGANIZATION The Reorganization is being proposed because each Fund's board believes it is in the best interests of shareholders to combine funds that have similar investment objectives and policies and each board believes that the Reorganization should result in better service for shareholders, including a wider variety of investment options. -2- CONCURRENT REORGANIZATION The Merging Fund currently invests all of its investable assets in The Prime 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 Prime Money Market Fund, J.P. Morgan Prime Cash Management Fund, J.P. Morgan Institutional Direct Prime Money Market Fund and J.P. Morgan Prime Money Market Reserves Fund, each a series of JPMIF with identical investment objectives and policies as the Merging Fund and J.P. Morgan Prime Money Market Fund, a series of J.P. Morgan Funds with identical investment objectives and policies as the Merging Fund (collectively, 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. JPFAM will continue to serve as investment adviser following the Reorganization. INVESTMENT OBJECTIVES AND POLICIES The Surviving Fund aims to provide the highest possible level of current income while still maintaining liquidity and preserving capital. The Merging Fund's goal is to -3- maximize current income consistent with the preservation of capital and same-day liquidity. See "Risk Factors" and "Investment Restrictions." The investment policies of the Surviving Fund are generally similar to those of the 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 in a wide range of high quality, short-term money market instruments that are issued and payable in U.S. dollars. The Surviving Fund principally invests in commercial paper and other short-term debt securities, debt securities issued or guaranteed by qualified banks, securities issued or guaranteed by the U.S. Government, its agencies and authorities, asset-backed securities and repurchase agreements. LIKEWISE, THE MERGING FUND INVESTS ACROSS A BROAD SPECTRUM OF U.S. DOLLAR-DENOMINATED MONEY MARKET SECURITIES, INCLUDING OBLIGATIONS ISSUED BY THE U.S. TREASURY, GOVERNMENT AGENCIES, DOMESTIC AND FOREIGN BANKS AND CORPORATIONS AND FOREIGN GOVERNMENTS, REPURCHASE AGREEMENTS AND ASSET-BACKED SECURITIES. As an AAA-rated Fund, the dollar weighted average maturity of the Surviving Fund will be 60 days or less. There can be no assurance that the Fund will continue to be rated by Standard & Poor's Ratings Service and/or Moody's Investors Service or that these agencies will not downgrade their current ratings while the dollar weighted average maturity of the Merging Fund will be 90 days or less. 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. Any investments that the Surviving Fund makes in foreign banks and issuers carry additional risk with respect to liquidity and foreign instability and regulations. 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. -4- OTHER SERVICES J.P. Morgan Fund Distributors, Inc. (the "Distributor") is the distributor for the Surviving Fund. The Chase Manhattan Bank ("Chase") serves as shareholder servicing agent, administrator, fund accountant and custodian, an affiliate of 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 JPMIF is organized as a Massachusetts business trust. The Merging Fund is organized as a series of JPMIF and the Surviving Fund is organized as a series of MFT. PURCHASES, REDEMPTIONS AND EXCHANGES After the Reorganization, the procedures for making purchases, redemptions and exchanges of shares of the Surviving Fund will be as described in this Combined Prospectus/Proxy Statement and in the Surviving Fund's Prospectus and Statement of Additional Information. COMPARATIVE FEE AND EXPENSE TABLES The table below shows (i) information regarding the fees and expenses paid by each of the Merging Fund and the Surviving Fund that reflect current expense arrangements; and (ii) estimated fees and expenses on a pro forma basis for the Surviving Fund after giving effect to the proposed Reorganization and the Concurrent Reorganization. Under the proposed Reorganization, holders of shares in the Merging Fund will receive Premier Class shares in the Surviving Fund. Please note that the Surviving Fund currently has six classes of shares: Reserve Class, Vista Class, Premier Class, Institutional Class, Class B and Class C. In connection with the Reorganization and Concurrent Reorganization, four additional classes, the Cash Management Class, Retail Class, a new Reserve Class and a new Institutional Class will be introduced, the Vista Class will be renamed the "Morgan Class" and the Institutional Class will be renamed "Agency Class" and the Reserve Class will merge into the Morgan 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 -5- certain fees and/or reimburse certain expenses to ensure that actual total operating expenses do not increase for at least three years. THE MERGING FUND THE SURVIVING FUND* ---------- --------------------------------------------------------------------- PREMIER VISTA INSTITUTIONAL RESERVE CLASS CLASS CLASS B CLASS C CLASS CLASS SHARES* SHARES SHARES SHARES SHARES SHARES SHARES ---------- --------- -------- --------- --------- --------------- --------- SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) -Maximum Sales Charge (Load) when you buy shares, shown as % of the offering price.............. None None None None None None None Maximum Deferred Sales Charge (Load) shown as lower of original purchase price or redemption proceeds......... None None None 5.00% 1.00% None None ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS) Management Fees................ 0.11% 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% Distribution (12b-1) Fees...... 0.25% None None 0.75% 0.75% None 0.30% Other Expenses(1).............. 0.13% 0.38%# 0.50%# 0.40%# 0.40%# 0.23% 1.05% Total Annual Fund Operating Expenses.................... 0.49% 0.48%# 0.60%# 1.25%# 1.25%# 0.33% 1.45% Fee Waiver and Expense Reimbursement(2).... 0.04% None None None None None None Net Expenses................... 0.45% 0.48% 0.60% 1.25% 1.25% 0.33% 1.45% * The table is based on the expenses incurred in the most recent fiscal year. # Restated from the most recent fiscal year current expense arrangement. (1) Service organizations may charge other fees to their customers who are beneficial owners of shares in connection with their customer's account. Such fees, if any may affect the return such customers realize with respect to their investments. (2) Reflects an agreement dated 3/1/01 by Morgan, an affiliate of JPMC, to reimburse the Merging Fund to the extent that its total operating expenses (which exclude interest, taxes and extraordinary expenses) exceed 0.45% of the fund's average daily net assets through 2/28/02. The actual Distribution fees are expected to be 0.00% for Reserve Class, the actual Other Expense for Premier Class, Vista Class, Class B, Class C, Institutional Class & Reserve Class are expected to be 0.35%, 0.49%, 0.39%, 0.39%, 0.16%, and 0.69%, respectively; and Total Annual Fund Operating Expense for Premier Class, Vista Class, Class B, Class C, Institutional Class and Reserve Class are not expected to exceed 0.45%, 0.59%, 1.24%, 1.24%, 0.26%, and 0.79%, respectively. That is because Chase and some of the Fund's other service providers have volunteered not to collect a portion of their fees and to reimburse others. Chase and these other service providers may terminate this arrangement at any time. This table does not reflect charges or credits which investors might incur if they invest through a financial institution. -6- THE SURVIVING FUND PRO FORMA WITH CONCURRENT REORGANIZATION ---------- --------------------------------------------------------------------- PREMIER CLASS SHARES ---------- SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) -Maximum Sales Charge (Load) when you buy shares, shown as % of the offering price.............. None Maximum Deferred Sales Charge (Load) Shown as lower of original purchase price or redemption proceeds None ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS) Management Fees................ 0.10% Distribution (12b-1) Fees...... None Other Expenses................. 0.38% Total Annual Fund Operating Expenses.................... 0.48% Fee Waivers and Expense Reimbursements(1)... 0.03% Net Expenses................... 0.45% (1) Reflects an agreement by Chase, an affiliate of JPMC, to reimburse the Fund to the extent operating expenses (which exclude Interest, Taxes and Extraordinary Expenses) exceed 0.45% of average daily net assets with respect to Premier Class Shares for three years after the Reorganization. The table does not reflect charges or credits, which investors might incur if they invest through a financial institution. 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 are unwaived for the period thereafter and remain the same as shown above. -7- Although actual costs may be higher or lower, based upon these assumptions your costs would be: 1 YEAR 3 YEARS 5 YEARS 10 YEARS ------------ ------------- ----------- -------------- THE MERGING FUND........................................ $ 46 $ 153 $ 270 $ 612 THE SURVIVING FUND Reserve Class Shares................................. 148 459 792 1735 Premier Class Shares................................. 49 154 269 604 Class B Shares with Redemption*...................... 627 697 886 1,331** Class B Shares without redemption*................... 127 397 686 1,331** Class C Shares with Redemption*...................... 227 397 686 1,511 Class C Shares without redemption*................... 127 397 686 1,511 Institutional Class Shares........................... 34 106 185 418 Vista Class Shares................................... 61 192 335 750 PRO FORMA THE SURVIVING FUND WITH CONCURRENT REORGANIZATION Premier Class Shares................................. 46 144 259 595 - --------------------- * Assumes applicable deferred sales charge is deducted when shares are sold. ** Reflects conversion of Class B shares to Morgan Class shares after they have been owned for eight years. 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. -8- The Surviving Fund's ability to concentrate its investments in the banking industry could increase risks. The profitability of banks depends largely on the availability and cost of funds, which can change depending upon economic conditions. Banks are also exposed to losses if borrowers get into financial trouble and cannot repay their loans. Investments in foreign banks and other foreign issuers may be riskier than investments in the United States. That could be, in part, because of difficulty converting investments into cash, political and economic instability, the imposition of government controls, or regulations that do not match U.S. standards. INFORMATION RELATING TO THE PROPOSED REORGANIZATION GENERAL The terms and conditions under which the Reorganization may be consummated are set forth in the Reorganization Plan. Significant provisions of the Reorganization Plan are summarized below; however, this summary is qualified in its entirety by reference to the Reorganization Plan, a copy of which is attached as Appendix A to this Combined Prospectus/Proxy Statement and which is incorporated herein by reference. DESCRIPTION OF THE REORGANIZATION PLAN In connection with the Reorganization, the Merging Fund and the Feeder Portfolios will cease investing in the Master Portfolio. The Reorganization Plan provides that at the Effective Time (as defined in the Reorganization Plan) of the Reorganization, the assets and liabilities of the Merging Fund will be transferred to and assumed by the Surviving Fund. In exchange for the transfer of the assets and the assumption of the liabilities of the Merging Fund, MFT will issue at the Effective Time of the Reorganization full and fractional Premier Class Shares of the Surviving Fund equal in aggregate dollar value to the aggregate net asset value of full and fractional outstanding shares of the Merging Fund as determined at the valuation time specified in the Reorganization Plan. The Reorganization Plan provides that the Merging Fund will declare a dividend or dividends prior to the Effective Time of the Reorganization which, together with all previous dividends, will have the effect of distributing to Merging Fund Shareholders all undistributed net investment income earned and net capital gain realized up to and including the Effective Time of the Reorganization. Following the transfer of assets to, and the assumption of the liabilities of the Merging Fund by, the Surviving Fund, the Merging Fund will distribute Surviving Fund Shares received by it to the Merging Fund Shareholders in liquidation of the Merging Fund. Each Merging Fund Shareholder at the Effective Time of the Reorganization will receive an amount of Premier Class Shares with a total net asset value equal to the net asset value of their Merging Fund Shares plus the right to receive any dividends or distributions which were declared before the Effective Time of the Reorganization but that remained unpaid at that time with respect to the shares of the Merging Fund. -9- The Surviving Fund expects to maintain most of the portfolio investments of the Merging Fund in light of the similar investment policies of the Merging Fund and the Surviving Fund. After the Reorganization, all of the issued and outstanding shares of the Merging Fund shall be canceled on the books of the Merging Fund and the stock transfer books of the Merging Fund will be permanently closed. The Reorganization is subject to a number of conditions, including without limitation: approval of the Reorganization Plan and the transactions contemplated thereby described in this Combined Prospectus/Proxy Statement by the Merging Fund Shareholders; the receipt of a legal opinion from Simpson Thacher & Bartlett with respect to certain tax issues, as more fully described in "Federal Income Tax Consequences" below; and the parties' performance in all material respects of their respective agreements and undertakings in the Reorganization Plan. Assuming satisfaction of the conditions in the Reorganization Plan, the Effective Time of the Reorganization will be on August 11, 2001 or such other date as is agreed to by the parties. In addition, the consummation of the Reorganization is contingent upon the consummation of the Concurrent Reorganization. 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 JPMIF 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 rations; the comparative investment performance of the Merging Fund and the Surviving Fund; the anticipated effect of such Reorganization on -10- the relevant Fund and its shareholder; 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 Fund's expenses so that the total expense ratio of each share class of the Merging fund does not increase during the period specified in the expense table. Additional important factors were that all costs and expenses of the Reorganization would be borne by JPMC and the fact that the Board was advised that Reorganization would constitute a tax-free reorganization. After considering the foregoing factors, together with such information as it believed to be relevant, and in light of its fiduciary duties under federal and state law, each Board determined that the proposed Reorganization is in the best interests of the applicable Fund and its shareholders, determined the interests of the shareholders would not be diluted as a result of the Reorganization, approved the Reorganization Plan and directed that the Reorganization Plan be submitted to the Merging Fund Shareholders for approval. THE JPMIF BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL. The JPMIF Board has not determined what action the Merging Fund will take in the event shareholders do not approve the Reorganization Plan or for any reason the Reorganization is not consummated. In either such event, the Board will consider other appropriate courses of action. INFORMATION RELATING TO CONCURRENT REORGANIZATION The terms and conditions under which the Concurrent Reorganization may be consummated are set forth in reorganization plans which are substantially similar to the Reorganization Plan you are considering. As a result of the Reorganization and the Concurrent Reorganization, the Merging Fund and the Feeder Portfolios will no longer invest their assets in the Master Portfolio. The consummation of the Reorganization is contingent upon the consummation of the Concurrent Reorganization. -11- FEDERAL INCOME TAX CONSEQUENCES Consummation of the Reorganization is subject to the condition that JPMIF receive an opinion from Simpson Thacher & Bartlett to the effect that for federal income tax purposes: (i) the transfer of all of the assets and liabilities of the Merging Fund to the Surviving Fund in exchange for the Surviving Fund Shares and the liquidating distributions to shareholders of the Surviving Fund Shares so received, as described in the Reorganization Plan, will constitute a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and with respect to the Reorganization, the Merging Fund and the Surviving Fund will each be considered "a party to a reorganization" within the meaning of Section 368(b) of the Code; (ii) no gain or loss will be recognized by the Merging Fund as a result of such transaction; (iii) no gain or loss will be recognized by the Surviving Fund as a result of such transaction; (iv) no gain or loss will be recognized by the Merging Fund Shareholders on the distribution to the Merging Fund Shareholders of the Surviving Fund Shares solely in exchange for their Merging Fund Shares; (v) the aggregate basis of shares of the Surviving Fund received by a shareholder of the Merging Fund will be the same as the aggregate basis of such Merging Fund Shareholder's Merging Fund Shares immediately prior to the Reorganization; (vi) the basis of the Surviving Fund in the assets of the Merging Fund received pursuant to such transaction will be the same as the basis of such assets in the hands of the Merging Fund immediately before such transaction; (vii) a Merging Fund Shareholder's holding period for the Surviving Fund Shares will be determined by including the period for which such Merging Fund Shareholder held the Merging Fund Shares exchanged therefor, provided that the Merging Fund Shareholder held such Merging Fund Shares as a capital asset; and (viii) the Surviving Fund's holding period with respect to the assets received in the Reorganization will include the period for which such assets were held by the Merging Fund. JPMIF has not sought a tax ruling from the Internal Revenue Service (the "IRS"), but is acting in reliance upon the opinion of counsel discussed in the previous paragraph. That opinion is not binding on the IRS and does not preclude the IRS from adopting a contrary position. Shareholders should consult their own advisers concerning the potential tax consequences to them, including state and local income taxes. CAPITALIZATION Because the Merging Fund will be combined with the Surviving Fund in the Reorganization as well as other funds as a result of the Concurrent Reorganization, the total capitalization of the Surviving Fund after the Reorganization and the Concurrent Reorganization is expected to be greater than the current capitalization of the Merging Fund. The following table sets forth as of February 28, 2001: (i) the capitalization of the Merging Fund; (ii) the capitalization of the Surviving Fund; and (iii) the pro forma capitalization of the Surviving Fund as adjusted to give effect to the Reorganization and the Concurrent Reorganization. There is, of course, no assurance that the Reorganization and the Concurrent Reorganization will be consummated. Moreover, if consummated, the capitalizations of the Surviving Fund and the Merging Fund are likely to be different at the Effective Time of the Reorganization as a result of fluctuations in the value of portfolio -12- securities of each Fund and daily share purchase and redemption activity in each Fund. Please note that the Surviving Fund currently has six classes of shares: Reserve Class, Vista Class, Premier Class, Institutional Class, Class B and Class C. In connection with the Reorganization and Concurrent Reorganization, four additional classes, the Cash Management Class, Retail Class, a new Institutional Class and a new Reserve Class, will be introduced, the Vista Class will be renamed the "Morgan Class", the Institutional Class will be renamed "Agency Class" and the Reserve Class will merge into the Morgan Class. CAPITALIZATION PRO FORMA WITH CONCURRENT REORGANIZATION (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) BENEFICIAL SHARES NET ASSETS NET ASSET INTEREST OUTSTANDING VALUE PER OUTSTANDING SHARE J.P. MORGAN FUNDS J.P. Morgan Prime Money Market Fund 4,662,032 $4,662,087 $1.00 J.P. Morgan Institutional Prime Money Market Fund 14,102,955 $14,102,612 $1.00 J.P. Morgan Institutional Service Prime Money Market 1,361,177 $1,361,097 $1.00 Fund (the Merging Fund) J.P. Morgan Prime Money Market Reserve Fund 279,169 $279,160 $1.00 J.P. Morgan Institutional Prime Direct Money 20,307 $20,307 $1.00 Market Fund J.P. Morgan Prime Cash Management Fund 533,344 $533,339 $1.00 THE SURVIVING FUND Reserve Class 123 $123 $1.00 Vista Class 10,213,350 $10,212,881 $1.00 Class B 12,496 $12,486 $1.00 Class C 309 $309 $1.00 Premier Class 2,059,160 $2,059,102 $1.00 Institutional Class 17,334,106 $17,333,442 $1.00 PRO FORMA THE SURVIVING WITH CONCURRENT REORGANIZATION Reserve Class 279,169 $279,160 $1.00 Morgan Class 10,213,473 $10,213,004 $1.00 Class B Class 12,496 $12,486 $1.00 Class C Class 309 $309 $1.00 Cash Management Class 533,344 $533,339 $1.00 Retail Class 4,662,032 $4,662,087 $1.00 Premier Class 3,420,337 $3,420,199 $1.00 Agency Class 17,354,413 $17,353,749 $1.00 Institutional Class 14,102,955 $14,102,612 $1.00 All class fund information should be included. 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. This objective cannot be changed without shareholder approval. THE MERGING FUND'S INVESTMENT OBJECTIVE IS TO MAXIMIZE CURRENT INCOME CONSISTENT WITH THE PRESERVATION OF CAPITAL AND SAME-DAY LIQUIDITY. THE MERGING FUND'S OBJECTIVE CAN BE CHANGED 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. -13- 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 in high quality, short-term money market instruments that are issued and payable in U.S. dollars. The Surviving Fund principally invests in: - high quality commercial paper and other short-term debt securities (including floating and variable rate demand notes of U.S. and foreign corporations), - debt securities issued or guaranteed by qualified banks, which include (i) U.S. banks with more than $1 billion in total assets, and foreign branches of these banks, (ii) foreign banks with the equivalent of more than $10 billion in total assets and which have branches or agencies in the U.S. and (iii) other U.S. or foreign commercial banks which JPMFAM judges to have comparable credit standing, - securities issued or guaranteed by the U.S. Government, its agencies or authorities, - asset-backed securities, and - repurchase agreements. The dollar weighted average maturity of the Surviving Fund will be 60 days or less and the Surviving 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 seeks to maintain a net asset value of $1.00 per share. The Surviving Fund may invest any portion of its assets in debt securities issued or guaranteed by U.S. banks and their foreign branches. These include certificates of deposit, time deposits and bankers' acceptances. The Surviving Fund invests only in securities issued and payable in U.S. dollars. Each investment must have the highest possible short-term rating from at least two national rating organizations, or one such rating if only one organization rates that security. Alternatively, some securities may have additional third party guarantees in order to meet the rating requirements mentioned above. If the security is not rated, it must be considered of comparable quality by JPMFAM. The Surviving Fund seeks to develop an appropriate portfolio by considering the differences in yields among securities of different maturities, market sectors and issuers. -14- INVESTMENT RESTRICTIONS The Surviving Fund and the Merging Fund have each adopted the following investment restrictions which may not be changed without approval by a "majority of the outstanding shares" of a Fund, which means the vote of the lesser of (i) 67% or more of the shares of a Fund present at a meeting, if the holders of more than 50% of the outstanding shares of a Fund are present or represented by proxy, and (ii) more than 50% of the outstanding shares of a Fund. - -------------------------------------------------------------------------------------------------------------- SURVIVING FUND MERGING FUND - -------------------------------------------------------------------------------------------------------------- While the Surviving Fund is also diversified under the The Merging Fund may not make any investment 1940 Act, it is not subject to a similar fundamental inconsistent with its classification as a restriction. diversified investment company under the 1940 Act. - -------------------------------------------------------------------------------------------------------------- The Surviving Fund may not purchase the securities of The Merging Fund may not purchase any security that any issuer (other than securities issued or guaranteed would cause it to concentrate its investments in the by the U.S. government or any of its agencies or securities of issuers primarily engaged in any instrumentalities, or repurchase agreements secured particular industry except as permitted by the thereby) if, as a result, more than 25% of the Commission, except that this restriction does not Surviving Fund's total assets would be invested in the apply to any instruments considered to be domestic securities of companies whose principal business bank money market instruments. activities are in the same industry. Notwithstanding the foregoing, (i) with respect to the Surviving Fund's permissible futures and options transactions in U.S. Government securities, positions in such options and futures shall not be subject to this restriction; and (ii) the Surviving Fund may invest more than 25% of its total assets in obligations issued by banks, including U.S. banks. - -------------------------------------------------------------------------------------------------------------- The Surviving Fund may not borrow money, except for The Merging Fund may not borrow money, except to the temporary or emergency purposes, or by engaging in extent permitted by applicable law. reverse repurchase transactions, in an amount not exceeding 33% of the value of its total assets at the time when the loan is made and may pledge, mortgage or hypothecate no more than 1/3 of its net assets to secure such borrowings. Any borrowings - -------------------------------------------------------------------------------------------------------------- -15- - -------------------------------------------------------------------------------------------------------------- representing more than 5% of the Surviving Fund's total assets must be repaid before the Surviving Fund may make additional investments. - -------------------------------------------------------------------------------------------------------------- The Surviving Fund may not purchase or sell physical The Merging Fund may not purchase or sell commodities unless acquired as a result of ownership commodities or commodity contracts unless acquired of securities or other instruments but this shall not as a result of ownership of securities or other prevent the Fund from (i) purchasing or selling instruments issued by persons that purchase or sell options and futures contracts or from investing in commodities or commodities contracts; but this shall securities or other instruments backed by physical not prevent the Merging Fund from purchasing, commodities or (ii) engaging in forward purchases or selling and entering into financial futures sales of foreign currencies or securities. contracts (including futures contracts on indices of securities, interest rates and currencies), options on financial futures contracts (including futures contracts on indices of securities, interest rates and currencies), warrants, swaps, forward contracts, foreign currency spot and forward contracts or other derivative instruments that are not related to physical commodities. - -------------------------------------------------------------------------------------------------------------- The Surviving Fund may not make loans, except that the The Merging Fund may make loans to other persons, in Surviving Fund may: (i) purchase and hold debt accordance with the Fund's investment objective and instruments (including without limitation, bonds, policies and to the extent permitted by applicable notes, debentures or other obligations and law. certificates of deposit, bankers' acceptances and fixed time deposits) in accordance with its investment objectives and policies; (ii) enter into repurchase agreements with respect to portfolio securities; and (iii) lend portfolio securities with a value not in excess of one-third of the value of its total assets. - -------------------------------------------------------------------------------------------------------------- SHAREHOLDERS OF THE SURVIVING FUND CURRENTLY ARE CONSIDERING A PROPOSAL THAT, IF PASSED AT A SHAREHOLDER MEETING TO BE HELD THE SAME DAY AS THE MEETING OF THE MERGING FUND, WOULD ADOPT A FUNDAMENTAL INVESTMENT RESTRICTION REGARDING LOANS THAT IS IDENTICAL TO THE MERGING FUND'S RESTRICTION. - -------------------------------------------------------------------------------------------------------------- -16- 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. Neither Fund may purchase or sell real estate (including, for the Surviving Fund, real estate limited partnerships), except that, to the extent permitted by applicable law, each Fund may (a) invest in securities or other instruments directly or indirectly secured by real estate and (b) invest in securities or other instruments issued by issuers that invest in real estate. Notwithstanding any other investment policy or restriction, the Surviving Fund may seek to achieve its investment objective by investing all of its investable assets in another investment company having substantially the same investment objective and policies as the Surviving Fund. The Merging Fund is not subject to a similar fundamental restriction. Although the Merging Fund currently invests all of its assets in the Merging Fund Master Portfolio, following the Reorganization, the Merging Fund will invest directly in portfolio securities. NON-FUNDAMENTAL INVESTMENT RESTRICTIONS. The investment restrictions described below are not fundamental policies of the Surviving Fund and/or the Merging Fund and may be changed by their respective Trustees. - -------------------------------------------------------------------------------------------------------------- SURVIVING FUND MERGING FUND - -------------------------------------------------------------------------------------------------------------- The Surviving Fund may not invest more than 10% of its The Merging Fund may not acquire any illiquid assets in illiquid securities. For purposes of this securities, such as repurchase agreements with more non-fundamental restriction, "illiquid securities" than seven days to maturity or fixed time deposits include securities restricted as to resale unless they with a duration of over seven calendar days, if as a are determined to be readily marketable in accordance result thereof, more than 10% of the market value of with the procedures established by the Board of the Merging Fund's total assets would be in Trustees. investments which are illiquid. - -------------------------------------------------------------------------------------------------------------- The Surviving Fund may not make short sales of The Merging Fund may not purchase securities on securities, other than short sales "against the box," margin, make short sales of securities, or maintain or purchase securities on margin except for short-term a short position, provided that this restriction credits necessary for clearance of portfolio shall not be deemed to be applicable to the purchase transactions, provided that this restriction will not or sale of when-issued or delayed delivery be applied to limit the use of securities. - -------------------------------------------------------------------------------------------------------------- -17- - -------------------------------------------------------------------------------------------------------------- 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 respect to 75% of its The Merging Fund is not subject to a similar assets, hold more than 10% of the outstanding voting non-fundamental restriction, although as a matter of securities of any issuer or invest more than 5% of its fundamental policy the Merging Fund may not make any assets in the securities of any one issuer (other than investment inconsistent with its classification as a obligations of the U.S. Government, its agencies and diversified investment company under the 1940 Act. instrumentalities). - -------------------------------------------------------------------------------------------------------------- The Surviving Fund may invest up to 5% of its total The Merging Fund may not acquire securities of other assets in the securities of any one investment investment companies, except as permitted by the company, but may not own more than 3% of the 1940 Act or any order pursuant thereto. securities of any one investment company or invest more than 10% of its total assets in the securities of other investment companies. - -------------------------------------------------------------------------------------------------------------- The Surviving Fund may not purchase or sell interests The Merging Fund is not subject to a similar in oil, gas or mineral leases. non-fundamental restriction. - -------------------------------------------------------------------------------------------------------------- The Surviving Fund may not write, purchase or sell any The Merging Fund is not subject to a similar put or call option or any combination thereof, non-fundamental restriction. provided that this shall not prevent (i) the writing, purchasing or selling of puts, calls or combinations thereof with respect to portfolio securities or (ii) with respect to the Surviving Fund's permissible futures and options transactions, the writing, purchasing, ownership, holding or selling of futures and options positions or of puts, calls or combinations thereof with respect to futures. - -------------------------------------------------------------------------------------------------------------- The Surviving Fund will not invest more than 25% of The Merging Fund is not subject to a similar its total assets in obligations issued by foreign non-fundamental restriction. banks (other than foreign branches of U.S. banks). - -------------------------------------------------------------------------------------------------------------- The Surviving Fund is not subject to a similar The Merging Fund may not borrow money, except from non-fundamental restriction, banks for extraordinary or - -------------------------------------------------------------------------------------------------------------- -18- - -------------------------------------------------------------------------------------------------------------- although it is subject to the fundamental restriction emergency purposes and then only in amounts not to regarding borrowing described above. exceed 10% of the value of the Fund's total assets, taken at cost, at the time of such borrowing or mortgage, pledge, or hypothecate any assets except in connection with any such borrowing and in amounts not to exceed 10% of the value of the Fund's net assets at the time of such borrowing. The Fund will not purchase securities while borrowings exceed 5% of the Fund's total assets; provided, however, that the Fund may increase its interest in an open-end management investment company with the same investment objective and restrictions as the Fund while such borrowings are outstanding. This borrowing provision is included to facilitate the orderly sale of portfolio securities, for example, in the event of abnormally heavy redemption requests, and is not for investment purposes and shall not apply to reverse repurchase agreements. - -------------------------------------------------------------------------------------------------------------- There will be no violation of any investment restriction if that restriction is complied with at the time the relevant action is taken notwithstanding a later change in market value of an investment, in net or total assets, in the securities rating of the investment, or any other later change. PURCHASES, REDEMPTIONS AND EXCHANGES Following the Reorganization, the procedures for purchases, redemptions and exchanges of shares will be those of the Surviving Fund, which are generally similar to those of the Merging Fund. The following discussion applies to Premier Class shares. This section is qualified in its entirety by the discussion in the Prospectus and Statement of Additional Information of the Surviving Fund, which are incorporated herein by reference. SALES CHARGES There is no sales charge to buy or sell Premier Class Shares. 12b-1 FEES There is no Rule 12b-1 distribution plan for Premier Class Shares of the Surviving Fund. -19- BUYING SURVIVING FUND SHARES THE FOLLOWING DISCUSSION APPLIES TO PURCHASES OF PREMIER CLASS SHARES THAT YOU MIGHT MAKE AFTER THE REORGANIZATION. The price shareholders pay for their shares is the net asset value per share (NAV). NAV is the value of everything the Surviving Fund owns, minus everything it owes, divided by the number of shares held by investors. The Surviving Fund seeks to maintain a stable NAV of $1.00. The Surviving Fund uses the amortized cost method to value its portfolio of securities. This method provides more stability in valuations. However, it may also result in periods during which the stated value of a security is different than the price the Fund would receive if it sold the investment. The NAV of each class of shares is generally calculated as of 5:00 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 5:00 p.m. A later cut-off time may be permitted for investors buying their shares through Chase or a bank affiliate of Chase so long as such later cut-off time is before the Fund's NAV is calculated. If you buy through an agent and not directly from the Center, the agent could set earlier cut-off times. The Surviving Fund can set an earlier cut-off time if the Public Securities Association recommends that the U.S. Government securities market close trading early. You must provide a Taxpayer Identification Number when you open an account. The Surviving Fund has the right to reject any purchase order for any reason. Premier Class Shares are available only to qualified investors. These are defined as institutions, trusts, partnerships, corporations and certain retirement plans and fiduciary accounts opened by a bank, trust company or thrift institution which has investment authority over such accounts, as well as individuals who meet the Surviving Fund's minimum investment requirements. Shareholders receiving Premier Class Shares in the Reorganization will be permitted to purchase additional Premier Class Shares in the future. For Premier Class Shares, checks should be made out to JPMorgan Funds in U.S. dollars. Credit cards, cash, or checks from a third party will not be accepted. Shares bought by check may not be sold for 15 calendar days. Shares bought through an automated clearing house cannot be sold until the payment clears. This could take more than seven business days. Purchase orders will be canceled if a check does not clear and -20- 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 5:00 p.m., Eastern time, on the day the shareholder buys. Shareholders seeking to buy Premier Class Shares through an investment representative should instruct their representative to contact the Surviving Fund. Such representatives may charge investors a fee and may offer additional services, such as special purchase and redemption programs, "sweep" programs, cash advances and redemption checks. Such representative may set different minimum investments and earlier cut-off times. A systematic investment plan is available for Premier Class Shares. SELLING SURVIVING FUND SHARES THE FOLLOWING DISCUSSION APPLIES TO SALES OF THE PREMIER CLASS SHARES THAT YOU MIGHT MAKE AFTER THE REORGANIZATION. Shares of the Surviving Fund may be sold on any day the Center is open for trading, either directly to the Fund or through an investment representative. Shareholders 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. For Premier Class Shares, a shareholder will need to have his or her signature guaranteed if he or she wants payment to be sent to an address other than the one in the Surviving Fund's records. Additional documents or a letter from a surviving joint owner may also be needed. A shareholder who purchased through an investment representative or through a financial service firm, should contact that representative, who will send the necessary documents to the Center. The representative might charge a fee for this service. Shareholders may also sell their shares by contacting the Center directly by calling ________________. A systematic withdrawal plan is available for Premier Class Shares. -21- EXCHANGING SURVIVING FUND SHARES THE FOLLOWING DISCUSSION APPLIES TO EXCHANGES OF PREMIER CLASS SHARES THAT YOU MIGHT MAKE AFTER THE REORGANIZATION. Premier Class shares of the Surviving Fund may be exchanged for Premier Class 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 Premier Class Shares, the Surviving Fund may close an account if the balance falls below $100,000. The Surviving Fund may also close the account if an investor is in the systematic investment plan and fails to meet investment minimums over a 12-month period. At least 60 days' notice will be given before closing the account. Unless a shareholder indicates otherwise on his or her account application, the Surviving Fund is authorized to act on redemption and transfer instructions received by phone. If someone trades on an account by phone, the Surviving Fund will ask that person to confirm the account registration and address to make sure they match those in the Fund records. If they do correspond, the Surviving Fund is generally authorized to follow that person's instructions. The Surviving Fund will take all reasonable precautions to confirm that the instructions are genuine. Investors agree that they will not hold the Surviving Fund liable for any loss or expenses from any sales request, if the Fund takes reasonable precautions. The Surviving Fund will be liable for any losses to a shareholder from an unauthorized sale or fraud against such shareholder if the Fund does not follow reasonable procedures. It may not always be possible to reach the Center by telephone. This may be true at times of unusual market changes and shareholder activity. In that event, shareholders can mail instructions to the Surviving Fund or contact their investment representative or agent. The 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 -22- services, each shareholder servicing agent will receive an annual fee of up to 0.25% of the average daily net assets of the Premier Class Shares held by investors serviced by the shareholder servicing agent. JPMFAM and/or JFD 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 without a sales charge; - take all distributions in cash or as a deposit in a pre-assigned bank account. If you don't notify us otherwise, we'll reinvest all distributions. If your distributions are reinvested, they will be in the form of shares of the same class. The taxation of dividends won't be affected by the form in which you receive them. Dividends of net investment income are usually taxable as ordinary income at the federal, state and local levels. If you receive distributions of net capital gain, the tax rate will be based on how long the Surviving Fund held a particular asset, not on how long you have owned your shares. If you buy shares just before a distribution, you will pay tax on the entire amount of the taxable distribution you receive, even though the NAV will be higher on that date because it includes the distribution amount. Early in each calendar year, the Surviving Fund will send its shareholders a notice showing the amount of distributions received in the preceding year and the tax status of those distributions. The above is only a general summary of tax implications of investing in the Surviving Fund. Shareholders should consult their tax advisors to see how investing in the Surviving Fund will affect their own tax situation. -23- COMPARISON OF THE MERGING FUND'S AND THE SURVIVING FUND'S ORGANIZATION STRUCTURE There are no material differences in the organizational structure of the Merging Fund and the Surviving Fund. Set forth below are descriptions of the structure, voting rights, shareholder liability and the liability of Trustees. STRUCTURE OF THE MERGING FUND The Merging Fund is organized as a series of JPMIF, which is organized under the law of the Commonwealth of Massachusetts. As a Massachusetts business trust, JPMIF's operations are governed by JPMIF's Declaration of Trust and By-Laws and applicable Massachusetts law. The operations of the Merging Fund are also subject to the provisions of the 1940 Act and the rules and regulations thereunder. STRUCTURE OF THE SURVIVING FUND The Surviving Fund is organized as a series of MFT, which is organized under the law of the Commonwealth of Massachusetts. As a Massachusetts business trust, MFT's operations are governed by MFT's Declaration of Trust and By-Laws and applicable Massachusetts law. The operations of the Surviving Fund are also subject to the provisions of the 1940 Act and the rules and regulations thereunder. TRUSTEES AND OFFICERS Subject to the provisions of its trust documents, the business of the Merging Fund is managed by JPMIF's Trustees and the business of the Surviving Fund is managed by MFT's Trustees, who serve indefinite terms and have all powers necessary or convenient to carry out their responsibilities. Information concerning the current Trustees and officers of MFT and JPMIF is set forth in the Funds' respective Statements of Additional Information, which are incorporated herein by reference. SHARES OF FUNDS Each of MFT and JPMIF is a trust with an unlimited number of authorized shares of beneficial interest which may be divided into series or classes thereof. Each Fund is one series of a trust and may issue multiple classes of shares. Each share of a series or class of a trust represents an equal proportionate interest in that series or class with each other share of that series or class. The shares of each series or class of either MFT or JPMIF participate equally in the earnings, dividends and assets of the particular series or class. Fractional shares have proportionate rights to full shares. Expenses of MFT or JPMIF that are not attributable to a specific series or class will be allocated to all the series of that trust in a manner believed by its board to be fair and equitable. Generally, shares of each series will be voted separately, for example, to approve an investment advisory agreement. Likewise, shares of each class of each series will be voted separately, for example, to -24- approve a distribution plan, but shares of all series and classes vote together, to the extent required by the 1940 Act, including for the election of Trustees. Neither MFT nor JPMIF is required to hold regular annual meetings of shareholders, but may hold special meetings from time to time. There are no conversion or preemptive rights in connection with shares of either MFT or JPMIF. SHAREHOLDER VOTING RIGHTS A vacancy in the Board of either MFT or JPMIF resulting from the resignation of a Trustee or otherwise may be filled similarly by a vote of a majority of the remaining Trustees then in office, subject to the 1940 Act. In addition, Trustees may be removed from office by a vote of holders of shares representing two-thirds of the outstanding shares of each portfolio of that trust. A meeting of shareholders shall be held upon the written request of the holders of shares representing not less than 10% of the outstanding shares entitled to vote on the matters specified in the written request. Except as set forth above, the Trustees may continue to hold office and may appoint successor Trustees. SHAREHOLDER LIABILITY Under Massachusetts law, shareholders of either MFT or JPMIF could, under certain circumstances, be held personally liable as partners for the obligations of that trust. However, the Declaration of Trust of each of MFT and JPMIF disclaims shareholder liability for acts or obligations of that trust and provides for indemnification and reimbursement of expenses out of trust property for any shareholder held personally liable for the obligations of that trust. Each of MFT and JPMIF may maintain appropriate insurance (for example, fidelity bonding and errors and omissions insurance) for the protection of that trust, its shareholders, Trustees, officers, employees and agents covering possible tort and other liabilities. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability generally is limited to circumstances in which both inadequate insurance existed and the trust itself was unable to meet its obligations. LIABILITY OF DIRECTORS AND TRUSTEES Under the Declaration of Trust of each of MFT and JPMIF, the Trustees of that trust are personally liable only for bad faith, willful misfeasance, gross negligence or reckless disregard of their duties as Trustees. Under the Declaration of Trust of each of MFT and JPMIF, a Trustee or officer will generally be indemnified against all liability and against all expenses reasonably incurred or paid by such person in connection with any claim, action, suit or proceeding in which such person becomes involved as a party or otherwise by virtue of such person being or having been a Trustee or officer and against amounts paid or incurred by such person in the settlement thereof. The foregoing is only a summary of certain organizational and governing documents and Massachusetts business trust law. It is not a complete description. Shareholders should refer to the provisions of these documents and state law directly for a more thorough comparison. Copies of the Declaration of Trust and By-Laws of each of MFT and JPMIF are available without charge upon written request to that trust. -25- 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 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 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. -26- SUBCONTRACTING. JPMFAM is authorized by the Advisory Agreement to employ or associate with such other persons or entities as it believes to be appropriate to assist it in the performance of its duties. Any such person is required to be compensated by JPMFAM, not by the Surviving Fund, and to be approved by the shareholders of that Fund as required by the 1940 Act. LIMITATION ON LIABILITY. The Advisory Agreement provides that JPMFAM will not be liable for any error of judgment or mistake of law or for any act or omission or loss suffered by MFT or the Surviving Fund in connection with the performance of the Advisory Agreement except a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services or from willful misfeasance, bad faith, or gross negligence in the performance of its duties or reckless disregard of its obligations and duties under the Advisory Agreement. DURATION AND TERMINATION. The Advisory Agreement will continue in effect from year to year with respect to the Surviving Fund, only so long as such continuation is approved at least annually by (i) the Board of Trustees of MFT or the majority vote of the outstanding voting securities of the Surviving Fund, and (ii) a majority of those Trustees who are neither parties to the Advisory Agreement nor "interested persons," as defined in the 1940 Act, of any such party, acting in person at a meeting called for the purpose of voting on such approval. The Advisory Agreement will terminate automatically in the event of its "assignment," as defined in the 1940 Act. In addition, the Advisory Agreement is terminable at any time as to the Surviving Fund without penalty by the MFT Board or by vote of the majority of the Surviving Fund's outstanding voting securities upon 60 days' written notice to JPMFAM, and by JPMFAM on 60 days' written notice to MFT. PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS JPMFAM, as the investment adviser to the Surviving Fund, has responsibilities with respect to the Fund's portfolio transactions and brokerage arrangements pursuant to the Fund's policies, subject to the overall authority of the MFT Board. Under the Advisory Agreement, JPMFAM, subject to the general supervision of the Board, is responsible for the placement of orders for the purchase and sale of portfolio securities for the Surviving Fund with brokers and dealers selected by JPMFAM. These brokers and dealers may include brokers or dealers affiliated with JPMFAM to the extent permitted by the 1940 Act and MFT's policies and procedures applicable to the Fund. JPMFAM shall use its best efforts to seek to execute portfolio transactions at prices which, under the circumstances, result in total costs or proceeds being the most favorable to such Fund. In assessing the best overall terms available for any transaction, JPMFAM shall consider all factors it deems relevant, including the breadth of the market in the security, the price of the security, the financial condition and execution capability of the broker or dealer, research services provided to JPMFAM, and the reasonableness of the commission, if any, both for the specific transaction and on a continuing basis. In no event shall JPMFAM be under any duty to obtain the lowest commission or the best net price for the Fund on any particular transaction, nor shall JPMFAM be under any duty to execute any -27- 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 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 JFD, a wholly owned, indirect subsidiary of BISYS Fund Services, Inc., which currently serves as the distributor for both the Surviving and the Merging Fund. BISYS Fund Services, Inc. is the Sub-administrator for both the Surviving Fund and the Merging Fund. The Distributor is unaffiliated with JPMC or any of its subsidiaries. Chase serves as administrator, shareholder servicing agent, fund accountant and custodian, and DST serves as transfer agent and dividend disbursing agent, for the Surviving Fund. The services provided by Chase include day-to-day maintenance of certain books and records, calculation of the offering price of the shares and preparation of reports. In its role as custodian, Chase is responsible for the daily safekeeping of securities -28- and cash held by the Surviving Fund. It is anticipated that prior to the consummation of the Reorganization, BONY will become the Surviving Fund's fund accountant and custodian. As administrator, Chase receives a fee of 0.10% of average daily net assets. It is anticipated that, in connection with the Reorganization, the administration fee will be amended to reduce the fee to 0.05% for complex wide money market Fund assets in excess of $100 billion. PROPOSAL 2: ELECTION OF TRUSTEES It is proposed that shareholders of the Merging Fund consider the election of the individuals listed below (the "Nominees") to the Board of Trustees of JPMIF, which is currently organized as a Massachusetts business trust. Even if the Reorganization described in Proposal 1 is approved, other mutual funds that are series of JPMIF will continue to exist and operate. All shareholders of any series of JPMIF as of the record date (April 6, 2001) are required to be given a vote on the proposal regarding Trustees. Because as of the record date you are still a shareholder in JPMIF, you are entitled to vote on this proposal. Shareholders of MFT are being asked to approve the same Trustees as are being proposed for JPMIF. In connection with the merger of J.P. Morgan & Co. Incorporated and The Chase Manhattan Corporation, it has been proposed, subject to shareholder approval, that the Boards of Trustees of the investment companies managed by JPMFAM, JPMIM and their affiliates be rationalized in order to obtain additional operating efficiencies by having the same Board of Trustees for all of the funds. Therefore, the Nominees include certain current Trustees of MFT and certain current Trustees of JPMIF (including certain members of JPMF's Advisory Board. Each Nominee has consented to being named in this Proxy Statement and has agreed to serve as a Trustee if elected. Shareholders of MFT are concurrently considering the election of the same individuals to the Board of Trustees of MFT. Biographical information about the Nominees and other relevant information is set forth below. More information regarding the current Trustees of MFT and JPMIF is contained in the Funds' Statements of Additional Information, which are incorporated herein by reference. The persons named in the accompanying form of proxy intend to vote each such proxy "FOR" the election of the Nominees, unless shareholders specifically indicate on their proxies the desire to withhold authority to vote for elections to office. It is not contemplated that any Nominee will be unable to serve as a Board member for any reason, but if that should occur prior to the Meeting, the proxy holders reserve the right to substitute another person or persons of their choice as nominee or nominees. -29- THE JPMIF BOARD HAS UNANIMOUSLY RECOMMENDED THAT SHAREHOLDERS VOTE "FOR" EACH OF THE NOMINEES LISTED BELOW. VOTE REQUIRED The election of each of the Nominees listed below requires the affirmative vote of a majority of all the votes entitled to be cast at the Meeting by all shareholders of JPMIF. The following are the nominees: -------------------------------------- The Board of Trustees of JPMIF met four times during the fiscal year ended November 30, 2000, and each of the Trustees attended at least 75% of the meetings. The Board of Trustees of JPMIF presently has an Audit Committee. The members of the Audit Committee are Messrs. Addy (Chairman), Eschenlauer, Burns, Mallardi and Healey. The function of the Audit Committee is to recommend independent auditors and monitor accounting and financial matters. The Audit Committee met four times during the fiscal year ended November 30, 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 JPMIF, the Master Portfolio and certain other investment companies in the Fund Complex, up to and including creating a separate board of trustees. *Interested Trustee, as defined by the 1940 Act. REMUNERATION OF TRUSTEES AND CERTAIN EXECUTIVE OFFICERS Each Trustee is currently paid an annual fee of $75,000 for serving as Trustee of the investment companies in the Fund Complex, which is allocated among all investment companies for which the Trustee serves, and is reimbursed for expenses incurred in connection with service as a Trustee. The Trustees may hold various other directorships unrelated to these funds. Trustee compensation expenses paid for the calendar year ended December 31, 2000 are set forth below. -30- Aggregate Trustee Compensation Paid by the Total Trustee Compensation Accrued Name of Trustee Trust During 2000 by Fund Complex(1) During 2000(2) - ------------------------------------------ -------------------------- ------------------------------------ Frederick S. Addy, Trustee $23,538 $ 75,000 William G. Burns, Trustee $23,538 $ 75,000 Arthur C. Eschenlauer, Trustee $23,538 $ 75,000 Matthew Healey, Trustee(3) Chairman and Chief Executive Officer $23,538 $ 75,000 Michael P. Mallardi, Trustee $23,538 $ 75,000 - ----------------------- (1) A Fund Complex means two or more investment companies that hold themselves out to investors as related companies for purposes of investment and investment services, or have a common investment adviser or have an investment adviser that is an affiliated person of the investment adviser of any of the other investment companies. (2) No investment company within the Fund Complex has a pension or retirement plan. (3) During 2000, Pierpont Group, Inc. paid Mr. Healey, in his role as Chairman of Pierpont Group, Inc., compensation in the amount of $200,000, contributed $25,500 to a defined contribution plan on his behalf and paid $18,400 in insurance premiums for his benefit. The Trustees decide upon general policies and are responsible for overseeing JPMIF's business affairs. Each of JPMIF and the Master Portfolio has entered into a Fund Services Agreement with Pierpont Group, Inc. to assist the Trustees in exercising their overall supervisory responsibilities. Pierpont Group, Inc. was organized in July 1989 to provide services for the J.P. Morgan Family of Funds (formerly "The Pierpont Family of Funds"), and the Trustees are the equal and sole shareholders of Pierpont Group, Inc. JPMIF has agreed to pay Pierpont Group, Inc. a fee in an amount representing its reasonable costs in performing these services. These costs are periodically reviewed by the Trustees. The principal offices of Pierpont Group, Inc. are located at 461 Fifth Avenue, New York, New York 10017. It is anticipated that the Merging Fund will terminate its agreement with Pierpont Group, Inc. in connection with the Reorganization. The aggregate fees paid to Pierpont Group, Inc. by the Merging Fund and the Master Portfolio during the indicated fiscal periods are set forth below: MERGING FUND -- For the fiscal years ended November 30, 1998, 1999 and 2000: $8,475, $25,409 and $26,527. -31- MASTER PORTFOLIO -- For the fiscal years ended November 30, 1998, 1999 and 2000: $173,032, $228,328 and $268,198. ADVISORY BOARD The Trustees determined as of January 26, 2000 to establish an advisory board and appoint four members ("Members of the Advisory Board") thereto. Each member serves at the pleasure of the Trustees. The Advisory Board is distinct from the Trustees and provides advice to the Trustees as to investment, management and operations of JPMIF; but has no power to vote upon any matter put to a vote of the Trustees. The Advisory board and the members thereof also serve each of the other trusts in the Fund Complex. The creation of the Advisory Board and the appointment of the members thereof was designed so that the Board of Trustees will continuously consist of persons able to assume the duties of Trustees and be fully familiar with the business and affairs of JPMIF, in anticipation of the current Trustees reaching the mandatory retirement age of seventy. Each Member of the Advisory Board is paid an annual fee of $75,000 for serving in this capacity for the Fund Complex and is reimbursed for expenses incurred in connection for such service. The Members of the Advisory Board may hold various other directorships unrelated to these funds. The mailing address of the Members of the Advisory Board is c/o Pierpont Group, Inc., 461 Fifth Avenue, New York, New York 10017. Their names, principal occupations during the past five years and dates of birth are set forth below: Ann Maynard Gray -- Former President, Diversified Publishing Group and Vice President, Capital Cities/ABC, Inc. Her date of birth is August 22, 1945. John R. Laird-- Retired; Former Chief Executive Officer, Shearson Lehman Brothers and The Boston Company. His date of birth is June 21, 1942. Gerard P. Lynch -- Retired; Former Managing Director, Morgan Stanley Group and President and Chief Operating Officer, Morgan Stanley Services, Inc. His date of birth is October 5, 1936. James J. Schonbachler -- Retired; Prior to September, 1998, Managing Director, Bankers Trust Company and Chief Executive Officer and Director, Bankers Trust A.G., Zurich and BT Brokerage Corp. His date of birth is January 26, 1943. PRINCIPAL EXECUTIVE OFFICERS: JPMIF's and the Master Portfolio's principal executive officers (listed below), other than the Chief Executive Officer and the officers who are employees of JPMIM, are provided and compensated by Funds Distributors, Inc., a wholly owned indirect subsidiary of Boston Institutional Group, Inc. The officers conduct and supervise the business operations of JPMIF and the Master Portfolio. JPMIF and the Master Portfolio have no employees. The business address of each of the officers unless otherwise noted is Funds Distributor, Inc., 60 State Street, Suite 1300, Boston, Massachusetts 02109. The principal executive officers of JPMIF are as follows: -32- NAME AND POSITION AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION - -------------------------------------- ----------- ------------------------------------------------------------ Matthew Healey 63 Chief Executive Officer; Chairman, Pierpont Group, since prior to 1993. His address is Pine Tree Country Club Estates, 10286 Saint Andrews Road, Boynton Beach, Florida 33436. Margaret W. Chambers 41 Vice President and Secretary. Senior Vice President and General Counsel of the Distributor since April, 1998. From August 1996 to March 1998, Ms. Chambers was Vice President and Assistant General Counsel for Loomis, Sayles & Company, L.P. From January 1986 to July 1996, she was an associate with the law firm of Ropes & Gray. George A. Rio 46 President and Treasurer. Executive Vice President and Client Service Director of the Distributor since April 1998. From June 1995 to March 1998, Mr. Rio was Senior Vice President and Senior Key Account Manager for Putnam Mutual Funds. From May 1994 to June 1995, Mr. Rio was Director of Business Development for First Data Corporation. ACCOUNTANTS PricewaterhouseCoopers LLP serves as the Merging Fund's, the Master Portfolio's and the Surviving Fund's independent accountants, auditing and reporting on the annual financial statements and reviewing certain regulatory reports and federal income tax returns. PricewaterhouseCoopers LLP also performs other professional accounting, auditing, tax and advisory services when MFT or JPMIF engages it to do so. AUDIT FEES. The aggregate fees paid to PricewaterhouseCoopers LLP in connection with the annual audit of the Merging Fund and the Master Portfolio for the last fiscal year was $42,500. 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. The Audit Committee has considered whether the provision of non-audit services is compatible with maintaining the independence of PricewaterhouseCoopers LLP. -33- INFORMATION RELATING TO VOTING MATTERS GENERAL INFORMATION This Combined Prospectus/Proxy Statement is being furnished in connection with the solicitation of proxies by the JPMIF Board for use at the Meeting. It is expected that the solicitation of proxies will be primarily by mail. JPMIF's officers and service providers may also solicit proxies by telephone, facsimile machine, telegraph, the Internet or personal interview. In addition JPMIF may retain the services of professional solicitors to aid in the solicitation of proxies for a fee. It is anticipated that banks, brokerage houses and other custodians will be requested on behalf of JPMIF to forward solicitation materials to their principals to obtain authorizations for the execution of proxies. Any Merging Fund Shareholder giving a proxy may revoke it at any time before it is exercised by submitting to JPMIF a written notice of revocation or a subsequently executed proxy or by attending the Meeting and electing to vote in person. Only the Merging Fund Shareholders of record at the close of business on _________, 2001 will be entitled to vote at the Meeting. On that date, there were outstanding and entitled to be voted _____________ Merging Fund Shares. Each share or fraction thereof is entitled to one vote or fraction thereof. The presence in person or by proxy of shareholders that own one-third of the outstanding Merging Fund Shares will constitute a quorum for purposes of transacting all business at the Meeting. If a quorum is not present at the Meeting, sufficient votes in favor of the proposals are not received by the time scheduled for the Meeting, or the Merging Fund Shareholders determine to adjourn the Meeting for any other reason, the Merging Fund Shareholders present (in person or proxy) may adjourn the Meeting from time to time, without notice other than announcement at the Meeting. Any such adjournment will require the affirmative vote of the Merging Fund Shareholders holding a majority of the Merging Fund Shares present, in person or by proxy, at the Meeting. The persons named in the Proxy will vote in favor of such adjournment those Merging Fund Shares that they are entitled to vote if such adjournment is necessary to obtain a quorum or if they determine such an adjournment is desirable for any other reason. Business may be conducted once a quorum is present and may continue until adjournment of the Meeting notwithstanding the withdrawal or temporary absence of sufficient Merging Fund Shares to reduce the number present to less than a quorum. If the accompanying proxy is executed and returned in time for the Meeting, the shares covered thereby will be voted in accordance with the proxy on all matters that may properly come before the meeting (or any adjournment thereof). PROXIES All Merging Fund Shares represented by each properly signed proxy received prior to the Meeting will be voted at the Meeting. If a Merging Fund Shareholder specifies how the proxy is to be voted on any of the business to come before the Meeting, it will be voted in accordance with such specifications. If a Merging Fund Shareholder returns its proxy but no direction is made on the proxy, the proxy will be voted FOR each Proposal -34- described in this Combined Prospectus/Proxy Statement. The Merging Fund Shareholders voting to ABSTAIN on the Proposals will be treated as present for purposes of achieving a quorum and in determining the votes cast on the Proposals, but not as having voted FOR the Proposals. A properly signed proxy on which a broker has indicated that it has no authority to vote on the Proposals on behalf of the beneficial owner (a "broker non-vote") will be treated as present for purposes of achieving a quorum but will not be counted in determining the votes cast on the Proposals. A proxy granted by any Merging Fund Shareholder may be revoked by such Merging Fund Shareholder at any time prior to its use by written notice to JPMIF, by submission of a later dated Proxy or by voting in person at the Meeting. If any other matters come before the Meeting, proxies will be voted by the persons named as proxies in accordance with their best judgment. EXPENSES OF PROXY SOLICITATION JPMC, and not the Merging Fund or the Surviving Fund (or shareholders of either Fund), will bear the cost of solicitation of proxies, including the cost of printing, preparing, assembling and mailing the Notice of Meeting, Combined Prospectus/Proxy Statement and form of proxy. In addition to solicitations by mail, proxies may also be solicited by officers and regular employees of JPMIF by personal interview, by telephone or by telegraph without additional remuneration thereof. Professional solicitors may also be retained. ABSTENTIONS AND BROKER NON-VOTES In tallying the Merging Fund Shareholder votes, abstentions and broker non-votes (i.e., proxies sent in by brokers and other nominees that cannot be voted on a proposal because instructions have not been received from the beneficial owners) will be counted for purposes of determining whether or not a quorum is present for purposes of convening the Meeting. Abstentions and broker non-votes will be considered to be a vote against each proposal. INTERESTED PARTIES On the record date, the Trustees and officers of JPMIF as a group owned less than 1% of the outstanding shares of the Merging Fund. On the record date, the name, address and percentage ownership of the persons who owned beneficially more than 5% of the Shares of the Merging Fund or any class thereof and the percentage of shares of the Surviving Fund or any class thereof that would be owned by such persons upon consummation of the Reorganization and the Concurrent Reorganization based upon their holdings at _______, 2001 are as follows: -35- Percentage of Percentage of Amount of Merging Fund Surviving Fund Shares Owned on Record Owned Upon Name and Address Owned Date Consummation - ----------------------------- ----------- ----------------- ------------------ On the record date, the Trustees and officers of 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. ADDITIONAL INFORMATION ABOUT JPMIF Information about the Merging Fund is included in its Prospectus, which is incorporated by reference herein. Additional information about the Merging Fund is also -36- included in JPMIF's Statement of Additional Information which has been filed with the Commission and which is incorporated herein by reference. Copies of the Statement of Additional information may be obtained without charge by calling 1-800-766-7722. JPMIF is subject to the requirements of the 1940 Act and, in accordance with such requirements, files reports and other information with the Commission. These materials can be inspected and copied at the Public Reference Facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices at 7 World Trade Center, Suite 1300, New York, NY 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can also be obtained from the Public Reference Branch, Office of Consumer Affairs and Information Services, Securities and Exchange Commission, Washington, D.C. 20549, at prescribed rates, and are also available on the Commission's web site at http://www.sec.gov. FINANCIAL STATEMENTS AND EXPERTS The audited financial highlights, financial statements and notes thereto of the Merging Fund for the fiscal year ended November 30, 2000, and the Surviving Fund for the fiscal year ended August 31, 2000, and the audited financial statements, notes thereto and supplementary data for the Master Portfolio for the fiscal year ended November 30, 2000, are incorporated by reference herein and into the Statement of Additional Information related to this Combined Prospectus/Proxy Statement. The audited financial statements and financial highlights, as applicable, for the Merging Fund, the Surviving Fund and the Master Portfolio have been incorporated herein by reference in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on their authority as experts in auditing and accounting. The unaudited financial highlights, financial statements and notes thereto of the 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 JPMIF Board knows of no other business to be brought before the Meeting. However, if any other matters come before the Meeting, it is the intention of the JPMIF Board that proxies that do not contain specific restrictions to the contrary will be voted on such matters in accordance with the judgment of the persons named in the enclosed form of proxy. LITIGATION Neither MFT nor JPMIF is involved in any litigation that would have any material adverse effect upon either the Merging Fund or the Surviving Fund. -37- SHAREHOLDER INQUIRIES Shareholder inquiries may be addressed to JPMIF in writing at the address on the cover page of this Combined Prospectus/Proxy Statement or by telephoning 1-800-________. * * * 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 J.P. Morgan Institutional Service Prime Money Market Fund (the "Transferor Portfolio"), Mutual Fund Trust (the "Acquiring Trust"), a Massachusetts business trust, on behalf of JPMorgan Prime Money Market Fund II (formerly, Chase Vista Prime Money Market Fund) (the "Acquiring Portfolio") and J.P. Morgan Chase & Co. WHEREAS, the Board of Trustees of each of the Transferor Trust and the Acquiring Trust has determined that the transfer of all of the assets and liabilities of the Transferor Portfolio to the Acquiring Portfolio is in the best interests of the Transferor Portfolio and the Acquiring Portfolio, as well as the best interests of shareholders of the Transferor Portfolio and the Acquiring Portfolio, and that the interests of existing shareholders would not be diluted as a result of this transaction; WHEREAS, each of the Transferor Trust and the Acquiring Trust intends to provide for the reorganization of the Transferor Portfolio (the "Reorganization") through the acquisition by the Acquiring Portfolio of all of the assets, subject to all of the liabilities, of the Transferor Portfolio in exchange for shares of beneficial interest of the Acquiring Portfolio (the "Acquiring Portfolio Shares"), the liquidation of the Transferor Portfolio and the distribution to Transferor Portfolio shareholders of such Acquiring Portfolio Shares, all pursuant to the provisions of Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the "Code"); NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties hereto agree as follows: 1. TRANSFER OF ASSETS OF THE TRANSFEROR PORTFOLIO IN EXCHANGE FOR THE ACQUIRING PORTFOLIO SHARES AND LIQUIDATION AND TERMINATION OF THE TRANSFEROR PORTFOLIO (a) PLAN OF REORGANIZATION. (i) The Transferor Trust on behalf of the Transferor Portfolio listed above, will convey, transfer and deliver to the Acquiring Portfolio all of the then existing assets of the Transferor Portfolio (consisting, without limitation, of portfolio securities and instruments, dividend and interest receivables, cash and other assets). In consideration thereof, the Acquiring Trust on behalf of the Acquiring Portfolio will (A) assume and pay, to the extent that they exist on or after the Effective Time of the Reorganization (as defined in Section 1(b)(i) hereof), all of the obligations and liabilities of the Transferor Portfolio and (B) issue and deliver to the Transferor Portfolio full and fractional shares of beneficial interest of the Acquiring Portfolio, with respect to the Acquiring Portfolio equal to that number of full and fractional Acquiring Portfolio Shares as determined in Section 1(c) hereof. The Acquiring Portfolio Shares issued and delivered to the Transferor Portfolio shall be of the Premier Class share class in exchange for A-1 shares of the Transferor Portfolio, with the amounts of shares of each share class to be determined by the parties. Any shares of beneficial interest (if any) of the Transferor Portfolio ("Transferor Portfolio Shares") held in the treasury of the Transferor Trust at the Effective Time of the Reorganization shall thereupon be retired. Such transactions shall take place on the date provided for in Section 1(b) hereof (the "Exchange Date"). All computations for the Transferor Portfolio and the Acquiring Portfolio shall be performed by The Bank of New York (the "Custodian"), as custodian and pricing agent for the Transferor Portfolio and the Acquiring Portfolio. The determination of said Custodian shall be conclusive and binding on all parties in interest. (ii) As of the Effective Time of the Reorganization, the Transferor Trust will liquidate and distribute pro rata to its shareholders of record ("Transferor Portfolio Shareholders") as of the Effective Time of the Reorganization the Acquiring Portfolio Shares received by such Transferor Portfolio pursuant to Section 1(a)(i) in actual or constructive exchange for the shares of the Transferor Portfolio held by the Transferor Portfolio shareholders. Such liquidation and distribution will be accomplished by the transfer of the Acquiring Portfolio Shares then credited to the account of the Transferor Portfolio on the books of the Acquiring Portfolio, to open accounts on the share records of the Acquiring Portfolio in the names of the Transferor Portfolio Shareholders and representing the respective pro rata number of the Acquiring Portfolio Shares due such shareholders. The Acquiring Portfolio will not issue certificates representing the Acquiring Portfolio Shares in connection with such exchange. (iii) As soon as practicable after the Effective Time of the Reorganization, the Transferor Trust shall take all the necessary steps under Massachusetts law, the Transferor Trust's Declaration of Trust and any other applicable law to effect a complete termination of the Transferor Portfolio. (b) EXCHANGE DATE AND EFFECTIVE TIME OF THE REORGANIZATION. (i) Subject to the satisfaction of the conditions to the Reorganization specified in this Plan, the Reorganization shall occur as of the close of regularly scheduled trading on the New York Stock Exchange (the "Effective Time of the Reorganization") on August 11, 2001, or such later date as may be agreed upon by the parties (the "Exchange Date"). (ii) All acts taking place on the Exchange Date shall be deemed to take place simultaneously as of the Effective Time of the Reorganization unless otherwise provided. (iii) In the event that on the proposed Exchange Date (A) the New York Stock Exchange shall be closed to trading or trading thereon shall be restricted, or (B) trading or the reporting of trading on said Exchange or elsewhere shall be disrupted so that accurate valuation of the net assets of the Acquiring Portfolio or the Transferor Portfolio is impracticable, the Exchange Date shall be postponed until the first business day after the day when trading shall have been fully resumed and reporting shall have been restored. (iv) On the Exchange Date, portfolio securities of the Transferor Portfolio shall be transferred by the Custodian to the accounts of the Acquiring Portfolio duly endorsed in proper form for transfer, in such condition as to constitute good delivery thereof in accordance with the A-2 custom of brokers, and shall be accompanied by all necessary federal and state stock transfer stamps or a check for the appropriate purchase price thereof. (c) VALUATION. (i) The net asset value of the shares of the Acquiring Portfolio and the net value of the assets of the Transferor Portfolio to be transferred in exchange therefore shall be determined as of the Effective Time of the Reorganization. The net asset value of the Acquiring Portfolio Shares shall be computed by the Custodian in the manner set forth in the Acquiring Trust's Declaration of Trust or By-laws and then current prospectus and statement of additional information and shall be computed to not less than two decimal places. The net value of the assets of the Transferor Portfolio to be transferred shall be computed by the Custodian by calculating the value of the assets transferred by the Transferor Portfolio and by subtracting therefrom the amount of the liabilities assigned and transferred to the Acquiring Portfolio, said assets and liabilities to be valued in the manner set forth in the Transferor Trust's Declaration of Trust or By-laws and then current prospectus and statement of additional information. (ii) The number of Premier Class shares of the Acquiring Portfolio to be issued (including fractional shares, if any) by the Acquiring Portfolio in exchange for the Transferor Portfolio's assets attributable to the Transferor Portfolio's shares shall be determined by an exchange ratio computed by dividing the net value of the Transferor Portfolio's assets attributable to its shares by the net asset value per share of the Premier Class shares of the Acquiring Portfolio, both as determined in accordance with Section 1(c)(i). (iii) All computations of value shall be made by the Custodian in accordance with its regular practice as pricing agent for the Acquiring Portfolio and the Transferor Portfolio. 2. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING TRUST The Acquiring Trust represents and warrants as follows: (a) ORGANIZATION, EXISTENCE, ETC. The Acquiring Trust is a business trust that is duly organized, validly existing and in good standing under the laws of the Commonwealth of Massachusetts and has the power to carry on its business as it is now being conducted. The Acquiring Portfolio is a validly existing series of shares of such business trust representing interests therein under the laws of Massachusetts. Each of the Acquiring Portfolio and the Acquiring Trust have all necessary federal, state and local authorization to own all of its properties and assets and to carry on its business as now being conducted. (b) REGISTRATION AS INVESTMENT COMPANY. The Acquiring Trust is registered under the Investment Company Act of 1940, as amended (the "Act") as an open-end investment company of the management type; such registration has not been revoked or rescinded and is in full force and effect. (c) CURRENT OFFERING DOCUMENTS. The current prospectus and statement of additional information of the Acquiring Trust, as amended, included in the Acquiring Trust's registration A-3 statement on Form N-1A filed with the Securities and Exchange Commission, comply in all material respects with the requirements of the Securities Act of 1933, as amended (the "Securities Act") and the Act and do not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (d) CAPITALIZATION. The Acquiring Trust has an unlimited number of authorized shares of which as of February 28, 2001 there were 2,059,160,000 Premiere Class shares of the Acquiring Portfolio outstanding, 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. A-4 (h) LIABILITIES. There are no liabilities of the Acquiring Portfolio, whether actual or contingent and whether or not determined or determinable, other than liabilities disclosed or provided for in the Acquiring Trust's financial statements with respect to the Acquiring Portfolio and liabilities incurred in the ordinary course of business subsequent to August 31, 2000 or otherwise previously disclosed to the Acquiring Trust with respect to the Acquiring Portfolio, none of which has been materially adverse to the business, assets or results of operations of the Acquiring Portfolio. (i) NO MATERIAL ADVERSE CHANGE. Since August 31, 2000, there has been no material adverse change in the financial condition, results of operations, business, properties or assets of the Acquiring Portfolio, other than those occurring in the ordinary course of business (for these purposes, a decline in net asset value and a decline in net assets due to redemptions do not constitute a material adverse change). (j) LITIGATION. There are no claims, actions, suits or proceedings pending or, to the knowledge of the Acquiring Trust, threatened which would adversely affect the Acquiring Trust or the Acquiring Portfolio's assets or business or which would prevent or hinder consummation of the transactions contemplated hereby, there are no facts which would form the basis for the institution of administrative proceedings against the Acquiring Trust or the Acquiring Portfolio and, to the knowledge of the Acquiring Trust, there are no regulatory investigations of the Acquiring Trust or the Acquiring Portfolio, pending or threatened, other than routine inspections and audits. (k) CONTRACTS. No default exists under any material contract or other commitment to which the Acquiring Trust, on behalf of the Acquiring Portfolio, is subject. (l) TAXES. The federal income tax returns of the Acquiring Trust with respect to the Acquiring Portfolio, and all other income tax returns required to be filed by the Acquiring Trust with respect to the Acquiring Portfolio, have been filed, and all taxes payable pursuant to such returns have been paid. To the knowledge of the Acquiring Trust, no such return is under audit and no assessment has been asserted in respect of any such return. All federal and other taxes 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. A-5 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 1,361,177,000 outstanding 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. A-6 (e) FINANCIAL STATEMENTS. The financial statements for the Transferor Trust with respect to the Transferor Portfolio and for The Prime Money Market Portfolio for the fiscal year ended November 30, 2000 which have been audited by PricewaterhouseCoopers LLP fairly present the financial position of the Transferor Portfolio and for The Prime 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 November 30, 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 November 30, 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. A-7 (k) TAXES. The federal income tax returns of the Transferor Trust with respect to the Transferor Portfolio, and all other income tax returns required to be filed by the Transferor Trust with respect to the Transferor Portfolio, have been filed, and all taxes payable pursuant to such returns have been paid. To the knowledge of the Transferor Trust, no such return is under audit and no assessment has been asserted in respect of any such return. All federal and other taxes owed by the Transferor Trust with respect to the Transferor Portfolio have been paid so far as due. The Transferor Portfolio has elected to qualify as a "regulated investment company" under Subchapter M of the Code, as of and since its first taxable year, and shall continue to so qualify until the Effective Time of the Reorganization. (l) NO APPROVALS REQUIRED. Except for the Registration Statement (as defined in Section 4(a) hereof) and the approval of the Transferor Portfolio's shareholders referred to in Section 6(a) hereof, no consents, approvals, authorizations, registrations or exemptions under federal or state laws are necessary for the consummation by the Transferor Trust of the Reorganization, except such as have been obtained as of the date hereof. 4. COVENANTS OF THE ACQUIRING TRUST The Acquiring Trust covenants to the following: (a) REGISTRATION STATEMENT. On behalf of the Acquiring Portfolio, the Acquiring Trust shall file with the Commission a Registration Statement on Form N-14 (the "Registration Statement") under the Securities Act relating to the Acquiring Portfolio Shares issuable hereunder and the proxy statement of the Transferor Portfolio relating to the meeting of the Transferor Portfolio's shareholders referred to in Section 5(a) herein. At the time the Registration Statement becomes effective, the Registration Statement (i) will comply in all material respects with the provisions of the Securities Act and the rules and regulations of the Commission thereunder (the "Regulations") and (ii) will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and at the time the Registration Statement becomes effective, at the time of the Transferor Portfolio shareholders' meeting referred to in Section 5(a) hereof, and at the Effective Time of the Reorganization, the prospectus/proxy statement (the "Prospectus") and statement of additional information (the "Statement of Additional Information") included therein, as amended or supplemented by any amendments or supplements filed by the Trust, will not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (b) COOPERATION IN EFFECTING REORGANIZATION. The Acquiring Trust agrees to use all reasonable efforts to effectuate the Reorganization, to continue in operation thereafter, and to obtain any necessary regulatory approvals for the Reorganization. The Acquiring Trust shall furnish such data and information relating to the Acquiring Trust as shall be reasonably requested for inclusion in the information to be furnished to the Transferor Portfolio shareholders in connection with the meeting of the Transferor Portfolio's shareholders for the purpose of acting upon this Plan and the transactions contemplated herein. A-8 (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 Prime Money Market Fund, a series of J.P. Morgan Funds, and J.P. Morgan Institutional Prime Money Market Fund, J.P. Morgan Prime Cash Management Fund, J.P. Morgan Institutional Direct Prime Money Market Fund and J.P. Morgan Prime Money Market Reserves Fund, each a series of J.P. Morgan Institutional Funds, into the Acquiring Portfolio shall have been consummated. A-11 7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING TRUST The obligations of the Acquiring Trust with respect to the consummation of the Reorganization are subject to the satisfaction of the following conditions: (a) APPROVAL BY THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. The Transferor Shareholder Approval shall have been obtained. (b) COVENANTS, WARRANTIES AND REPRESENTATIONS. The Transferor Trust shall have complied with each of its covenants contained herein, each of the representations and warranties contained herein shall be true in all material respects as of the Effective Time of the Reorganization (except as otherwise contemplated herein), and there shall have been no material adverse change (as described in Section 3(h)) in the financial condition, results of operations, business, properties or assets of the Transferor Portfolio since November 30, 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 Prime Money Market Fund, a series of J.P. Morgan Funds, and J.P. Morgan Institutional Prime Money Market Fund, J.P. Morgan Prime Cash Management Fund, J.P. Morgan Institutional Direct Prime Money Market Fund and J.P. Morgan Prime Money Market Reserves Fund, each a series of J.P. Morgan Institutional Funds, into the Acquiring Portfolio shall have been consummated. 8. AMENDMENTS; TERMINATIONS; NO SURVIVAL OF COVENANTS, WARRANTIES AND REPRESENTATIONS (a) AMENDMENTS. The parties hereto may, by agreement in writing authorized by their respective Boards of Trustees amend this Plan at any time before or after approval hereof by the shareholders of the Transferor Portfolio, but after such approval, no amendment shall be made which substantially changes the terms hereof. A-12 (b) WAIVERS. At any time prior to the Effective Time of the Reorganization, either the Transferor Trust or the Acquiring Trust may by written instrument signed by it (i) waive any inaccuracies in the representations and warranties made to it contained herein and (ii) waive compliance with any of the covenants or conditions made for its benefit contained herein, except that conditions set forth in Sections 6(c) and 7(d) may not be waived. (c) TERMINATION BY THE TRANSFEROR TRUST. The Transferor Trust, on behalf of the Transferor Portfolio, may terminate this Plan with respect to the Transferor Portfolio at any time prior to the Effective Time of the Reorganization by notice to the Acquiring Trust and JPMFAM if (i) a material condition to the performance of the Transferor Trust hereunder or a material covenant of the Acquiring Trust contained herein shall not be fulfilled on or before the date specified for the fulfillment thereof or (ii) a material default or material breach of this Plan shall be made by the Acquiring Trust. In addition, this Plan may be terminated by the Transferor Trust at any time prior to the Effective Time of the Reorganization, whether before or after approval of this Plan by the shareholders of the Transferor Portfolio, without liability on the part of any party hereto, its Trustees, officers or shareholders or J.P. Morgan Investment Management Inc. ("JPMIM") on notice to the other parties in the event that the Board of Trustees determines that proceeding with this Plan is not in the best interests of the shareholders of the Transferor Portfolio. (d) TERMINATION BY THE ACQUIRING TRUST. The Acquiring Trust, on behalf of the Acquiring Portfolio, may terminate this Plan with respect to the Acquiring Portfolio at any time prior to the Effective Time of the Reorganization by notice to the Transferor Trust and JPMIM if (i) a material condition to the performance of the Acquiring Trust hereunder or a material covenant of the Transferor Trust contained herein shall not be fulfilled on or before the date specified for the fulfillment thereof or (ii) a material default or material breach of this Plan shall be made by the Transferor Trust. In addition, this Plan may be terminated by the Acquiring Trust at any time prior to the Effective Time of the Reorganization, whether before or after approval of this Plan by the shareholders of the Transferor Portfolio, without liability on the part of any party hereto, its Trustees, officers or 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. A-13 10. NOTICES Any notice, report, statement or demand required or permitted by any provision of this Plan shall be in writing and shall be given by hand, certified mail or by facsimile transmission, shall be deemed given when received and shall be addressed to the parties hereto at their respective addresses listed below or to such other persons or addresses as the relevant party shall designate as to itself from time to time in writing delivered in like manner: if to the Acquiring Trust (for itself or on behalf of the Acquiring Portfolio): 1211 Avenue of the Americas, 41st Floor New York, New York 10036 with a copy to: Simpson Thacher & Bartlett 425 Lexington Avenue New York, New York 10017 Attention: Sarah E. Cogan, Esq. if to the Transferor Trust (for itself or on behalf of the Transferor Portfolio): 60 State Street Suite 1300 Boston, Massachusetts 02109 with a copy to: Sullivan & Cromwell 125 Broad Street New York, New York 10004 Attention: John E. Baumgardner, Jr., Esq. 11. RELIANCE All covenants and agreements made under this Plan shall be deemed to have been material and relied upon by the Transferor Trust and the Acquiring Trust notwithstanding any investigation made by such party or on its behalf. 12. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT (a) The section and paragraph headings contained in this Plan are for reference purposes only and shall not affect in any way the meaning or interpretation of this Plan. (b) This Plan may be executed in any number of counterparts, each of which shall be deemed an original. A-14 (c) This Plan shall be governed by and construed in accordance with the laws of The State of New York. (d) This Plan shall bind and inure to the benefit of the Transferor Trust, the Transferor Portfolio, the Acquiring Trust and the Acquiring Portfolio and their respective successors and assigns, but no assignment or transfer hereof or of any rights or obligations hereunder shall be made by any party without the written consent of the other parties. Nothing herein expressed or implied is intended or shall be construed to confer upon or give any person, firm or corporation, other than the parties hereto and their respective successors and assigns, any rights or remedies under or by reason of this Plan. (e) The name "J.P. Morgan Institutional Funds" is the designation of its Trustees under a Declaration of Trust dated November 4, 1992, as amended, and all persons dealing with the Transferor Trust must look solely to the Transferor Trust's property for the enforcement of any claims against the Transferor Trust, as none of the Transferor Trustees, officers, agents or shareholders assumes any personal liability for obligations entered into on behalf of the Transferor Trust. No series of the Transferor Trust shall be liable for claims against any other series of the Transferor Trust. (f) The name "Mutual Fund Trust" is the designation of its Trustees under a Declaration of Trust dated February 1, 1994, as amended, and all persons dealing with the Acquiring Trust must look solely to the Acquiring Trust's property for the enforcement of any claims against the Acquiring Trust, as none of the Acquiring Trustees, officers, agents or shareholders assumes any personal liability for obligations entered into on behalf of the Acquiring Trust. No series of the Acquiring Trust shall be liable for claims against any other series of the Acquiring Trust. A-15 IN WITNESS WHEREOF, the undersigned have executed this Plan as of the date first above written. J.P. MORGAN INSTITUTIONAL FUNDS on behalf of J.P. Morgan Institutional Service Prime Money Market Fund By: ----------------------------------------- Name: Title: MUTUAL FUND TRUST on behalf of JPMorgan Prime Money Market Fund By: ----------------------------------------- Name: Title: Agreed and acknowledged with respect to Section 9: J.P. MORGAN CHASE & CO. By: ----------------------------------------- Name: Title: A-16 STATEMENT OF ADDITIONAL INFORMATION (SPECIAL MEETING OF SHAREHOLDERS OF J.P. MORGAN INSTITUTIONAL SERVICE PRIME 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 16, 2001 for the Special Meeting of Shareholders of J.P. Morgan Institutional Service Prime Money Market Fund (the "Merging Fund"), a series of J.P. Morgan Institutional Funds ("JPMIF"), to be held on July 3, 2001. Copies of the Combined Prospectus/Proxy Statement may be obtained at no charge by calling the Merging Fund at 1-800-766-7722. Unless otherwise indicated, capitalized terms used herein and not otherwise defined have the same meanings as are given to them in the Combined Prospectus/Proxy Statement. Further information about the Surviving Fund and the Merging Fund is contained in each of MFT's and JPMIF's Statements of Additional Information, which are incorporated herein by reference. The date of this Statement of Additional Information is May 16, 2001. GENERAL INFORMATION The Shareholders of the Merging Fund are being asked to consider and vote on two proposals. With respect to an Agreement and Plan of Reorganization (the "Reorganization Plan") dated as of __________, 2001 by and among JPMIF, on behalf of the Merging Fund, MFT, on behalf of the Surviving Fund and JPMC, and the transactions contemplated thereby, the Reorganization Plan contemplates the transfer of all of the assets and liabilities of the Merging Fund to the Surviving Fund in exchange for shares issued by MFT in the Surviving Fund that will have an aggregate net asset value equal to the aggregate net asset value of the shares of the Merging Fund that are outstanding immediately before the Effective Time of the Reorganization. Following the exchange, the Merging Fund will make a liquidating distribution of the Surviving Fund shares to its Shareholders, so that a holder of shares in the Merging Fund will receive Premier Class shares of the Surviving of equal value, plus the right to receive any unpaid dividends and distributions that were declared before the Effective Time of the Reorganization. At the Meeting, shareholders will also be asked to consider and vote upon the election of Trustees of JPMIF. A Special Meeting of Shareholders of the Merging Fund to consider the proposals and the related transaction will be held at the offices of J.P. Morgan Chase & Co., 1211 Avenue of the Americas, 41st Floor, New York, NY, on 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 statements and notes thereto of the Merging Fund and the Master Portfolio contained in its Annual Report to Shareholders dated November 30, 2000 are incorporated by reference into this Statement of Additional Information related to this Combined Prospectus/Proxy Statement. The audited financial statements and notes thereto of the Surviving Fund contained in its Annual Report to Shareholders dated August 31, 2000 are incorporated by reference into this Statement of Additional Information related to this Combined Prospectus/Proxy Statement. The financial statements and notes thereto which appear in each of the Merging Fund's and the Surviving Fund's Annual Report to Shareholders have been audited by PricewaterhouseCoopers LLP, whose reports thereon also appear in such Annual Reports and are also incorporated herein by reference. The financial statements and notes thereto for the Merging Fund and the Master Portfolio for the fiscal year ended November 30, 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- PRO FORMA FINANCIAL STATEMENTS THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS) SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- -------------------------------- CERTIFICATES OF DEPOSIT 8.06% ------------------------------- 125,000 125,000 Banc One NA, 5.67%, $ - $125,000 $125,000 5/7/2001 Banca Commerciale Italiana (Italy), 100,000 100,000 (Yankee), 5.75%, 4/9/2001 100,000 100,000 Banco Santander Central Hispano SA (Spain), 50,000 50,000 (Yankee), 6.50%, 6/6/2001 50,000 50,000 Bank Austria AG, Floating Rate, (Austria), (Yankee), 75,000 200,000 275,000 5.63%, 7/16/2001 74,994 199,978 274,972 Bank of Nova Scotia, 50,000 50,000 5.47%, 4/23/2001 (Canada) 50,000 50,000 100,000 100,000 5.53%, 4/27/2001 (Canada) 100,000 100,000 Bank One NA, 70,000 70,000 5.13%, 7/17/2001 70,000 70,000 40,000 40,000 6.65%, 3/22/2001 40,000 40,000 Barclays Bank PLC (United Kingdom), (Yankee), 120,000 120,000 5.53%, 4/10/2001 119,973 119,973 Floating Rate, 5.57%, 260,000 260,000 12/12/2001 259,941 259,941 Floating Rate, 5.59%, 210,000 210,000 9/24/2001 209,937 209,937 Bayerische Hypo-und Vereinsbank AG (Germany), (Yankee), 100,000 100,000 5.58%, 4/27/2001 100,000 100,000 Bayerische Landesbank Girozentrale, 5.22%, 150,000 145,000 295,000 2/20/2002 (Germany) 149,958 144,959 294,917 Canadian Imperial Bank, 100,000 100,000 5.51%, 3/6/2001 (Canada) 100,000 100,000 Commerzbank AG, 7.00%, 25,000 25,000 7/17/2001 (Germany) 25,158 25,158 Credit Agricole Indosuez SA (France), (Yankee), 141,000 101,000 242,000 5.23%, 2/20/2002 140,974 100,981 241,955 Credit Communal de Belgique, 7.06%, 20,000 20,000 5/3/2001 (Belgium) 19,999 19,999 Deutsche Bank AG, (Germany), (Yankee), 150,000 150,000 6.73%, 3/16/2001 149,996 149,996 Dexia Bank (Belgium), 23,600 23,600 5.59%, 4/11/2001 23,602 23,602 Dresdner Bank, 5.27%, 125,000 125,000 7/16/2001 (Germany) 125,009 125,009 Landesbank Baden Wurttenberg, 5.74%, 75,000 75,000 4/9/2001 (Germany) 75,000 75,000 Landesbank Hessen-Thueringen, 205,000 205,000 7.14%, 5/8/2001 (Germany) 204,997 204,997 Landesbank Hessen-Thuringen Girozentrale (Germany), (Yankee), 75,000 75,000 6.54%, 4/6/2001 75,000 75,000 110,000 110,000 6.89%, 4/30/2001 109,997 109,997 Lloyds Bank Plc, 7.20%, 160,000 160,000 6/15/2001(United Kingdom) 159,987 159,987 Rabobank Nederland NV, 6.66%, 105,000 105,000 3/9/2001(Netherlands) 104,999 104,999 Rabobank Nederland NV, 7.05%, 100,000 100,000 5/2/2001(Netherlands) 99,995 99,995 Societe Generale, 5.52%, 32,800 32,800 4/9/2001(France) 32,799 32,799 Suntrust Bank Atlanta, 95,000 95,000 6.77%, 4/18/2001 95,002 95,002 Svenska Handelsbanken, Inc. (Sweden), (Yankee), 50,000 40,000 90,000 5.12%, 8/2/2001 49,996 39,997 89,993 Toronto Dominion Bank, 20,000 20,000 5.53%, 4/9/2001(Canada) 19,999 19,999 UBS (Switzerland) (Yankee), 100,000 100,000 5.10%, 8/2/2001 99,983 99,983 -4- THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS) SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- 130,000 130,000 6.88%, 4/30/2001 129,996 129,996 40,000 40,000 7.03%, 7/19/2001 39,996 39,996 Westdeutsche Landesbank Girozentrale (Germany), (Yankee), 6.66%, 100,000 100,000 11/16/2001 100,005 100,005 World Savings Bank, 160,000 160,000 5.32%, 5/31/2001 160,000 160,000 ------------------------------------ ------------- TOTAL CERTIFICATES OF DEPOSIT 1,950,754 2,127,453 - 4,078,207 ------------------------------- COMMERCIAL PAPER 50.36% ------------------------------- Abbey National North America Corp. (United Kingdom), 170,000 170,000 5.20%, 8/20/2001 165,882 165,882 168,250 168,250 5.40%, 4/24/2001 166,865 166,865 Alliance & Leicester Plc (United Kingdom), 50,000 50,000 5.18%, 4/23/2001 49,601 49,601 100,000 100,000 5.19%, 4/24/2001 99,187 99,187 50,000 50,000 5.19%, 4/25/2001 49,587 49,587 25,000 25,000 5.19%, 4/26/2001 24,790 24,790 30,000 30,000 5.34%, 3/12/2001 29,942 29,942 50,000 50,000 5.34%, 3/13/2001 49,894 49,894 Allied Irish Banks North America (Ireland), 85,000 85,000 5.62%, 3/19/2001 84,761 84,761 70,000 70,000 5.62%, 4/9/2001 69,574 69,574 Alpine Securitization Corp., 40,500 40,500 5.25%, 3/22/2001 40,370 40,370 100,000 100,000 5.52%, 3/22/2001 99,679 99,679 143,191 143,191 5.52%, 3/23/2001 142,710 142,710 Amstel Funding Corp., 30,000 30,000 5.12%, 5/2/2001 29,727 29,727 50,000 50,000 5.32%, 3/16/2001 49,885 49,885 152,000 152,000 5.37%, 5/9/2001 150,456 150,456 95,000 95,000 5.56%, 3/7/2001 94,912 94,912 48,000 48,000 6.67%, 3/15/2001 47,878 47,878 Amsterdam Funding Corp., 125,000 125,000 5.26%, 3/21/2001 124,620 124,620 70,000 70,000 5.34%, 3/12/2001 69,883 69,883 25,000 25,000 5.43%, 4/4/2001 24,873 24,873 50,000 50,000 5.51%, 3/7/2001 49,954 49,954 Aspen Funding Corp., 45,000 45,000 5.32%, 3/16/2001 44,894 44,894 34,085 34,085 5.34%, 3/12/2001 34,028 34,028 Asset Portfolio Funding 37,300 37,300 Corp., 6.47%, 3/16/2001 37,201 37,201 Asset Securitization Corp., 50,000 50,000 6.49%, 3/7/2001 49,953 49,953 3,000 3,000 6.49%, 4/27/2001 2,974 2,974 Associates Corp. of North America, 20,000 20,000 6.68%, 3/2/2001 19,996 19,996 109,000 109,000 ECN, 6.50%, 3/2/2001 108,981 108,981 Associates First Capital Corp., 25,000 25,000 5.26%, 3/21/2001 24,924 24,924 25,000 25,000 5.27%, 3/20/2001 24,928 24,928 11,000 11,000 5.32%, 3/16/2001 10,971 10,971 Atlantis One Funding Corp., -5- THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS) SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- 35,806 35,806 5.13%, 5/9/2001 35,446 35,446 113,295 113,295 5.16%, 5/4/2001 112,239 112,239 50,000 50,000 5.30%, 5/4/2001 49,534 49,534 50,000 50,000 5.31%, 5/4/2001 49,534 49,534 Banco B.I. Creditanstalt SA (United Kingdom), 15,000 15,000 5.01%, 8/22/2001 14,638 14,638 25,000 25,000 6.73%, 3/9/2001 24,964 24,964 Banco Rio De La Plata SA (Argentina), 6.78%, 20,000 20,000 3/8/2001 19,975 19,975 Banco Santander Central Hispano SA (Spain), 50,000 50,000 (Yankee), 5.17%, 8/6/2001 48,894 48,894 Bank of America Corp., 40,000 40,000 4.91%, 7/26/2001 39,200 39,200 29,000 29,000 5.34%, 3/7/2001 28,969 28,969 Bank of America N.A., 75,000 75,000 6.52%, 5/10/2001 74,075 74,075 250,000 250,000 6.69%, 3/12/2001 249,505 249,505 Banque & Caisse d' Epargne de l'Etat (Luxemburg), 38,000 38,000 5.00%, 8/15/2001 37,103 37,103 20,000 20,000 5.17%, 4/9/2001 19,869 19,869 100,000 100,000 4.93%, 8/30/2001 97,568 97,568 Banque Generale du Luxembourg SA (Luxemburg), 100,000 100,000 4.84%, 8/27/2001 97,608 97,608 50,000 50,000 5.50%, 7/16/2001 48,982 48,982 Barton Capital Corp., 31,308 31,308 5.33%, 3/15/2001 31,241 31,241 49,485 49,485 5.33%, 3/2/2001 49,477 49,477 100,000 100,000 5.34%, 3/8/2001 99,893 99,893 115,000 115,000 5.50%, 3/7/2001 114,895 114,895 74,366 74,366 5.52%, 3/13/2001 74,230 74,230 140,154 140,154 5.52%, 3/7/2001 140,026 140,026 BASF AG (Germany), 53,000 53,000 5.09%, 6/5/2001 52,112 52,112 75,000 75,000 6.68%, 3/29/2001 74,623 74,623 Bavaria TRR Corp., 100,000 100,000 5.18%, 4/17/2001 99,159 99,159 49,212 49,212 5.34%, 3/12/2001 49,129 49,129 15,876 15,876 5.51%, 3/5/2001 15,866 15,866 Bavaria Universal Funding Co., Floating 50,000 50,000 Rate, 5.54%, 8/10/2001 50,000 50,000 Bayerische Hypo Vereinsbank (Germany), 75,000 75,000 5.60%, 3/13/2001 74,860 74,860 90,000 90,000 5.60%, 5/21/2001 88,811 88,811 BBL North American Funding Corp., 5.20%, 50,000 50,000 3/26/2001 49,806 49,806 BCI Funding Corp., 100,000 100,000 5.41%, 4/24/2001 99,189 99,189 Beta Finance Corp., Inc. (Channel Islands), 50,000 50,000 6.73%, 3/22/2001 49,810 49,810 Bills Securitization 82,500 82,500 LTD, 5.33%, 5/8/2001 81,680 81,680 Blue Ridge Asset Funding Corp., 23,000 23,000 5.34%, 3/7/2001 22,979 22,979 83,478 83,478 5.48%, 3/23/2001 83,199 83,199 50,015 50,015 5.52%, 3/14/2001 49,916 49,916 -6- THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS) SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- 23,000 23,000 5.53%, 3/9/2001 22,972 22,972 Bradford & Bingley Plc (United Kingdom), 40,000 40,000 6.38%, 3/8/2001 39,950 39,950 25,000 25,000 6.38%, 4/4/2001 24,867 24,867 50,000 50,000 6.38%, 4/9/2001 49,695 49,695 Brahms Funding Corp., 90,000 90,000 5.27%, 3/20/2001 89,737 89,737 40,000 40,000 5.45%, 4/25/2001 39,670 39,670 140,000 140,000 5.61%, 3/26/2001 139,459 139,459 Canada (Government of), 65,000 65,000 5.08%, 6/7/2001 63,885 63,885 35,000 35,000 6.52%, 6/7/2001 34,400 34,400 CBA Finance, 5.45%, 47,650 47,650 4/11/2001 47,354 47,354 CC USA Inc., 30,000 30,000 5.00%, 8/15/2001 29,290 29,290 35,000 35,000 5.02%, 8/6/2001 34,229 34,229 Certain Funding Corp., 45,815 45,815 5.46%, 5/1/2001 45,397 45,397 59,000 59,000 6.51%, 3/12/2001 58,885 58,885 Charta Corp., 5.34%, 50,000 50,000 3/14/2001 49,901 49,901 Christiania Capital 40,000 40,000 Corp., 4.93%, 8/28/2001 39,038 39,038 Ciesco L.P., 31,000 31,000 5.18%, 4/12/2001 30,807 30,807 30,000 30,000 5.18%, 4/18/2001 29,786 29,786 50,000 50,000 5.39%, 4/12/2001 49,688 49,688 50,000 50,000 5.39%, 4/18/2001 49,643 49,643 Citibank Capital Markets Assets LLC, 5.34%, 65,000 65,000 3/14/2001 64,848 64,848 Citibank Credit Card Master Trust, 100,000 100,000 0.00%, 3/2/2001 99,985 99,985 100,000 100,000 0.00%, 3/7/2001 99,908 99,908 Citicorp, 300,000 300,000 5.51%, 3/2/2001 299,955 299,955 200,000 200,000 5.52%, 3/5/2001 199,878 199,878 Clipper Receivables 105,000 105,000 Corp., 5.26%, 3/21/2001 104,680 104,680 Comision Federal De Electricdad (Mexico), 150,000 150,000 6.48%, 3/20/2001 149,495 149,495 Commerzbank US Finance, 95,500 95,500 5.50%, 3/13/2001 95,325 95,325 100,000 100,000 5.50%, 3/7/2001 99,908 99,908 100,000 100,000 5.50%, 3/8/2001 99,893 99,893 200,000 200,000 5.53%, 3/13/2001 199,633 199,633 Compass Securitization LLC, 7,191 7,191 5.19%, 4/25/2001 7,131 7,131 56,000 56,000 5.25%, 3/22/2001 55,820 55,820 44,424 44,424 5.34%, 3/12/2001 44,337 44,337 30,000 30,000 5.34%, 3/15/2001 29,925 29,925 120,000 120,000 5.52%, 3/16/2001 119,725 119,725 60,000 60,000 6.50%, 3/15/2001 59,851 59,851 Corporate Asset Funding, 60,000 60,000 5.17%, 4/3/2001 59,704 59,704 Corporate Receivables 60,000 60,000 Corp., 5.32%, 5/10/2001 59,388 59,388 Credit Suisse First Boston, Inc., 100,000 100,000 6.71%, 3/12/2001 99,802 99,802 -7- THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS) SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- 75,000 75,000 6.71%, 3/14/2001 74,824 74,824 70,000 70,000 5.24%, 7/20/2001 68,594 68,594 Credit Suisse First Boston, Inc. (Switzerland), 40,000 40,000 5.02%, 8/6/2001 39,122 39,122 40,000 40,000 5.12%, 5/25/2001 39,496 39,496 50,000 50,000 5.12%, 5/29/2001 49,336 49,336 40,000 40,000 5.18%, 4/12/2001 39,699 39,699 75,000 75,000 5.18%, 4/20/2001 74,327 74,327 26,000 26,000 5.33%, 3/5/2001 25,981 25,981 50,000 50,000 5.34%, 3/13/2001 49,892 49,892 Credit Suisse First Boston International, (Switzerland), 36,000 36,000 6.63%, 4/16/2001 35,703 35,703 20,000 20,000 6.66%, 5/7/2001 19,760 19,760 CXC Inc., 105,000 105,000 5.11%, 5/15/2001 103,596 103,596 70,000 70,000 5.17%, 4/2/2001 69,615 69,615 100,000 100,000 5.18%, 4/23/2001 99,199 99,199 50,000 50,000 5.19%, 4/24/2001 49,592 49,592 50,000 50,000 5.19%, 4/27/2001 49,568 49,568 174,000 174,000 5.34%, 3/8/2001 173,783 173,783 75,000 75,000 5.59%, 4/4/2001 74,609 74,609 Dakota Certificate Program (Citibank Credit Card Master Trust I), 147,956 147,956 5.51%, 3/7/2001 147,821 147,821 Danske Corp. (Denmark), 80,000 80,000 5.01%, 8/20/2001 78,064 78,064 75,000 75,000 5.34%, 3/13/2001 74,860 74,860 Den Danske Corp. (Denmark), 6.37%, 40,000 40,000 3/14/2001 39,908 39,908 Den Norske Bank (Norway), 75,000 75,000 5.03%, 8/2/2001 73,386 73,386 50,000 50,000 5.13%, 5/11/2001 49,416 49,416 162,000 162,000 5.17%, 5/2/2001 160,535 160,535 Depfa Bank Europe Plc (United Kingdom), 65,000 65,000 5.09%, 6/6/2001 63,975 63,975 125,000 125,000 5.13%, 5/10/2001 123,459 123,459 35,000 35,000 5.16%, 5/4/2001 34,605 34,605 65,000 65,000 5.17%, 4/4/2001 64,604 64,604 100,000 100,000 5.17%, 5/1/2001 98,921 98,921 40,000 40,000 5.18%, 4/12/2001 39,741 39,741 18,000 18,000 5.18%, 4/16/2001 17,869 17,869 75,000 75,000 5.18%, 4/17/2001 74,385 74,385 25,000 25,000 5.27%, 3/20/2001 24,916 24,916 42,839 42,839 5.28%, 3/19/2001 42,703 42,703 125,000 125,000 5.32%, 3/16/2001 124,668 124,668 75,000 75,000 5.33%, 3/6/2001 74,942 74,942 75,500 75,500 5.34%, 3/13/2001 75,340 75,340 Deutsche Bank Financial Inc. (Germany), 5.16%, 193,500 193,500 5/4/2001 191,467 191,467 Dexia CLF Finance Co. (France), 100,000 100,000 5.60%, 3/20/2001 99,704 99,704 50,000 50,000 5.60%, 4/27/2001 49,569 49,569 Dexia Delaware LLC, 70,000 70,000 5.16%, 8/10/2001 68,416 68,416 Diageo Plc (United Kingdom), 5.17%, 50,000 50,000 4/10/2001 49,664 49,664 -8- THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS) SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- Dorada Finance, Inc., 47,000 47,000 5.44%, 4/19/2001 46,656 46,656 30,890 30,890 5.47%, 4/24/2001 30,640 30,640 31,000 31,000 5.47%, 4/25/2001 30,744 30,744 40,500 40,500 5.47%, 4/30/2001 40,136 40,136 Dresdner U.S. Finance Inc. (Germany), 5.34%, 10,000 10,000 3/12/2001 9,983 9,983 Edison Asset Securitization LLC, 100,000 100,000 5.34%, 3/7/2001 99,906 99,906 80,000 80,000 5.34%, 3/9/2001 79,900 79,900 150,000 150,000 5.50%, 3/6/2001 149,886 149,886 Edison Asset Securitization LLC, 150,000 150,000 5.50%, 3/7/2001 149,863 149,863 Enterprise Funding Corp., 38,235 38,235 6.52%, 3/9/2001 38,180 38,180 75,274 75,274 6.52%, 3/15/2001 75,088 75,088 31,725 31,725 6.52%, 3/19/2001 31,622 31,622 5,007 5,007 6.52%, 4/25/2001 4,965 4,965 Fairway Finance Corp., 45,000 45,000 4.89%, 8/23/2001 43,937 43,937 15,000 15,000 5.01%, 8/8/2001 14,664 14,664 6,392 6,392 5.48%, 4/16/2001 6,348 6,348 40,000 40,000 6.48%, 3/15/2001 39,901 39,901 Falcon Asset Securitization Corp., 37,955 37,955 5.33%, 3/15/2001 37,874 37,874 75,000 75,000 5.34%, 3/7/2001 74,931 74,931 45,000 45,000 5.51%, 3/13/2001 44,916 44,916 171,000 171,000 5.64%, 3/13/2001 170,682 170,682 57,100 57,100 5.65%, 3/9/2001 57,029 57,029 Forrestal Funding Master Trust, 102,140 102,140 5.47%, 4/24/2001 101,313 101,313 140,000 140,000 6.64%, 3/16/2001 139,621 139,621 Forrestral Funding Master Trust, 30,000 30,000 5.45%, 4/12/2001 29,809 29,809 35,000 35,000 5.45%, 4/24/2001 34,717 34,717 Four Winds Funding Corp., 13,000 13,000 5.17%, 4/10/2001 12,921 12,921 70,000 70,000 5.28%, 3/19/2001 69,807 69,807 26,480 26,480 5.49%, 4/10/2001 26,320 26,320 50,000 50,000 #, 5.52%, 3/21/2001 49,847 49,847 73,000 73,000 5.54%, 3/19/2001 72,799 72,799 Galaxy Funding, Inc., 29,500 29,500 5.01%, 8/10/2001 28,832 28,832 50,000 50,000 5.04%, 7/30/2001 48,943 48,943 90,000 90,000 5.17%, 8/10/2001 87,963 87,963 64,000 64,000 5.33%, 3/15/2001 63,863 63,863 73,000 73,000 5.56%, 3/15/2001 72,843 72,843 50,000 50,000 5.56%, 3/16/2001 49,885 49,885 General Electric Capital Corp., 100,000 100,000 5.00%, 7/11/2001 98,167 98,167 80,000 80,000 5.11%, 7/11/2001 78,534 78,534 50,000 50,000 5.18%, 4/19/2001 49,630 49,630 115,000 115,000 5.18%, 4/20/2001 114,133 114,133 33,000 33,000 5.19%, 4/25/2001 32,728 32,728 -9- THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS) SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- 50,000 50,000 6.66%, 3/7/2001 49,946 49,946 Giro Funding U.S. Corp., 2,164 2,164 5.52%, 3/1/2001 2,164 2,164 Giro Multi Funding Corp., 60,000 60,000 5.27%, 3/20/2001 59,826 59,826 3,365 3,365 5.52%, 3/1/2001 3,365 3,365 121,000 121,000 5.53%, 3/20/2001 120,648 120,648 Goldman Sachs Group Inc., 225,000 225,000 5.18%, 4/12/2001 223,529 223,529 125,000 125,000 5.18%, 4/16/2001 124,109 124,109 200,000 200,000 5.76%, 4/12/2001 198,677 198,677 Govco, Inc., 90,000 90,000 5.16%, 5/4/2001 89,160 89,160 60,000 60,000 5.32%, 5/16/2001 59,335 59,335 Grand Funding Corp., 60,000 60,000 5.34%, 3/13/2001 59,890 59,890 75,000 75,000 5.34%, 3/14/2001 74,851 74,851 40,000 40,000 #, 5.51%, 3/12/2001 39,933 39,933 Greenwich Funding Corp., 85,000 85,000 5.33%, 3/6/2001 84,935 84,935 40,000 40,000 5.34%, 3/7/2001 39,963 39,963 100,000 100,000 #, 5.52%, 3/6/2001 99,919 99,919 57,468 57,468 #, 6.54%, 3/6/2001 57,421 57,421 Greyhawk Funding LLC, 53,000 53,000 5.51%, 4/24/2001 52,568 52,568 90,000 90,000 5.52%, 3/14/2001 89,821 89,821 220,000 220,000 #, 5.47%, 5/4/2001 217,891 217,891 136,300 136,300 #, 6.40%, 6/8/2001 133,976 133,976 Halifax PLC (United Kingdom), 25,000 25,000 5.17%, 4/3/2001 24,861 24,861 75,000 75,000 5.45%, 7/16/2001 73,487 73,487 30,000 30,000 5.60%, 4/10/2001 29,816 29,816 150,000 150,000 6.61%, 5/2/2001 148,347 148,347 HD Real Estate Funding 160,263 160,263 Corp., 5.17%, 5/22/2001 157,923 157,923 HomeSide Lending, Inc., 25,000 25,000 5.50%, 3/21/2001 24,924 24,924 12,775 12,775 5.50%, 3/22/2001 12,734 12,734 14,716 14,716 5.50%, 3/23/2001 14,667 14,667 Ing America Insurance Holdings, 5.01%, 73,000 73,000 8/22/2001 71,211 71,211 Jupiter Securitization Corp., 21,409 21,409 5.32%, 3/16/2001 21,360 21,360 32,755 32,755 5.34%, 3/8/2001 32,720 32,720 20,870 20,870 5.34%, 3/13/2001 20,832 20,832 50,000 50,000 5.34%, 3/14/2001 49,901 49,901 98,710 98,710 5.52%, 3/7/2001 98,620 98,620 211,167 211,167 5.52%, 3/12/2001 210,812 210,812 47,435 47,435 5.53%, 3/8/2001 47,384 47,384 41,880 41,880 6.40%, 6/12/2001 41,137 41,137 K2 (USA) LLC, 38,000 38,000 5.01%, 8/10/2001 37,142 37,142 28,000 28,000 5.15%, 8/7/2001 27,379 27,379 38,000 38,000 5.17%, 5/2/2001 37,653 37,653 52,000 52,000 5.17%, 8/9/2001 50,828 50,828 14,000 14,000 5.47%, 4/25/2001 13,884 13,884 -10- THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS) SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- 50,000 50,000 6.94%, 4/17/2001 49,569 49,569 Kitty Hawk Funding Corp., 50,000 50,000 5.00%, 8/15/2001 48,829 48,829 69,647 69,647 5.18%, 8/15/2001 68,015 68,015 Landesbank Schleswig Holstein (Germany), 55,000 55,000 5.03%, 7/31/2001 53,553 53,553 40,000 40,000 5.09%, 6/6/2001 39,322 39,322 50,000 50,000 5.10%, 6/4/2001 49,165 49,165 100,000 100,000 5.11%, 6/1/2001 98,382 98,382 215,000 215,000 5.19%, 4/25/2001 213,216 213,216 Liberty Street Funding Corp., 32,000 32,000 5.26%, 3/21/2001 31,902 31,902 19,880 19,880 5.55%, 4/20/2001 19,729 19,729 Links Finance LLC, 100,000 100,000 5.01%, 8/21/2001 97,552 97,552 20,000 20,000 #, 5.16%, 8/1/2001 19,572 19,572 Lloyds Bank Plc (United Kingdom), 70,000 70,000 5.59%, 3/12/2001 69,880 69,880 65,000 65,000 5.59%, 3/16/2001 64,848 64,848 Lloyds TSB Bank PLC (United Kingdom), 5.14%, 40,000 40,000 8/1/2001 39,148 39,148 Market Street Funding, 22,064 22,064 5.34%, 3/13/2001 22,024 22,024 Mont Blanc Capital 20,000 20,000 Corp., 5.33%, 3/6/2001 19,985 19,985 Montauk Funding Corp., 40,000 40,000 5.34%, 3/9/2001 39,951 39,951 100,000 100,000 5.51%, 3/9/2001 99,878 99,878 Monte Rosa Capital Corp., 10,000 10,000 5.20%, 3/26/2001 9,962 9,962 26,233 26,233 5.25%, 3/22/2001 26,149 26,149 42,000 42,000 5.26%, 3/21/2001 41,872 41,872 36,000 36,000 5.51%, 3/19/2001 35,901 35,901 Morgan Stanley Dean Witter & Co., 150,000 150,000 5.18%, 4/23/2001 148,792 148,792 80,000 80,000 5.33%, 3/15/2001 79,825 79,825 Floating Rate, 5.64%, 75,000 75,000 5/30/2001 75,000 75,000 Moriarty LLC, 60,000 60,000 5.00%, 8/13/2001 58,603 58,603 65,000 65,000 5.16%, 8/9/2001 63,538 63,538 65,000 65,000 5.21%, 8/13/2001 63,487 63,487 250,000 250,000 5.33%, 5/8/2001 247,515 247,515 26,400 26,400 5.36%, 7/16/2001 25,876 25,876 89,000 89,000 5.56%, 4/9/2001 88,472 88,472 80,000 80,000 5.92%, 7/5/2001 78,390 78,390 National Rural Utilities Cooperative Finance 45,000 45,000 Corp., 5.04%, 7/19/2001 43,913 43,913 Nationwide Building Society (United Kingdom), 100,000 100,000 5.18%, 8/13/2001 97,685 97,685 65,000 65,000 5.73%, 4/3/2001 64,663 64,663 Nationwide Building Society (United Kingdom), 117,700 117,700 6.60%, 3/1/2001 117,700 117,700 46,000 46,000 6.60%, 3/22/2001 45,826 45,826 Ness Limited, 100,000 100,000 5.45%, 4/20/2001 99,243 99,243 -11- THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS) SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- 57,900 57,900 5.52%, 3/16/2001 57,768 57,768 New Castle Certificate Program (Discover Card Master Trust I, Ser. 2000-A), 40,000 40,000 5.55%, 3/22/2001 39,871 39,871 175,000 175,000 ECN, 6.66%, 3/6/2001 174,840 174,840 Newport Funding Corp., 65,000 65,000 5.17%, 4/6/2001 64,643 64,643 16,534 16,534 5.32%, 3/16/2001 16,495 16,495 20,000 20,000 5.34%, 3/7/2001 19,982 19,982 50,000 50,000 5.34%, 3/12/2001 49,916 49,916 68,000 68,000 5.58%, 4/11/2001 67,574 67,574 Nordbanken NA Inc. (Sweden), 6.37%, 85,000 85,000 3/14/2001 84,804 84,804 Northern Rock Plc (United Kingdom), 25,000 25,000 5.18%, 4/17/2001 24,823 24,823 25,000 25,000 5.33%, 3/6/2001 24,978 24,978 Old Line Funding Corp., 39,372 39,372 5.34%, 3/8/2001 39,330 39,330 35,000 35,000 5.34%, 3/14/2001 34,931 34,931 65,556 65,556 5.52%, 3/14/2001 65,426 65,426 Parthenon Receivables Funding LLC, 25,116 25,116 4.87%, 8/28/2001 24,508 24,508 31,050 31,050 5.33%, 3/5/2001 31,031 31,031 25,000 25,000 5.34%, 3/13/2001 24,953 24,953 Pennine Funding LLC, 40,000 40,000 5.15%, 8/1/2001 39,147 39,147 45,000 45,000 5.49%, 4/19/2001 44,668 44,668 Pooled Accounts Receivable Capital Corp., 50,000 50,000 5.32%, 3/16/2001 49,885 49,885 50,000 50,000 5.52%, 3/16/2001 49,885 49,885 Preferred Rec Funding (PREFCO), 110,000 110,000 5.32%, 3/16/2001 109,749 109,749 65,640 65,640 5.62%, 3/13/2001 65,518 65,518 Procter & Gamble Co., 50,000 50,000 ECN, 5.60%, 4/5/2001 49,731 49,731 Quincy Capital Corp., 100,032 100,032 5.51%, 3/12/2001 99,864 99,864 34,212 34,212 5.51%, 3/9/2001 34,170 34,170 Receivables Capital Corp., 25,320 25,320 5.18%, 4/16/2001 25,145 25,145 35,000 35,000 5.34%, 3/12/2001 34,941 34,941 90,462 90,462 5.51%, 3/9/2001 90,352 90,352 60,000 60,000 5.52%, 3/12/2001 59,899 59,899 Repeat Offering Securitization Entity 71,340 71,340 (ROSE), 5.53%, 4/23/2001 70,768 70,768 Salomon Smith Barney Inc., 35,000 35,000 5.17%, 4/10/2001 34,788 34,788 100,000 100,000 5.18%, 4/17/2001 99,292 99,292 50,000 50,000 5.18%, 4/18/2001 49,639 49,639 60,000 60,000 5.23%, 3/2/2001 59,991 59,991 125,000 125,000 5.33%, 3/5/2001 124,913 124,913 100,000 100,000 5.33%, 3/6/2001 99,911 99,911 San Paolo IMI US Financial Co. (Brazil), 84,000 84,000 5.02%, 8/6/2001 82,146 82,146 -12- THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS) SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- Santander Hispano Finance Delaware Inc. 40,000 40,000 (Spain), 5.02%, 8/6/2001 39,115 39,115 SBC Communications Inc., 34,000 34,000 5.17%, 4/11/2001 33,793 33,793 Sheffield Receivables Corp., 52,900 52,900 5.33%, 3/5/2001 52,868 52,868 75,000 75,000 5.33%, 3/15/2001 74,840 74,840 40,000 40,000 5.34%, 3/8/2001 39,957 39,957 53,500 53,500 5.52%, 3/12/2001 53,405 53,405 175,000 175,000 5.52%, 3/15/2001 174,625 174,625 150,000 150,000 5.53%, 3/19/2001 149,588 149,588 150,000 150,000 5.62%, 3/20/2001 149,559 149,559 26,800 26,800 6.50%, 3/12/2001 26,753 26,753 Sigma Finance Corp. (Channel Islands), 150,000 150,000 #, 5.14%, 8/2/2001 146,778 146,778 83,500 83,500 #, 5.16%, 8/2/2001 81,707 81,707 66,400 66,400 #, 5.47%, 4/23/2001 65,872 65,872 45,000 45,000 #, 6.37%, 6/11/2001 44,213 44,213 Sigma Finance Corp., 100,000 100,000 5.03%, 8/2/2001 97,857 97,857 50,000 50,000 5.16%, 5/4/2001 49,532 49,532 Silver Tower U.S. Funding LLC, 135,000 135,000 4.98%, 8/29/2001 131,701 131,701 95,000 95,000 5.25%, 8/17/2001 92,721 92,721 Societe Generale NA (France), 100,000 100,000 5.19%, 4/26/2001 99,152 99,152 124,700 124,700 5.34%, 3/7/2001 124,567 124,567 Special Purpose Accounts Receivable Cooperative Corp., 25,000 25,000 5.16%, 5/3/2001 24,770 24,770 117,000 117,000 5.47%, 4/26/2001 116,017 116,017 18,320 18,320 5.54%, 4/12/2001 18,203 18,203 Spintab-Swedmortgage AB (Sweden), 60,000 60,000 5.13%, 5/9/2001 59,396 59,396 78,669 78,669 5.16%, 5/3/2001 77,945 77,945 Surrey Funding Corp., 43,500 43,500 5.16%, 5/3/2001 43,099 43,099 30,000 30,000 5.49%, 3/26/2001 29,886 29,886 Svenska Handelsbanken, Inc. (Sweden), 16,500 16,500 5.03%, 8/1/2001 16,149 16,149 65,000 65,000 5.20%, 8/15/2001 63,471 63,471 25,000 25,000 5.28%, 3/19/2001 24,930 24,930 69,760 69,760 5.32%, 3/16/2001 69,597 69,597 25,000 25,000 5.33%, 3/15/2001 24,938 24,938 156,500 156,500 5.34%, 3/12/2001 156,195 156,195 Swedish Export Credit 10,300 10,300 (Sweden), 5.03%, 8/1/2001 10,083 10,083 Thames Asset Global Securitization (TAGS), 22,573 22,573 5.11%, 5/15/2001 22,326 22,326 32,000 32,000 5.61%, 4/17/2001 31,769 31,769 86,394 86,394 6.51%, 3/15/2001 86,179 86,179 Total Fina Elf SA 202,000 202,000 (France), 5.57%, 3/1/2001 202,000 202,000 Triple-A One Funding Corp., 82,107 82,107 5.51%, 3/8/2001 82,019 82,019 24,963 24,963 5.61%, 4/5/2001 24,829 24,829 -13- THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS) SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- Tulip Funding Corp., 62,500 62,500 5.16%, 5/4/2001 61,917 61,917 56,749 56,749 5.34%, 3/8/2001 56,688 56,688 35,000 35,000 5.34%, 3/13/2001 34,936 34,936 150,000 150,000 5.49%, 5/1/2001 148,625 148,625 46,687 46,687 #, 5.07%, 8/28/2001 45,534 45,534 UBS Finance LLC (Switzerland), 5.03%, 85,000 85,000 8/1/2001 83,190 83,190 Unibanco - Grand Cayman, Series A, (Germany), 60,000 60,000 5.55%, 7/11/2001 58,812 58,812 Variable Funding Capital Corp., 45,000 45,000 5.13%, 5/10/2001 44,541 44,541 100,000 100,000 5.47%, 4/27/2001 99,145 99,145 Victory Receivables Corp., 68,000 68,000 5.42%, 4/25/2001 67,437 67,437 50,000 50,000 5.57%, 4/11/2001 49,687 49,687 Wal-Mart Funding Corp., 116,000 116,000 5.25%, 3/22/2001 115,628 115,628 25,000 25,000 5.53%, 3/22/2001 24,920 24,920 WCP Funding Inc., 29,000 29,000 5.11%, 5/14/2001 28,687 28,687 50,000 50,000 5.33%, 5/14/2001 49,460 49,460 Wells Fargo & Co., 45,000 45,000 5.38%, 5/4/2001 44,575 44,575 Windmill Funding Corp., 69,000 69,000 5.26%, 3/21/2001 68,790 68,790 8,000 8,000 5.28%, 3/19/2001 7,977 7,977 25,000 25,000 5.34%, 3/13/2001 24,953 24,953 110,800 110,800 5.51%, 3/7/2001 110,699 110,699 40,000 40,000 5.52%, 3/7/2001 39,963 39,963 75,000 75,000 5.52%, 3/20/2001 74,782 74,782 ------------------------------------ TOTAL COMMERCIAL PAPER 12,287,567 13,183,427 - 25,470,994 ------------------------------- CORPORATE BONDS & NOTES 21.63% ------------------------------- ASSET BACK SECURITIES 3.65% ACE Overseas Corp., FRN, 47,000 47,000 6.51%, 3/16/2001 46,999 46,999 Beta Finance Corp., Inc., (Channel Islands), 75,000 75,000 FRN, 5.56%, 8/14/2001 74,998 74,998 30,000 30,000 MTN, #, 6.90%, 3/30/2001 30,000 30,000 85,000 85,000 MTN, #, 6.94%, 5/2/2001 85,000 85,000 MTN, FRN, 5.36%, 50,000 50,000 4/30/2001 50,000 50,000 MTN, FRN, #, 5.55%, 125,000 125,000 5/8/2001 125,000 125,000 MTN, FRN, #, 6.11%, 50,000 50,000 3/30/2001 50,000 50,000 CC USA Inc., (Centauri 0 Corp.), 100,000 100,000 MTN, #, 7.07%, 7/25/2001 100,000 100,000 35,000 35,000 MTN, #, 7.12%, 5/7/2001 35,000 35,000 75,000 75,000 MTN, #, 7.48%, 6/7/2001 75,000 75,000 MTN, FRN, #, 5.56%, 50,000 50,000 4/20/2001 50,000 50,000 Ciesco L.P., Ser. A, MTN, FRN, 5.54%, 120,000 120,000 10/15/2001 120,000 120,000 MTN, FRN, #, 5.54%, 80,000 80,000 9/20/2001 80,000 80,000 Dorada Finance Inc., 70,000 70,000 MTN, #, 7.06%, 7/17/2001 70,000 70,000 K2 (USA) LLC, MTN, FRN, #, 5.57%, 55,000 55,000 7/16/2001 55,000 55,000 -14- THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS) SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- MTN, FRN, #, 5.57%, 100,000 100,000 8/15/2001 100,000 100,000 Liberty Lighthouse U.S. Capital Co., MTN, FRN, 120,000 120,000 #, 5.36%, 3/5/2001 120,000 120,000 Links Finance LLC, MTN, 75,000 75,000 FRN, #, 5.55%, 5/11/2001 74,998 74,998 Restructured Asset Securities with Enhanced Returns (RACERS), 1999 Ser. MM-35, FRN, #, 37,000 37,000 5.60%, 12/17/2001 37,000 37,000 Restructured Asset Securities with Enhanced Returns (RACERS), 2000 Ser. MM-7, FRN, #, 90,000 90,000 5.40%, 5/30/2001 89,988 89,988 Restructured Asset Securities with Enhanced Returns (RACERS), 2000 Ser. MM-10, FRN, #, 100,000 100,000 5.59%, 6/22/2001 100,000 100,000 Sigma Finance Corp., (Channel Islands), MTN, FRN, #, 5.46%, 100,000 100,000 5/2/2001 100,000 100,000 MTN, FRN, #, 5.56%, 75,000 75,000 3/5/2001 75,000 75,000 MTN, FRN, #, 5.57%, 100,000 100,000 5/15/2001 100,000 100,000 ------------------------------------ TOTAL ASSET BACKED SECURITIES 1,843,983 - - 1,843,983 AUTOMOTIVE 0.48% American Honda Finance Corp., MTN, FRN, #, 60,000 60,000 6.55%, 6/19/2001 60,000 60,000 General Motors Acceptance Corp., MTN, FRN, 5.61%, 5,000 5,000 7/27/2001 5,000 5,000 MTN, FRN, 5.81%, 30,000 30,000 4/30/2001 30,006 30,006 Toyota Motor Credit Corp., MTN, FRN, 6.37%, 150,000 150,000 4/23/2001 149,992 149,992 ------------------------------------ TOTAL AUTOMOTIVE 244,998 - - 244,998 BANKING 6.92% ABBEY NATIONAL TREASURY SERVICES PLC (UNITED KINGDOM), (YANKEE), 210,000 210,000 FRN, 5.44%, 10/25/2001 209,932 209,932 MTN, FRN, 5.47%, 350,000 350,000 6/15/2001 349,921 349,921 American Express Centurion Bank, 100,000 100,000 FRN, 5.54%, 2/14/2002 100,000 100,000 MTN, FRN, 5.53%, 50,000 50,000 4/12/2001 49,999 49,999 200,000 200,000 MTN, FRN, 5.54%, 5/8/2001 200,000 200,000 MTN, FRN, 5.56%, 50,000 50,000 11/20/2001 50,000 50,000 Bank of America, N.A., 50,000 50,000 5.13%, 7/17/2001 50,000 50,000 23,600 23,600 6.60%, 10/30/2001 23,775 23,775 50,000 50,000 FRN, 6.71%, 9/6/2001 50,019 50,019 MTN, FRN, 5.66%, 70,000 70,000 7/11/2001 70,002 70,002 Bank One, N.A., 39,000 39,000 FRN, 5.60%, 12/17/2001 39,011 39,011 100,000 100,000 FRN, 5.60%, 9/10/2001 100,013 100,013 85,000 85,000 FRN, 5.62%, 2/15/2002 85,040 85,040 MTN, FRN, 5.64%, 85,000 85,000 12/12/2001 84,981 84,981 Bayerische Landesbank Girozentrale, FRN, (Germany), (Yankee), 190,000 190,000 5.64%, 3/1/2001 190,000 190,000 -15- THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS) SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- Commerzbank AG (Germany), (Yankee), 160,000 160,000 FRN, 5.34%, 6/29/2001 159,968 159,968 200,000 500,000 700,000 FRN, 5.48%, 4/26/2001 199,991 499,985 699,976 240,000 240,000 FRN, 5.50%, 3/19/2001 239,994 239,994 Credit Suisse First Boston Inc. (Switzerland), MTN, FRN, 100,000 100,000 5.54%, 5/9/2001 99,998 99,998 Dexia Bank (Belgium), (Yankee), FRN, 5.63%, 100,000 100,000 3/1/2001 100,000 100,000 Dresdner Bank AG, (Germany), (Yankee), 246,000 246,000 FRN, 5.31%, 3/28/2001 245,993 245,993 Fleet National Bank, MTN, FRN, 5.77%, 85,000 85,000 5/24/2001 85,019 85,019 National City Bank, 44,000 44,000 6.98%, 8/2/2001 43,993 43,993 70,000 70,000 FRN, 5.54%, 12/4/2001 70,000 70,000 50,000 50,000 MTN, FRN, 6.27%, 7/5/2001 49,992 49,992 Wachovia Bank, N.A., 50,000 50,000 FRN, 5.55%, 1/7/2002 50,000 50,000 ------------------------------------ TOTAL BANKING 2,953,648 543,978 - 3,497,626 DIVERSIFIED 0.37% Abbott Labs, 5.25%, 100,000 100,000 3/1/2002 100,000 100,000 General Electric Capital Corp., Series A, 7.38%, 85,000 85,000 5/23/2001 85,000 85,000 ------------------------------------ TOTAL DIVERSIFIED - 185,000 - 185,000 FINANCIAL SERVICES 7.71% Associates Corp. of North America, 26,000 26,000 FRN, 5.48%, 2/22/2002 26,045 26,045 75,000 75,000 FRN, 6.46%, 6/26/2001 75,000 75,000 SUB, FRN, 6.58%, 110,000 110,000 3/15/2001 110,000 110,000 Bear Stearns Companies, Inc., FRN, 5.78%, 85,000 85,000 8/1/2001 85,065 85,065 Bollingbrent L.P., Ser. 1999, FRDO, 5.67%, 5,000 5,000 3/6/2001 5,000 5,000 Citigroup Inc., 175,000 140,000 315,000 MTN, FRN, 5.52%, 4/4/2001 175,000 140,000 315,000 250,000 150,000 400,000 MTN, FRN, 5.54%, 6/6/2001 250,000 150,000 400,000 Goldman Sachs Group, Inc., 244,000 244,000 FRN, #, 5.80%, 3/15/2002 244,000 244,000 MTN, FRN, 5.59%, 67,000 67,000 2/11/2002 67,113 67,113 Homeside Lending, Inc., MTN, FRN, 5.68%, 5,000 5,000 4/24/2001 5,001 5,001 Household Finance Corp., MTN, FRN, 5.36%, 50,000 50,000 3/30/2001 49,995 49,995 MTN, FRN, 5.76%, 25,000 25,000 7/16/2001 25,004 25,004 MTN, FRN, 6.62%, 100,000 100,000 6/22/2001 100,027 100,027 MTN, FRN, 6.65%, 37,000 37,000 6/21/2001 37,011 37,011 Merrill Lynch & Co., Inc., MTN, FRN, 5.48%, 4,885 4,885 8/10/2001 4,887 4,887 350,000 350,000 MTN, FRN, 5.52%, 3/6/2001 349,999 349,999 MTN, FRN, 5.56%, 75,000 75,000 11/19/2001 75,000 75,000 70,000 70,000 MTN, FRN, 5.64%,1/4/2002 69,982 69,982 -16- THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS) SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- MTN, FRN, 5.65%, 70,000 70,000 3/11/2002 70,065 70,065 Morgan Stanley Dean Witter & Co., 260,000 260,000 FRN, 5.59%, 3/15/2002 260,000 260,000 50,000 50,000 FRN, 6.73%, 12/17/2001 50,124 50,124 MTN, FRN, 5.55%, 150,000 150,000 3/16/2001 150,000 150,000 MTN, FRN, 6.62%, 50,000 50,000 9/14/2001 50,061 50,061 MTN, FRN, 5.64%, 55,000 55,000 5/15/2001 55,000 55,000 MTN, FRN, 6.67%, 35,000 35,000 3/13/2001 35,000 35,000 MTN, FRN, 6.68%, 75,000 75,000 3/15/2001 75,000 75,000 Wells Fargo Bank, N.A., MTN, FRN, 5.51%, 175,000 30,000 205,000 7/24/2001 174,973 29,995 204,968 MTN, FRN, 5.55%, 330,000 500,000 830,000 3/15/2002 329,999 500,000 829,999 Westpac Banking Corp., (Australia), (Yankee), 75,000 75,000 FRN, 5.43%, 5/8/2001 75,005 75,005 ------------------------------------ TOTAL FINANCIAL SERVICES 3,079,356 819,995 - 3,899,351 INSURANCE 0.10% Prudential Funding Corp., MTN, FRN, 5.82%, 50,000 50,000 4/17/2001 50,004 - 50,004 ------------------------------------ MACHINERY & ENGINEERING EQUIPMENT 0.18% Caterpillar Financial Services Corp., 10,000 10,000 MTN, FRN, 5.83%, 7/9/2001 10,003 10,003 75,000 75,000 MTN, FRN, 5.92%, 7/9/2001 75,001 75,001 5,000 5,000 MTN, FRN, 6.79%, 6/1/2001 5,000 5,000 ------------------------------------ TOTAL MACHINERY & ENGINEERING EQUIPMENT 90,004 - - 90,004 TELECOMMUNICATION 2.23% AT&T Corp., 250,000 250,000 FRN, #, 5.51%, 3/8/2001 249,999 249,999 273,000 273,000 FRN, #, 5.61%, 7/19/2001 273,000 273,000 BellSouth Telecommunications, 250,000 250,000 Inc., FRN, 6.56%,1/4/2002 250,00 250,000 SBC Communications, Inc., FRN, #, 5.34%, 356,000 356,000 5/15/2001 355,986 355,986 ------------------------------------ TOTAL TELECOMMUNICATION 1,128,985 - - 1,128,985 ------------------------------------ TOTAL CORPORATE NOTES & BONDS 21.63% 9,390,978 1,548,973 - 10,939,951 ------------------------------- FLOATING RATE NOTES 8.17% ------------------------------- American Express Centurion, 21,500 21,500 5.54%, 3/16/2001 21,500 21,500 100,000 100,000 5.67%, 3/1/2001 100,000 100,000 25,000 25,000 MTN, 5.53%, 4/12/2001 25,000 25,000 Associates Corp. NA, 325,000 325,000 6.43%, 3/29/2001 325,000 325,000 Bank of America Corp., 130,000 130,000 5.65%, 3/1/2001 129,997 129,997 470,000 470,000 5.67%, 3/1/2001 470,000 470,000 Bank of Scotland (Scotland), 144A, 6.65%, 384,500 384,500 3/5/2001 384,500 384,500 -17- THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS) SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- Bayerische Hypo Vereinsbank (Germany), 300,000 300,000 5.59%, 3/1/2001 299,919 299,919 Bayerische Landesbank Girozentrale (Germany), 200,000 200,000 5.61%, 3/1/2001 199,957 199,957 Commerzbank AG (Germany), 5.80%, 10,000 10,000 3/1/2001 10,000 10,000 First Union National Bank, 45,000 45,000 5.66%, 3/1/2001 45,000 45,000 500,000 500,000 5.67%, 3/1/2001 500,000 500,000 Household Bank FSB, 15,000 15,000 5.88%, 4/9/2001 15,003 15,003 5,000 5,000 6.55%, 4/3/2001 5,001 5,001 Lehman RACERS 144A, Series 1999-35-MM, 165,000 165,000 5.60%, 3/15/01 165,000 165,000 Lehman RACERS 144A, Series 2000-15-MM-MBS, 175,000 175,000 5.59%, 3/13/2001 175,000 175,000 SPARCS, Series 2000-1, 447,000 447,000 5.70%, 4/24/2001 447,000 447,000 Unilever (Netherlands), 135,000 135,000 6.71%, 3/7/2001 135,000 135,000 US Bank NA Minnesota, 75,000 75,000 5.63%, 3/1/2001 74,997 74,997 US Bank North Dakota, 100,000 100,000 5.65%, 3/1/2001 99,997 99,997 Wells Fargo & Co., 8,000 8,000 6.78%, 3/15/2001 8,010 8,010 52,000 52,000 MTN, 6.49%, 3/19/2001 51,994 51,994 Wells Fargo Financial Inc., MTN, Series C, 100,000 100,000 5.62%, 3/1/2001 99,981 99,981 Westdeutsche Landesbank New York (Germany), Series CD, 5.48%, 342,000 342,000 3/23/2001 341,989 341,989 ------------------------------------ TOTAL FLOATING RATE NOTES - 4,129,845 - 4,129,845 ------------------------------- FUNDING AGREEMENT/GIC 1.74% ------------------------------- 50,000 50,000 AIG Funding Inc., 50,000 50,000 Floating Rate, 6.63%, 10/1/2001 First Allmerica Financial Life Insurance Co., Floating Rate, 25,000 25,000 5.72%, 4/6/2001 25,000 25,000 G E Financial Assurance, Floating Rate, 6.81%, 150,000 150,000 3/1/2001 150,000 150,000 Jackson National Life Insurance Co., Floating Rate, 5.83%, 100,000 100,000 1/18/2002 100,000 100,000 Floating Rate, 5.86%, 80,000 80,000 9/1/2003 80,000 80,000 MetLife Funding Inc., Floating Rate, #, 6.81%, 100,000 100,000 6/1/2001 100,000 100,000 Security Life of Denver Insurance Co., Floating 275,000 275,000 Rate, 5.43%, 2/27/2002 275,000 275,000 Travelers Insurance Co., Floating Rate, 5.71%, 50,000 50,000 4/24/2001 50,000 50,000 United of Omaha Life Insurance Company, Floating Rate, 5.72%, 50,000 50,000 5/17/2002 50,000 50,000 ------------------------------------ TOTAL FUNDING AGREEMENT/GIC 880,000 - - 880,000 ------------------------------- REPURCHASE AGREEMENT 0.69% ------------------------------- -18- THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS) SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- 51,206 51,206 Deutsche Bank 51,206 51,206 Securities, Tri-Party, 5.47%, due 3/1/2001 (Dated 2/28/2001, Proceeds $51,214, Secured by Federal National Mortgage Association, $51,808, 5.75%, due 2/15/2008, Market Value $52,230) Goldman Sachs Repurchase Agreement, 5.41%, 300,000 300,000 3/1/2001 300,000 300,000 ------------------------------------ TOTAL REPURCHASE AGREEMENT 51,206 300,000 - 351,206 ------------------------------- RESIDENTIAL MORTGAGE BACKED SECURITIES 0.57% ------------------------------- COLLATERALIZED MORTGAGE OBLIGATIONS Merrill Lynch Mortgage Investors, Ser. 2000-WM2, Class A1, FRN, 231,069 231,069 5.41%, 11/27/2001 231,069 231,069 Ser. 2000-WM2, Class A2, 6.68%, 57,583 57,583 11/27/2001 57,583 57,583 ------------------------------------ TOTAL RESIDENTIAL MORTGAGE BACKED SECURITIES 288,652 - - 288,652 ------------------------------- STATE AND MUNICIPAL OBLIGATIONS 0.31% ------------------------------- California Housing Finance Agency, Single Family Housing, Home Mortgage, Taxable, Ser. M, Rev., 20,205 20,205 FRDO, 5.31%, 3/5/2001 20,205 20,205 33,530 33,530 FRDO, 5.31%, 3/5/2001 33,530 33,530 California Pollution Control Financing Authority, Environmental Improvement, Shell Oil Co. Project, Taxable, Ser. B, 20,000 20,000 Rev., FRDO, 5.46%, 3/7/2001 20,000 20,000 Sacramento County, California, Taxable, Rev., FRDO, 5.45%, 22,000 22,000 3/7/2001 22,000 22,000 Sault Sainte Marie, Michigan, Tribe Building Authority, Taxable, Rev., FRDO, 7.04%, 3,636 3,636 6/1/2001 3,636 3,636 SSM Healthcare, Missouri Health Facilities, Taxable, Ser. E, 16,200 16,200 Rev., FRDO, 5.50%, 3/6/2001 16,200 16,200 Texas State, Veterans Housing Assistance, Taxable, Ser. A-2, 32,500 32,500 GO, FRDO, 5.45%, 3/7/2001 32,500 32,500 Wake Forest University, Series 1997, 5.28%, 3/7/2001 (LOC: 6,200 6,200 Wachovia Bank) 6,200 6,200 ------------------------------------ TOTAL STATE AND MUNICIPAL OBLIGATIONS 148,071 6,200 - 154,271 ------------------------------- TIME DEPOSITS 6.12% ------------------------------- ABN AMRO Bank N.V. (Netherlands), 300,000 (300,000)(a) - 5.54%, 3/1/2001 300,000 (300,000) (a) - Allied Irish Banks PLC (United 50,000 50,000 Kingdom), 6.66%, 3/30/2001 50,000 50,000 Bank of Brussels (Belgium), 250,000 250,000 5.56%, 3/1/2001 250,000 250,000 Bank of Ireland (Ireland), 5.38%, 120,000 120,000 7/2/2001 120,000 120,000 Bank of Nova Scotia (Canada), 100,000 100,000 5.50%, 7/16/2001 100,000 100,000 Banque & Caisse d'Epargne de 460,896 460,896 l'Etat, 5.53%, 3/1/2001 460,896 460,896 Bayerische Hypo-und Vereinsbank AG (Germany), (Yankee), 5.66%, 134,000 134,000 3/1/2001 134,000 134,000 Caisse des Depots et Consignations (France), - 750,000 (750,000)(a) - 5.53%, 3/1/2001 750,000 (750,000) (a) - -19- THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS) SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- 300,000 (300,000)(a) - 5.54%, 3/1/2001 300,000 (300,000) (a) - Caja De Madrid Bank (Spain), - 59,000 59,000 5.38%, 7/10/2001 59,000 59,000 60,000 60,000 6.64%, 4/27/2001 60,000 60,000 37,000 37,000 6.65%, 4/24/2001 37,000 37,000 110,000 110,000 6.65%, 7/24/2001 110,000 110,000 75,000 75,000 6.67%, 11/19/2001 75,000 75,000 Canadian Bank (Canada), 5.66%, 200,000 (200,000)(a) - 3/1/2001 200,000 (200,000) (a) - Credit Suisse First Boston (Swiss Bank), (Switzerland), 5.56%, 200,000 (200,000)(a) - 3/1/2001 200,000 (200,000) (A) - Deutsche Bank (Germany), 5.53%, 375,000 (375,000)(a) - 3/1/2001 375,000 (375,000) (a) - ING Bank N.V. (Netherlands), 275,000 (275,000)(a) - 5.63%, 3/1/2001 275,000 (275,000) (a) - Landesbank Baden-Wuerttemberg 100,000 (67,646)(a) 32,354 (Germany), 5.56%, 3/1/2001 100,000 (65,646) 34,354 Landesbank Schleswig Holstein 100,000 100,000 (Germany), 6.69%, 4/17/2001 100,000 100,000 Societe Generale, (France), 192,050 192,050 5.53%, 3/1/2001 192,050 192,050 250,000 250,000 5.53%, 3/1/2001 250,000 250,000 200,280 200,280 5.63%, 3/1/2001 200,280 200,280 417,044 417,044 5.63%, 3/1/2001 417,044 417,044 Svenska Handelsbanken, Inc. 175,000 175,000 (Sweden), 5.53%, 3/1/2001 175,000 175,000 223,500 223,500 Swedbank (Sweden), 5.59%, 3/1/2001 223,500 223,500 Wells Fargo Bank, N.A., 5.55%, 48,000 48,000 4/30/2001 48,000 48,000 ------------------------------------ TOTAL TIME DEPOSITS 3,883,544 1,678,226 (2,465,646) 3,096,124 ------------------------------- U.S. GOVERNMENT AGENCY SECURITIES 2.90% ------------------------------- 25,000 25,000 Federal Farm Credit Bank, DN, 24,426 24,426 4.86%, 8/22/2001 Federal Home Loan Bank, 13,702 13,702 DN, 4.95%, 8/3/2001 13,416 13,416 5,488 5,488 DN, 4.96%, 8/10/2001 5,368 5,368 20,375 20,375 DN, 4.96%, 8/15/2001 19,917 19,917 10,105 10,105 DN, 4.97%, 8/17/2001 9,875 9,875 40,456 40,456 DN, 4.97%, 8/24/2001 39,497 39,497 75,000 75,000 DN, 6.51%, 3/15/2001 74,822 74,822 Federal Home Loan Mortgage Corp., 160,000 160,000 DN, 4.86%, 7/27/2001 156,869 156,869 23,000 23,000 DN, 4.86%, 8/16/2001 22,482 22,482 165,000 165,000 DN, 4.92%, 7/27/2001 161,734 161,734 39,295 39,295 DN, 4.95%, 7/13/2001 38,578 38,578 192,000 192,000 DN, 4.95%, 8/16/2001 187,671 187,671 Federal National Mortgage Association, 100,000 100,000 DN, 4.83%, 7/30/2001 98,003 98,003 20,000 20,000 DN, 4.84%, 8/16/2001 19,556 19,556 334,120 334,120 DN, 4.89%, 8/23/2001 326,298 326,298 100,000 100,000 DN, 4.95%, 8/16/2001 97,741 97,741 98,856 98,856 DN, 4.97%, 8/2/2001 96,801 96,801 76,762 76,762 DN, 4.97%, 8/9/2001 75,094 75,094 ----------------------------------------------------------------------------------------- TOTAL U.S. GOVERNMENT AGENCY SECURITIES 823,979 644,169 1,466,148 ----------------------------------------------------------------------------------------- -20- THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS) SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JP MORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- ----------------------------------------------------------------------------------------- TOTAL INVESTMENTS 100.55% $29,704,751 $23,618,293 $(2,465,646) $50,857,398 ----------------------------------------------------------------------------------------- TOTAL COST $29,704,751 $23,618,293 $(2,465,646) $50,857,398 ----------------------------------------------------------------------------------------- TOTAL NET ASSETS $50,576,945 ----------------------------------------------------------------------------------------- DN - Discount Notes ECN - Extendible Commercial Note. The maturity date shown is the call date. The interest rate shown is the effective yield at the date of purchase. FRDO - Floating Rate Demand Obligation. The maturity date shown is the actual maturity date. The rate shown is the rate in effect at February 28, 2001. FRN - Floating Rate Note. The maturity shown is the actual Maturity date. The rate shown is the rate in effect at February 28, 2001. FSB - GIC - Guaranteed Insurance Contract GO - General Obligation LOC - Letter of Credit MM-MBS MTN - Medium Term Note RACERS - Restructured Asset Certificates Rev. - Revenue Bond Ser. - Series SPARCS - Structured Product Asset Return 144A - Securities restricted for resale to Qualified Institutional Buyers # - SECURITY MAY ONLY BE SOLD TO QUALIFIED INSTITUTIONAL BUYERS (a) REFLECTS THE REDEMPTION OF SHORT-TERM SECURITIES OF THE J.P. MORGAN MANAGER'S MONEY MARKET FUND, JPM INSTITUTIONAL MONEY MARKET FUND, LTD. AND J.P. MORGAN INSTITUTIONAL SERVICE MONEY MARKET FUND, LTD. -21- J.P. MORGAN PRIME MONEY MARKET FUND / J.P. MORGAN INSTITUTIONAL PRIME MONEY MARKET FUND / J.P. MORGAN INSTITUTIONAL SERVICE PRIME MONEY MARKET FUND J.P. MORGAN PRIME MONEY MARKET RESERVES FUND / J.P. MORGAN INSTITUTIONAL DIRECT PRIME MONEY MARKET FUND J.P. MORGAN PRIME CASH MANAGEMENT FUND / THE PRIME MONEY MARKET PORTFOLIO/ JPMORGAN PRIME MONEY MARKET FUND II 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 INSTITUTIONAL J.P. MORGAN INSTITUTIONAL J.P. MORGAN INSTITUTIONAL SERVICE PRIME DIRECT PRIME PRIME PRIME MONEY PRIME MONEY MONEY MONEY MARKET MONEY MARKET MARKET MARKET RESERVES MARKET FUND FUND FUND FUND FUND ASSETS: Investment Securities, at Value $ - $ - $ - $ - $ - Investment in The Prime Money Market Portfolio ("Portfolio"), at Value 4,681,811 14,165,871 1,368,882 280,538 20,431 Cash - - - - - Deferred Organization Expenses - - 4 - - Prepaid Trustees' Fees and Expenses 4 8 2 - - Other Assets 4 4 1 - - Receivable: - - - - - Interest - - - - - Fund Shares Sold - - - - - Expense Reimbursements - 1,561 105 38 17 ------------------------------------------------------------------------------ Total Assets 4,681,819 14,167,444 1,368,994 280,576 20,448 ------------------------------------------------------------------------------ LIABILITIES: Payables: Investment Securities Purchased - - - - - Fund Shares Redeemed - - - - - Dividends 18,639 63,295 7,351 1,189 85 Accrued Liabilities: Investment Advisory Fees - - - - - Administrative Services Fees 80 274 30 6 - Shareholder Servicing Fees 865 1,208 67 14 1 Distribution Fees - - - 67 - Custody Fees - - - - - Administration Fees 5 7 2 - - Service Organization Fees - - 335 67 2 Fund Services Fees - 3 - - - Other 143 45 112 73 53 ------------------------------------------------------------------------------ Total Liabilities 19,732 64,832 7,897 1,416 141 ------------------------------------------------------------------------------ NET ASSETS: Paid-in Capital 4,662,391 14,102,966 1,361,171 279,169 20,307 Accumulated Undistributed /(Distributions in Excess of) Net Investment Income - 62 5 - - Accumulated Net Realized Loss on Investment (304) (416) (79) (9) - ------------------------------------------------------------------------------ Net Assets $4,662,087 $14,102,612 $ 1,361,097 $ 279,160 $ 20,307 ============================================================================== PRO FORMA COMBINED J.P. MORGAN THE JPMORGAN JPMORGAN PRIME PRIME PRIME PRIME CASH MONEY MONEY MONEY MANAGEMENT MARKET MARKET PRO FORMA MARKET FUND PORTFOLIO FUND II ADJUSTMENT FUND ASSETS: Investment Securities, at Value $ - $23,618,293 $29,704,751 $ (2,465,646)(f) $50,857,398 Investment in The Prime Money Market Portfolio("Portfolio"), at Value 535,496 - - (21,053,029)(a) - Cash - 1 146 - 147 Deferred Organization Expenses - - - (4)(b) - Prepaid Trustees' Fees and Expenses - 18 - - 32 Other Assets 1 12 143 - 165 Receivable: - - - - - Interest - 101,001 116,304 - 217,305 Fund Shares Sold - - 13 - 13 Expense Reimbursements - - 7 4(b) 1,732 --------------------------------------------------------------------------------- Total Assets 535,497 23,719,325 29,821,364 (23,518,675) 51,076,792 --------------------------------------------------------------------------------- LIABILITIES: Payables: Investment Securities Purchased - 198,003 70,252 - 268,255 Fund Shares Redeemed - - 31 - 31 Dividends 1,806 - 122,404 - 214,769 Accrued Liabilities: Investment Advisory Fees - 2,024 2,331 - 4,355 Administrative Services Fees 8 446 2,096 - 2,940 Shareholder Servicing Fees 91 - 3,718 - 5,964 Distribution Fees 183 - 7 - 257 Custody Fees - 103 204 - 307 Administration Fees 1 20 - - 35 Service Organization Fees - - - - 404 Fund Services Fees - 4 - - 7 Other 69 50 1,978 - 2,523 --------------------------------------------------------------------------------- Total Liabilities 2,158 200,650 203,021 - 499,847 --------------------------------------------------------------------------------- NET ASSETS: Paid-in Capital 533,344 - 29,619,555 - 50,578,903 Accumulated Undistributed / (Distributions in Excess of) Net Investment Income - - (152) - (85) Accumulated Net Realized Loss on Investment (5) - (1,060) - (1,873) --------------------------------------------------------------------------------- Net Assets $ 533,339 $ 23,518,675 $29,618,343 $(23,518,675) $50,576,945 ================================================================================= (a) Reflects reallocation of investment from the feeder funds to master portfolio. (b) Reflects write-off of deferred organization expense. (c) Reflects the additional number of shares outstanding due to the Concurrent Reorganization. (d) Reallocation of the fund's shares of beneficial interest outstanding to Cash Management, Reserves, Morgan, Premier, Retail, Agency, Class B, Class C, and Institutional Shares due to the Concurrent Reorganization. (e) Reallocation of the fund's shares outstanding to Cash Management, Reserves, Morgan, Premier, Retail, Agency, Class B, Class C, and Institutional Shares due to the Concurrent Reorganization. (f) Reflects the redemption in short-term investments of J.P. Morgan Manager's Money Market Fund, JPM Institutional Money Market Fund, Ltd. and J.P. Morgan Institutional Service Money Market Fund, Ltd. * All classes See Notes to Pro Forma Financial Statements -22- J.P. MORGAN J.P. MORGAN J.P. MORGAN INSTITUTIONAL J.P. MORGAN INSTITUTIONAL J.P. MORGAN INSTITUTIONAL SERVICE PRIME DIRECT PRIME PRIME PRIME MONEY PRIME MONEY MONEY MONEY MARKET MONEY MARKET MARKET MARKET RESERVES MARKET FUND FUND FUND FUND FUND Shares of Beneficial Interest Outstanding ($.001 par value; unlimited number of shares authorized) 4,662,032 14,102,955 1,361,177 279,169 20,307 Shares Outstanding Premier Vista (renamed Morgan) Class B Class C Institutional (renamed Agency) Reserves Net Asset Value Per Share $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 PRO FORMA WITH CONCURRENT REORGANIZATION JP MORGAN PRIME MONEY MARKET FUND SHARES OUTSTANDING Cash Management - - - - - Reserves - - - - - Morgan - - - - - Premier - - - - - Retail - - - - - Agency - - - - - Class B - - - - - Class C - - - - - Institutional - - - - - NET ASSET VALUE PER SHARE Cash Management - - - - Reserves - - - - Morgan - - - - Premier - - - - Retail - - - - Agency - - - - Class B - - - - Class C - - - - Institutional - - - - ------------------------------------------------------------------------------ Cost of Investments $ - $ - $ - $ - $ - ============================================================================== PRO FORMA COMBINED J.P. MORGAN THE JPMORGAN JPMORGAN PRIME PRIME PRIME PRIME CASH MONEY MONEY MONEY MANAGEMENT MARKET MARKET PRO FORMA MARKET FUND PORTFOLIO FUND II ADJUSTMENT FUND Shares of Beneficial Interest Outstanding ($.001 par value; unlimited number of shares authorized) 533,344 - - (20,958,984)(d) - Shares Outstanding Premier 2,059,160 (2,059,160)(e) - Vista (renamed Morgan) 10,213,350 (10,213,350)(e) - Class B 12,496 (12,496)(e) - Class C 309 (309)(e) - Institutional (renamed Agency) 17,334,106 (17,334,106)(e) - Reserves 123 (123)(e) - Net Asset Value Per Share $ 1.00 - $ 1.00* - $ - PRO FORMA WITH CONCURRENT REORGANIZATION JP MORGAN PRIME MONEY MARKET FUND SHARES OUTSTANDING Cash Management - - - 533,344(c) 533,344 Reserves - - - 279,169(c) 279,169 Morgan - - - 10,213,473(c) 10,213,473 Premier - - - 3,420,337(c) 3,420,337 Retail - - - 4,662,032(c) 4,662,032 Agency - - - 17,354,413(c) 17,354,413 Class B - - - 12,496(c) 12,496 Class C - - - 309(c) 309 Institutional - - - 14,102,955(c) 14,102,955 NET ASSET VALUE PER SHARE Cash Management - - - - $ 1.00 Reserves - - - - $ 1.00 Morgan - - - - $ 1.00 Premier - - - - $ 1.00 Retail - - - - $ 1.00 Agency - - - - $ 1.00 Class B - - - - $ 1.00 Class C - - - - $ 1.00 Institutional - - - - $ 1.00 --------------------------------------------------------------------------------- Cost of Investments $ - $23,618,293 $ 29,704,751 - $53,323,044 ================================================================================= (a) Reflects reallocation of investment from the feeder funds to master portfolio. (b) Reflects write-off of deferred organization expense. (c) Reflects the additional number of shares outstanding due to the Concurrent Reorganization. (d) Reallocation of the fund's shares of beneficial interest outstanding to Cash Management, Reserves, Morgan, Premier, Retail, Agency, Class B, Class C, and Institutional Shares due to the Concurrent Reorganization. (e) Reallocation of the fund's shares outstanding to Cash Management, Reserves, Morgan, Premier, Retail, Agency, Class B, Class C, and Institutional Shares due to the Concurrent Reorganization. (f) Reflects the redemption in short-term investments of J.P. Morgan Manager's Money Market Fund, JPM Institutional Money Market Fund, Ltd. and J.P. Morgan Institutional Service Money Market Fund, Ltd. * All classes See Notes to Pro Forma Financial Statements -23- J.P. MORGAN PRIME MONEY MARKET FUND / J.P. MORGAN INSTITUTIONAL PRIME MONEY MARKET FUND / J.P. MORGAN INSTITUTIONAL SERVICE PRIME MONEY MARKET FUND / J.P. MORGAN PRIME MONEY MARKET RESERVES FUND / J.P. MORGAN INSTITUTIONAL PRIME DIRECT MONEY MARKET FUND / J.P. MORGAN PRIME CASH MANAGEMENT FUND / THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINING STATEMENT OF OPERATIONS FOR THE TWELVE MONTHS ENDED FEBRUARY 28, 2001 (UNAUDITED) (AMOUNTS IN THOUSANDS) J.P. MORGAN J.P. MORGAN J.P. MORGAN INSTITUTIONAL J.P. MORGAN INSTITUTIONAL J.P. MORGAN INSTITUTIONAL SERVICE PRIME DIRECT PRIME PRIME PRIME MONEY PRIME MONEY MONEY MONEY MARKET MONEY MARKET MARKET MARKET RESERVES MARKET FUND FUND FUND FUND FUND INCOME: Interest Income $ - $ - $ - $ - $ - Allocated Interest Income 263,803 646,625 125,099 23,337 1,186 Allocated Portfolio Expenses (5,766) (14,196) (2,722) (508) (25) ---------------------------------------------------------------------------- Investment Income 258,037 632,429 122,377 22,829 1,161 ---------------------------------------------------------------------------- EXPENSES: Shareholder Servicing Fees 10,161 10,027 957 179 9 Investment Advisory Fees - - - - - Administrative Services Fees 974 2,238 457 85 5 Service Organization Fee/Distribution Fee - - 4,789 1,786 18 Registration Expenses 394 1,684 250 77 41 Custodian Fees - - - - - Transfer Agent Fees 4 1 18 2 4 Trustees' Fees and Expenses 47 105 20 1 - Professional Fees 27 53 16 12 14 Fund Services Fee 60 143 27 5 - Printing and Postage 15 13 13 11 17 Administration Fees 42 97 20 3 - Financial and Fund Accounting Services Fee 5 5 19 5 5 Amortization of Organizational Expenses - - 2 - - Other 263 195 32 46 27 ---------------------------------------------------------------------------- Total Expenses 11,992 14,561 6,620 2,212 140 ---------------------------------------------------------------------------- Less: Amounts Waived - - - - - Less: Earnings Credits - - - - - Less: Expense Reimbursements - 8,703 721 219 112 ---------------------------------------------------------------------------- Net Expenses 11,992 5,858 5,899 1,993 28 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Net Investment Income 246,045 626,571 116,478 20,836 1,133 ---------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net Realized Gain (Loss) on Investments (91) (167) (20) (9) 1 Change in Net Unrealized Appreciation/ (Depreciation) of Investments - - - - - ---------------------------------------------------------------------------- Net Realized and Unrealized Appreciation/ (Depreciation) on Investments Allocated from Portfolio (91) (167) (20) (9) 1 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations $ 245,954 $ 626,404 $ 116,458 $ 20,827 $ 1,134 ============================================================================ PRO FORMA COMBINED J.P. MORGAN THE JPMORGAN JPMORGAN PRIME PRIME PRIME PRIME CASH MONEY MONEY MONEY MANAGEMENT MARKET MARKET PRO FORMA MARKET FUND PORTFOLIO FUND II ADJUSTMENT FUND INCOME: Interest Income $ - $ 1,259,669 $ 1,076,858 $ (187,055)(e) $2,149,472 Allocated Interest Income 12,602 - - (1,072,652)(c) - Allocated Portfolio Expenses (275) - - 23,492(b) - ----------------------------------------------------------------------------- Investment Income 12,327 1,259,669 1,076,858 (1,236,215) 2,149,472 ----------------------------------------------------------------------------- EXPENSES: Shareholder Servicing Fees - - 29,798 7,055(a) 58,186 Investment Advisory Fees - 20,487 16,596 (3,665)(a,e) 33,418 Administrative Services Fees 45 4,509 16,596 8,509(a) 33,418 Service Organization Fee/Distribution Fee 1,453 1,824 115 (8,046)(a) 1,939 Registration Expenses 145 - 612 - 3,203 Custodian Fees - - 987 2,795(f) 3,782 Transfer Agent Fees 4 - 1,196 - 1,229 Trustees' Fees and Expenses - 205 809 - 1,187 Professional Fees 17 127 294 (68)(g) 492 Fund Services Fee 2 279 - - 516 Printing and Postage 13 13 238 (21)(g) 312 Administration Fees 2 116 - - 280 Financial and Fund Accounting Services Fee 5 - - (44)(f) - Amortization of Organizational Expenses - - - - 2 Other 14 20 1,337 - 1,934 ----------------------------------------------------------------------------- Total Expenses 1,700 27,580 68,578 6,515 139,898 ----------------------------------------------------------------------------- Less: Amounts Waived - - 7,896 6,514 14,410 Less: Earnings Credits - - 164 164 Less: Expense Reimbursements 96 - 11 436 10,298 ----------------------------------------------------------------------------- Net Expenses 1,604 27,580 60,507 (435) 115,026 ----------------------------------------------------------------------------- ---------------------------------------------------------------------------- Net Investment Income 10,723 1,232,089 1,016,351 (1,235,780) 2,034,446 ----------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net Realized Gain (Loss) on Investments (5) (356) (143) 291(d) (499) Change in Net Unrealized Appreciation/ (Depreciation) of Investments - - - - Net Realized and Unrealized Appreciation/ (Depreciation) on Investments Allocated from Portfolio (5) (356) (143) 291 (499) ----------------------------------------------------------------------------- ----------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations $ 10,718 $1,231,733 $ 1,016,208 $(1,235,489) $2,033,947 ============================================================================= (a) Reflects adjustments to investment advisory fee, administrative fees and shareholder servicing fees and/or related waivers based on the surviving Fund's revised fee schedule. (b) Reflects the elimination of master portfolio expenses which have been disclosed under Feeder Expenses. (c) Reallocation of investments income to feeder funds (d) Reallocation of realized and unrealized loss to feeder funds. (e) Reflects elimination of J.P. Morgan Institutional Money Market Fund, Ltd, J.P. Morgan Institutional Service Money Market Fund, Ltd. and J.P. Morgan Manager's Money Market Fund allocated expenses/income. (f) Reflects new combined custodial agreement. (g) Reduction reflects expected benefits from combined operations. See Notes to Pro Forma Statements. -24- J.P. MORGAN PRIME MONEY MARKET FUND, J.P. MORGAN INSTITUTIONAL PRIME MONEY MARKET FUND, J.P. MORGAN INSTITUTIONAL SERVICE PRIME MONEY MARKET FUND, J.P. MORGAN PRIME MONEY MARKET RESERVES FUND, J.P. MORGAN INSTITUTIONAL DIRECT PRIME MONEY MARKET FUND, J.P. MORGAN PRIME CASH MANAGEMENT FUND, THE PRIME MONEY MARKET PORTFOLIO, JPMORGAN PRIME MONEY MARKET FUND II 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 Prime Money Market Portfolio ("Master Portfolio"), J.P. Morgan Prime Money Market Fund, J.P. Morgan Institutional Prime Money Market Fund, J.P. Morgan Institutional Service Prime Money Market Fund, J.P. Morgan Prime Money Market Reserves Fund, J.P. Morgan Institutional Direct Prime Money Market Fund, J.P. Morgan Prime Cash Management Fund, (collectively the "feeder funds" of the Master Portfolio) and JPMorgan Prime Money Market Fund II ("JPMPMMF II") as if the proposed Concurrent Reorganization occurred as of and for the twelve months ended February 28, 2001. Under the Concurrent Reorganization, the Pro Forma Statements give effect to the proposed transfer of all assets and liabilities of Master Portfolio, J.P. Morgan Prime Money Market Fund, J.P. Morgan Institutional Prime Money Market Fund, J.P. Morgan Institutional Service Prime Money Market Fund, J.P. Morgan Prime Money Market Reserves Fund, J.P. Morgan Institutional Direct Prime Money Market Fund, J.P. Morgan Prime Cash Management Fund in exchange for shares in JPMPMMF II. 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, JPMPMMF II would commence offering Cash Management Shares, Reserves Shares, Morgan Shares, Premier Shares, Retail Shares, Agency Shares, Institutional Shares, Class B Shares and Class C Shares. The net asset value per share for Cash Management Reserves, Morgan, Premier, Retail, Agency, Institutional, Class B and Class C, at the commencement of offering would be identical to the closing net asset value per share for the JPMPMMF II Institutional Class prior to Concurrent Reorganization. Under the Concurrent Reorganization, the existing shares of J.P. Morgan Prime Cash Management Fund would be renamed Cash Management Shares, the existing shares of J.P. Morgan Prime Money Market Reserves Fund would be renamed Reserves Shares, the existing shares of JPMPMMF II Reserves and Vista Classes would be renamed Morgan Class, the existing shares of J.P. Morgan Institutional Service Prime Money Market Fund and JPMPMMF II Premier Class would be renamed as Premier Class, the existing shares of J.P. Morgan Prime Money Market Fund would be renamed as Retail Class, the existing shares of J.P. Morgan Institutional Direct Prime Money Market Fund and JPMPMMF II Institutional Class would be renamed as Agency Class, the existing shares of J.P. Morgan Institutional Prime Money Market Fund would be renamed Institutional Class, and the existing shares of JPMPMMF II Class B and Class C would remain as such respectively. The net asset values per share for the following classes: Cash Management, Reserves, Morgan, Premier, Retail, Agency, Institutional, Class B and Class C, at the commencement of offering would be identical to the closing net asset value per share for the JPMPMMF II Institutional Class immediately prior to the Concurrent Reorganization. Under the proposed Concurrent Reorganization, each shareholder of J.P. Morgan Prime Money Market Fund, J.P. Morgan Institutional Prime Money Market Fund, J.P. Morgan Institutional Service Prime Money Market Fund, J.P. Morgan Prime Money Market Reserves Fund, J.P. Morgan Institutional Direct Prime Money Market Fund, and J.P. Morgan Prime Cash Management Fund would receive shares of JPMPMMF II with a value equal to their holding in their respective funds. Holders of the J.P. Morgan Prime Cash Management Fund will receive Cash Management Shares. Holders of the J.P. Morgan Prime Money Market Reserves Fund will receive Reserve Shares. Holders of Reserves and Vista Classes in JPMPMMF II will receive Morgan Shares. Holders of J.P. Morgan Institutional Service Prime Money Market Fund and holders of Premier Class in JPMPMMF II will receive Premier Shares. Holders of J.P. Morgan Prime Money Market Fund will receive -25- Retail Shares. Holders of J.P. Morgan Institutional Direct Prime Money Market Fund and Institutional Class in JPMPMMF II will receive Agency Shares. Holders of J.P. Morgan Institutional Prime Money Market Fund will receive Institutional Shares. Holders of Class B and Class C in JPMPMMF II will receive Class B and Class C Shares respectively. Shareholders of the J.P. Morgan Prime Money Market Fund, J.P. Morgan Institutional Prime Money Market Fund, J.P. Morgan Institutional Service Prime Money Market Fund, J.P. Morgan Prime Money Market Reserves Fund, J.P. Morgan Institutional Direct Prime Money Market Fund, and J.P. Morgan Prime Cash Management Fund will become shareholders of JPMPMMF II. The Pro Forma net asset value per share assumes the issuance of additional shares of JPMPMMF II, which would have been issued on February 28, 2001 in connection with the proposed Concurrent Reorganization. The amount of additional shares assumed to be issued under the Concurrent Reorganization was calculated based on February 28, 2001 net assets of J.P. Morgan Prime Money Market Fund, J.P. Morgan Institutional Prime Money Market Fund, J.P. Morgan Institutional Service Prime Money Market Fund, J.P. Morgan Prime Money Market Reserves Fund, J.P. Morgan Institutional Direct Prime Money Market Fund, J.P. Morgan Prime Cash Management Fund and net asset value per share of JPMPMMF II - Institutional Class. JPMORGAN PRIME MONEY MARKET WITH CONCURRENT REORGANIZATION Cash Reserves Premier Retail Agency Institutional Management Increase in 533,344 279,169 1,361,177 4,662,032 20,307 14,102,955 Shares Issued Net Assets $533,339 $279,160 $1,361,097 $4,662,087 $20,307 $14,102,612 2/28/01 Pro Forma $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 Net Asset Value 2/28/01 3. PRO FORMA OPERATIONS: The Pro Forma Statement of Operations assumes similar rates of gross investment income for the investments of each Fund. Accordingly, the combined gross investment income is equal to the sum of each Fund's gross investment income. Certain expenses have been adjusted to reflect the expected expenses of the combined entity. The pro forma investment advisory, administration, shareholder servicing and distribution fees of the combined Fund and 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. -26- 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.(5) 7 Distribution and Sub-Administration Agreement dated August 21, 1995.(5) 8(a) Retirement Plan for Eligible Trustees.(5) 8(b) Deferred Compensation Plan for Eligible Trustees.(5) 9 Custodian Agreement. (1) 10(a) Rule 12b-1 Distribution Plan of Mutual Funds including Selected Dealer Agreement and Shareholder Service Agreement. (1) and (2) 10(b) Rule 12b-1 Distribution Plan - Class B Shares (including forms of Selected Dealer Agreement and Shareholder Servicing Agreement).(5) 10(c) Form of Rule 12b-1 Distribution Plan - Class C Shares (including forms of Shareholder Servicing Agreements).(11) 10(d) Form of Rule 18f-3 Multi-Class Plan.(11) 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. (5) 13(c) Form of Administration Agreement.(5) 13(d) Form of Administration Agreement (to be filed by Amendment). 13(e) Form of Sub-Administration Agreement (to be filed by Amentment). 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. 17(h) Annual Report of the Merging Fund and the Master Portfolio dated November 30, 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 16th 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 16, 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 Service Prime Money Market Fund. (e) Statement of Additional Information for J.P. Morgan Institutional Service Prime Money Market Fund. (f) Annual Report of JPMorgan Prime Money Market Fund II (formerly, Chase Vista Prime Money Market Fund) dated August 31, 2000. (h) Annual Report of J.P. Morgan Institutional Service Prime Money Market Fund (and The Prime Money Market Portfolio) dated November 30, 2000.